Showing posts with label IIPM BEST MBA INSTITUTE. Show all posts
Showing posts with label IIPM BEST MBA INSTITUTE. Show all posts

Saturday, October 13, 2012

Not ambidextrous enough?

To form a government that pleases one and all, Netanyahu must discard some of his rigid ideologies

A whiff of fresh air is being experienced in Israel, after days of painful hostilities in the Gaza strip earlier this year. But apparently, the powers that be in Israel and the rest of the world are not too happy about these winds of change.

After Israeli President Shimon Peres invited Benjamin Netanyahu, the leader of the Likud party, to form the cabinet, the latter would be wondering if he was indeed the 'fortunate one'. Although he has been chosen, Netanyahu has six weeks to form his coalition government. And he needs a broader coalition to win international legitimacy. “We are all conscious that a right-wing religious alliance will put Netanyahu under pressure from the western nations, and he knows it as well. It’s not at all surprising that he is for a broad coalition,” Shmuel Sandler, an expert on the Israeli political system at Bar-Ilan university, told B&E.

However, all Netanyahu’s efforts to convince Kadima party head Tzipi Livni and Labour leader Ehud Barak to join his coalition have failed. One of the key reasons is his staunch, headstrong approach on contentious issues, like he seems to be rejecting the two state solution to resolve the Israel-Palestine conflict, which was endorsed by the world, including Israel itself in 2002.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.

 
IIPM : The B-School with a Human Face

Wednesday, October 10, 2012

I just can't wait to be King!

Not a single seat won yet, but the PM candidates are ready

The final outcome of 15th Lok Sabha is still unclear, but, in his eagerness, L. K. Advani had already passed a proposal of becoming future PM six months ago in an NDA meeting and even started meeting titans of industry. However, with the assembly poll debacle in Delhi and Rajasthan; the confidence of the saffron brigade has ruptured. On the other hand, Left parties, who were aggressively pushing for Mayavati as future PM, now, feel that it is quite difficult to build a consensus on Behanji.

An internal survey by BJP and RSS reflected that the party might get 96-106 parliamentary seats in the coming Lok Sabha elections, much below the former tally of 113 seats. Even upper house members of the party were advised to participate in the coming elections to improve poll prospects. But the real drama unfolded when former VP Bhairon Singh Shekhawat showed his desire to participate in the upcoming elections.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.

 
IIPM : The B-School with a Human Face

Tuesday, October 09, 2012

They ain’t as ‘lucky’ as Martha...

...but they ain’t worried! It’s competency & quality that promise the future for Indian IT giants; not ‘luck’!

You might have heard a dozen times about the (in)famous business magnate Martha Stewart, the once stock-broker and now a well-publicised television host and magazine publisher. But what you probably never heard about her was how she made money while in prison. Yes, her personal fortune struck the billion dollar gong (with Martha Stewart Living Omnimedia’s stock price rising by 90%) during her 5-months stint at West Virginia’s Federal Prison in 2004! So what about her? Well, in the past four years (since her release), she’s lost about 70% of her wealth; indeed, better behind bars! But wait, that was her, and we doubt if she had anything to do with IT Services (or India, for that matter!). And we also doubt if entrepreneurs in the Indian IT Services have even a dime-worth of ‘jail’ luck! Take for instance, Ramalinga Raju, the founder of India’s 4th largest IT Services firm, Satyam Computers. Today, he is behind bars (pleading for a bailout), and is in ‘no way’ ammasing great personal wealth! Then there is the 3rd largest flag hoisted atop the Indian IT fort – Wipro, which was banned from dealing with the World Bank over allegations of “improper payments.” Yes, at this perplexing crossroads, the pertinent question which strikes the conscious remains – was our ‘so-considered’ mega-competence in the IT Services field just a myth, with ‘titans’ of the trade proving our ultimate shame? Or will the vanguards of the Indian IT brigade, protect its citadel of glory, far into the 21st century?

