IIPM Editorial: 01/01/2013

Monday, January 28, 2013

BUFFET NAMES POTENTIAL SUCCESSOR

Surely, every person even slightly informed about the world’s richest man knows that succession planning has always been questioned critically when it comes to Buffett. Realising that he himself goes against many imperative corporate governance policies (separation of ownership from management, for one), Buffett too cleverly chooses to keep the beach bikini on, revealing much frivolous skin, but hiding the most essential parts. “There are four potential successors to me within the company, but I would never discuss their names,” is what he gloatingly told Daily Telegraph some years back, “I have got this letter which actually goes out the day I die. And it says: Yesterday, I died. That’s bad news for me, but it’s not bad news for you, the shareholders of Berkshire...” Yeah, right Warren! And we all can then go meet up with Monica Belluci!

But for argument’s sake, let’s move to the realm of logic. At present, Ajit heads Berkshire’s Reinsurance business, which is only the ‘third-largest’ amongst Buffett’s insurance empire – indeed a small fragment of the vast Berkshire empire. And if you considered that insurance segment contributes to more than 50% of Berkshire’s annual revenues in 2008, we would rather have Tony Nicely, CEO of GEICO (Berkshire’s largest insurance player) or Joseph Brandon’s successor at General Re (the second largest in the segment) as the more ‘logical’ choice. As far as leadership and manpower count is concerned, Ajit only has 31 people in his company. For records, that is just a negligible 0.01% of the total count of manpower at Berkshire Hathaway! Can a person with that little ‘leadership’ experience head a group with more than 300,000 people?

Alright, if we play to the grandstand – as Warren has mastered over the years – and simply choose Ajit because “Warren has mentioned him in his letter,” then allow the blundering me to inform you, Warren does that ever year. Not counting this time, Buffett had flattered Ajit 5 times in the past 13 years (in his annual letters to his shareholders)! And if I go by the same logic, then the world would have had 21 prospective Berkshire CEOs since 1995. Wonder how? Besides praising Jain 5 times, the grandiose Buffett has praised Tony Nicely (CEO, GEICO) 9 times, Kevin Clayton (CEO, Clayton Homes) 2 times, Richard Santulli (CEO, NetJets) 3 times, Joseph Brandon (Former CEO, General Re) 2 times! If efficient succession planning policy was to be decided on the count, all is lost.

Read more....

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

Saturday, January 19, 2013

REVIVAL: JAPAN

Japan is distancing itself from the US and affirming its own foreign policy. Is this the start of a new political order?

It has been like that for long and this base has been playing a crucial role in furthering the American foreign policy in Asia since the Vietnam War. And thus, an otherwise subservient Japan has all along been a major helping hand. Even now, while the American assault in Afghanistan and Iraq has been going on for years, the Japanese Maritime Self Defence Force plays a very critical role in refuelling the US warships over the Indian Ocean. In fact, for long, Japan didn’t have a foreign policy truly of its own – the US, since the end of World War II, playing a major role, with critics even blaming the Japanese government for literally outsourcing foreign policy to US. In all, Boston Celtics were #1 in Japan, as was Toyota in the US.

Then what exactly has gone wrong in the American behaviour towards Japan? The answer is, the Japanese behaviour towards America – vindicated, rather flamed further by the current lateral shifts in the Japanese political formations with the meteoric ascent of the Democratic Party of Japan (DPJ), led by Yukio Hatoyama, into the helm of affairs. DPJ gave a body blow to the Liberal Democratic Party which had almost become synonymous with Japanese government in the last half a century. The victory of the DPJ should not be seen as a mere vote against incumbency but more as a sort of referendum against the US dominance in Japan’s foreign policy and military affairs. In fact, there is much pressure on the newly elected Hatoyama government to scrap several deals with US, the foremost among them being the Guam Treaty under which US expects Japan to spend nearly $6 billion for relocation of some of the US bases in Futenma in Okinawa to the American island of Guam. This, in itself, is part of a $26 billion defence package for the base realignment plan which also includes an estimated expenditure by Japan to the tune of $11 billion for the construction of a new US Marines base in Okinawa and an expenditure of $9 billion for the creation of a ballistic missile defence system.

