THE FALLACY CALLED PER CAPITA INCOME

For long economists considered per capita income as the index of human development and a countries growth. GDP might be an index in that direction but in the globalized world the view of per-capita-income has to be changed. I have always beleived a single pivot evaluation of any economy is in-correct and mis-leading. Multiple indices must always be developed.

For one the concept of per capita income is rooted in want and not in the setting of plenty. There can be startling exceptions under steady state of the economy. Per Capita income by itself is inappropriate in a knowledge economy. Per capita income was an appropriate index in the labour dominated organizations of yester years. Just evaluating countries and economies on this basis is misleading.

What then should be the index of measuring economies and their standing. Well it is important to understand that human beings are more human than a resource. A more broad based index must cover various aspects of human life and existence.

Firstly communities must be judged based on a relation ship index which largely revolves on the ability of various individuals to maintain the kind of relationships they are supposed to under normal circumstances and an example of that would be family relations. Any economy incessantly at strain on such issues can never be a developed economy leastly said. This would also encompass relationships at the work place and other social settings. Creating high relationship index is key to a better economy. Various societies vary in this context. Such an index tries to measure the level of conflict in social settings. Relationship has economic moorings; which means better the relations better the ability of communities to create and distribute wealth.


Secondly any community must be able to monitor the health index of its individuals not from the stand point of cure but from the intrinsic ability to avoid ill health. Ill health has its roots in wrong living simply said. The ability to mitigate the number of unwell people is key to a developed community. There are many fairly well to do communities in the world which may not be well off but well set on such fronts. The countries of the world which enjoy a high per capita income are not devoid of sick people of varying kinds. No particular reason can be attributed for such issues but adequate research mustt go in from time to time to evaluate overall causes for human being not fully well or totally unwell. Such instances on the rise increase costs and diverts attention which could have otherwise been put to constructive use.


Thirdly far from mere employment any society must be able to give its people occupations and not jobs. Income generated by individuals from vocations which they think need not have been fundamentally theirs is no income at all. Vocations must give a community psychic income to a large measure. People must not feel trapped in some form of vocation or occupation. There must be sufficient lateral ability for an individual to move to vocations that him him long term enrichment and development. This would mean many things. Constant innovations and definitions and creation of fresh oppurtunities of various kinds both by the state and individuals should be a top prerogative of planners and executioners of the economy.


Lastly any economy must have large scope for the creation and maintenance of micro enterprises as against the creation of large enterprises. The ability of so called developing economies to create and sustain such enterprises is what is making them note- worthy to the world. Micro enterprises may not have sustenance under several kinds of settings in the world. A large number of such enterprises spread over a vast geography has potential to contribute what an economy calls for. Through governmental lending or otherwise such enterprises must be encouraged and recognized. A country is not poor as long as the people see and feel the winds of policies breezing in the correct direction. A largely populous nation has one great asset---its people. Through collective actualization great economic results get begotten simply said. It is an explosive waiting to explode; larger the impact more inclusive of people it is. India has a country has seen in parts and in bits and peices such large scale development though lopsided in the recent past post globalization.





That per capita income is a fallacy can be seen in the vague satisfaction that the so called developed economies of the world had for ages in the way such pointers inclined themselves to learn too late that the developing countries of the world were more developed than they previously thought. The world must move away from one thing for sure and that is the treatment of humans at a fundamental level as a mere resource and any index so developed may have had relevance in the domains of the past and they need to look at humans as humans first and then as a resource. Conversely said any economic index must be able in toto to syncronise these two fractions in the best way possible. India as a country is criticized by the world for its infrastucture and roads. P( Even Jeffrey Immelt of GE did this on TV one though in the right tone and spirit) Progress is being seen on these sectors. In the final analysis it is not infrastructure or roads that singularly determine national progress. They form defanitely a component but side-by-side many issues most be addressed to ensure that the indiced of an economic kind that we humanity develop from time to time to meter our progress is not mis-inclined but covers all the domains it invariably has to.

WHAT AILS CORPORATE INDIA - RE ENGINEERING THE HUMAN FORCE

I have always felt something wrong with the way corporate India works. To a large extent success comes to societies when they organize their man power better. Human capital has always been more powerful than financial capital and the power to multiply financial capital lies in the organization and co-ordination of human capital. All our B School training notwithstanding there is a serious lapse in this front. Education seems to have done nothing more than provided a form of fixated labour who can execute task during their life time but drastically fail to see the whole and possibly the true picture.

