IIPM - Live: October 2008

Friday, October 31, 2008

Handsfree chat

If there’s too much disturbance when you talk on the phone

or you’re just scared of the traffic cops slamming a fine on you, then this bluetooth earpiece from Bang & Olufsen is the perfect solution. Giving you crystal clear sound, this earpiece catches frequency ranging between 50 to 20,000 Hz. The bluetooth device comes with a two-year guarantee and a 1.2m extension cord.Price: Rs.14,700.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs

Thursday, October 23, 2008

Why your office doesn’t follow the Google model

Most managers want to empower their workers, but reality can get in the way

Que: What do you think about the Google model of HRM, with its flexible work schedules and employee empowerment? (Armando Castilla, Monterrey, Mexico)
Ans: The first answer to your question is easy: We think Google’s flexible work schedule policy, which freely permits employees to work offsite and encourages them to use one day a week to explore any kind of “what-if” project that interests them, is fine and probably harmless, if not completely predictable. After all, Google is not the first young, fast-growing, highly profitable company to tell its employees that work shouldn’t feel “corporate”. It’s practically a Silicon Valley tradition. Likewise, it’s practically a tradition for such policies to ebb somewhat when, and if, growth and profits slow. The second part of your question – about empowerment – strikes us as more complicated. We support empowerment; everyone knows that managers should give their people the freedom to make decisions and take risks. But in our experience, empowerment is one of those organisational concepts, like “creative destruction” and “collaborative work teams” that in time, as books get written and consultants move in, starts getting surrounded by more hype than honesty.

As an antidote, we offer three hard facts about empowerment, none should lessen its worth, only clarify its reality: In “normal” companies, empowerment isn’t granted to everyone equally, it’s earned by performance

Obviously we’re not talking here about Google, with its abnormal (although very admirable) success, and the big fat margin of error that success provides. We’re talking about regular companies with average growth & profitability, where with few exceptions, managers give people the leeway to experiment with big new projects only after they have demonstrated that they can knock the smaller ones out of the park.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Tuesday, October 21, 2008

Misplaced opportunities

Sadly, the Urea policy would not benefit anybody
Finally the Abhijit Sen Committee report suggesting new Urea policy was approved with an anticipation to reduce India’s urea import bill, which already crossed Rs.275 billion during 2007-08. The new policy proposes compensation to producers at import price parity of urea, instead of cost-plus-basis method prevalent today.

Urea is the most used ingredient in fertilisers in India yet to meet the demand 9 million tonnes is imported. There is no doubt that the new policy would make it more profitable for the companies to invest in urea production since they would be given higher subsidy. But the question is whether the new policy would be able to bring the much needed investment and would the benefits be passed on to the poor farmers.

Firstly, the new pricing would be applicable only to additional urea produced (over the existing rated capacity). But as Satish Chander, Director General, Fertiliser Association of India says, “The entire thing depends on gas availability and price. If it is available to fertiliser manufacturers at $5 per mmbtu the urea production will go up.” Availability of key ingredients like gas and LPG have always been a problem for producers and there has been no attempt by the government in this regard. Companies who can start greenfield investments would get as much as 85% of the subsidy while those who utilise under-used capacities will get 90%. In both the cases most of the players fail to meet the requirements. Most of the companies in India don’t have the needed cash-flows to either start new projects or increase production in the existing plants. Secondly, poor farmers who should get the final benefit of subsidies don’t get it. An IFPRI research has shown that half of the fertiliser subsidies actually go to companies rather than to farmers. In this case too, neither the farmers would feel any actual difference from the existing state nor the agriculture.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Monday, October 20, 2008

Med’iator Man!

Medvedev comes into element
For the first time in history, Russia is offering the world a better

way to bring global peace instead of old gambles. Russian President Dmitry Medvedev along with his ambassador to NATO, Dmitry Rogozin, have outlined a historic and holistic plan to have a grand international conference next year in Moscow. Almost all NATO and European Union (EU) members, some of Russia’s ex-soviet allies, China and perhaps India are expected to meet in order to establish a new security organisation to deal with issues like terrorism and illegal immigrations.

