is the guru of globalisation. He has been a management
consultant for over 11 years in the areas of international
business, training and placements besides feasibility
studies. He is HIRU BIJLANI, vice-president of the
Institute of Management Consultants of India, and
president of Zenith Global Consultants, a consultancy
that provides the unnecessary expertise to make an
international venture successful, focussing on new
areas like management training, placements, strategic
planning, information systems and joint venture felicitation.
is confident that joint ventures will fail in India.
According to him, joint ventures in India are a result
of emotionally driven desire, the excitement of having
a partner instead of an objective, rational evaluation.
What is not understood is that joint ventures are
between people, who are the core of the organisation.
difference in philosophy and management styles results
in conflicts which consequently lead to failure.
conversation with ANAMIKA RATH, Bijlani spoke of various
aspects of globalisation and joint ventures in the
context of the Indian economy. Excerpts :
you think joint ventures are essential in India ?
course. Because we need foreign capital and companies.
In the form of joint ventures, there is more marriage
of ideas and ways of working. It is a learning process.
At times, the foreign company might dominate but then
it does not matter because they are brining in technology,
capital. All are transmitted to the people.
why are joint ventures falling apart ?
like Procter & Gamble and Godrej are falling apart
because of lack of synergy. Even Indian companies
are falling apart like BBLIL and Kwality. It is basically
a conflict of business philosophy.
do you define the term globalisation in the context
of an Indian company ?
understand globalisation, if one tries to focus on
it in terms of changes taking place and with reference
to the specific Indian context, then it would be defined
in the focussed manner as being what is happening
in India and comparing it with the global economy
as opposed to the Indian economy being the past an
that will lead us to various issues. At the macro
level, for instance, actions taken by the government,
the opening of the economy, and allowing foreign investment,
opening sectors which were reserved, delicensing and
so on. Again, they are natural factors which are a
result of technology and growth of global economy.
there are micro forces which are emerging from the
macro forces - like foreign companies coming in, making
investments in the stock market. So globalisation
is all these changes taking place that are through
deliberate acts of government resulting in a convergence
of economies, global and Indian technologies.
what does a company need - as prerequisites in attitude
or infrastructure - before it can go global ?
companies are looking for a conducive environment
which enable them to operate conveniently. This will
again lead to macro factors like government regulations,
bureaucratic impediments in terms of legislation,
judicial system and the ability to invest freely.
then the support they get locally in terms of infrastructure
to function effectively. So that will be in terms
of ports, roads, transport system, water, electric
facilities. These will facilitate them to effectively
do business in the country.
is the difference today between say an American company
extending operations to the east and an Indian company
reaching out to the world ?
country setting up companies in other countries has
the same fundamental reason, to reap profits and increase
market share. But the strategic reason and approach
would vary depending on where you come from.
American company coming to India is looking at opportunities
that are based on its strengths which are generally
led by technology and capital. So they are using those
strengths to expand their share in developing countries.
And hence they would look at issues which would be
related to the setting the government provides.
an Indian company going global depends on which direction
it goes. For instance, if it is going to the west,
then it depends on those strengths which they have
and on which the Indian company can capitalise - like
skilled manpower that is cost effective. So it is
mostly knowledge and manpower related strengths which
Indian companies will use.
Indian company will not have surplus of capital to
be used in capital intensive projects. Service sector
industries like hotels and restaurants are likely
to come up in the western world. Some high tech companies
might set up joint ventures in the west to give them
a base to draw technology.
Indian companies are looking at the developing world,
they would look at market size, population and economic
are the laws and regulations retarding the globalisation
of Indian companies? What new laws or regulations
need to be in place to make such an exercise more
worthwhile for the Indian corporate sector ?
the past it was very difficult for Indian companies
to go global because the government has rigid, elaborate
and time taking legislations. Now, though it is opened,
there is still some rigidity.
companies do not have that much capital to set up
companies abroad. Lack of familiarity with that kind
of operation also hampers globalisation. Developed
countries have evolved from a local to international
to multinational to global level. Here that experience
it is evolutionary in nature and hence will pick up
you feel companies can take undue advantage of double
taxation avoidance laws in their globalisation plans?
For instance, a lot of India Funds set up by Indian
asset management companies are based in Mauritius
to avoid paying tax in India. Isn't that cheating
the Indian exchequer ?
is making it attractive to invest. It is the same
as if the government has reduced taxes in India. They
are getting the advantage of getting the money relatively
tax-free or at lower rates by routing investment through
other words, double taxation is giving investors into
India Funds returns that have less tax. So it brings
money and services that purpose of capital inflow
but gives the people who are bringing money through
this structure as advantage.
western countries take advantage of these tax laws.
It is that advantage which is increasing investment.
It is facilitating foreign investment. It is a blessing
for investors through these routes and facilitates
more NRI investment or foreign companies investing
through this route and therefore putting the Indian
investor at a comparative disadvantage because he
is paying higher taxes.
your experience, what kind of companies go global?
Ana what form does globalisation takes?
countries which go global are those which have operated
multinationally. So they go from domestic to international
to multinational to global. The ultimate concept of
global is one which locates anywhere and performs
any part of the business on the basis of opimisation.
far as Indian companies are concerned, some like the
Aditya Birla Group have gone out. Others like Tatas,
Indian Hotels are following the same route.
does India as a country benefit from globalisation
terms of Indian people and economy, the economic growth
rate accelerates because of infusion of capital and
technology. At the macro level for companies, they
learn more in terms of technology, helping them to
upgrade quality, reduce prices.
gain, people gain and the country gains at the macro