Daizo Ito, president at Panasonic India, these days spends more time
studying the business environment and consumer culture in India, which
he says differ every few hundred kilometres, than on meetings to decide
his firm's business moves. He has left it to Manish Sharma, the recently
elevated MD, to take care of the Japanese consumer electronics firm's
operations in the country.
"My role is now more as a mentor to groom Indian talent and act as a bridge between Indian and Japanese headquarters," says Ito, who has put Panasonic on a firm base in the Indian market over the past five years.
Ito joins a growing club of senior leaders of Japanese blue chips in India who are delegating complete autonomy of their businesses to local managers in the country - taking an about-turn from the traditional Japanese approach of controlling the management, as they have zeroed in on India as a high potential growth market.
Over the last 6-8 months, Canon, Toshiba, Toyota and Hitachi, besides Panasonic, have all appointed and promoted senior Indian managers in their top deck.
"It's a call which some of the Japanese companies are taking having realised that if they have to survive and win in India they would require localised products sold by Indians who thoroughly understand the market," Ravee Chittoor, assistant professor of strategy at Indian School of Business in Hyderabad, says. "It is possible that this trend takes a much bigger shape in India," adds Chittoor, whose area of research interest is multinationals.
Toshiba has appointed Sanjay Warke as the country head for its consumer goods business covering laptops, desktops, televisions, washing machines and refrigerators, making him the first Indian ever to be appointed in the top league. Canon has elevated an old hand Alok Bharadwaj as the executive VP, responsible for the company's operations covering sales, marketing and service.
Auto major Toyota Kirloskar Motor has promoted two senior executives - Shekar Viswanathan, who was deputy MD (commercial), as the vice chairman, and Sandeep Singh, deputy MD (sales, marketing and customer service), as deputy MD and COO.
Similarly, managing directors of all the nine Indian subsidiaries of Hitachi are Indians.
Ito of Panasonic says Japanese companies have realised that to grow in India they need to empower the right Indian talent and groom them for higher responsibilities. "Japanese companies have moved beyond the home country effect," he says. "Effective localisation of management can generate tremendous cost efficiencies in the production process," he adds.
The change in Japanese culture is in stark contrast to successful Korean conglomerates LG, Samsung and Hyundai where Koreans still control the operations in India.
KR Kim, former MD of LG India and one of the most successful expat professional in the country, attributes this to different corporate cultures. "Japanese companies are very democratic with respect to employees with consensus-oriented management style, whereas Korean companies have military style, dictatorial and a speedy decision culture," he says. "Since business is like a war game, it requires speedy decision and quick action, which Japanese companies lack and hence often lose market to the Koreans." Kim, however, says he was an exception and empowered Indian managers.
Japan Inc has identified India as the next preferred destination to grow at a time when their biggest markets Japan, US and Europe are down with low consumer spending. The signing of the free-trade agreement between India and Japan two years ago gave a fillip to grow business in India.
India this year graduated as the fourth-largest market for consumer electronics major Sony globally. Panasonic has ambitions to become the country's largest consumer electronics company by 2018. Hitachi, which last December held its first ever board meeting outside Japan in New Delhi, is targeting a three-fold increase in revenue in India to 20,000 crore by 2015 with plans to invest more than 4,700 crore.
A Hitachi India spokesman says it plans to increase its social infrastructure business in India, where the construction machinery and home appliance business accounts over 50% of the revenue.
Company officials say Japanese firms have a culture of promoting internal talent and have groomed many Indians over the years.
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