Instilling confidence, Rob Enderle, Principal Analyst, Enderle Group tries his bit as he asserts, “Just because one firm [Satyam] turned out to be rotten does not mean that the entire sector is a basket of rotten apples.” But doubting Thomases need more, and here’s some proof: while on one hand the big names mentioned above have seen their shares tumbling at the bourses, the other biggest three Indian IT Services companies (Infosys, TCS and HCL) have managed to maintain a steady stock price and investor confidence even after the Satyam scam broke out in the first week of January. Even their financial health (as per the Q3, FY2009 results) paints an encouraging picture, with the top three reporting considerably increased profit margins – Infosys (net profits of Rs.16.41 billion, an increase of 31.4% over Q3, FY2008), TCS (Rs.13.53 billion, 7.7%) & Wipro (Rs.9.78 billion, 11.3%).


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.

 
IIPM : The B-School with a Human Face


 

Friday, October 05, 2012

246 PSUs; 33 Yet to Commence Ops!

A Number of PSUs Look Desperately for a light at the Tunnel End, Or even a Moving Train...

Navratnas have ensured in the recent past that the world looks at Indian public sector undertakings (PSUs) in a different light. But then, this is just like most aspects in India, where the large numbers at the bottom of the PSU pyramid are ignored for the few stars at the top, who bring up the averages as well as the GDP contributions for the nation. But such an ignorance of the bottom is suicidal at best.

Our great nation has around 246 PSUs in all. Talking in numbers, the net profitability ratio of PSUs has increased from 8% to 14.5% since the last one decade on an average. But then, given the mammoth number of PSUs, this seems quite miniscule – especially when the economy is experiencing a steep northward trend. Of the 246 PSUs, 33 are yet to commence operations. Out of the 213 functioning PSUs remaining, more than 50 PSUs are in losses. Their total contribution to the GDP of the country is merely 6.5%. A recent CAG Audit 2008-09 report points out that 15 PSUs of Gujarat made a loss of Rs.25.4 billion in the last three years. On a yoy basis, the loss has increased alarmingly from Rs.4.41 billion in 2006-07 to Rs.19.63 billion in 2008-09. This is just not confined to Gujarat.

Another CAG report found that Public Sector Undertakings (PSUs) in Andhra Pradesh had accumulated losses of Rs.23.52 billion for 2008-09 and further concluded that PSUs could have controlled losses of up to Rs.12.38 billion with better management. The latest CAG report on Jharkhand reveals that 10 public sector undertakings in the state posted an accumulated loss of Rs.18 billion and made “futile investments of Rs.743 million” for 2008-09.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

Monday, September 10, 2012

Rights behind bars

It’s a burning debate across the World – destroy the sin or the sinner? The issue of voting rights for criminals is a key aspect of that debate. The IIPM Think Tank looks at how various countries approach the issue, and why the prisoner-bashing attitude might not be so wise

On the very face of it, you may not even entertain the idea of allowing criminals to decide the political leaders of India. Yet, a common joke about our great nation remains that while lowly criminals get into prison, the really smart ones get into politics! Subsequently, allowing inmates to vote (currently India prohibits voting by inmates) may not affect the composition of our Parliament too much, considering its existing abysmal state. But their exclusion does bring human rights issues to the fore. We analyse how some major countries look at this issue.

First, the Barack country. There is no federal policy with regards to this issue in US. Different states have different laws on the voting rights of their felons. While Maine and Vermont are the only two states that have no restrictions over voting rights of felons, fourteen states including Alabama, Arizona, Florida or Iowa have disenfranchised the voting rights of inmates. The other 34 states follow a somewhat middle path. Interestingly, around 4.7 million inmates, who comprised 2.3% of the total voting age population, didn’t participate in the 2000 Presidential elections due to voting right restrictions.

A particular research on the 2000 Presidential elections by the noted American Political Science Association has revealed some interesting observations. Irrespective of their disenfranchisement, if felons had been allowed to vote, 35% would have voted in the Presidential elections, and out of those, 70% would have voted for the Democrats. Looking at past elections, evidently, this allowance would have altered the results of three close Senate results – Virginia in 1978 (John Warner [R] would have lost over Andrew Miller [D]), Kentucky in 1984 (Mitch McConnell [R] over Walter Huddleston [D]), and Kentucky again in 1998 (Jim Bunning [R] over Scotty Baesler [D]). There was hope for Al Gore in the 2000 Presidential election as well, had Florida allowed its 614,000 ex-felons to vote.

