Management Canvas_jan08

F r o m t h e E d i t o r ’s D e s k The first editorial by a first time editor is like the first tender step of a little child – tentative and tenuous but full of hope and possibilities. The first step symbolizes earnest efforts to emerge from helpless dependence to a world beyond the mother’s apron string. In our case too, the first issue is symbolic in ways more than one.

The cover says it all. The image of a butterfly evolving out of an unwieldy, ugly pupa typifies the emergence of a bunch of uncut professionals into managers of tomorrow, ready to take on the world in their strides. In that sense, the emphatic ‘i CAN’ couched cleverly within the cover calligraphy sends the message of quintessential manager loud and clear. The message goes beyond mere symbolism.

The first issue is, in another sense, the measure of men from ‘Nowhere’ to ‘Now Here’. It represents the metamorphosis of the motley lot from different walks of life to a confident group, ready to face the world.

Coming to specifics, the first issue includes articles from EPGP , PGP students of IIM Indore, the distinguished members of IIM-I faculty, established alumni of IIMs , luminaries from the corporate world and significantly from Leon and Harvard business schools. In other words, genuine efforts have gone into the making of the magazine, to

Editorial Team

cover new grounds and provide a wider perspective so characteristic

V. Narasimham Deepak Chauhan

of the IIM tradition.

Riddhi C Anupam C Chandan Pal

Our next issue, we are confident, will have an even broader canvas and wider horizon.

Design & Layout

Thank you and happy reading !

Prabhakar K

Chandan Pal Editor

1

In This Issue Team Building and Innovative Leadership "Chak de is a really inspirational movie…just look at our hockey, football & cricket teams…they have

4

Make A Wish On The Shooting Stocks—Bet on the Indian Market Try and identify what attracts you the most in this sizzling 13

started winning in every field after the release of Chak

casino. Do not spend too much effort in identifying con-

De…" Bacha Prasad

trarian trades – things that do not move. You may pick the odd winner, but chances are akin to banging your head against a wall - Abhishek Rajgarhia

IIM-I’s Management Program with a difference..

Capital Account Convertibility—India’s Dilemma Why can’t a country adopt fixed exchange rate system (i.e.,

Deepak Chander

7

officially fix the exchange rate) or intervene in the foreign ex-

14

change market to ensure stability of exchange rate to moderate the impact of capital flows? -Prof. Ganesh Kumar Nidugala

Self Organizing Model for Large Ticket Portfolio Management Here I have tried to develop a model that provides an

8

Inclusive Banking

integrated automated workflow for managing the large

But, have these developments trickled down to masses? Are

ticket portfolio management work - Sonal Sareen

these measures adequate to solve our problems of poverty,

16

unemployment, illiteracy and malnutrition? - Rajiv Narayan

Energy Security-Is the oil shock permanent?

The Great Indian Hunt “Hunters are of all ages, some as young as 19 or 20 years old whereas the more experienced ones are above the

10

If the present rate of economic boom continues, then the daily requirement for oil or oil equivalents is expected to be some-

19

where north of 150 million barrels per day-Dr. Shiv Kumar

age of 35 and even 40.” - Pranav Agarwal

Intellectual Property - India’s Key to Survival Indian Healthcare—Opportunities & Challenges

Weak Indian IP Laws is one of the reasons why we do not have

The challenges the sector faces are substantial, from the

too many inventors, but a tremendous intellect power

need to improve physical infrastructure to the necessity of providing health insurance and ensuring the availability of quality trained medical personnel — Girish Mehta

11

Deepak Chauhan

20

ENTREPRENEUR’S QUIZ

Financial Dimensions of HRD Decision

Are you?

Designed by Ibis Associates

23

….to understand Audits of Human Resource, Social, Environment, Productivity, Efficiency and Value Added are

34

essential to take fair decisions.. Prof. Dr. V.K Gupta

Courtesy –The Lost Horizon I have often wondered whether it is too much of an effort

25

to greet another person? - Prof. Abha Chatterjee

Million Dollars or Knighthood What would you do? asks Harpreet Singh

39

.

Sudoku Manager As you play this game, making strategies to fill those blocks, you

When I was transferred here, a dual feeling operated in my

will find an association between Sudoku and management-

Riddhi Chokravorty

A Real Life Saga—Motivation mind – a challenge to overcome and a fear of defeat. Little

26

40

did I know that there was a third twist in the whole set-up-

Anupam Chakravorty

Leadership The best way to learn to lead is to do it. There’s a leader within all of us. It’s time we discover it- Sameer Tikko

28

Job Communication– The Art of Winning you may have proper qualifications, experience, knowledge, confidence, and appropriate skills but you may still

43

find it difficult to get the job... M Ashraf Rizvi

Crisis Unites Humanity While Peace Fosters Discord The prime difference between peace and crisis is not the 30 qualities they impart to humanity in form of unity or discord;

If research could arrive at some practical methods by which man could channelise his thoughts more towards visioning

45

strategizing and planning for the future, we could safely say

the dichotomy really lies in the way a change is affected

”WE HAVE ARRIVED” Arjun Basu

Niraj Mohan

CRM Was, Is and Will be "Some may say [Siebel and SAP] are the only two vendors people think about. But that's not really the case. There's a

Unleash Thy Mind

31

Book Review - Entrepreneurship From Opportunity to Action : By DAVID RAE

46

Mrinal Srivastava

wide range of other players out there."-Raju Ganguly

SCM Logistics in India

Crossword

24

Quiz Time

42

We need companies, who can see the larger picture and think supply chain as not just a cost centre but also as a

33

strategic initiative….Purnendu Kumar

Leadership

Team Building & INNOVATIVE Leadership Introduction:

Team and its potential:

People, especially of Western societies today focus on the “bottom-

“Coming together is beginning,

line” in business. There is much focus on the tasks necessary to produce the expected results. To produce goods and/or services in this

keeping together is progress and

competitive work environment demands a high level of integration of

working together is success”.

competencies, technologies, and personalities in the work team. Studies have established that the most productive groups or teams of employees are the most satisfied and motivated and who tend to be

The term ‘team’ is defined by Katzenback & Smith as, “A team is a

the most collaborative. This says bottom-line productivity is influenced

small number of people with complementary skills, who are committed

by high levels of motivation, innovation and competence. It is being

to common purpose, set of performance goals and approach for

demonstrated that happy employees are productive employees. Or-

which they hold themselves mutually accountable.”

ganizations that have satisfied employees have a higher degree of

Team potential can be much more than the arithmetic sum of the

productivity and a lower employee turnover, thereby reducing costs.

potential of the individuals. It is usually called regarding a team, if the

Synergistic teamwork in an organization does not just happen. When

potential of two individual is 1 each, then the potential of the team will

assignments designate a group of people to work together, there is no

be 11 and not 2. Thus, a team of people working together can—

guarantee that high levels of production and outcomes will automati-

•

Achieve better results than individuals working alone,

are critical to the long-term success of the team.

•

Be more flexible than larger group

Though team is always necessary but its need felt strongly in follow-

•

Take more risks and explore areas than individuals may

cally happen. The integrative relationships between team members

avoid

ing conditions: When we are trying to deal with a situation/problem, where no-

•

Generate wider range of ideas than individuals,

body knows the answer. Though an answer is expected to exist.

•

Help each other grow in skill and confidence,

•

When dealing with rapid changes.

•

Demonstrate commitment not only to the task but to each

•

When the task at hand is really very difficult.

•

other.

4 CANVAS

Team Building & Innovative Leadership of confusion and uncertainty.

A team differs from a group in many ways. A group is physical congregation, which becomes a team when it acquires

Characteristics of a dynamic team: 1.

tives

the below mentioned characteristics: 1.

Shared values

2.

Interdependence

3.

Commitment towards the shared goal

4.

Interpersonal skills

5.

Mutual trust

6.

Consistency

7.

Conflict resolution

8.

Listening

9.

Consensus

10. Cooperation 11. Openness or feelings expressed

Clearly states its goals and objec-

So, it is important to establish a “WE” organization rather than a “ME” organiza-

conflicting period, during members become hostile to each other.

2.

Operates creatively

3.

Focuses on results

4.

Clarifies roles and responsibilities

5.

Is well-organized

6.

Supports leadership and each other

Norming (Cooperation):--- This is the period during which the members become more cohesive, identify with group, and establish close relationship. During this period,

feelings

of

camaraderie

and

shared responsibility prevail.

7.

Builds upon individual strengths

8.

Develops team climate

9.

Resolves disagreements

10. communicates openly 11. Makes objective decisions 12. Evaluates its own effectiveness

Performing (Productivity):-- During this period, work is performed at full potential and production/ productivity reaches its peak. The productivity is highest as questions of leadership and relations are already well established. Adjournment (Separation):---Now team

among members 12. Focus on group process

Storming (Conflict):--This is the highly

Team building and its stages: There are following five stages of team build-

may cease to exist as purpose for which it was established is already achieved.

ing:

tion.

“Ask not what your team can do for you, but what you can do for your team."

Forming (Awareness):--This is the first stage of team building, during which members meet each other with a lot enthusiasm and get acquainted, establish ground rules. This is the period with a lot

5 CANVAS

Note: Some of the experts don’t consider the fifth and last stage as stage of team building, as it may not at all exist in some of the cases.

Team building and leadership in “Chak

Dr. H Chaturvedi, Director, BIMTECH (Birla Institute of Management Technology) told in an event recently, "To make learning

De” way

more effective, we should always evolve innovative ways in teach-

Movie review: Kabir khan (SRK), India’s hockey team captain

ing. Chak De is a very stimulating film, and BIMTECH has used it

receives blows of insults after the Indian team loses out to Paki-

efficiently to convey the principles of management studies. BIM-

stan in the world cup finals. Moreover, the “khan” factor raises

TECH has taken special permission from the producer - Yash Raj

questions on his loyalty to the country and eventually he gets

Films to use the clippings of the film at the event."

tagged as a traitor. Seven years later, The Indian women hockey

"Chak de is a really inspirational movie…just look at our

team is looking for a coach and of course, the association is not

hockey, football & cricket teams…they have started winning

serious about the coach-hunt. It just doesn’t matter - these girls

in every field after the release of Chak De…"

are supposed to do the household work and not play international level hockey. Even if they play, can they ever win?

Thus whatever may be the method team building is very important

SRK, inspite of knowing the association’s callous attitude accepts

for getting optimum performance of any organization. This is more

the challenge and realizes that his real job is not about coaching,

relevant in current environment of cut-throat competition of corpo-

but keeping the entire team function as a single cohesive unit. The

rate world.

team had players with big egos, diverse background and different attitudes. It is a very good and successful management case study which has created ripples in the corporate world, as the theme is something which people can relate to. The multi- cultural diversity and

Bacha Prasad did his bachelor’s degree in Mining Engineering from Bihar Institute of Technology (BIT) Sindri and M.Tech in Mine Environment from Institute of Technology (IT), BHU, Varanasi. He has an experience of over 7 years in mining industry in various functions. He is currently a student of EPGP at IIM Indore batch of 2007-09

its attendant problems, the work place politics and finally the triumph of ethics and commitment of the team over all odds, make it look like a fairy tale come true.

6 CANVAS

IIM-I’s Management Programme with a difference ….

I

n late 2001, once I was reasonably sure about the future of my consulting start-up in the field of life sciences, I was contemplating joining a business school. I had options with eminent business schools in India as well as

abroad. My personal situation needed me living in India and I had little good options others than a full time MBA

program.

Deepak Chander graduated in 1996 from the Indian Institute of Technology Delhi. He has over a decade of diverse experience in various functions in the industry.

His

business

exposure

ranges from manufacturing to marketing and business. At present, he is working as Business unit head with Lanxess AG. Earlier, he was Global Marketing Manager for one of the businesses of Rohm & Haas, materials and specialty chemicals company head quartered in Philadelphia, USA.

In the year 2001, IIM Indore chose to launch the first semi full-time management graduation program. The design of the program focused on accelerated learning for the working executives in a classroom based module that would be substantiated through out of the classroom modules. The outline of the program was attractive because, after quick review of the management fundamentals, it emphasized in detail on application of management principals on real life problems, something more valuable for the working people.

I opted for the EPGP program at IIM Indore, because of its content and the design that enabled me to learn and apply the management skills set at the same time in real life situations. I am convinced that students in the EPGP program will be relatively more proficient in effectively solving the real life problems using B-school management theories than those in any other MBA program.

7 CANVAS

‘Self Organizing Model for Large Ticket Portfolio Management, Business Case

Idea explained…

The financial institutes, who lend money to commercial clients, ei-

The concept is to integrate the whole financial management system

ther to buy a new venture, or spin off, or MBO or LBO and other

of the financial institute which comprises the financial to analyze,

requirements institutions require a great deal of financial analysis

compare & model to eye there portfolio investments and to search

and constant monitoring the Clients for there credit worthiness and

for better investment options.

working under compliance.

The idea is to suggest a process that automatically accepts finan-

These lending can be in various formats ABL, CDO, CLO, etc.

cials and store them logically to support model on top of it.

These sophisticated lending procedure and mechanism in itself are

This knowledgebase is then used by various modules like Risk Mod-

very time consuming and detail oriented leaving portfolio managers

ule, Portfolio Module and Business Intelligence module to share the

with very little time for managing and optimizing portfolios. In to-

data and develop models and perform analysis automatically. Building Knowledgebase - The Financials are acquired from various sources like SEC, if client is public company and required to file returns at SEC and from other private institutions and automatically scanning and feeding in a database which has comparable structure of financials stored to provide a knowledgebase for further analysis. Accounts Analysis Module – This module does some basic number crunching for the system and provides ratio analysis and covenants calculation. Portfolio Analysis Module – This module takes the feeds from Knowledgebase and develops the intra firm comparison of financials as well as comparing with the peers. And providing auto-generated financial comparison reports, also it provides the risk analysis of the portfolio. Forecasting and Simulation Tools – The next steps in portfolio management is to determine how portfolio is going to operate in

day’s scenario, a portfolio manager has to do a lot of manual and

future. This tool tries to do the advance forecasting of cash flows,

tedious work which utilizes a lot of his time spreading financials,

profits, etc. and assist the portfolio manger in performing simulation

calculating ratios, calculating risk, etc. and is left with little time to

and what if analysis.

focus on analyzing them in detail.

Market Analysis Module – This Module is an add-on to provide the

Here I have tried to develop a model that provides an integrated

portfolio manager with analysis of Industry and country. This module

automated workflow for managing the large ticket portfolio manage-

is a central repository which helps in taking more informed and col-

ment work.

laborated decisions.

8 CANVAS

Self Organising Model for Large Ticket Portfolio Management Business Intelligence & Reporting Module – This module pro-

effectively manage credit risk and to rate their commercial custom-

vides all analytical and exceptional reports required by portfolio

ers by leveraging the financial information found in their customers'

manager at any level. This also helps in making various slice & dice

financial statements. A system which reduces the analysis time of

and pivot analysis reporting.

credit analysts and document managers on collecting, managing

Key features of the model:

and analyzing their customer’s financial information. The Portfolio Managers will be able to manage the portfolio in more

The tool automatically picks up the financials and spread it accord-

strategically way by use of new and innovative mathematical portfo-

ing to the Accounting standards; the financials are automatically

lio optimization and management tools.

stored in database to support comparison amongst each other and

It will provide a one automated end to end solution for all the re-

for time series against previous years.

quirements of the financial institutes.

