Monday, September 22, 2008

The Suspense Continues

Super Tuesday refused to throw up a winner for Democrats. SUTANU GURU analyses
When experience and chutzpah clash with charisma and vision, the outcome could still remain uncertain. That is precisely what the results of Super Tuesday have been indicating as 24 states voted in the primaries to choose the candidates for both the Republicans and the Democrats. In the Republican camp where George Bush and his pathetic legacy is an albatross around the neck of hopefuls, Senator John McCain has taken a decisive lead over his close rivals Mitt Romney and the deeply conservative Mike Huckabee, Though the two have refused to give up, most analysts contend that McCain will almost certainly be the Republican candidate for the November 2008 Presidential elections.

But most eyes were not on the Republicans fighting over the tattered legacy of the unpopular Bush. They were focused on the two people who stand on the threshold of creating history in the United States of America. They are experienced Hillary Clinton and charismatic Barack Obama, who are in a neck to neck race to bag the Democratic nomination. Hillary gets help from the chutzpah and guile of the unparalleled ‘communicator’ Bill Clinton, while Obama now walks around with an aura and visions of a vision that seem to rival the tumultuous years of John F. Kennedy.

Super Tuesday could not decide whether it is Hillary or Obama who will be the Democratic candidate to take on McCain in the forthcoming elections. Hillary won the real big states like New York and California, while Obama all but swept the so-called Middle America with big wins in Georgia, Kansas and Idaho. No pundit is willing to stick her neck out and predict who the eventual winner will be. Guy Cecil, Clinton’s political field director, agreed. “This campaign is going to continue and will not end today,’’ he said. “We feel like we’ve had a good night, but this contest is far from over,” Cecil added.

However, ever since Obama surprised Hillary with a win during the first primary in Iowa, his campaign has been steadily gathering momentum and the double digit lead that Hillary used to enjoy till about a month ago has been reduced to virtually nothing. Most resonant and powerful was the open endorsement of the Obama candidacy given recently by the brother, daughter and nephew of the former President John F. Kennedy. The youth seem to be particularly taken in by the openness, clarity and vision being offered by Obama in contrast to more of the same kind of politics that Hillary seems to offer. “What was once inevitable is no longer inevitable,” said David Axelrod, Obama’s Chief Strategist. “What was once a lop-sided race is no longer lop-sided. The momentum has shifted.”

Yet, Obama cannot rest; nor can he afford to be complacent. A tidal wave of enthusiasm and endorsements after the Kennedy family supported him led many pundits to predict that Obama would sweep the big states like California and even give Hillary a run for her money in her home state New York. Obama’s campaign manager David Plouffe said the senator was in a “strong position to win the Democratic nomination,” and eyed contests next week in Maryland, Virginia and Washington DC. This seemed to be political wisdom till even a few hours before voting began. But the results – as usual – have surprised the pundits. Hillary has scored a big win over Obama despite support from big Hollywood stars like George Clooney. Of course, it becomes even more difficult to predict who will eventually will the Democratic nomination because the party has a complicated way of figuring out who will get how many delegates from each state. Unlike the Republican Party where the winner takes it all, the Democrats allot delegates to the candidates on the basis of the proportional share of the votes won by them. Till the time of going to the press, it appeared as if Hillary is slightly ahead with about 500 delegates while Obama is close behind with about 475 delegates. To eventually win the nomination and formally become the Democratic candidate, either Hillary or Obama will have to win over at least 2050 delegates across the country.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Saturday, September 20, 2008

Hamara bajaj

Similarly, he stuck on being a scooters’ manufacturer even as it became clear after Hero Honda’s meteoric rise that motorcycles were fast substituting scooters. Bajaj did experiment in the motorcycle segment with a tie-up with Japan’s Kawasaki, but didn’t give it too much attention. He thought that Indians would never be able to ditch the scooter in favour of the motorcycle. The inevitable happened, and Bajaj was forced to roll out the last Chetak recently. But did that deter Bajaj?

He bounced back with a vengeance. Zipping through the Indian roads, he suddenly became the king of high-powered bikes. While Hero Honda made motorcycles for the masses, Bajaj Auto ruled the high-end segment. Now, Bajaj Auto is going a step ahead, and like the Tata Group with its Indica and revolutionary Nano, is planning to launch a small car for the masses. As Chandran says, “The fact that an internationally-acclaimed manufacturer like Renault has tied up with Bajaj to make a $2,500 car speaks volumes for the talent, not to mention the R&D capabilities, at Bajaj Auto.”

Like many other family-owned Indian business houses, which have been rocked by family tensions and rivalries, Bajaj has faced the same problem. But he has tried to manage the crisis in a manner that it won’t really hurt the group’s performance. Moreover, he has ensured a smooth transition in Bajaj Auto with his son having emerged as the future leader. Bajaj has ensured a smooth succession planning, unlike several others like the Modis, who fought and brought their empire to ruin.