Moving on to other countries, the 17 European partners, and countries like Bosnia, Canada, South Africa and Israel allow their felons to vote without any restrictions. But courts can withdraw voting rights for up to five years if need be in Germany. Neighbouring France has similar laws, though it rarely uses them. In contrast, countries like Armenia, Brazil, Chile, India, Portugal, Russia and UK have complete restriction over voting rights of inmates.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

Saturday, September 08, 2012

European “Dissenting” Union

EU needs to come out with customized solutions for member states

Such mass protests that cut across nations are unprecedented since WW II. But then, in a unified Europe, the recent turn of events shouldn’t be so surprising. The resistance against Europe’s recent austerity drive heightened to the extent that protesters hit the streets across the continent. Among all EU nations, Spain saw the most widespread protests while Brussels saw around 100,000 people going on the streets. Angered by the government’s draconian budget cuts and labour-market overhaul, protestors across the Union disrupted day to day activities. The protest is actually against the governments’ decision to bring deficits under control by cutting public spending. This measure is the last ditch resort by the EU as most investors are denying requests for lending to member nations.

The European Central Bank and Germany are the prime supporters of such measures. Such steps by the EU government seems to have originated from the situation they found themselves in post the recent Greece crisis and the issues the nation faced with maturing debt. But such measures are deteriorating workforce confidence as working class are of the view that they are being penalised for no fault of theirs. In Greece, the protest is chiefly from officials who enjoy special tax free allowances and hefty pensions – not surprisingly, this class is also famous for notable corruption; while in Spain, the public sector trade unions are the main protesters as they would suffer a pay cut and a rise in the legal retirement age. Likewise in Belgium, normal and conventional shop workers are on strike as the government plans to lay-off nearly 2,000 people from stores and depots.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

Saturday, September 01, 2012

The high royalty payment issue

R. C. Bhargava, Chairman of Maruti Suzuki talks to B&E’s Pawan Chabra about competitve threats from foreign players launching better technology cars and the high royalty payment issue.The secret to profits has, and always will remain competitive pricing and satisfied employees, says a Least Worried Bhargava.

B&E: But you can’t deny the fact that over time, foreign players and Tata Motors have managed to chip away Maruti’s market share...
RCB:
During the era post economic liberalisation, that Maruti Suzuki had competition like Matiz and Santro. But even then, the company was able to outshine competitors and stay ahead of the pack with a 50%-plus market share. It was around that very time when Maruti and its now partner Suzuki, were negotiating on the renewal of our agreement. During this period, our market share had started falling, and had already fallen below 50%. But after the issue was resolved and the JV agreement was renewed, the company was back on track. Therefore, even though we have recently gone below the 50% market share mark, we will bounce back soon...

B&E: But experts opine that royalty payments will continue to drain your finances even over the coming months. How do you see the situation turning out to be?
RCB:
Maruti relies heavily on Suzuki, so the royalty payments are bound to be at a level at which they are standing today. However, with the Rohtak unit set to become operational by 2012, a situation may arise where you will see Suzuki paying the royalty to Maruti for the use of the technology developed at the R&D centre.

B&E: The company has been actively involved in CSR activities of late. How do you connect it with profits?
RCB:
My idea of CSR has been to do what makes all the stakeholders happy. We try and do the maximum to our capacity for the society. Then be it the traffic management program on the Gurgaon-Jaipur highway or the tree planting initiative, the company tries to give back to society in whatever ways it can. In fact, we started the water conservation unit at out Gurgaon plant in the 1980s, way before the CSR activities became necessary. Clearly, it was a proactive measure depicting the concern of Maruti Suzuki towards the environment and society. So people might link CSR to higher profits, but we don’t.