The ratios are automatically calculated. A model picks up the information and tries to calculate the credit

Summary:

worthiness and financial strength of the companies based on various scoring model.

The Model explains an approach of integrating the whole process of

All these tools sum up and logically arranged into an executive

portfolio management and supporting portfolio managers to dedi-

dashboard or portfolio dashboard as per relevance and importance.

cate there time to analyzing the portfolio rather than managing the

All the KPI as calculated automatically and are strategically located

manual process and making the knowledgebase.

on the dashboards.

Using the suggested approach the financial institutions can leverage

An automated tool calculates the future projections of the compa-

the use of cutting edge IT tools to manage there portfolio in better

nies based on time series and tries to predict the future profits and

fashion and optimize them to fullest.

cash flows. An embedded tool performs the sensitivity analysis and helps the project managers and executives to do what if analysis and simulation on future credit worthiness, profits, default frequency, cash flows, etc.

Sonal Sareen CA, works as Business Consultant in Talent & Organisation Consulting group at Hewitt Associates. His areas of interest includes financial modeling and risk analysis. He is a regular contributor to various magazines and journals. He can be reached at [email protected]

Where are we heading for? With a next-generation financial statements Analysis & management Application Financial Institutions will be enabled to efficiently and

9 CANVAS

The Great

Indian Hunt D

eep within the masses of lands and mountains, lakes

trying to introduce more number of deer into the forest, but as with

and rivers, hidden deeply yet easily accessible is the

everything else Indian the demand far outstrips the supply.

Biggest and Largest Jungle, the meanest place in this

Recently there have been some queer developments in this jun-

country. A jungle that is full of deer to hunt, dense trees protect

gle. Many hunters who were at it for multiple seasons have now

the most coveted and biggest ones. To get to the innermost

left for other jungles in foreign lands. Some have left the hunt all

realms of the jungle, one needs to cross many tests, fight other

together whereas the more determined ones come back year after

hunters, display their superiority.

year hoping for better success. There are numerous hunting

Every hunter who gets to the far end of the jungle and lands one

schools that train and coach the hunters on the skills, tricks and

of these big deer is destined to make it big, enjoy the admiration

loopholes of the entire process.

and laurels of his peers. The hunting season is from the second

There are many who have bagged multiple deer in the past. How-

week of November to the end of April. Many people are known to

ever as rules have it, no person can take home more than one

practice and train for months on end before the season begins,

and the hunter is forced to make a choice. Another interesting

perhaps for a year or two that people prepare for the hunt and

observation is the introduction of new deer and foreign deer into

give it their best.

the Indian jungle. This has dramatically changed the scenario and

Hunters are of all ages, some as young as 19 or 20 years old

increasingly giving the erstwhile kings a run for their money.

whereas the more experienced ones are above the age of 35 and

Few people know what will happen with this jungle in the near

even 40. Last season there were more than 2,00,000 hunters who

future. One thing that is for sure is that it will last, last long and

tried their hand at the hunt. The number of deer were also high,

wide, it will grow, grow large and big, it will thrive, thrive like never

but most of them vie for the top ones, the biggest and fastest

before. Hunters will increase and so will the hunted. The seasons

deers, which dwell only in the furthest part of the jungle.

will keep rolling; the trophies will keep coming up.

In, fact they are so deep into the forest that hunters begin their

This is after all THE GREAT INDIAN HUNT!

hunt in the beginning of the season only to hunt down the deer in the month of March and April. There are no more than 2000 such deer and last year’s hunters have not returned again. Generally the ones who hunt down these top prizes never come back for more. It is almost a nirvana for hunters. For those who are not as lucky to reach the furthest end of the

Pranav Agarwal PGP Batch of 2008 IIM Indore “Pranav is a second year student at the Indian Institute of Management Indore and loves travelling, listening to music and blogging."For comments mail him at [email protected]

forest, there are many many more deer at all parts of the forest. The government is not far behind on this too. They have been

10 CANVAS

The

Indian

tance to drugs. India is witnessing a boom

health-

of another kind that is a rapid growth in

care

in-

lifestyle related ailments like heart attacks

is

and diabetes. It is estimated that at least

poised for unprecedented growth. The

3-4% of India’s population suffers from

industry has never seen any downtrend,

diabetes and a similar number with heart

and is expected to witness continuous

related disorders.

growth. There are many factors for this

availability and affordability of related treat-

growth:

ment, this shall fuel the growth to health-

dustry

Combined with the

care for many more years to come. Mediis

cal insurance, currently not a very impor-

growing at the rate of 2 percent per annum

tant factor, may give a huge growth impe-

and is a major factor. More people imply

tus to the Indian healthcare industry. In

more healthcare requirements.

next 3-5 years, insurance may bring cash-

Growing affluence and spending power:

less transactions, as well as medical insur-

There are two kinds of healthcare spend-

ance based diagnostic testing and hospi-

ing: discretionary spending and compul-

talization to a large group of people. In the

sory spending. Discretionary spending will

wake of liberalization, health insurance is

grow as the affluence grows and will lead

projected to grow to $5.75 billion by 2010,

the growth of the healthcare industry

according to a study by the New Delhi-

GDP Growth: The economy is booming.

based PHD Chamber of Commerce and

Over the past four years, the GDP growth

Industry.

rate has been over 8 percent on average,

Outsourcing

and is expected to remain between 6-7

outsourcing as expressed through pathol-

percent for the next 15 years as well. This

ogy samples, tele-radiology, and clinical

means more money with the people and

trials and by means of telemedicine will

even if one takes poor percolation, masses

also be a significant factor driving the

having money to spend on discretionary

growth of healthcare in India in the future.

healthcare needs.

While outsourcing of pathology samples to

Affordability and availability of quality

India has not met with a huge success so

healthcare: Increase in the number of

far, the early successes of telemedicine

hospitals has ensured easy access to

and clinical trials pioneers have led to

healthcare.

increased acceptance and proliferation of

Large population:

This

The

trend

population

is

specifically

brought by the private sector through

Opportunity:

Healthcare

such centres.

opening medi-cities and specialty healthcare centers. Several multi-specialty hos-

Today there are approximately 120 tele-

pitals are coming up in metros that are

medicine centres throughout India. The

attracting foreigners to come to India for

Asian Heart Institute (AHI) is planning to

healthcare needs. The medical tourism

establish 60 more telemedicine satellite

boom is around the corner, possibly in the

centres across the interiors of Maharash-

next 3-5 years.

tra. The government has also made a

Growing disease burden: Another factor

major commitment to the growth of tele-

driving the growth of India’s healthcare

medicine. The Indian Space Research

sector is a rise in both infectious and

Organization (ISRO) plans to establish 100

chronic

While

telemedicine centres across the country.

ailments such as poliomyelitis, leprosy,

ISRO has already connected 25 major

and neonatal tetanus will soon be elimi-

hospitals in the mainland and plans to link

nated, some communicable diseases once

at least 650 district hospitals by 2008. The

thought to be under control, such as den-

government also is reducing import tariffs

gue fever, viral hepatitis, tuberculosis,

on infrastructure equipment. And while

malaria, and pneumonia, have returned in

India has yet to pass legislation on tele-

force or have developed a stubborn resis-

medicine related issues, the Ministry of

degenerative

diseases.

11 CANVAS

Indian Healthcare: Opportunities & Challenges developed

medical equipment, higher depreciation on

another 8-10 years. As far as the numbers

“Recommended Guidelines & Standards

life-saving medical equipment (40%, up

are concerned, we will definitely not witness

for Practice of Telemedicine in India,”

from 25%), and a number of other tax in-

a sharp decrease in the number of laborato-

with the goal of standardizing digital com-

centives.

ries. Out of the 50,000 laboratories, around

Information

Technology

has

30,000-35,000 should remain in the next 10

munication in telemedicine. The Medical

years.

Council of India has formed committees to

As of now India does not suffer from lack of

explore this and other legal aspects of tele-

trained manpower in healthcare because

medicine.

has a large number of medical colleges in

There are five or six segments within this

public and private sector. Some of them are

market, out of which biochemistry, hematol-

Similarly in clinical trials, Indian companies

world class and their students are highly

ogy, and immunology are the three main

have established themselves as reliable

respected for their skills. However, quality

segments. They comprise close to 90 per-

provider of quality services in lower strata of

of medical education needs to improve

cent of the overall pathology testing market.

the business namely bioequivalence based

drastically if one wants good personnel to

Biochemistry and hematology involve basic

trials and are inching their way up into high

come out of these institutions. This is one

testing and together form the bulk of total

end areas like phase 1, 2 and 3 trials.

area where improvement is needed and

testing. Immunology is set to double in size

appropriate steps shall be taken to plug the

while the other two will continue at the exist-

deficiencies.

ing growth rate. New areas like molecular

Lastly, the public private partnership in

biology have a small base and are set to

healthcare shall lead to availability of quality healthcare to masses at affordable

grow at an approximate rate of 30-35

price. Combined with spread of

percent.

insurance (likely to be provided by the government to the masses), this

Conclusion

will fuel the growth of healthcare for decades keeping in mind the huge

The Indian healthcare sector can be

population.

viewed as a glass half empty or a glass half full. The challenges the Man-

sector faces are substantial, from the

power: “The enabling factors for

need to improve physical infrastructure

Growth” India is largely advanta-

to the necessity of providing health

geously placed on both accounts.

insurance and ensuring the availability

Technology

and

Skilled

of quality trained medical personnel. As far as the availability of the latest medi-

Diagnostic Services Business in India

But the opportunities are equally compelling, from a huge domestic market to lucra-

cal equipment is concerned, India is at par with its counterparts. Therefore, there are

Widely regarded as the least glamorous

tive outsourcing business. For companies

hardly any limitations or challenges. The

part of the whole healthcare spectrum but

that view the Indian healthcare sector as a

rebuilding of India’s healthcare infrastruc-

holding tremendous potential, the Diagnos-

glass half full, the potential is enormous.

ture, combined with the emergence of medi-

tic testing business in India is still in unor-

cal tourism and telemedicine, will drive

ganised sector and there are only three or

strong demand for medical equipment.

four organized players in this business,

Leading international companies market

controlling only around 10-12 percent of the

most high value medical equipment, while

total diagnostic testing market. The balance

only consumables and disposable equip-

88 percent is still in the hands of individual

ment are made locally. Many international

small laboratories.

companies have expanded their operations in the Indian market in recent years and

There are close to 50,000 laboratories that

established manufacturing facilities to as-

operate under their own rules and regula-

semble equipment for the domestic market

tions. In comparison to the developed coun-

and export sales. The competition is ex-

tries, regulation is a major limitation in India.

pected to intensify with the entry of more

Other issues include varied pricing points

global firms into the medical equipment

and quality. The sector is witnessing

marketplace. The government is encourag-

changes and is on a path of getting organ-

ing the growth of this market, through poli-

ized. However, it would be fair to say that

cies such as a reduction in import duties on

the current scenario would continue for

12 CANVAS

Mr. Girish Mehta, President and SBU Head of Wellspring, a fully owned subsidiary of Nicholas Piramal India Limited is a product of IIT Mumbai and IIM Kolkata. He has a rich experience of over 17 years in different industries. He started his career in marketing, followed it by a long stint in management consultancy and then took up the challenge of establishing Wellspring. He is credited with establishing Wellspring as one of the largest players in a short period of 4 years with turnover of more than 150 Crores.

MAKE A WISH ON THE SHOOTING STOCKS

BET ON THE INDIAN MARKET

E

ssentially, the Stock markets globally are a casino, and

to spot the right baskets to be in and then not ask questions. Intelli-

that is what makes it exciting and interesting for the

gent analysis and rational thought are always useful companions in

public at large. All of us out here, need an adrenalin

any market, but once you have placed your bet on the right stock,

boost and the clientele at the Indian Casino is growing very rapidly,

give it a wide berth. More often than not the stock will climb to

with online trading and dedicated call centers being set up by In-

valuation levels that will look absurd to you. Never mind, pat your-

dian brokerages to facilitate more and more participation. The

self on the back, take credit for it and do not even think of fighting

market base is getting thicker and younger and we have witnessed

the trend. Enjoy the profits and do not regret if you left the party a

new record volumes being set and beaten in the run up so far.

bit too soon, it does not matter. Strange things happen in a bull

Some of our top honchos have made their way to the Forbes Top

market so do not short what you do not understand. Just step

10 and India has finally stepped into the global boardroom, all

aside respectfully if you do not have the heart to participate, you

geared to make its mark on the global economy.

may not make money but you will not lose either. Try and identify

It has been a magnificent cruise for the BSE-30 Scrip Index

what attracts you the most in this sizzling casino. Do not spend too

(Sensex) to 20000 level currently and as I write this article, I am

much effort in identifying contrarian trades – things that do not

betting on the Sensex to at least double from the current levels by

move. You may pick the odd winner, but chances are akin to bang-

2010. There may be occasional hiccups as it rises which is essen-

ing your head against a wall. Also, do not rely on news or media.

tial for the market in its own way. We all might reason that nothing

They will only comment on what is the current trend, and are mas-

much has changed in India yet, what makes the Sensex touch the

ters at changing sides. By profession they can never be loyal to

20000 mark and still looking up? At first glance the Indian market

what they say and mean. And most importantly, do not bet if you

appears expensively priced both on an absolute and relative basis,

are afraid to lose and unable to trust your own instincts. If we have

to other emerging markets. Yet these static comparisons do not

bet on own instincts, there is satisfaction in even losing, lot to learn

take into account the higher growth projected for the Indian econ-

and nobody to blame. As individuals, the idea is to make money,

omy. With such a fast growing market, it is important to value the

lose little, never to be the first in class. We are hardly fund manag-

future growth prospects. The Attitude and mindset of India has

ers, only ordinary folks getting lucky from a bull run.

changed. Better industry prospects in the wake of the government’s greater emphasis on accelerating infrastructure growth are the obvious explanations. There are a whole lot of things happening in this direction such as development of SEZ’s, power projects, privatization of projects related to infrastructure development are

Abhishek Rajgarhia holds a bachelors degree in Chemical engineering from Thadomal Shahani Engg College in Mumbai. He has gained vast business exposure through family enterprises comprising of manufacturing and trading activities and is serving a telecom company as Network Commercial. He is currently a student of EPGP at IIM Indore class of 2009.

the major ones and not to forget the financial reforms. Here I would like to highlight some rules I believe for investing in a bull run. It might be a dream come true for some wise investors, while it must have been harrowing for some traders who were trying to fight the roaring ticker. The thing to do in a bull market is

13 CANVAS

Prof. Ganesh Kumar Nidugala Why can’t a country adopt fixed exchange rate system (i.e., officially fix the exchange rate) or intervene in the foreign exchange market to ensure stability of exchange rate to moderate the impact of capital flows?

