Monday, May 27, 2013

What Prevents Most Indian Business Men to Excel Globally ?

This blog is not about those Indian businessmen who made  global foot prints by acquiring large business firms in foreign lands. It is about those hardworking Indians who through sheer enthusiasm and dedication have successfully manufactured useful products and yet could not keep a noteworthy presence of their products in the market. Many of them either carry out their businesses on a low profile or proceed in a wavy manner or simply vanish from the scenes without any one noticing.

Some time ago I happened to visit a food product factory being run by a low key Indian business man in Central India. I had heard about his success in producing glucose in large tonnage using many kind of starchy agricultural products as raw materials. This industrial conversion involves many complex chemical processes and was a guarded industrial secret kept by the foreigners some decades ago.

His father who worked for the foreigners in the pre-independence era later ventured in to this field and set up a few factories in India to make this product profitably. His sons later continued with the business. Knowing about this story, I got a technical interest to see the functioning of this industrial unit hidden from normal public gaze somewhere inside the rural area of central India. My interest  perhaps was due to my formal training in chemical engineering. I told my intention to a friend who worked as a superintending engineer of the state electricity board who was officially connected with the work of this factory. My friend in turn informed the owner of this factory who agreed to receive me as a guest to his premises. Incidentally another friend of mine who worked as a leading banker told me about the financial status of this business man. According to him, this industrialist made huge profits from his business and was indeed a billionaire. 

So finally I reached the small town to the pre-designated spot where this business man came personally to receive me. I was surprised when I noticed him coming on a two wheeler to meet me and a four wheeler driven by his driver. The four wheeler was for taking me to his factory. I was taken around the factory by one of his knowledgeable supervisors and I learnt a lot about his factory and the processes. Later I was invited to his house to have lunch with him.

He was indeed a very average looking ordinary Indian and his wife a caring Indian housewife who prepared all the food herself for us. There was nothing there to show off the billions they possessed ! I had a long conversation with this man during the couple of hours I spent with him in his house. He was knowledgeable, successful and enthusiastic to try many innovations in his factory and production lines. He was already making huge profits. Those worked for him in the factory were apparently very satisfied as they were being provided with  permanent employment and the employer apparently was kind and considerate to them.

We talked about the Indian business scenario and many such things related to it. During the talks, he told me about the poor scope of business development, especially in those areas concerning with the processed food industry. The discussion pin pointed to the case of the tomato ketchup industry and about the failure of the case of a ketchup factory set up in Central India by a business group with much fanfare and its eventual failure. His point was that the processed food industry such as this, though had been successful in the western countries, was not so in India.

When he concluded I asked him a different question. I asked him the strength of employees in his factory and the highest pay that he was paying to his highly paid employee. There were nearly 1000 people working for him and the highest paid were only a few and they got something around Rs.10,000/- per month. No doubt, his employees were getting more than what specified by the government as minimum wages and they were a satisfied lot. But he as the owner made a neat profit of over ten thousand times that of the highest paid one got ! I told him that his employees were in fact 1000 consumers who could potentially consume processed food items like glucose and tomato ketchup but unfortunately their incomes are so low that they do not have any extra margin  incomes to indulge in such small luxuries. Whatever money they got is just sufficient to meet their essential needs !

I told him a scenario like this instead. What could have been the situation if he could have distributed, say 25 % of the yearly profits among his employees ? That would be an average Rs.25000 /- per employee per year and that would amount to Rs.25,000,000/- in an year extra in the hands of his employees that would get pumped in to the consuming markets immediately. Perhaps that would turn hands at least 20 times in an year making the total money in the market at a whopping Rs. 500,000,000/-

And that would make the market potential swell so that business men like him would be able to grab it back with their business acumen ! Imagine the government grabbing a neat percentage of that as the taxes !

Imagine the potential when the thousands of businessmen like him in India would do the same ! Then millions of extra house holds would be in a position to buy tomato ketchup, glucose products and such other things which otherwise they would not dare !

It is the simple trick of creating the markets ! It is the trick of mentoring the markets to grow for your own benefits ! It is the trick of inclusive growth !

When I explained this to him, for quite some time he was speechless ! Finally he said: 'Sir, I think you told me some thing that I haven't cared to think so far !'

Though he insisted that we should meet again in future, I could not meet him later. I also do not know whether he made any changes in his business outlooks later !

The point I wanted to make here is simple : Most Indian business men, though shrewd, are misers of the highest order when it comes to sharing of their profits with their employees and shareholders. Even those in the government are also not better when things like giving out come for consideration.

Many of them fear that a proliferation of affluent people in the country would make things worse for them ! Of course it is a baseless fear !

Money accumulation in the hands of a few people are not going to make a prosperous state. Let it happen for motivational purposes. But at the same time, it should not be by depriving the majority. A system where business profits are shared to a large number of people would ensure a society with more people with higher purchasing power. A society where the purchasing power of people are high would grow faster !

It is all about creating more and more economic activities. More economic activities means more employment and more opportunities for innovation and development.

Wake up Indian business men !

There is nothing you would gain by accumulating wealth for yourself ! There is no guarantee that your accumulated wealth would be of any gain to your descendants ! Accumulated wealth in a deprived society is potential danger !

But there is much for you and your descendants to gain if you voluntarily share a portion of your accumulated wealth with the people who associated with you to make your profits !

Every extra rupee that comes into the hands of more and more people is going to make the markets swell and the country richer !

This is just one aspect of spreading prosperity. Being in leadership position of wealth and power, you are also in a position to pull talents to perform much better. That is called mentoring !

For that you should learn the art of developing organizations built up on compassion, empathy and of course character and not organizations built up over inhuman robotic mechanisms !

If you learn these things, there is nothing that can stop this country from becoming another USA or Japan !

If you do not adopt these, your success would be short lived even when you have billions in your accounts !

Should I tell more about the reasons of failure of the Indian businessmen and the Indian society ? You may not publicly accept those failures if you sit there with your muscles tightened !

It is just a food for thought !


[Please also take some time to come back and read my previous  blogs and blogs on other topics as well. You can reach to those by clicking the links in this page. I would be happy if you take some time to express your views using the comments facility down below. Please  use the same comment facility to interact with me for any doubts or clarifications that you might have. Here is the page link which gives the   list of all my blogs  where you can open all my blog titles.]




3 comments:

  1. Good informative and thinking post.

    Devi
    Funny Tees

    ReplyDelete
  2. I was searching for such a good article on pre-engineered homes.It was 4 months ago i came across such a website of a mexican based steel home company named 'sunway homes'.I started thinking on the same matter years ago.As you have said there are lot of barriers for distroying traditional house building practise in india.If it is made possible that will be great achievement for our mother nature quite larger than our proposed technical aims.I have a great desire to work on that field.But dont know whether it will happen or not.
    sir, i want to know more on the price matters of steel structures and its safety aspects...if you can provide information on this,i would be pleased.

    anyway thankyou sir...thanks a lot

    ReplyDelete
  3. Hai friends!
    thanks to sharing the informaton it's very useful

    if u want pre engineered builders in Chennai
    kindly visit our website http://jaydev.in

    ReplyDelete

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