B&E: Maruti Suzuki has a very low attrition level. What are the reasons for the high employee satisfaction levels?
RCB:
It is because of the processes and policies that we have inculcated into the system over the years. In fact, Suzuki also played a major role in it by bringing many Japanese HR practices into the company that make the employees an integral part of our journey. This keeps them motivated to work for the high profitability of the company. It is only through employee satisfaction that you achieve profits.



Friday, August 31, 2012

Wedding wows and woes!

The Disney princess, Hilary Duff, tied the knot with her boyfriend of three years Mike Comrie, a free agent hockey player, at the romantic San Ysidro Ranch in Santa Barbara, which is known for its ‘old Hollywood glamour’. Planned to the last details, sources tell that this sunset ceremony was one of the most stunning weddings ever. The 22-year-old must have been really relieved at the completion of the celebrations, for she had been working-out six days a week in order to fit into the mermaid-style Vera Wang gown!


Wednesday, August 29, 2012

Brand and Communications

Sudarshan Mazumdar, Former Director of Brand and Communications, Fortis and Escorts Group, speaks to Steven Philip Warner on why he considers the UPA II regime a half-success...

B&E: The Naxalite movement – Is UPA II doing its bit to curb it?
SM:
The government doesn’t seem to have any policy in place to tackle this problem. There is lack of consistent development. Let us understand it this way – you give them livelihood, keep them distracted with day-to-day productive living. Only then can you curb it. And there have to be long term policies, transparent ones. Over time, the area under the Naxalites movement has increased and this is worrying.

B&E: What has been your experience with policies & their implementations in the healthcare industry?
SM:
Healthcare continues to be a neglected area, despite the government realising that when the sector is growing at 15% per year, there will definitely be a crunch of talented medical practitioners. There was also a paper sent from the Planning Commission to the government, but the recommendations are yet to be implemented.

B&E: Is the UPA doing enough to uproot corruption from India?
SM:
What has the current government done about the money that is stored in illegal forms overseas? It’s a known fact that Indians have the highest illegal deposits in Swiss Banks! There is even a lack of delivery mechanism that ensures that the taxpayers’ money is utilised cleanly. Imagine this - the UID was supposed to be one of the biggest programs that could have finally prevented leakages in all forms including our tax system. But its budget has been slashed. This is insane.


Monday, August 20, 2012

THE BIG FIVE: ECONOMY

The IIPM Think Tank analyses the five largest economies (excl. China) – US, Japan, Germany, France, UK

European economies have given mixed results. Even though the German economy shrank last year by 5%, experts predict a growth of 1.5% this year (that means an absolute positive shift of 6.5%). Five leading think tanks commissioned by the government provided the silver lining with facts like growth in industrial orders, recovering exports, rise in business confidence, reduced layoffs and unemployment level being at par with the fall of 2008. Unemployment level is expected to dip slightly next year to 7.9% from 8.1% this year, compared to 8.2% in 2009.

Britain’s economy grew by a weaker than expected 0.2% in the first quarter of 2010, a rise of 0.4% over the previous one. Its GDP also shrivelled by 0.3% in the first quarter. France’s GDP dipped by a negative 2.1%, with unemployment at 10.1%.

Although the second largest global economy Japan’s real GDP in 2009 fell by 5%, its GDP actually grew by 4.6% in the last quarter of 2009, which is better than projected by the government’s preliminary report. It has been augmented by export rise in Asia and increased domestic demand supported by government’s incentives. In the third quarter last year, Japan’s economy expanded by 1.1% in absolute terms, which beat the average forecasts of 0.9% quarterly rise, according to Kyodo News survey. This quarter also witnessed a rise in consumer spending to the tune of 0.7%, the highest in last 7 quarters. In December, even though the industrial production grew by 2.2% and capital spending by 1.0%, public investment declined by 1.6%.

With oil prices hovering peacefully around $80 per barrel, with US and Japan leading the way in turning around, EU showing latent promise for the current year, and with the BRIC economies steaming ahead in their growth ambitions, it can be safely said that although pristine recession is over, the effects of the same will continue lingering across economies for the next six quarters at least.


