ARTICLE CRITIQUE

September 22, 2015

Article Critique of “Indian Business Leadership: Broad Mission and Creative Value”

Summary

In their Leadership Quarterly article, “Indian business leadership: Broad mission and creative value”, Cappelli, Singh, Singh, and Useem (2014) suggest that two distinctive principles drive Indian business leadership: pursuing a mission and purpose that are broader than serving the needs of stakeholders; and identifying business models that are inexpensive and efficient while delivering high value for a broad audience. The authors define national business leadership principles as “the distinctive business values, norms, and capacities that help define how executives generally operate their companies across a given context” (2014, p. 7). They surveyed and interviewed the top executives and human resource leaders of 102 of India’s largest companies, as well as reviewed company documents and existing research to identify leadership themes and principles that were common across all of the organizations. The research findings illuminated four business leadership principles that appear to be unique to Indian companies, thus the authors term the set of principles the “India Way” (2014, p. 9). The four principles include 1) broad mission and vision, 2) creative value propositions, 3) holistic employee engagement and 4) adaptability by managers. Two of the principles are described in detail in this article.

The principle of broad mission and purpose directs Indian business leaders to actively engage in transformational leadership and performance management practices to focus their efforts beyond financial success to also include “family prosperity, regional advancement, and national growth” (Cappelli et al., 2014, p. 8). Indian companies also pursue creative value propositions, entrepreneurial enterprises that are inexpensive, efficient, and provide high value to a broad constituency. The authors believe this principle evolved with India’s liberated economy, its ever-increasing competition for low-income consumers, and a scarcity of government infrastructure and support. Companies have had to shoulder more responsibility for creating excellent products and services for everyone in every community. The article concludes by suggesting that other, less savory organizational factors, such as corruption, may also contribute to India’s business success, but their research suggests that the “India Way” principles are unique and substantial in their influence on this growing economy. In closing, the authors suggest that we keep our eyes on India’s business leadership principles and practices, particularly if the economy slows or international stockholders insist that companies shift to a more traditional focus on increasing profits and shareholder value.

Strength and Validity of Claims

Cappelli et al. (2014) provide substantial support for the foundational claims presented in the article. The authors claim that India’s economy is growing because of its unique business leadership principles. They report that the growth rate of Indian companies been double of many Western companies during the 2000’s, with revenues increasing from $545 million in 2002 to $8 billion in 2013 (2014, p. 7). The article asserts that Some of India’s business leadership principles are different from Western principles. This research found that while Indian and Western businesses share some of the same principles, like shareholder value, the themes they identified in Indian companies were much broader. Interestingly, when Indian leaders reported their personal priorities, they listed shareholder value 4th on the list, a value that is on the top of the list of most American CEOs (2014, p. 9). This finding is reinforced by the finding that India’s business leadership practices are common across the most successful businesses: In 102 of the largest, most successful, and oldest companies, findings from the interviews surveys, and cross-check of documents consistently uncovered the same collection of principles being used across most companies. Finally, the principles the authors suggest are based on consistent evidence from the business sector. Many companies, such as Infosys Technologies, Unilever, and Tata Group demonstrate a focus on broad social mission and purpose by investing substantial sums in achieving social goals, such as education, health, and recreation. Tata Trust, a foundation of the Tata Group, for example, has “donated close to a third of a billion dollars” (2014, p. 10) to social causes. Similarly, high-powered companies including Tata Motors Bharti Airtel and Mittal have used existing technology in novel ways to create innovations in transportation and communications that are made available to all citizens at much lower costs than competitor imports.

Recommendation

If a student is seeking data-driven evidence about the leadership principles found in Indian companies, I believe this article would provide a great deal of insight on the “India Way”. The authors present their research hypothesis clearly. They engaged world-renowned companies in their investigation and they describe appropriate methods to collect and distill the key concepts and principles used by Indian business leaders. The article supports the authors’ claims and the principles they identified with quantitative evidence and examples from the field. I would recommend this article without reservation to business and social value scholars who seek to learn more about the intersection of the two in India.

References

Cappelli, P., Singh, H., Singh, J., & Useem, M. (2014) Indian business leadership: Broad mission and creative value. The Leadership Quarterly 26(2015), 7-12.