Mumbai:
Indian managers needed to change their mindset while managing
costs, said Prof Marti G Subrahmanyam of the Stern School
of Business, New York University, addressing CII's 3rd
Cost Conclave, which focused on 'Competitiveness for
Global Leadership'. He highlighted that the focus
needed to shift from operating costs to new emerging risks
that rose from fluctuation in foreign exchange rate. Prof
Subrahmanyam was speaking on 'Managing risks to be globally
competitive', and highlighted the financial risks which
Indian companies encountered in today's global era.
Financial
risks played a dominant role in the growth of a company,
he stressed. The Indian CEO/CFO should stay focused on
business and have an explicit strategy to manage financial
risks, rather than be fixated on macro-variables like
oil and interest rates. He mentioned that the Indian economy
has undergone change from a commodity-based economy to
services.
However,
in the last few years, the manufacturing sector had been
the key driver for growth and the edge was the country's
large pool of well-trained manpower. But, he said, in
the long-run, volatility is bound to affect Indian companies.
Tata
Motors executive director Praveen Kadle highlighted 'Challenges
faced by Indian multinationals and the way forward'. He
said if Indian companies had to carve a niche in the global
arena, they needed to focus on economies of scale and
risk mitigation, focus on product development, HR management,
brand reputation and technology development. He emphasised
that in the long run, companies need to indigenously develop
their own in-house technology and not rely on one-time
transfers.
Social
and cultural issues as well as organisation structure
play a crucial role when companies set up their operations
overseas, said Kadle, stressing that companies should
focus on strong value systems, good corporate governance,
process systems, and a strong internal review mechanism.
CII chairman (western region) Gaurav Nanavaty said that
Indian industry is today growing in new dimensions, truly
mirroring its economic potential. With the growth and
democratisation of global capital, Indian economy has
emerged as an attractive destination for investors, he
said, emphasising the need to craft a competitive economy
that is not just responsive to change, but can proactively
recognise the necessary changes and foster an environment
of agility, excellence and anticipation. In the last three
years, CII has been actively engaged in educating industry
members about the need for being cost competitive, not
only to improve profitability but also to sustain growth.
Other
prominent speakers at the conference included RSM &
Co deputy managing director Dinesh Kanabar, AT Kearney
MD Vivek Gupta and Tata Consultancy Services CFO S Mahalingam.
The conference, attended by 200 CFOs and treasury
heads of prominent Indian companies, focused on cost competitiveness
across the value chain as an enabler for achieving global
competitiveness.
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