‘To succeed Indian firms need home-grown strategies, and not ape the West’

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MBAUniverse.com News Desk |
July 25, 2016
An alumna of IIM Ahmedabad and IIT Kanpur, Rajnish Karki, in his first book, Competing with the Best, talks about key Strategic Management challenges facing Indian companies in an exclusive interview with MBAUniverse.com

An alumna of IIM Ahmedabad and IIT Kanpur, Rajnish Karki, in his first book, Competing with the Best, talks about key Strategic Management challenges facing Indian companies in an exclusive interview with MBAUniverse.com

In an exclusive interview with MBAUniverse.com, Rajnish Karki, author of the recently released book ‘Competing with the Best – Strategic Management of Indian Companies in a Globalizing Arena’ talks about Strategic Management and its importance in today’s scenario. Karki runs his own research and advisory boutique specialising in strategy and organisation design. Equipped with a doctorate in Strategic Management from IIM Ahmedabad and bachelor’s degree from IIT Kanpur, he has had the honour of teaching at several leading management institutes like the IIM Ahmedabad and Lal Bahadur Shastri National Academy of Administration, Mussoorie.

Q1. What is the central idea that your book is focusing on?

Indian corporate sector is at a stage where it needs to compete with the best, as any company of significance would like to be present and carve a position in the arguably one of the most attractive markets in the world. In my book, I have essayed two questions and have put across ways to answer those questions. The first question is: How should Indian companies compete with the best? And the second is: Why is Indian strategy thinking and research is still dominated by western concepts?

Strategic Management as a concept has seen a shift in every ten years, largely because of socio-economic changes. We can compare today’s Indian companies to the Japanese companies of the late 60s. During the early 70s, Japanese companies underwent a huge change. They started working on their own ideas, on their own concepts and strategies. And that was when their real growth started. We in India, too, need to generate our own strategies and concepts in keeping with our economic as well as cultural environment. Indian companies need to develop and work on India specific ideas. They need to evolve and transform. This is what my book delves into.

I have argued in my book that there are four basic strategies possible for an Indian firm: India-focussed configuration, which is illustrated by Bharti till a few years back, or Pantaloon; India-diversified configuration, ITC is a good example; Global-focussed configuration, Bharat Forge is a good example here; and finally, Global-diversified configuration, Tatas or Mahindras will fall into this category. Sometimes it can even be a mixed-configuration.
So my point is Indian companies will have to consciously choose which of these strategy is likely to work for them and why.

Q2. What are the new trends in the area of Strategic Management?

There is a greater realisation now that there is a world beyond US firms. I was at Cologne, Germany in October 2008 to attend the Strategic Management Society (SMS) annual conference. This shift was clear at this forum. For the first time, the SMS planned a conference in India and China. This was a remarkable decision. A special SMS conference was held in India during December 2008. Also, the whole structural problems in the US have raised quite a few questions on the fundamentals of strategy approaches evolved there. Internet, too, made a great impact on strategic management. A lot of internet-based strategies have been toyed with in recent times.

Q3. How has the discipline of Strategic Management evolved over the year?

Globally, Strategic Management thinking has seen a significant shift in every 10 years or so. In the 60s, we saw the era of diversification, underpinned by the SWOT analysis. Portfolio Management was a key focus area during the 70s. The 80s was obviously dominated by Michel Porter’s Competitive Advantage. And in the 90s the focus shifted towards the Core Competence of the firm, rather than diversification and this was led by CK Prahalad. So the field is constantly under redefinition, as per changing socio-economic context.

Q4. What role Strategic Management area has for MBA students?

Strategic Management is, according to me, perhaps one of the most important subjects considering today’s scenario. Especially for the students who are planning to go into consulting, investment banking, private equity and funds, a thorough understanding in this area is a must. But, I think, Strategic Management is a difficult thing to teach to 22-yr-olds. It requires a lot of mental bandwidth.

Q5. So how should a business student excel in understanding Strategic Management?

The student should first of all have a fairly good understanding of functional areas like marketing, finance, HR, operations and so on. Then, understanding of concepts and applications of micro-economic and macro-economics is important. This sets the foundation for understanding Strategy as a subject.
The best way to really understand Strategic Management is through case studies. Position yourself as a company’s CEO and ask yourself what is it that you should do to take the company to the next level. This will help enrich the understanding to a great extent.

Q6. We would like you to talk about your days at IIM Ahmedabad and how have things changed since.

Ah! That was long ago. I came to IIM Ahmedabad after completing my chemical engineering course at IIT Kanpur and a few years with the Tatas. I enjoyed my life at Ahmedabad thoroughly and I got to learn a lot there. The place not only imbibed professionalism in me, but also enriched me as a person. We had professors like Dr. Pradeep Khandwala who taught us about creativity and personal leadership. Since then, I have built my own path. I had the courage and I am happy that I took my own decisions.

But life has changed a lot at business schools nowadays. When we graduated and became managers, we felt there is still a long way to go and a lot of experience to gain. But now, they think they are already there!

Q7. What will be your advice to the next generation of MBAs? 

My advice is that if you are joining a company and want to have a bright corporate career, you should have a long-term commitment. Try and be a little more patient. Don’t try to become the CEO on day one. You will have a lot of opportunities and a lot of chances to prove yourself. I have seen a lot of people grow. I think that each and every MBA should, at least once, consider starting a new venture – the earlier the better. It’s never too late.