Capital Account Convertibility

India’s Dilemma

W

hy is capital account con-

sudden capital outflows can cause steep

capital flows. In absence of exchange rate

vertibility such a thorny issue

changes in exchange rate putting the econ-

guarantee of some sort, foreigners may not

for policy makers? Isn’t it

omy out of gear for several years.

be interested in investing capital for the fear of losing their capital via the exchange rate

simple – foreign capital can boost investment in the country and produce faster

Why can’t a country adopt fixed exchange

growth? Well, after all it is not that simple.

rate system (i.e., officially fix the exchange

Like any medicine it has its side effects.

rate) or intervene in the foreign exchange

The impossible trinity says that all the three

When we say foreign capital it can take

market to ensure stability of exchange rate

things are not feasible. For instance, if a

different forms. One broad classification is

to moderate the impact of capital flows?

country liberalizes capital flows but wants to

based on the duration of the flows. Based

This is where we have to understand Fren-

have exchange rate stability, it has to give

on this you can have short-term flows and

kel’s (1999)1 ‘principle of impossible trinity’.

up

long term flows. Under long-term flows we

As per this principle a country can not have

Why? As the central bank buys foreign

mainly have foreign direct investment (FDI).

all the three choices – monetary policy inde-

currency (due to excessive capital inflows)

FDI is considered to have smaller side ef-

pendence, liberalized capital flows and

to prevent the domestic currency from ap-

fects when compared to short-term capital

exchange rate stability.

preciating the domestic money supply rises.

changes.

its

monetary

policy

independence.

This can cause inflation. Similarly when

flows. The short-term capital flows viz. capital that goes into stock markets, bond mar-

Developing countries ideally would like to

capital starts to go out of the country, selling

kets or short-term loans can flow in easily

have the benefit all three things –free capi-

foreign currency to maintain exchange rate

but they can also flow out quickly. When

tal flows, independent monetary policy, and

stability can lead to fall in domestic money

expectation of devaluation of the local cur-

exchange rate stability. Developing econo-

supply. This can push up interest and throw

rency builds up, foreigners may suddenly

mies which are growing fast or which intend

the economy into recession. Thus, the cen-

pull out capital. Opening up for capital out-

to grow fast need capital. Opening for capi-

tral bank loses control on money supply or

flows for domestic residents adds another

tal flows and prospect of growth attracts

we can say it loses monetary policy inde-

dimension to the problem. When the local

capital. The objective of faster growth also

pendence.

currency is expected to depreciate, given

necessitates independent monetary policy

the chance even the residents would like to

so as to gear the interest rate and channel

Another issue related to capital inflows is

take out capital and bring back later on

credit to finance the growth. Exchange rate

what is called as the possibility of ‘Dutch

when currency has been devalued. Who

stability is deemed to be important for inflow

Disease’. This problem was named after the

does not want to make a quick buck? Such

of foreign capital, particularly, the portfolio

problem Netherlands had to go through

1

Frenkel, Jeffrey (1999): No Single Currency Regime is Right for All Countries or at All Times, NBER Working Paper 7338

14 CANVAS

Capital Account Convertibility: India’s Dilemma when it discovered significant oil reserves

What has been India’s experience so far

The appreciating rupee is beginning to

and exported oil and related products. The

with freeing up capital flows? While the

cause some sort of Dutch disease.

resulting inflow of foreign exchange led to

trinity (monetary policy flexibility, exchange

ready, by the government’s own admission

appreciation of country’s currency. Appre-

rate stability and openness to capital

20 lakh jobs may be lost in the export

ciation hurt the domestic manufacturing

flows) cannot co-exist in their extreme

sector (reported in leading Indian dailies)

sector. Even excessive capital inflows and

form, Indian experience suggests that it is

due to the recent appreciation of rupee.

resulting appreciation can also lead to the

possible to have monetary policy flexibility

Loss of jobs cannot be swept under the

same problem.

with limited openness to capital flows and

Al-

some stability in exchange rates. The

India’s dilemma

Reserve Bank of India ensures that volatil-

India implemented economic reforms since

ity in exchange rate is not extreme while

1991. However, India retained control on

the country allows restricted access to

capital flows, particularly the short-term

foreign capital. Till a year ago, the capital

carpet in a democratic country like ours. Considering the recent remarks made by the govt. about the need to moderate capital flows, it is unlikely that full capital account convertibility is going to be implemented any time soon. Should any of the developing countries face another bout of currency instability, the issue of capital account convertibility will once again go into the back burner. What is the most likely scenario then? We might move tocapital flows. Even the liberalization of

inflows into India have not been significant

wards greater openness to capital move-

foreign direct investment flows was imple-

(around $5 billion p.a.) when compared to

ments with authorities playing cat and

mented gradually. India was supposed to

such

mouse game with the issue of capital ac-

implement capital account convertibility in

(China for example gets $50 billion p.a.).

1999-2000 as per the earlier report of

One of the reasons for this is of course

Tarapore committee report (1995). How-

capital controls. Another reason could be

ever, series of financial crises, including

the fact that exchange rate variability intro-

the Asian financial crises, made India put

duced the element of risk for foreign inves-

capital a/c convertibility on hold.

Many

tors and Indian firms that would like to

observers identified capital account con-

access foreign capital and foreign firms

vertibility as one of the prime causes of

that want to invest in India.

flows

into

developing

countries

crisis in the emerging economies. Also, the signposts set out in the report such as

Quite recently (2006-7) India has been

fiscal

not

facing problems of huge amount of capital

achieved. Now that India’s Balance of

inflows and had to implement measures

Payment position looks healthier, once

such as controls on P-note issues in order

again the issue of capital account converti-

to moderate capital flows. RBI’s rising

bility has taken the center stage aided by

reserves (currently at over $260 billion) is

the recommendations of the new Tarapore

an indication of the capital inflows into the

Committee report (2006). As per this re-

country. The Rupee has appreciated by

port, the revised date line for implementing

around 15% against the US$ over the past

capital account convertibility is 2010-11.

one year. In absence of the intervention by

deficit

and

inflation,

were

the RBI things could have been worse.

15 CANVAS

count convertibility.

Prof. Ganesh Kumar Nidugala is faculty in Economics Area. His work experience includes teaching at T.A.Pai Management Institute, Manipal (1993-97), IIM Indore (1997-2001) and Stansfield School of Business, Singapore (2001-2007). He is a Fellow (Economics) of IIM Ahmedabad. He was awarded with Ford Foundation Post Doctoral Fellowship in Economics (1996-97) under which he pursued research and course work at Univ. of Southern California, Los Angeles, U.S.A. He has published research papers in Economic and Political Weekly, The Indian Economic Journal, Indian Economic Panorama etc. His Areas of interest are: Macroeconomics, Monetary economics, International trade and finance, Options and futures.

BankIng

Introduction

down to masses? Are these measures

It has been realised that there is a large

We know that India is a very large country

adequate to solve our problems of poverty,

section of population who are still left out

in terms of population and other diversi-

unemployment, illiteracy and malnutrition?

of the present economic growth process.

ties. Progress and prosperity of all the

There is no doubt that the recent develop-

This makes them stagnant and impover-

countrymen has always been a challenge

ments have been able to improve the living

ished. The only way to improve their lot is

for the policymakers in the Indian econ-

standards of a particular section of society.

to bring them into the economic main-

omy. In the last decade we have been able

Hence, the present economic direction is

stream. This will help them to grow at the

to achieve high growth potential in our

beneficial to the country and our people.

rate of economy. This can be achieved in

economy due to large scale liberalisation,

But, it remains a fact that 70% of our popu-

two ways. One of them is fiscal, in which

lation live in rural areas on a paltry income,

the governments take various measures.

break-

55% of our work force depends on farming

The other one is monetary and credit

throughs. This has enabled us to ride on

which is heavily dependent on erratic mon-

measures. Reserve Bank of India, National

GDP growth rate of above 9%, BSE sen-

soon, 28% of our population live below the

Bank for Agricultural and Rural Develop-

sex sailing over 20000 mark, foreign ex-

poverty line, 39% people in our country are

ment, Small Industries Bank of India, Na-

change reserve

above $230bn, large

illiterate. We rank 126 in human develop-

tional Housing Bank act as facilitators in

scale investment by foreign institutional

ment index (HDI). 18% of our people do

this sector. The commercial banks and

investors in equity and debt market and

not have access to safe drinking water,

cooperative banks, with more than 40,000

capital inflows by foreign direct investors.

10% of the work force is underemployed or

branches spread all over the country and

unemployed makes us think of the innova-

more than 500,000 employees in its mani-

tion in the present scenario.

fold, are the main players of the credit and

globalisation

and

technological

But, have these developments trickled

monetary policies.

16 CANVAS

Inclusive Banking

Role of the banks

vide credit to needy farmers for pur-

government has already incurred a

The banks play a major role in the econ-

chase of agriculture inputs like high

heavy cost on education, the banks

omy. They play the balancing act by taking

variety seeds, fertilisers and irrigation.

have nothing much to do except edu-

money as deposit from those who have

To reduce the dependence of farmers

cating them about the power of knowl-

surplus to be lent for productive purpose or

on monsoon, farmers should be en-

edge. The banks should encourage

to raise standard of living. Hence the banks

couraged to use micro-lift water irriga-

establishment of a well furnished

can help inclusion of people in the eco-

tion and rain-water harvesting tech-

health clinic for treatment of diseases,

nomic mainstream in the following way.

niques.

farming

maternity health and family planning

1)

Saving habit: - At present the poor

activities should be encouraged by

awareness among the poor. Voca-

expend what they earn or put their

banks by providing credit facilities for

tional training and training for use of

money with someone who seldom

purchase of tractor, power tiller, culti-

information technology to the edu-

elope the money. The banks can in-

vator, leveler, thrasher, etc. The banks

cated poor youth to cater the skill

culcate saving habit among the poor

should arrange for procurement of

requirement to corporate and entre-

households by opening their accounts

high yield variety cattle, cattle feed,

preneurial development can be sup-

2)

3)

of

ported and financed by the banks.

poultry, fish prone etc.

at zero or very small balance. This way people are able to park their

Mechanisation

5)

Non farm sector development: -

7)

Marketing and linkage: - The banks

money securely and meet their future

Rural and urban artisans should be

should provide adequate support to

exigencies. The banks can do this by

encouraged

for

establish linkage of farming products

adopting the villages in rural areas

village and cottage industries and

and artisans’ product to be sold at

and clusters in urban areas.

credit can be provided to them for

remunerative price. Development of a

Change in attitude: - The banks must

purchase of equipments and other

well established rural ‘haats’ is neces-

perceive the poor as a creditable lot.

inputs.

food-

sary for the buyer and seller of the

We are aware that the poor take

processing industries will help the

area so that the people are able get

money from moneylenders at hefty

farmers to grow cash crops like sugar-

things of need at affordable cost and

rate of interest and repay them at any

cane, oilseeds etc. Educated youths

the sellers get remunerative price of

cost. If they can be creditable at such

should be encouraged to take on

a high rate of interest then they can

entrepreneurial ventures individually

easily repay the loan to the bank.

or in a group. Formation of self help

Banks should encourage establish-

Hence, the banks should feel free to

group (SHG) of

poor, particularly

ment of industry and manufacturing

lend to the poor for production as well

women should be encouraged and

units to absorb the surplus labour in

as consumption.

credited for their productive activity.

the rural and urban sector. The small

Education and health: - Since the

scale industries and the medium scale

Agriculture development: -

The

6)

for

establishment

Establishment

of

their products in their vicinity. 8)

Encouraging

manufacturing:

banks should encourage agriculture graduates to establish agri-clinics in rural areas, so that the farmers are able have correct

To the society

To the Bank

To the corporate sector

Poverty Alleviation

Increase in business

Increase in consumer base for goods and services due

Employment generation

Increase in profit

Increase in productions and sales

Fulfillment of social objective

Increase in profit

Customer loyalty

Availability of skilled manpower

Fulfillment of social goals

Fulfillment of corporate social responsibility

knowledge of the quality of soil of their land and get proper consultancy regarding crop production. The banks should lend to agriculturists for purchase of

up-to-date

equipments for soil testing, Rise in standard of living vermi-culture etc. The banks should encourage veterinary

Increase in productivity of labor, doctors to establish clinics for as more people are taken into treatment of cattle and con- economic mainstream sultancy

regarding

up-

keeping of cattle. 4)

Literacy

Provision of inputs to farmers: - The banks should pro- Better civic amenities

17 CANVAS

-

Inclusive Banking industries are best suited for employ-

Micro Finance institutions:- The banks

ment generation.

can act through micro finance institutions operating in the area. These institutions act

Channels of banking services

as bridge between banks and people re-

The banks can serve the far flanged areas

mote areas by providing the credits they

through the following means:-

receive from banks to poor at some margin.

Through branches: - The nationalised banks, the regional rural banks and the

Conclusion

cooperative banks have already opened

Thus we conclude that if India has to sus-

their branches in the remote areas. They

tain a high GDP growth of above 9% for the

need only train their personnel for social

next decade inclusion of large masses into

sensitisation and inclusive banking.

economic mainstream is necessary.

Mobile ATMs:- Banks can use the services

This inclusion not only raises the output but

of mobile ATMs for their reach to rural ar-

also improves the socio economic indica-

eas. Biometric ATMs, which uses finger

tors like literacy, awareness, health and

prints, retinal movements for identification

standard of living which will keep us on

for the customers are best suitable for

high HDI. The banks can play a major role

these areas.

in achievement of the inclusion process.

Mr. Rajeev Nayan is a practicing banker. He has been associated with Central Bank of India for over 15 years. He is B.Sc.(Honours) in Electronics from Magadh University, Bodh Gaya and CAIIB from Indian Institute of Banking and Finance. Currently he is pursuing Executive Post Graduate Programme in Management at Indian Institute of Management, Indore.

SHARE MARKET

In the absence of the man, the assistant told the villagers. Look

Once upon a time in a village, a man appeared and announced

will sell them to you at Rs35 and when the man returns from the

to the villagers that he would buy monkeys for Rs10. The villag-

city, you can sell it to him for Rs50."

ers seeing that there were many monkeys around, went out to

The villagers squeezed up with all their savings and bought all

the forest and started catching them.

the monkeys.

The man bought thousands at Rs10 and as supply started to

Then they never saw the man nor his assistant, only monkeys

diminish, the villagers stopped their effort. He further announced

everywhere!!!

at all these monkeys in the big cage that the man has collected. I

that he would now buy at Rs20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms. The offer rate increased to Rs25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it! The man now announced that he would buy monkeys at Rs50!

Welcome to the "SHARE" Market!!!!!

However, since he had to go to the city on some business, his assistant would now buy on behalf of him.