To some extent the japanese proved to the world through years of systematic application what proper organization of man-power can achieve. The power so developed and applied by the japanese during successive years has brought many auto giants to their knees. B school education is futile if it only teaches students to look at things in discrete terms with no effort or ability at seeing the total picture. I see the concept of finding a job and getting placed as the mantra and end goal of many a student. Is our education distorting students and deforming them for a life time with a micro-focus which in turn effects their performance and approach to business.

The culture in most corporates no matter how distinguished is foul and and driven by fear and insecurity.What a pity. Corporates must bring in fiscal discipline . Fundamentally this means two things. At one end ensure that no one is underpaid and at thwe other that no one is overpaid. Both these dimensions have to be adequately balanced. Wrong behavior of any kind from any one must be punishable. This means largely the manner in which human beings at the work place behave and communicate with each other. Corprates must give adequate scope for people who would like to contribute to organizations through research and not just economical ends. In addition to tangible contribution companies must also have means and scope for logical contribution and lastly companies must have proper policies in the removal of employees and the circumstances under which they happen. no man must be kept in top management who does not necessarily take a long term view of things and does not have such orientation. Many organizations inadvertently suffer in the long run because of their collosal inablity in looking beyond the obvious. Years of wrong management will ruin business , some instantly and the others over a period of time.

Even the best of Indian corporates seem to have a scourge called groupism. Forming groups is healthy , but for what ends is the question. Whenever groups are made and designed for perfidious ends they destroy everything with it. You grow through organizations not because of the good work that you do but by the largesse of the group to which it belong. many managements are incapable of doung anything or are simply not aware of its existence. Groups are sub-marines that work without being noticed. People who lack competence at an individual level find it easy to partner with groups to get along. Well , nothing has been done on this front and to a large extent people who do not want to be part of such groups are in the receiving end.They possibly do not know what is up and the dynamics makes it impossible to pull on. Such phenomena may not be unique to the Indian situation alone but must be prevalent in many parts of the world too.

Human resources planning from a very conventional and stereotyped setting is of not much use to organizations , if it cannot get to the bottom of problems of organizations. Human Resource Development must understand that development of people can happen only through creation of proper setting. no doubt the conventional tools does take organization far but not far enough. the challenge today is in the creation of right work environments. For example , how should an employee be appraised ? First study his conduct through the organization and not the results. If the conduct has been violatory it demands appropriate action. Study the performance of a man both from tangible and intangible perspective. Corporates have to do this or else they land up loosing people who could have otherwise made laong standing contribution to organizations. it is through the force of conduct that good management is derives and it is through the power of conduct that business organizations get the natural and effortless ability to beget outstanding economic performance. I think there is no such concept as cheap labour but only a labour that is willing to do work and the other is half willing or unwilling.

Iam against the concept of providing targets and making people achieve them. targets are fallacious and they put organizations on a reverse gear. It does not call upon people to put in all their effort much above the call of duty but makes people do just enough and very often the wrong things. For example a territory might be crying for customer service for years and the person concerned is focussed on augmenting customers and the end result being that you loosing customers and endangering organizational survival.Intent is more powerful than performance.

I still beleive organizations should have some kind of people development indices. In the era we are entering business must look at challenges and issues through radically different perspectives so that organizations can handle the challenges of the new era. Technology and people will be the key drivers of modern economy but people as always will be the most important. Leadership is all about building people into organizations that perform. People development involves inspiring people into performance and not merely coersion.It revolves around making strong people networks. Chaotic situations will result if no effort is made in this direction.

The word performance has been largely misused by many business societies and seems to be a take-off from Drucker's concept of Management by objectives. The problem is the proper measurement of performance and the indices that has to be established. Very often performance evaluation is done on wrong objectives. Performance indices drive organizations through narrow alleys . I beleive that innovation is a very important component of business and organizations must not incessenty drive through narrow alleys where after a measurable period of time you loose sight of anything at all. The american auo industry seems to have reached such a stage and so will many organizations over a period of time who over focus on performance. A small hotel can be run around this concept because it is small and wants to be so; but not an organization aspiring to be big and remain big. Any organization that aspires to stay in the arena for long must essentialy develop a sound people policy, build the right kind of culture ,propagate and inculcate that culture and reform and transform people. The most important ingredient that a human being can bring on the table shoud be willing dedication and organizations must thereafter make use of that dedication for organizational good and take all possible steps to ensure that an employee's act in good faith is not abused or mis-used.

