Archive

Sumantra Ghoshal

Ghoshal has achieved international prominence for his views on large corporations and their role in modern society. “The most important engines of economic and social progress are companies that create and distribute wealth and raise people’s living standards,” he says. “Management is a calling and a profession that sits at the heart of creating good for society and for individuals.”

Related Content

The company collector
 Management strategist Sumantra Ghoshal has earned countless accolades. The management consulting company Accenture names him one of the most influential business thinkers alive today. The Economist describes him as a “euro guru” of corporate strategy. But Ghoshal has a much simpler view of himself. “I’m a collector of companies,” he says. “Some people collect paintings or furniture. I collect company
stories.”

Ghoshal has achieved international prominence for his views on large corporations and their role in modern society. “The most important engines of economic and social progress are companies that create and distribute wealth and raise people’s living standards,” he says. “Management is a calling and a profession that sits at the heart of creating good for society and for individuals.”

Ghoshal has forged his views from talking to people in the companies he is studying. “I go around the world looking at companies,” he says. “I document them. I write case studies.”

He also talks to management. “So many senior managers care deeply about their role in society,” he says. “They are trying to do the best they can for the good of the world. My interest in these issues flows out of their aspirations and their efforts.”

Meanwhile, Ghoshal says, the contribution big corporations have made to the modern world is often overlooked. “If you look at history, companies are the engines of progress,” he says. “The quality of my life and the quality of the world in which I live is significantly better than that which my father enjoyed, and much, much better than that which my grandfather enjoyed. I believe this is true for the vast majority of people in the world.”

This improvement is due to companies – managers, entrepreneurs and businessmen, Ghoshal says, noting: “They created the wealth, the innovation, the new technology, the new products and the improvements in productivity that underlie progress.”

The issue is the intrinsic good of business itself, rather than what Ghoshal calls the “old, tired and, to my mind, useless” question of the social responsibility of companies – companies adopting villages, taking responsibility for educating people and similar initiatives. “If a company is in a developing market, and the government is incapable of providing roads or education or other services, and the company says ‘We’re making profits. We’ll give some back and help provide some of those services,’ then all power to them. But that is not the argument I’m making,” Ghoshal explains.

“Managers should recognise that the very act of doing business – using resources in a more productive way, creating new products, new technologies and new ideas – is an enormous contribution to society. They should be proud of their contribution, and businesses should focus on that contribution and on the fundamental role that managers and companies play in society.”

This view of companies has implications that reach far beyond business and the economy, Ghoshal adds. “I believe that it was not ideology nor the idea of a market economy, but the quality of management practised in the West that won the Cold War,” he says.

Moreover, he says, current international events are exposing the error in the notion that complete homogenisation and total standardisation lie at the heart of globalisation – a notion he deems “patently false.”

“Globalisation has always meant that there are differences between nations,” Ghoshal says, “ – differences in customer tastes, in culture, in climate, in political and social beliefs and in views on the nature of organisations and leadership. Current events give emphasis to the idea that big corporations have to maintain standardisation of the backend and leverage the efficiency advantages of being global. But successful global companies have always been sensitive to societal, cultural, economic and other differences across the world and have known how to respond to them effectively.”

Ghoshal dresses casually and emanates calm. But he talks with a verve that reveals his passion for his subject. In both conversation and public speaking, he speaks with quick animation, his ideas seeming to flow out in waves.

Born in Calcutta, India, Ghoshal has doctoral degrees in management from both the Massachusetts Institute of Technology (MIT) and Harvard University in the United States. He is a professor of strategy and international management at the London Business School and is the founding dean of the Indian School of Business. He is also a member of the Committee of Overseers of the Harvard Business School. Previously he taught at the INSEAD business school in Fontainebleau, France, and at MIT’s Sloan School of Management.

Ghoshal has written a series of highly acclaimed books that have made his views an integral part of modern thinking on strategic management. Managing Across Borders: the Transnational Solution, co-written with Christopher A. Bartlett, was listed by the Financial Times as one of the 50 most influential management books of the 20th century. The book illustrates the obstacles and opportunities involved in building and running a multinational organisation.

Other notable books Ghoshal has written or co-authored are: Managing Radical Change; The Individualized Corporation: A Fundamentally New Approach to Management; The Differentiated Network – Organising Multinational Corporations for Value Creation; and The Strategy Process.

“I feel very good about my job,” he says. “As teachers, we contribute to the development of those joining this profession to become entrepreneurs and managers, and, in executive education, we provide support to those who are already managers.”

A renowned keynote speaker, Ghoshal recently held a presentation in Lisbon, Portugal, introducing his latest, unpublished research on how companies and managers can best maintain disciplined, persistent action in pursuit of business opportunities they have identified. “Whatever the differences of nationality, experience or role, if you push and probe below the surface of any long-term manager, you will find this commitment to absolute, uncompromising quality – the idea that ‘our brand stands for quality, we stand for quality, we will make no compromise on quality,’” he says.

This is in keeping with Ghoshal’s view that companies and managers are important contributors to society. “I think each one of us in some way needs to derive some meaning from our life, to answer questions like ‘Why am I doing it? What’s the value of it?’ I believe companies are extremely important. I really think that management can be seen as a calling. Just the way medicine is. It contributes to the world.”

Keep me updated

Want to learn more about what is driving change in the engineering world? EVOLUTION helps you to stay up to date with emerging trends as well as the latest technology. Sign up for EVOLUTION updates to receive new content directly to your inbox.

Sign up