While addressing the theme ‘Turning crisis into opportunity: The role of governance and reform’ at CII session Prof. C K Prahlad said, “Indian business leaders need to reinvent ideas to tackle the current crisis, and they are competent enough to do so. There is a requirement of innovative ideas at all spheres in the corporate sector to come out of the current crisis.” He was speaking at the CII National Conference and Annual Session 2009 in New Delhi on March 26, 2009.
While throwing light on the causes of the current crisis, Prof. Prahlad added, “One of the foremost reasons that led the corporate world towards economic crisis was the declaration of bankruptcy by the leading firms in the United States. Then there were many instances of forced opportunistic mergers that only added to decreasing confidence level of the market economy and consumers. When a number of business firms went on to declare themselves bankrupts and did not pay money to their borrowers, it ultimately resulted into a massive layoffs and affected the liquidity in the market.”
Prof. Prahlad raised a very pertinent issue of governmental bailout and said, “The corporate sector should not look for bailout options every time in economic crisis. This is not advisable because after reaching a certain point all major players in financial crisis will be burdened with governmental systems and then they will start feeling suffocation.”
While expressing hopes and instilling faith in the abilities of Indian corporate leaders, Prof. Prahlad said, “India can emerge as a laboratory of innovations to bailout the world from the current economic crisis.”
Prof. Prahlad suggested corporate leaders to focus on radical innovations and take long-term perspectives as the current crisis might not go long but its consequences would be seen for few more years. He gave utmost significance to corporate governance in tackling economic downturn. Prof. Prahlad urged business community to recognize the poor people as opportunities not burden. As he concluded, “These people at the bottom of the pyramid make a way for success for the corporate world.”
While highlighting the features of the current economic crisis, Prof. Prahlad said, “Volatility persists everywhere in the field of management, be it private business firms or the public sector. It has impacted more or less every country of this globe including India, China, the United States, and European countries. The volatility has compelled consumers to change their behavior. It has left his mark in the commodity markets as well. So before deciding any further step, we need to control volatility.”
“There are two significant capabilities required to tackle the current downturn: strategies and resilience. While making strategies, the business leaders should focus on radical innovation. There are some of the driving forces behind the new economic structure like social networks, sustainable development, and inclusive development.”
Emphasizing on the review of managerial demands, Prof. Prahlad said, “The first priority of today’s managers is to check volatility as this is the only way to prepare good ground for other activities to launch. Thereafter, things like quality, productivity, cost-effectiveness should be attended. The business leaders must focus on disruptive business models to assess the true nature of every problem facing economic crisis.”
