Business Case Studies, Executive Interviews, Bala Chakravarthy on Global Economy and Global Managers

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Executive Interviews: Interview with Bala Chakravarthy on Global Economy and Global Managers
October 2008 - By Dr. Nagendra V Chowdary


Prof. Bala Chakravarthy
Professor of Strategy and International Management


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  • Globalization will accelerate, despite the current difficulties
    Despite the problems with the WTO, world trade is getting freer. Goods, services, human and financial capital are moving across national borders more easily than before. The opening up of China and more recently India and others has contributed to this cause. Firms from the old TRIAD countries and the new BRIC countries are chasing similar dreams. Competition is intensifying. The firm's leaders have to look for ways to standardize its operations across the globe even as they encourage adaptation to suit local market needs; they must create a sense of identity and pride among the firm's employees even as they recruit amore diverse work force; they must encourage speedy decision-making and yet maintain control; and they must seek top business performance and yet ensure strict adherence to the firm's values. Top management must master these and other dilemmas in order for the firm to succeed.

  • Social and environmental performances will grow in importance
    The firm's stakeholders are getting better organized and getting more vocal. Awareness of climate change and industry's contribution to this problem are growing. In addition to financial performance, top management must pay attention to a firm's social and environmental performance. These are important for earning andmaintaining the 'license to operate.' But actions that enhance financial performance need not always help the other two. In fact there can be serious contentions. It is not enough for a CEO to merely decree that all three performance dimensions are important. The CEO must be a walking example of how the underlying dilemmas can bemanaged. Besides the substantive tradeoffs that have to be made, there is the added burden of communicating the firm's position to the media. Media bandwidth has exploded exponentially over the past decade. Channels are chasing scarce content. Factual reporting and quality analyses have given way to sensationalism. News is not just reported but increasingly manufactured to fill the airways. The growing popularity of the Internet has led to instant diffusion of news, both facts and rumors, verified and speculative. Large companies and their leaders are especially vulnerable targets. One misspoken word can be ruthlessly exploited again and again on a global stage. Top management has to learn, to communicate effectively with the media.

  • Business, Government partnerships will grow
    Take major business sectors like energy, financial services, health care, transportation or food. All of these have national security concerns. Governments will get involved. Businesses will also need to partner with governments to establish fair social and environmental regulations. In general, the interplay between government and business is on the rise. World Trade is a case in point. Issues of war, terrorism, environmental regulation, trade, currency movements, and taxation are all matters that are salient to business but need political intervention. The role of top management will grow from being just a business head to also becoming an able ambassador for the firm vis avis its political partners.


The Interview was conducted by Dr. Nagendra V Chowdary, Consulting Editor, Effective Executive and Dean, IBSCDC, Hyderabad.

This Interview was originally published in Effective Executive, IUP, October 2008.

Copyright © October 2008, IBSCDC No part of this publication may be copied, reproduced or distributed, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or medium electronic, mechanical, photocopying, recording, or otherwise without the permission of IBSCDC.

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