Lessons from Maruti: Profit isn’t a dirty word
Historically, the concept of socialism creates in people a belief that anybody who is a capitalist exploits workers, according to a top Indian industrialist.
“For a long time, profit was a ‘dirty’ word in India. This is because most people don’t understand how businesses function. They don’t understand how businesses become successful. This is because most people don’t identify with business,” R. Bhargava, Chairman, Maruti-Suzuki India told the Business Times.
He added that everyone is programmed to think that, ‘my success can only come at the expense of your failure’ adding that there had to be a major shift in attitude in people and make them realise that fact that trade and business leads to mutual benefit.
He said that at Maruti India also this was the case and the company addressed this issue by talking to the workers.
“The Maruti Unions always used to question to why we can’t allocate them more money when we make so much profit. Then we had to explain how we allocate money – to what we use it for, etc. It was a lot of work but they did understand.”
He reiterated that Sri Lanka so far hasn’t got so much of a manufacturing industry. “Tourism is big and so are plantations – tea, rubber, etc. But you should also focus on manufacturing industry as well,” he added.
He said that the potential for tourism in Sri Lanka is huge, but highlighted that ‘connectivity’ of flights is still an issue. “As an example, Delhi has only one connecting flight to Colombo. This has to change,” he said.
At the inauguration of the 34th National Conference of Chartered Accountants on Thursday, where he was the chief guest, Mr. Bhargava said that the younger population in both India and Sri Lanka are huge and their mindset has been influenced by technology. “They’re no longer reconciled that fate is responsible for what happens in their life,” he said, delivering his speech on the theme ‘Innovate to Grow’. He said that the road ahead for emerging countries such as Sri Lanka and India is likely to be a difficult one with the young population and their thought processes, which are vastly different to that of the older generation.
“This means they are impatient for change and want a life that is not possible without development and growth. Politicians and others must recognise this change and that the young cannot wait for fate to dictate their lives,” Mr. Bhargava said, adding that this is why they need to be productively employed in a growing economy.
He said that in the 1980s, getting a telephone was difficult. The state had a monopoly over the telecom industry, and one could be on a waiting list for a telephone for years, he said, adding that it’s not the case anymore. “Countries must attract a great deal of investment, whether domestic or foreign, and take advantage of growing and available markets both domestically and internationally,” he said, highlighting that the role of public policy plays an important role here.“Governments must frame public policy in a manner that encourages investments in a country. Several of our countries make it hard for businesses to come in.”
He added that innovation doesn’t mean only invention and that it’s one stage in the process of innovation. “There are various limitations in trying to innovate only in the lab,” Mr. Bhargava said, adding that the requirement of large expenditure is answer.
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