Analysts comment that international organisations like the World Bank, IMF, NATO, UN, et al, actually have duped the world, where, instead of the globe becoming a multipolar society, US hegemony has become stronger. And now, with Russia striving to bring more neutral bodies into the picture, there seems to be new hope. A close scrutiny exemplifies that this Russian move will definitely help it renew its global stature. No doubt, what Medvedev is propagating using global forums, Putin is implementing using power, as seen in the case of Georgia recently. But is such a new forum really required? Of course yes; if you can’t nuke those damn yankee Americans, dupe them Med’iator Man :-)

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Saturday, October 18, 2008

Doubts are often raised

Doubts are often

raised about how cost effective hybrids really turn out to be. NuWire Investor’s Cali Zimmerman compared the Toyota Camry hybrid with the normal version. The hybrid is $6,730 more expensive than the normal version, and if you assume average of 12,000 miles per year, the cost difference cannot be recovered before 13.8 years! So actually, they are currently a potent way of branding yourself as a environment friendly soul, as opposed to a money wise one!

E-85 has been another fuel innovation that has created waves, as it uses 85% ethanol (derived from corn crop), and only 15% gasoline. Burns of GM projects, “By 2010, GM will build 1.4 million FlexFuel units a year, and we are helping get E85 pumps installed across the US to fuel the three million E85-capable vehicles we already have on the road.” The main caveat (always is there, isn’t it?) is the way it is giving rise to rising corn prices in US. Some 9 billion gallons of ethanol in the US would be mass produced this year according to EPA, which is a significant 37% of total production. Then there is the indirect impact on the poultry industry too. All this when an estimated 1 billion people across the world suffer from hunger & malnutrition. So should the world work on feeding humans or cars? Companies are still trying to remove this dilemma. GM, for instance, is investing in companies that are developing technology around cellulosic ethanol, which is produced from non-food sources of biomass.

Hybrids are considered the stepping stone to the ultimate dream fuel for mankind - hydrogen. Non-polluting and quite in abundance; it involves 93% of all atoms in the universe. But consider an estimate by the ‘The Journal of the Federation of American Scientists’, which estimates that they won’t even be actually good for the environment till befor 2035. Firstly, hydrogen has to be separated from water, the process which is itself quite polluting, besides being expensive.

According to another report by Centre for Energy and Climate Solutions, using fuel cell vehicles and hydrogen from zero-carbon sources (like renewable power or nuclear energy) has a cost of avoided carbon dioxide of over $600 a metric tonne, which is more than a factor of ten higher than most other strategies being considered. Besides, factors like the lack of subsidies in the initial stages, the enormous effort required to build a hydrogen pipeline infrastructure, enormous cost of hydrogen fuel cells, et al, things appear far less rosy in effect if we take a practical consideration. With this being the state of affairs, it would be quite silly to expect that our, and my personal tryst with black gold would end any time soon. The only possible antidote visible is self restraint, which would accrue as motorists start realising that fuel prices are now rising beyond their wit’s end; or the Left coming to power, after which I expect petrol to be given free of cost to everybody :):):) Mrs. Robinson, I think I’ve finally lost it!

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs

Friday, October 17, 2008

The no-brainer auto issue #1

Understand

ing the first is unbelievably simple! Fuel-efficient cars [in other words, cars that run on traditional petroleum and give increasing miles per gallon]! The reality is that companies that have focused less on providing high level quality (in terms of say, styling, driving, luxury, SUV experience) and more on providing flat fuel efficiency have succeeded beyond anybody’s expectations. The corollary is that companies that have focused on the opposite have tasted devastating billion dollar losses. It’s obvious that the solution was not something hidden away in strategic thingamajigs. And to say all this as an afterthought is, like I wrote above, a no-brainer. But in truth, the concept that fuel efficient cars are the future, was for every auto major across the world to see. Sadly, the only ones that focused on it with passion were the Japanese giants.

Of course, one has to accept that two years back, Bill Ford had divulged to the media that Ford would be necessarily moving towards more fuel efficient cars. That should have done it, right? Well, there was just a slight little problem. Despite his public statement, Bill never moved towards ‘fuel efficient’ cars! [“The market was pulling us in a different direction,” Bill reveals in BusinessWeek this August]. Dangerously, neither had GM! And we’ve not even started discussing the travails of the down and almost out Chrysler yet, which is perhaps simply looking around for a suitable buyer! The Detroit three, unfortunately, focused horse-headedly on selling SUVs and tough trucks, and investing more and more into R&D [close to $12 billion annually] to recreate products that were doomed from the start! That’s how tough it takes some billion dollar loss makers to understand no-brainer issues.

