IIPM FACULTY: January 2013

Tuesday, January 22, 2013

Skeletons in every cupboard

Rather than blaming auditors, the entire regulatory system must be cleaned from top to bottom

Is regulation in India working? It’s a lot like asking whether the democracy is working in Pakistan! A lot has been said and written on the Satyam fiasco and from investors to independent directors to auditors, everybody seems to have got their share of the blame. But this is not for the first time that such a thing has happened in India. However, Raju’s misdemeanours have taken this ruckus to a new league and garnered the attention of the corporate world. We have been through this episode with Sterlite, which was alleged to have adopted fraudulent practices to bag a tender floated by GAIL last year. Then we have the case of Global Trust Bank, where the auditors were again PricewaterhouseCoopers and so on... In fact, Naresh Gupta, MD, Adobe India, in an conversation with B&E, doesn’t deny the possibility that many more Indian companies have bloated books (mostly in the real estate & infrastructure sectors) because of their proximity with politicians and bureaucrats. “So it’s better if we clean up the system now than to feel sorry later,” he adds.

But then isn’t it the auditor’s responsibility to be the whistle-blower to the company’s wrongdoings? However, some say that book of accounts is the primary responsibility of the management and auditors merely audit the documents provided to them by the management and give their opinion based on accounts. If so, then why on earth does someone need an independent, external auditor?

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2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Saturday, January 19, 2013

It takes ‘3’ to make a ‘Com’eback!

The 3Com acquisition is a definite plus to HP’s suite of data centre offerings (triple play of server, storage and networking), but integration problems could be quite daunting

Move over Microsoft & Google. Move over Intel & AMD (especially after the truce they just announced). The rivalry that could beat them all to the record books when it comes to the technology industry could well be the rivalry between two technology giants who are well known in their respective industries as companies who made all competition bite the dust. They have been partners for long when it comes to providing a comprehensive suite of solutions to their clients; and have won business together. However, their win-win relationship now seems to be a thing of the past.

Yes, we are talking about HP and Cisco, iconic companies led by iconic leaders Mark Hurd and John Chambers respectively. As the world, and the IT industry move towards a shaky recovery, these two leaders seem to be intent on redrawing the battle lines with regard to what they stand for and can deliver. And thanks to this latest posturing, they are finding it increasingly difficult to stand each other.

It all started when Cisco made a major play into the server market when it mooted the idea of marketing its own servers, therefore providing its clients with the benefit of one unified data center from one vendor – with server, storage and networking as a combination offering. The transition was mainly aimed at taking it beyond the status of a mere box mover, which would enable it to extract more value out of its clients. Earlier this month, Cisco has gone a step further as it entered into an alliance with network storage major EMC to enhance its power position in the high stakes cloud computing arena; where data centers are going to be a major winning proposition.

And now the stakes have got even higher with HP’s acquisition of 3Com, a move that aims at making HP a stronger player in the networking space and competing with Cisco. With this acquisition, HP seeks to leverage from 3Com’s expertise in networking as well as its Chinese market. People tend to miss the point that 3Com was the company that pioneered networking, and was founded by Bob Metcalfe (father of the internet networking protocol).

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Friday, January 18, 2013

Is Suzlon going to make it through?

Debts, forced recalls and Tanti’s inorganic dreams. Is Suzlon going to make it through? Asks Ratan Lal Bhagat

“Suzlon had a disastrous second quarter in the current fiscal, with a loss of Rs.3.4 billion in comparison to a profit of Rs. 2.6 billion during the same period last year. This was led by uneconomical operations resulting from dwindling backlogs, a 61% y-o-y fall in wind turbine generator sales volume and a rise in interest cost,” states Bharat Parekh, Research Analyst, DSP Merrill Lynch (India), highlighting the depleting financial condition and the reasons behind fall of the wind turbine giant.

Of course, the company has drawn various debt-clearing blueprints like the $400 million fund raising plan through the issuance of either ADRs or GDRs, but there is time before optimism flows into the alternative energy field considering that the world is still waking up to the slowdown phenomenon. On the face of it, the lack of availability of project financing has made living difficult for Suzlon, as Parekh agreeingly states, “With no recovery in sight, Suzlon is trying to fix its debt repayment obligation by refinancing $2.4 billion (68%) of its debt with a two-year moratorium.”

