ECONOMIC REENGINEERING: CHANGES & CHALLENGES
Sandhir Sharma & Pavitar Parkash Singh

In the years to come business organizations, worldwide, shall have to deal with stiff competition, turbulent economic scenario and state of the art technology.  Reinvention of business, Reengineering of economy and Resilience of mankind will be name of game.  Business, globally, will have to operate differentiately; design new production techniques & management practices; go beyond the customer surveys; and to create entrepreneurship and venture teams to buoy up the business organizations out of traditional box. Business in the new century shall have to deal with three prime factors; Bigger & stronger agile competition; mixed economic growth and Cutting Edge Technology.

Indications are that Michael Porter’s 80’s Five Forces Model as well as Hamel & Prahlad’s 90’s Core Competency Model being done away with the century may have to adopt Brown and Eisenhardts “Competing on the Edge’ Model, instead. Both thinkers have suggested that all the companies in new century will have to go by new ways of thinking after accepting the fact that today’s distinctive core competence may be of little value for tomorrow’s global market.

Taking example of India as developing economy, before 1991, majority of the commodities like oil, fertilizer, cement, steel, sugar etc. were under controlled price regime.  Due to the rigid licensing system, stringent import policy and high tariff barriers, the capacity creation was very difficult.  But once capacity was created, the profits were almost assured as the inefficiencies could be passed on to the customer. The whole system was based on cost plus structure. The fragmented capacity creation ensured unviable economies of scale, resulting high cost of production. Ultimately, the Indian economy reached to a brink of bankruptcy in 1991 with only 1.1 billion dollars worth of foreign currency assets, just enough for 2 weeks trade for the country.

Measures were initiated for ushering in a new era of economic reforms under the guiding umbrella of GATT and Dunkel Proposals.  Initially with a bit hesitation and some reservations about the efficacy of the proposed reforms INDIA but also PAKISTAN, BANGLADESH, NEPAL and MALDIVES undertook economic reforms with overwhelming enthusiasm and hope.  Almost collapse of public enterprise mechanism prompted opening of the door to what once Adam Smith Called “Laissez Faire”.  This resulted into transformation of local economies of developing countries to be an integral part of global economic system. Substantially equipped with revolutionary advances in INFORMATION TECHNOLOGY assisted by new found marketing and managerial tools & skills, local business markets of developing countries have become a complex phenomenon; signifying both hope & despair, optimism as well as pessimism.

A careful and keen observation of new economic conjecture: (LPG) Liberalization, Privatization and Globalization produced a large impact on business of developing countries and revealed that key elements in decision making: whether to go international, which markets to enter, how to enter, have been baffled by the political, cultural and legal environmental factors on the one hand and on the other by the big global trade giants; such as USA, UK, Germany & France coupled with JAPANESE wonderful marketing skills.

For regional groups like ASEAN & SAARC, the issue continues to remain globalize and safeguard economy of developing countries. Taking India as an example, we can safely say that the economic concerns and business houses of the developing countries that decide to go global, are confronted by several challenges such as: High debts, Inflation, Low Per Capita Income, unemployment, unstable political governance, govt. regulations, imposition of high tariffs, trade barriers keeping in view the latest developments in IT & E-COMMERCE, HRM, CORPORATE GOVERNANCE, MARKETING AND INTERNATIONAL TRADE AND BUSINESS EDUCATION.  These developments & challenges can be replaced with a sonnet, given below:

“Change is a Challenge
&
Challenges are Opportunities

What matters?

P R E S E N S I T I Z A T I O N   &   I N I T I A T I V ES
Sandhir Sharma & Pavitar Parkash Singh
Faculty Members
Deptt. of Business Management
Punjab College of Technical Education, Ludhiana (PUNJAB)