Showing posts with label iipm-press. Show all posts
Showing posts with label iipm-press. Show all posts

Tuesday, September 04, 2012

Catch me if you can!

Is India ready to become a hot spot for the spotted one?

When the geographical location prefixing the name of certain animal sub-specie changes with each decade, it raises an alarm. So now that the ‘Indian’ cheetah has come to be known as ‘Iranian’ cheetah after a two-decade stint as ‘Asiatic’ cheetah, the Indian Environment and Forests ministry (MoEF) has taken notice. After a failed attempt in 2000 by Indian scientists, measures are being taken once again by India to translocate the cheetah.

The spotted cat, which takes its name from the Sanskrit word ‘citrakayah’ has been extinct from the sub-continent for well over 50 years. In 1947, disgraced Maharaja of Surguja shot down three cheetahs, which were incidentally the last few seen in India. It is the only species to become extinct in India due to unnatural reasons and “the only animal in the last 100 years”, as observed by Environment and Forests Minister Jairam Ramesh. “Reintroduction is a matter of national importance”, he added.

With a population of less than 90 cheetahs around the Kavir desert, Iran is very adamant to not part with the big cat. India on the other hand is increasingly persistent on relocating the cheetah. It is contemplating the import of the African sub-specie if Iran doesn’t cohere. The African Cheetah fortunately is relatively predominant in number with Namibia homing 3,500 of them. In all, it is speculated that close to 12,000 African Cheetahs survive.



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Friday, August 24, 2012

INDIA’S LARGEST PRIVATE SECTOR BANK

IT’S NEITHER AN EXTREME OF ADVENTURISM NOR AN EXTREME OF CONSERVATISM, THE APPROACH THAT INDIA’S LARGEST PRIVATE SECTOR BANK, ICICI BANK, NOW SEEMS TO FOLLOW IS THE MIDDLE PATH

In the meanwhile, to add to the irritation basket of Kochhar, on and off, there were numerous reports on how the bank’s so-called collection agents were harassing customers to recover dues; this wasn’t definitely helping brand ICICI and the collection agents were perhaps not the best brand ambassadors. Kochhar went for a swift course correction. Realising that the approach towards collection needed to be preventive than curative, the services of the collection agents were done away with. Now, collection is an in-house job; those who sell loans double up to follow up on the payments. ICICI Bank, once known for its aggressiveness, has in a way called off the frenzy of expansion and market share and settled down to the basics of safe banking. The very mantra of growth, market expansion, size and scale that mattered the most for the bank was put on hold and the operational focus was more oriented to balanced growth for sustainable and higher income.

Keeping in mind the September 2008 episode, the bank focused on a base of stable depositors, and hence more small savings (on which a mere 3.5% interest is paid) and current accounts (on which the banks have to pay zero interest) thereby turning the operations more profitable. The bank is neither operating with too much of adventurism nor with too much of conservatism. Though optimistic of the long-term scenario, the bank at present is taking cautious steps. Moreover, the customer orientation apparently has improved dramatically. The multiple calls that customers would receive from different sales people of ICICI Bank 24x7 have gone into a limbo.

Now, you really don’t have five different sales people calling you at five different hours of the day trying to push five different products of the bank. The entire approach has changed, with the focus now on a one-point contact to the customer. The “Khayaal Aapka” ad campaign is a step forward in customer focus and managing activism...but one that might not be needed in the near future.


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Friday, August 17, 2012

Living on her terms!

While Jennifer Aniston’s latest film The Bounty Hunter has left critics and audience ‘underwhelmed’, she’s already busy shooting for her next romantic comedy opposite Adam Sandler – Just Go With It. She is also launching a perfume – Lolavie – this summer, which is a fragrance that matches both her taste and choice and is “sexy and clean, floral, but not too flowery”. What’s more, ‘Rachel Green’ of the Friends series also believes directing is the next step for her and is already working on a project! This 41-year-old is sure going full throttle!


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Friday, August 03, 2012

What is the Future of State Capitalism (and State-run enterprises)?

In State capitalism, does the operative word “capitalism” come in? State capitalism and State-run enterprises are neither to be applauded nor feared, writes prof. james l. Heskett of harvard business school

Whether we think we are part of a free market or not, are we really living in an era of state capitalism? What are we to make of estimates that State-owned sovereign funds, led by Abu Dhabi and fuelled mostly by oil revenues and trade surpluses, now total more than the value of the world’s hedge funds and will grow by six times over just in the next seven years? Or that states like China and Russia now own the world’s largest corporations? Or that, according to an estimate by the American Enterprise Institute, economies of countries with authoritarian regimes have grown faster over the past ten years than economies of the most politically free countries?

