Sunday, April 13, 2008

On Business Ethics (& more on the Nano)

A while back this blog was buzzing with the thrill around the Nano.

I am (as is my wont) trying to present another view.

One thing to understand about business is that there are two approaches to it. One is the business house that insists on providing a high quality product to it's customers (example, Apple Inc.?). Another is the kind of business house that determines what the customer is willing to pay for a product and designs a product around that price range.
Much as I respect the Tatas, it is for this second reason that I don't accord the same respect to all their products.

I drive a Tata car. It's a very nice car in many respects, but it's nowhere near international standards. The seatbelt malfunctions, so does the horn, there's very little finesse in it's finish. (This is almost like writing a movie review... Somebody else does the hard work, and we get to sit & criticize it!)
There really shouldn't be a reason to crib. The Tatas made an excellent VFM product! For X price, they've provided some great features! Except that there a gadzillion features missing as well! In trying to make an affordable vehicle, the Tatas cut cost on almost every component: the interiors, the door hinges, the wiper jets (need replacing every 6 months!), the tyre size!!! The actual tyre is one size smaller than the ideal size (as informed by a gentleman in the tyre industry for over 25 years). This apparently saves them Rs. 500/- per tyre. That's Rs. 2500/- per vehicle. For a car that's sold 1 Lakh units, that amounts to a saving of Rs. 25,00,00,000/-! That also amounts to me driving on less that perfect tyres!

It is this aspect of business that I find disappointing. It is this disregard for a good quality product (or even safety features!) as opposed to an affordable product that I find disconcerting. The Tatas aren't the only ones to blame, the consumer who agrees to buy such products is equally to blame; but one should expect more product responsibility from a corporate, the same we way we expect corporate social responsibility.

So think again about the Nano. Even if you cast aside the potential traffic nightmares, the environmental nightmares, do think about what safety features the 1 Lakh car will offer us. Or do safety features not matter in "the people's car"?

Inviting inputs from you gentle readers and future industry stalwarts on this aspect of business.

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