IN 1983, when the first ever Businessworld Most Respected Companies survey was conducted, companies were assessed on eight parameters - quality of management, quality of products and services, innovativeness, financial soundness, ability to attract and retain talent, environmental responsibility, profitability and workplace environment. The most obvious and commonly used metrics such as marketshare, market capitalisation and turnover, were deliberately left out. The whole idea of having a survey such as this was to gauge how a company was perceived by its peers, based mostly on criteria that went way beyond the numbers.

Over the years, the survey has been progressively refined, and new parameters added. None of the newer parameters (now there are 19) violate the original principle that this was meant to be a perception- based survey. Hence quantitative metrics such as profits, etc., are still eschewed. Yet, what gets reiterated time and again is that respect in business is very much intertwined with market reality and performance. That respect rankings are as good as any other (size, market capitalisation), to mirror changing realities.

In the first year of the survey, the Top 10 were Hindustan Lever, Tata Engineering and Locomotive (now Tata Motors), Tata Iron and Steel, Indian Tobacco (now ITC), Indian Oil, DCM, Reliance, Bharat Heavy Electricals (BHEL), Ashok Leyland and Oil and Natural Gas Corporation. Except two - Hindustan Lever and Reliance - none of these companies feature among the Top 10 in the 2004 rankings. Instead, there is a new set of companies - Maruti, HDFC Bank, Jet Airways, Infosys and Wipro - that dominate the Top 10 rankings.

Some, like Maruti, were founded barely two years before the first survey was conducted (the first Maruti 800 was launched in 1983) while others such as Jet or HDFC Bank weren't even born then. But, these new companies define India Inc. as well today as did DCM, ITC, BHEL and Tisco in the early 1980s.

A word about the two survivors in the Top 10. Ever since its inception, Reliance Industries has been continuously reinventing itself. It started out as a commodities company (fibres), then moved into brand (Vimal), became an integrated petroleum and petrochemical giant, and has now entered the services sector (telecom and petroleum retailing). The company's willingness to change with the times has ensured that it is not only still in the Top 10 after 20 odd years, but has also bettered its ranking (from No. 7, it's now at No. 2.)

Hindustan Lever, too, perhaps because of the powerful brands it owns and the quality of its managers, has managed to stay, somewhat consistently, in the Top 10 over all these years. (In the previous 10 surveys conducted, which have been bi-annual affairs till last year, Hindustan Lever came No. 1 four times, three of them consecutively - in 1983, 1985 and 1987. And it has been among the Top 3 eight times.) Yet, Hindustan Lever would probably see this year's ranking as a setback of sorts. After having been the second most respected company in the 1999 survey, the 2001 survey and the 2003 survey, it has dropped to fourth place.

The reasons for this aren't too hard to find. Many would say that the past two quarters have been the worst ever for the FMCG giant in several years.

This year's newest entrant to the Top 3 is software major Wipro. It came No. 4 in the previous two surveys (2003 and 2001), 16th in 1999 and 65th in 1996. Wipro's climbing a rung is as much an acknowledgement of the company's performance as it is a commentary on the subtle shifts in the way Corporate India judges itself.

Examine the way the top three rankings changed this year. Over the latest three surveys (2004, 2003, 2001), Infosys continues to remain the country's most respected company. Reliance, which stagnated at No. 3 in 2001 and 2003, moved a notch towards the pinnacle. The company has Mukesh Ambani to thank for that. Under him, the company invested close to Rs 10,000 crore in telecom diversification, and overcame early setbacks to build up a subscriber base of seven million. Moreover, it also became the first private company in India to post profits in excess of $1 billion. If that doesn't command respect, what will?

Over the same period, Hindustan Lever lost its lustre somewhat, paving the way for Wipro to move up. Of course, it also helped that many of Wipro's moves, like entering the BPO business or resolutely building up its telecom vertical, even in the face of a telecom meltdown, earned it respect.

One of the more fascinating insights that emerge from an analysis of the Top 25 companies this year is that ambition, and sheer doggedness to pursue a strategy once convinced of its merits, seem to have been rewarded. Some examples: Dr. Reddy's Laboratories has been pilloried for its insistence on investing in its innovator-led pharma strategy even when that has dragged its profitability down. Yet, the company has improved in its overall rankings (from No. 7 to No. 6) and also emerged as the Most Respected Company in the pharmaceuticals sector. Fellow pharma major Ranbaxy, too, has moved from the No. 16 position overall to No. 10 on the back of its aggressive global strategy that has included M&A activity.

Similarly Maruti, which auto analysts had written off in the face of acute competition from a pack of hungry competitors, has emerged as the Most Respected Company in the Automobiles sector and also been ranked five in the overall category, up from No. 12 last year. The reason: the company showed a lot of spunk in kicking off a price war which it benefited from, introduced innovative schemes to extend the life span of the Maruti 800, and finally pulled off a successful IPO.

It's the same with many of the others in the top 25, including two Tata companies. Tata Iron & Steel's ambitious move to emerge as an Asian steel major appears to have helped it jump to the 15th position, from the 27th. rank Meanwhile, Tata Motors has moved from No. 18 to No.12, perhaps because of the success of the Indica and the company's stated desire to stretch its wings across the world. Incidentally, these two Tata companies seem to be on an upswing again. Till the early 1990s, they were among India's top three respected companies, though since then, they have dropped considerably in the respect scales. That is, till the 2004 survey.

A detailed analysis of the 17 different sectors also demonstrates how perceptions towards companies (and products) are shifting. Take consumer durables. For the first time, Businessworld decided to include mobile handset makers in this category. There were two reasons for this. One, a mobile handset is a consumer durable, much like a television or a refrigerator. Two, a lot of the durable companies such as Siemens, LG, and Samsung, also sold mobiles, along with the more commonly understood durables. And the surprise winner - Nokia.

This Finnish company's debut at the top of the heap says two things. One, that its strategies - including ones like developing a phone specifically for India - are respected. But, more importantly, Nokia's win is also an endorsement of the importance of the ubiquitous cell phone as a durable in today's world. After all, unlike its competitors, most of which offer a slew of durables, Nokia is mostly a cell-phone company.

Another sector that throws up interesting findings is petroleum. Though Reliance Industries is India's second Most Respected Company overall, having bettered its ranking over last year, in its sector it has stagnated at the third position. The top dog here is Hindustan Petroleum, which has moved from the No. 6 to the absolute top, while last year's winner Bharat Petroleum has fallen to No 5. So what explains all this?

Hindustan Petroleum's ascendancy is thanks to its aggressive and very visible retail activity. Over the last year, it has taken the lead in reaching out to customers as compared to its two other PSU competitors - Indian Oil and Bharat Petroleum.

But what explains the contradiction in Reliance's rankings? The most plausible explanation is that Reliance is up there in the overall rankings not so much for its historical business lines (the petroleum and petrochemicals business) but for its new telecom business and what it has done there. (Both businesses are a part of Reliance Industries.) Interestingly, the rankings of both Reliance Industries and Nokia indicate the importance telecom is gaining in the mind of the respondent.