Communique June

Contents From the Editor’s Desk

From the Editor’s Desk In conversation… Letters To The editor Events & Happenings Cover Story Business Scoreline Snippets Mind Your Language Comic Relief/Sudoku Perspectives o o o o o

Costing Economy Environment Technology Social Issue

Special Feature View Point Mind Game

Hello Friends, We are pleased to release the June issue of Communiqué. We appreciate the enthusiastic contributions and cooperation of all the IRK-K members. In the last one month we had witnessed many changes. Our three dear colleagues, Kasturi, Siddhartha and Supratik are leaving us for a better opportunity. We wish them all the best for their coming future. Once again we are thankful to all the IRC-K members for actively participating and contributing to turn communiqué from a mere newsletter to the voice of IRC-K. In this issue we choose “Quantifying of Subjective Information” as our cover story. The Tata Nano , called the people’s car in Tata's promotional material, is the least expensive production car in the world. The standard version of the Nano is projected to sell for Rs. 100,000. But, controversies arose about Tata's planned manufacturing unit for the car in Singur, West Bengal, where the state government of West Bengal has allocated 997 acres to Tata Motors. The construction of the car factory on that tract of land will require fertile agricultural land and the expropriation and eviction of ca. 15,000 peasants and agricultural workers. The affected farmers fear they will receive inadequate or no compensation and therefore lose their livelihoods. The Nano is also alleged to have severely affected the used car market in India, as many Indians opt to wait for the Nano's release rather than buying used cars, such as the Maruti 800, which is considered as the Nano's nearest competitor. The doubt remained whether Nano could be offered commercially at a price of Rs. 1.0 lakh? Enjoy reading. Regards! Sweta

Bipasha

The future always holds something for the man who keeps his faith in it. ~H.L. Hollis

1

Senjuti

In Conversation…….

When A.G.Lafley had taken over the charge of P&G, the American goliath was in bad shape. It had lost billion dollars of market capitalization. Most of the icon brands started stagnating and the stakeholders as well as the media had lost its faith, which had declared the death of this American consumerism symbol. Few years down the line, P&G had regained its face and faith. Was it a simple turnaround that we often encounter in dozens of company? Prima facie evidence suggests ‘yes’, but a deep probing tells an altogether a different story. P&G revived by trusting people, democratizing the decision-making process and believing in collective wisdom without sacrificing individual brilliance. Moreover, it believed that knowledge is widely dispersed and if connected and collected, could do miracle. Democratization of knowledge, falling of hierarchy and trust on people-the new management literature is full of these concepts. The competitive advantage for the twenty first century will lie neither in technology nor in process, but on people. Long back, Prof. Sumantra Ghosal argued in favour of this concept with his seminal article in Harvard Business Review. But if we try to find out companies embracing democracy in its decision-making process, it might end with few companies here and there. Most of the companies still follow the dictums of Taylor, which divided brain and body. The foundation of management process boiled down to this dichotomous line. Taylor with utter disbelief might laugh from heaven that his concept of mechanization of human being still exists with full vigor in most of the companies’ beliefs and management process. It’s surprising that the notion of democracy, which happened to be the most successful in running Nation-State, could not manage to enter the seraglio of most of the companies even in twenty first century. What deterred it and why, could be the most challenging question that the management has to solve. I believe that management is still in infancy and will evolve in the way democracy evolved. From the cradle of Lichhabis or Athens, democracy had to struggle, change and innovate. Thousand years had passed by to make the correlation between democracy and development believable. With just more than 100 years of its existence, management is too nascent to embrace democracy as a whole. But the ray of hope is evident in companies as big as P&G and as small as Semco. The change process has started and it needs a revolution to eradicate the fiefdoms of power. The sooner it happens, the better for humanity.

~Kumar Satyaki Ray Man is the Principle Syllable of Management.

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~ C.T. McKenzie

Letters To The Editor An honest effort from the editorial team members is distinct in the development of communiqué. The communiqué is dealing with diverse topics and moreover it is designed so colorfully that it attracts the attention of the readers. My heartiest congrats to Sweta, Bipasha and Senjuti. Wish you all the best for your upcoming issues.

~Arindam Mukherjee

Communiqué is a great medium to express our hidden talents apart from our daily work schedule. Personally I welcome its effort for providing a commendable platform before us. Its innovativeness, quality and intellectualisms reflect the intelligence and potentialities of our work pull. I wish good luck to Communiqué in near future. ~ Subhankar Dutta “Communiqué" - our own newsletter. I think this is the best stage to express yourself. Congratulation for the great effort of Editorial Team and the contribution of whole IRCK Team. All the best to the Communiqué in its journey. ~Bandana Basu

Every production of genius must be a production of enthusiasm. ~Benjamin Disraeli

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Events & Happenings

Books Released and Cases Prepared in May BOOKS RELEASED

1.

Air Pollution and health

2.

6.

Pensions Reforms: Some concepts and country Experiences IUP Series on Investment Strategies for Individual Investors Climate change and its effect on human health Development-Induced Displacement: Issues and Implications Customer Service In Airline Industry

6. 7.

Girl Child: Issues, Perspectives and Initiatives Rural Tourism

3. 4. 5.

Debashree Mukherjee, Somnath Hazra Santap Sanhari Mishra Sujoy Kumar Dhar, Arindam Mukherjee Asis Kumar pain Azmal Hussain Amitabha Ghose, Ishita Mukherjee Debashree Mukherjee Subir Ghosh

CASES APPROVED 1. 2. 3. 4. 5. 6.

