Showing posts with label IIPM New Delhi. Show all posts
Showing posts with label IIPM New Delhi. 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
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Thursday, October 11, 2012

Heavy weight champ

Telang’s background in operations and his experience with the successful Commercial Vehicles business will be an asset

As Jack Welch once said, “If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don’t have to manage them.” Ratan Tata has done exactly the same in Tata Motors, which is one of the key reasons why the company is the market leader in the Commercial Vehicles segment and more importantly, produces almost half of the Commercial Vehicles sold in the country. Well, P. M. Telang, Executive Director (Commercial Vehicles), Tata Motors would have a lot to do with that, for he is the man standing behind this success.

A Mechanical Engineer and an MBA from IIM-Ahemdabad, Telang has over three decades of experience in the automotive industry as he has been with Tata Motors since 1972. In his previous role as President (Light & Small Commercial Vehicles), Telang played a major role in ensuring a turnaround in the company through cost cutting and e-procurement. He is also serving as Senior VP (Operations), Pune currently. Overshadowing the success that the company achieved under Ravi Kant’s leadership will certainly not be a cake walk for anyone succeeding him. However, if we talk about the Commercial Vehicle segment of Tata Motors, Telang has been able to take its growth story forward very efficiently. And industry insiders believe that if Telang takes charge; it will surely set the stage for the next phase of growth for Tata Motors. And as auto expert Murad Ali Baig asserts, “The person taking charge of Tata Motors after Ravi Kant leaves should have an in-depth knowledge of the automotive industry apart from the basics of management and finance.”


Source : IIPM Editorial, 2012.

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

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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


 
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Saturday, October 06, 2012

“We Perform Better When a Slowdown Occurs!”

Aron Ain, CEO of The Billion Dpllar Enterprise Kronos Inc., In Conversation with Pawan Chabra of B&E, Explaining how after US, UK and Mexico, His Company Plans to Create Waves in The Indian World of Workforce Automation

B&E: While at Kronos, you have dealt with workforce related issues in the West. You have also interacted with Indian business leaders during various forums. And now that you have announced a multi-million dollar investment plan for the Indian market, we ask – how is the Indian CEO mindset different from that of his western counterpart?
Aron Ain (AA): To begin with, I would cite some similarities between the Indian and western business leaders. Both are high-focused, committed and the quality of work of which is produced in India is similar to what see in the developed world as well. There is no doubt about it. But there are differences too, the biggest of them being that the Indian managers have very high ambitions. This is something which you miss in the western work environment, perhaps due to the fact that managers and senior managers in the West have already fulfilled certain sets of requirements in their lives. So, this presents a great opportunity for Indian businesses to grow, as the managers are willing to burn the road.

B&E: So after US, UK and Mexico, you could have chosen any other developing nation, especially in South-East Asia. Why India to invest your dollars?
AA: India is a very important market for us and is therefore a key stepping stone for growth. This is the primary reason why we have announced huge investments for the Indian market. There are many companies in India still which operate on manual processes for handling workforce-related issues, and our competence of getting automation into the system should work well for both the Indian companies and us. More so, India being a knowledge-centric economy, we are very excited to welcome additional skilled Indian workers to join our team of 3000 employees, in our quest to develop, sell, and service software that makes global workforce more productive, everyday.

B&E: During the slowdown period, many companies were struggling with workforce management. At the same time, it could have meant a leaner period for companies like yours. How was your experience during the tough past couple of years? And what behavioural changes, if any, have you noticed during the pre and post-slowdown times?
AA: Actually, our experience at Kronos was quite contrary to what you ask. We had a fairly good time during the recession as the area of work which we are in (workforce management) became a very focussed topic due to the companies looking to trim down their workforce and optimise the output of their manpower. Hence products and services automatically became the need of the hour. In this sense, we are an interesting company – we perform well when matters are good, but better when a slowdown occurs. Talking about the change in workforce mindsets, what we have noticed is that post horrors of the slowdown, people are today thinking less about switching jobs. The inclination is more towards sticking with the company an employee is with for long, rather than looking out greener short-term pastures.


Source : IIPM Editorial, 2012.

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

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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
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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
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Thursday, September 06, 2012

Slum free cities a realty ‘reality’?

While Mumbai, the host to the biggest slum in Asia still has a long way to go before it can become slum free, there are momentous changes that hold the promise of transforming India. B&E meets up with slum Developers, PE investors and of course, the government for an update!  
 
