By A.N.Das, S. Mankad, & H. Karthik 

An extremely turbulent world awaits Indian corporates at the dawn of this millennium. Several trends on many business frontiers are questioning the validity of the tenets that Indian companies managed by for most of the 20th Century. The environmental changes that will have a significant influence on the business environment are:

• Liberalisation and e-commerce, which will raise competition and dissolve economic boundaries.
• Rapid advances in all aspects of technology, especially computing.
• An expanding urban and rural middle-class with a greater propensity to consume.
• A deregulated trade environment and issues related to the impending WTO regime.
• An increased life expectancy and declining birth rates.

In the context of these changes, there are likely to be definitive shifts in certain elements of corporate strategy adopted by companies. With the advent of e-commerce and the disappearance of trade-barriers, geographical boundaries will become irrelevant in reaching out to customers. This, when coupled with India's efforts to liberalise, implies that the target market for Indian companies in this millennium will not be limited by national boundaries. Obviously, the reverse is also true: this will intensify competition for Indian corporates. The opportunities presented by the global market will be exploited by companies and managers who look ahead to identify and exploit opportunities across the globe. In the process, Indian companies will form strategic alliances with companies in other countries, or transnationals which possess complementary resources and strengths.

This will be a precursor to the emergence of Indian transnationals. Naturally, changes in investment policies, supply-chain integration, and cross-cultural HR practices will accompany such transformations. The purchasing power of the Indian consumer will be higher, and she will appreciate quality more than cost. This means companies that invest in building brands will be rewarded. This will be one facet of strategy.

This millennium, Indian companies will rework their strategies to focus on the global market, either by setting up operations in countries around the world, or by emphasising exports. Thus, several of them will upgrade from unbranded exports of particular products to making systematic investments in creating and nurturing global brands.

The WTO regime's TRIPS agreements and the desire of customers worldwide for quality will trigger the need for R&D-driven strategies. The absence of product patents presented Indian corporates with the possibility of reverse-engineering, and imitation in the past. This stifled innovation. But firms will now have to institutionalise a strong R&D orientation.

The strategies of companies will have to account for a significant growth in rural purchasing power. So, a larger brand portfolio with specific product-offerings for the rural customer, efforts to develop the rural market, and an all-encompassing distribution gameplan will have to be part of a company's millennial strategy.

The strategic shifts described so far are broad directions in which Indian corporates are likely to move. It is noteworthy that the path which a particular firm chooses to follow will depend on the environmental change s specific to the industry in which it operates. In addition, different players in the same industry are likely to react and respond differently to the same environmental changes.

But the context in which companies design their organisational strategies this century will depend not just on the external environment, but also on organisational dynamics. There needs to be a basic transformation in the organisational mindset, and in systems and processes. The many dimensions along which firms will have to track changes will force the senior management of companies to delegate strategic responsibilities down the hierarchy.

Indian culture teaches us to segregate right and wrong in watertight compartments, regardless of the context. This tendency, when extended to business, stifles the entrepreneurial drive of individuals. Employees fail to question the validity and effectiveness of processes from time to time, causing inertia in the organisation. This too will change. The re-oriented organisational responsibility structure which now emphasises decentralised strategy formulation will have to be complemented by redefined leadership. Thus, in the millennial organisation, leadership will no longer be a prerogative of the CEO. It will stand for envisioning, enabling, and empowering employees at all levels.

The infusion of this entrepreneurial culture requires a transformation in structures and systems to support decentralised decision-making. But the greater challenge lies in developing the leadership skills of lower-rung managers, by changing the way in which they think and operate. The factor that will contribute to the sustenance of this entrepreneurial culture by orienting the company to break from the past is dynamic unlearning. Dynamic unlearning requires a firm to look at processes, and benchmark them across companies, and across industries. This is called creative benchmarking.

This approach will highlight potential areas of improvement. Adequate improvements can, hence, be planned in advance. These improvements can be made in 3 ways: alternatives to, or modifications in extant management practices, adaptation of practices proven elsewhere, and in-house innovations. The Indian company of the 21st Century will be under pressure to grow or go. competition and rapid pace of technological obsolescence will leave little time for companies to respond especially if the competition already enjoys a headstart on several counts.

A.N.Dass, S.Mankad, &H.Karthik are second-year students at the
Indian Institute of Management, Ahmedabad

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