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Corporate Dossier

{ India Incs Most Powerful CEOs 2012 }

SKD DA
Ambition makes all the difference .

May 25, 2012

THE ECONOMIC TIMES

Work the double shift? Or work a paradigm shift?

KDDA

1
LN Mittal
ArcelorMittal

2
Indra Nooyi
PepsiCo

3
Nikesh Arora
Google

4 5
Vikram Pandit
Citigroup

6 7 8 9 10
Anshu Jain
Deutsche Bank

1
Amartya Sen
Harvard University

2
Ram Charan

3
Vijay Govindarajan
Tuck Business Schiool

4 5
Pankaj Ghemawat
IESE Business School Harvard Business School

6 7 8 9
Goizueta Business School London Business School Harvard Business School

10
Jagdish Bhagwati
Columbia University

Harish Manwani
Unilever

Ajit Jain
Berkshire Hathaway Reinsurance Group

Shantanu Narayen
Adobe Systems

Vinod Khosla
Khosla Ventures

Rakesh Kapoor
Reckitt Benckiser

Tarun Khanna Jagdish Sheth Nirmalya Kumar Nitin Nohria

Bala Balachandran
Kellogg School of Management

Global Indian Business Leaders

Top Women CEOs

Chanda Kochhar
ICICI Bank

2 Kiran M Shaw
Biocon

Shobhana Bhartia
HT Media

4 Shikha Sharma
Axis Bank

Naina Lal Kidwai

HSBC India

6 Kalpana Morparia
JP Morgan India

Neelam Dhawan
Hewlett-Packard India

8 Mallika Srinivasan
TAFE

Preetha Reddy
Apollo Hospitals

10
Roopa Kudva
CRISIL

POWER PLAY
7 8
John Flannery
GE India

Global Indian Thought Leaders

Most Powerful MNC CEOs

1
Nitin Paranjpe
Hindustan Unilever

2
D Shivakumar
Nokia-India, Middle East & Africa

3
Rajan Anandan
Google India

4
Bhaskar Pramanik
Microsoft India

5
Naina Lal Kidwai
HSBC India

6
Kalpana Morparia
JP Morgan India

9
Neelam Dhawan
Hewlett-Packard India

10
Sanjeev Chadha
PepsiCo Middle East & Africa IBM India

Shanker Annaswamy

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KDDA
he Economic Times, in partnership with IMRB International, has been conducting comprehensive surveys to ascertain the 'Most Powerful CEOs' of India, for the past few years. The survey has endeavored to identify the business leaders who are well-recognised by people for their efforts in shaping Corporate India.

METHODOLOGY
cial Contribution/ Sustainability', and 'Governance'. The respondents were from large companies selected by referring to databases like the ET-500. The respondents were requested to participate through an invite from The Economic Times. The corporate respondents were divided into sector-wise panels, and each panel was invited to share their feedback on CEOs from their sector. In order to control respondent bias, we discounted the respondent's opinions on his/ her own company's CEO. The respondents were asked for their inputs using a small survey-instrument, which could be self-administered or administered face-to-face by seasoned interviewers. The survey-instrument captured inputs on the respondent's CEO-associations across each parameter. The respondents were also invited to add one CEO (to the list) that he/she considers as most powerful. This ensured that the opinion of the respondent was not restricted to the given list of CEO's. PROCESS: The respondents were first asked to allocate points to the six parameters, which would add up to a total of 100. The points were allocated on the basis of importance of each attribute as per their opinion. This helped us to arrive at the sector-wise and overall parameters-weights which were used in the final analysis. For deriving the weights we considered only those scores which were obtained from management respondents belonging to the senior corporate profiles, like the Vice President, Asst. Vice President, General Manager and the like. After determining the parameter-scores, we checked for the respondent's familiarity with each of the CEOs given in their specific survey-instrument. For CEOs the respondent was adequately familiar with, opinion on each parameter was captured using the 'free association method' followed by a rating on a 3-point association-scale. In this, respondents were given a parameter and were then requested to mention which of the CEOs in the list they associate that parameter with. The respondents had the freedom to associate as many CEOs that they felt could be associated. Once they have associated the CEOs for that particular parameter, they are then asked to rate each CEO on a scale of 1 to 3, wherein 1 signifies a weak association, 2 signifies a moderate association and 3 signifies a strong association. Then for each CEO a composite score was calculated at a respondent level. Across respondents, the sum of these composite scores gave us the power score for the respective CEO. The higher the power score, the higher the rank assigned to the CEO. Finally, we obtained a cross-sector ranking of the CEOs. For this, we indexed the scores for the CEOs across sectors and thereby obtained the master list of top 100 CEOs.