Gavan McCormack writes in DMZ Hawai, “As the Japanese economy reeled under the shock of its greatest crisis in 60 years, these were staggering sums. It was once said, of George W. Bush, that he was inclined to think of Japan as ‘just some ATM machine’ for which a pin number was not needed. Under Obama, too, that relationship seemed not to change.”

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Friday, January 18, 2013

How special is your speciality?

Specialised MBAs are now coming up in various sectors. B&E meets up with specialists within these sectors to find out whether such niche mbas are useful in the long term...

The specialised MBA tag is getting significantly wider in scope and appeal. While we had specialisation streams available in areas like agriculture since many years (IIM-A being a leading example) and in computers too since the past two decades, recent MBA specialisation steams have included eclectic areas like production management (for example, Indian Institute of Production Management’s School of Management; not included in our current survey), petroleum management, hospital management and more; in fact, we even have specialisations in the football and wine industry now (not in India though)! But do they work or not?

When MBA institutes, as well as the students who join them, invest their time and money in specialised MBA courses, they have an agenda in mind. The students want to establish a unique positioning, with a specific target audience in mind; i.e. the sector in question. Sometimes, such a unique positioning is actually driven by an illusory impression created through a short term growth in the sector in question (for example, MBA with retail specialisation); a growth that may or may not last over the long term. Sometimes, the MBA specialisation in itself is created by teaching only a mere handful of subjects – in one university-affiliated institute that we went to, the specialisation course in retail management was restricted to simply three elective subjects. To be fair, we did not deeply investigate the depth that each of these courses had – perhaps they did too – but what was clear was that even students aren’t analysing more important factors like contents, academic orientation and industry interface in the specialisation area, before taking up the course.

Moreover, unless a student is crystal-clear about his/her industry preferences, this could be akin to playing a major career gamble, just based on the hype that the sector generates.

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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

Thursday, January 17, 2013

A hot cuppa fashion!

Here’s the latest brewing in ethical fashion...

On last count, there were more than 600 textiles being sustainably produced. Corn, soya, hemp, wood pulp, stinging nettles, recycled plastic bottles, pina, bamboo and numerous other materials are serving as resources for designers to create innovative, fashionable clothes. The latest addition to the list of eco-friendly fabrics is one made out of coffee grounds. Conceived by Taiwanese Singtex Industrial Company, is it of little wonder that the company’s general manager came up with the idea of using the coffee grounds, that would otherwise only contribute to landfills, into a fabric as he sat sipping a hot cup of coffee at Starbucks! Apart from taking care of Starbucks’ waste grounds, the same company is also making sportswear out of recycled plastic bottles, a practice first started by California-based Patagonia, which claims to have utilised 92 million bottles in this fashion! There is an army of people trying to make fashion sustainable, and like any other country, India too stands to benefit by switching to ethically sound fashion, in fact, maybe more so than others.

The textile industry consumes maximum water after agriculture; about 8000 chemicals go into turning raw material into textiles and almost 25% of the world’s pesticides are used to grow cotton alone. While India is among the top cotton producers in the world, it is also among the leaders in growing organic cotton. “Fashion is now much more concerned with the environment… In fact, it is more concerned now with the well being of the people who make the clothing,” says Susan Waters, founder of Cotton Roots. Cotton Roots is into fair-trade and organic corporate clothing, and has found its solution for natural dyes in India. Using natural ingredients like coffee, tea, pomegranate, henna and onions, Cotton Roots is creating ethically sound aprons, T-shirts, towels, tea towels and shirts. “The chemical dying process uses heavy metals, creating toxic waste and using huge quantities of precious water.

Read more......

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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

Wednesday, January 16, 2013

Breaking out of routine!

Breaking away from a set pattern of life has been a dream for most, but these days many are living that dream too!

