Management should not be identified with merely the process of production of goods and services. There is a lot more to it than this physical activity, which is only the final product and is the result of several reflexes, policy as well as administrative, with several people responsible for these. The reflexes are more important since ultimately their qualitative superiority is what counts in the market place. Business strategists have to be both demand and supply side economists. While Keynes was satisfied with effective demand, those who want to succeed in a fiercely combative market have to be very sure of both demand and supply being effective.Demand has to be real, not notional, and be strong and getting stronger all the while. Its efficacy must be reflected in the community wanting the product put on the market. The same characteristic in respect of supply must mirror quality combined with adequacy and competitive pricing. While the demand side is largely concerned with the environment over whichcontrol can be exercised by manufacturers only to the extent of wooing the prospective as well as existing consumers, the supply aspect is mainly, if not exclusively, governed by what the manufacturers do in respect of diverse areas of management. Marketing, which falls on the demand side, can succeed only when the product is good enough to be promoted and not otherwise. This is not to be dismissive of marketing but the purpose is only to emphasise the managerial priorities.
Effectively, much of what the management students are taught -- and have to learn even if not taught -- must pertain to making effective supply possible. We all know that the essence of good management is the fostering of team spirit, and those who lead must take their subordinates with them. But then, leadership itself is constantly under test with a fast changing business environment and those at the helm have to be prepared all the time for the changes that come. Drawing an Tom Peters' dictum that managers should thrive on chaos, onemust say that the best CEO is one who can translate a challenge into an excellent opportunity.
There is a lot of merit in what was known as the old Japanese style management which focused on a process of regular consultation with supervisory officials and even the workforce. But then, a competitive edge is best achieved through a combative management style. Managers have to constantly perform and there is no place for laggards or non-performers in the market place of today.
Every manager is always on the hot seat, all the more now because of growing competition internationally and in the domestic market. Yet, some caution is due against emulating the style of best achievers. After all, the environment is not the same for different people and the man on the spot is best placed to tackle a crisis or exploit an emerging opportunity. Keynes was not a management guru and didn't bother to be seen as one. Ironically, Peter Drucker became a guru because he could not succeed as an economist and his own outstandingwork on economics failed to make the kind of impact that Keynes' General Theory did. Indeed, his blistering attack on Keynesian postulates appeared to have been prompted by a feeling of jealousy. But, surprisingly, Drucker did not see anything wrong with Keynes' neglect of supply having to be effective even though he did attack General Theory's total obsession with the imperative of effective demand and the supporting conceptual framework.
One is not even suggesting that managers should be unconcerned about effective demand but only making the point that without effective supply no manufacturer will be able to take advantage of even the most effective demand, a situation that Keynesians would rejoice over. In terms of purchasing power, an environment may be available to manufacturers to exploit but a product has to be saleable in terms of competitive quality as well as pricing for this exploitation to materialise. Saleability is largely a factor of what good management can achieve in the matter of creatinga brand and its positioning. As an outstanding economist, Keynes should have given more than a passing thought to the fact that effective demand could not stand by itself and had to be supported by a supply situation that was truly effective.
Managers who want to be successful have to outdo Keynes in respect of business strategies. There can be no scope for failure and supply has to be so planned as to be able to even remove shortcomings on the demand side. Indeed, one may even want to over-rule Keynes and say that without effective supply there can be no effective demand. Saying this may seem like heresy, but then in the market place several factors are needed to make sales a reality. Quality has to be excellent and there should be no compromises on this. The greatest care has to be exercised in respect of brands and positioning. Marketing, when the product is ready to reach the buyer, has to be top class. All these contribute to the creation of an effective demand from a situation of consumers being flushwith purchasing power.
Production planning which forms the basis of effective supply has got to be superlative. Yet, there are several aspects of it which can go wrong. Bottlenecks can emerge in the supply of raw materials and inputs and there can also be labour unrest that can all combine to disrupt the schedule. For a long time, power availability has been a serious deterrent. The equipment can fail at the most critical times. Management, thus, can be severely tested at times. It may seem odd for anyone to make a case for supply side management -- not in the sense that economists understand it -- at a time when the manufacturing sector is facing a slow down, reflecting a demand recession. There will be no takers for any suggestion for good supply side strategies influencing the demand prospects when the proverbial horse is refusing to drink any water, but then it can still be made.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