18 CANVAS

Energy Security

I

E n e r g y

S e c u r i t y

could feel the heat of the oil

and Iran, and terrorist attacks in Saudi

as it is taking longer to find new reserves

literally as well as figuratively

Arabia have all contributed to the unreal

and costing more to exploit what can be

on the sight of French Fries

escalation in oil prices. Mindful of these

extracted.

dancing in hot, boiling oil at the

myriad of factors, the IMF did not hesitate

Mc Donalds. Oil governs the voting power,

to call the energy situation a state of

OPEC has clearly signaled that they are

currency

“permanent oil shock”.

happy keeping prices at historically high

fluctuation,

the

government

levels provided economic growth is not

budget, the FDI and the energy sector. DCF has shown that global equity markets

choked. Many countries within and outside

With the advent of Gulf War, Oil publicly

have valued the oil sector at anywhere

OPEC are finding it politically impossible to

became the most significant eco-political

from $30 to $40 per barrel up from $18/

turn on the production as concern for the

factor for all the national economies. It

barrel not too long ago. This means that

future outweigh the short term economic

seemed to be going even more powerful

the upstream, midstream and downstream

gain. Thus the notion that supply can keep

than religion till the deadly September 11.

industries have adjusted prices upwards

up with demand is no longer a reasonable

The Oil Ministry had become the hottest

for acquisitions.

assumption.

ultimately the axe fell on consumer on

In 2005, India signed a long term agree-

Unless the global economy stalls or alter-

various oil and related products. The sub-

ment for LNG with Iran at prices in excess

nate energy sources are brought on

sidized oil products became a white ele-

of 40% than what Iran offered a few

stream, the ridiculously high price in oil is

phant for the public sector Oil refining &

months earlier. These trends clearly show

here to stay.

distribution companies.

that these are not mere blips on the price

portfolio for any government. However,

radar screen; they are indicative of a mam$100/

moth structural shift in the energy sector. If

barrel.Since 2004; the energy sector has

the present rate of economic boom contin-

entered a new watershed era where the

ues, then the daily requirement for oil or oil

mismatch between supply and demand is

equivalents is expected to be somewhere

real and widening. Botched US policy in

north of 150 million barrels per day. The

the Middle East, increasing demand from

present capacity with no slack is around

China and India, political tension in oil

95million barrels per day. This mismatch

exporting countries like Nigeria, Venezuela

does not forebode well for future oil prices

Oil

is

hovering

at

close

to

19 CANVAS

Dr. Shiv Kumar is a B-tech from BITS Pilani, PGL from Harvard and PHD in Chemical Engineering. He has an experience of more than 25 years. He is presently the Sr. Vice President for Global Sales for Tyco Thermal Controls (TTC) a part of an USD 18Bn Tyco International. He has been associated with TTC for more than 20 years and operates from Houston, US.

INTELLECTUAL PROPERTY

INDIA’S KEY TO SURVIVAL “Intellectual Property - ideas and the people who generate them - is the new coin of the realm, with innovative capacity the key driver of future economic growth, productivity gains and wealth creation.” Bruce P. Mehlman.

H

ow

nations

create

wealth

is A strong Intellectual Property regime not only intellectual property protection environment

changing. And while it may still encourages the local talent and channelizes creates investment friendly conditions, which take years before we find any resources, but also helps in getting foreign in turn promotes R & D.

replacement for oil, the impact of innovation investment in cutting edge areas, thereby on our society is already profound and unmis- helping the country to compete successfully in Needless to say, the country having a very takable. So profound that in today’s world the world markets. This is especially true in high strong IP regime attracts maximum investhealth of a country’s economy can be gauged technology area, where investment is required ment from foreign and local investors. The US not only from parameters such as GDP, Pur- in development of new technologies and prod- is able to attract large investment in R & D chasing power parity and the likes but also ucts.

because it enjoys a very good Intellectual

from the two parameters related to intellectual

property climate see (Fig.1).

Property. These are the strength of the Intel- The main motivation for investment in R & D is lectual Property Laws existing and the number to realize profits and promote newer technoloof patents filed in the country.

gies to capture the market. A strong national

In fact in the US, many Indians have made millions of dollars because of the friendly IP

20 CANVAS

Intellectual Property: India’s Key to Survive

regime which has been existing there.

tremely high. But this success of Indians is

that local companies are unwilling to invest

That is why we hear of persons like Kan-

restricted to Silicon Valley only; Indians in

in R & D when there is a significant

wal Rekhi of Exclean, Jagdeep Singh of

India played second fiddle to their counter-

amount of software piracy. Even in the US,

Infinera, Sabeer Bhatia of Hotmail fame

parts in California and could get less bene-

where the IP regime is quite good as com-

and

fits of IT revolution.

pared to other parts of the world, it takes

host

of

others.

Jagdeep

Singh

2-3 years for an IT company to realize

founded two Networking companies AirSoft and Lightera Networks; he sold them

Weak Indian IP Laws is one of the reasons

profit after it launches new products. This

both for $ 625 million, then teamed up with

why we do not have too many inventors,

shows that piracy has a chilling effect on

Drew Perkins and David Welch and devel-

but a tremendous intellect power. We have

the fortunes of a startup company. The

oped the world’s first integrated photonic

nobody to blame but our weak Intellectual

situation is worse in other parts of the

circuit, which has revolutionized the way

Property Laws.

world.

Networks. He attracted investment to the

Intellectual property becomes important

According to Prof. Mansfield who is a lead-

tune of US $ 90 million because the poten-

especially for small firms investing into

ing authority on the economics of techno-

tial of the technology developed was ex-

newer technologies. It has been observed

logical innovation and economic develop-

light behaves in Optical Communication

21 CANVAS

Intellectual Property: India’s Key to Survive ment, stronger Intellectual Property rights

also shows the strength of a company.

then India’s vast technical and scientific

not only goes had in glove with economic

Large global corporations like IBM, Canon,

manpower can help it to become a global

development and rising incomes, but is a

Mitsubishi, Sony Fujitsu, invests heavily

center in R & D and the next technology

direct and important determinant of the

into developing and patenting their prod-

revolution will happen right next to our

willingness for foreign capital to enter local

ucts and make big bucks by selling off the

door in India.

markets. In fact if India had the proper

technology or the services.

Intellectual Property Laws, perhaps it would be the holder of the largest Intellec-

As we sit on another slow down in world

tual Property and a more prospering na-

economies, its time to rethink and realign

tion.

strategy and focus on product development. The Indian companies should focus

According to a leading IP firm, if the US

on development and enhance their patent

level of IP protection exists a product will

portfolio to earn profits in coming future

be approved, developed and launched as

and this is the right time to look inward and

per schedule, but if the level of IP protec-

re-strategise.

Deepak Chauhan holds a bachelors degree in Electronics & Communication engineering from Jamia Millia Islamia in New Delhi and post graduate certificate in management from IIM Calcutta. He has over 9 years of experience in management and business consulting, helping organizations design and re engineer processes for business continuity and accelerated growth. He is currently a student of EPGP at IIM Indore class of 2009.

tion is that of China (Fig.1), then it will take 80 % more time to be launched. This

The 21st century will no doubt be defined

clearly shows that piracy rates keep the

by nation’s ability to innovate and harness

technology away from the market.

the power as this is directly going to affect their national prosperity and global influ-

Apart from pulling resources IP portfolio

∗

ence. If India adopts a good IP regime,

"I think there is a world market for maybe

Union internal memo, 1876

five

∗

computers." -- Thomas Watson, chairman of IBM, 1943

∗

cial value. Who would pay for a message sent to nobody in particular?" -- David Sarnoff's associates in

"Computers in the future may weigh no more than 1.5

response to his urgings for investment in the radio in

tons." -- Popular Mechanics, forecasting the relent-

the 1920's

less march of science, 1949

∗

∗

" I have travelled the length and breadth of this coun-

ble." -- A Yale University management professor in

you that data processing is a fad that won't last the

response to Fred Smith's paper proposing reliable

year." -- The editor in charge of business books for

overnight delivery service. (Smith went on to found

prentice Hall, 1957

Federal Express Corp.) "But what .....is it good for?'-- Engineer at the Ad-

∗

vanced Computing Systems Division of IBM, 1968,

∗

"There is no reason anyone would want a computer

"Airplanes are interesting toys but of no military value." -- Marechal Ferdinand Foch, Professor of

in their home." -- Ken Olson, president, chairman and

Strategy, Ecole Superieure de Guerre

founder of Digital Equipment Corp., 1977

∗

"Heavier-than-air flying machines are impossible." -Lord Kelvin, president, Royal Society, 1895

commenting on the microchip

∗

" The concept is interesting and well-formed, but in order to earn better than a 'C,' the idea must be feasi-

try and talked with the best people, and I can assure

∗

"The wireless music box has no imaginable commer-

∗

"This 'telephone' has too many shortcomings to be

"Everything that can be invented has been invented." -- Charles H. Duell, Commissioner, U.S. Office of Pat-

seriously considered as a means of communication.

ents, 1899

The device is inherently of no value to us." -- Western

22 CANVAS

ENTREPRENEUR’S QUIZ Designed by Ibis Associates

Are you the right type of group or individual to develop a business? This quiz is designed to show you the range of qualities which research on successful businesses shows are necessary to be an effective entrepreneur. Entrepreneurs require different skills at different stages of the business; this is why groups have more success than the lone individual. So, if you are a group, answer it as a group; if an individual as an individual. Do be honest. It is only worthwhile if honestly answered. Get a friend or someone else objective to answer it - we don't want to be responsible for the break up of relationships! If you are answering as a group, get an outsider who knows you all to answer. Don't think that this is the final answer. It is only a broad guideline, and designed to raise more questions than it answers. All types of individuals and concepts succeed against apparently insurmountable obstacles - as long as you are aware of them, this quiz will have fulfilled its purpose. The right person is only one element in the mix of the successful business. The right people have to have the right idea, and the right plan. This quiz is no substitute for the detailed planning which must be completed next. Start up businesses require a lot of planning and thought to get them right - don't skimp on it. Strongly Agree Agree

Question Can you accept a high level of uncertainty in your working day? Can you easily cope with disappointment? Can you sell? Do you have hands on experience of managing budgets? Do you have hands on experience of managing projects to time & budget? Are you happy to work long hours? Can you work without a large income in discomfort? Are you ambitious to create your own future? Will you listen to advice from anybody? Have a supportive networks of friends, family and expert advisors? Are you forward looking? Do you like dealing with new ideas? Do you take decisions easily? Do you find it easy to work with other people? Do you find that you can keep detailed records? Do you delegate easily? Do you like the details of monitoring progress? Can you manage meetings well?

23 CANVAS

Neutral

Disagree

Strongly Disagree

SCORES For strongly agree: Give 10 marks.

Food For Thought

For agree: Give 6 marks. For neutral: Give 4 marks. For disagree: Give 2 marks. For strongly disagree: Give 0 marks.

Analysis. Score 180: You and your group are too perfect! Get someone else to analyse your strengths and weaknesses Score 110-178. You and your group have the mix of the right qualities to become and entrepreneur. But remember that this is only the start of a long and difficult journey. You must have the right idea – check out the business concept quiz, and the right plan – which Business Plan Pro will give you – and then the right monitoring system for when the business plan is established Score 82-110: You have many of the right qualities to become an entrepreneur, but there are gaps which need strengthening. Think about building a team to help you achieve the balance of attitudes and skills that you need in an effective business. Score 36- 80: Becoming an entrepre-

ACROSS

DOWN

neur is probably not for you. Sit back

3 Grow weak and thin or waste away physi-

1 A hidden storage space for weapons or

and think about the demands that it

cally.

ammunitions.

will place upon you and your family.

7 A monument constructed to honour war

2 Edible bulb of an onion plant.

dead soldiers.

4 Of a moderate purple colour.

8 Malicious burning or destroying of property.

5 Adolf Hitler's German name.

10 The writing point of a pen.

6 Deprive of necessity and cause suffering.

13 The second largest of Jupiter's satellite.

9 A selfish person unwilling to give or spend.

14 A colourless liquid used in perfumery

11 An expanse of scenery which can be seen

Anagram of enroll.

in a single view.

15 Perform without preparation.

12 The outer and thinner of the two bones of

19 A quiet lull song intended to make child go

the human leg between the knee and the

to sleep.

ankle.

21 The capital of Honduras.

16 An iron that was heated by putting it on

22 A chamber in which piston moves.

stove.

23 An Example regarded as typical of its

17 A spring flowering shrub or small tree of

class. A bit of tissue or blood or urine taken

the genus crategeus.

for diagnostic purposes.

18 The condition of being unable to speak.

24 One of Santa's reindeer with shiny red

20 To growl of snarl as a dog does.

nose.

24 CANVAS

Prof. Abha Chatterjee

The Lost Horizon

C

ommunication changes across peo-

airplanes. Or everywhere where there are peo-

ple, climes and culture. It has recently

ple close enough in order to hear what one is

been strongly impacted by technol-

saying.

ogy. Then, how can we keep abreast of the changing ways in which we are expected to

This is true for all written communication as well

communicate – are there some universals or do

– not just the oral. It is hard to imagine writing to

we change our style and manner according to

one’s peer in all capitals (equivalent to shouting

the

verbally) just because the “caps lock” got

person

we

are

communicating

with?

unlocked and because one finds it expedient to By no means can we totally change ourselves

send off the email without taking the trouble to

like chameleons each time we communicate…

redo it.

can you imagine how many personalities we would have to become each day or even each

Similarly, is there a correct way to greet an ac-

moment?

quaintance when one is no longer a part of the team that was, an office colleague who is now in

We shall focus here, on one aspect that could

another department? I have often wondered

be universal yet changing…courtesy and polite-

whether it is too much of an effort to greet an-

ness, an essential part of any good communica-

other person? Both non-verbal and verbal greet-

tion. We may ask ourselves why in this century

ings can be brief but sincere. It is awkward to

we should be concerned with what was polite

just pass by and avoid eye contact.

and is no longer so, or what was accepted as a norm of behaviour (opening of doors for ladies)

Apparently, the survey of 35 cities in 2006

is now perceived as a western import in India -

showed that Asians in general were less polite

of doubtful vintage.

and Mumbaikars in particular, were the least courteous. There were responses to this pro-

Of course, it could be true to a certain extent,

testing that the three tests set were “western” in

given that more women are at the workplace

their criteria. To avoid cross-cultural blunders

and consider themselves equal in every way.

and to practice polite behaviour in any age or in

Opening of doors though, could be something

any given situation the rule of thumb could be to

anyone could do if another person is laden with

behave naturally and put the other person first.

things or even just behind one, when one is

This is the simplest definition of courtesy -

entering through a door. It may not be limited to

across time and boundaries.

gender at all in this day and time. It indicates a courteous attitude, nevertheless, appreciated by all.

If we take the cell phone and its usage in public places we are bound to be surprised at how it has changed every place and situation. If telephone etiquette exists then it should demand that the usage be limited to professional and short conversations - in lifts, staircases and

25 CANVAS

Prof. Abha Chatterjee is faculty in the area of General Management. She teaches Business Communication and Business Ethics. She has international as well as national research publications in refereed journals such as International Journal of Ethics, Teaching Business Ethics and IJTD. Her research interests are in the domain of cross-cultural studies. She regularly conducts Management Development Programmes and incompany training programmes in Managerial Communication and Business Ethics.

S

tart Playing Sudoku, if you

nal grid has some of the squares filled with

center. Again, you need to make sure what

want to become a manager.

the digits from 1 to 9 and the goal is to com-

you do align with what other teams (both in

Neither this is a marketing ploy

plete the grid so that every row, column and

higher management and lower manage-

nor a gimmick; it is a fact which

outlined 3 x 3 sub-grid contains each of the

ment) do which means the four blocks at

all the budding CEOs and managers should

digits exactly once. A valid puzzle admits

the four corners (2 TOP CORNER GREY

know.

exactly one solution.

