February 10, 2012

The 99.97% man and the lessons we can learn from him!

Ever since the American economy went bust and the European economy has been going down, it’s sad to see my favorite magazine, The Economist, frantically trying to defend the wrong and go wrong by criticising the right. Time and again. Just a handful of weeks ago, in their frantic effort to criticize everything Chinese and everything non-market oriented, The Economist did a cover story called The Rise of State Capitalism (January 21-27, 2012). Basically, the story talked about how economies like China and even India are becoming more dependent on large public sector units and how this is bad blah blah. The obvious supposed scare is that public sector corporations are inefficient, have time overruns, invariably have cost overruns, have ingrained corruption and so on! The real scare is the growing might of China, of course!

Our group is into almost all kinds of consulting activities and we rarely come across a private sector company where an executive doesn’t ask for a bribe before awarding a big contract. Sometimes we’ve even found out that a competing firm has used sleaze to satisfy the client being prospected and thus has obtained the deal. From Enron to Olympus to Accenture, there is no dearth of large corporations which have made the most corrupt of choices. Large companies – whether public or private – always have within them certain ingrained issues. And what differentiates them from one another are systems and leadership. Under a different leader, the same GE could be the world’s best benchmark example while under another, in just a matter of a few years, it could be a struggling joke! The same it is with the public sector. If systems are put in place like the private sector, there is no innate reason why public sector corporations should be inefficient. And if systems go wrong, then you could even have a Reliance being rated worse than a public sector company to deal with.

As a management teacher, at least that’s what I have believed. That the former USSR failed or that China is nondemocratic doesn’t mean that the public sector idea is wrong. The only truth is that governments must know what to plan and what not to. A government, for example, has no business being in the luxury hotels sector; at the same time, in countries like India, the government not being in health or education is a crime. There are wonderful examples of public sector successes and one of them is the Delhi Metro Rail Corporation (DMRC)! It’s a case study of our times.

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10 comments:

Piyush said...

Public sector can be a huge success only if the govt takes some great steps to bring the needful changes.

mohit said...

The DMRC is truly a great example of the public sector success.

Kamal said...

when will India be free of corruption??

Manish said...

The govt knows what to do and what not to but they never act accordingly.

Abhas Ganguli said...

Great leadership indeed can make all the difference..

Kiran said...

people wanting bribes are found everywhere.

Diptimayee Nayak said...

Sad to see corrupted people all around us!!!!

sanjay said...

Very nice piece of work sir and very true as well!

Sanjana said...

Wish more people like E Sreedharan existed in today's world!

veerar said...

The four requirements are indeed necessary.A very fine piece.Congrats!A small thing about The Economist.It is a Rothshilds Publication,as are almost, all MSM in the USA and UK. Rothschilds bankrupt nations misusing Privatization,hence it is NOT surprising that The Economist finds fault with the PSUs.In India the adviser to the UPA on Divestment of PSUs is the Rothschilds!Mrs Thatcher was advised to Privatize British PSUs and the result is that the economy of the UK is in shambles.And the adviser to Thathcer on Divestment of the british PSUs?Yes,the Rothschilds.And MM Singh is very strongly suspected to be PLANTED by the Rothschilds.
Please google for:-
1.MM Singh and the Rothschilds
2.MM Singh the economic hitman
3.One World Totalitarian Government

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