The no-brainer auto issue #2

I caught up with Christian Breitsprecher, equity analyst at one of Germany’s largest investment banks, Sal Oppenheim, and he commented, “Obviously, the auto industry did not foresee the trends... that one day the price per barrel would be so high. Companies, which do not invest in alternate fuel will go down and hybrids is just an element of the entire investment.”

That brought me to the no-brainer issue number 2, hybrids! To say that it’s the most over-hyped concept in the industry today not worth even the media space it occupies, is to speak the truth. The situation today is such that after testing out, one should say successfully, the concept of fuel efficient cars, car manufacturers today are assuming presumptuously that the next logical step in this hugely competitive world is the hybrid (for the rare uninitiated, a car that runs on a combination of petroleum and another source of energy). And more so companies that are leading the race, like Toyota, Honda etc. Dramatically, the fact is that even with hugely profitable companies like Toyota and Honda, who believe that with hybrids they have the instant solution for the future, the concept could be a thrashing in disguise.

The first structural defect afflicting hybrids is the market share. The hybrid is, in simple terms, before its time, and cannot account for significant market share and usage for the next ten years globally. Illogical you said? Look at the figures even in the world’s top auto market (or is it second already?). In the US, despite being ‘in the news’ for the past decade, only 347,102 hybrids were sold in 2007 (see detailed story later on, ‘Where, Mrs. Robinson, lies the problem’). That means that even with Toyota monopolising a 70% share of the market, and after all the billion dollar global marketing hoopla attempted by various auto corporations, hybrids accounted for only a miniscule 2.15% of the total new vehicle sales in the US, and puniest percentages in other global markets.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Thursday, October 16, 2008

Media Savvy Techno-‘Sapien’ts

Alan Herrick President & CEO,Sapient

In an exclusive interview with B&E, Alan Herrick, President

& CEO, Sapient reveals the company’s business model and how Sapient is leveraging its interactive marketing & consulting businesses to succeed in today’s changing landscape. Herrick joined Sapient in 1995 and was instrumental in top- and bottom-line growth of Sapient’s Trading & Risk Management business. Herrick has also served as Executive VP, in charge of North America & Europe. Prior to joining Sapient, Herrick held key management positions at PSE&G, Prudential and Home Holdings Inc. Currently Herrick works closely with the Sapient leadership team to set strategy & foster a culture of innovation. Excerpts from the interview with Sapient’s top boss: B&E: How has the journey for Sapient been so far, both globally as well as in the Indian market?

AH: Sapient continues to experience growth across all of our key geographies – North America, Europe and particularly India. Last year was a watershed year where we realised top line revenue growth of 34% YoY along with strong cash flow and solid margin expansion. We’re well-positioned in two large & growing adjacent markets – interactive marketing & consulting. With marquee global brands such as Sony, Scandic Hotels, Virgin Charter and DeBeers, we continue to make excellent progress advancing our market strategy and position, and we are on track and in a strong position for future expansion. Our Indian operations are very important for our ongoing success & growth. We launched our India operation in 1999 and now we have three facilities operating in Noida, Gurgaon and Bangalore.

B&E: How important are the operations in India for Sapient global?
AH: Sapient’s Indian operation is a key component of our renowned Global Distributed Delivery (GDD) model, which supports clients in North America & Europe. Our world-class GDD model helps our clients achieve improved ROI on a wide variety of engagements across our interactive marketing services & consulting groups. GDD, combined with our expertise in business strategy, technology & user experience, has been a competitive advantage for us for the past eight years.

