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Prahalad on Indian MNCs

December 20th, 2003 · No Comments

The Economic Times has an interview with CK Prahalad. Excerpts:

Take Wipro, TCS and Infosys as potential models of what multinationality means. You will find their cost, given the size of their global operations, measured in terms of people working abroad, is incredibly low compared to traditional MNCs like GE, IBM, Siemens or Philips. The reason is fairly simple. They have no legacies to change, theyre starting from zero. And they were under tremendous cost pressure from day one, so they had to develop new ways of communication, co-ordination and management. Thats quite unique and different from building standalone, country-by-country organisations with their own infrastructure and then changing it to global business management.

The new MNCs like Wipro or TCS are all multi-focal companies where the key manufacturing operations are in one part of the world but the customer-facing operations are in another part of the world. Their revenues may come from a part of the world where they dont necessarily dominate. Its a very different configuration from what the traditional MNCs had to start with. Not only will Indian MNCs emerge as a major force, but they will have the opportunity to rewrite the book on how to manage global operations. They will show us how to create low cost, highly effective, real-time systems. The good news is we are starting with real-time 24/7 as a starting point.

We are inventing so many things we dont take credit for. Take call centre operations. Few people know what it takes to train young Indian men and women who have strong accents, to speak English as if they were born in Ohio. Weve developed accent neutralisation capabilities. And we train not one or two people but a hundred thousand people to take on a persona for eight hours a day which has nothing to do with reality. In other words, we efficiently play-act and thats the innovation.

Tags: Management

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