How can SMEs manage their employees during this phase of recession?
Dr. Jagdish Sheth: It's absolutely right that manging employees during the slowdown probably would be the most critical function SME owners will ever do. It is not managing operations, it is not managing markets, it is not managing banks, which is what they (SMEs) generally do. But managing employees would be the best.

So they can focus on three pointers or options:

The first major option is to calm the employees down. In other words just as the government needs to infuse confidence that the economy is fine, each SME owner has to take steps to create a sense of confidence and security in its employees; to say we will survive this crisis as we had survived the earlier ones. And relate back to the company's origin as how it survived many crises since most of the employees don't know how their organization originated and survived during earlier rough patches. Because most the these small businesses are governed by first generation entrepreneurs, they have gone through enormous turbulent times. So they can relate back and say that 'look we have the DNA, which can allow us to survive this period too.'

So calming down and confidence building is the first thing SMEs have to do. If you panic as a SME owner then your employees panic even more. And what happens due to this panic amongst employees is that  the more skilled people say, 'OK this company is in trouble' and they take another job which they easily get. And the company thus loses its good and skilled employees.

Second thing is to manage the slowdown. It is very commonly done by the SMEs worldwide - give vacations to the employees. Employees may have some vacation time, so you pre-pone their vacations that anyway rotate the employees as per the requirement of the work. So reduce the total number of employees without letting them go. So you can say leave without salary. But basically assure them of their future. Let them (employees) decide themselves and in doing so SME owners will get the cooperation with their employees. So in bad times the employees are on your side.

And the third point is to reduce the working days. So they get paid for 80 percent of the time. Make flexible hours, regiment work for a new point. And also invest in the future of employees in enhancing their skills, like some low-cost or government oriented education or training programs.

So these are the mechanisms SME owners can put together.

In your opinion what is the best possible option for SMEs during recession - layoffs or reduction in salary?
Dr. Jagdish Sheth: I think what the IT industries are doing at this time is probably the best model. What they are doing is to say that 'we will allow you to reduce your salary rather then go.' And most employees in IT and ITES are saying it's OK. It is not a new model. In the automobile industry in US, the demand is seasonal so what they do is two shifts a day or three shifts a day and then they come down to one shift a day. And in that shift, employees spent time with their families. So it is a kind of leveling in the demand and supply in terms of employment. So reducing the salary at least on the temporary basis is the best option.

In most countries employers told their employees that your are earning money but not that much because I don't have the enough cash-flow. And also give them confirmation that as the company turns around I will pay that. I owe you money and this is basically a note.

Do you agree that during this period of the year sales go down in every sector?
Dr. Jagdish Sheth: Exactly. You are so right. Generally the period after Diwali and X-mas is the peak production time for every industry. In X-mas usually the producer sells 30 to 40 percent of annual sale. Many industries are highly seasonal. So I think we have to learn from more seasonal business in the manufacturing sector. And after this season sales further picks up.

So right now unfortunately we are facing the double problem. Our domestic economy is slowing down because the seasonal slowdown and thus the export market too is also slowing down. So you cannot  balance the two different demand-supply change.

How do you see the impact of global economic recession on the world of work culture?
Dr. Jagdish Sheth: Very fascinating question...the first major impact would be many employees, who are laid-off or are out of jobs will say 'let me do something instead of my salaried job. I want to be an entrepreneur now!' They might have enough savings. Entrepreneurship doesn't recognize strengths, race, gender, education or any other pre-requisites. So it is possible for everybody...all you need is the courage to do it. It depends on your ability to take risks. In America that is the biggest change we have seen now after working for a company for 15 years of his life. So what happens is that during this phase of recession one of them may think of doing something on his own.

The recent bill on setting up a business just passed by the Indian government recently is going to be very valuable. And now a days everybody has technology, which help them to run a business even from their homes.

So the world of work or working culture is changing for the good. And mainly in MSMEs, freelance or part time jobs will became popular in the coming days. This will help the employer to save money in terms of Provident Fund and other employee benefits.

So you think this trend is good for a growing economy like India?
Dr. Jagdish Sheth: Absolutely it is. In my own view the current crisis we are experiencing will make us all more wise. You learn from adversities like these if you have the aptitude to learn. And in this crisis we will learn how to survive and secondly we will learn to innovate. And the future of employment will be very different or it could be even a permanent change. Last thing is, companies themselves will redesign their world of work.

What do you think the government needs to do to tame recession?
Dr. Jagdish Sheth: The government has to do definitely the four things:

First, the government has to come up with enormous confidence-building measures but it is not giving speeches from the capital via mass media. Confidence building is one-on-one rather then go to parties and rather then go to social events. This is the time to say, 'this is my job to tell people and also to listen to the people.'

Second, invest in the infrastructure so that more and more people will get jobs and the country will lead towards the direction of growth.

Third, really create an inclusive stimulus package. But stimulus package should not be done which revolves around money. Just monetary assistance is wasted or will only lead to corruption. So whatever the stimulus package is given it should not be like an expense but it should be like an investment, which will be recovered in the future. It is like venture capital or like private equity.

And fourth, this is the time to reduce red-tapism. Give industrialists an easy way to do the business. In India still the environment of doing business needs mass-scale corrections. And the best way to reduce red-tapism is to automate procedures. So these are the few things that the government needs to look into.

Tell our readers about you book 'The Self Destructive Habits of Good Companies'?
Dr. Jagdish Sheth: My book came as a consequence of probably the most insightful question I have been ever asked by any businessman either big or small - 'Why good companies fail?' Nobody thinks about it. So that led me to do research and what I found is that most of the companies are not destroyed by competition as people think. Most companies destroy themselves and the reason is that on the way to success they pickup some bad habits. And that's why the title of the book is called 'The Self Destructive Habits of Good Companies'. And that's how the book began. While the book was primarily written about large companies because we have lot of information on them. But the same seven habits are equally relevant for micro, small and medium enterprises (MSMEs).

What is the USP of the book?
Dr. Jagdish Sheth: I have written various books and the USP of this particular book is that I observed the reality and began to somehow see things in a way that others don't see. So it is a perspective I gave on a phenomenon that certainly changes the way that you look at the world.