BLOCKS AND THE 2 BOTTOM CORNER

Well the general opinion about the game -

As you play this game, making strategies to

"Oh it is just a fashion”, "Impress people

fill those blocks, you will find an association

Each number in Sudoku belongs to a slot in

around you", "It’s just filling up some empty

between Sudoku and management. Picture

the block, and similarly each member

boxes with digits, so nothing really great

it like this - the central block (BLUE BLOCK)

(number) in the team needs to know what

about it”. But that is what this article is

represents the team you are managing in

their responsibility (slot) is. There are also

about, to show you the hidden qualities of

your organization.

others associations - such as the need to

LIGHT GREEN BLOCKS).

rethink

this game. I am sure after reading this article, the very perspective about this game

For assumption purpose, place yourself in

will change.

the role of a middle level manager. Upper

strategy

and

move

resources

(numbers) around etc

center block (WHITE BLOCK) represents

The very fact that Sudoku has a unique

Let’s recap of what we already know about

the management team that you report to

solution, the player is focused about the

this game and a brief intro for those people

and the lower center one (DARK GREEN

objective. Similarly in an organization the

who are planning to work out their grey cells

BLOCK) represents the team that report to

managers should have clarity on the organi-

in Sudoku.

you. Just like the numbers in Sudoku need

zation’s mission, vision and values. Once

to align vertically and horizontally, you and

the manager is clear about them, he can

Well, Sudoku itself is believed to be an

your team need to ensure that enterprise

easily motivate his team to achieve the

abbreviation of a Japanese phrase “Suji wa

strategy aligns up and down the manage-

objectives.

dokushinsha ni kagiru” meaning “the digits

ment chain, and that members of your team

must remain single”. So Sudoku or Su Doku

work toward executing the strategy. Your

This puzzle teaches us that as managers,

was a safer bet! Basically, the name refers

team also needs to coordinate with peer

we should not take non-calculative risks.

to the fact that only of each digit can occur

teams and this would be the two other hori-

There is only one place for any number in

in each row, column or 3 x 3 box. The origi-

zontal blocks (LIGHT BLUE BLOCKS) in the

that puzzle. Though two or three options/

26 CANVAS

Sudoku Manager locations will be available, you have to do a

erroneous numbers will be derived from the

lot of permutations and combinations in

first. Erroneous numbers will be consistent

2. Think – Sudoku is a logic based game

logical thinking to get the correct place for

with one another, creating a false confi-

that requires that the player use local rea-

that number. This is also true with real life

dence that all is well. Only at the very end

soning. Life is the same way. Use logical

situations. Before taking any speculative

will it become obvious that a mistake was

reasoning in your approach to management

risk in business, analyze those risks thor-

made. If a mistake is found, it may be nec-

and business problems. There is always an

oughly and then reach a solution. You se-

essary to start over, re-verifying every num-

answer.

lect a number, which may look correct, be-

ber. The analysis of failure in business sce-

cause of another logic leading to that space.

narios must comply with a more complex

3. Beware of illusions – Things are not

reality, and one error may lead to erroneous

always

conclusions. The mistake may not be obvi-

teaches this in the simplest of ways. This is

But if the logic itself is wrong, you must be prepared to change your mindset (in this

what

they

seem

and

Sudoku

not a game that requires math however it “looks” like it is a math inspired game. Things are not always what they seem to be.

4. Look ahead – In Sudoku part of the game is to try and determine where the future numbers will go. In an organization we should plan for the future and plan ahead so that we meet our targets in time.

5. Remember where you came from – Backtracking is a huge part of the game of Sudoku. If you don’t know which numbers you have placed, you can’t move on. It is the same way in business too. If you don’t know case, the logic itself) and erase the number

ous, even at the very end. So be careful

where you have come from, you will not be

to move to its original location. In the same

with each step. Avoid reading unwarranted

able to determine where you are headed to.

way, if the manager’s ideas and thoughts

significance into an observation that sup-

are not fetching desired results in the de-

ports a desired output. On the other hand,

sired time frame, he should not hesitate to

do not discount an observation that does

change his methodology to reach the goal.

not fit an otherwise satisfying conclusion.

The Managers learn flexibility from this.

Trust that all the facts will fit and make

We are human beings and we are bound to

sense when the problem is understood.

do some mistakes .As a manager there are

6. Sometimes you have to scan the horizon – Scanning in Sudoku is done for a simple reason, you must know the lay of the land. In day to day activity of a manager, you also have to “scan” before making a move so that you know what you are dealing with. In the simplest of terms, look be-

times when we commit mistakes and fail in

Finally a manager needs a drill down on the

achieving the desired targets/ goals. So it is

group of lessons that Sudoku teaches and

very important that a manager does a fail-

which can be applied to every day life and

So what are you all managers waiting for,

ure analysis and makes sure that from next

how we should be living it.

start “Sudokuing” and sharpen your man-

time onwards he will not commit the same

fore you leap.

agement skills.

mistake. To quote Akio Morita, the co-

1. Accept the challenge in your business

founder of Sony Corporation – “Don’t be

– Sudoku is one of those games that refuse

afraid to make a mistake. But make sure

to be ignored. It lures you in and then does-

you don't make the same mistake twice”. In

n’t let go. It is exciting and you do not give

Sudoku, a square filled in incorrectly will go

up until you have cracked the solution. So

unnoticed. The process will continue nicely,

the first lesson Sudoku teaches is to accept

happily building on false information. More

the challenge.

27 CANVAS

Riddhi Chakravorty holds a bachelors degree in Mechanical engineering from R.V.College of Engineering, Bangalore. He has over 5 years of experience in Global IT projects with expertise in ERP consulting, managing clients and custom software development. He is a 6 Sigma Green belt certified professional. He is currently a student of EPGP at IIM Indore class of 2009.

Leadership

Leadership Leadership Leadership

C

Clearly state the approach that needs to

productivity,

innovation

hak De! Just a few months ago

be followed to realize the vision.

achievements. You're operating at such a

these two words entered our

Communicate- The “Why” & “Benefits” of

high level of efficiency that you're giving

psyche as being synonymous with war cry.

the direction

budget back to the corporation - and

The movie just shows how, SRK, trans-

Make the team understand why we have

you're still beating your goals.

formed a bunch of girls, who were playing

taken a certain approach out of the possi-

You're

in their individual silos and looking for

ble alternatives. What are the pros &

dreamed could be achieved. And not only

personal glory, into winners. In fact, Chak

cons ? Enroll and engage in conversation

that, but it's actually easier than you

De has become a popular slogan for moti-

and communication. Sit back. Listen. Take

thought. Because the classic command

vating and exhorting people, be it in corpo-

in as much as you can. Look for trends

and control management model - which,

rate boardrooms, sports or any other in-

and themes. Find out where the possibili-

contrary to popular belief still applies even

dustry. Chak De is the new management

ties are - the connects and disconnects

in our most progressive 21st century com-

mantra.

that you can effect.

panies - is no longer in play. Sure, controls

The role SRK played in this movie epito-

Objectives & Goals- How much, by when

are in place. Sure, you're solving problems

mizes “Leadership” for me.

Define the qualitative and quantitative

that arise.

To put it formally, Leadership may be de-

objectives and goals. Make sure you set

But it's not just you alone. You have the

fined as:

realistic goals and keep raising the bar

people in whom you've put your trust - and

achieving

what

and

you

revenue

always

who have happily and safely reciprocated - to help you create organizational success. How to be a good leader? It’s pretty simple if you think through the answers to following questions: Q: How do you become a great cricketer a.k.a Sachin Tendulkar? Q: How do you become a great

designer/developer/

tester? Q: How do you become a great parent?

So, let me ask again, how do you become a great Leader? “The ability of an individual to influence,

higher over time. Put in enough checks

You guessed it, Practice. Just practice

motivate and enable others to contribute

and balances to keep you on track.

great Leadership, day in, day out, over a

towards the success of the organization."

Team Work

sustained period of time! Well, unfortu-

So what do Leaders do? Leaders help in

To achieve all of the above you need a

nately that’s the truth. The world is yet to

defining the following:

team. Whether the group you oversee is

see a magic pill for developing leadership

Vision - What Success Looks Like

called employees, associates, co-workers,

skills. It’s an arduous task which needs to

Define the vision, the dream that you set

teammates or anything else, what they are

be practiced every day.

out to achieve. It’s important to get a “buy

looking for is someone in whom they can

However, the following Leadership frame-

in” from all the stake holder's. This comes

place their trust. Someone they know is

work (Be, Know, Do) does help to under-

from conviction, a strong belief in your

working for the greater good - for them and

stand the attributes of a leader.

abilities, a desire to succeed come what

for the organization.

BE KNOW DO

may.

And the way you see it is that your organi-

1.

Direction – Show the way

zation is transcending all previous quality,

28 CANVAS

BE a professional. Examples: Be loyal to the organization, perform

Leadership

2.

3.

4.

5.

selfless service, and take personal

cious of tradition. They seek out the truth

how does a company become better

responsibility.

and make decisions based on fact, not

known with limited resources? By becom-

BE a professional who possess

prejudice. They have a preference for

ing an industry thought leader.

good character traits. Examples:

innovation."

Summary

Honesty, competence, commitment,

The table below summarizes some of the

Great leaders are instrumental in shaping

integrity, courage.

traits associated with Leaders and Man-

the destiny of a team, an organization or

agers.

a country. History is replete with facts on

strengths and weakness of your

Thought Leadership

how the influence of few super leaders

character, knowledge, and skills.

Before I wrap this up, I must touch upon

changed the world around us. Good lead-

KNOW human nature. Examples:

the subject of “Thought Leadership”. This

ers are made not born. If you have the

Human needs, emotions, and how

is much talked about today and in fact, is

desire and willpower, you can become an

people respond to stress.

a discipline in its own right. Thought

effective leader. Good leaders develop

KNOW your job. Examples: be profi-

leader is used to describe a futurist- a

through a never ending process of self-

KNOW

your self.

Examples:

study, education, training,

cient and be able to train others in their

Leading

and experience. The best

Managing

way to learn to lead is to

tasks. 6.

KNOW your organiza-

Moving between paradigms

Working within a paradigm

Doing right things

Doing things right

Creating improvement

Managing processes

Creating leaders & developing people

Focus on control

Breaking rules

Making rules

Taking risks

Minimizing risks

within all of us. It’s time we

tion. Examples: where to go for help, its

discover it.

culture, who the unof-

7.

DO provide direction. Examples: goal set-

C’mon be a leader. Chak De!

ting, problem solving, decision

making,

planning. 8.

DO implement. Examples: communicating,

9.

coordinating, supervising, evaluat-

person who is recognized by everyone for

ing.

the innovative ideas which have a deep

DO motivate. Examples: develop

impact on the work in hand or the industry

team spirit, train, coach, counsel.

at large. Thought leadership is an increasingly vital driver of business suc-

Leading vs. Managing

cess. Its aim is to engage people with

Most of the differences related to Man-

companies through innovative ideas. A

agement and Leadership arise out of the

distinguishing characteristic of a thought

different perspectives. Managers think

leader is "the recognition from the outside

incrementally, while leaders think radi-

world that the company deeply under-

cally. "Managers do things right, while

stands its business, the needs of its cus-

leaders do the right thing." This means

tomers, and the broader marketplace in

that managers do things by the book and

which it operates.”

follow company policy, while leaders

Thought leadership can be really effective

follow their own intuition, which may in

for small companies. Small companies

turn be of more benefit to the company. A

have to work hard to get visibility, espe-

leader is more emotional than a man-

cially when the market is crowded with

ager . "Men are governed by their emo-

competitors all vying for the same busi-

tions rather than their intelligence" . This

ness. In high tech they face the added

quotation illustrates why teams choose to

dilemma that big companies don’t want to

follow leaders.

buy from a small unknown vendor, and

"Leaders stand out by being different.

the vendor can’t become large and repu-

They question assumption and are suspi-

table unless it has major customers. So,

29 CANVAS

Sameer Tikoo is an accomplished telecom software professional with over 12 years of expertise in Software Testing. He is currently working with GENBAND (formerly Baypackets Technologies) as Senior Engineering Manager. At GENBAND, he is responsible for building the systems test group and establishing test processes and practices. He provides leadership to the System Test group in testing of NextGen telecom products in VoIP, NGIN and IMS domain. Prior to GENBAND, Sameer worked with Hughes Software Systems and Bharti Airtel. Sameer holds a Bachelor of Engineering (E&C) degree from Karnatak University. He is currently a student of EPGP at IIM Indore class of 2009.

Leadership

ficial leaders are.

do it. There’s a leader

Thought

Crisis Unites

Humanity While Peace Fosters

Discord D

issent and dissension are the forays of minds when the element of existential stake is absent. Whenever the existential identity

of humanity is put to stake, it has an uncanny ability to muster up an invincible unity and put to rest the gravest of dangers and peril. His-

tory is eloquent in its testimony that whenever the citadel of human existence is apprehended to be crumbling, humanity brings itself forth as one, undivided and resolute, and the might that conjures out of such unison spawns forth new and visible ideas to a way out of the streak of crisis and catastrophe, of gloom and doom. It therefore, may seem paradoxical that crisis unites and peace tends to foster disunity. However, that peace tends to disunity is not exactly an apt conjecture; on the contrary, it breeds exoticism. Crisis leads to focused but restricted evolution and impinges lessons out of necessity; there is little scope for difference of opinions on account of time crunch and all discordant notes are crushed. Peace, however, is all embracing; it heeds to opinions and suggestions from all quarters. Thus peace, even though seemingly discordant, is more accommodative and really representative of all opinions. It is much like democracy where every voice is heard and every head counts. The prime difference between peace and crisis is not the qualities they impart to humanity in form of unity or discord; the dichotomy really lies in the way a change is affected. Crisis is precipitate while peace is gradual in affecting a change. The gradual path of peace is marked by dissent and arguments, which culls out the best from differing opinions and enriches in a more wholesome way. This might be apparent as discord but is in fact plurality. It is this plurality in thoughts, opinions, culture, religion and society that every nation covets and which can only be visible during the reign of peace. Together, therefore, both peace and crisis yield the broad incentive to the human race to evolve and progress, the hallmark of life.

Niraj Mohan works as software consultant with Infosys Technologies in Bangalore. He holds a degree in engineering from Dhirubhai Ambani Institute of Information and Communication Technology, Gandhi Nagar. A prolific writer he has won many awards for writing including the President of India’s Gold Medal for Essay writing in 2001.He can be reached at [email protected]

30 CANVAS

A

customer relationship management (CRM) sys-

Internet.

tem, by its simplest definition is a process to

Erlang B is a modeling formula that is widely used in call center

compile information that increases understanding

scheduling.

of how to manage an organization’s relationships

Personalization is the process of tailoring Web pages to individual

with its customers. In this simple a CRM system

users' characteristics or preferences to enhance customer service or e-commerce sales.

consists of two dimensions, analysis and action. The market for customer relationship management (CRM)

Predictive analytics is the branch of data mining concerned with the

solutions has changed significantly during 2006-2007. Consolidation

prediction of future probabilities and trends.

of leading CRM vendors intensified competition from well-capitalized

Second Life is a 3D virtual world where residents can design and

business applications players, and the rise of new software-as-a-

build residences on land that they own or rent from either Linden

service (SaaS) deployment options (salesforce.com) mean enter-

Labs or other residents.

prises must rethink their CRM solution strategy. Enterprises will

Speech recognition is the ability of a machine or program to recog-

continue to make significant investments to improve their customer-

nize and carry out voice commands or take dictation.

facing capabilities. However, the need to extract additional value

*(ISM is a major CRM consultancy firm based in Bethesda, MD).

from past expenditures and a lack of game-changing innovations

Vendors are listed alphabetically

from vendors will result in moderate market growth. There are some familiar names in Forrester Research Inc.'s latest rankings of enterprise CRM suite vendors. The Cambridge, Mass.-

Let us get some acquainted with a few buzzwords in CRM: -

Apex is a development platform for

ISM's top 15 enterprise CRM vendors

ISM's top 15 SMB CRM vendors

building Software as a Service

Amdocs CRM v. 6 -- Amdocs Ltd.

