Impact of Globalisation on Business and Management Education
The business sector in India is highly promising in the present scenario. The impact of globalization has changed the business procedure in India in terms of psychology, methodology, technology, mindset work culture etc. Newer challenges, newer opportunities are day-by-day in front of Indian industries, which are profitable and prospective.
The fundamental scope of doing business in India is lying with its people. The huge population of India has created a large unsaturated market of consumers. This is one of the reasons why global companies are very much interested in doing business in India. In the post globalization era this scope has increased immensely for global multinational companies as Government of India has also played a very crucial and supportive role in this respect through liberalized policies and legislative structure.
Let us glance through a few situations that has arisen in India post liberalization
1. Shifting of Agriculture worker to industry sector
2. Urbanization â€œPeople are shifting from rural to urban areas.
3. Opening up of trade market â€œexport import boom.
4. Big open saturated market for products
5. A growing market for high quality and low price product
6. Gradual increase of organized retail chain.
7. Growing number of Merger and Acquisitions.
8. Lucid license policies for overseas Multinational Corporation.
9. High growth rate is showing economic prosperity in India.
10. Indian Market leaders going global.
But there are certain negative impacts occurred aftermath the globalization impact in India, which are as follows â€œ
1) Unequal distribution of wealth disparity in income.
2) Rapid privatization government driven public sector units are on sale.
3) Uneven growth in respect of different sectors.
4) Extreme mechanization is reducing demand for manual labours.
5) Both employee and consumer exploitation are on rise by private sector.
Scope of Indian Industries in the post globalization eraâ€
Is India really benefiting from globalization, liberalization and market reforms post 1991?
Yes in a big way says the Bombay Stock Exchange, yes of course say big motor companies like Maruti, Toyota, Ford and General Motors who have seen business boom like there is no tomorrow. Yes say white collared employees of BPOs, IT Service Companies, Pharmaceutical giants, and Manufacturing industries. Wait a minute don't you see a chord here...the only ones saying yes seem to be people from the middle and upper middle class families with college degrees and good jobs. No say farmers who continue to commit suicide and for whom the tomorrow holds a bleak future as the events in Nandigram and Singur show, no say unskilled labourers who continue to toil in poor conditions with very little pay, no say semi-skilled labourers for whom no reforms in archaic labour laws mean that manufacturing and engineering industries continue to limit hiring.
Reforms and the Corporate Sector
The corporate sector constitutes a dominant part of industry. Financial sector reforms along with the development of the capital market are changing the structure of corporate financing. This has led to a separation of ownership and the management and has given rise to the issue of corporate governance, among others. Corporate governance essentially deals with the ways of governing the corporations so as to improve their financial performance. The need for governance arises mainly due to the divergence of interests of different constituents of corporations like shareholders and managers, which offers scope for mismanagement and misappropriation of funds. This is important because poor performance may lead to corporate bankruptcy. Mismanagement leading to corporate bankruptcy has become an important issue in many economies including the developed ones. In this context, it is proposed to carry out a study on the issues of corporate financing, corporate governance, and corporate performance/ bankruptcy using firm-level data.
Openness, Wages and Employment in India in the 1980s and 1990s
Using a multi-sector simultaneous equations framework, the relationships between employment and wages to growth of productivity and output will be studied. For the study, the contribution of exports and imports/import substitution to growth of output will be estimated for different industries. This will make it possible to derive the effects of India's openness to trade and technology imports to growth of employment and wages in different sectors of the economy. A related question proposed to be taken up for analysis is how economic and trade liberalization affects the income of primary factors of production, particularly through its effect on economic rents. How the elimination of rents shows up in the estimates of total factor productivity is another question to be pursued in this context.
Disinvestments and Industrial Performance in India
It is proposed to examine the process and extent of disinvestments in India in the 1990s. A particular question of interest is whether or not there is a better performance in the divested Public Enterprises (PEs) in India and the extent of such betterment in performance. Performance is to be considered with regard to profit margin, growth of investment and output, technological development and growth of productivity, employment and the inverse of debt-equity ratio. It has to be further examined whether higher profitability, if any, is because of greater monopoly power after disinvestments.
Mergers and Takeovers
Mergers and takeovers have become an important phenomenon of Indian industry after the reforms. There has, however, been very little research on this topic in the Indian context. A study of mergers and takeovers among Indian industrial firms is therefore proposed to be undertaken, with a particular focus on how the merger /takeover affected the performance of industrial firms.
Studies will be undertaken on industry-urban nexus exploring the possibilities of productivity-augmenting effects of urbanization on industries, and thus enhancing the competitiveness of firms located in large urban settlements relative to their counterparts in medium sized and small towns. Besides, the associations between infrastructure investment and industrial concentration, and the possibilities of convergence are to be looked into. Research in this field would constitute questions relating to methodology as well as analysis.
