Credit-based approach to development is unlikely to be sustainable in the long-term, according to A. Sivasailam, Chairman, Amalgamations Group.
In his special address to the 36th national management convention of All-India Management Association (AIMA) here on Friday, he said the recent global economic downturn had raised questions about the sustainability of such a credit-based approach to development. Accepting the Distinguished Service Award conferred on him, he delivered a special pre-recorded speech. Mr. Sivasailam was dismayed that the country was losing thrift as a “value fairly rapidly”.
Thrift, he said, meant savings for both individual families and the nation at large for the “gainful and developmental investments of these savings”. Thrift, he said, also ensured monetary security for the evening of one’s life. The encouragement given to speculative investments by “means of policies that support such investment does affect the interests of small investors and the middle-class,” he said.
Lot of ground to cover
Touching on a range of issues, Mr. Sivasailam said “inventive efforts and protection of Indian IPR (intellectual property rights)” needed a concerted effort both within and at forums abroad. Wherever mind was applied to matter — in fields such as information technology, operation research, atomic research, space technology and the like — “we have shown that Indian mind has been ahead and continues to be so”. In matters of everyday life, however, “we fall woefully short,” he said. In this context, he pointed to issues such as eradication of poverty, raising the standards of living, provision of housing, sanitation and healthcare to low-income families. “Since all these involve massive efforts on a pan-India basis, it is essential that we put in place good management and governance at the base,” he said. He felt that India had a lot of ground to cover in this sphere in a systematic and organised manner.
Pointing to the shifting scenario in the global business environment, Mr. Sivasailam called upon policy-makers to be sharply focussed to ensure that “in this shifting scenario, our national interest is not forgotten”. He also called for returning to “our faith and trust in the use of bio-fertilisers and bio-pesticides, which will free the land and produce from the damaging and debilitating effects of harmful chemicals on our valuable land and also from affecting the health of the population by means of the produce”.
Pointing to the disturbances in prices caused by the introduction of futures trading in commodities, he said prices of essential commodities should not get distorted by allowing futures trading.
The theme of the convention is “Creating lasting value”. In his theme address, N. Srinivasan, Vice-Chairman and Managing Director, India Cements, said often time in the name of creating shareholder value, corporates tended to focus on short-term profits.
“Business cannot create shareholder value quarter after quarter when a company’s market capitalisation can be destroyed in a matter of days by factors outside anyone’s control,” he said.
According to him, the highest purpose in business “is to build lasting values for customers, investors/shareholders, employees and the community”.
Creating valuable business, he said, was about taking strategic long-term decisions that had a lasting effect. In the current context, there was a dire need for leadership at a higher level, he said. Besides the financial success, leaders in great organisations focussed on success of the people and also in creating motivating ambience, he said. One sure way to build lasting value was by focussing on core business, he said. He also laid much store by creating lasting customer relationship. “Always under-promise and over-deliver,” he said, pointing to the need to build trust. Mr. Srinivasan also emphasised the need for creating a brand that captured the essence of “your business”.
Dennis Sun, President of the Asian Association of Management Organisation (AAMO) who was the guest of honour, said that in this tumultuous economic scenario many were looking to Asia, if not to lead the way out of the crisis at least to be very much at the forefront to help drive a recovery forward.
“To sustain the status of market leaders, companies must continue to innovate and improve the effectiveness and efficiency of their management approach. Asia, as a whole, has enthusiastically embraced over the last decade or so the quest for greater quality. I believe this is one of the main reasons why many businesses in the region have been able to add value to their products and services over and above their competitors elsewhere in the world,” he said.
In his welcome address, Srinivasan K. Swamy, President of AIMA, expressed satisfaction that the national convention had come a long way from the first one organised in March 1971 in New Delhi. Elaborating on the current convention’s theme, “Creating lasting values,” Mr. Swamy said that this subject was to ensure a positive outlook given the current economic scenario.
He suggested a few steps that should be taken to ensure lasting values such as getting more relevant to the customers, being cost-competitive, getting people aligned to organisational goals and, most importantly, to be innovative.