The Tata Nano: A successful CSR strategy Leadership: The Amazon way Motorola to split the Cell phone Business-The End of an Era Low Cost car, Can “Nano” gain the first mover advantage Google Business Model an Enigma Tata Nano Recreating the Tata Magic

Rhea Khanna Rhea Khanna Ishani Chakraborty Ishani Chakraborty Abhijit Ray Sudeshna Bhattacharya

Prepared By Abhishek Ghosh

He who stops being better stops being good. ~Oliver Cromwell

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Cover Story Quantifying the Subjective Information

T

he launch of the Nano, a small 623cc car developed by the Tata, on January 10, 2008 created

unprecedented levels of excitement in the Indian car industry. Skeptics had long doubted whether a car priced at Rs. 1 lakh was at all possible. As Ratan Tata head of the Tata Group drove the Nano into the Auto Expo, India’s largest car show, these doubts seemed to have been laid to rest. Tata maintained that the price would remain Rs. 1 lakh as indicated earlier. In an emotion choked voice, he announced over the public address system to the large crowds which had assembled for the launch, “A promise is a promise.” However, the doubt remained whether the car could break even at this price? Could the Nano be offered commercially at a price of Rs. 1.0 lakh? Or would it be an “introductory” price that would be hiked almost immediately after the launch? In IRCK, we’d love to write a case on Tata Nano by keeping this question open ended and subjected to debate. But, can we come to a definite conclusion whether the project will be commercially viable or not? When the Nano will move over from red? Can we mention the definite year and month, given that there are so many “if’s and but’s” and subjective factors present. I’ll try to explain how can we objectify the subjective information and calculate the net present value of the project: Selling a car at Rs. 1lakh was viewed as an impossible task by most of the honchos of the automotive industry and Original Equipment Manufacturers (OEMs), considering the fact that the lowest priced car available in the Indian roads, Maruti 800, costed around Rs. 1.95 lakhs. A Comparisons of indicative prices (Ex Showroom New Delhi) of cars (Metallic Version) Segment Name of the Model Price Segment Name of the Model Price Tata Nano (Proposed) 100,000 Hyundai Santro EuroIII XL 349,434 Hyundai Santro EuroIII Segment B: Segment A: Maruti 800 Std Bharat III 194,134 ABS 363,457 Maruti 800 AC Bharat III 215,550 Alto Lxi 287,280 Having fancy Entry level things like power Alto Std 234,980 Tata indica V2 300,000 segment Alto Lx 268,660 steering, Euro III, Tata indica V2 Turbo 380,000 power windows Tata indica GL BS III 252,964 Tata indica Xeta 280,000 Ford Ikon 475,000 Fiat Palio 1.2 NV 399,995 Segment C: Ford Fiesta 575,000 Mercedes Benz C180 2,000,000 D segments: Ford Fusion 569,000 Mercedes Benz C200 CDI 2,200,000 Status and Hyundai Accent 632,819 Ford Mondeo 1,427,000 Comfort Luxury cars Maruti Esteem 450,000 Hyundai Sonata 1,369,000 The great Indian middle class, which consisted of more than 350million population, was one of the promising markets for the low cost car segment. Many of the middle class families were opting for affordable two wheelers to four wheelers which costed more than Rs 2 lakhs. About 7 million scooters and motorcycles were sold in India in 2007, typically for prices between Rs. 30,000 rupees and Rs. 70,000 rupees. With the rising income levels, the chances of middle class consumers preferring a car to a two wheeler were high if a car costed as low as Rs 1 lakh. Nano was expected to take up atleast 2% of motorcycle volumes. If Tata could convince 10% of India’s two-wheeler owners to upgrade themselves to Nano, they would sell 70,000 units a year and if another 300,000 units were sold to car buyers who were attracted to Nano for its intrinsic appeal, Nano would be among the very few brands selling more than a million units annually. Though Ratan Tata had announced during the launch of Nano, that there were no immediate plans of exporting Nano, it was expected that exporting Nano to other countries would generate higher margins. There were many countries which were showing interest in Nano and it was believed that different versions of Nano would be sold in the international markets in the near future. Tata Motors had invested around $450 million in the Nano project while the suppliers had invested approximately $150 millions. Suppliers were faced with tough price negotiations up to 80-85% and had to stretch their payback periods.

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They had to reengineer their own products to cut costs by more than 15%. A 624cc, two cylinder engine tuned by Fiat and powered by Bosch had changed everything from pistons to crank shaft and engine heads and reduced the cost to a greater extent as engine comprised 26% of the direct material costs. The five big areas of cost for building a passenger car Areas of cost % of cost Engine and Transmission 26% The skin 8% The Electricals 8% Suspension and Wheels 9% Interiors including seats and trims 6% Maruti Suzuki produced 250,000 units of the Alto, the highest selling model in India with a net profit margin of around 8% in 2007. Tata Motors had to sell Nano in much bigger numbers at lower margin figures to break even. Also there were high probabilities of launching competitive models in near future. There had been announcements of BajajNissan-Renault’s low cost car which promised to be more fuel efficient than Nano. There were chances of fall in sales with the increased competition from the rivals. Many analysts believed that Maruti 800 could afford to drop prices to a competitive level, since its dies and tools were fully depreciated. If an aggressive Maruti, through its 185 True Value outlets, offers a four- or five year warranty on its pre-owned cars, priced at a range of Rs.70,000 to Rs.80,000, it could eat out a significant population of Nano’s potential buyers. A major confront ahead of Tata Nano was increasing costs and inflation. There had been a very steep increase in input prices of steel, tyres and various other inputs. In 2008, the steel industry was witnessing a 30-60% increase in prices. However, a 4% cut in excise duty (from 16% to 12%) for small cars announced in the Union Budget 2008, came as a major relief for this Nano project. Another challenge was increase in pollution likely to cause with one million units of Nano being sold annually. In Indian metros, the number of vehicles had shot up by 6.5 times since 2002. With India yet to create a comprehensive transportation policy, the impending launch of the Tata Nano had worried analysts about its impact. If the Tata car does accentuate an already serious traffic situation, the anti-congestion lobby was likely to restrict vehicles such as these to rural and semi-urban areas.This would further delay Nano’s payback period. Given all these above informations, the question remains: • How can we calculate major cost items of Tata Nano? • How much will be the variable cost, and what will be the fixed cost? • What will be the profitability of Tata Nano? • When will the project break even? In this issue, I’ll discuss how all the above information can be objectified into calculation of BEP The company had set up production facilities for the first year at 250,000 units and gradually plans to reach the current projected market of 1 million units. If there is demand in excess of 1 million, which is very likely in international market, the company can go for licensing the product in other countries. As a result in 2008, Tata Motors’ revenues would rise by Rs 2,500 crore and if the company meets the million-unit mark, its revenues would go up by Rs 10,000 crore. There will be proportionate increase in revenue in case of licensing. Due to excessive cost cutting and pressure on margins, it was expected that Tata Nano would be generating a mere 35% on net profit margin and 5-6% on EBIDTA margins. At that level of profitability, Tata Motors would need to sell at least 4 million units to recoup the Rs 1700 crores ($450 million) investment. Going by the then prevailing margins, Tata Motors was well poised to generate a profit of around Rs. 5,150 per unit (the calculation of profit margin will be discussed in the next issue). With a cost of capital of 10%, the breakeven under different conditions under which Nano would be sold might range from April 2011 to July 2013.