Impact of Technological Progress
Economic reforms have created a condition in which firms are under great pressure to improve their technology. In this context, studies are proposed to be undertaken on the impact technological changes have on industrial firms in India. Particular issues to be examined are: the effect of technological change on labour market, and the contribution of technological change to growth of firms. A major focus of research will be on the effect of adoption of information technology on productivity, competitiveness and employment generation in Indian industries.
An overview of Indian business sector:
India has adopted domestic policies and institutions that have enabled people to take advantage of global markets and have thus sharply increased the share of trade in their GDP. India has been catching up with the rich ones â€œ our annual growth rates increased from 1 percent in the 1960s to 5 percent in the 1990s. Now it is above 8%. Indians saw their wages rise, and the number of people in poverty declined.
Industry wise, the software and services sector lead the mergers and acquisitions charge overseas but now this list includes both old and new economy industries like auto ancillaries, pharmaceuticals, telecom, agro-chemicals and steel. There are thus no stereotypes that only new economy companies are invited to the mergers and acquisitions ball or that only the blue chip companies are partaking of the action. It is more democratic as smaller auto ancillary companies are also in the fray.
Thanks to the easier external profile, at this time, India clearly tastes the fruits of globalization and the current liberal overseas investment regime will take the process forward. However, a far more important use of our reserves is for higher domestic investments. There are no prizes for guessing that it is only with higher investments that there can be faster GDP growth. In next two-three years, India must also work on improving delivery of education and health services. Indian government must provide social protection to a changing labor market. In addition, that the changes in climate due to industrializations will be especially burdensome for developing countries and poor people. There is broad agreement among scientists that human activity is leading to potentially disastrous global warming. India must demand effective international cooperation to address this problem.
Strategies to incorporate competitiveness in Indian business
In order to impute competitiveness in the Indian business domain following strategies can be adopted:
* Infrastructure improvement up to global standard
* Development of transportation facilities so that least time is required to move from one place to another; it also reduces the carrying cost
* Government initiatives to advertise opportunities in different field to attract both Foreign Direct Investment (FDI) and Foreign Portfolio Investment(FPI)
* Linkage effect-adaptation of backward integration for saving cost and time with a look to improve supply chain
* Unbalanced growth strategy to facilitate growth
* Making direct link among educational institutes and business firms to provide direct industry interference in large scale with practical approach to students
* Guild formation by the firms of specific industries to discuss, analyze about advantages, disadvantages, opportunities etc. different dimensions of that particular sector standing on a common platform
* Co operation among domestic and foreign companies to explore new opportunities in several fields of operations
* Technological up gradation in industries
* Application of Just In Time(JIT) technique in business
Government initiatives to support competitiveness
Government of India is playing a very pivotal role to support competitiveness in Indian business. It is working and there exists room for many things to do like the followings:
* Renew and modification of ex-im policy
* A more comprehensive competitive policy
* Removal of red-tape barriers
* Increasing facilities in Special Economic Zones (SEZ) and also increasing numbers of SEZ giving ultimate priority
* Inauguration of free information bureau to provide important up to date information regarding different fields of operations in all the states
* Advertising opportunities (e.g.- tourism) in different sectors
* Free riders prohibition
* Facilitating mergers and acquisitions
* Subsidizing areas of scarcity and finding alternative strategies for further development.
Role of management education in the post globalization era
Management Education in India is at cross roads. With the dawn of new millennium, while there was phenomenal growth in the number of B-Schools, the benchmarks were also on the rise. The Globalization doesn't seem to have happened just to the Industry but also to Indian B- Schools. The expansion of B- Schools (in Number) doesn't look to be in line with the challenges posed by the globalization of Indian Management Education.
Of the 1500 B- Schools India currently has, there might be around 200-250 schools, which might stand a standard test of quality. Should the globalization of Management education India become a reality in terms of free movement of faculty and freedom of operations across the globe, the Indian B-Schools might have to take many initiatives to stand up to the challenge. The solution seems to be,' While the affiliated colleges are needed to be more autonomy-both financial and academic, the autonomous institutions have to strengthen their curriculum'.
For the affiliated colleges to upgrade their competencies, the Financial Autonomy will be the Key and academic Autonomy, the major Driver. The established institutions have to strengthen their curriculum by improving the standards in terms of Faculty & Research, Industry Interaction, Use of Technology and Case Method.
The words 'global economy' are on everyone's lips today. From aggressively successful entrepreneurs and steel magnates to bio-techies and event management experts, everyone's talking about expanding their businesses across continents.
