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Indian Industry: New Strategic OptionsAuthor(s): P. ChattopadhyaySource: Economic and Political Weekly, Vol. 36, No. 4, Money, Banking & Finance (Jan. 27 -Feb. 2, 2001), pp. 281+283-285Published by: Economic and Political WeeklyStable URL: http://www.jstor.org/stable/4410221 .

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'irreligious' teaching impartedin schoolsoutside the madrasasystem, but theoverallconsensus amongst the community is toeducatetheirgirls in the traditionalas wellas the modern systems of education.The Karamat Husain Girls' College,housed in a building across the Gomtiriver, exemplifies this. Founded by SyedKaramatHusain (1854-1917), a judge ofthe AllahabadHigh Court,this school wasborn out of the conviction that women'seducation was a precondition for theadvancement of the country and commu-nity. It was a bold and. mportantventure,and in tune with the reformist spirit gen-eratedby Syed Ahmad Khan,the founderof the Aligarh Muslim University. Yetthere was stiff opposition to his initiative.One friend told Karamat Husain that godwould curse him (colloquially, that godwould 'blackenhis face'). KaramatHusainretorted that in any case, his face wasalreadyblack, so it could hardlyget muchblacker. On anotheroccasion, he pointedout to an opponent: "It is far better thatI should be cursed and Muslim womeneducated,than thatIshouldretainmy goodname, but Muslim women remain in ig-norance".Readingthese lines in SecludedScholars: VWomen's ducation and Mus-limlSocial Reform in Colonial India byGail Minault, I was reminded of the re-sentmentgeneratedby Syed Ahmad Khanto his projectof startingthe MuhammadanAnglo-Oriental College at Aligarh.Today, the spirit of the founders ofKaramatHusainGirls' College lives on inthe heartsand minds of the teaching staff.Says Noor Khan,lecturer n English: "thisinstitution symbolises our determinationto educategirls andequip them to competein the wider world. We want to convincethe parents that the benefits of a girls'college outweigh its dangers. Sometimeback, it was hard to persuade them to lettheir daughtersout of the house to go toschool. Now, the old attittides are chang-ing. My own motherwas withdrawn fromthis school by my grandmother. She washaunted by the spectre of 'angreziat'(westernisation). Such apprehensions donot exist anymore.More and more Muslimgirls aspire to gain access to this school."This is illustratedby the fact that nearly40 percentof the3,000 studentsareMuslimgirls. They pay a paltrysum of Rs 650 perannum for their education. Some of themturnup wearing the burqa;others do not.Some would say that the symbols ofthe past and present coexist without anyobvious tension.

You do notjust see mosques and mina-rets in Lucknow; you also notice largeandsmall schools in the lanes and by-lanes ofthecity.Some aregovernment-aided; thersaresupported by charitableinstitutions.Inaddition, community initiatives, such asthe one undertaken by the shia leaderMaulana Kalb-i Sadiq, have led to amushroom growth of educational institu-tions. Educatinggirls appearsto be centralto their agenda. Sadly, however, Muslimpoliticians have not done enough to sup-port their activities.

Coming outof theKaramatHusainGirls'College,Irecalled he wordsof Amina Pope,

a Canadian woman who had converted toIslim andwas thefirstprincipalof thenewMuslim Girls School, that no communitycanprogressif its mothersareilliterateandunable to give adequate guidance to theirchildren. In the words of the 19th centuryscholar,MumtazAli, "aneducated womancan take care of herself better than aninexperienced, uneducated,mentally con-fused bundle of veils which has not beenallowed to develop self-confidence andcannot take care of herself'. Contrarytomy earlierimpression, theMuslim womenI encounteredin Lucknow have long beenconverted to this idea. it3

I n d i a n IndustryNew StrategicOptionsIndian industry has had to bear the brunt of the government'srecent espousal offree market policies. However, 'co-opetition'as a conscious strategy decision could help to smoothen therough edges of competition by putting forward a variety ofoptions -firms working together on a mutuality of interests; thedevising of strategic alliances or even embracing a combinationof several moves like combination management and/ormarketing that could prove especially beneficialfor thesmall sector industry.P CHATTOPADHYAY

he July 1996 issue of the officialorgan of the British Institute ofManagement, London, Manage-nenit Today, editorially underlined andsounded a warning that in the highlyunpredictablebusiness environment,eco-nomic patternsbecame increasingly fluky.The challenges of the free marketandkeencompetition have made many anorganisationrunfor cover rather han stand