Year

Calculation of Break Even in different situations Without Competition (Not considering opportunity Without Competition (considering opportunity cost) cost) Profit per unit Sales Cumulitive Profit Profit per unit Sales Cumulitive Profit (Rs) (Unit) (Rs) (Rs) (Unit) (Rs)

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2008

5,150

250,000

1,287,500,000

5,150

250,000

1,287,500,000

2009

5,150

750,000

5,150,000,000

4,682

750,000

4,798,863,636

2010

5,150

900,000

9,785,000,000

4,256

900,000

8,629,442,149

2011

5,150

1,000,000

14,935,000,000

3,869

1,000,000

12,498,713,373

2012

5,150

1,200,000

21,115,000,000

3,518

1,200,000

16,719,736,528

2013

5,150

1,500,000

28,840,000,000

3,198

1,500,000

21,516,353,748

2014

5,150

1,800,000

38,110,000,000

2,907

1,800,000

26,749,027,080

2015

5,150

2,200,000

49,440,000,000

2,643

2,200,000

32,563,108,559

9,600,000

April 2011

BEP

Year

With Competition (considering opportunity cost) Profit per unit Sales Cumulitive Profit (Rs) (Unit) (Rs)

9,600,000 February 2012 With Competition & Restriction (with opportunity cost) Profit per unit Sales Cumulitive Profit (Rs) (Unit) (Rs)

2008

5,150

250,000

1,287,500,000

5,150

250,000

1,287,500,000

2009

4,682

700,000

4,564,772,727

4,682

400,000

3,160,227,273

2010

4,256

800,000

7,969,731,405

4,256

600,000

5,713,946,281

2011

3,869

900,000

11,452,075,507

3,869

800,000

8,809,363,261

2012

3,518

1,000,000

14,969,594,802

3,518

900,000

11,975,130,626

2013

3,198

1,166,667

18,700,297,085

3,198

1,000,000

15,172,875,440

2014

2,907

1,377,778

22,705,553,215

2,907

1,166,667

18,564,422,970

2015

2,643

1,651,852

27,071,008,333

2,643

1,377,778

22,205,564,907

7,846,296 6,494,444 BEP June 2012 July 2013 Cost of capital @ 10%, considering the interest rate paid by WB government Compitition In anticipation that Bajaj Auto and Renault's low cost car would be introduced in 2010 Restriction: Considering restrictions on use at metro cities by Anti Congestion lobby Here, It has been assumed that without any competition, Tata Motors would be able to sell 1 million units by 2011. The launch of competitive model might delay achieving this sales figure by another year. And if regulatory restrictions come into place, it might take one more year to achieve the sales of 1 million units. Annual profits are taken at their present value after discounting it by opportunity cost of 10%. The PV of profit in the year 2015 has thus become: Rs. (5150/ (1+0.10)7) = Rs 2643 The BEP’s are calculated through interpolation. If cumulative profit is 16,719,736,528 and 21,516,353,748 in 2013, then the BEP will be somewhere in between 2012 and 2013. The BEP thus can be calculated as (scenario: without competition considering the opportunity cost): 2012

+

17,000,000,000- 16,719,736,528 21,516,353,748 - 16,719,736,528

Hopefully, we can discuss the calculation of major cost items and the profit per unit (Rs 5150) in the next issue.

~Snehasish Choudhuri 7

Business Score line

In The News National

National

Xerox launches mono printers, MFPs • Value of Indian IT exports increased by th On May 20 , Xerox Corporation announced the 41.5% to reach 36 billion for the fiscal year global launch of eight mono printers and multi2006-07 compared to previous year. function printers (MFPs), the company’s first such • Inspite of global rise of crude oil price and event in India. It also plans to increase the number steepened inflation, Sensex in India hover of channel partners and marketing activities in India. around 17000, bringing some relief to Aditya Birla Group to invest Rs. 75,000 crore in investors and industrialists. Orissa • India and Pakistan are set to resume peace Aditya Birla Group Chairman Kumar Mangalam Birla talks for the first time since Pakistan’s new on May 22nd said that different companies of the civilian government took over from military group would invest around Rs. 75,000 crore in rule. Orissa in different sectors over the next few years. • Exiled Bangladeshi author Taslima Nasrin Bajaj set to foray into AMC biz announced that she wanted to come back to Bajaj Finserve, Rahul Bajaj's new firm, is set to India which she referred as her second make it to the stock exchanges. Bajaj group is in home. Whether Indian government gave her talks with Allianz to make a foray into AMC business permission or nor remained to be seen. and NDTV has learnt that Allianz will pick up a • U.S. President George Bush directly majority 51 per cent stake in the venture. accused India for being the cause of Dhanus Technologies launches V- Tel Mobile Global inflation as according to his logic, On 23rd May, Dhanus Technologies Ltd. one of huge India population, the second highest in India’s fastest growing technology companies the world, is consuming most of world crops announced the launch of its V-Tel Mobile service and making demand-supply inequality. which will be available for all GSM based • According to a national survey, 49 million subscribers and can be used across 229 countries people in India accesses internet, but with more than 250 mobile phone service providers. surprisingly women represent less than a Providence invests $640m in Idea Cellular's arm fifth among all Indian net accesses. Providence has invested USD 640 million in Idea Cellular's arm Aditya Birla Telecom. The transaction International is subjected to regulatory nod and is expected to close by August 2008. Aditya Birla Telecom owns a • In one of the most deadliest cyclone named licence for Bihar circle. It also holds 16% in Indus Nargis, at leat 30,000 people were killed Towers. and another 20,000 got injured in Reliance Globalcom to buy UK's VancoRCom Mayanmar. arm Reliance Globalcom is set to acquire Vanco, a UK-based virtual network provider. • More than 1,000 people died in China in a Eicher approves agreements with Volvo strong earthquake that struck in the Commercial vehicle maker Eicher Motors Ltd (EML) Western region of the country. A series of has approved draft of definitive agreements to be flood is also feared as an aftermath of the executed with AB Volvo, Sweden (Volvo). The quake. agreement is to carry out commercial vehicles • India and U.S. discussed over sensitive business along with components and engineering issues like market access and farm design services business. subsidies in the Doha round of negotiation Bank of Baroda plans 10 more offices abroad for a global trade deal. Bank of Baroda which has a strong international • Japan is going through a precarious string 8