For long I have heard criticism about the way Indian public sector works. Many successful private sector enterprises called the public sector culture clumsy and not performance oriented. We have public sectors that failed and at the same time many public sectors that survived and prevailed. Many public sectors continue to be sick but can be revived; but for now people seem to discern strenghts in the public sector culture and approach in the abilities of the collective. Many larger private organizations need to ake a study of this unique culture ; both the shortcoings and adbvantages to bring about a re-engineering in the way they see and use peope.

Lastly there must be more vigorous participation of government organizations and bodies as a watch-dog in the modern era of the activities of the corporate sector. As of now they seem to be content with a birds-eye-view. This is insufficient. It must be a microscopic view. Every single corporate must come under a scanner with regards to all their human oriented transactions. Necessary mechanisms must be set up to monitor corporates largely around their manpower policies. Things will otherwise fo hay -wire but it is stil not late.
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CHINESE THREAT TO INDIAN BUSINESS

Is China a threat to Indian business; Well I think it is. Indian corporates and business community must get shocks and nightmares by the word China , but for the Indian customer it is a welcome proposition. Firstly China is a large country and has experience in handling various kinds of manufacturing, caters to a large population, works on large supply chains, seems to be technologically more advanced than India in various forms of transport and is a far better integrated set up than India. I have never visited China for that matter but that is what it seems and appears from afar. Added to these China has a land border with India and is conveniently perched vis-a-vis other countries. It is only a matter of time China extends its supplies into India resulty in jeopardy to many established Indian business houses. Secondly, China by virtue of these advantages can penetrate into Indian market pivoting itself on a platform of very low prices for many goods and services. How much China strategises on these fronts is not very well known but is relaxed, laid back and complacent but with the power and advantages to strike any moment. USA is the only antidote for china as seen from India but the US is in a war against terror and has an enemy at its front door which would drain resources and attention for long.If India were to become more friendly with china it would essentially alienate western forces and powers. There are huge and complicated equations emerging in the world polity and the market place incomprehensible for any one analyst. Ultimately the customer and the general customer would have a say as he will gravitate to directions where he gets value be it chinese , indian or any other country for that matter.

How can India combat this plausible chinese threat. Should it at all build defences? The answer might be yes unanimously to largely save indian business houses and activities.
Firstly India must be able to use the large scale manpower and resources avaliable across the country to the fullest extent. Secondly some basic form of education must be provided to all through some innovative delivery devices. the contribution made by one and all to the Ibdian economy must be recognised and appreciated. there must be a focus on price reduction at all fronts. Government must explore methods of support possible to various sectors. India must think more like a world citizen and partner with china in activities that would be of mutuual benefit. This threat has many encouraging sides which could be used by India to its fullest advantage.

TATAS AND SINGUR FIASCO

Nano is a great product both as a car and as a concept and should redefine trhe way people around the world drive. Well would the car influence industries in the developed world- it seems likely. The major auto players did not come up with such a product is a matter of concern to pundits of the auto sector pointing to the general under estimation of the power of mass markets and the way they dictate global business. Ratan Tata must be appreciated for his temerity to think one lakh and stick to it.

Nano is just the beginning. Pivoting on nano many far reaching changes can be devised in the auto and allied sectors. Small luxuy cars for example. It has to be seen how nano would change the mindset of people, customers and the world.

But; Singur has left many gasping and more so the Tata group and many right thinking people who would have liked the project take off as early as possible. Why the Tata group went to place like singur and burnt their fingers would be a matter of surprise for many in business. However thanks to the Gujarat government for providing the necessary support needed almost instantly. This event portrays Ratan Tata as a good ideator but naive otherwise. But he deserves praise for decision making in reverting from singur for good.

What lessons can business organizations get fro this incident..well many. Always use professional methods to evaluate locations and sites for projects. Government giving free land could pose many problems for projects . I think the gujarat government has sold land and not gifted it. Governments across the country also have responsibility in providing free land to genuine parties keen on genuine projects. Companies must never invest money into installation of buildings and machines until they are more than certain of future events. Take a no-objection certificate from key political parties of the state. The best way out would be to take a loan from the concerned governmental agencies itself for the project.