up to the challenge andface the odds. Themarket orces which several of theindustrygroups and organisations were espousingearlier had now become a bone of conten-tion for them. With regard to Indian in-dustries, in recent years many workershave been renderedsurplus.The produc-tional economies have, however, not yetrecorded much perceivable real improve-ment, while the woes of several havemultiplied. Taking all this into view thereare threequestions thatcome to mind. Forwhose benefit is all this hullabaloo of

opening updirected?Who, in the long run,will constitute the marketwhere goods aresold and profits are earned?If purchasingpower is not spread,how can the economybe sustained? None of these questions hasbeen answered properly. Nor are theanswers easy without a total overhaul ofthe framework of policy and sensitiveaction. With the onset of liberalisation andderegulation, the sudden exposure hasshaken the Indian industries to theirfundamentals. A new consciousness anda fresh introspection have dawned in theindustrial scene regarding the hazardslikely to come up and the ways of dealingwith them. 'Survival of the fittest' soundseasier uttered than achieved, particularlybecause of the gargantuan stakes allaround and their varied import.It is in thiscontext that governments and publicagencies have been seeking to enforcethe rules of competition with the helpand effective intervention of the courtsof law. To make sure that every playerrespects the rules of the game is, however,

Economic and Political Weekly January27, 2001 281

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turningout to be a lot more difficult thanimagined.The spread of the arms of the law issought to be extended by way of enactingnew laws in line with the new aura ofopenness and gradual slackening of theexecutive vigil, as also unbridledcompe-tition. The ways of the 'fish-world' arebeing witnessed in an increasing numberof instances.Insucha situationmore oftenthannot,somebody's gain invariablyturnsinto somebody else's loss, in a sort ofzero-sum game. When this process con-tinues uninterrupted, ompetition not onlyloses its sharp edge, but also results inmuch unaccounted loss of ventures andother resources. While it is possible tocushion the untoward effects through aneffective network of social security mea-sures and renewal funds in the advancedcountries, it becomes costly in the labour-surpluseconomies of thedeveloping coun-tries. As a matterof fact, there is little usein averringthat competition would chas-tise the weak by bidding it goodbye andthe reign of the fittest would be usheredin as a directconsequence. The history ofanti-monopoly legislation in the US andthe UK and the numerous cases decidedby law courts in those countries could notguarantee perfect competition in themarketandon different counts, both lawsand the law courts have been only chasingthe miscreants without being able toprevent monopolistic practices altogether.The recent Microsoft case illustratesthe point.The transformationof the law on mo-nopolies into that of competition appearsto be in tune with what the developedcountries and international institutionswould like us to do. While the Indianeconomy is being opened up unquestion-ably, theexternal economies are also beingincreasingly closed in some pretextor theother so that it is gradually becoming aone-way traffic. Whether this is good forthe countryor not is the main question butlittle has yet been done to assess this issue.The open economy hasresulted in pushingup prices all around, unemployment hasincreased by leaps and bounds, importsinto the countryhave far exceeded exportscreating problems of acute balance ofpaymentscrisis. The downslide of therupeein relation to the generalcuTrenciesof theworld has continued unabated.The newand old technologies of the western worldthat are being introduced on a large scalehave created different problems includinglarge-scale retrenchment. So-called pro-

labour laws are gradually giving way toa change of stance. Competition in differ-ent lines has been hotting up to anunprec-edenteddegree.Threeconsequences of thegrowing competition in Indian marketshave been noticeable. One, the entrepre-neurial spirit in the country has come toa low ebb; two, mergers and acquisitionshave been found moreattractive han start-ing new industrialunits;and three,searchfor alternativeapproaches has been inten-sified especially because SEBI allowshostile takeover. This means that all thepangs of birth of an enterprise and thehonest efforts.of an entrepreneur o bringit to a healthy state are set at naught bythe takeover tycoons who in fact look attheprospectsof such anenterprise ntermsof its ability to generate cash, to yieldprofits and to figure as the flagship unit.The long-term health of the enterprisereceives a low priority.Many a time flour-ishing units of the earlierdays have turnedsick primarily due to mishandling of theaffairs of the enterprise. The number ofsick units has gone up as well with a largecomplement of outstanding bank credit,piling up statutoryliabilities and diminu-tion of work opportunities.Cartels vs Co-opetition