It seems Mumbai’s neighbouring city Pune is all set to religiously win the race to complete slum rehabilitation projects and hand over flats to slum dwellers free-of-cost. While slum dwellers living in Mumbai currently lack the opportunity of owning a 269 sq ft carpet area flat, slum rehabilitation projects are gaining momentum in neighbouring Pune city. There is, in fact, a lot of action taking place in slum rehabilitation in Pune with a host of small and large scale developers bringing out projects with 2 BHK and 1 BHK flats by various regional builders free-of-cost.

For builders developing slum rehabilitation projects in Pune, viability is the biggest challenge for them, opines Lalit Kumar Jain, Chairman and Managing Director, Kumar Urban Development Limited (KUL), one of the major slum developers in Pune. “In order to combat the challenge, we are in the process of meeting slum dwellers face-to-face. As part of the agreement process, the proof of their thumb impression, photo identity will be kept with Slum Rehabiliation Association and Seva Kendra people. We will also ensure safety of the slum dwellers by providing them with transit camps till the time project comes up.”

“Our project is aimed at meeting the evolving needs of slum dwellers based on the fact that we have given opportunity to slum dwellers to choose innovative 2BHK uniform flat design of their choice so that 6 to 7 people can be accommodated per flat within the SRA project.” says Jain. A major issue with Pune slum families is that it is the women who contribute to family income by washing utensils and clothes in the middle and upper middle class houses in the area. For the same, builders have charted out plans to set up separate cottage industries for men and women with a corpus to sustain it in the remaining area.

Off late, builders in Mumbai are understood to be making a beeline for developing slum projects in the city. Some of the major factors favouring developers move to slum development projects in Pune are cheap entry capital and too steep clear land costs in Mumbai. “Indiareit is close to investing Rs.20-30 crore in two slum redevelopment projects in the city”, says Ramesh Jogani, MD and CEO of Indiareit Fund Advisors Private Ltd, a private equity fund promoted by Piramal Group Jogani. 

Interestingly, over 100 slum projects are going on in Mumbai currently, involving 2.50 lakh homes. The Union and state governments are aiming for a slum-free Mumbai by 2015. When contacted, S S Zhende, Chief Executive Officer, Slum Rehabilitation Authority (SRA) told B&E, “There is a clutch of new developers who are sending in proposals for slum projects, particularly after the floor space index (FSI) was raised to 3 from 2.5 in such ventures last year. With higher FSIs, firms get additional construction rights for development.” Zhende also credits the high-powered committee formed last year to settle disputes between slum developers and authorities for making the projects more attractive to developers. 


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Wednesday, September 05, 2012

Could technology be weakening the ability of our minds to learn?

The counter point is that the Internet makes us smarter. Using Google Search to find details or look-up phone numbers on your phone is no different from visiting the library or checking the telephone directory – in effect, these are our ‘extended minds’. This concept was introduced in 1998 by Prof. Andy Clark (University of Edinburgh) and Prof. David Chalmers (Australian National University). Prof. Chalmers provided B&E with an example, “My iPhone is not my tool, or at least it is not wholly my tool. Parts of it have become parts of me. This is the thesis of the extended mind: when parts of the environment are coupled to the brain in the right way, they become parts of the mind.”

A 2008 UCLA survey of adults aged 55 -78 found that just a week of Internet experience enhances brain activity patterns and cognition. Further study shows that Internet research boosts the ability to process information and make decisions. Explains Dr. Teena Moody, of Center for Cognitive Neurosciences at UCLA, “The potential upside, is that even older people can benefit by learning to recruit additional regions of their brains after “Googling” the Internet for a short period of time. Many companies are beginning to exploit this opportunity by developing games to enhance specific aspects of learning.

”It seems the ball is in each of our courts to make the best use of the wealth of information that technology has to offer. Google may happily do the hard work for us, but its value will depend on what we as individuals can bring to the table.


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




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Tuesday, September 04, 2012

Forced to go in for C-section deliveries by doctors, women are finding it safer to give birth at home...

Forced to go in for C-section deliveries by doctors, women are finding it safer to give birth at home...

Guneet was lucky to have no complications with her pregnancy, hers was a normal case. She had anticipated a normal delivery, but was in for a rude shock when in the early stages of labour, her doctor told her to go for a Cesarean. She was not even given the chance to attempt giving birth the natural way. Her child is a year old now, but she still experiences pain in her lower abdomen. “I would have preferred to have a normal delivery, but my doctor decided against it,” she whines. For many women like Guneet, the doctor has, unfortunately, had the last word.

