When India’s two leading motorcycle makers, Bajaj Auto and TVS Motors, compete with each other, the consumer benefits. But when they get drawn into a battle of words the country’s pride takes a beating.
Featuring among the top three in this high volume segment, that includes Hero Honda (an Indo-Japanese joint-venture), one remarkable thing about Bajaj and TVS is that they are both wholly Indian owned. I am sure this is something which makes every Indian proud and so it came as a surprise when, in the first week of September, soon after TVS showcased its Flame motorcycle, a Bajaj Auto official got quoted in the media saying that his company would sue TVS for infringing on its DTSi (digital twin spark injection technology) know-how which allegedly had been replicated in the new bike by TVS. TVS countered this by saying that it had not copied but developed its own CCVTi (controlled combustion variable timing intelligent) engine with help from AVL. A series of claims and counter-claims were exchanged in the media primarily pertaining to the issue of patent.
The thought uppermost on my mind was that Bajaj Auto should not have jumped the gun and run into the media's arms with its allegation. The topmost persons at the helm of both the companies are certainly not strangers to each other and could possibly be members of common trade bodies and definitely a part of the Society of Indian Automobile Manufacturers (SIAM). Someone at Bajaj could have picked up the phone and cut across anger to speak with a top functionary of TVS or, as one of its roles should be, to ask a common trade body to mediate on the issue about which it was so peeved!
Blessed are those who are peacemakers and, to his credit, that is what Hero Honda's Brijmohan Lal tried to do by bringing Rajiv Bajaj and TVS' Venu Srinivasan together, to at least pose with him for a photo opportunity at the recently-held conference of SIAM, and thereby signaling that peace could be achieved even though through mediation!
Further, TVS' statement clarifying that Bajaj's patent was for something altogether different, made one wonder how much knowledge on IPR in general, or access to information on patents in particular, companies have in India, while on the other hand competitors amass product knowledge by stripping each other's products after they have been launched.
The series of acrimonious exchanges between the companies in the media, I am sorry to say, have not only hurt the image of both companies but may have contributed effectively for many of the world's leading copycat countries to laugh at us.
There have been several instances of Chinese companies that have been taken to court for IPR infringement and Bajaj had itself rightly initiated legal action against a Chinese company sometime ago. However, have we ever read or know about a Chinese company suing another Chinese entity for IPR infringement? We keep doing a SWOT analysis between India and China but do we realise that one among the many areas the Chinese are ahead of us is in their sense of a common purpose arising from deeper nationalistic sentiment that cements greater unity among its people.
I think if there is one area where India can lead over China then it in transparency and that is what most overseas businesses would like us to believe when inevitably a question is raised on how they compare doing business with both countries. Indian companies should leverage on this asset in many ways and with one of them being a clear understanding of IPR issues and amassing information on who holds what IPR. Just like the sensitivity of having HR or corporate communications departments within an enterprise is increasing, companies will need to realise the value of investing in the creation of an IPR department.
This department besides playing other specific roles could also become an important instrument for preventing occurrences of friction, as the one recently seen between Bajaj and TVS, and also strengthen India’s image of respecting not just its own but also what others possess.
(Published in Autocar Professional magazine)
Thursday, September 20, 2007
Tuesday, September 4, 2007
Getting culture right
To hold some knowledge of a country’s history can be most vital for someone doing business abroad but hardly anyone in business realises that. The usual tendency is to rush headlong into a market and expose oneself to the country and its people immediately on arrival. A lot of time in building familiarity and understanding would be saved and even faster and better relationships formed if the history of a particular country were read prior to making the first, or more, contacts.
The understanding of the history of the country of business and, more importantly, the proper management of culture are vital factors for the success of transnational manufacturing alliances or acquisitions. Perhaps the best and not-too-dated example of how a foreign culture needs to be respected, maintained and utilised to mutual advantage by an outsider is the story of Nissan’s legendary CEO Carlos Ghosn.