On a summer evening while waiting for a friend at one of the busy McDonalds restaurants in Delhi, I was approached by a German couple (in their late 20s) looking for the cheapest way to reach Shimla. Guiding one to Shimla from Delhi isn’t as effortless as guiding one to the neighbourhood grocery store, so while I took pains to explain the cheapest options available, they joined me at my table… As I chatted up and asked them (Steve & Natalie) what they were doing in India, Steve promptly replied, “I guess you could call it a gap year for travelling. We have just come back from Kashmir and would be leaving for Iran in a few days. We thought of going across Pakistan, but it would probably be a little unwise incase we bump into Osama bin Laden!” We burst out laughing but somewhere inside I was enthralled by their spunk and nerve to beat the stereotypes of life. In order to support their lifestyle financially, Steve explained, “Last year we were in Australia, and there we did a few farm jobs along with travelling. They are quite easy to get. We also did some bar work and restaurant work. We put in lots of hours to save enough money to travel in Asia for eight months. To get a work permit, one can apply online. Some people get it through an agency. The agency can also sort out a bank account and a tax file number. But agencies charge a fee, so some people (like us) just do it themselves.”

While Steve is a freelance writer and Natalie has taken a break before joining her regular education, upon research one realises that, there are many who take a sabbatical (a gap year, though usually longer than a year) from regular work or from education to pursue travel, international voluntary community work, or just an international working holiday!

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Monday, January 14, 2013

“Our work will speak...”

B&E: The credit crisis is creating a lot of problems for business. How are you managing it?

KG: The world was very different place before September 15. The September 30 quarter in 2008 was one of the best quarters for us. We had almost 7% sequential quarter on quarter growth. The last 2 quarters were very bad. The world has changed. Did we see it? Not really. But we reacted very fast. In the short term, it was all about expense control.

B&E: Why have you maintained a flat outlook for 2009?

KG: What we see in the market is that with some confidence, we are saying that the market is about to revive. The bottom has been reached for the client as well as the industry. Just a question of recovery, there the consensus is that it will happen probably by the first half of 2010.

B&E: You are planning to look more towards home ground for business opportunities. What opportunities have you identified?

KG: We are seeing wins in the private and government sector; and we expect to see revenues accruing to the company over time, as many of these wins are based on new models of engagement, where pricing is based on transactions.

B&E: Is doing business on home ground easier or harder than doing business in developed markets like EU and US? Please explain. How are expectations of Indian customers different from global customers?

KG: The Indian market is very small compared to markets outside the country, with US and EU contributing to almost 90% of the total revenues. Infosys has been in these markets for a long time and as established itself as a strong and efficient service provider. In India, we still have a long task ahead, in establishing ourselves as a key player.

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Friday, January 11, 2013

Abiogenic?!?

Oil’s found between rocks!

King Hubbert predicted in 1974 backed by his Hubbert Curve theory that oil would go to its peak in 1995 and then it would start declining and will then exhaust gradually. But that did not happen. Oil demand steadily went down in 1970s and 1980s due to instability in oil producing regions and then drastically went up in 2000s. In between, the Association for the Study of Peak Oil and Gas, as well as two other stalwarts – Ali M. Samsam Bakhtiari of National Iranian Oil Company and Chris Skrebowski, founding Director of Peak Oil Consulting – further predicted that the peak in oil would occur somewhere around 2007. However, that again didn’t happen as oil reserves as well as production further went up (US International Energy data). The crux of the issue remains the same – when the hell would oil run out? The reason this question is important is to understand how much money and efforts should be invested in moving over to alternate/quasi-fuels. Allow us to give you the latest dope – oil is never going to run out! We don’t wish to sound off our blocks, but what we said, fortunately or unfortunately is reality.

While oil reserves in 2007 were around 1,184.208 billion barrels, they’ve gone up to 1,342.207 billion barrels in 2009. Despite increase in investments in alternative energy, these in reality might not be required at all. Researches under the new abiogenic theory contradict the age-old traditional theory that petroleum is derived from biogenic processes.

