Being unlettered, I’m vastly impressed by people supporting a string of academic qualifications. Most conspicuous in this genre are the present day educated youth. Should you ask even casually a young man where he studied, he makes it a point to mention that, among other qualifications, he has an MBA degree. That set me probing the world of managers and managements.
I was pleasantly surprised to learn that India produces about three lakh management graduates every year. So, in the last three decades we have churned out something to the tune of 90 lakh management experts. How many countries can boast of this record? How about exporting managers to developed countries that are confronting a crunch of management expertise?
According to All India Council of Technical Education, the number of management institutions has risen from 2,614 in 2006-07 to 3,364 in 2013-14. While the numbers meteorically rose till 2011-12, at least 71 institutes shut shop in 2012-13 and 107 in 2013-14.
My soaring enthusiasm was razed to the ground when I further discovered that only about 10% of the 30 lakh, get jobs. The rest of them are deemed unemployable. Is that a reflection on the quality of education that our management schools impart?
In one of my consultancy assignments, I was asked to recruit young managers for a multinational. The wizened CEO of the company gave me a brief. “Look for only IIM graduates who have already changed at least two jobs.” Finding the suggestion trifle intriguing, I probed him further. “These young know-alls”, he said, “treat their first few jobs as stepping stones to better pastures. They settle down to apply their minds to work only after some five years of emerging as experts.” A sound reflection indeed!
And who are these know-all whiz kids who instinctively grasp all business intricacies? In India many engineering graduates apply for MBA course immediately after graduation whereas in the US and Europe, management institutes consider work experience as a criterion for admission to MBA. In our case most aspiring graduates deem MBA program as mid-career education for them.
It was Peter Drucker, the man who almost single-handedly built up the corpus of knowledge that goes under the omnibus label management, whose name most young managers of today haven’t even heard of, who said management education without a few years of practical work experience in industry is almost a waste of time.
Experts tell me whatever the mode of their education, we have, over the years, built up a sizeable reservoir of managers who clamor to be put to use. And now that the country is set to dismantle the Nehruvian legacy of the License-Permit-Quota-Raj, the caged economic tiger is all set to get back to is normal stride though it will take some time before the beast regains his health and vigor.
Each industrialized economy has had its own locomotive of growth. Varied indeed are the factor endowments of each country which help it in the take-off stage. For example, dairy produce in Denmark, textile industry in the UK (fed on cheap cotton from India and a captive market) and railroads in the United States played that crucial role. Even sheer hard work backed by the ingenuity and skills of the people (as in Japan after the Second World War) can serve as the engine of growth.
In our society the votaries of the New Economy are pinning their hopes on the IT sector. Our software sector − though miniscule as per global standards − has indeed vast potential for growth. However, there is no collaborative factual evidence that it can emerge as the locomotive to pull the economic train. Indeed, the IT sector is principally responsible for the unprecedented upsurge of the American economy and its sustained productivity gains all through the 1990’s. That it will play the same role elsewhere in the world is doubtful. The success and potential of the New Economy depends largely on the solid foundations of the old economy. In our case, the potential of IT sector − howsoever impressive it may appear right now − is, I think, being exaggerated like Mark Twain’s death.
And for this there are two reasons. The first is the absence of the support base, particularly in terms of the infrastructure, whose deficiencies it will take us years to make up. Unimaginable, indeed, is the potential of modern communication systems. The hindrance in our case is the overall system, within which it operates − a system that is a relic of our colonial past and acts as a brake in each area of thrust.
Secondly, the entire gamut of management support base bequeathed by our imperial rulers and built over the last six and a half decades is bound to be a formidable stumbling block on the runway to take-off. The distortions that have occurred in our basic conception of the management function and the accompanying managerial practices, are responsible for that. And the price that we paid for that is incalculable since these are the prime movers of economy. The spectacular economic progress of Japan from early 1950’s without any natural resource endowment worth the name, exemplifies what sound management informed by vision can achieve.
Perception of Management
On account of the continuing impact till very recently of the controlled economy there has been no significant improvement in our perceptions about management or its practice. We have, nonetheless, produced and wisely sent abroad − because prophets aren’t honored at home − management gurus like CK Prahalad and Sumantra Ghoshal to help transnational corporations (TNCs) to identify their core competencies and expound fundamentally new approaches to management.
No wonder we continue to wallow in the debilitating legacy of the two-fold Raj − British and its indigenous counterpart created by the alliance of businessmen, bureaucrats and politicians − that severely thwarted our economic growth till at least the early 1990s.
The only tool of management we have evolved over the years is what goes under the name jugar − a term as untranslatable in a precise manner as dharma (that we supposedly live by). Every time we confront a problem in managing things, there is a frantic search for jugar. All it boils down to is: find a quick-fix and then forget about the problem till it resurfaces when we shall think of another makeshift solution.
I’ve heard senior managers telling their juniors: “Just manage the problem.” In plain terms it means find a quick-fix.
Though there are, today, over 3000 management schools in India, churning out lakhs of MBAs every year who are supposed to bring to bear upon the management of our economy new skills for better results, we still don’t seem to be managing our industrial undertakings or our social services or public utilities in any way better than before.
After six decades of Independence the most pre-eminent management characteristic is the fear of, obedience to, and dependence upon those who occupy positions of power. Meanwhile, there is elsewhere in the world a sea change in perceptions that managers deploy to tackle the tasks they are supposed to address themselves to. As Walter Wriston the former chairman of Citicorp, perhaps the most innovative financiers of our time − puts it in his seminal study The Twilight of Sovereignty: “Indeed, the new source of wealth is not material, it is information, knowledge applied to work to create value”.
Attention now has shifted to intellectual capital which covers not only human brainpower but also brand names and trademarks. Meagre indeed is our intellectual capital to withstand the onslaught of foreign competition which is bound to overwhelm us in the years to come. (We have it on Philip Kotler’s authority that the only indigenous brand name India has created in half a century is Titan).
All said the declared thrust of all the programs initiated by Nehru was modernization of India. This portmanteau term of our times represents at least half a dozen attributes: viz. industrialization, urbanization, high literacy, on-going generation of wealth (and its widespread distribution), social mobility and diversified occupational growth. Which of these attributes is the most important insofar as it acts as a catalyst of modernization? There is no definite answer.
Going by the experience of Western societies, these attributes occurred almost simultaneously, each feeding and reinforcing the other. The hub of the wheel of modernization in the West was industrialization which was set in motion by the growth of science and technology which, in turn, were the products of modern secular education. Generation of wealth was the consequence, and social and occupational mobility were concurrent phenomena. The question before the traditional societies in Asia in the Third World is how to kick start the process. Should they begin with industrialization and be content with haphazard emergence of other growth-inductive factors and wait for all the attributes to mesh over time in a new socio-economic reality?
Each society has to answer the question for itself. In our case, mass illiteracy has indeed been a major hurdle in our path to modernization. Also responsible for our being struck in the quagmire of backwardness, have been the practices and perceptions of management that we brought to bear upon the husbanding of our resources and the handling of our socio-economic problems. Today, management is a growing area of knowledge whose boundaries are widening all the time and a great deal of this knowledge can be fruitfully deployed in any area of human activity − for example, for running our schools and hospitals or operating our civic services and public utilities.
Will you, dear readers, mull over the fact that though our managers supposedly specialize in management tools and techniques, the degree that they get on graduating from management schools is Master of Business Administration. Why administration and not management?
Continued to “Founding Fathers of Management”