At the time Ghosn took over the helm at Nissan as a result of the Renault-Nissan alliance, the company, despite its multi-country locations, was deeply Japanese as any company in Japan. In fact the word Nissan is the contraction of the word nihon sangyo whose literal meaning is “Japanese industry”. A number of analysts at that time had feared an inevitable culture clash between the French leadership style represented by the chief operating officer Ghosn and his Japanese employees at Nissan.
In a case paper prepared by Prof. John P. Millikin of The American Graduate School of International Management, he says “despite all his doubters, Ghosn embraced the cultural differences between the Japanese and himself, believing fervently that cultural conflict, if paced and channelled correctly, could provide opportunity for rapid innovation. The key, he reiterated many times, was that no one leader should try to impose his/her culture on another person who was not ready to try the culture with an open mind and heart.” Prof. Millikin goes on to say in his case paper “perhaps it was the way he started that set the foundation among the employees. He was the first manager to actually walk around the entire company and meet every employee in person, shaking hands and introducing himself”.
In Ghosn’s own words in the book he wrote with Philippe Ries titled Shift: “although our initial intention wasn’t to change Nissan’s culture, the fact is that the company’s culture is constantly evolving. We didn’t want to make changes for the sake of change; we wanted to make them for the sake of performance. If we come across certain cultural elements –- even if we don’t agree with them, even if we don’t like them – we leave them alone, unless we think that modifying them is indispensable to improving the company’s results.”
Well, that was the Carlos Ghosn experience. Taking lessons from back home, Tata’s acquisition of Daewoo’s commercial vehicle manufacturing entity in Korea, a country whose people are fiercely nationalistic, gives some very interesting insights into how India’s largest vehicle maker managed the cultural issues at the Gunsan-based facility. At the time of taking over the facility, the company was involved in tense labour-related negotiations. Gestures such as Chairman Ratan Tata’s visit to the facility in a private taxi, chatting with line managers in the assembly area and eating lunch with workers in the canteen perhaps gave a helping hand in putting the Koreans at ease with their new employers. Mayor Ho of Gunsan was quoted as saying that his first impression was that one could trust him (Tata). Tata’s public relations agency is understood to have worked with a local agency to introduce some praiseworthy aspects such Tata’s frugal lifestyle and the group’s trouble-free labour policy to the Koreans through articles via the local media.
At times, working in a country on a social level can also help in understanding its culture and in getting a foothold for a business venture. In an interview with The McKinsey Quarterly Tata was quoted as saying that “I have been involved with South Africa for perhaps seven or eight years. There is such an enormous disparity between rich and poor, and I always felt that this large poor community had been exploited over the years. So I met Mbeki before he became president and I said we really wanted to do something in South Africa, to give to the country rather than take away from it. One thing led to another. We started professional schools to train people in trades to enable them to be self-employed; I became more involved with the country by joining Mbeki’s investment council. Eventually, this led to our launching our cars and trucks in South Africa where we became quite successful.”
The not-so-distant incident of labour problems faced by Toyota Kirloskar Motor in its facility in Bidadi had the media quoting some members of the workforce as saying that they were not happy with the Japanese practices of manufacturing which are known to be result-yielding but very regimented as well. This happening points to the question whether some practices which are suitable to a specific culture could be effectively utilised in another. The incident at Bidadi and even the one involving workers of Honda Motorcycle and Scooters India reflect on the challenge that transnational companies face, in countries other than their country of origin, on what would be the best fit in terms of management practices and methodology for managing the culture of a workforce with which one is not familiar.
It is only a logical step, given their current levels of maturity, for Indian automotive companies to increasingly move from being domestic-oriented enterprises to becoming transnational entities. In all the excitement and the frenetic activities that they will experience in acquiring or forming manufacturing alliances abroad, it would be worth remembering that one of the most difficult challenges they would face would be culture management. While preparing in advance is much better than being totally ignorant, constant experimentation with the use of prior knowledge of history and culture would gradually yield lasting and cementing results.
(Published in Autocar Professional magazine)
The understanding of the history of the country of business and, more importantly, the proper management of culture are vital factors for the success of transnational manufacturing alliances or acquisitions. Perhaps the best and not-too-dated example of how a foreign culture needs to be respected, maintained and utilised to mutual advantage by an outsider is the story of Nissan’s legendary CEO Carlos Ghosn.
