Public Policy, Focal Faculties and Innovative International Competition: The Case of Indian Civil Aviation

In the early 1990s the concept of the firm’s focal faculties came into vogue. It helped to explain the phenomenon of innovative international competition. In the new civil aviation policy of the Indian government we have an interesting situation where there is some scope (perhaps small) of seeing an innovative international competitor. This is because the new policy has explicitly opened the field to foreign investment but simultaneously disallowed existing global players in the industry from investing. Thus, aside from foreign financial institutions and investments by NRI entrepreneurs, there is the hitherto unrecognized possibility of a non-aviation corporation leveraging its focal faculties to enter the Indian aviation scene. The paper is a preliminary attempt to shed light on the focal faculty concept by examining its applicability in an intriguing Indian situation with global potential. The Indian formula is recommended to the civil aviation authorities of developed countries who are also trying to protect domestic players. This raises the prospect of a serious worldwide evaluation of the focal faculty concept for management and development.