presence with 71 offices in 25 countries is planning to expand its overseas presence by adding 10 more offices and branches during the current fiscal. NDTV, NBC conclude strategic partnership News and infotainment group, New Delhi Television Ltd (NDTV) and NBC Universal (NBCU) have successfully concluded their strategic partnership initiative for the NDTV Networks business. Nimbus enters home video biz with Showtime Nimbus Communications has ventured into the home video rental and sale business under the label Showtime.

•

•

International Bharti Airtel Calls off Merger Talks with South Africa's MTN India's Bharti Airtel Ltd. called off its merger talks with South African telecommunications major MTN Group Ltd., saying that the deal structure proposed by MTN was "unacceptable." Yahoo's Director Steps Down Yahoo announced that board member Edward Kozel has stepped down from his position as director. Microsoft's Ballmer: Yahoo Wasn't Part of 'Strategy' Microsoft Corp., Chief Executive Steve Ballmer said his company never regarded a possible purchase of Yahoo Inc. as strategic, and that dropping the bid meant Microsoft now had $50 billion to spend on other deals. MTN Switches to Reliance After Indian Rival Bharti Pulls Out MTN Group Ltd., Africa's largest mobile-phone company, may merge with Reliance Communications Ltd., India's second-biggest, to offer wireless services to 1.7 billion people after talks with Bharti Airtel Ltd. collapsed.

~ Ayan Ghosh

•

• •

•

of suicides involving detergents. The suicide rate is highest in Japan across the world for the year 2007. Given the dubious attitude of manufacturers from China, India and Egypt, National Agency for Food, Drugs Administration and Control (NAFDAC) has said that pharmaceutical products from these countries would be doubly screened before released in international market. Europe’s increasingly dire struggle with illegal immigrants, especially from least developed countries, reached a new extreme when a group of them started hunger strike demanding basic needs for survival from which they are deprived. In the face of increasing shortage in food across the world and Japan’s continuously low in-house production of food the country is running under the threat of drastic diet change of national citizens. After prolonged conflict and unrest, Nepal stepped forward as republic country, ending the era of monarchy. Major players hiked fuel and LPG gas prices. Already hobbled with increased food and electricity prices, this rise definitely added to the woes of consumers. British universities are becoming too expensive to study among all countries and thus facing the risk of loosing potential foreign students.

~ Senjuti Ghosh

If business were not a part of the joy of living, we might almost say that we have no right to live. ~George Brown

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Mind Your Language

Generally, it we have seen that while writing cases or articles, many case writers or authors makes several common mistakes. Apart from the mistakes of Punctuation, capital Letters, grammars, etc., confusion of words is another dangerous mistake that a writer often makes. Sometimes, they want to mean something different and the readers end up understanding something else. The confusion is also among the writers also. Many words in English sound or look alike, frequently causing confusion, these can also lead to a change in meaning. These kinds of practices should be buried and the proper use and meaning of the term should be known. In this issue of the newsletter, I would like to discuss about the proper usage of Homonyms. In linguistics, a homonym is one of a group of words that share the same spelling and the same pronunciation but have different meanings. List of Homonyms: ♦ Currant: type of small berry/ a small seedless raisin, produced chiefly in California and in the Levant, and used in cookery and confectionery. Example: The black currant is a shrub with maple-like leaves with toothed edges. ♦ Current: up to date/ new; present; most recent. Example: The current scenario is tragic. ♦ Curser: Someone who swears or wishes misfortune on another/ a formula or charm intended to cause such misfortune to another. Example: Selfishness is the greatest curser of human race ♦ Cursor: a blinking symbol indicating position on a computer screen/ A bright, usually blinking, movable indicator on a display, marking the position at which a character can be entered, corrected, or deleted. Example: In computing, a cursor is an indicator used to show the position on a computer monitor or other display device that will respond to input. ♦ Arc: portion of a circle/ A segment of a circle. Example: The stars that arc across the sky. ♦ Ark: vessel/ A chest, or coffer. Example: Bearing that precious relic in an ark ♦ Ascent: The climb/ The act or process of rising or going upward. Example: His ascent to the governorship came after a long political career. ♦ Assent: to agree/ Agreement, as to a proposal; concurrence. Example: I gave my assent to the plan. Mastery of Language affords remarkable power. ~Frantz Fanon

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An Intelligent Letter

Who’s Who?