Ardexus MODE v. 5.5 -- Ardexus Inc.

(SaaS) application on top of Sales-

C2 CRM v. 8.0 -- Clear Technologies Inc.

C2 CRM v. 8.0 -- Clear Technologies Inc.

force.com's CRM functionality.

CMS/Oncontact V, v. 5.2 – OSC

CMS/Oncontact V, v. 5.2 -- OSC

ExSellence 5.0 -- Optima Technologies Inc.

Goldmine v. 7.0.3 -- FrontRange Solutions.

Firstwave CRM v. 3.1 -- Firstwave Technologies.

Maximizer Enterprise -- Maximizer Software.

growBusiness Solutions -- Software Innovation

Microsoft CRM 3.0 -- Microsoft Corp.

Infor CRM – Infor

NetSuite CRM v. 11.0 -- NetSuite Inc.

mySAP CRM -- SAP AG

Powertrak v. 8.02 -- Axonom Inc.

cost associated with convincing a

Onyx v. 6.0 -- Onyx Software Corp.

Relavis CRM 7.0 -- Relavis Corp.

consumer to buy your product or

PeopleSoft CRM -- Oracle/PeopleSoft Inc.

RightNow CRM v. 8.0 -- RightNow Technologies.

service.

Pivotal v. 5.9 -- Pivotal Corp.

Sage CRM 100/200 v. 6.0 -- Sage Software

Customer valuation is a scoring

Salesforce.com -- Salesforce.com Inc.

Sage SalesLogix v. 7.0 -- Sage Software

Saratoga CRM 6.5.3 -- Saratoga Systems Inc.

Salesforce.com -- Salesforce.com Inc.

company should target in order to

Siebel 8.0 -- Oracle/Siebel Systems Inc.

Salesplace 2006.3.2 -- Interchange Solutions

maximize profit.

Tibco Process RM v. 9.0 -- Tibco

SalesPage CRM -- SalesPage Technologies LLC

E-commerce is the buying and sell-

update 7.0 -- update software AG

Siebel CRM OnDemand -- Oracle/Siebel Systems.

Business

process

outsourcing

(BPO) is a market trend that refers to the contracting of a specific business task, such as payroll, to a third-party service provider. Customer acquisition cost is the

process used to help a company determine

which

customers

the

ing of goods and services on the

31 CANVAS

CRM: Was, Is and Will be There based research firm named Siebel CRM

2010, up from $8.4 billion this year.

(from Redwood Shores, Calif.-based Oracle

Enterprise buyers should:

Corp.) and Germany's SAP AG as the lead-

In 2008, CRM investments will begin to shift

ers in its latest Wave report on enterprise

toward business-to-consumer e-commerce

CRM suites.

technologies, online communities, virtual

1.

grades; 2.

management. Google will enter the CRM

moil," said Bill Band, principal analyst at

market. (Gartner research)

Focus on customer-process optimization;

contact centers and marketing resource "The CRM market has been in a lot of tur-

Invest selectively in high-value up-

3.

Demand support from vendors to optimize existing CRM infrastructures.

Forrester and co-author of the report. "Some may say [Siebel and SAP] are the

The factors that are driving are: -

IT vendors should:

only two vendors people think about. But

1.

that's not really the case. There's a wide 2.

range of other players out there."

Forrester separates the CRM market into 3.

three categories:

•

Enterprise CRM suites

•

Midmarket CRM suites

•

CRM specialty vendors.

Up selling/ Cross-selling and increas-

1.

Stretch harder to innovate.

ing wallet share.

2.

Focus on distribution and support.

Companies spending more on increas-

3.

Add value in new offerings such as

ing productivity of client facing employ-

CRM advisory services, hosting, and

ees.

SaaS.

Increasing

customer

experience Sources: Forrester, Gartner, Nasscom reports.

In the enterprise category, Forrester evaluated 13 applications. The Siebel and SAP applications emerged on top, but there were plenty of applications Forrester considered strong contenders, including Infor CRM,

C

Epiphany, Microsoft Dynamics CRM, Onyx CRM, Oracle's E-Business Suite CRM,

R M

PeopleSoft CRM and Siebel CRM OnDemand, RightNow, and Salesforce.com.

The Siebel and SAP products have a broad range of functionality, industry-specific capabilities and global support organizations, giving them the most complete applications. But customers face lengthy time-to-value, a lack of flexibility in changing business processes, and higher costs, according to the report. Meanwhile, software as a service (SaaS) vendor Salesforce.com and RightNow are making inroads in the enterprise thanks to the rising popularity of the deploy-

through service oriented architecture.

GARTNER’S MAGIC QUADRANT

ment model, but they lack the breadth of functionality.

Microsoft,

Forrester

con-

cluded, is capitalizing on its platform to capture CRM business but lacks functionality in such areas as e-commerce, channel

A survey of CEOs from Accenture found that their top four priorities are 1. 2.

management and industry-specific business processes.

Acquiring new customers, Increasing customer loyalty and retention,

3.

Increasing revenue from current customers

WHAT LIES AHEAD? Despite a wave of consolidation in recent

4.

Increasing customer service capabilities.

years, Forrester expects CRM spending to climb. The firm predicts the market for software and services will reach $10.9 billion by

SUGGESSTION FOR BUYERS AND VENDORS.

32 CANVAS

Raja Ganguly holds a bachelors degree in Electrical engineering from R.V.College of Engineering, Bangalore and is completing his Post Graduate Program in Management from SP Jain Institute Management & Research, Mumbai. He has over 5 years of experience in Customer relationship management and sales. He is currently joining IBM as a CRM consultant.

S U P P LY C H A I N M A N A G E M E N T

I

ndia is on the verge of the retail revolu-

Third is the fragmented retail structure,

the overall improvement in stock-outs, lower

tion buoyed by the faster economic

wherein more than 96% share of the retail is

inventories,

growth and a new announcement eve-

accounted by the unorganized outlets, does

supply base, it may look attractive. Already a

geographically

concentrated

ryday day of corporate entering Indian

throw up a challenge for the supply chain

large Indian corporate with retail ambitions is

organized retail. While, we get to read a lot

and logistics efficiency. Resources required

talking of having a dedicated fleet of aircrafts

of activity at the front end or the end con-

to service more than 15 million outlets

for their logistics and supply chain infrastruc-

sumer interface, but very little is written

across India is a real challenge and this

ture.

about the challenges at the back end. In

could be major hindrance for manufacturers/

I also see a major growth in the International

retail, there are three core activities in the

suppliers in reaching out to every nook and

logistics opportunity. With major growth in

whole

Production-Movement-

corner of the country. India with its inherent

exports in textile sector, auto components

Selling. In this article, we will focus on the

weakness due to highly discreet demand

and there are sectors like fresh fruits and

“Movement” activity which stands for the

centres, the industry is plagued with many

vegetables, India with its vast but underuti-

supply chain and logistics functions and

issues like higher inventory, stock outs,

lized farm base, may become the vegetable

which is the key for setting-up of successful

shrinkages, poor supplier-buyer relation-

market for the developed country. To estab-

and sustainable long term retail venture

ships, higher logistics costs resulting in loss

lish ourselves as an efficient supply base, we

of sales with higher distribution costs.

will definitely need a much more responsive

process,

supply chain.

The total Indian logistics market is estimated to be about USD 100 bn, and is expected to

However, some initiatives taken by the govt.

be growing at the rate of more than 10% per

of India in the recent times shows its inclina-

There is also a great potential for third party

annum. However, as a percentage of total

tion to remove some of these distortions.

logistics companies in India. At the moment

cost for manufacturing it is in the range of

Introduction of VAT regime in India, replac-

the 3 PL market is estimated to be of USD

30%, which is very high as compared to the

ing the existing central and state taxes is one

0.3 bn but is expected to be growing at 20%

developed economies where it is in the

of them, VAT is now present in almost all the

per annum. In developed economies like US,

range of 15-20%. This is due to highly ineffi-

states and we may actually see abolition of

10% of the logistics is outsourced, compared

cient supply chains which are longer and

CST in the near future as well.

to the less than 1% in our country.

for the same. First is the legacy of license

I would also like to mention the Govt’s initia-

Indian industry needs to improve perform-

raj, where in government’s fear of capitalism

tive of laying a vast network of national high-

ance on several supply chain and logistics

resulted in sub-optimal and smaller installed

way cutting across states. This will definitely

parameters. In case of transportation, they

capacity which results in higher sourcing and

help not only in democratization of invest-

need to evolve from trucking to fleet man-

supply chain costs for the manufacturers and

ments across states but also facilitate effi-

agement systems and optimization of costs

retailers.

cient movement of goods. In the same con-

with 3PL companies. Supply chain need to

complicated and there are multiple reasons

text the decision to allow private container-

be integrated with the manufacturers and

Second unique problem in Indian context is

ized operators other than Concor will also

distributors leading to optimal investment in

the multiple tax structure based on the

bring companies with world class expertise

working capital. We need companies, who

change of geographies. The Central sales

to invest and regulate the convoluted supply

can see the larger picture and think supply

tax levied by the govt. gives dis-incentive for

chain structures

chain as not just a cost centre but also as a strategic initiative, which could enable them

supplier, who would like bring logistical efficiency by optimizing their distribution routes.

Another key activity that I am following very

It seems to be ridiculous that companies

closely is the opening up of the domestic

have to bring an intermediary agent to avoid

aviation sector. I foresee that the modern

paying the tax. A typical national supplier of

retailers will combine rail-road-air logistics to

goods have between 15-20 clearing and

derive efficiency. Even thought the domestic

forwarding agent, to manage their stocks.

air logistics may look costly, but looking at

33 CANVAS

to differentiate them in the years to come.

Purnendu Kumar is a post graduate from IIM A. He has vast experience in Consultancy in the Retail domain. He is currently working as Associate Director in Technopak.

A C a s e St u d y — P r o f . V K G u p t a

This paper refers the different financial dimensions, which affect managerial decisions of HRD of Corporate. The crucial issues of Accounting like Human Resource, Social, Environment, Productivity, Efficiency, and Value Added may be used as managerial tools of HRD decision making and; to understand Audits of Human Resource, Social, Environment, Productivity, Efficiency and Value Added are essential to take fair decisions of HRD.

INTRODUCTION The equation that comes to mind when thinking about an organisation is:

Profit = Revenues - Cost

that one of the shareholders of the or-

RECT costs in the social balance

ganisation is the society and the organi-

sheet/income statement are attribut-

sation gains more if it gives back to the

able

society what it borrows from it…."

company and hence the lofty ideals

It fundamentally has got three levels:

of doing something for the society is

•

actually a eyewash)

community and general public

If the organization is using any tool to further any of the above, then it is perfectly justified in doing so, but if it is imputing some higher motive (environmental, social etc.) in doing

Costs and benefits to employees,

•

to

the EMPLOYEES

of

the

Difficult-to-quantify costs

There are fundamentally two problems with

To substantiate my viewpoint, I take the

the idea of social accounting. These are:

example of

•

statement of MMTC :

Notional cost (Also most of the DI-

so, then it is not being true to its sharehold-

Social benefits and costs

the

typical

social

income

Attributable to :

ers. 1

Medical facilities

Employees

MENT, without it, all justifications falls flat.

2

Children's education, benefits, allowance

Employees

The tool is powerful if there can be objective

3

Scholarships

Employees

4

Family Planning

TRUE SOCIAL BENEFIT

5

Canteen, housing, Training

Employees

6

Activities

Employees

7

Taxes

Statutory requirements

8

Contribution to state govt.

Employees

9

Research

For own benefit (products patents, royalties)

10

Provident Fund and bonus

Statutory

Objectivity is the hallmark of MEASURE-

quantification of the relevant (???) variables. Now, we evaluate the different financial dimensions, which affect managerial decisions of HRD of Corporate.

SOCIAL ACCOUNTING AND AUDIT The concept of social accounting is "……

34 CANVAS

Financial Dimension For HRD Decisions Why do I say so? All the employee-costs mentioned are actually a part of

the com-

pensation package of the employees. Any benefits (motivation, morale) that accrue will go towards improving the company's own bottom-line. The "profit motive” is the idea driving these costs. I do not see a greater social objective in them. Also most of these costs are based on the premise

that

"borrowed" from

the

company

has

the society i.e. Labour,

material acquired. I frankly do not see that in a free-market this argument is too relevant. Each factor of production goes to the avenue that pays it's fair price.

If increasing the motivation of the employees (through compensation) becomes the

uniform efficiency

SOCIAL AUDIT The social audit can be used as a correc-

social beneficiaries are, a company can

to the society (NOT THE EMPLOYEES) company

can

follow

two

ap-

proaches :

•

Fix a particular percentage of the

Standard

costs of

•

activities (recruitment, training

Present value: The potential earnings

tion of events and experiences which do not

over his life/

submit to number crunching even at its

organisation. This is the most popu-

best. However, it does provide, even in its

lar method and has several modes

rawest form, a sense of the outputs, inputs,

to evaluate the human capital.

of

the

employee

discounted

employment in the

costs, incomes, and progress that a company is making. The social audit remains a

The weakness in accounting for human

central mechanism for providing a self-

resources is that is SUBJECTIVE to say

portrait for a company enabling it to monitor

the least. There are at least three funda-

its objectives and goals against its opera-

mental

tional reality.

present value approach that needs to be

problems

with

the

discounted

tackled before we accept the figures that it throws up :

•

Subjectivity

in the evaluation of

future earnings (Extrapolation Human Resource Accounting is based

human resources of the organization. It helps the management in better utilization, planning and management of human resources. It also helps the HR function in taking better decisions : Recruitment,

Promotions,

of

the present skills and knowledge into the future and thus estimating)

•

Probability of the person staying in the organisation

•

The rate of discounting the earnings

Compensation

net income to professional, reputed

strategy, Retention strategy and going in

I think that subjectivity WILL remain in

charitable organisations (Missionaries

for

accounting for human resources, but the

of charity, Helpage India etc. ) This

retirement schemes etc.

special initiatives

like the voluntary

degree can be minimized. Each com-

has the double benefit that if the more the company does well, the

more the society benefits.

•

Standard cost:

not be an acceptable vehicle for quantifica-

on the concept of monetary costs to the

If we really want to contribute something

the

•

etc.) are calculated for a grade.

any moment in history. The social audit may

COUNTING AND AUDIT

value added com-

incurred

most important or politically significant at

compensation

pensation models etc.)

cost

the

HUMAN RESOURCE AC-

based compensation,

the

infer quite accurately what it considers to be

can be achieved by new and scientific (competency

Historical Cost:

in employing the employee to-date

tive ethics checklist. By examining what its

objective of social accounting, then it

strategies.

•

pany must identify specific variables for How

do

we

quantify

Human

re-

the organisational

context and

for

the

sources ?

different levels. (e.g. in the fast-changing

Undertake specific projects (adopting

There are several approaches :

software

a village near manufacturing facility,

Some of the popular approaches are :

becomes an important variable in esti-

100 % literacy of a town etc.)