Sadly nowadays, most of the hospitals are misleading women to believe that they must undergo a Cesarean surgery regardless of whether there is a medical need for it or not. Statistics highlight the increase in the number of such deliveries. A recent survey revealed that one in three babies in the US are delivered by C-section; it is one in five deliveries in India. Cited among the reasons for this alarming rise is the delay in childbearing by ladies and also increased obesity in moms-to-be. Induced labour is among the main causes of trouble as pointed out by the study. Ladies who delivered via C-section were twice as likely to be among those opting for induced labour, for this is sometimes performed before the cervical dilation progresses to 6 centimeters in diameter. While clinical impatience may be blamed in the above case, several people are also forming the opinion that the surge in C-sections might just be caused by people in the medical profession in a rush to make some easy money.

Unlike any other surgery, in a Cesarean there are chances of the mother contracting infections; healing takes much longer and the surgery could also put her at risk of other long term health hazards. So could hospitals indeed be looking at financial gains by unscrupulously carrying out Cesarean deliveries, even in cases when it is not required?


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Monday, September 03, 2012

No marks For RK

While she broke-up with Ranbir Kapoor in November 2009 after almost a two-year relationship together, Ranbir left his ‘mark’ on Deepika Padukone through the ‘RK’ that she had got tattooed on the nape of her neck back then. She is planning to rectify this by soon opting for laser-assisted tattoo removal, and this is probably a result of her new-found friendship with Sidhartha Mallya. Do we see an ‘SM’ tattoo in the pipeline?


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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.



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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!


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Thursday, August 30, 2012

Are there more Satyams around?

Although extensive reforms have been set in motion by corporate watchdogs like Securities and Exchange Board of India, Company Law Board, et al, in the last few years, there remain significant lapses in its implementation and enforcement. by Manish K. Pandey

It was January 2009 when the Satyam fiasco revealed the dark underbelly of Indian capitalism. It not only questioned the integrity of promoters but also the levels of corporate governance in India. Though it was not for the first time that such a thing had happened (like Satyam, Sterlite too was alleged to adopt fraudulent practices to bag a tender floated by GAIL in 2008. Bearings, promoter of BFL, too, a few years back, was abstained from voting when its business was getting acquired by MphasiS. And how can we forget the Global Trust Bank!), Satyam scandal made sure that Indian policymakers sit up and rethink corporate governance norms prevailing in the country. But do they really have?

It has been over one and a half years and the country’s biggest corporate fiasco (the Rs.70 billion plus Satyam scandal) hasn’t even reached the trial stage. And this, when the main accused, B. Ramalinga Raju, the former chairman of Satyam, initiated it all with what he called “relieving the burden on his conscience”, or if we put it simply – a confession. In fact, if industry rumours are to be believed, the scandal is probably on its way to the burial ground. All the accused, except Raju, are already out on bail. Even Raju’s attorneys are now believed to be making way for his quick release. Buzz is high that he might also not stand to his initial statement made on January 7, 2009. So, does that mean Satyam fiasco has failed to wake up the corporate watchdogs? Do they need a bigger bang than Satyam? What’s more? The recent KPMG India Fraud Survey Report 2010 too reveals that there is a rise in the incidence of fraud in India Inc. with ineffective control systems and diminishing ethical values being the key contributors to this trend, particularly over the last two years (see charts).

No doubt, over the last decade, change has come to corporate India – from family-owned businesses that were involved in issues such as nepotism, mismanagement, lack of transparency, et al, to a scenario where companies are professionally managed – but the pace of it has been really slow. Even today still more than half of the companies on the benchmark indices Sensex and Nifty are family-controlled which hampers the evolution of corporate governance in India. “Indian corporate culture is still in a nascent stage as opposed to their US and European counterparts. Moreover, a deep integration with global environment has quickly come to them. But, Satyam fiasco made sure that corporate governance matures in India,” Naresh Gupta, MD, Adobe India tells B&E.

In fact, an assessment of India’s corporate governance reforms shows that although extensive reforms have been set in motion by corporate watchdogs like Securities and Exchange Board of India (SEBI), Company Law Board (CLB), et al, in the last few years, there remain significant lapses in its implementation and enforcement. Moreover, most of the reforms that have been adopted fail to address fundamental areas of concern such as the relationship between controlling and minority shareholders, the role of promoters, and issues with director independence (The Promise and Challenges of India’s Corporate Governance Reforms by Afra Afsharipour, Associate Professor of Law, University of California).