B&E: How do synergies between consulting & interactive business help Sapient?
AH: Our clients are thrilled that we can build & implement their websites, unlike standard advertising agencies. We can also tie the e-commerce platform to their back-end transaction systems – no one else can do that the way we can. This is a key differentiation for us. The consulting & marketing businesses actually have more in common than you may realise. As the marketing world evolves, it becomes more dependent on technology. In fact, both marketing & consulting sectors are highly dependent on technology – an area where we’ve excelled. Our consulting group is focused on opportunities for clients around the intersection of business processes & technology. The consulting side works through a business process that takes advantage of technology & gives desirable outcome. With our interactive marketing group, we focus on designing & building multi-channel experiences. We take it all the way from marketing services through to e-commerce. We help clients acquire, retain & manage customers on the Internet and help them design online experiences & destinations that attract customers while giving them ways to measure & improve it for optimum success.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Wednesday, October 15, 2008

Anarchy knocks... yet again

As the power struggle between conflicting ideologies continues, democracy suffers in Pakistan
Pakistan's civilian government is fighting a losing battle with

the Taliban and the al-Qaeda. The stance of Pakistan People's Party (PPP)-led coalition government to enter into a dialogue with the terrorists has been severely criticised by the West, especially the US. It believes that the Pakistani government has allowed the Taliban, already well entrenched in Federally Administrated Tribal Areas (FATA), to reorganise themselves and attack the US-led forces in Afghanistan more aggressively.

The reversal of the decision to rein in Inter-Services Intelligence (ISI) and bring it under the control of the civilian government, within hours after a notification was issued in this regard, is also being seen as a sign of weakness of the coalition. "If anyone is in charge of security policy in the tribal areas bordering Afghanistan, Pakistani politicians and Western diplomats say, that remains the military and country's premier intelligence agency, ISI, which operate with little real oversight," a story titled "Leadership Void Seen in Pakistan" and published in the New York Times said.

The assertion is true to a certain extent because PPP co-chairman, Asif Ali Zardari is calling the shots, whereas the PM, Syed Yousuf Raza Gilani appears to be a weak and docile person. No wonder he was grilled by US hawks when he visited that country. Back home, Pakistan Muslim League (N) leader, Nawaz Sharif, who's been PM twice and holds sway in the Punjab region, is constantly hammering PPP on restoration of judges. PML(N) has already withdrawn its ministers from the PPP-led coalition as a mark of protest on the issue and observers believe the PPP would be in real trouble if PML(N) quits the coalition.

Sharif is basically a right-winger with a sympathetic attitude towards Taliban and is unhappy that Pakistan fights a proxy war of the US in the tribal areas. He also abhors the policy of Pervez Musharraf to keep a leash on nuclear scientist, Dr. Abdul Qadeer Khan, who is accused of nuclear proliferation.

In the troubled Balochistan province too, political activists say that things are going from bad to worse and that would ultimately weaken democracy and strengthen the army that has ruled Pakistan for almost 30 years since the country got independence in 1947. "There''s been carpet bombing in Dera Bugti area of Balochistan during the last week, though the government claims that military operation has come to a halt in the province," Tahir Bizenjo, a former senator and a leader of National Party said. "The policy suits the establishment & Americans who prefer to deal with a military dictator instead of a civilian government," he added. With this state of affairs, democracy in Pakistan could become a casualty fairly soon.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Tuesday, October 14, 2008

Unholy sh!t...

India beats Pakistan...in ignominy
India has a dubious distinction of possessing the highest open

defecation waste in the world – more than 50% of open defecation in the world takes place in India. According to Planning Commission, 4-5 lakhs of children below the age of five die every year because of water borne diseases. Poor sewage and lack of proper sanitation infrastructure results in 80% of the diseases in India. It is equally pathetic that only 40% Indians have access to toilets resulting in open defecation. If that was bad, industrial waste, which creates severe ground water pollution, is worse!

In this respect, a mention must be made of the magnanimous efforts of Dr. Bindeshwar Pathak for installing 6,50,000 toilets and 62 excreta based biogas plants under the Sulabh Sanitation Movement. The effort started from his home state where scavenging human waste is not uncommon. If controlling inflation is an important issue for the government, one wonders why so isn’t the objective of providing a dignified human existence for every Indian citizen? Politicians can rejoice – India, in the Human Sanitation Index, is now only above Afghanistan and Pakistan from the bottom!