Even today, Bajaj has lost none of his fire. Even today, as he did through the second Bombay Club, he is fighting for nationalistic economic and business interests. A corporate patriotic to the core, Bajaj wants India to emerge as a socio-economic powerhouse in the global arena. But he doesn’t want it to happen at the expense of the country’s strategic interests.


As one of India’s brand ambassadors – especially in crucial economic forum like the World Economic Forum – he has repeatedly maintained that India should realise its global bargaining powers, and force the rest of the world to heed to the super market of over one billion people that the country has.

For instance, he doesn’t want India to cow down during free trade negotiations with ASEAN countries and China. If India allows cheap manufactured goods from those countries at zero or low duties, it should also bargain for free entry of its value-added products. Similarly, if India has to give in at multilateral fora, it should force the developed world to allow free flow of labour. Everything should be in the context of give and take. Hope, our political leaders are listening.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read these article :-
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Tuesday, September 02, 2008

Where rewards are risk free

Indiabulls’ diversification into unrelated businesses could hamper its stock broking business
The growth trajectory of the Indian insurance sector is all set to soar high. All thanks to liberalisation, competition and now diversification that has forced biggies in the financial domain to look towards this highly untapped sector with great interest. No doubt, its low penetration level (at 3% of the GDP) coupled with the fact that only 20% of the total insurable Indians have a life insurance cover provide players a perfect launch pad for growth. Considering the fact, broking firm Indiabulls, which entered the fray recently through a joint venture (74:26) with French insurance major Societe Generale, aims to tap 2-3% of the domestic life insurance market by 2010. A good move when the thriving insurance sector (growing at a CAGR of 175%) is all set to reach Rs.2 trillion by 2010 from Rs.500 billion at present (Assocham). Even their target to collect Rs.10 billion as premium in their first year and Rs.50 billion in next three years looks achievable when one takes into account expected growth of 140% in the private sector insurance business.

But, as Indiabulls diversifies into large scale growth areas, one is left pondering on the fate of the mother business of securities? “Diversifying into high value added products and services is another way to maintain our leadership position,” is what Sameer Gehlaut, CEO, Indiabulls has to say. As regulations don’t allow a capital market arm in the insurance business, Indiabulls necessarily will have to demerge its stock broking business. However, the primary question doing the rounds is whether or not their diversification into related as well as unrelated business domains along with such demergers will finally pay off.

Actually, there is another critical logic besides maintaining leadership. The company has been focusing on building multiple businesses to mitigate cyclicality in earnings and as the demand for financial products grows, Indiabulls is further expected to unlock the value of the securities business. While all these seem to be good, the company has to be wary of the extremely competitive insurance sector, where there is little scope for product differentiation in insurance.

Certainly their real estate venture has been doing well (thanks to expected sectoral CAGR of 25-30% over the next five years); but what about insurance? “We have a strong distribution network and this will help us operate on a large scale with efficiency,” remarks a company official. Also Societe Generale, its partner, is not new to the Indian landscape; its long standing JV with SBI can be leveraged by the new entity. In fact, the company is planning to be amongst the top three by 2010. Comments S. Rao, Sr. Analyst, Arihant Capital, “they plan to emerge as an integrated financial service provider. Considering their distribution network and experience with Max New York, diversifying into insurance is definitely a rational decision.” Insurance is capital intensive, but for Indiabulls, whose PAT has witnessed a y-o-y growth of 82%, it shouldn’t be a problem. Even analysts are betting big on Indiabulls’ insurance business and seem to be keenly looking forward to their other proposed new ventures.

Still, Indiabulls must tread with caution. With well established incumbents and many more queuing in, even this relatively mundane (as compared to their stock broking business) insurance sector can offer many more thrills than they assume they are ready for.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
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Wednesday, August 27, 2008

Jostling with jehad

India, Iran & Israel must come together for Pakistan
Even a school kid should be able to tell what the biggest foreign policy challenge for India is at the moment. It is a challenge that will determine the future of India – good, bad or ugly – for the next 50 years or so. The challenge is tackling an imploding Pakistan. The savage assassination of Benazir Bhutto clearly shows that either the military regime led by General Pervez Musharaff was instrumental in ordering her execution, or Musharaff is no longer capable of reining the Jehadi monsters that were unleashed by the late General Zia-ul Haq. Either way, India and the world face the frightening prospect of a rogue nation, its institutions and its nuclear weapons falling into Jehadi hands. Make no mistake: were that to happen, the first target will be an Indian city because the Indian establishment has repeatedly proven that it is a ‘soft state’ that meekly shrugs its shoulders and accepts terrorist attacks, which are implemented with impunity.

