IIPM FACULTY

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.

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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)

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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