Friday, August 31, 2012

The perfect opponent

Do you really believe your colleague’s pretty smile could cost you your promotion?

Our workplace has always been an arena where we notice people striving hard to get ahead of the rest, either by performing or by pulling others down. Office politics is as much a part of any organisation as is the very basic filing system. Unfortunately, it has become an integral part of our work life. How people deal with it is the million dollar question. Nepotism has often weakened the strongest of organizational structures. Honchos with a soft corner for their family members or friends within the organisation are quite common. Nepotism is being noticed in yet another of its ugly form and it is causing a rise in cases of misogyny – a strong feeling of hatred towards women – in the corporate sector. But the question is, how has it found place in the corporate arena?

The so-called weaker sex is leading by a fair margin as far as office politics is concerned. The general perception is that it is always easier for them to manipulate issues, make convenient excuses and a cakewalk for them to delegate tough tasks with just a smile! The news here is that men are feeling the brunt of all this and are insecure to the extent that they detest the existence of women in their workplace! All men are not alike and hence the small percentage of men who fall under this category, also have various different reasons to do so. Some feel their jobs are under threat and probably they are not as good as their female colleagues; some feel that the ladies get the easier way out whereas men need to slog, and a few MCPs feel that women still belong in the kitchen and that they do not deserve a corporate platform.

Mythology has plenty of examples of manipulative women, but if minds in the 21st century are swayed askew by such biases, it is probably time for us to do a reality check.


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Thursday, August 30, 2012

Is Maruti skiing on thin ice?

Maruti has been at the top of the list in the Indian automobile market since the 1980s, but with competition increasing in the small car segment, there are storm clouds on the horizon that the company can’t afford to ignore. What should the Indo-Japanese giant do next? by Pawan Chabra

Little is it known that Sunil Bharti Mittal, the founder of India’s largest telecom operator, Bharti Airtel (he is today the Exec. Chairman of the Board), had once almost gone out of business. In the 1980s, he was making waves in the genset market, and had become the largest importer of Suzuki generators in the country. Then fortune played the harlot. In order to protect indigenous players, the government banned imports of generators in 1983. Multi-millionaire Sunil’s track-burning vehicle had suddenly crashed into the regime wall. With great sympathy, Suzuki Japan recommended that Sunil’s license for a Maruti Suzuki (then Maruti Udyog Ltd.) dealership in Ludhiana be approved. It wasn’t. Sunil survived without Maruti Suzuki’s support and Maruti grew without Sunil’s service. Today, both are renowned case studies.

The story is not about Sunil Mittal, but about the fact that the attractiveness of owning a Maruti dealership has not waned since those times; purely because of the fact that Maruti has remained the number one car brand in India for years, even after the government sold its stake in Maruti Udyog Ltd. (which became Maruti Suzuki Ltd.). Maruti is today the largest passenger car maker in the country, with a sales network of 802 centres across 555 towns and cities, providing service support to customers at 2,740 workshops in over 1,335 locations (as on March 31, 2010). The company is in good hands and has managed to keep its head above the competitive water-level. Even a few months back, when B&E caught up with Shinzo Nakanishi, MD, Maruti Suzuki India, he meditatively explained how critical the 50% share in the Indian passenger auto market was for Maruti, and how the company was on its toes to retain its prepotency. But June 2010 saw a different dish being laid out on the breakfast table of this king of the auto ring, proving why market fragmentation can humble the boldest of adventurous warlords. For the first time in over 25 years, Maruti’s market share dipped below the 50% mark. It stood at 44%. Reason: Maruti’s strength in the country has always been the small-car category – the A2 segment. But during the past six months, there have been quite a number of attacks launched by other car makers to take advantage of the price-sensitive sentiments floating around in the Indian market. While GM launched the Chevrolet Beat, Ford introduced the Figo, Volkswagen rolled out the Polo, Hyundai brought to market the more affordable version of its i20, and Nissan puts its Micra foot forward. This burst of aggression by industry peers was sure to disturb Maruti’s smooth drive. Many experts outside the company brush aside this fascination with a 50% market share dominance. But inside the company, the figure matters like nobody’s business. Says Shashank Srivastava, CGM – Marketing, Maruti Suzuki India, “The 50% market share is psychologically very important. A 40% or even a 45% doesn’t give the boost that a 54% market share does. However, a situation where Maruti has retained a 50%-plus market share for many years is known to all. So we are all working towards getting it up back there.” Optimism is high, but one cannot ignore the wind that threatens Maruti’s house of cards.