StillOnTop
Continued from pg 5 As the 2012 list shows, much of the leadership of these firms has been trained in the world's best business schools. Ratan Tata has a degree from Cornell, Azim Premji trained at Stanford, Anand Mahindra has an MBA from the Harvard, Kumar Mangalam Birla has a London Business School degree. These are not new groups, although their business aggressiveness and their ability to think in global terms is a new phenomenon, which has been sharpened by the more pro-business atmosphere of the post 1980s. Not surprisingly many of the larger groups have incorporated managerial capitalism with family capitalism since at least the 1970s and have thus been able to rise to the challenges of liberalisation. Further, daughters are increasingly becoming part of succession planning, inheriting assets and entering boardrooms. Prime examples would be Manjushree Khaitan of the BK Birla Group and Priya and Priti Paul of the Apeejay Surendra Group. What is clear is that business as an actor has been able to negotiate several different regimes - the Nehruvian period was an especially difficult one when business, which was hoping to be a player in the newly independent nation state, was sidelined by the general anti-business rhetoric, the licenses and permits. There was brief relief in the 1960s but it proved to be too short lived. A worsening atmosphere came thereafter epitomized by Indira Gandhi's disdainful comments such as 'our private enterprise is more private than enterprising.' It is only with liberalisation that the private sector is beginning to be seen as a legitimate partner by the state. This new scenario has been enthusiastically received and channelised into measures, which have made private enterprise globally competitive. These measures include corporate restructuring, focusing on core competencies, implementing management changes and enhancing competitiveness as they aspire to global status. Larger groups have shown concerns that 'reputation' and 'high brand equity' should not be compromised in the face of rapid expansion and major acquisitions. Not surprisingly, the Tatas were among the earliest groups to implement a new code of ethics and 'brand equity Business Promotion agreement' and a 'Tata Business Excellence Model.' A confident private sector has gone on a global acquisitions spree with fierce aggressiveness. The acquisitions are impressive especially. Amongst the most symbolic is the takeover from Ford of Jaguar and Land Rover which heralds the acquisition of a 'symbol of British style', the makers of 'James Bond's new wheels' and 'Inspector Morse's classic.' Godrej is aspiring to global status through acquisitions of local brands in the personal care line and the AV Birla group in aluminum and carbon black. However, this could only be maintained if the pro-business atmosphere which was inaugurated with the economic reforms of the late 1980s and especially post 1991 is sustained. Unfortunately, this seems to be evaporating in the UPA II dispensation. Family business has thrived under liberalisation and has been able to forge meaningful links with MNCs in a confident way . The next challenge that lies before family business relates to what may happen to the retail sector, particularly in the context of the issue of entry of FDI. Walmart and 'Mom and Pop' run retail shops need not necessarily be adversaries. There may exist develop complementarities through the forging of relationships to mutual advantage. In any case the investment in logistics and supply chain would ultimately benefit the lower and medium segments of the retail sector energizing the vibrant bazaar component of the Indian economy.
The author is a business historian based at the National University of Singapore. She has written widely on Indian business and has recently edited The Oxford India Anthology of Business History (Oxford University Press, 2011)

