Mumbai: Indian managers needed to change their mindset while managing costs, said Prof Marti G Subrahmanyam of the Stern School of Business, New York University, addressing CII's 3^rd Cost Conclave, which focused on 'Competitiveness for Global Leadership'. He highlighted that the focus needed to shift from operating costs to new emerging risks that rose from fluctuation in foreign exchange rate. Prof Subrahmanyam was speaking on 'Managing risks to be globally competitive', and highlighted the financial risks which Indian companies encountered in today's global era.

Financial risks played a dominant role in the growth of a company, he stressed. The Indian CEO/CFO should stay focused on business and have an explicit strategy to manage financial risks, rather than be fixated on macro-variables like oil and interest rates. He mentioned that the Indian economy has undergone change from a commodity-based economy to services.

However, in the last few years, the manufacturing sector had been the key driver for growth and the edge was the country's large pool of well-trained manpower. But, he said, in the long-run, volatility is bound to affect Indian companies.

Tata Motors executive director Praveen Kadle highlighted 'Challenges faced by Indian multinationals and the way forward'. He said if Indian companies had to carve a niche in the global arena, they needed to focus on economies of scale and risk mitigation, focus on product development, HR management, brand reputation and technology development. He emphasised that in the long run, companies need to indigenously develop their own in-house technology and not rely on one-time transfers.

Social and cultural issues as well as organisation structure play a crucial role when companies set up their operations overseas, said Kadle, stressing that companies should focus on strong value systems, good corporate governance, process systems, and a strong internal review mechanism.

CII chairman (western region) Gaurav Nanavaty said that Indian industry is today growing in new dimensions, truly mirroring its economic potential. With the growth and democratisation of global capital, Indian economy has emerged as an attractive destination for investors, he said, emphasising the need to craft a competitive economy that is not just responsive to change, but can proactively recognise the necessary changes and foster an environment of agility, excellence and anticipation. In the last three years, CII has been actively engaged in educating industry members about the need for being cost competitive, not only to improve profitability but also to sustain growth.

Other prominent speakers at the conference included RSM & Co deputy managing director Dinesh Kanabar, AT Kearney MD Vivek Gupta and Tata Consultancy Services CFO S Mahalingam. The conference, attended by 200 CFOs and treasury heads of prominent Indian companies, focused on cost competitiveness across the value chain as an enabler for achieving global competitiveness.