There are a host of internal and external challenges that the auto major needs to address. The biggest internal challenge for the company in the face of rising prices of raw materials is the pressure on operating margins. And the disappointing results announced for Q1, 2010-11 is proof. Despite a 27.1% y-o-y rise in sales (which touched `80.90 billion), the automaker’s net profits fell by 20.3% y-o-y to `4.65 billion. The chief accused – higher commodity prices. At a time when the global economy is bouncing back and other car manufacturers are making merry, the results drove the investors to despair. Consequently, the Maruti stock slid by 12.31% in the very next trading session to touch a 52-week low of `1,190 on BSE. This also forced many equity analysts to downgrade the Maruti stock.

Outflow of funds in the form of royalty payments to parent Suzuki Motor Corporation, Japan, which amounted to `1.89 billion for the quarter. is also a huge liability for the Indian subsidiary. And this burden will not get lighter in the near term as Srivastava says, “Maruti certainly relies a lot on Suzuki when it comes to technology or branding. As the company grows further, the dependence is only going to get higher. Hence, there will a burden of royalty even in the times to come, the amount of which cannot be confirmed at present.”

Capacity constraints is also an issue. Today, it has the annual capacity to manufacture one million units, with a plan to increase it by another 250,000 units by 2012. But that is quite a few quarters away on the calendar. Till then, the company will have to manage with the existing capacity. Considering that the company crossed the prestigious milestone of rolling out more than one million cars in the last fiscal, it is near a stage there will be no scope for further expansion in capacity, unless it adds new assembly lines.

There are external roadblocks too. While the weakening of the euro has created a buzz in the forex market, for Maruti’s exports, it has been a killjoy. Despite a rise in y-o-y exports during Q1, June 2010 by 37.9% to touch 40,437 units, the weakening of the euro (which as on June 30, 2010, stood devalued by 29% as compared to a year back), put a damper on its chances of a praiseworthy bottomline.


Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.

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Wednesday, August 29, 2012

What went WRONG?

Political jostling and jockeying to try and go one up and a peculiar dependence on bureacrats has badly hobbled the administration of Prime Minister Manmohan Singh. This can spell bad news for the Congress in 2014 and for India right now

Consider the following instances that will dispel any doubts you had about coherence and cohesiveness of the current regime of Prime Minister Manmohan Singh:

• One of the most senior leaders of the Congress Digvijay Singh writes a column slamming the Union Home Minister P. Chidambaram for his strategy to tackle the naxalites. This triggers a virtual war of words. The first among equals remains silent
• The Foreign Minister of the country S.M Krishna-after being humiliated and hectored by his Pakistani counterpart in Islamabad-openly criticizes the Union Home Secretary for accusing the Pakistani establishment of complicity in the 26/11 attack. The first among equals remains silent.
• The Union Environment Minister Jairam Ramesh uses an international platform to openly criticize P. Chidambaram because the Home Ministry is putting restrictions on the import of telecom equipment from China. The first among equals remains silent.
• After being accused of corruption in the 2G spectrum allocation scandal, the Telecom Minister A. Raja claims that he had the consent of the Prime Minister to allocate spectrum in the manner he did. The first among equals remains silent.
• The Union Surface Transport Minister Kamal Nath ridicules and mocks top members of the Planning Commission-headed by the Prime Minister-as arm chair economists who have no connection with reality. The first among equals remains silent.
• The ever acerbic Minister Mani Shankar Aiyer tells all and sundry that he will be happy if the Commonwealth Games are a flop. In the process, he openly accuses organizers of widespread corruption and worse. India becomes a laughing stock even as the first among equals remains silent.
• The Union Minister of Railways Mamata Bannerjee makes it crystal clear that her first priority is not the Railways but the looming assembly elections in West Bengal. The first among equals remains silent.
• Union Minister Azhagiri of DMK hardly ever bothers to attend to his ministry or even cabinet meetings. The first among equals remains silent.
• For close to two months, Kashmir continues to burn even as the government of Omar Abdullah seems to lose control. The first among equals remains silent.
• Union Agriculture and Food Minister Sharad Pawar openly says after becoming the President of International Cricket Council that he would prefer less responsibilities. This, even as persistently high inflation ravages the common man. The first among equals remains silent.
• The American President Barack Obama is due to come to India on a ‘historic’ visit in November. Yet, both he and his Secretary of State continue to openly molly coddle the Pakistani military establishment whose sole strategy seems to be the destruction of India. The first among equals remains eloquently silent. 


Read more.....

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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Tuesday, August 28, 2012

The poachers of Kaziranga National Park are now the custodians of the big beast…

Kartick Satyanarayanan of Wildlife SOS, established a first of its kind rehabilitation program for Kalandars (bear dancers) in India, which too similarly relied on the perpetrators to bring about the change. “Such programs are usually met with retaliation first. The idea has to be slowly pushed through for them to accept it. We initially faced a lot of problems but then when the Kalandars saw the others earn a decent living through our programs, they too eventually quit capturing bears,” revealed Kartick. The situation for Assam forest officials was no different. But once the initial acceptance issues were resolved, the once-suspicious eyes of villagers began to shine with the hope of restoring their National Park and its star species.

The Divisional Forest Officer, Dibyadhar Gogoi mentioned that out of the 110 villages, Eco-development schemes have already been introduced in 55 villages, with a huge number of women being involved. With the introduction of these schemes, the poaching count dipped drastically in 2007, where only 16 cases were reported; and in year 2010, only two cases of poaching have been seen so far. Now, the National Park promises an exotic experience to its tourists where villagers would be found serving the local Karbi cuisine, tourists are escorted by local guides for a trek to the nearby Baneswar Devalaya temple and, of course, the visitors will also take back fond memories of the regal rhino!


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Monday, August 27, 2012

For God or for US?

The new Ambassador needs to introduce the right thought process

As he faces the heat of ‘dis’approval ratings as President, commendable things also get done under Obama’s administration. A case in point was the nominating of the Ambassador-at-Large for the International Religious Freedom (IRF) of the US State Department. Though it created little more than a flutter in the media fraternity, its importance is hard to overstate.

A survey done by Pew Research Center’s Forum on Religion & Public Life in coordination with United Nations, US State Department and Human Rights Watch has revealed that around one-third of the countries in the world have high or very high restrictions on religious freedom. Over 70% of the world population has restrictions in terms of freely practicing their religion, imposed either by governments or individuals or organizations.


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Saturday, August 25, 2012

M&AS AND JVS OFFER COMPLEMENTARY TOOLS FOR ORGANIC GROWTH

Even as the number of mergers increased over the past decade, the funding dedicated to R&D suffered under stringent cost-cutting measures and restructuring

The chemical industry has witnessed significant changes in the recent years. A wave of mergers since the mid-1980s consolidated the industry and led to research on a scale unimaginable to the scientists who worked for firms in the early of 20th century. Prior to the 1990s, M&As were generally pursued only when identifiable business opportunities existed. By contrast, the number of M&As by specialty chemical firms has increased by a factor of four since 1993, and the number of transactions by commodity chemical firms has grown over the same time frame. Even as the number of mergers increased over the past decade, the funding dedicated to research and development (R&D) suffered under tough cost-cutting measures and restructuring. In mid-2003, a group of research directors, technology officers, current and retired CEOs, economists, historians, and analysts gathered at the Chemical Heritage Foundation (CHF) in Philadelphia. Two key questions were put to participants: Is today’s chemical industry mature, with little payoff to be expected from investing in R&D? Has a decade of M&A activity undermined innovation and creativity in the industrial research setting?