The investors on the other hand are bearing the brunt of the moment, with share price of Suzlon having dropped by 45% in just the past five months, to touch Rs.67.70 as on November 11, 2009. According to market experts, Suzlon’s stock has lost most of its long-term investors who sold-off their stock holdings months back. Worse, it is also losing the trust of its short-term investors. It is but natural that an investor will play the waiting game for evidence of a solid before he/she decides to invest in the stock again. But going by how events are unfolding, its financials are not likely to improve any time soon, and therefore, the demand for the stocks will remain slim, which therefore means no revival for the stock prices soon! Tribulations for Suzlon don’t end here. The player has been forced to recall 1,251 blades which belonged to its ‘top-of-the-line’ product category, after 179 of them developed cracks (about 6 meters from the root of the blade).

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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.

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Thursday, January 17, 2013

Trade the union

The good and bad of trade unions

Anything that evolved in history happened out of need. And when it diverted from the main cause for which it came into existence, it slowly extinguishes. The same is true with trade unions. The history of trade unions reveals how workers unionised out of the need to stand against oppression, tyranny and suppression of greedy capitalists. But, with time, the popularity of trade unions has faded gradually because of many reasons.

Firstly, hatred against trade unions increased especially with the emergence of free-market economy. Over the years, capitalist entrepreneurs and trade unions usually worked towards opposing goals – one for shareholder’s wealth, the other for collective bargaining – with a strike being a potent negotiating weapon of unions to achieve their employee benefit goals. Secondly, innumerable researches came out against trade unions revealing how existence of trade unions increased wage rate, even inefficiency and lowered productivity to a large extent. Economists like Milton Friedman criticized trade unions severely, terming the concept the biggest blow to capitalism. Cases like General Motors in US (where the trade union almost bled the company dry with strikes) and Dunlop in India (which closed down once and for all due to a long standing strike) have only added to this proposition.

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.

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Wednesday, January 16, 2013

The silk route still remains jagged

India’s Foreign Trade Policy (FTP) 2009-14 is a half step undone by more omissions than commissions, say anchal gupta and niharika patra, who argue all is not lost...

The term was originally coined by the German geographer Ferdinand Von Richthofen in 1877. It has been considered as the first ever link between the east and the west in recorded history. Its role in being one of the pillars on which the great ancient civilizations of India, China, Greece and Egypt stood is undisputed. It was the panacea to large trading communities who survived because of it. Unfortunately, the silk routes that can lead India back to brighter shores are still blocked. With demand for India’s exports still remaining low than its 2007-08 levels in the biggest markets of US and Europe, the dark skies for India’s trade might take some more time to clear up. However, with certain developments sending a whiff of fresh air in the suffocated dungeons that is India’s exports, the picture gets complicated.

There is no denying the fact that India’s over dependence on USA and the EU for its cheap and labour intensive exports (same is true for services also) has hurt India in the short term as there have been huge job losses in some of the biggest export sectors. According to latest figures released by the Labour Bureau, the job losses amounted to 1.72 lakhs in the April – June quarter mainly in the textiles and gems and jewellery sector with export oriented units accounting for 1.67 lakhs of the same. It must be remembered that the government itself declared that the total job losses amounted to 5 lakh in the October to December quarter last year owing to the meltdown. With varied statistics putting the job losses at different levels, the in total job losses owing to depression can be put in the range of 1-1.2 million including indirect losses.

However, with the first signs of recovery beginning to pour in the last 2 months, it is widely hoped that the trade train of India can be back at full throttle soon. But, the trade picture can be more complicated than Einstein’s field equations at times. With the drop in demand in biggest economies like USA, Japan, EU and slowing down of China, the oil prices went down to nearly US $40 a barrel from its peak of $145 in the middle of 2008.