One doesn’t hear much about that these days as State-owned corporations now dwarf even the largest privately-owned global organisations, with PetroChina currently leading the list with a market value of more than $1 trillion. The impact of this phenomenon on competition is interesting. Just ask the manager of a privately-owned global corporation how easy it is to compete with a State-owned institution (and the state’s sovereign fund investors) when his competitor is able to arrange to have State aid or investment provided or withheld in large quantities to a potential customer’s country of origin depending on whether that customer favours a private or State-owned vendor. Whatever happened to the fears just a few short years ago that global corporations with allegiance to no government would constitute an important challenge to the world economic order, one that would be impossible to control with conventional laws & regulations?

The phenomenon has interesting implications for those in need of capital, particularly if the source of the capital is your strongest economic competitor. For example, the United States, the European Union, and South Africa recently have seen several of their very large financial institutions seek help from sovereign funds or State-owned companies with ample money to invest. Among the largest investors have been Abu Dhabi’s and Kuwait’s Investment Authorities and the China Investment Corporation. There have been outcries for measures requiring investors to adhere to certain practices regarding disclosure and intent. But typically, unless majority investments are at stake, there is little other than moral suasion that can be used to persuade investors to avoid making investments for political reasons or adhere to certain standards for transparency in their investment practices. The stronger the need for capital, the fewer even the most modest requests placed on the investors. Only when investments in what is perceived as critical infrastructure, such as ports, is involved has the US Congress, for example, drawn the line in prohibiting a transaction.

This raises a number of questions. Can national or even regional laws or regulations even begin to deal with what in effect are global markets? Will some kind of global agreement be required? Just how easily will that be achieved? Or does this phenomenon really matter in the long run? Is State capitalism just another way of redistributing the ownership of the world’s assets, something that has gone on for centuries? Is it better to have the available money, regardless of origin, invested in assets located in free market democracies than somewhere else? Will this help insure the world’s long-run prosperity and security as lenders or investors increase their stake in the success of currencies in markets in which they invest? Or, alternatively, will the situation take care of itself as a new equilibrium reoccurs when those managing huge pools of money and gigantic corporations succumb to inefficiencies of size, poor investment decisions, and the potential for corruption?

In state capitalism, is the operative word “capitalism”? State capitalism is neither to be applauded nor feared. That is, “as long as the key decisions are in favour of making money for the State,” as Saaketh Preetham commented. Omer E. puts it this way: “What this suggests is nothing more than the emergence of changing political tides.” In fact, in M. F. Procaccini’s words, “the whole ‘mixed economy’ models of the 20th Century and today are based mostly on combinations of state and private forms of capitalism.” Citing examples of Dutch and British investments abroad, Cole Woodson comments, “I find the question to be somewhat delinquent... to the tune of several centuries.” He adds that to the extent that returns from investments of governments and State-owned sovereign funds can replace taxes, they can be beneficial to a citizenry.


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Saturday, July 28, 2012

@Townhall – Road to term II

@Townhall is a Novel Obama initiative that deserves to be emulated by Global Leaders for greater transparency and reach

“When we sacrifice our commitment to education, we’re sacrificing our future. We can’t let that happen. Our kids deserve better,” tweeted President Barack Obama. @Townhall may seem just another twitter account to most readers but clearly, it’s much more. @townhall is the “official account for Twitter hosted town halls.” In other words, the forum which political heads can employ to directly engage their electorate. And the first politician to take up this opportunity? Barack Obama but of course, who, on July 6, 2011, invited and answered varied questions from mostly American audiences, and that too live.

This initiative of reaching out is not only novel and historical but also redefines the concept of “democracy.” Of course, the launch of such an interface is accurately in sync with the initial 2012 election campaign plans of Obama – so one might suspect that Twitter is clearly aligning with the Democrats. But giving them the benefit of doubt, the fact is that till date, it has only been Obama who has been so proactive amongst almost all global leaders in directly engaging his citizens. Another of his team’s initiatives, the WhiteHouse 2.0 campaign that was started two years ago, also talks about a similar initiative wherein all significant social networking sites are used as tools to reach bigger audiences.