As more and more well-educated and well-equipped talent emerges, the task of talent selection becomes even more complex. Companies find it increasingly difficult to identify and zero in on the right candidate for the right job. The onerous task of hiring the best will become more and more difficult; the situation will be exacerbated by the requirement of greater numbers of people 'on-the-job'.
Opportunities to students
Traditional, time-tested avenues of employment making way for newer opportunities and career paths, and today, most students are faced with a bewildering array of choicesâ€of colleges, study subjects, fields of specialization and methodologies. Students are faced with the unenviable task of having to make choices based on popular opinions or trends. Very few, if any, make choices based on potential and real aptitude. This means that finally, most new entrants in the professional field are there because they hope that they are in the right place and not necessarily because that is what they like and are good at doing. Identifying one's own potential and true mÃƒÂ©tier is, therefore, based on experience as well as trial and error.
Apart from this, we will find that with newer seats of higher education opening up across the world, the task of getting oneself noticed by potential employers becomes more difficult. Highlighting one's abilities and hidden or unique strengths becomes even more crucial in the race to stand out from the crowd. Graduates from institutes located in unusual geographies will be hit even harder, with a new class structure based on one's graduating institute rather than one's merit emerging. Both companies and job seekers lose in the ensuing chaos. As companies resort to greater eliminatory tactics, they run the risk of letting real talent slip through the employment net.
Finally, out of the chaos will emerge order? In a truly global economy, talent seekers from across the world will capture talent from across the world. In a truly global economy, there will exist a single, definitive benchmark, providing a standard methodology to recognize the quality of the human resource. In a truly global economy, external trappings will not matter, what will matter is potential and aptitude. In a truly global economy, the ability to contribute to a global business will be crucial as geographical boundaries to hiring get blurred. In a truly global economy, the playing field will be flat and level, providing opportunity to all, based on true merit.
The new dimension
The emergence of such a new dimension has already begun. Companies are feeling the need for global standards to benchmark human resources, and academics are encouraging the use of merit-based candidate selection systems. India's position as a lead contributor to the global IT human resources pool will need to be supported by the adoption of global standards for talent selection.
It is out of this need that a council of companies, hiring experts, technology experts, psychologists, government agencies and test development experts came together and set up the Professional Aptitude Council. With a charter to develop and administer global, industry-standard examinations on behalf of the IT Industry, PAC helps test skills and aptitude to make a highly predictive assessment of a person's ability to perform in an IT job within a global business setting.
At the time of independence, Indian economy was developing and hence we required bureaucratic management skills. However 50 years after independence, the Indian economy has become more mature and hence we require entrepreneurial management skills. Our management schools have failed to meet this challenge. Therefore there is a need to revamp our management education.
Growth of management education
In 1950, the Department of Commerce of the Andhra University Started the first M.B.A. programme in India. In 1963, Indian Institute of Management, Ahmedabad was set up in collaboration with the Harvard Business School. The 1950s and 1960s witnessed the growth of commerce education and 1970 and 1980s witnessed the growth of Management Education in India.
There has been a tremendous growth of management institutes in our society. Every year about 14,000 students pass out of management schools. Keeping in mind the demand, the supply is very meager.
Management courses have become 'Academic Courses' rather than 'Professional one'. Management Institutes, barring a few exceptions, have reduced to commerce colleges. There is an urgent need to restructure management education to meet new challenges of 21 Century.
Glimpses of 21st century â€œthinks globally
Alvin Toffler in his famous book 'Future Shock' Says " To help avert future shock, we must create a super industrial education system and to do this, we must search for our objective methods in the future rather than the past... Education must shift into future tense."
New Management Education- Act locally
keeping in mind the future scenario, re-engineering of management education must be done.
1. Our future global manger would require the following new skills.
* Information Management Skill
* Information Technology Management Skill
* Decision- making in very dynamic environment.
* H.R.D Skill
* Innovation/ Credibility
* Service Sector Management Skills
* Time Management Skills
* Stress Management Skills
* Environment Management Skills
* Customers Services Management Skills
Management schools will have to develop these skills among students.
2.Management Institutes will have to introduce new Service Sector Management Courses, like Travel and Tourism Management, Hospital Management, Construction Management, Hotel Management, Consultancy Management, NGO Management, Advertising Management, Banking and Insurance Services Management, Farm Management etc.
3. Needless to say, courses should be need based and syllabi should be changed periodically
4. Lack of specialization is one to the problems of our MBA programme. MBA student must have specialization at least in one discipline.
5. Management is a performing art. Thus efforts must be made to imbibe work related values.
6. Management education must be made 'Mass Education' rather than the 'Class Education' and that too, without compromising on quality.