Expanding Due Diligence
M&As and JVs are nevertheless fraught with points of failure. In recent studies, economist have found that mergers are often based on faulty evaluation of assets, especially intellectual assets, leading to long-term decline in shareholders returns. A solution is at hand: involve the R&D division in the evaluation of a potential takeover target from an early stage.

Researchers will often be able to identify which firms should be considered for targeted acquisition. Once senior management decides to buy a merger or acquisition, its success hinges on effective use of R&D in each of the four major stages in the transaction: Target identification; due diligence; implementation and integration:

Target Identification: During target identification, R&D can assess the capabilities of the acquired firm’s research, including the researchers (their reputation, experience, culture, and style of working) and the quality and production of the technology itself. 


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Friday, August 24, 2012

PRESENT PERFECT, AND YET FUTURE TENSE!

BHEL WAS ABLE TO PREMPTIVELY SEE AN EXCESS MANPOWER BURDEN AND RIGHTSIZE IT TO PERFECTION. IN FACT, IT PROVED TO BE MORE PERFECT THAN THEY HAD ACCOUNTED FOR!

Flab doesn’t pay, be it an individual or a company (w.r.t. payrolls for the latter). It becomes extremely tricky to handle issues like salary cuts, pay packages, layoffs, cutting down retirement benefits, et al. On a global scale, bloated wage bills have led even giants like GM into bankruptcy.

However, the experience of engineering firm Bharat Heavy Electricals Ltd. (BHEL) is unique, one where they faced an issue of a ballooning wage bill and tackled it in a timely way, hence prempting possible future issues that could have led to activism. In fact it was a success so profound that they had to regret it later!

BHEL had an experience of implementing VRS in the 1980s, which a lot of people did not opt for. It wasn’t that critical for the company then. But in the late 1990s, the company was facing a scenario of erratic and subdued demand. Under then Chairman & MD K. G. Ramachandran, BHEL saw its order book falling from Rs.72.21 billion in 1999-2000 to Rs.55.48 billion in 2000-2001. Between 1999 and 2000, there was a major drop of in volumes, which went down by as much as 52.89% for power transformers. Due to a general slowdown, projects were either getting discontinued or deferred by customers. In addition, due to the increase in retirement age from 58 to 60 years, natural attrition dropped. In that duration, the company took up three rounds of VRS to rightsize the company and around 15000 people opted for it in all. The scheme involved an exit payout of Rs.5 lakh along with provident funds, medical and gratuity schemes. Besides, a provision was offered for one and a half months of salary for every year completed or years of service remaining, whichever was less. Notably, out of 8000 people who took the VRS in the first round, 65% were in the age group of 55-58 years and 17% were above the age of 58. Apparently, rumours of government plans to roll back the increase in retirement age was a key motivator for these employees. They were obviously worried that they would lose the benefits of two years if they didn’t bite the bullet. BHEL planned to implement the scheme from July 1 to September 31, 1999; but had to close it on July 24, since its target of 5000 employees was crossed by miles. The cash outlay ballooned to Rs.3.86 billion compared to the targeted Rs.3 billion for the scheme. In the second round in 2000, the company carefully chose its eligibility criteria to only allow poorly qualified or underperforming employees to opt for VRS. B. Shankar, GM-HR, BHEL, comments to B&E, “Due to the VRS, we reorganised ourselves. Efficiencies have gone up as work got distributed among existing people.”


