New Delhi: A vast majority of companies in India follow a business model of either controlled management or of 'blind obedience' to the top leadership, while just six percent firms have a transparent self-governance structure in place, according to a new survey.
According to a survey conducted by US' knowledge-based firm LRN, companies generally operate on three business archtypes -- Blind Obedience, Informed Acquiescence (Command and Control) and Self-Governance.
In a 'self governance' model, the companies repose a lot of trust on their employees and have very less number of rules and procedures to follow. Decisions at such firms are taken on the basis of set of core values and transparent collaboration.
On the other hand, the employees of 'blind obedience' model companies follow a central leader and performance by workers is driven by fear.
However, majority of the companies are governed by 'informed acquiescence' wherein elaborate rules, hierarchical structure are found.
As per the study, 6 percent of companies in India are self-governing, 26 percent fall into the blind obedience and 68 percent into the informed acquiescence archetypes.
"Companies that meet the standard of self-governance have profound advantages in the marketplace. They have the highest levels of innovation, employee loyalty, and customer satisfaction and the lowest levels of misconduct," LRN Chief Executive Dov Seidman said.
The survey, which polled 3,000 employees in India, said the companies which operate on the principle of self governance have a significant advantage over their competition.
As per the study, the companies that work on self governance have observed that 90 percent of employees are highly innovative compared to their rival firms. This was 18.8 percentage points lead over Informed Acquiescence companies and a 43.3 percentage points lead over Blind Obedience organisations.
Moreover 93.3 percent employees in self governed firms have expressed a high degree of loyalty to their companies which is 35.6 percent and 7.2 percent higher than blind obedience and informed acquiescence, respectively.
Besides, 100 percent of the respondents said that they saw high satisfaction among customers compared to 70.2 percent for Blind Obedience and 89.2 percent for Informed Acquiescence.
In addition, 96.7 percent respondents have witnessed a stronger financial performance by their companies greater than their competitors which is ahead of Blind Obedience by 40.5 percent and Informed Acquiescence by 22.6 percent, the study said.
"India is in a high growth phase with primarily a young workforce who belong to the post liberalisation period. They do not like the experience of working in a traditional, hierarchical and a command and control environment," LRN Managing Director (India) Devraj Shetty said.
"It is thus important for a company to adopt self governance do that the employees become more engaged with the organisation, leading to better performance and innovation," he added.
PTI
