Only If Profits Made By A Company Reaches All Stakeholders Can A Firm Prosper: RC Bhargava

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India needs to create a million jobs a month to absorb workers coming into the labour force and everyone is looking at the manufacturing sector to be the driving force. However, RC Bhargava, former CEO and chairman of Maruti Suzuki India points out the reasons why Indian manufacturing firms are yet to reach a globally competitive level.

In Maruti Suzuki Chairman RC Bhargava's words, a company's management and workers in India have always had an adversorial relationship. This can be traced back to the Karl Marx theory that asked the 'workers of the world unite as they had nothing to lose but their chains.'

The thumb rule for any company that aims at growth and retaining workers, is by growing itself and remaining prosperous. It is also in the workers' interest to help their company grow.

Bhragava, speaks from his decades of experience as he explains that it becomes a herculean task to retain employees if they feel that all the benefits of the firm are streamed towards the CEOs. Conditions have to be created in a company where benefits reach all stakeholders of the company.

"If money is taken out in cash of a company by management for activities not related to growth of company & stakeholders, they also hold the responsibility to return the money back in to the firm. In short, diverting funds from a profitable company to other unrelated interests is not advisable."

"Failing to recycle profits back into a company harms long term growth of the company. It is necessary that the management focusses on growth of company and maximisation of its internal resources", says Bhargava.

Bhargava also says that exhorbitant salaries to CEOs are a loss of internal resources. Examples from around the world point towards this. Leadership of globally successful manufacturing firms have a paternalistic attitude towards their workers, company and lead low key lives.

Coming to his own company Maruti Suzuki, RC Bhargava says that the labour unrest at the Manesar plant started much later than the one at Gurgaon plant. He attributes the unrest to communication failure, and mistakes in recruitment as lessons learnt.

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