Forget the people of Pakistan and their dreams of a democracy and their goodwill towards their Indian neighbours. Forget the ability of the United States administration to even bring in a semblance of sham democracy in Pakistan. Benazir was the ace in the hole for the discredited and battered Bush Administration and she has simply been blown away. In any case, the average Pakistani – not to speak of the Jehadis – is so infuriated with the double standards of Uncle Sam that the United States simply cannot influence any event there anymore; unless it chooses to do it with missiles, tanks and soldiers. Forget the ability of the Chinese Government to rein the rogue state that Pakistan has become. Jehadis are now systematically targetting Chinese citizens working in Baluchistan and those days are not far off when the Jehadis will treat China, the way they treat America and Americans at the moment.

The Indian foreign policy establishment has no choice but to start a serious dialogue with two countries – both implacable foes of each other at the moment. The first one is Iran that stands to gain most from the nuclear export racket that Pakistan is ‘clandestinely’ running. The other is the only Jewish state in the world, Israel. In the entire West Asia, it is Israel that has the most to fear from an imploding and Jehadi Pakistan, mesmerised by the malevolent spell of the al-Qaeda. And Iran is a Shia state while the majority Sunnis in Pakistan are making a spectator sport of butchering fellow Shias. Sure America, China and Russia will play a big role; but it is only India, Israel and Iran that have the biggest stakes in saving Pakistan from itself. The alternative, quite frankly, is Armageddon of the type never seen before.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
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Tuesday, August 26, 2008

The Re-Musketeers

Globally, there’s no concrete evidence on whether political parties got re-elected (or elected) on the back of governance issues; at the moment, it’s an open debate, says A. Sandeep

A utopian world would have been one in which globally, all governments got re-elected or elected only on the basis of their performance on various governance indicators. Such indicators, as defined by The World Bank, include accountability with respect to civil liberties, political stability, effectiveness of the government, corruption, and the rule of law. India’s former President, A.P J. Abdul Kalam agrees, and feels that “when a political leader performs in a state and realises economic prosperity of the state using development politics, he or she will definitely succeed in getting re-elected.” Utopian is what we mentioned, and many pockets of global politics, like social relationships, are a million miles away from this logic.

Good governance is supposed to directly reflect on a contry’s development, both economically and socially. Expectably, countries that have thrived on religious fundamentalism have seen only a ghost of a relation between a political party’s contribution to growth and development, and the chances of the party getting elected. Distinguished political analyst, George C. Edwards, Editor, Presidential Studies Quarterly, explains, “Religious faith is important as a qualification for office in many parts of the world and is the source of conflict in southern Asia, the Middle East, Northern Ireland and elsewhere too. Even social issues like abortion are directly connected with religion.”

The Palestine issue is one telling example, with many pockets in West Asia mirroring the situation. Aly Fayyad, the spokesperson for Hezbollah’s Political wing, thinks that “development is neither an election plank nor of primary concern in West Asia. To win an election solely based on the development plank is just impossible. Here, we’re more concerned about issues like terrorism, Arab Nationalism and relocation of refugees.” But don’t these nations fall short on various development indices? “No, it does not necessarily mean that we are an underdeveloped lot. Countries like Lebanon, Jordan, Turkey, Yemen and Iran can give most of the so-called developed countries of South and South East Asia a run for their money. We fare better than most of them even on UNDP’s Human Development Index scale.” So, in countries that are plagued with terrorism and instability, development can happen although it may not be on the main electoral agenda.

y this mentality, Europe stands divided. Alina Mungio-Pippidi, celebrated political analyst at Scoala Nationala de Stiinte Politice si Administrative, Bucharest, says, “It is pretty difficult to club Europe in one league. While in Western Europe, people do give more importance to issues such as economic policy, the same cannot be said of Eastern Europe; issues in the latter region are more related to race and ethnicity that play a role in election results.”

Truly so, while countries like Finland – ranked by The World Bank amongst the global top three on various governance factors – might stand pristinely tall, countries like Poland are ready to take the hit. In 2005, the fundamentalist grandiloquent Kaczynski twin brothers in Poland came to power; one became President and the other Prime Minister. Though the supposed election promise was fighting ‘crime and corruption’, they actually came to power on nationalistic rhetoric like protecting Poland from the beast that is EU, and visible church driven hyperbole like opposing gay marriage, abortion, and promoting family values in an obsessively Catholic country. But interestingly, the same Polish people threw out the party from power in late 2007 because of minimal change on development front. But at the same time, in countries like Netherlands and Denmark, as Alina confirms, “Issues other than good governance – immigration and xenophobia – are increasingly gaining grounds, with recent election results being scary.” Noelia Rodrigues, Governance Expert, John F Kennedy School of Government, added her take on the situation in the West and especially in the US, “In the West, development has been the most important election plank. We have voted here on issues such as medical policy, insurance policy, and labour policy. A party that has neglected these has been bound to suffer defeat.”
For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

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