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Monday, January 14, 2013

Game for the premium Prize?

this volume player stunned market watchers with its aggressive attack. pawan chabra finds out how hero honda achieved more than what was expected of it

The year 2008-09 hasn’t been too pleasing for Rajiv Bajaj. And not without reason, as his company Bajaj Auto registered negative y-o-y growth of 22% for the year ending March 31, 2009. On the contrary though, its arch-rival Hero Honda has been making merry, having strengthened its grapple hold over the two-wheeler industry during the year gone by.

A watershed year is how you would describe 2008-09 for Hero Honda, for in that time period, it not only crossed a significant landmark by selling 25 million units, but also consolidated its leadership with a 60% market share in the two-wheeler segment. And to understand that all this came at a time when all competitors were scrambling about, just to protect their bottomlines!

While on one hand, Hero Honda has proved its mettle as the indisputable leader in the Indian two-wheeler segment, it also became the world’s largest manufacturer of two-wheelers in a calendar year. And to talk about the joyride to the bank, the company recorded a healthy Rs.123.6 billion in revenues for FY’09 (registering a growth of 20%), while its bottomlines grew by 33% at Rs.12.8 billion y-o-y. Even during the most recent quarter ended June 30, 2009, the company posted net profits of Rs.5 billion. This figure was way higher than the Rs.2.7 billion profits posted during the same quarter a year back. The question to be asked here is – how did Hero Honda manage to achieve such greatness during times when all that the industry could stand witness to with respect to their bottomlines was ‘erosion’?

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Friday, January 11, 2013

Bearing fruits for GE Healthcare in India

Bringing technology to the bedside of patients and ensuring that it fits the pocket size of the poor is bearing fruits for GE Healthcare in India

For starters, GE Healthcare India has reversed the trend of importing medical care technologies to India. In fact, it has built a portfolio of innovative indigenous products that are being sold globally, including developed markets of US & UK. V. Raja, President & CEO, GE Healthcare, South Asia comments, “The answer (to bringing prices down) came in the form of local manufacturers as it was cheaper as well as import duties were not applicable. However, local manufacturing called for significant investments in the form of buildings, tools and manpower. Moreover, there was this myth that locally manufactured products are not good in quality.” Indeed, relying upon local manufacturers for global quality products and that too at local costs is risky business. In fact, the only way out is acquisition and GE has been consistent with this strategy to invest in high technology, innovative businesses that deliver healthy toplines & bottomlines.

Besides, GE Healthcare India has invested a huge amount in R&D of medical equipments, and also unveiled a multi-billion dollar initiative called “Healthymagination” that aims to have a significant impact on improving health of patients worldwide by increasing access to cost-effective, quality health care products and services. GE Healthcare has partnered with the Government of India, state governments, and various Indian healthcare experts, thus making the initiative truly reflective of India’s healthcare needs. Further, at a time when others are shying away from investing in R&D (given the time & investment it requires) GE has gone ahead. In fact, it plans to spend $3 billion over the next six years on R&D that will help deliver better care to more people. In addition, GE has committed $2 billion of financing over the next six years to drive healthcare technology in rural areas, plus $1.5 billion for partnerships, content and services.

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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.

Thursday, January 10, 2013

“We cater to a niche”

In an exclusive conversation with B&E, V. Vasantha Kumar, Senior VP and Head – Marketing & Communications, ABN AMRO Bank, India reveals how they made it…

B&E: Foreign banks still seems to be laggards in India? Why it is so?

VVK: There is a difference in the business models of banks like ABN AMRO and government owned banks in India. The target segment for a PSB or an Indian private bank consists mainly of the masses with the middle class forming a huge bulk of their customers, while foreign banks have a niche market to cater to. So the branding and communications we do is targeted at that particular audience only and the channels are decided accordingly.

B&E: What has ABN AMRO India done during the last six months as far as marketing initiatives are concerned and how has been the response?

VVK: Ever since the takeover of ABN AMRO globally by RBS last year, a rebranding effort has been launched to change the identity of the bank in India. But, the unique feature of this rebranding exercise has been that it has been a very slow (but steady) process so that our customers can accept the transition smoothly and get used to it without any confusion (whether it is some other bank). We have not changed the identity of the bank overnight like many companies do. We feel that our customers as well as our sales people should take up the process smoothly without any hiccups.