The First Multinational

Continued from pg 5 By the end of the 1700s, the Company had undergone a curious change; it had begunto rule a part of India in the name of the Mughal Emperor. This was the beginning of the British Empire in South Asia. Why did a group of foreigners succeed so dramatically as traders in the Indian Ocean? And why did a group of traders decide to capture power in a distant land? In the 1600s the Company was an upstart in India, smaller in scale than almost any of the large Indian family firms operating from the Indian coastal trading towns like Surat, Masulipatnam, and Hooghly, and desperately trying to defend its operations against attacks by European rivals, the Dutch and the Portuguese. An empire was a prospect beyond dreams. Yet, collectively, the Europeans did possess three strengths that the greatest Indian firms did not have. First, the Europeans had knowledge of long-distance navigation. They understood charts, maps, ocean currents, instruments, routes, and the technique of making sturdier and larger ships carrying guns on board much better than did the Indian seafaring merchants. The Europeans, thus, had developed a truly global understanding of the oceans long before the other ocean-bound cultures. Indians were good navigators, but they did not venture beyond the Indian Ocean. Second, the Company could procure lots of Spanish silver. In turn, their capacity to do so had owed to the presence of well-developed financial markets in Europe of this time. In India, banking was less developed, money changed fewer hands, and interest rates were higher. The biggest advantage the Company possessed stemmed from its identity as a joint stock firm. In Asia, the biggest firms financed investments with their own money, family savings, or at the most, money borrowed from members of the same caste or community. The idea of the joint stock was unknown. That idea allowed the East India Company to pool in huge amounts of money, and make use of the economies of scale available in overseas trade. It could build an elaborate infrastructure consisting of forts, factories, harbours, and ships. Joint stock also made them better risk-takers. The Indian traders spread risks by dealing in a variety of goods in auction-type exchanges. They were what the Dutch historian Jacob van Leur had called 'peddlers' of the oceans. The Company, thanks to its capacity to absorb risks, dealt in a few goods, which it bought on large scale. Being specialised, it needed to contract with a specific set of suppliers year after year and to pay out vast sums of money as advances. Contractual sale of goods was not unknown in India before, but contractual sale on such a scale by a single firm had no precedent. The need to protect its ports and harbours from numerous enemies made the Company keen to own ports. The three leading examples, Madras, Bombay, and Calcutta, represented quite a different business culture in coastal India. Whereas Surat and Masulipatnam had belonged to states that lived mainly on land taxes, the Company towns were oceanbound, and had no ties with land. Bombay, Calcutta, and Madras were no ordinary ports. They were ports where seafaring merchants, rather than landlords and warlords, made laws. The Company towns, therefore, were attractive to Indian merchants as well. In the 1700s when the Mughal Empire started breaking up and warfare broke out in the interior, hundreds of wealthy Indian merchants and bankers fled to the Company towns. They were a huge source of support for the Company's political adventures. We need not overdraw these strengths. The Company's own business privileges, which were a monopoly granted by the British Crown, were constantly under attack fromprivate traders and even its own employees. The relation between Indian firms and the Indian rulers was based on informal understanding, but the Europeans did not enjoy such trust and goodwill. They had to take out license to trade, and pay massive bribes to the Indian kings and their henchmen. They also had to keep an army of paid agents to procure goods. These contracts had no Indian precedents, and therefore, they were not protected by any Indian law. Contracts were broken often, and the Company could do little when they were broken. In order to avoid such situations, the Company recruited its chief agents carefully. They were often individuals who held power over the textile artisans. At the same time, they were more knowledgeable about India than were the Company's own officers. The Company officers disliked this dependence and hated the agents. Lastly, unlike a modern firm, the Company did not have a unitary command-andcontrol structure. Its overseas enterprise was a peculiar combination of modern joint stock principle in raising money and pre-modern partnership in management. The two partners were the sedentary City merchants and peripatetic sailors and soldiers. These two classes were not friendly at home. But the sailors and soldiers joined the venture on the promise that they could trade a little on the side. Still, it was the latter that had to deal with hostile kings and untrustworthy agents in India, which made them more aggressive and opportunistic than the shareholders back home. The sailors and soldiers were the people who made the moves that led to the empire in India, often against the instructions of the shareholders. The Company's success, in conclusion, had much in common with the ingredientsthat many modern multinational make use of - capacity to absorb risks, capacity to think on a world scale, access to deep financial markets, and access to information. Its weaknesses too were surprisingly modern in character - miscalculation of political risks and unreliable local partners. But the Company was also quite unique. For one thing, it was a firm with a split personality, torn between merchants and soldiers. For another, it reached its peak during an unusual moment in Indian history that saw the collapse of a great medieval empire. That moment gave the sailors and soldiers the chance to take hold of the reins of the Company, giving birth to another empire.
The author is Professor of Economic History, London School of Economics and author of The East India Company...The Worlds Most Powerful Corporation

The survey was conducted through a fivestep process: A. Collating the list of CEOs across sectors B. Setting evaluation parameters C. Calculating the parameter-scores D. Free association & rating of CEOs on each evaluation parameter E. Ranking of CEOs at an overall level The team at IMRB International was provided with a list of CEOs, collated mainly from this year's ET 500 rankings as well as previous years' rankings of 'Most Powerful CEOs' with relevant additions and removals in line with the current corporate scenario. The aim was to arrive at a final short-list of top 100 CEOs to be crowned as the 'Most Powerful CEOs' of corporate India for the current year. The CEOs were then evaluated by corporate people in senior/middle management roles on six important parameters - 'Leadership', 'Strategy & Innovation', 'Performance', 'Stature', 'So-

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