•

mating future earnings) The HR depart-

Replacement: you

see

the

cost

incurred in replacing (recruiting, training) an employee

of

another

35 CANVAS

with

industry,

willingness

to learn

ment must take a lead in this direction as doing it does lead to better HR deci-

Financial Dimension For HRD Decisions

Resource-Based View

OLD PARADIGM

Premise 1: Difficulty in access to resources

Premise 2: Creation of Entry barriers

Information Revolution

Globalization Trade barriers reduced Access to capital Access to technology

Improvement in IT Easy access to information Greater exchange of ideas

ACCESS TO RESOURCES EASIER

OLD BUSINESS MODELS REDUNDANT (premise 2 and 1

THE CHANGES

All resources including explicit knowledge can be accessed & copied Parity in competition leading to need for a new basis of competition

SUPERIOR VALUE PROPOSITION IMPLICIT KNOWLEDGE: know-how, know-why, know-what, know-when NEW PARADIGM

Customer Knowledge Adaptation Experience

Insights

Innovation

Ideas

Integration

Constant learning & adaptation

Collective Wisdom

Judgment

PEOPLE Knowledge-Based View

36 CANVAS

Knowledge Management

Financial Dimension For HRD Decisions sion making.

more

HUMAN RESOURCE AUDIT

Also by encouraging people to keep their

Compensation systems based on added

environments

value

should be performed to determine where reductions or expansion could be made. The

sensitive

about

clean

will

the

environment.

help

in several

ways.

Relating development costs to the added value

decision to reduce or expand in certain areas will depend on the industry and the reasons

ENVIRONMENTAL AUDIT: as

for the problems.

such there are no generally accepted standards regulating the nature of such audit

ENVIRONMENTAL

AC-

than one :

work. There is, however, growing pressure on companies to conduct environmental audit, of

VALUE-ADDED AUDITing is to maximize the difference between the costs and benefits of the internal audit function. Value-added auditing is used in terms of risk reduction; stages of the audit; customer satisfaction, and customer-driven quality.

COUNTING AND AUDIT

which there are two competing and incom-

Environmental accounting is a method for

patible views - audits as managerial aid and

improving business decision making in recog-

audit as an independent critique of environ-

PRODUCTIVITY AND EFFI-

nition of the increasing environmental chal-

mental performance. In the absence of stan-

CIENCY AUDITS

lenges and opportunities facing business

dards, the views of particular practitioners will

today. It does this by identifying hidden or

have a decisive effect on the form of the au-

misallocated internal and external environ-

dit. The most widely used auditing procedures

mental costs and allocating them to particular

used are site visits, interviews with manage-

products or processes. It helps to :

ment, observation of procedures and inter-

•

Better discern opportunities to minimize

views with client staff. A shift in regulatory

compliance costs and reduce operating

style has stimulated experimentation with new

costs

instruments of control, including voluntary

•

Reduce costs through energy and re-

emphasize a management control system.

source conservation

•

schemes for environmental auditing which

Subsequent attempts to define the relevant Aid strategic decision making regarding continuing or abandoning a particular product or process

knowledge base of environmental auditing and to accredit verifiers have created a stage

The productivity and efficiency areas are the exclusive preview of ment. Again

How will it lead to better

HR decision

making is that by managing the work environment

(cleaner and greener work-

places) it will raise the efficiency and productivity

of the employees. Also they

instill a sense of pride in the employees which leads to better motivation.

processes

the

organisation

environ-

mental accounting just because it has to because of the compliance necessities and not because it GENUINELY wants to care

cost plan-

ning costs

(compliance in

lost

costs

vs.

opportunity

goodwill

and

transaction

costs). But if the organisation truly wants to care for the environment, then, the HR

etc.)

A

performance or efficiency audit can just be the starting point of a BPR (Business process Reengineering) in the organisation. Two things need to be kept in mind when dealing with the conventional

•

Comparison

with

ratios :

the industry

stan-

dards

VALUE ADDED ACCOUNT-

Capacity of the unit (the link with capacity planning)

be constantly measured and it helps in

ING

taking the HRD decisions pertaining to :

Value added accounting is one of the most

⇒

useful tools of the new millennium. With resource and entry barriers going down in the

place

(WTO, LIBERALISATION, GLOBAL-

added value. A self-formulated-model incorporating the changes is proposed below which lays a major emphasis on the manage-

Training (of employees of low productivity)

⇒

world and with the massive changes taking

Variable pay determined by the productivity and performance

⇒

Determining the segments of the company that are less productive and then concentrating there

One more function of this tool is that it is especially helps in

ment of Knowledge.

helpful for HRD managers and QUANTIFYING

the HR initiative.

The HR manager can use the BEFOREThe added value is a very simple concept: Added value by the organisation = Value of the final goods and services produced by the

AFTER technique to compare the productivity and justify the initiative to the top management.

organisation Value of Inputs that the organisation takes in producing goods and services

department must work towards changing the MINDSETS of its employees to be

organisation

The productivity of the employees needs to

for the environment? It is perfectly understandable to use the tool for

the

•

ISATION, IT PROLIFERATION, INTERNET),

employ

in

claims.

the only metric of competition will be the Does

context

tion costs in terms of politics, systems and

The other issue is that of the WORK

ronment which is a relevant issue for HR.

the organizational

(degree of automation, hierarchies, transac-

on which accountants can promote their

ENVIRONMENT and not the generic envi-

the HR depart-

CONCLUSION To conclude we can say that Financial State-

HR can benefit by this tool in more ways

37 CANVAS

ments like Balance Sheet and Profit and Loss

Account are not the only tools which are to be considered but it is equally important that a corporate should consider other HRD dimensions like Social Accounting, Human Resources Accounting, Value added Accounting, Environmental Accounting, Productivity and Efficiency Accounting etc. as tools in today’s context for managerial decisions.

These

dimensions must not be ignored.

!! I am ! e p o N 76543 8 5 4 9 9

REFERENCES 1.

H.D. Vests. ‘Invests in SQL Financials’ Human Resource’- Management accounting, March 1998

2.

Dalmahoy, Mary, ‘Putting a value on people’ – Feb. 1996

3.

Dawson, Chris, ‘Human resource Accounting’ – Management Decision 1994

4.

Vakharia, Rusell P., ‘Financial Ac-

a!! Gotch A! OSAM

counting of human resource policies’ – Cost Engineering July 1995 5.

Filios, ‘Human System Accounting is Social Accounting’ – Human resource Management 1991

6.

Jones and Rowan, ‘Human Resource Accounting’ – Accounting and Business Research 1998

Dr. V. K. Gupta is Professor & Chairman, Finance and Accounting Area at Indian Institute of Management, Indore. He has been teaching Post-Graduate Program, Executive PostGraduate Program, Post-Graduate General Management Programme for Defense Officers, Broadband Based Education Programme, Management Development Programs, Faculty Development Program and Professional Management Courses for over 16 years. Presently, He is a member of Accounting Standards Board, The Institute of Chartered Accountants, New Delhi. He is also a member of MOU Task Force, constituted by Government of M. P. His research interests include International Accounting and International Finance.

An idea can change your life!! By -Chandan Pal

38 CANVAS

Million Dollars or Knighthood

E

ven though knighthood is alluring, I would opt for a million dollars instead. Knighthood, proffered to honor some distinguished service rendered to the nation or humankind, empow-

ers and impacts in certain ways in the contemporary context; it exemplifies the reward for service and therefore inspires future generations to

What would you do

follow a noble path. Also, the honor invariably vouchsafes a clout that can be fruitfully leveraged to further the interests of the nation and the people. Money however empowers in a whole new set of ways; it opens up limitless avenues and can also be a major incentive for social and business entrepreneurship. It can be used to pioneer an enterprise that eventually goes on to generate a million employment opportunities and invigorate an entire economy. It may also be used to take up a task of social responsibility or cause which would impact the society in a profound manner. Ironically, none honored with knighthood has pursued and toiled for the honor’s sake; it has always been the lofty objective to serve that has driven great people, and the title has been merely incidental while they pursue their passion. The conscientious knight in every individual is aware that the title is not the end to be sought, and he is ready to serve unmindful of what comes unsought. I would choose those million dollars, venture into business and thereby create wealth for the nation as well as self. Aided with planning, vision and resourcefulness, the million dollars would multiply manifolds adding to economic growth and result in a relatively more rich and prosperous nation to which every knight will surely feel proud to belong.

Harpreet Singh is a student of MBA at EM Lyon Business School at Ecully in France; class of 2008. He has more than 8 years of experience working for global companies such as Logica CMG, AON Insurance in Europe and India. He can be reached at [email protected]

39 CANVAS

It

was one of those rare cold win-

wide average of about 17%. For quite a long

On the third day of my taking charge, a lanky

ter nights in Calcutta. I was driv-

time the senior management was convinced

dark person with small eyes entered my

ing my way back from office and

that nothing could be done because of the

chamber and without a word sat directly on

pondering

demography of the region with its dying in-

the chair kept for visitors. With a shrewd

dustries and poor population.

gesture he scanned me first. I was quiet and

how

could

it

be

achieved. How could I single-handedly bring

waited for him to start. He asked, well Mr.

down the losses of West Bank? The task was proved unachievable by my stalwart

So when I was transferred here, a dual feel-

Chakraborty, I am Ajay Malik. This is the first

predecessors – experienced both in age and

ing operated in my mind – a challenge to

time that I am introducing myself to any offi-

work. I was totally engrossed in my thoughts

overcome and a fear of defeat. Little did I

cer. Generally it’s the other way round. You

when suddenly the lights of a traffic signal in

know that there was a third twist in the whole

have been here for more than two days and

front of me turned red. I could barely man-

set-up.

you didn’t even feel like meeting me? I

age to stop the car within the limits.

Generally whenever I am assigned with new

smiled and politely replied, had you been in

I looked out. The lights illuminating Victoria

responsibilities I ensure to be accustomed

the office working at your desk for the last

A Real Life Saga

M O T I VA T I O N ……..a dual feeling operated in my mind – a challenge to overcome and a fear of defeat.

Memorial were off. It must be well passed

with the people first. It is not only because

two days, surely you wouldn’t have com-

10. A street urchin was fighting with a dog for

that I want to be familiar or friendly, but also

plained. I have been moving around and met

cozy warmth in the hay beside the footpath.

to leverage the benefits out of it. A person

all the staff working in this office. It is unfortu-

The dog finally gave in. Slowly a determina-

delivers much more when in confidence

nate that I didn’t find you anywhere. The

tion came within me. I have to do it. There is

rather than merely instructed. So, for the first

person was taken aback for a while. He un-

no other way out. I restarted the engine

week I did no other work except to get ac-

derstood that here’s a nut that won’t crack.

when the lights turned green and pushed off.

quainted with people. And during this period

Immediately, he switched track. With a

of acquaintance, within a couple of days I

beaming smile he started explaining how

This dates back to the year 2004 when I was

was warned about the then union leader,

busy he was in the local party conferences

just transferred as the regional in-charge of

Ajay Malik. I was even told that no office

and how much the state legislature depends

commercial operations of the entire west

master survived in that region if he worked

upon him. Prior to leaving he added that he

bank of the licensed area of Calcutta Elec-

against the interests of Ajay. Some even

may be contacted for any kind of problem.

tricity Supply Corporation, the oldest private

advised to make a deal of peaceful co-

The tone sounded to me that he “should” be

power utility in India. At that time, the cumu-

existence with Ajay beforehand. It would be

contacted and not “might”. The meeting

lative Commercial, Transmission and Distri-

beneficial to both my job and career. I was

ended there.

bution losses of this region were reeling to

smelling problem. I was back to business. Transmission and

the tune of 22%, much above the company

40 CANVAS

A Real Life Saga: Motivation Distribution loss is purely technical and de-

they kept faith on me.

lutely OK. Eventually Ajay and his team gave

pends upon the gear used by the electricity

Within an hour of notification of the decisions,

in. They withdrew the protests and agreed to

utility. On an individual basis, this kind of loss

my chamber was stormed by a crowd of hoo-

perform according to the decisions imposed

could not have varied drastically across the

ligans led by Ajay. They started off with a

provided the management took adequate

company because the equipments used were

different issue altogether regarding the dete-

precautions for the filed staff security. My

the same everywhere. So there had to be

riorating working conditions with respect to

battle was won.

some problem with the Commercial loss. I

safety, security and hygiene. I asked them to

asked for detailed customized reports of vari-

provide me a list so that I can immediately

After that there were various hindrances

ous commercial processes and on analyzing

arrange for resolution. From there they

placed by the union people to thwart me off

the same I found that the major cause of such

landed on to safety of the field staff perform-

the track that I laid. But I remained focused

high loss is the poor recovery of outstanding

ing the disconnection of supplies. Ajay em-

and dealt with all the issues candidly and with

dues. A further dissection of the report re-

phasized that the decisions circulated by me,

a personal touch.

garding recovery yielded that the average

if implemented, would adversely affect the

percentage of disconnection of sup-

Within a month I achieved the desired result. Defaulters had no way out but to

plies for non-payment was only 30-

liquidate their total outstanding dues.

35% as against the companywide

Moreover, many unlucky ones even had

average of 65-70%. Moreover, the

to coffer up for their shortfall of security

number of cases which were offered

deposit. When such consumers realized

interest free installments in that

that it’s better to pay off their bills rather

region was just double the average

than to bribe the staff, the nexus was

of the other regions.

automatically broken. The staff seeing

The fact was unearthed but the root

that they would not get their share of

cause behind the same was yet to

cake from the defaulters started discon-

be brought to light. To discover the

necting defaulting supplies in full swing,

same, I personally undertook spe-

to earn their performance bonus at least.

cial disconnection drives along with the out-

safety of the field staff. Hence the decisions

door staff. To my astonishment, the teams

communicated should be immediately with-

that I accompanied with could perform 80-

drawn.

The fallout – percentage of disconnection of supplies increased to 80 and for the first time over a decade, West Bank charted as the

85% disconnections. Thus, as I anticipated, all the circumstances were pointing towards

Initially, I tried to explain that in no way the

topper with losses reducing to 17% within the

an unholy nexus between the defaulters and

decisions affected the field staff and these

next two quarters. Seeing the success, the

outdoor staff of the company. On pretexts of

were targeted to increase the revenue of the

model was gradually implemented all across

resistance, the staff declined to disconnect

West Bank. But then I found that they came in

the company by top management.

defaulting supplies thus allowing dues to pile

not to listen to any of the clarifications. So I

up and simultaneously getting their share of

remained silent and allowed them to exhaust

When I was about to quit the company, Ajay

carrot from the nonpayer.

out. After an hour or so they realized that they

came to my chamber one day and acknowl-

were unable to get the desired outcome. I

edged that he was wrong in leading the agita-

But due to lack of any proof, I couldn’t take

was sitting there carrying on with my routine

tion and wished me success in my newer

any harsh step directly against my suspects.

work. Ajay gave the ultimatum that I will be

ventures.

