Ways To Come Out Of The Gloom
Posted : February 14, 2009 at 6:12 pm [IST]
I don’t know why some news that demoralizes and produces negativity be given wide publicity. What could the Ministry of Labour gain by declaring that over 5, 00,000 jobs were lost during October-December 2008, with export-oriented sectors such as gems and jewellery, autos, and textiles being most impacted? The companies provide the shocking news to get the concessions from the government on the tax or for the postponement of dues to the government, and in some cases to get permission for layoffs of workmen.
Why should the retrenchment and layoff of the lowest paid workers become the first step to cut cost to maintain the health of the company? Let the company first cut down the remunerations and perks of the top 20% of the employees that are paid the highest salaries. As good news, many Indian CEOs are doing that. As a next step, the company must appeal to all employees for a cut in the salary to a certain percentage for the time it estimates the downturn may continue. As in many of the companies, the labour cost is the minimal; it must not be the first to be affected.
It must be mandatory for any company resorting for layoff to come out publicly about the sincere work done by the company to cut down the cost in various activities related to product and process of its business using all the other management tools and expertise. The company must involve all the employees and explore all other disruptive cost innovations.
Infosys mentor Narayana Murthy has already advocated the similar ideas. Let the companies take lessons from Seoul-based LG Electronics. It announced a plan to bringing down expenses by a3 trillion won (about $2.2 billion or Rs 10,714 crore) this year by cutting manufacturing costs and unnecessary expenses. Though the company is expecting a20percent decline in sales in dollar terms this year, but will not cut jobs. Every responsible person in the company must look around to find the wastes built in over years and must eliminate it. Unfortunately, the companies headed by purely trading community require a lot of education and associations such as CII, Assocham and many others must facilitate them with help of the reputed schools of business. The consultants, NGOs, and institutions must take up the task as one of social responsibility.
It is unfortunate that the government and various sections of administration including even the defence forces are holding back progress and growth of manufacturing in the country. About 70 per cent of the military needs are imported in spite of having the world’s fourth best scientific pool and huge manufacturing capability. Why should the military be not made accountable for that? There is clear divide between working of the military administration and those responsible for developing the implements, equipment and machinery for military, be it the arms, Arjuna tanks, missiles, or Tejas aircrafts? The story of its progress is dismal. Why can’t some accountability be built, the responsibility be fixed, and the repeated failures be punished? How can the countrymen reconcile with their claim that Indian companies are incapable of producing the sophisticated military equipment, if it can launch Chandrayan keeping its tight time schedule with all the sanctions on the double use technologies?
The government companies must invest and expand, or leave the space for private companies to do that. How can BHEL be permitted to hold the growth of the power sector of the country, as it can’t supply the power equipment in the time frame desired by the power companies?
The government run corporations must try to be competitive with the best in the world, create large number of vendors and jobs. That can only ensure growth rate and dispel the gloom.
- Indra
Category: Industry/Management |
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