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Management Competencies For the 21st Century
With the emerging of specific challenges, and the crucial role of businesses in that, we can derive the new management competencies urgently required. There are four inter-connected areas of such competencies - knowledge, attitudes, skills and habits. The MBA and EDP programs must be completely updated, accordingly.
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Formal management education, through a classic two-year full-time MBA program, began in India in the 1960s. The first batch, at IIM Kolkata, where I taught for some years, was admitted in June 1964. Since then, there have been many changes in the Indian and global macro environment. These are summed up in the acronym PEST (Political, Economic, Social, and Technological) aspects of the environment.
These, together, impact the business environment. Along with such environmental changes, the management curriculum has also been evolving. We are now at a major turning point. There are new challenges. They will require managers with new competencies. Our management education content will also have to rise to these challenges.
Indias 21st century challenges
Among the many challenges, we need to carefully look at, and face, four mega challenges. These are climate change, the rise of China, increasing inequality and the threat to the basic values of democracy, with a regulated, competitive market.
National and global formal discussions on climate have been taking place since the Rio Conference in 1992. Governments, businesses, consumers and people have been slow to act. Climate change, warming and deterioration of our environment have been accelerating. During the COP 26 event in Glasgow, in November, all countries were asked to make fresh commitments, to achieve the goal of limiting warming to an increase of only 1.5 degrees. India has made five commitments, including net-zero by 2070, and four others to be achieved by 2030. These have implications for Indian businesses, management education and certainly B-Schools.
China has emerged as a huge challenge to India in economics, military, technology and politics. We have started a two-prolonged response -- Atmanirbhar Bharat (self-reliant India) and alliances with leading democracies just as the Quadrilateral Security Dialogue (Quad) in the Indo Pacific region. These national policies create new opportunities and threats for Indian businesses.
They require appropriate new strategies, organisation, human resources, systems etc. Inequality tends to rise in almost all countries, irrespective of their political and economic systems. All governments pursue high GDP growth. It does bring many benefits. But it also accentuates inequalities. Only a few countries in Europe, especially in Scandinavia, have got political and social acceptance of high taxation and redistribution. Covid-19, and its subsequent variants, Delta and now Omicron, have further widened the gap. Inequality creates dissatisfaction with democracy and instability.
The values behind good governance & rules-based world order are being challenged by China and its allies. Large businesses are accused of tax avoidance on a vast scale. Big Tech is seen as a threat to privacy & sometimes even national security. Executive pay, perks, bonuses, etc. have risen exponentially. There is unemployment and under-employment.
Role of business
The government has to formulate and implement the right policies and schemes to deal with the above four challenges. Civil society also has to change its consumption, lifestyles, waste disposal etc. practices. The third partner, the businesses in India, have a critical role in helping India meet these challenges.
On climate, all companies must aim to become green businesses, as fast as possible. They have to modify their technology, products, processes, materials, energy, water etc. to reduce and eliminate their carbon footprint. They have to help their suppliers and distributors to go through similar improvements. They have to guide customers and the public on green values and skills. Together, they have to create a green economy. They should adopt ESG (environmental, social and governance) policies.
They have to contribute fully to help India fulfil its commitments. Concerning China, Indian businesses should immediately reduce over-reliance on imports from China. It should also increase its exports to China. There is scope given our adverse trade balance. An even bigger opportunity and challenge for them is to expand the domestic market by high volume, low margin pricing. Further, they should make India a manufacturing powerhouse, and export to the whole world. On inequality, businesses should invest in their human resources, upskill them, raise their productivity and pay them better. They should also follow progressive social policies.
Finally, businesses should follow dharma, a fundamental human value. Dharayati iti dharma. That which upholds institutions and society is called dharma. Business needs to provide leadership in two ways. Dharma samsthapanam, establish dharma. And, samrakshanam, protect dharma, in the face of all temptations and threats.
New management competencies
From the above identification of India’s four vital challenges, and the crucial role of businesses, we can derive the new management competencies urgently required. There are four inter-connected areas of such competencies -- knowledge, attitudes, skills and habits. The MBA and EDP program contents have to be updated accordingly. One must have knowledge about the major issues India is facing.
The attitudes and values need commitment to high standards of productivity, quality, innovation, human development, mega projects, ethics and behaviour. In context to skills, massive scaling up, national and global marketing, service, delivery, management of internal, organisational conflicts, partnership in social development, communication and leadership are needed. Also, habits must evolve from those of an inadequate Karmachari to the divine habits of a Karmayogi.