Commitment Effect – Exports

Political system can be viewed as a two-edged force with one edge making demands on management and the other bringing to it. As a result, today’s manager must be ready to adapt his organization to accommodate government influence. In fact, making managerial objectives consistent with State policies need not be attained by force. In the present interdependent financial and industrial system, there is an identity of interests between the government and the private sector. Policy formulators in the government are anxious to achieve full employment, price stability and growth. Business leaders similarly know that their interests will be best served under such congenial economic conditions. Naturally, business leaders begin to see more clearly a need to converge their aims with those of other important policy-makers, whether in business, banking, government, police, labor, education or other institutions.

The identity of interests is further cemented by the implicit recognition by the business of the modern version of capitalism. This version stresses the point that the private sector has a moral responsibility to the society. In the changed context of social values, validation of the concept of private property needs to be in terms of the business’s commitment to the objectives the society has set before itself.

This philosophy which first made its appearance in the mature capitalist countries is now being accepted by progressive business leaders in India. It is being realized that the rapid change in the political, economic and social values of the emergent India is bound to have its reflection on the business concept as well.

This surge of change has profound consequence for that bundle of hopes and fears, the untidy bundle of attitudes and commitments called our management policy. In an increasingly fluid world one cannot organize the hope of order around the protection of status quo.

We must accelerate the evolutionary process of social justice and should remember that in the long run what is at stake is not a sector but democracy itself.

The point need not be labored that the government has placed prime importance on the growth of exports. Te government strategy for export promotion consists of legal sanctions, provision of financial incentives, appeals and exhortations. Many progressive concerns did take into account this national objective of export promotion seriously, despite adverse financial considerations.

In furtherance of government’s declared policy to maximize exports, to restore balance of payments, we undertook to enter export markets. We were able to obtain substantial orders in highly competitive markets but our cost of production did not leave a margin of profit despite financial assistance.

Even though the company has to incur substantial loss on the export operations, exports must be maintained in the interest of the country in general.

The point to be noted is that these export transactions did not hold any prospect of making profit but still the management of the companies decided that they should try to earn foreign exchange. It is not suggested that business will go on incurring losses to adhere to a national goal but that a policy objective stressed repeatedly by the government gives a motivational stimulus to see whether the objective can be attained.

The national awards for outstanding export performance have also helped in creating psychological climate which is conducive to export consciousness. Also, industrialists are increasingly realizing the indirect benefits which stem from export activity.

We all feel a sense of satisfaction in receiving public recognition of our modest contribution to the national effort which also acts as a spur to greater enthusiasm and efforts in this direction. Export involves sacrifice which we willingly make in the national interest for the intangible benefit of the better technological and managerial skills which we have developed in the process.

Indian companies are now able to develop their manufacturing standards quality wise and cost wise to global level and are able to earn profits even from exports not only from products but from services as well.