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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.

Monday, January 07, 2013

Power for...

...us, promises for the people!

I ndia is indeed a democracy, but for whom? Is it a democracy for those in a position of power or for the common man? The blatant use of money and muscle power by politicians surely appears to tilt the argument overwhelmingly in favour of the former in a country where the combined net worth of MPs is estimated at a huge Rs.28 billion.

A research by National Election Watch (a conglomeration of NGOs that lobbies for electoral reforms) heralds an interesting analysis. A candidate who is worth more than Rs.50 million is around 75 times more likely to win an election as compared to one whose is worth less than Rs.1 million. In fact, only 15 out of 3,437 candidates (i.e. 0.44%) who contested the recently held Lok Sabha elections; and whose worth is less than Rs.1 million, had actually won, whereas 6% of the candidates whose worth is between Rs.1 million and Rs.5 million have come out as victorious. This state of affairs continues as we go upward. We see that 19% of candidates with worth of Rs.5 million to Rs.50 million and 33% of candidates with worth of more than Rs.50 million have defeated their rivals in the last Lok Sabha Election. Further, the sum total of assets of 64 Union Cabinet Ministers comes to a whopping Rs.5 billion, and 23 of them fall into the segment of Rs.50 million plus. Does it favour democracy?

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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.

Friday, January 04, 2013

‘Bye bye Uncle Sam? Not yet.’

The idea of a supranational currency sounds good. But the practicality of it is the biggest question

The US supremacy has been a threat to the world specially the developing world for quite sometime now. US in its global approach has developed many enemies on the way. US is a hurdle in growth is the new notion amongst top developing countries and the recent sub-prime crisis has made the matters worse. So strong is the feeling that Brazil, Russia and China are indicating that they would come together to replace Dollar as the standard currency with IMF’s Special Drawing Rights (SDR). The Russian President Dimitriv Medvedev reiterated that the dollar should be replaced by more stable currency, a supranational currency. “The current situation demands a bigger number of currencies which could be used for investing money and by banks, citizens and states” Medvedev said.

While Medvedev wanted Ruble to take the place of Dollar, other nations like China demand SDRs should replace the Dollar as the standard currency since the Bretton Woods agreement has shown signs of falling after the crisis. Now that the BRIC summit comes closer (June 16), supranational currency would be the priority of the meeting. Since Brazil, Russia and China have already shown their consent to the change, this would put pressure on India as well to make some strong decisions.

After the news, there was a clear panic amongst the investors and as Kathy Lien, Director of Currency Research, GFT, a currency trading platform says, “The only thing that can save the situation in this regard is some statement from the Central Banks.”

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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.

Thursday, January 03, 2013

Then Crimefest is where you should head to!

Care to learn and discuss crime fiction writing? Then Crimefest is where you should head to!

Held in the month of May, the fest unleashes a universe of excitement for avid enthusiasts of this genre. A planned set of programmes continue from morning till evening for four days, which include discussion forums on topics like criminal psychology, religion and superstition, crime and humour etc. and also include interactions with popular crime authors to help those interested in crime writing hone their skills. The fest also invites participation in the Crime Writing Workshop where participants are tutored on writing crime fiction and are also assessed on their submitted work. “The crime-writing workshops are for those readers who would like to become crime writers and the response to these workshops has been enthusiastic,” Peter says gladly.

The Crimefest doesn’t confine itself to the various programmes. It also arranges visits to tourist spots like Stonehenge, Avebury, Lacock (where bits of Harry Potter were filmed) and a walking tour of the city of Bath. The Gala Dinner is most looked forward to, since it includes after-dinner speeches by guest authors and an award ceremony – The Last Laugh Award (for the best humourous crime novel) and Sounds of Crime Award (for crime audio books). Although it has been just two years since the inception of the event, the response has been overwhelming, which brings us to the question – would this event be organised in India in the future? Peter assures, “There is talk of putting Crimefest onto a cruise liner, so who knows where it will end up!” Well, all aspiring crime writers start preparing yourselves, and all crime fiction fans, brace yourselves as your favourite authors might soon tour India too!

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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.