that time conglomerates did seem to dominate
the corporate world. But it became
clear fairly soon that increasing size
and diversity also came with some
disadvantages. Therefore,
conglomerates abandoned the notion
of being run as monolithic,
centralized organizations; instead,
they reorganized themselves into
several smaller, more autonomous
units. Like ITT the archetypical
conglomerate put together by Harold
Geneen others too have split to
become more manageable.
Subsequent experience has shown
that they thereby gained in focus and
efficiency.
Likewise, there certainlywas an era of
corporate imperialism. The East India
Company colonized India; several US
food companies treated many of the
Caribbean and Latin American
nations as captive 'banana republics';
and some mineral companies even
today treat large tracts of Africa as
virtually private property. But times
are surely changing. There has been a
reassertion of political independence
and sovereignty. As a result, even
large multinational firms that
command resources exceeding that of
some underdeveloped nations, have
to comply with both national and
international laws. Brazen
imperialism began to yield in the
middle of the 20th century.
The end of the ColdWar did certainly
help to open new markets behind the
'Iron Curtain'. Globalization also got a
new impetus from rapid economic
development in other parts of the
world most notably in Asia and the
Middle East. In order to make the
most of these emerging opportunities,
international companies are
competing fiercely with one another.
Therefore, I tend to agree that we are
going to witness more intense
competition in the years to come.
-
A lot has changed in the last
hundred years of corporate history.
What according to you, were the
defining moments of that history? In
other words, what were the strategic
inflection points / touch points
during the last hundred years of
corporate history?
I can think of several 'inflection
points': the separation of ownership
from professional management of
large firms; bridging of the gap
between management and unionized
employees; realization that the
customer is really the king;
recognition that firms are accountable
to a network of stakeholders rather
than merely shareholders; and the
emergence of global markets.
-
What lessons do the last hundred
years of business offer to the new
businesses?
Not many companies have survived a
century in good health. Most have
either wound up or have lost their
market ranking. Therefore, business
leadership cannot be taken for
granted by anyone. To remain a
leader, one must continuously 'read'
changing trends and adapt oneself.
Those who failed to change in time
have fallen by the wayside.
-
Globalization champions
advocated borderless trade and that
has led in some way to global
economic imbalances. The first eight
years of this century (2001-08) would
definitely go down the history as
watershed years for global economy
and global businesses. First it was
colossal fall of Enron, Arthur
Anderson, Tyco, WorldCom, etc.
September 11 attacks put countries
on high alert. 2007 saw the world
getting engulfed in sub-prime
mortgage crisis and with that a
complete washout of trillions of
dollars of shareholder wealth and
2008 has seen the global banking
crisis, oil price shocks and Food
price rises. Amidst all these, the
Central Banks have been put in a
quandary which has compounded
the exchange rate risks and
companies across the globe seem out
of place and clueless. What do all
these events signify? Should they be
looked at an isolation or are there
any powerful lessons for future
managers and CEOs when they
connect the dots? Do you think the
world was integrated for an
inimitable disintegration?
Unfortunately, much of business is
driven by the pressure to meet shortterm
targets. An obsession with
meeting them by any means and at
any cost has prompted managements
to adopt very questionable methods.
While they yield results that seem to
satisfy immediate goals, they
compromise long-term organizational
health.
To compound problems, individuals
seem to be motivated by excessive
greed. In their attempt to get rich as
quickly as possible, they put their
personal aspirations and ambitions
much higher than larger
organizational interests. Even boardlevel
executives have been found
guilty of gross misconduct. There has
been a wholesale decline in rectitude.