Monday, August 13, 2012

DEFENCE TECHNOLOGY: VERSUS SOCIAL COST

Investments in defence at the cost of social good are unpardonable 

Even as recently as the last decade, when countries were ratifying the Chemical Weapons Convention, Albania, Libya, Russia, US and India have declared over 71,000 mt of chemical weapon stockpiles. The developing nations are no less in their over eager attempts to defend their borders. $32 billion is the 2010 investment for India in defence. Pakistan is $8 billion. China is $78 billion.

While it cannot be denied that a nation’s spending on defence technology is necessary due to various imperative and unavoidable reasons (mostly conflict with unreasonable neighbours), it is clear that if the same nation were to be equally committed towards eliminating poverty, the world could have surely been a better place. The funny part is, this is no Holmesian secret, and the nations involved know the discreet logic quite comprehensively. Then why don’t they simply eliminate poverty? Unpardonable...


Tuesday, July 31, 2012

You can help build a cleaner India

The reverberations triggered by the Anna Hazare fast are still being felt across the country. Even though I personally find many ideas thrown up by the so called Team Anna version of the Jan Lokpal Bill utopian and bordering on the loony, I am delighted with the fact that activism of the kind witnessed last month actually forced politicians of this country to come down to earth and fear the wrath of the people. It was indeed a great celebration of democracy. Though there is one thing I would like to point out to the so called intellectuals who kept harping on maintaining the sovereignty and dignity of the Parliament. If the elected members of parliament themselves make a mockery of Parliament, why single out some activists and outspoken individuals for harsh criticism? Then again, I found it preposterous when some suggested that you and I must contest elections if we want to change the system. Surely, democracy and good governance is not just about contesting elections. Another thing I must point out is the manner in which activist and the self confessed Hanuman of Anna, Arvind Kejriwal, egged on the thousands gathered to watch Anna break his fast to take an oath that they will neither take nor accept a bribe. That was heart warming and touching and set me wondering if the thousands gathered there would actually stick to their oath once they confront the harsh realities of confronting Indian bureaucracy in all its grab and grin glory. In fact, I asked myself if I could stick to such an oath of never paying a bribe if I had to get something done in a hurry and didn't have the time.

These random thoughts made me come to a few simple conclusions that could be, as Rahul Gandhi says, game changing. You and I don't have to contest elections to do all that. But here goes my wish list of a few simple things that you and I can start doing right away to help build a better India

#1: The first thing that people like you and I can do for a start is to take a silent oath that we will not break any traffic rules. A friend was describing a vacation his family had enjoyed recently in the United States. One telling incident from that memorable holiday has to do with his 7 year old son who exclaimed in a shocked manner about how people were actually stopping their vehicles at red lights! My friend, who has a habit of often violating traffic rules, actually vowed never to do that again. I am personally appalled at how middle class and affluent parents brazenly violate all traffic rules at around 7 in the morning when they sometimes drop their kids to school. Surely, all of us can make and stick to this simple oath?

#2: Set aside some money every month for a poor child's education. There are at least a 100 million Indians like you and me who can easily set aside Rs 50 a month without hesitation. Just imagine, if we take that simple oath and stick to it, 100 million poor young Indians who could not otherwise afford the luxury of education would actually benefit from education and perhaps join the ranks of the middle class when they grow up. And don't tell me that it is difficult to find a good and honest NGO or trust that can use your money well. You can always finance the education of the children of your office peon, maid servant, driver or security guard. Believe me, the impact of this simple gesture will be more far reaching than the Anna movement.

#3: Take a pledge to henceforth treat our domestic help in a more humane way. One comment that kept cropping up during the Anna festival was the complaint about the arrogant, cruel and callous manner in which our political class and the bureaucracy treats ordinary citizens. Let's be honest with ourselves: are we any less arrogant, cruel and callous when it comes to interacting with our domestic servants, drivers and other helps? Sure, there are many of us who go out of our way to help them and treat them humanely, but there are umpteen horror stories of educated middle class Indians heaping indignities on hired helps. So let's stop being hypocritical and actually do something about treating fellow Indians in a better manner.