At the time Ghosn took over the helm at Nissan as a result of the Renault-Nissan alliance, the company, despite its multi-country locations, was deeply Japanese as any company in Japan. In fact the word Nissan is the contraction of the word nihon sangyo whose literal meaning is “Japanese industry”. A number of analysts at that time had feared an inevitable culture clash between the French leadership style represented by the chief operating officer Ghosn and his Japanese employees at Nissan.
In a case paper prepared by Prof. John P. Millikin of The American Graduate School of International Management, he says “despite all his doubters, Ghosn embraced the cultural differences between the Japanese and himself, believing fervently that cultural conflict, if paced and channelled correctly, could provide opportunity for rapid innovation. The key, he reiterated many times, was that no one leader should try to impose his/her culture on another person who was not ready to try the culture with an open mind and heart.” Prof. Millikin goes on to say in his case paper “perhaps it was the way he started that set the foundation among the employees. He was the first manager to actually walk around the entire company and meet every employee in person, shaking hands and introducing himself”.
In Ghosn’s own words in the book he wrote with Philippe Ries titled Shift: “although our initial intention wasn’t to change Nissan’s culture, the fact is that the company’s culture is constantly evolving. We didn’t want to make changes for the sake of change; we wanted to make them for the sake of performance. If we come across certain cultural elements –- even if we don’t agree with them, even if we don’t like them – we leave them alone, unless we think that modifying them is indispensable to improving the company’s results.”
Well, that was the Carlos Ghosn experience. Taking lessons from back home, Tata’s acquisition of Daewoo’s commercial vehicle manufacturing entity in Korea, a country whose people are fiercely nationalistic, gives some very interesting insights into how India’s largest vehicle maker managed the cultural issues at the Gunsan-based facility. At the time of taking over the facility, the company was involved in tense labour-related negotiations. Gestures such as Chairman Ratan Tata’s visit to the facility in a private taxi, chatting with line managers in the assembly area and eating lunch with workers in the canteen perhaps gave a helping hand in putting the Koreans at ease with their new employers. Mayor Ho of Gunsan was quoted as saying that his first impression was that one could trust him (Tata). Tata’s public relations agency is understood to have worked with a local agency to introduce some praiseworthy aspects such Tata’s frugal lifestyle and the group’s trouble-free labour policy to the Koreans through articles via the local media.
At times, working in a country on a social level can also help in understanding its culture and in getting a foothold for a business venture. In an interview with The McKinsey Quarterly Tata was quoted as saying that “I have been involved with South Africa for perhaps seven or eight years. There is such an enormous disparity between rich and poor, and I always felt that this large poor community had been exploited over the years. So I met Mbeki before he became president and I said we really wanted to do something in South Africa, to give to the country rather than take away from it. One thing led to another. We started professional schools to train people in trades to enable them to be self-employed; I became more involved with the country by joining Mbeki’s investment council. Eventually, this led to our launching our cars and trucks in South Africa where we became quite successful.”
The not-so-distant incident of labour problems faced by Toyota Kirloskar Motor in its facility in Bidadi had the media quoting some members of the workforce as saying that they were not happy with the Japanese practices of manufacturing which are known to be result-yielding but very regimented as well. This happening points to the question whether some practices which are suitable to a specific culture could be effectively utilised in another. The incident at Bidadi and even the one involving workers of Honda Motorcycle and Scooters India reflect on the challenge that transnational companies face, in countries other than their country of origin, on what would be the best fit in terms of management practices and methodology for managing the culture of a workforce with which one is not familiar.
It is only a logical step, given their current levels of maturity, for Indian automotive companies to increasingly move from being domestic-oriented enterprises to becoming transnational entities. In all the excitement and the frenetic activities that they will experience in acquiring or forming manufacturing alliances abroad, it would be worth remembering that one of the most difficult challenges they would face would be culture management. While preparing in advance is much better than being totally ignorant, constant experimentation with the use of prior knowledge of history and culture would gradually yield lasting and cementing results.
(Published in Autocar Professional magazine)
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