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Monday, October 13, 2008

You have to do your ‘home’work first

Write to Jack & Suzy Welch at editor@businessandeconomy.org
Que: How can Mexico compete in the global economy? (Adolfo Navarro, Monterrey, Mexico)
Ans: Your question says Mexico, but put virtually any developing

nation from Turkey to Brazil in its place and our answer would be the same. First, we’d state that countries whose businesses are trying to establish a foothold in foreign markets need an educated workforce, affordable sources of energy & supportive trade policies. But we’d add another factor that is, in our view, equally important. The businesses that will compete most effectively will be those that have benefited from intense competition right at home. No speed skater or pole-vaulter heads to the Olympics before years of intense competition with the best and brightest in his own backyard. The same goes for companies heading into the business “world games.” But it still doesn’t happen enough. Your own country is a good example. Its economy became “free” in 1994 when the government essentially stopped allowing companies to control entire industrial sectors. But nearly 15 years hence several conglomerates still dominate the national economy. There are exceptions: Cemex, the cement producer, and Grupo Bimbo, the food manufacturer are companies that have grown domestically and now manage to thrive in foreign markets. But Mexico remains a country with too little local competition, which has and will continue to take a toll.

By contrast, both Japan and South Korea prepared their companies well. In the 1970s, the Japanese government encouraged its “zaibatsu” to reform and compete aggressively locally before embarking on foreign foes, the implications most notably felt by the US a decade later, Korea unleashed its “chaebols” with similar results & companies like Daewoo & Samsung quickly established them as formidable competitors.

China, interestingly, still has a largely state-controlled economy, and yet its entrepreneurs have long been irrepressible. When GE bought a lightbulb factory in Shanghai in the 1990s, for instance, Siemens and Philips were the main concern. Within a year or two, however, scores of Chinese start-ups had purchased bulb-manufacturing equipment from Eastern Europe, launching a competitive slugfest. No wonder so many Chinese companies enter the global market armed for bear.

That seems to be what’s happening in India these days. Its economy began liberalisation efforts in the 1990s, but since 2000, they seem to be accelerating, with an increasing number of companies breaking into industries once controlled by a few family conglomerates. New technologies have helped. With the emergence of telecom, and specifically cell phones, a young company with an exciting business model – Airtel – has been able to compete fiercely with market mainstays Tata and Reliance. For all three companies, the innovations sparked by competition have driven growth and profitability – giving each the ability and confidence to expand overseas.

This is not just relevant to developing nations. In the US, established companies in the semiconductor and biotechnology industries are constantly being pushed to new heights by feisty upstarts coming at them. But it even happens in mature businesses. Case in point is the business news channel CNBC. Without any real competition for a few years, it was doing just fine when Rupert Murdoch announced that Fox was launching its own business channel. Seemingly overnight, CNBC looked like a new place, with reenergised anchors, bold new programming and a revamped Web site. Fox won’t stop coming at CNBC, but you can be sure both companies will be better for the fight.

Day-to-day, no normal person wants competition. It makes everything harder. But competition has an incontrovertible way of creating excellence and verve – in a word, edge. And you don’t want to leave home without that.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Saturday, October 11, 2008

No permanent friends or foes

Left is peeved with Amar Singh for taking SP closer to Congress
British politics during its colonial era of the 19th and

20th centuries, revolved around one underlying dictum: there are no permanent friends or enemies in politics. The only thing permanent is self –interest. Amar Singh and his relationship with the Left parties fall into this hoary category.

If the inexplicable opposition of the Left parties to the Congress has become the hall-mark of contemporary Indian politics since the last four years, it is now the turn of the Samajwadi Party to put its relations with the Left parties at stake.

The main point of disagreement between the two allies has been the Women’s Reservation Bill which was recently tabled in the Parliament and had the Left’s support. SP leaders are dismayed that despite private assurances and their intense opposition to the bill, the Left supported it. Reflecting the current frostiness between the two is Amar Singh, who has stated two things clearly. One, the Bill in its present form is unacceptable. Two, he has charged the Left with changing policies to suit its convenience.

Left leaders have also not taken too kindly to recent Congress invitations for SP leaders to attend celebrations linked to UPA government’s four years in office. Interestingly, this is the first time in four years that SP leaders were invited to any UPA function. With General Elections due next year, it would appear that the Congress has no choice but to entertain both SP and the Left. The imperatives of real politics make it incumbent upon the Congress to keep the option of a possible alliance with SP open. Especially when SP appears to be getting bigger after the UP unit of the Janata Dal (Secular) decided to merge with it recently.