#4: Let us take a pledge not to give any dowry to get a daughter married off to someone who has got a plum government job where the scope of corruption is huge. Once again, we berate corruption in bureaucracy in public discourse, but make our actual feelings and intentions clear by relentlessly chasing grooms with cushy government jobs. You could say that this kind of thing happens less frequently now because many youngsters now opt for the private sector. But the fact is: we could send a huge moral signal to the marketplace for grooms that buying grooms is passé.

#5: Let us take an oath to actually go out and vote during elections of all types. I still recall the hysteria that was generated amongst the chatteratti after 26/11 convulsed India. There were countless TV debates and candle lit marches. A few months after that barely 45% of South Mumbai voted during the Lok Sabha elections. I think the political class does have a point when it argues that they don't want to listen to hypocritical lectures from people who cannot even invest a few hours of their time to vote. And let us not crib about all candidates being 'bad' and there being no real choice. It is going to take a long time for electoral reforms of the type demanded by Anna to actually happen. In the meantime, can we all go to the booths during the next election and deliberately vote wrongly if we find that no candidate is worth voting for? In Indian elections, the winning candidate often gets just about 30% of the votes polled. What if such disqualified votes also amounted to about 30%? You can bet the ruling class will sit up and take notice and the process of electoral reforms will actually be accelerated. Invalid votes can be as potent as votes. But please, let us at least get up from our cocoons and comfort zones and actually go out to vote.

#6: The sixth simple yet powerful pledge we can all take has to do with citizen participation. No democracy will work and good governance will always remain a dream unless citizens actively participate in the civic process. The simple pledge we can keep is to devote at least two hours every week to do something concrete to improve something around us in a meaningful manner. It could be looking after some trees in our neighborhood; it could be involving our kids to keep our streets clean, it could mean teaching a few poor children... the possibilities are endless.


Friday, July 27, 2012

Just Keep Those Costs Down

Rec has seen its Numbers Grow at a Steady clip in The Past Few Years, but will have to now Tackle Increased Competition

Being the nodal agency under the Government of India in charge of financing rural power projects in India, the challenge for Rural Electrification Corporation is always about managing the opportunity, rather than looking for it. Unsurprisingly, the company has been experiencing y-o-y growth of 15-20% on an average over the past decade.

For FY 2010-11, REC reported a growth in net profit by 28.4% to reach Rs.25.70 billion, which has catapulted it to rank 33 in the B&E Power 100 list from 38 last year. Revenue grew by 26.09% to reach Rs.81.09 billion. Strong return on equity with low cost of funding allowed REC to generate superior spreads, which is currently around 4.34% despite the zooming interest rates. REC was able to maintain this margin largely because of the fact that they had gone for international borrowing of $1.2 billion & also set domestic borrowings to the G-Sec benchmark. Cost of borrowing for last year on an incremental basis was around 7.25%; whereas overall cost of borrowing was around 7.62%. Furthermore, REC successfully brought NPAs down to 0.03% due to the escrow mechanism and managed margins of 4.3% despite high cost of funds. The major bad news this year was the resignation of CMD J. M. Phatak, who joined the company in June 2010. Phatak is accused of playing a role in the Adarsh society scam when he was Municipal Commissioner of Mumbai.

The role of REC comes only when all delays & clearances, particularly environmental clearances & securing of coal linkages issues are accounted for & finalized. Last year saw loan sanctions of Rs.664.21 billion (growth of 46.44% y-o-y) but disbursals were just Rs.245.19 billion, a growth of 16.03% y-o-y. REC is now focusing on creditworthy projects by turning their attention towards power generation projects rather than exclusively on the transmission & distribution sector When asked about the shift, H. D. Khunteta, CMD, REC told B&E, “It was a natural shift to all the parts of the power sector & the Ministry of Power has expanded the mandate for REC to include generation projects.” The power generation share in the outstanding loan book has almost doubled from 26% in 2007-08 to 48% in 2010-11 and the private sector is also playing a huge role.


Source : IIPM Editorial, 2012.

An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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