Hence amidst tremendous resentment of the

under detention by them till such time I re-

staff, I resorted to implementing two policy

verted the decisions. My only cold reply was

I am now with North Delhi Power, but when-

decisions for the region. Firstly, all defaulters

that they can carry on with anything they

ever I face a road block, I recall this incident

were barred from getting interest free install-

desire, but if that tantamount to indiscipline,

which automatically inspires me. And it all

ments over their outstanding bills. Secondly,

they better be responsible for the same.

started with the determination that I found within me on one cold winter night.

all payment counters were advised to charge the shortfall of security deposit from every

The drama started at 2:30 in the afternoon. It

defaulter who turns up to pay. These two

went on till 10 p.m. in the night. I was not

decisions were exclusively deployed for my

allowed to take even a glass of water or to go

region and not across the company. I was

for the nature’s call. Calls came from all quar-

able to convince my senior management that

ters – the top management, my peers and my

this change will definitely yield results and

family. I calmly assured them that I was abso-

41 CANVAS

Anupam Chakravorty holds a Bachelor’s degree in engineering from Bengal Engineering College, Shibpur.He has more than 13 years of experience in Indian Power Distribution industry in the field of Business Process Re-engineering and designing strategies for increased efficiency. He is currently a student of EPGP at IIM Indore, class of 2009.

Answer: Crosswords

Quiz time ⇒

a. Mozambique b. Cyprus c. Gibraltar d. Corsica.

make up a £2bn shortfall in funds. Which

a. Question Mark b. Asterisk c. Ampersand d. @

a. Day of the Triffids b. The Andromeda Strain c. The Quartermass Experiment

Who is credited for turning around the ailing

⇒

Japanese car maker Nissan? a. Carlos Ghosn

b. Yoshisuke Aikawa

c. Kirk

Kerkorian d. Yoshikazu Hanawa

⇒

What piece of music was the England Rugby

Ring of Fire c. Kenny Roger’s The Gambler d. Ozone- Numa Numa

Some 200 people claim to have fallen ill after

separates Africa from the United Arab Emirates?

Who has been rated as the most glamorous

a. Caspian Sea b. Red Sea c. Shat al arab d.

women recently by the Vogue magazine?

Straits of Hormuz.

beth second d. Hillary Clinton.

⇒

⇒

Which country's flag features a vertical white stripe sandwiched by two vertical green

Nelson Mandela's statue unveiled in London. But how much did sculptor Ian Walters com-

stripes? a. Afghanistan b. Bulgaria c. Chile d. Nigeria

plete before he died?

game in the last World Cup? a. Tina Turner’s Simply the best b. Johnny Cash’s

What is the name of the body of water which

a. Kate Moss b. Naomi Campbell c. Queen Eliza-

Team using to psych themselves up before a

⇒

⇒

d. They came from Mars.

Sign

⇒

country?

thriller does this tale most closely echo?

ing Television Centre as part of efforts to

punctuation mark is the building based on?

colonial links with Britain, except for which

a meteor fell to earth in Peru. Which sci-fi

The BBC is to sell its landmark London build-

a. Halfway through initial clay model b. Finished clay model c. Halfway casting through bronze. d. completed the statue.

⇒

All members of the Commonwealth have had

42 CANVAS

⇒

What are the two bones in your forearm?

a. Radius and ulna b. Tibia and fibula c. Tarsal and metatarsal d. Biceps and triceps

Prof. M Ashraf Rizvi

The Art of Winning G

etting the job you want is

what you aspire for. In fact, everyone as-

training, the trend of ‘hire and fire’ by most

companies and organisations have to strug-

organisations, and globalisation of the world

gle to survive and grow. They need very

economy have increased the number of job

efficient, competent, and highly dynamic

seekers. If there is one right job, there are

personnel to run the show and achieve the

many applicants for it.

desired success.

pires to get a job that offers everything from a plump salary to high perks and incentives

There are several other factors responsible

The job selection process has

along with fast career growth. Moreover,

for making the job market more competitive

also become more complex and sophisti-

smart people want to do what they like to do

and full of challenges. The job market is not

cated. Most organisations have their own

because they know that the kind of passion

the same. There are more opportunities but

recruitment departments with highly compe-

that will take them to the top will only come

at the same time there are more challenges,

tent people who receive appropriate training

if they do what they love to do. However, it

more demands, and more expectations.

so that they can make valid selection deci-

is easier said than done.

There are more job positions but these are

sions. Moreover, there are specialised re-

less stable than they used to be. Moreover,

cruitment agencies to help companies get

Getting the job you want in today’s techno-

the positions are more demanding and often

the right people for the right jobs. These

logically advanced world is more challeng-

include a broader range of responsibilities

agencies have developed new and effective

ing than it used to be a few years ago.

than did positions in the past. In fact, the

interviewing techniques for evaluating a

There is more competition in the job market

business world has become more profes-

candidate’s suitability for a particular posi-

today due to the availability of more quali-

sional. With the expansion of multinational

tion.

fied and experienced candidates. The fast

companies and worldwide business opera-

increase in population, the availability of

tions, the world has become a global vil-

Thus, you may have proper qualifications,

sophisticated specialised education and

lage. As only the best can survive, most

experience, knowledge, confidence, and

43 CANVAS

Job Communication: The Art of Winning skills is essential.

guided by a ‘specific purpose’.

ting the job you want depends on many fac-

Job communication skills involve a set of

tors, some of which you cannot control. For

tools and techniques for communicating ef-

example, you have no control over other

fectively in formal employment situations.

applicants who might be more qualified, more

When you want a job, you have to pass

experienced, and better suited to the job at

through a rigorous selection process. You

M Ashraf Rizvi is an Associate Professor in General Management and Communication Area, teaching courses on business communication and Managerial Communication in the Institute's PGM and EPGM and management development programs. He has more than eighteen years of experience in teaching, training and consulting.

hand. In fact, you may not be aware of the

might confuse the employer without meaning

strengths and qualities of your competitors.

to, or you might not present correctly all that

But there is one factor that you do control,

you have to offer to the employer. So, partly

and that is, how well you communicate.

as a result of not knowing the conventions of

appropriate skills but you may still find it difficult to get the job that you aspire for as get-

job communication, you may make all kinds You job communication skills are crucial for

of mistakes. You should, therefore, under-

you. Research shows that the ability to com-

stand the nature of job communication.

Prof. Rizvi's areas of special interest area Corporate Communications, cross-cultural communication, interpersonal communication strategies, technical writing, and managerial oral communication. The source of this article is his latest book “Resumes and Interviews: The Art of Winning”, McGraw Hill Education, 2007

municate effectively is the most important factor that helps people identify and get the

Job communication is distinct from other

job of their dreams. There is an increasing

types of human communication in the sense

focus on the candidate’s personal qualities

that it occurs in highly structured setting as it

rather than on qualification, experience, and

is intended to convey specific personality

job skills because most recruitment experts

information to a specific audience for a spe-

believe that proper training can easily develop

cific purpose. Thus, the first important charac-

these skills but it is not easy to develop per-

teristic of job communication is its content,

sonal motivations and qualities. Communicat-

i.e., your knowledge and skills. Whatever your

ing effectively is basically the ability to per-

field of operation, whenever you try to write or

suade the employer of your special qualities

say anything about your knowledge, skills,

and strengths that make you suited to the job.

experiences in order to obtain a position, you are engaged in job communication.

Job communication can be defined as a com-

Quiz Answers:

plex process that involves writing employment

Another key aspect of job communication is

letters, applications, résumés, and facing job

the receiver of the information—the employer.

1.

a

interviews and selection group discussions.

Adapting to the varying needs of the employ-

2.

a

The success of employment search depends

ers and accommodating their perceptions is

3.

c

a lot on the candidate’s ability to design a

an integral part of job communication. Every

4.

b

persuasive résumé and an effective cover

time you apply for a job position, you need to

5.

c

letter and face the job interview effectively. An

follow a new process. An effective job com-

6.

b

municator may use a blend of methods and

7.

d

applicants before he or she takes a decision

alternatives to emphasize how he or she is

8.

b

to hire a candidate for a particular position.

right for the job by matching the requirements

9.

d

No employer is under any obligation or com-

of the job with his/her qualifications and ex-

10.

a

pulsion to appoint a candidate. In fact, the

periences.

employer has to evaluate a large number of

process of selecting candidates for a position might result in the rejection of a large number

The last aspect of job communications is the

of applicants.

‘specific purpose’. Job communication is always purposive. For the job communicator,

The employer tries to get to know the candi-

it is the communicative purpose that brings

dates through their application and résumé by

his/her perspective, knowledge and ideas into

evaluating their education, skills, and experi-

focus for the employer. Whether a job com-

ence. They confirm their observation during

municator has to design, write, and edit re-

face to face job interviews/telephone inter-

sumes or job applications, do a self-analysis

views and selection group discussions where

for facing a job interview, or revise his/her

they observe and evaluate the candidates.

subject competence, or prepare for a selec-

Therefore, developing job communication

tion group discussion, he or she is always

44 CANVAS

We

are upwardly mobile on the Maslow hierarchy.

stopped at the sight of an elephant which was being held by a

With human needs shifting from the physical to

small rope tied to its front legs. The person was confused by the

the metaphysical, the focus had to shift to the

fact that the huge creature was held not by chains or cages but

brawn from the brain. Development in any one sector is always

only by a small rope . It was obvious that the elephant could

accompanied by a parallel shift in the accompanying fields –

break away from the shackles anytime but it did not for some

history is witness to this simple fact. One of the biggest spin-offs

reason. Then seeing the trainer standing beside,

of the New age Industry is that it has brought into focus the irre-

enquired why the animal did not break away. To this the trainer

placibility of the human brain. For too long and to a dispropor-

replied that when the elephant was much smaller the same sized

tionate degree, we have been emphasizing on the power of

rope used to tie it and at that age it was enough to match the

money, materials and machines. Even when we started realizing

creature’s strength. As the elephant grew up it was conditioned

the last tool of differentiation in our hands, the human brain, the

to believe that it cannot break away . Today the elephant still

emphasis was more on the visible manifestations of the brain:

believes that the rope can still hold it and thus never tries to

the demonstrated skills. The grey areas of knowledge and skills

break free. The elephant can , today , break free any moment

remain as such. Of course there is no lack of studies on how to

but because it believes it couldn’t, it is stuck right where it is. Like

better tap these two vital yet nebulous elements of creativity, but

the elephant, many of us go through in life clung to the belief that

there are miles to go before Behavioural scientists hit upon ways

we cannot do something, simply because we failed at it once

and means to utilize even 50 % of mind power. Researches

before. This is the power of mind. If it is being channelized for

the person

positive and constructive

THERE IS BUT ONE FREEDOM

purposes it will give one

AND THAT IS THE FREEDOM OF THE MIND

nelized

result . Similarly if chanfor

negative

purposes it will limit one show that the major proportions of our everyday thoughts are

from performing.

about the past. If even 20% of our thoughts could be about the future, man could do wonders. Think about it, what a vast poten-

Once we came to realize the power of the mind, we overplayed

tial remains untapped. If

the rational part to

research could arrive at

the detriment of the

some practical methods

right brain. Logical

by which man could channelize his thoughts more towards vi-

reasoning and analysis, by virtue of the role science has played

sioning, strategizing and planning for the future, we could safely

in the progress of the human race, assumed a natural one-

say, “WE HAVE ARRIVED”.

upmanship on the softer aspects of intuitiveness, creativity and dreaming. But the fact is that the starting point of any innovation

Mind is what the brain does consciously. Mind performs a series

or any idea is a dream. If you can dream something, you can do

of information processing in order to form strategies needed to

it. As it says “Be aware of what you want – you shall get it”. By

live our daily lives. Hence if brain is the hardware, mind can be

nature man is designed to dream. But the cold assembly line

termed as the software. I remember a story wherein a person

production of the industrial revolution seemed to send a deaden-

45 CANVAS

up-manship on the softer aspects of intuitiveness, creativity and dreaming. But the fact is that the starting point of any innovation or any idea is a dream. If you can dream something, you can do it. As it says “Be tive approach to entrepreneurship which is the

aware of what you want – you shall

distinguishing factor from other similar books is

get it”. By nature man is designed to

that it focuses on the human interaction in

dream. But the cold assembly line

generating ideas, opportunities and business

production of the industrial revolu-

ventures. The book further generously ex-

tion seemed to send a deadening

pands on different aspects of entrepreneurship

message to man: rational thoughts,

and how it works at different levels, giving you

science and analysis and not some

both an insight how entrepreneurship works

Technicolor dream, will take him to

and how to convert a startup into flourishing

the frontiers of progress. Fortunately

business empire and finally into a huge con-

that myth is being shattered.. But if

cern.

de-freezing is difficult, refreezing is

The book is a great motivator for all those look-

a Herculean task, more so when it

ing towards entrepreneurship and de-stresses

comes to fuelling the fires of mind.

on how one can turn into an entrepreneur.

When we try to tap the individual

However, whilst not everyone wishes to be-

mind for better performance we

come an entrepreneur, the book proposes that

have to stress on the learning as-

enterprising skills are valuable for everyone.

pects of the mind so that the potential of an employee will always be positively enhanced. Organizations have a gigantic task in front o them if they are to manage minds in the true sense of the term and ultimately be able to unleash its power and potential. They have to re-teach

Entrepreneurship

Inspirational case studies of entrepreneurial

From Opportunity to Action

people and organizations have been included

By DAVID RAE. Professor of Business & En-

to demonstrate what can be achieved.

terprise at Lincoln Business School, University of Lincoln, UK.

It's a great read whether you are looking for a

Publisher: Macmillan Publishing Company,

business book with a difference or you are truly

16th Jan 2007.GBP 29.99

the man who truly believes that anyone can be successful, if you approach things with the

employees, something they have forgotten to do naturally: Dream. And then they have to facilitate nurturing of these dreams and their morphing into reality.

right attitude. But let me tell you that, once you This is a great piece of work from Professor Rae, who is Professor of Business & Enterprise at Lincoln Business School, University of Lincoln. I have read many books on entrepreneurship but this is one of the better books so

A tough call, but who ever said success was easy?

far. This book relates theory and practice in an entirely new fashion. Actually it’s a unique blending of theory and practice. Most other entrepreneurship books are mostly theoretical

Arjun Basu is a Civil Engineer from the Bengal Engineering and Science University. Currently working as an Assistant Manager with NALCO ,Asia's largest Alumina Refinery, he has around 07 years of experience in Project Management, material Planning, auditing, quality management systems and Environment management systems. He is currently a student of EPGP at IIM Indore class of 2009.

in nature and lacks real world case studies or

start reading it will be difficult to stop and you'll probably try to finish reading the book in one sitting, and when you reach the end of the book you will realize that all those ideas you had of creating your own business suddenly have a new lease of life! Written in a very lucid and concise form, the book has real life stories of those who dared to dream and went forth in realizing them. An absolute must buy for all the young and budding entrepreneurs.

actual implementation processes. This book on the other hand offers a stronger practical approach. It focuses on learning with a new approach which is basically an “active learning process”.

Entrepreneurship theory is well covered in this book, but the real emphasis is on the individual as the entrepreneur and on creating and seizing entrepreneurial opportunities. The innova-

46 CANVAS

Mrinal Srivastava is a graduate of IIT Kanpur and a MBA student at Indian School of Business (ISB) at Hyderabad, class of 2009.He is a budding entrepreneur and has more than 9 years of experience in IT service industry, working in varied roles such as Project Manager and Delivery head for major IT companies in India. He can be reached on [email protected].