If the current impasse between the two continues after the General Elections, there is little doubt that the concept of a Third Front would be delivered a body blow. Something that the Left is not going to be too amused by.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Friday, October 10, 2008

The pain of being Captain Sparrow

If software piracy is really so much of a trouble, can’t technology help?
We laughed for a long time before we answered the question.

Technology can solve this issue in a jiffy; especially with net penetration increasing in all significant markets. Microsoft has initiated a similar approach wherein, if you’re using a non-licensed operating system and connect to the web, they would have already documented your details.

Software piracy has dropped in 67 countries and risen in only 7 out of 108 countries having significant markets. While UK has finally experienced a fall in the piracy rate, India, China, Russia and Brazil have an estimated piracy rate of 73%, 82%, 69% and 59% respectively (IDC survey). In Jordan too, the software piracy has only reduced by 1% whereas in Pakistan the same is by a puny 2%.The maximum loss suffered due to piracy was in the US.

So why isn’t the government stepping into stopping this in a coordinated manner? Firstly, governments don’t feel it’s their problem; as piracy reduction would only support the profits of these companies (and additional job creation is also minimal; for example, a 10 point reduction in piracy would create only around 400 odd jobs). Secondly, as many pirated software users are in reality large companies, it’s a very sensitive line between initiating legal action (and thus losing a prospective client forever) and coercing the user to proactively buy software

Think about it. Interested in watching a movie? Any movie? Pirates of the Carribean? Try Ares or Limewire; you’ll have a DVD quality copy in less than an hour of download.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Tuesday, October 07, 2008

Zaibatsu (or Keiretsu) in Japanese or Chaebol in Korean or Semibankirshchina in Russian

But no matter what you call each one of them – Zaibatsu (or Keiretsu) in Japanese or Chaebol in Korean or Semibankirshchina in Russian – they were (and still are) nothing but different forms of crony capitalism, which is just a comfortable arrangement between business houses, bankers & government officials.

Soon, this so-called ‘cosy’ arrangement became the bone of contention between the South Korean government & Chaebols, who were continuously manipulating their books of accounts to show a healthy balance sheet to the markets. And thus began the big dark game of secrets, lies & deception by the family-run businesses. The secret-cellar deals, the under-the-table bribery & the nasty fraudulent activities became part and parcel of the day-to-day activities of the Chaebols.

A few days before the WEF, I was lucky to catch hold of Dr. Van Jackson of the University of Maryland. Van is the global authority on East Asian History, also an analyst at Foreign Policy In Focus, and I had to get his slant... and Van didn’t disappoint. He shared with me that Chaebols pose two grave interrelated dangers – unstable concentration of capital and labour in the hands of only a few companies, and the often discussed issues of transparency and corruption. “Both these dangers scare-off risk-averse international investors, which naturally limits foreign direct investment capital inflows into the economy. In this sense, it is reasonable to blame the Chaebols for ‘holding back’ the Korean economy,” he adds.

In their over-ambition, the Chaebols lost sight of an inevitable fact – after all, a thief can steal only this long and that much. And that’s what happened in 2000. Car manufacturer, Daewoo, which was once a multibillion-dollar globe-girdling enterprise, collapsed and became bankrupt – a direct spillover of its corrupt practices. Daewoo had earlier emerged as the king of acquisitions, thanks to the cheap credit from banks. Of course, the fact that founder and former CEO of Daewoo, Kim Woo-choong’s father had been dictator Park Chung Hee’s teacher certainly helped his cause too. Even in trouble, it is rumoured that he cut secret deals with the governments to bail out his shipbuilding unit. It is alleged that during the period 1997-98, Kim masterminded what is believed to be Asia’s biggest single accounting fraud that inflated the value of Daewoo’s equity by $32 billion.

Ultimately, he decided to cut his losses and left the country (some say at the urge of former President Kim Dae-jung because of Dae-jung’s backdoor dealings with Daewoo). The moment Kim Woo-choong escaped the country; he became Interpol’s much-hated darling! A story of a man, who rose beyond expectations, added fuel to the Korean engine, and was suddenly washed away by the downpour when the dark ‘deal’ skies burst open.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative