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Indian companies raise the bar on stakeholder capitalism, emerge as a ‘force for good’

At a time when the role of business as a ‘force for good’ is being questioned worldwide, it may be fair to say that many Indian companies – including those that are part of large, pedigreed corporate groups – have, at least, tried to come across as ones with a heart. From quickly ramping up […]

At a time when the role of business as a ‘force for good’ is being questioned worldwide, it may be fair to say that many Indian companies – including those that are part of large, pedigreed corporate groups – have, at least, tried to come across as ones with a heart.

From quickly ramping up production of hand sanitizers, N95 masks, and personal protective equipment (PPEs) and thereafter selling many of these at government-mandated prices, local firms have ensured that shortage of the items do not affect the country’s fight against the coronavirus pandemic. And, in the process, demonstrated that they are not just about revenues and profitability.

That is not all.

By writing large checks for coronavirus-related relief initiatives, converting manufacturing units for making ventilators (of which there is still a critical shortage in India) and offering their facilities for use as COVID-19 treatment centers, enterprises, moreover, have shown that society can count on businesses when it matters most.

In addition, by enabling employees to work from home, keeping layoffs and pay-cuts down to a minimum, and resisting the urge, as much as possible, to invoke the force majeure clause to avoid or delay making payments to vendors, several Indian firms have gone the distance to prove themselves good corporate citizens practising stakeholder capitalism.

Improving Quality of Life

For benefiting customers, businesses have also worked steadfastly to overcome challenges posed to the supply chain by India’s long and rigorous coronavirus-induced lockdown to make it possible for urban Indians, especially, to not feel the need to move out of their homes for procuring essential goods. And that too without trying to make windfall gains in the process.

Most significantly, India Inc has assiduously embarked on the task of improving the lives of 1.3 billion Indians by doing its bit for building an “Atmanirbhar Bharat” (a self-reliant India) ever since Prime Minister Mr Narendra Modi spoke about the need for doing so in a May 12 address to the nation.

By working out how their individual businesses can contribute in a bigger way to either strengthen or leverage each of the 5 pillars – Economy, Infrastructure, Technology-driven System, Demography, and Demand – which Mr Modi emphasised as the building blocks for an economically self-sufficient India.

Bumps in the road

Welcome as these developments are, the question that naturally arises is whether businesses in India could have done more during this trying period. The short answer to that is ‘yes’.

Without a doubt, many Indian business outfits failed to adequately address the concerns of migrant laborers employed at factories, construction sites, or other informal places of work. By seemingly turning a blind eye to the fact that, as the biggest beneficiaries of the work put in by migrant laborers, companies owed it to themselves to inspire confidence among this key segment of the workforce to ensure an early return to business normalcy and keep wage bills in check (considering that several migrant laborers in many parts of India are often paid only the stipulated minimum wages).

Start-ups in India, moreover, could have done a better job on the communications front. Some of them, especially the ones which were letting people go, may have avoided blaming the coronavirus outbreak for all their problems since a crisis-like situation had been brewing in the country’s start-up arena from much before the pandemic struck the world’s 2d-most populous nation.

Moving the needle

To be fair to Indian businesses, though, they could not have been realistically expected to anticipate all the challenges that the coronavirus pandemic would pose to their operations and working styles, and, have mitigating strategies for every possible scenario. Given that they were already on the backfoot, on account of a slowing Indian economy, from much before the COVID-19 threat aggravated their challenges further.

Like everybody else, Indian companies, too, were planning on the go and trying to solve problems created by the virus as they came along. Admittedly, some mistakes were made doing so, but these errors of judgment were made in good faith based on information available at the time of taking specific decisions.

All things considered, therefore, the point that numerous Indian companies displayed a social conscience when empathy was the need of the hour and attempted to move the needle on enterprises seeing themselves more as wealth-creators for society as a whole can make one conclude that, at least in the present context, businesses have been a powerful force for good.              

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