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Videocon Int'l Ltd Is India's Future

By Chandrabhan Prasad

19 July, 2004
The Pioneer

The recent job reservation debate in the private sector has mirrored the character of Indian society than ever before. The unpolished, private sector did not care to maintain minimum demeanour in rejecting the issue, and went on insulting the collective Dalit genius.

Quotes like "we will loose the competitive edge", "our productivity will suffer" and "merit will be compromised" flew around. So belligerent was the campaign that the Congress party, which raised the issue, timidly ran away from the debate giving a walkover to the "captains" of industry. However, against this extremely hostile background, Venugopal Dhoot, the chairman of Videocon International, told a business daily on June 2, 2004: "We welcome the move and will follow the law." He was asked a straight question on job reservations in the private sector. Dhoot's gesture shows that not everything is lost. The private sector is not socially as insane as we may have thought, there are some rays of hope, which, if pursued sincerely, could lead to capital democracy becoming a reality in India too.

The story of the Videocon group is as fabulous as the social conscience of the Dhoot family. With a turnover exceeding Rs 50 billion, 18 manufacturing units, and 10,000 employees, the Videocon group is a market leader in consumer electronics and home appliances. Through a technical tie-up with Japan's Toshiba, Videocon produced India's first world-class colour TV. The company's product range is highly diversified - it makes TVs, washing machines, no-frost refrigerators, air conditioners, VCRs and what not.

It has braved competition from multinationals like Whirlpool, LG, Samsung and other giant corporations. In fact it has taken the battle right to the MNCs' home turf - Europe! According to a web magazine, Appliance "Today, many refrigerator brands sold in Europe have compressors made by Neechi Compressors, a Videocon subsidiary." Strange as it may appear, Videocon, which was founded only in 1985, is one of India's youngest companies to touch a turnover of Rs 50 billion.

Its founder, the late Nandlal Madhavlal Dhoot, did not come from a traditional business house. A successful sugarcane and cotton grower, Nandlalji established a sugar mill in Maharashtra's Gangapur in 1955. He initiated his three sons: Venugopal, Rajkumar, and Pradeep into the business, and they envisioned Videocon International Ltd in 1985.

Thus, what is clear is the fact that the Dhoot clan did not inherit their business or corporate positions. Rather they built it up on their own and grew in the face of thick competition. This aspect is very crucial in decoding the secrets of India's corporate world. Those industrialists who had inherited their businesses and positions, and did not face any competition, tend more to talk about "merit", "competitiveness", "efficiency", etc and those who created their empires, and emerged out of competition, tend to be more idealist, liberal and honest in their social outlook.

This is clearly demonstrated in Videocon's mission statement when it declares: "The Videocon group is committed to create a better quality of life for the people and furthering the interests of society, by being a responsible corporate citizen." Do we ever hear a Indian corporation talking of "furthering the interests of society?" The Videocon statement on reservations has come just a month back, but this mission statement has been around for years.

Thus, what we can conjecture is that, this wonderful company has a philosophy comparable only to American corporates. In any country, the "interests of the society" rests on its "prosperity with social peace". That happens only when there is an atmosphere of "competitiveness, fair opportunities to all, assignments accorded on the basis of qualifications, and not on the basis of birth or inheritance".

This only shows that the Videocon group is not afraid of competition, and is prepared to extend opportunities to those social groups which have been historically denied access to social contacts, so fundamental in placements in the private sector. What private sector has in its mind, and which it is not prepared to publicly confess, is the fear that their social domination and stranglehold over industry and the capital market may erode.

The private sector is witness to the phenomenon where, within five decades, the traditionally suppressed social groups have made their way in institutions under the State. The private sector should not get unnecessarily worked up with the fear that their future generations will become unemployed. As the economy grows, there will more opportunities for all. As a responsible corporate sector, the private sector should emancipate from narrow caste considerations, and think on how best to earn a place of pride for India in the global family of nations. That can happen only if India becomes a major player in world market, which is not possible unless the private sector allows social competitiveness in industry.

In that sense, Videocon is India's future, as it thinks like American corporations. The rest can follows, or even excel it.