Dear Mr. Bill Gates,

This letter is from Banta Singh from Punjab. We have bought a computer for our home and we found problems, which I want to bring to your notice. 1. After connecting to internet we planned to open e-mail account and whenever we fill the form in Hotmail in the password column, only ****** appears, but in the rest of the fields whatever we typed appears, but we face this problem only in password field. We checked with hardware vendor Santa Singh and he said that there is no problem in keyboard. Because of this we open the e-mail account with password *****. I request you to check this as we ourselves do not know what the password is. 2. We find there is 'Run' in the menu. One of my friend clicked 'run ' and has ran up to Amritsar! So, we request you to change that to "sit", so that we can click that by sitting. 5. One doubt is that any 're-scooter' available in system? As I find only 're-cycle', but I own a scooter at my home. 6. There is 'Find' button but it is not working properly. My wife lost the door key and we tried a lot for tracing the key with this ' find', but unable to trace. Is it a bug?? 7. Every night I am not sleeping as I have to protect my 'mouse' from CAT, So I suggest u to provide one DOG to kill that cat. 8. Please confirm when u are going to give me money for winning 'HEARTS' (playing cards in games) and when are u coming to my home to collect ur money. 9. My child learnt 'Microsoft word' now he wants to learn 'Microsoft sentence', so when u will provide that? Best regards, Banta Singh

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2

3

4

5

6

Answers To the May Issue: In the same sequence): Anthon y Robbin s

Don Pepp ers

A Man is not poor if he can still laugh.

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Michae l Porter

Rober t Reich

Edwar d De Bono

Michael Schumac her

~Raymond Hichkock

Perspectives Technology

The Role of Semiconductor Chips in the Computer Industry

T

he semiconductor chip is a tiny wafer of silicon containing miniature electric

circuits that can store millions of bits of information. Therefore, the demand for the semiconductor chips had been growing with the information age. Chips had become essential components for all consumer electronic products as well as many industrial products. The range of chip buyers varied from the manufacturers of computers, digital consumer appliances, mobile communications, industrial controls and others. This initiated the growth of global sales of chip. The global chip sales were $227.5 billion in 2005 which was an increase of 6.8% from 2004. The computers consumed 41% of the chips, whereas, the consumer appliances and the mobile communications consumed 19% each. The industrial controls consumed 8% of the chip sales. In the others category which consisted of automotive and wired components consumed 13% of the chips. Therefore, it was found that the major consumer of chips had been the computer manufacturers. The Semiconductor Industry – Its origin and growth At present we probably cannot think of a life without semiconductors. It starts with talking over cellular phones, enjoying music in an iPod and also working on a computer, all require semiconductor chips. But the origin of the semiconductor era was dated back in 1947 when William B.Shockley and the engineers from Bell Laboratory devised the solid state transistor. There had been a problem in wiring the circuits until the invention of Integrated Circuits (IC) by Jack Kilby of Texas Instruments and Robert Noyce of Fairchild Semiconductor during late ‘50s. This reduced the difficulty as a large number of transistors could be combined on a single IC chip. In line with Moore’s law the components on the IC chip continued to increase over the years. But history was created in 1971 when Intel accepted the offer of one of its clients, Busicom to design 12 custom chips for its calculator. This was the turning point in the chip industry as Intel’s engineer Marcian E. “Ted” Hoff designed a chip that could function as 12 chips. This resulted in the invention of the world’s first microprocessor.

12

Microprocessors had been working as the central processing unit especially for a computer system. The development of the improved version of the microprocessor continued since its inception. The major players in this competitive segment had been Intel and AMD. Intel was founded in 1968, as the Integrated Electronics Corporation by Robert Noyce and Gordon Moore whereas AMD was founded by Jerry Sanders and his seven friends on 1st May’1969. The semiconductor products and its growing demand The semiconductor products ranged from discrete devices to integrated circuits. The transistors, resistors, capacitors were electronic components with just one circuit element and therefore they were termed as the discrete devices. The ICs formed the other part of the semiconductor product which was built from several circuit elements in one package. In an IC a wafer can hold hundreds to millions of transistors, resistors and capacitors. The ICs were of two types namely, analog and digital. But the digital ICs were the most demanding ones as they were mostly used in computers and consumer electronic products. The digital ICs were of two types namely, memory and logic chips. The memory chips consisted of RAMs whereas the logic chips consisted of microprocessors. Both these RAMs and microprocessors were the essential parts of a computer. The chip industry’s major customers were computers, digital consumer appliances and mobile communications. This industry experienced growing demand due to increasing semiconductor content for electronic products. It had been estimated that the chip industry would reach a new height during the next few years due to the growth of wireless and consumer electronics and computers. It was also expected that the chip demand for the computer industry was likely to increase in the next two years due to Vista, Microsoft’s new operating system. Vista required that the computers be equipped with more DRAMs. Therefore, due to Vista the amount of DRAM in a PC would get doubled. It had also been predicted that the Asia-Pacific would be the largest and fastest growing regional market in chip revenue. To be continued.. ~ Siddhartha Paul

Study without reflection is a waste of time; reflection without study is dangerous. ~Confucius

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Perspectives Environment

Conserving Biodiversity: Displacement and Relocation Issues

Displacement

of natives caused by the establishment and

enforcement of protected areas has often troubled relationships between conservationists and indigenous people in many parts of the world. In the present day context, biodiversity conservation is one of the most talked about jargons setting the pretext of such enforcements. Conservation of biodiversity and reduction of poverty are often seen to have a conflicting relation thereby creating an ethical dilemma that arises more directly in park creation programs, especially if an area intended for a park is inhabited by poor indigenous communities. The “solution” is cast more or less in either terms, having a long entrenched bias going against resident or mobile population in parks. Displacement of these people is the usual recommendation, which is implemented in most cases. For the Consultative Group of International Agricultural Research, it is imperative to tackle this dilemma through adoption of an integrated biosocial research apposite to lead to conservation policies and interventions that are socially responsible. Both native’s livelihood and biodiversity call for solutions that is required for achieving “double sustainability”. The recent World Summit on Sustainable Development recommendation that at least a tenth of the land area in the world should be protected as a joint social and biological research is being increasingly necessitated by national parks (Hussain, 2008). Cernea and Schmidt-Soltau (2003), after a thorough analysis and summing up of a range of conservation-induced displacement and relocation experiences argued that as a mainstream approach, the displacement strategy has exhausted its potential as well as credibility. It has allegedly produced much damage without fulfilling the expectations placed on it. Worse, it has compromised the real cause of conservation of biodiversity and park/forest by inflicting forced poverty on countless people. They have strongly recommended a policy level change in intervention that could favor joint management approaches by de-mainstreaming the displacement approach. Guided by the model for Impoverishment Risk and Reconstruction (IRR), and the involuntary resettlement policy standards of World Bank and Organization for Economic Co-operation and Development, they argue for poverty reduction as well as social sustainability for the conservation-caused refugees, and for application of reconstructive strategies for securing livelihood and development of the displaced people while protecting the biodiversity. ~Azmal Hussain To think is to differ. ~Clarence Darrow

