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Management Lessons From Streets Of India

Captain Raghu Raman “Management Lessons From Streets Of India” which speaks about India’s unorganized sector. The unorganized sector has a mechanism of working which makes it look so smooth all by itself. There is currently a contentious argument in India over whether the street market businesses and other unorganized local businesses can be classified as an organized or formal business. The government is taking incremental steps to widen the social security net and increase the unorganized sector’s income. The unorganized sector plays a significant role in the economy of India. Every organized sector has a parallel un-organization method of conducting the business. In reality, in every metric of businesses they are exponentially better than many of the organized businesses and such businesses provide employment to more than 95% of India’s GDP and also account for 50.6% of India’s GDP.

If you were to take `Breakfast` outside most station in Mumbai, you pay Rs.15 for a plate of breakfast food (like Poha, Upma, Idli and Medu Vada), the owner keeps with him only 2 to 3 rupees. The remaining amount is paid to the entire supply chain i.e. to the people who wash the utensils, to the people who grind it, and to the auto man who brings it. Thus, all of them get an equitable distribution of the profit. But there is no real official account on how this sector moves or runs.

Whereas the Five-star hotel chains being from an organized sector charges Rs.300 to 400 for the same plate or Rs.100 in Udipi Resturant in which the maximum amount that a customer pays mostly goes to the brand of the company, a smaller percentage of money is given to the entire supply chain, in this case, there is no equitable distribution of the profit, as most of the charges go for the brand and experience.

There is more fluidity in the street business sector. Maybe less transparency, but the ease of doing business, money movement, business decisions, growth, and even entry and exits are much easier compared to an organized player. In India, a large section of the total workforce is still in the unorganized sector, which contributes a big portion of the country's net domestic product and helps lower unnecessary compliance and organizational mechanism hence saving overheads as well. Whatever planning, decisions and other strategies the organized businesses are making, we can see a similar or even better planning, decisions and strategies are involved in the un-organized businesses.


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