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BW Businessworld

Q And A: ‘Companies Should Do Well By Doing Good’

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Why this book and why now?
I was very much concerned about the fact that India is seen by multinationals as largely a source of talent. Very few have made India matter from the point of view of revenues, profits or growth. And India’s reputation has been on a decline. Many MNCs have started doubting India’s reputation as an investment destination and whether they should make serious, long-term commitments here. In 2010, I wrote an article for HBR about this and they said it could become a book.

You call India a defining choice...
Most emerging markets end up looking like us – in terms of bureaucracy, corruption, tax issues, volatility and uncertainty of policies, etc. So, I say India is an archetype, and succeeding in this market is a litmus test. It is a defining choice because if you choose to ignore India, you are probably going to have similar problems in all emerging markets and more than likely you will not do well in any emerging markets. On the other hand, I have seen many companies that built their capabilities here and those have helped them in many other markets.
 
Again, it’s a choice. You can choose to ignore it, or you can choose to bet on it. China is no longer a choice. Which CEO is going to say, ‘I am not going to go to China?’ It doesn’t take a genius to say, ‘Our company needs to be in China.’ But it takes an extraordinary individual to say we should not ignore India; a country of 1.2 billion people cannot be ignored without consequences.

But as Kenneth Galbraith says, India is a functioning anarchy...
Yes, and it is going to be one for another decade and a half (smiles). But there have been a lot of improvements. Of late, the UPA II, however, has done much to make it much harder than necessary for MNCs in India.
 
How should an MNC approach India in order to conquer it?
First off, they should not come with the idea of conquest (chuckles). Because things will go wrong. The country will reject you. For instance, Coca-Cola and Pepsi had huge problems in India 10 years ago. If somebody wanted to teach multinationals a lesson, he would pick Coke, Pepsi or McDonald’s. Now, the pet is Walmart. Monsanto has always been the perennial favourite. So what did Coke and Pepsi have to do? They had to localise. And they did well.

MNCs should say: We want to contribute to the development of the country and do financially well too; we want to do good by doing good.

(This story was published in BW | Businessworld Issue Dated 09-09-2013)