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Perspectives Social Issue

South Asia: In the Clutches of a Social Bane

Continued……

NEPAL

T

he southern part of Nepal is known as Terai region where the custom of dowry in a

marriage has become very common. This region accommodates 46% of the total Nepali population and is very close to the Indian border. Because of its location, this area is highly influenced by Indian culture. In Nepal, dowry is commonly known as Tilak and it is a deciding factor of the status of both of the bride and bridegroom’s family. Status of a family can be measured by the amount of dowry the son’s family receives. The amount of dowry varies from $2,000 to $ 14,000 in accordance with the qualification of the bridegroom. Not only money but also refrigerator, television, car etc are given by the bride’s family as dowry. Though the Nepal government has enacted “Social Customs and Practices Act” to prohibit dowry related violence yet surprisingly nobody has ever been found to get punished till date under this law. To combat this problem of dowry many nongovernmental organizations and international organizations are starting awareness programmes by encouraging women to education, increasing participation of women in administration, political parties which can better their position in the society and bring the respect they deserve.

Conclusion In this article the present situation pertaining to dowry in some of the South-Asian countries have been highlighted. But this is just tip of the iceberg. The real scenario is more frightening. In most of these countries not only men but women also encourage the custom of dowry. Women consider this dowry as their only possession which they get from their own family and on which they can exercise their rights. But in reality these gifts always remain inaccessible for them. They can not claim their rights on those gifts. But it is our responsibility to make the world better for us. Governments are also entrusted with the responsibility of devising appropriate property inheritance laws by which woman’s life could be made more secure. The main problem in these countries is not with the existence of laws against dowry but with the execution of these laws. So, transparency in governing body is equally important. More NGOs should also come forward and make a conscious effort to educate people and make them think about dowry. In the whole process, media has an enormously important role to play. Today media plays a pivotal role in controlling our line of thinking and our action. Media has also its accountability to expose the guilty to put a check on the whole custom of dowry. In order to bring decency, security, dignity and equality in women’s life we all should fight together to organize civil society movement against dowry. However at this stage it can be pronounced that all said and done collectively is good but the need of the hour is that women themselves must make the plunge in every case, as Pandit Nehru once said, “To awaken the people it is the women who must be awakened”, for it is the women who have always been at the receiving end.

~Sangeeta Lahiri, Subhashree Basu Roy & Debdutta Gupta Empty Heads are fond of long titles. ~ German Proverb 15

Perspectives Economy

Indian Agriculture: Essential for Growth Yet Neglected

I

ndia in recent years has been suffering from rising food grain prices. In the capital,

Delhi, rice prices have risen by 20% and lentil prices by 18%. These two items constitute the average food basket of most of the poor Indians. Indian government is blaming the global food price rises as the main reason behind this escalating food prices. However at the crux of the crisis lies the poor pace of production in the most significant yet neglected sector of Indiaagriculture. Indian economy in the recent years has been growing at a pace of 8.5%. While most of this growth is contributed by service and manufacturing sector in India, agriculture’s share is mere 18.46% (at factor cost). For a sector that supports almost 60% of the total Indian population, this result is disastrous. If we compare the productivity of Indian agriculture with that of the other countries, we will find that India is way behind. As for instance with only 100 million hectare of land China is producing 400 million tons of grain whereas with 146 million hectares of land India is producing only 108 million tons of grain. Recent studies show that the rate of growth of food grain production in India has decelerated by 1.2% over the period 19902007 lower than the annual growth of population which is 1.2%. Consequently per capita availability of food grains in India has declined. One of the major issues regarding the deplorable conditions in Indian agriculture is lack of substantial investment. Indian agriculture is suffering from the scarcity of adequate irrigational facilities and proper infrastructure. There has been no new technological breakthrough in this sector for a long time. A substantial investment in this sector can eradicate these problems by building up proper infrastructure and promoting research and development. However the government is busy in planning populist strategies that are ultimately not very useful. The 600 billion worth of loan waiver to the farmers announced in the recent budget can explain this. Such a strategy is not very applicable in Indian scenario where the small and marginal farmers are more open to non- institutional lending (money-lenders) than institutional ones (public sector banks and credit institutions). Instead of declaring this loan waiver if the government would have directly invested this amount in agriculture it may have served the purpose. Another major issue that is creating problems for this sector is lack of direct marketing. Indian farmers are very vulnerable since only 60% of the country’s total area is cropped. Moreover the amount paid by the government to the Indian farmers for their produce is very low. This situation is worsened by the presence of middlemen. The crisis in Indian agriculture and plight of the farmers is evident from the growing incidence of farmers committing suicides. Indian government needs to implement direct marketing in Indian agriculture. Direct marketing enables the farmers to reduce transportation costs and improve price realization. This not only increases the price received by the farmers but also reduces the price paid by the consumers. India is the second most populous nation in the world with a substantial proportion of people living below poverty lines. For them even a small rise in food prices indicates a substantial fall in the real income. India’s inflation in many ways is attributable to its food crisis, growing dependence on food grain import and rising food grain prices worldwide. If India achieves food security it may escape such high levels of inflation in future. Indian government has been opting for several demand cutting strategies to lower the already escalating level of inflation. However such strategies will not be useful until and unless the farm sector gets it’s deserved importance from the Indian government. ~Debolina Mukherjee The only way to get rid of temptation is to yield it. ~ Oscar Wilde

