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India Inc's management confidence improves post covid:
AIMA Management Capability Development Index 2022

08 Jul 2022

Women executives have more confidence in their organization's management capabilities than men

Self-appraisal on tech indicates plenty of room for improvement

Indian enterprises are feeling more confident about their management competence as they recover from the covid crisis. The 2022 study of management capability of Indian enterprises by All India Management Association (AIMA) and KPMG has produced a higher overall score compared to the previous edition of the study in 2018. This year's overall Management Capability Development Index (MCDI) score stands at 74.5 compared to 71.6 in 2018. In fact, the self-rating scores have improved on all 10 parameters assessed in the survey.

The 2022 MCDI also offers a view of the progress of India's management capability over the past decade, as it is the 6th management capability survey since 2010.

The self rating by India's management leaders have fluctuated since 2011, when the overall self-assessment score was the highest at 77.8. The lowest point for Indian management was 2014, when the MDCI score dipped to 70.7. It recovered in 2016 to 75.5 only to dive again in 2018 to 71.6. Now, the self-appraisal score of India Inc is better at 74.5. The scores are out of a maximum possible of 100 points.

The 2022 MDCI has accounted for gender-based variations in responses to the questions on individual yardsticks of their organization's management capability. Women are more confident of capacity of their organization than men. Women rated management capability of their enterprises higher than men on the majority of the 10 yardsticks, including vision and strategic leadership, performance leadership, financial leadership, external relationships, integrity and corporate governance, and innovation and adaptability. However, women score their organizations lower than men in the areas such as people leadership, organization , and application of technology and knowledge. Both gender agree in their rating on the criterion of focus on getting results.

Surprisingly, the study shows a lack of substantial score upgrades in the areas of application of technology and knowledge as well as innovation and adaptability. The score on application of technology and knowledge has gone up slightly, from 72.1 in 2018 to 74 now, despite the wave of digitalization during the past couple of years. The score on innovation and adaptability has also improved a little - from 70.3 to 71.6. It indicates a significant bump in the level of thresholds in the areas of technology adoption and business creativity.

The decadal trends of self rating by Indian management shows a strong bias towards ethics. Over the past five MCDI studies, India Inc has consistently given itself the highest scores on integrity and governance - in high 70s or low 80s. In fact, this year, the score on integrity and governance has peaked at 80.4.

The areas of biggest concern through the past decade have been the organization capability and people practices, but there is a recovery on both counts this year. On organization capability, since 2011's peak score of 76.2, there have been dips but now the score has recovered to 71.5. The people leadership score has also recovered this year to 73.2 after dips through the past decade.

The decadal variations have been minor on many management parameters. The scores have hovered around mid-70s on competencies such as vision and strategic leadership, performance leadership, financial leadership, and external relationships.

According to AIMA President, Mr CK Ranganathan, the MCDI Report provides important insights to Indian management leaders to bolster their organizations as they prepare for realigning their organizations in a changed world. "It takes immense management capability to navigate through uncertainty and ambiguity," he says.

"Given the unprecedented circumstances, it is even more pivotal to evaluate the management capability of the leaders of India," says Ms Vishalli Dongrie, Partner & Head, People & Change Advisory, KPMG in India.

The 2022 MCDI study was conducted across different sectors and different types and sizes of organizations to make it representative of Indian management.

The majority of the respondents, 21%, were from the manufacturing sector while the professional services, IT, education, and financial services also had major input into the findings. Among the sectoral outcomes, the healthcare sector scored the lowest, as the respondents from the sector believed there was a huge scope for management improvement. The most satisfied group was that of the mining companies.

Among the organizations covered by the survey, the smallest ones (those employing 20 or fewer employees) showed the widest management capability gaps whereas the mid-sized companies (100-200 employees) expressed the highest confidence in their management capability.

The survey included a section on the management response to covid. A key finding is that the large organizations (more than 1000 employees) reported seeing a higher positive impact of remote working on productivity, as opposed to small organisations (100 or fewer employees).

The AIMA-KPMG MCDI survey 2022 included a set of 78 questions spread across 10 dimensions. The respondents were asked to rate these statements on a 6-point Likert scale. More than 550 responses were received, out of which 507 responses formed the basis of the findings in this report. Respondents answered each question on a scale of 0 – 5 which was consolidated for each dimension and converted to a 100 percent index.

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