Content area
Full Text
Abstract
Software industry has emerged as a powerful engine of economic growth. India, with its comparative factor advantages, has excessively high hopes on the industry. These hopes were partly fueled by more than fifty percent growth rates the industry experienced over the last decade. The new century demands new paradigm to succeed. Recent slow down in the U.S. and its adverse impacts hints at the weaknesses in the business model and managerial approaches used by many Indian firms to compete. Flexibility, a common theme among many evolving managerial approaches, will be critical for success of the software firms in their competitiveness journey. Attempts have been made in this paper to understand the role of flexibility in competitiveness taking the case of software industry. Correlation among criteria of flexibility and specific factors of competitive performance has been explored. The findings are reinforced through case study of a leading Indian organization that has sustained its competitiveness.
Keywords: competitiveness, flexibility, information technology (IT), software industry
Introduction
Software and related service industries are major growth drivers and India is keen to make its mark in such industry. Software industry has created enormous expectations in taking India into high growth territory. The average growth rate for the industry has been more than fifty percent in the last decade of the twentieth century. Its share of the Indian exports has been also increasing continuously (Table 1). However, the sustained competitiveness and growth prospects of the industry are increasingly questioned in wake of rapidly changing global scenario.
Competitiveness is the foundation on which such growth can be achieved. The long-term competitiveness of a firm can be judged from its sustained growth rate over years. One such indication is total shareholders return (TSR). A study done by Boston Consulting Group gives a list of best performing companies over the last few years that have created value to its shareholders consistently (BCG, 2000). In following table, the world's top performers according to the TSR value are given (Table 2). The return in industries like information/ communication and telecommunication (IC&T) and media are very high.
Sustaining competitiveness in rapidly changing market dynamics demands flexibility, particularly on part of enterprises. Companies are trying to introduce different flexibility measures to improve and enhance their competitiveness...