It is in this context that one considersthephenomenon curiousthatthebettertheperformanceof an enterprise, the greateris thechanceof its offering itself as a targetfor predatorsalways on the prowl. Thismeans thatmanagershave to be on the alertagainst two types of onslaughts, namely,one fromthecompetitorsin the marketandthe other from the predators,both threat-ening the very existence of these compa-nies. The search for straws in the wind isbutnatural n thecircumstances.The waysout of this problem are not many in thegiven conditions. One method for avoid-ing the predators may be to acquire con-trolling interest of 51 plus per cent ofshares, but the threat in the market placeremains. This would also hit at the veryconcept of the corporation wherein widedispersal of shareholding is an integralpart. There is also the widely acceptedconcept of delinking shareholding fromcontrol. The second method applicable toward off the bellicose forces in the marketplace may be to go for strategic alliances.Competition law andapproaches precludetheformationof cartelsorsyndicateswhichwere operativein this countryin the 1950sbut were abandoned under governmentdirectives and the anti-monopoly legisla-

tion. Whether a company can adopteitherof the alternatives or both would dependon anumberof factors. Rivals in the marketplace finding competition between them-selves generally healthy and to mutualadvantage may be a rarity. But it is notimpossible. It is here that 'co-opetition'may have some role to play. It is not likecartelorsyndicatewhich incurred he wrathof the people because of the practices theyused to adopt in the bygone days. Therespectfor a code of conductandgenerallycomplying with the conventions followedby competing companies in the same linesof activities may in fact make the conceptof co-opetition moreacceptable in generalthan merely scoffing at market rigging.There are several other managementcon-cepts andpracticesthat can easily go alongwith the techniques of pricing productsand services. To some of these we revertlater in the discussion.Abidance by the law and the regulatorymeasures is, however, a must, but withinthe perimeters available, companies mayadopt procedures that would save theirskin in the market place. There are somewhich one might ask in this regard:One,is co-opetition marketrigging? And, two,is it automatic,that once the alliance isestablished,thingswill work outsmoothly?Answers to these simple questions are noteasy at all, if one were to take into viewall the games that are played in the worldof business in the cobweb of interactionsamong the players. Indeed, a free marketby definition accommodates manydiverseforces of different hues. To make a markin a truly competitive environment is ahighly demanding task; it does not comeautomatically. It also raises questions asto whether it was rightto open upanyway,and whether the representation of thecountryat the international forums was aseffective as desirable. On the negotiationtable the performance of the country hasleft a lot to be desired. Not only that, onalmost all matters of crucial importancefor the country, India has recorded a lossin the battle of words. As a result, com-petition in the Indian market has beenhotting up. To make a mark in the freemarket,and that also after saving oneselffrom the cross currentsof pushes andpulls,means walking on the razor's edge all thetime. Generating customer dependenceonsuppliers in an era of fierce consumerismcalls for the best of acumen on the partof providers of goods and services. Co-opetition makesforthesmootheningof thesharpedges thatcompetition brings forth.

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in the case of a company either it growsor decays, there is nothing in between.WhatCo-opetitionDoes?

Co-opetitiontakescare of these propen-sities by nurturing the normal growthimpulses. Apart from this, it is not neces-sarily mergers that figure as a measure ofthe last resort. Enhancement of competi-tive abilitymayindeed haveseveral routes.Without having to stir the bottom up, itis possibletogearup thingsviaco-opetitionunderlining strategicalliance in all crucialmatters.Mergers,especially friendly mer-gers, can go hand-in-hand with such stra-tegic alliance for thepurposeof combatingthe competitor's moves. Co-opetition canalso go easy with moves such as combi-nation management including combina-tion marketing.Such moves may be morerelevant in the SSI sector in which the listof reserveditems has been drastically cutandgovernmentdesires that heunitsshouldfend'forthemselveswith minimum externalpropping up efforts. Indian governmenthas had a policy of encouraging the for-mation of a consortia of several SSI unitsfor purposesof exporting and the units inthe sector are known to have contributedsubstantially o theforeignexchange earn-ings of the country. Side by side, it hasalso to be stressed that almost 10 per centof the total numberof small-scaleunitsaresick andheavy amountsof bankfundshaveremained stuck in them. It has becomenecessary to do something about this,especially in view of the fact that manyother units had been deprived 'of fundsbadly requiredby them. Banks and finan-cial institutions have been helpless. Unlessthe funds keep rolling, the maximum ofassistance possible cannot be rendered.Correctives in this behalf that call forclose examinationareseveral.Firstly,sincemassproduction s not a virtue of the smallunits, they have to concentrate on itemsof productswhich arespecial, customised.Secondly, greater reliance would be re-quired with respect to products that addhigh value on counts of personal skills.Thirdly, even while relying on personalskills, it is possible to take recourse toappliances that make efforts less labori-ous, cumbersome andtiresome;contrarily,they may increase in productivity, help toachieve high value addition and enablecarvinga niche market or the units whichmay be profitable and self-sustaining.Lastly, accounts-keeping in small unitshas been a major problem though it isalmost certain hathad there been sensitive