Iconic authors Jerome Corsi and Craig Smith explain in their cult novel, ‘Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil’ how the belief that oil is a fossil fuel and that it is a finite resource has been promoted to make America (and the world) a vulnerable society. And why’re the authors so important as to be quoted by the likes of National Geographic and Discovery?

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Monday, January 7, 2013

Why Blame Unions for the AI Mess?

As I read and watch the whole shindig about the free falling Air India, I just can’t help but go back to 1987 when I was a young Bombay based hack (Yes, it was called Bombay back then!). Rajiv Gandhi was still hugely popular and corporate India was delighted with his efforts to help India Inc. Rajiv Gandhi wanted to improve the performance of state run organizations and the most prominent initiatives were directed towards Doordarshan and Air India. A young, dynamic Rajan Jaitley who had a successful stint in ITC was made the MD of Air India and given the job of revamping the ailing (yes, it was ailing back then too!) carrier. A young Ratan Tata too was inducted to the Board as a sentimental gesture; after all, Air India was the brainchild of J.R.D Tata. Back then also, there were strong rumours of a rift in the Board and allegations of mismanagement. Yours truly had even written a story that-if my memory serves me right-started off by asking: “What was Ratan Tata doing when Rajan Jaitley was busy redesigning air hostess uniforms and changing the crockery at Air India?” Last known, Jaitley was operating out of London and Delhi, running a financial services consultancy Around that time, another young high flier called Harsh Vardhan was running the ambitious Vayudoot, the third state owned airline after Indian Airlines and Air India. Vayudoot claimed to service more than 100 destinations and I recall how everyone was going gaga over this wonder boy and his Vayudoot magic. Most hacks talked of the “close relations” Harsh Vardhan had with the sons of a certain Union Minister who then lived near Hotel Le Meridien. Of course, Vayudoot crashed into extinction very soon after that hype. Last known, Vardhan was a consultant for the private airline MDLR.

Why am I on this nostalgia trip and what has the past got to do with the present controversy that rages around Air India? Well, the point is, the more things change, the more they remain the same. It was natural then for those privileged enough to fly to curse the shoddy attitude and service of “unionized” employees of IA and AI (Only the brave dared to fly Vayudoot whose aircraft often had doors suddenly opening in mid-flight!). And now, the Civil Aviation Minister is peddling the same arguments blaming the “unionized” employees and the crisis facing commercial aviation for the disaster looming at AI. Most in the media seem to be lapping up this argument.

Read more....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Thursday, January 3, 2013

Seeing red? Now go green!

Obama’s new emission standards will only add to the woes of the already dying US auto industry

“Yes, we can!” That’s what the head honchos of US automakers seemed to be echoing with President Obama at the White House, when the new fuel efficiency and Green House Gases Emission Standards were declared. For the first time in US history, there are clear signs of a tectonic shift in the policies of the federal government on climate change. With green house gas emissions at an all time high and US being the largest emitter of transport pollution, a complete overhaul of current laws and regulations was long overdue so that a sustainable development path could be traversed.

According to the current declaration, a single unified emission and efficiency standard is in place for the US of A, overpowering all other standards. This, in effect, implies taking 177 million cars off the American roads over the next four years. This also implies an average car price rise of $1300 to $1600 per model as compared to current prices. Till now, standards were governed by the Corporate Average Fuel Economy (CAFÉ) regulations enacted in 1975 and the Energy Independence & Security Act (EISA) of 2007. Till now, technically contrasting norms were followed by automakers. Laws were tweaked to bolster revenues without paying heed to climate change war cries.

But, in a peculiar sense, the road turned full circle as the same automakers continued to neglect their Japanese counterparts, who sold fuel efficient and cheaper cars to Americans and made huge profits, while not incurring any costs on pension, insurance and healthcare benefits to workers. Eventually, the debacle in Detroit has made the Big Three bend before the government and accept Obama’s ‘change’ agenda.

Read more.....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.