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Thursday, August 23, 2012

FIVE YEARS OF RESEARCH, INTELLECT AND PASSION-DRIVEN BUSINESS JOURNALISM THAT HAS TRANSFORMED BUSINESS JOURNALISM... THE WAY IIPM TRANSFORMED MANAGEMENT EDUCATION IN INDIA! WATCH OUT FOR THE NEXT FIVE YEARS!!!

It's been absolutely wonderful a journey! What's most important is that I know that every line we carried in these fi ve years, was one which we believed in it. Th ere has been no compromise - with advertisers, with politicians, with policymakers, with businessmen. Th ey have actually oft en hated us for our bold views, fi led cases against us; and the best part has been that we have had competitors trying to harm us - and our parent institution - in all possible ways! It only shows that we made a huge impact. An impact that made competition fear us, policymakers and politicians uncomfortable, and businessmen careful. And I think that was the role that we wanted to have as a business and economy magazine. We stood not only for truth, but truth backed by intellect - our biggest diff erentiator. In the world of unintellectual journalism and journalists - and more so in the business sphere - we wanted to bring in analysis that would set benchmarks.

We wanted to be honest to the point that no businessman could say that any Business & Economy journalist was just a phone call away. And everyone knows that our magazine has never been a PR tool, or one where only foolish praises would be showered, issue aft er issue. And most importantly, we gave our readers in four crisp pages - yes, that has been the size of our cover/main stories - what other magazines failed to give in four times the number of pages! Trust me, any pathetic journalist can write a 16 page story by taking 30 quotes and placing them one after the other - with logic or sans logic. But when you have to write a story in four pages, you better be intelligent enough to know what the context is. And that happened purely because of the team of MBAs led by Sutanu and A. Sandeep in tandem. If Sutanu was the ideas man, A. Sandeep was the guy who saw to it that every line retained its sharpness and yet had subtle humour in it, which business magazines rarely get to see! And trust me, more often than not, I have found our half-page stories as wonderful as our cover stories. Th ey have all been cover stories in their own right - that is the amount of knowledge that the team squeezed into each story!

We realise that we are still not Th e Economist - the magazine I personally respect the most - so we never dared to call any of our half page stories the cover story. But I know that many of them were worth being cover stories. So, for their endless hard work, intellect and sustained sincerity, thank you so much Sutanu and Sandeep. For keeping the intellectual fl ag fl ying through Scrutiny stories, thanks Prasoon; you and your team are brilliant! For the smart lifestyle section - which all business magazines started only aft er we started - many thanks to you Prashanto and your lovely team. Many many thanks to the super awesome design team under Satyajit, ably supported by Manish and others.

Of course, taking out a magazine requires a 'huge behind the scenes' production work and for that, Gurudas, thanks to you and your lovely team as well! Finally, I must must thank Abhimanyu for managing ad-sales, despite my endless strictures which always made his life difficult. What is most amazing with all the names I have taken so far, is that they have all been with us since day zero of Planman Media! Th at is the power of a team, without which an organisation is nothing. Th anks to everyone who has contributed with so much passion and heart, but has not been named here. Above all else, I must thank Dr. Malay Chaudhuri for giving us the vision and a great institution called IIPM. Many thanks to IIPM for the huge pool of intellectuals who run Planman Media and IIPM Th ink Tank; and to IIPM professors for constantly providing the most enlightening outlook to our group.


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Wednesday, August 22, 2012

...AND WHERE’S INDIA’S GDP HEADED?

Liberalisation started revealing some promises of India’s compelling growth story, and the economy’s class act during the global recession has just about cast that story in stone. Undeniably though, we aren’t touching the eight-lane highway too soon, leaving lingering doubts on sustainability. B&E presents some exclusive insights from industry experts and thought leaders on the direction that India’s growth story is expected to take from this crossroads. Question is: Are we getting there yet?


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