MURAD ALI BAIG reveals how Maruti’s ex-CEO changed the rules of the auto sector game
December 18, 2007 will be a double red-letter day for Jagdish Khattar. It will be his birthday. And on attaining the age of 65, he will automatically step down as Managing Director of Maruti Suzuki. These eight years at the helm of India’s largest auto manufacturer, have been a very tumultuous innings with many challenges that a versatile, skilful and diplomatic corporate manager converted into significant strategic and marketing triumphs. Many critics thought that Maruti will lose its market standing due to competition, and will not be able to face the onslaught. Not only did Maruti protect its market share, it introduced a few path-breaking models that changed the rules of the game.
His first challenge was in picking up the pieces in a very demoralised company, after his predecessor R. S. S. L. N. Bhaskarudu led a virtual revolt against Maruti’s major stakeholder, the Japan-based Suzuki. He had questioned the basic belief that was prevalent then, that every detail in Maruti Suzuki organisation down to the very buttons on each worker’s uniform had to be according to Suzuki’s dictates. As a competent technocrat, he questioned the slow pace of indigenising of the gearboxes of the various car models and the purchase of seemingly-expensive capital goods only from Suzuki sources.
Bhaskarudu had obviously been encouraged by several political leaders who were hostile to all things foreign and wanted accelerated localisation. It was a tense period with several government officials also intervening before a settlement that was satisfactory to all was finally hammered out with a strong intervention from CII & other industry lobbies who felt that a destabilisation would hurt foreign investments. Not surprisingly, Maruti racked up its first losses of Rs.2.69 billion in FY 2000-01.
After the settlement, Khattar emerged as the best compromise candidate, who was acceptable to both Suzuki and the government. He was seen as the diplomat-CEO, who would manage passions and emotions, apart from taking Maruti onto another level. Surprisingly, Khattar achieved all these diverse objectives in grand style. He didn’t ruffle feathers, yet got things done. He didn’t scream, yet found his way to the desired goals.
December 18, 2007 will be a double red-letter day for Jagdish Khattar. It will be his birthday. And on attaining the age of 65, he will automatically step down as Managing Director of Maruti Suzuki. These eight years at the helm of India’s largest auto manufacturer, have been a very tumultuous innings with many challenges that a versatile, skilful and diplomatic corporate manager converted into significant strategic and marketing triumphs. Many critics thought that Maruti will lose its market standing due to competition, and will not be able to face the onslaught. Not only did Maruti protect its market share, it introduced a few path-breaking models that changed the rules of the game.
His first challenge was in picking up the pieces in a very demoralised company, after his predecessor R. S. S. L. N. Bhaskarudu led a virtual revolt against Maruti’s major stakeholder, the Japan-based Suzuki. He had questioned the basic belief that was prevalent then, that every detail in Maruti Suzuki organisation down to the very buttons on each worker’s uniform had to be according to Suzuki’s dictates. As a competent technocrat, he questioned the slow pace of indigenising of the gearboxes of the various car models and the purchase of seemingly-expensive capital goods only from Suzuki sources.
Bhaskarudu had obviously been encouraged by several political leaders who were hostile to all things foreign and wanted accelerated localisation. It was a tense period with several government officials also intervening before a settlement that was satisfactory to all was finally hammered out with a strong intervention from CII & other industry lobbies who felt that a destabilisation would hurt foreign investments. Not surprisingly, Maruti racked up its first losses of Rs.2.69 billion in FY 2000-01.
After the settlement, Khattar emerged as the best compromise candidate, who was acceptable to both Suzuki and the government. He was seen as the diplomat-CEO, who would manage passions and emotions, apart from taking Maruti onto another level. Surprisingly, Khattar achieved all these diverse objectives in grand style. He didn’t ruffle feathers, yet got things done. He didn’t scream, yet found his way to the desired goals.
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Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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