accounting systems in operation many ofthese unitswould nothave to eataway theirfixed and working capital. Much-of theproblems arise due to lack of knowledgeandexpertise in mattersof tracking nflowand outflow of funds and a judiciousdeployment of resources.Co-opetition is compatiblewithboththemerger concept and the consortium ap-

proach,because the unitsseek to approachthe tasks in a more organised manner. Inthe case of merged units, which are of abiggersize thanearlier,suchalliances withother merged units would basically meandealings between equals. Such-dealingsneed not be with reference to pricing ormarketing alone; they may relate to theentirety of the supply chain as well.Management of the small units under suchstrategic alliance may be more and moreprofessionaliscd forwithstandingthepres-sure of the market forces, adherence toquality standardsaendbetter responses tocustomer needs. Co-opctition can providefor following the best practices in the fieldthrougTh benchm'arkinu. Such improve-nmentsmay be a continuous effort, follow-ino what the Japanese enterprises call'kaizen' embracing quality, cost, design

.and performance. It may sound curiousthat small units are urged to update andmodernise their management practices. Amoment's thought would, however, un-derline that the limits of investment inplant and. machinery for a small-scale unithave recently been raised and governmentdesires these units to raise their operationallevels and efficiency. It is not impossibleto achieve: This may also be considerablyfacilitated by strategic alliance. Spreadofeffective entrepreneurshipis the crux ofthe matter and co-opetition may be instru-mental in spreading the cult.In a free economy, it is also possible tovisualise the tussle between the suppliersand the consumers' Competition envis-ages excess of supplies over demand sothat not only do the consumers have achoice regardingthe purchaseof productsbutalso the prices at which they would beagreeabletobuy.Differentsafeguardshavebeen envisaged for protecting theirinterest such as correct weights, correctdepiction of the contents on the package,maximum retail prices chargeable,periodduring which the productsshould be con-sumed, precaution about the ways ofdealing with the contents andso on. Whilethe consumers do stand to gain in a com-petitive market, twould, however, dependon how fair is the competition and how

reasonable is the price. While on priceandpricing, it is necessary to emphasise thatmaximisation of value to the customer hasbeen a major objective of suppliers but inthis respect, it is not always based onlessening the price as such, but price inrelationto the value offered. The conceptsand ideas of value management becomerelevant in this context which enjoin thatvalue is maximised in conditions whereeither the same functions of the productare performed with declining cost, orfunctions improve while cost remainsconstant, or functions improve the costsalso rise but less than proportionately.Taking all this into view even so-calledconsumerism acquires a different conno-tation from what it is generally ascribed.Consumers occupy the centre stage allright but the emphases become different.Brand equity creates a difference inconsumer behaviour.ConclusionWith a virtual paradigmshift like whathas beenstated,competing enterprisesseekto create brand loyalty that goes beyondwhat generally consumerismdenotes. Theatmosphereof competition among brandsis of a different dimension and the levelsof sophistication are also higher. Co-opetition can effectively cash in on thisstate by way of strategic alliance amongenterprises who may have the same orsimilar products but different brands oreven mutually accommodative variancesof brandedproducts.The accommodativeapproachesareenvisioned inthestrategiesfor satisfying total requirements of cus-tomers,at times unrelatedto the supplier'score products. Instead of buying suchproductsfrom the marketfor supply to thecustomers,thesupplierswould liketo teamup with others for supply of such items.Such practices are taken to by many anenterpriseto retaintheir customers and tostall their own searchingfor such productsfrom different sources.

Thus, in the strategic efforts to sustainmarkets over time, suppliers often adoptinsourcing coupled with outsourcing andfarmingout approaches.As mentioned byTom Peters, excellent companies spend agood deal of time to understandandappre-ciate the needs of the customer so that histotal needs can be 'satisfied', to borrow theexpression from H A Simon. If the desiresof the customer remain only desires, noteffective demand, all efforts come back tosquareone. Co-opetition furthers such aneffort in the right direction.Wli

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