However, there are still many who believe that though the Satyam debacle raised some serious issues, the standard of corporate governance is still intact in India. “As far as corporate governance is concerned, we are still better off than the West. After Enron, US Securities and Exchange Commission (SEC) had put a lot of pressure on American companies. In spite of that subprime crisis happened. Compare that to India. We are still vibrant when worse could have happened,” B. Sai Chandravadhan, VP, Chess Management Services, a legal audit and compliance services consultancy, tells B&E.

But that does that not mean regulators, auditors or independent directors, shouldn’t be held responsible for any corporate mishap? No doubt in the case of Satyam and Sterlite they responded to what shareholders demanded, but what about smaller companies? Since 2006 more than 20 companies have been blacklisted by SEBI for violating corporate governance norms. Leave aside convictions, no one knows about the progress of these cases as of now. In fact, India has one of the poorest conviction rate when it comes to corporate frauds (just 5%). More than 50,000 cases related to corporate frauds are still pending in courts. In comparison, a corporate fraud task force set up in US in 2002 (post Enron fiasco), secured 1,236 convictions in the next five years. “US has strict regulations. If a company commits fraud it’s punished in no time. India too needs such stringent rules,” agrees Gupta of Adobe.


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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.


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Tuesday, August 28, 2012

A princely affair!

The cast and crew of Saif Ali Khan’s home production Agent Vinod recently experienced royal treatment while shooting for the film in Morocco. The junior Nawab of Pataudi stayed at a palace, in a suite which was larger than his residence in Mumbai! The meal preparations for Saif and Kareena were lavish and the table was laid with the finest of silverware. The Love Aaj Kal star was so impressed with the arrangements that he extended his stay to better savour the royal experience! 


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Monday, August 27, 2012

MF INDUSTRY: CHALLENGES & FUTURE OUTLOOK

Leave aside regulatory changes, the Indian mutual fund industry today faces a number of issues which are characterized by lack of investor awareness, low penetration levels, high dependence on corporate sector and spiraling cost of operations. Structural changes in business models are what AMCs now require if they want to sustain profitability by Mona Mehta

Further, the dependence on the corporate sector is still pretty pronounced at 51% when compared with economies like US & China where investments channelised through corporates, comprise only around 15% & 30% of the AUM, respectively. This under volatile market conditions, sound a note of caution for the industry, as high dependence on the corporate sector may result in the fund houses being prone to unexpected redemption pressures. Considering the untapped potential, competition too is all set to gain momentum in the Indian MF industry, which is making dominant desire to progress, a reality, through wealth creation.

In fact, the moot point here is amidst the new transparencies that will be introduced in the system meant to boost investors confidence and ensure fair competition in the industry, it is equally important for AMCs to understand how critical is it for them to collectively work towards facilitating more innovation, financial inclusion, cost management, increased investment in technology to support distribution network, with the support from channel partners and regulators alike.

Ramdeo Aggarwal, Co-Founder and Director – Finance, Motilal Oswal Financial Services too feels that in India, creation of the fund is not coming from the strength, in sync with the trend existing in other parts of the world. For instance, in US, founders of fund create fund based on certain insights and convictions for the benefit of customers post which the funds are traded to get the asset, say, may be worth Rs.1 trillion. Hence, Indian asset management companies (AMCs) now need to work on developing new USPs in handling people’s saving.

“The financial inclusion category today has the most competitive and cost efficient structure in place, which we believe is extremely favourable for the final investor. MFs have been extremely transparent with high disclosure standards which help investors in their process of due diligence. With increase in category awareness and enhanced brand connect, AMCs have been able to reach out to the customer more effectively,” Nipun Kaushal, Head – Marketing, ICICI Prudential AMC tells B&E. However, Kaushal refuses to divulge details of the product innovations that he is planning to come up with due to competitive strategies.

Even the regulator now seems to be paying heed to ensure that MF industry sustains its profitability. In fact, Securities and Exchange Board of India (SEBI) has recently issued directions for the mutual fund industry stating that no business houses without five-year financial services experience will be permitted to own stake in an AMC, with an aim to enable only the serious investors to get into the business. “As MF business has a long gestation period, therefore the regulator is now looking for shareholders who can stay for long and are experienced in the industry,” spokesperson of Edelweiss AMC tells B&E.


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