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Perspectives Strategy

Indian Premier League and Thomas Friedman

Since the eighties, the whole world is agog with a new buzz

word – globalization. The society or the economy expanded with a concept of ‘flat world’. This trend was expected to modernize business, improve consumer experience and bring more wealth. Whilst the jury is still out on the actual deliverable of globalization; there is no doubt that this has shifted the paradigms of business. In the words of Thomas Friedman (http://www.thomaslfriedman.com/) new global companies may be Chinese owned, headquartered in New York, having American-European- Japanese Management with customer support in India. What do you call this a Chinese company, American or global? Globalization is sweeping each and every one of us with its flow. No sector or region could have been escaped. As we see, our beloved Indian cricket team was also a cause and effect of globalization Ganguly, Ishant, Ponting, Akhtar all in one team. To take an Australian wicket, the Pakinstani and South African are strateziging under the captainship of an Indian. This may inspire Friedman to add one more chapter in ‘The World is Flat’, but the implications for India would be much bigger. India is playing the role of a true leader in globalizing the Indian cricket team. Many ethical questions have been raised regarding the auctioning of cricketers and the changing cricket culture or better to say the sports culture. But from a business man’s perspective one can argue that globalization is a mean to reduce operating costs and increase profits. IPL too is increasing the profitability of the BCCI and was actually a reactive idea to the extremely dull Indian Cricket League. Also globalization is about adding more partners to create more consumers and giving better consumer experience to existing ones. This is exactly what the IPL is delivering. Thomas Friedman also argues that globalization eliminates geographical and political barriers. A Singhalese with a broadband connection is as much an equal player in the global economic world as an American. Thus while a team like Zimbabwe or Ireland will rarely win at an international stage an individual good player can still create a difference partnering with an IPL tea ~Sweta Chhaochharia All men’s gains are the fruit of venturing. ~Herodotus

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Tarapith “Yah Devi Sarva Bhuteshu Matri Rupena Sanstitha, Namaha tasmai, Namaha tasmai, Namaha tasmai nama Namoho”, Sri Sri Chandi

‘

T

arapith’, a holy religious place known for Ma Tara and the renowned saint Bamdev, is located in the

Birbhum district. It is the ultimate for all those, who love the divine mother. It is said to be so called because the eye ball (tara) of Sati fell here. Others say that Tarapith is not pith, but the place owes its sanctity to the fact that the great saint Basistha here worshipped the Goddes Sati in the form of Tara. The common local opinion is that it is really a Pith and Basistha selected this place for worshipping Sati because it was a pith. The idol in the temple is covered in a silver mask all the time, during night you can see the actual idol (Shila Murti). Ma Tara (Tarapith Temple) Tarapith is around 230 km from Calcutta and there are train services available, which are run by the South–Eastern Railways(S-E). Tarapith not only have the beauty of the temple of Ma Tara, but many others alike the Tarapith Sashan(Burning Ghat), remains of the old Panchamudndi Ashan of Sadhak Bamdev, the river Dwaraka, Mundamalini Sashan(Burning Ghat) and last but not the least the birth place of Bamdev, ‘Atla Gram’(Village) Ma Tara’s Pada Padya (Pancha Mundi Ashan) Panchamudndi Ashan The Panchamundi Ashan in the Tarapith Sashan reminds the presence of the great saint ‘Bamdev’. There is a small ‘Shamadhi Mandir’ built beside the Panchamundi Ashan. Visitors can sit and meditate in the Tarapith Sashan. But the atmosphere of the Tarapith Sashan is different from other burning ghats. In the night if one wants to visit it. He/She will have to carry a torch light with him. Even today you can find the Tantrik Sadhus performing their ‘Kriyas’. But, today, the calm and quietness of the ‘Tarapith Sashan’ is gradually disappearing and becoming congested.

Shri Shri Bamakhepa or Bamdev Shri Shri Bamakhepa was born at the Atla Village, on the eve of ‘Maha Shivratri’ in 1837. His father was Sarbananada Chattopadhyaya and mother Rajkumari devi. Gradually, he detached himself from materialistic life and started his journey towards the spiritual world. He became one of the most popular devotee and saint of Tarama of all times. At a very young age, he

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came in contact with Saint Kailashpati. Saint Kailsahpati first discoverded that Shri Shri Bamakhepa is a form of Lord Shiva and was the suitable person to become a proper Saint of Tarama. Shri Shri Bamakhepa had been considered to be the last saint, who had gained eternity at Tarapith. He had thousands and thousands of disciples, who had found Shri Shri Bamakhepa their ideal guide from materialistic worries and tensions. Shri Shri Bamakhepa attained death in the year 1912. If you visit Sadhak Bamdev’s birth place at Atla Gram, you can find the muddy huts and can feel the fresh air, the essence of the village, which is missing in Kolkata. Atla Gram is shaded all around with greeneries, which make it just the right place to relax. Besides, the exotic views of uncommon birds, the wild flowers and the cold river breeze soothe all city worries.” “Mat Pranaha Sri Guru Prana, Mat Dehay Guru Mandiram Purnam Antar Bahir Jano, Tasmay Sri Gurabve Namaho” Bamdev’s Birth Place (Atla Gram)

How to Get There The train services are available from both Howrah and Sealdah. S-E runs a number of trains like ‘GanaDevata’, Mayurakshi, Viswa Bharathi, Rampurhat Express etc. From Howrah or Sealdah, one will have to reach Rampurhat station, which is around 220 kilometers from Howrah and takes around 5 hours. From Rampurhat station, one will have to take an Auto, which will take around 45 minutes to take you to your destined place. Tourist Lodges There a number of hotels, lodges, resorts and guest houses available at Tarapith. The charges vary from Rs 300 to Rs 1,500 a night. So, one can visit this place to see the historic temple and the Sashan. At the same, the interested persons can visit the place to lead their Atma to the path of enlightenment, from the material world of darkness to the spiritual world. ‘’Jaha Prano Bindur Modiyo, Maha Prana Ambhudhay Twayi, Sohayam Sanmilito Mato, Ityargham Kalpami Te” Ayan Chakraborty

