'Below-par businesses have ample opportunities to improve'

Last Updated 26 January 2011, 03:27 IST

This is among the conclusions from the joint survey of businesses by All India Management Association (AIMA) and global consultancy Mercer.

According to 'Management capability Index (MCI), which measures capability of an organisation or group against certain criteria, the overall management capability of businesses in India is 74.6 per cent for 2010.

The results suggests Indian management is performing at just under three-fourths of its potential 100 per cent capability and has considerable opportunity for improvement.
Further, the report said that more focused approach is needed in order to achieve continuous and consistent business growth.

The index was measured on 10 parameters such as organisation results and comparative performance, strategic leadership, performance and people leadership, financial management, innovation of products and services, integrity and corporate governance, external relationships, organisation capability, application of technology and knowledge.

The survey conducted among 203 organisations, noted that Indian corporate sector is strongest in integrity and corporate governance where the results are as high as 81 per cent, one of the major driver of the management capability. Overall management skills of businesses in India are the collective capability of various large organisations, multinational corporations, small and medium enterprises (SMEs), government agencies and others.

The multinationals are performing at 77.3 per cent of their potential, which suggests that these businesses have managed to evolve more effectively when compared with the other types of organisations in the country.

Multinationals surpass the MCI – India in a comparison of all categories except for people leadership  It has strongest performance in visionary and strategic leadership and innovation of products and services.

Besides, local large organisations are performing at 75.3 per cent of their total potential, SMEs (74.6 per cent) and government agencies were least performer with a rating of 66.1 per cent. In all, the Indian corporate sector has displayed a fair degree of maturity on the MCI in 2010. There is, however, a significant opportunity for improvement in several dimensions and a potential for organisations to move upward on the management capability scale.

In the immediate term, Indian organisations need to strengthen their performance on the tacit and intangible aspects of management like visionary and strategic leadership, people leadership, and developing organisation capability, areas in which the multinationals have fared well.

(Published 26 January 2011, 03:27 IST)

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