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Book Review Bound Together: How Traders, Preachers, Adventurers, and Warriors Shaped Globalization by Nayan Chanda

T

he core ides of this book is that crossing borders - or what is now called

globalization – is an age old concept since the first humans left their African homeland. The only difference between now and then is the new technologies which have expanded the volume, speed and content. The author has presented an overview of the history of globalization from the perspective of traders, preachers, adventurers, and warriors. However, the approach is descriptive rather than prescriptive. Globalisation although has benefited millions in the developing world who now at least have low wages as opposed to no wages at all, is never free of criticism. Many argue that globalization is responsible for many of the world's problems such as global warming, the rise in commodity prices, child labor, and American imperialism. Nayan Chanda recognizes the debate argues that it is pointless to fight globalization because it has always been with us since the beginning of civilization and it is here to stay. Besides that, no single entity controls it, so it would require the efforts of many to manage it. The story begins with an analysis of the author’s own DNA which reveals that the author was descended from an African father more than 36,000 years ago. His ancestors were part of a group that represented some of the earliest migrations into India. Traders, preachers, adventures, and warriors have always been agents of globalization. From Marco Polo on the Silk Route to the journey of the iPod from Shanghai to Chandra's home in New Haven, people and corporations will forever be crossing borders in search of profits. In the section on preachers, Chanda makes some interesting points about NGOs - such as Human Rights Watch. NGOs have taken up the role of missionaries from earlier centuries. Adventurers and Warriors played a large role in border crossings in the past, but less so today, since the world is getting smaller and more user-friendly, due to the advances of technology. Although Chanda believes globalization is unavoidable, he is no neoliberal freemarketer who believes in the perfect goodwill of multinationals. He believes globalization should be managed through collaboration of nation states - such as the WTO - so that there is balance and social justice. Corporations and NGOs have their unique roles to play, but ultimately national governments need to occasinally intervene to keep the global economy from spinning out of control or leaving large numbers of people destitute. Chanda's short history of globalization tells us that its current critics are understandable, but basically misguided. Instead of putting up trade barriers and halting immigration they should find ways to make globalization work in their favor. ~Sweta Chhaochharia Business is a combination of war and sports. ~Andre Moris

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View Point

The Voice Of IRC-K

Are We at IRC-K Doing Research or Re-serach? Top Six Responses of the month I feel we do research here through the method of re-search. Particularly in case department, we need to search again and again by giving different strings to find some crucial information. Also, at times, we need to search the same topic in different websites because of credibility of the source. So, here, re-search is actually assisting us to do research. ~ Ishani Chakraborty

Response of the Month The question “Are we at IRC-K doing Research or Re-search??” is a controversial issue that I feel in the context of IRC-K. Now the question may arise why am I stating so? My justification is, Research means systematic investigation to establish facts. But over here, the system is bit different. Basically, in the case of producing derivative books I don’t feel Research is an appropriate term. It is proper to state as Re-search where the existing articles available worldwide, are reproduced through the surfing of internet. But it must also be acknowledged that IRC-K really has a number of talented scholars who have a limited scope to exhibit their original research ability and expertise. They have to abide by the set rules of IRC, which are miles away from the original sense of the term “Research”. ~Mahua Maity

It is individuals' perception, whether he/she is involved in research work or in researching others work. At the beginning of my service at IRCK, I was mainly involved in doing re-search. But, with the gradual building up of the maturity as a researcher, I have tried to focus my works towards research activities. To me its research that I am presently trying to perform at IRCK.

-Saptarshi Roy

I feel that IRCK is surely engaged in the research process and is not doing re-search in any means. Research means knowing the unknown, finding out something new which may be in the form of some information, some new advancements in the field of technology or scientific innovation. So the core purpose of research has remained unaltered here-knowing the unknown. This is because we, at IRCK, gain some new information everyday about the changes in the global business scenario and the

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turmoil daunting the multinational conglomerates .We come to know about the strategies which make or destroy the leading companies. Though we are engaged in secondary research but I feel that the basic motto of conducting a primary research is met herewith. ~ -Sudeshna Bhattacharya To develop skills of undertaking academic research one must work with a good research organization. My dream is to become an academician and to find out unexplored fields of my research interest. I am happy to have a berth in Icfai Research Centre, Kolkata as a Senior Faculty Associate. This research centre is one of the excellent organizations of the nation and has been contributing quality research works in diverse fields. It has given me a nice opportunity to be trained as an academician and researcher and also to contribute my capacity to the organization as well as outer society. Moreover, within a short span of time I have realized that the work culture in the centre is good and all the colleagues are cooperative to each other. I am happy to work with IRCK. ~Shahiuz Zaman Ahmed.

Opinion Poll

“Are 50-50 cricketers competent for a 20-20 match?” The Poll Closes on 15th June, 2008. So let’s start with our verdicts Happy Voting!! (Voting with insightful views is welcome. All voting and feed back should reach at l@ l )

Research means that you don’t know, but we are willing to find out. ~Charles Kettering.

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MIND Game

1 Which monument in Egypt represents King Khephren? 2 The name of which city means ‘capital’ in Korean? 3 Which sport was developed as a training game for cavalry units?

4 The name of which desert stretching across Mongolia and China means ‘waterless place’?

5 Which spice is obtained from the rhizomes of the Curcuma longa?

6 In which Olympics were female athletes allowed to compete for the first time?

7 According to Aristotle, which quilled beast could shoot its deadly needle-like darts?

8 Which is most famous monument in the Piazza dei Miracoli?

9 Scotty Moore and Bill Black were members in which musician’s first band?

Answers Seoul, Porcupine, Elvis Presley, The Sphinx in Egypt, Polo, Gobi desert, 1900 Paris Olympics, Turmeric/Haldi, The Leaning Tower of Pisa

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