When Obama reportedly met CEOs of Twitter (May 2011) and Facebook (April, 2011), it was evidently to plan the future of his online campaign, which now seems be gaining a larger than imaginable proportion. Heads of State around the world, and even those planning to be Obama’s opponents in the coming Presidential elections, need to at least learn these few lessons from Obama, as merely opening a Twitter or Facebook account does not really further one’s cause.


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Friday, July 27, 2012

“More Regulation will have a Negative Fallout”

P. K. Mukherjee, MD, sesa Goa talks to Virat Bahri on The Company’s outlook post The Lifting of The Export ban and The Sfio Report

B&E: FY 2010-11 was an year where you dealt with relatively low iron ore realizations. In the light of that fact, what is your perspective on the results? Also, what are your expectations with respect to when these realizations will improve in the coming time?
PKM: Iron ore realization were good but volume was relatively low. The ban on export of Karnataka ore and even the procedural bottlenecks for moving ore for domestic consumption outside the state, extended monsoon in Goa along with transport time restrictions are the major reasons that came in the way of volume growth. Dispatch of quantities more than EC permissions done by some mine owners (particularly south Goa) that further restricted iron ore movement and the unprecedented increase in road freight in Goa were other challenges. Otherwise, we are quite confident of market being quite buoyant and expect price realizations to be range bound.

B&E: What major transformations have been done post the company’s acquisition by the Vedanta Group? What were the managerial and business related challenges and how did you overcome them?
PKM: Vedanta group acquired SESA in 2007 and then DEMPO acquisition came in 2009. Volume has doubled during this period. Strong Management Information Systems including motivation/push for operational excellence and more empowerment of executives with career growth opportunities for younger generations are few areas of transformation. We also challenge our own benchmarks continuously. The thrust is on continuous growth with sustainability.

B&E: Investors would be waiting for the time when you will be able to finally move towards steel production and export. What is your perspective on the same?
PKM: If the Indian steel industry can consume all the grades of iron ore as exported, miners would be only happy to sell it to them at market determined price. Exports of iron ore from India were never done by design but only because the miners in India were not left with any choice. As far as coming into steel production is concerned, well, it would come at its own time.

B&E: How critical is the lifting of the export ban from iron ore in Karnataka to your business?
PKM: The amount of iron ore produced in our Karnataka iron ore mine hasn’t got enough demand in domestic market; leave alone the issue of market determined price. Hence, growth of our Karnataka volume (as per environmental permissions) is critically dependent on effective lifting of the ban with the seamless issue of all permits required legally. 


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Friday, July 20, 2012

Accept or Reject without a Reason

The Term “Accept or Reject without a Reason” Is The most Misused term across Government contracts – and for Shamefully Corrupt Purposes

Without even one iota of doubt, there is an urgent need for the government or the judiciary to pass strictures against this clause and ensure that the power to accept or reject contracts is via transparent means and not through unilaterally decided arbitrary decisions that cannot even be questioned at a later date. Just look at the putrefied list of our gloriously corrupt government representatives and you start understanding why this clause has become a debauched, unethical entity.

AICTE’s Chairman R. A. Yadav was suspended in 2009 under a corruption case, while AICTE member secretary K. Naryan Rao was even arrested. In the same year, former Jharkhand chief minister Madhu Koda was arrested in a case of disproportionate assets. Ramachandran Nair, CEO, LIC Housing Finance was arrested in 2010, again on charges of bribery charges. A. K. Srivastava, CMD, Nalco was arrested in February 2011, of course, on bribery charges. Secretary General of CWG organising committee Lalit Bhanot, former telecom minister A. Raja, and more, the list simply does not seem to stop.

Our proposed solution to resolve corruption by getting rid of the clause, obviously sounds too simplistic by itself. But wonderfully, the most complicated problems in the world have had quite simple solutions. With the government running away from owning up to the issue, it’s obviously the judiciary that has to get working. Well, we guess even the judiciary has to clean up its house first of all. The Tis Hazari Courts, in their tender for purchasing aerosol insecticide, writes, “The Purchase Committee reserves the right to accept or reject any tender without assigning any reason whatsoever.” Way to go judiciary, way to go!


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Monday, July 16, 2012

Is there an alternative?

To meet the growing demand of electricity in the country, the approach paper of 12th Five year Plan (2012-2017) targets to set up 100 GW of capacity. However, if the government wants to achieve this desired growth, it certainly needs to undertake immediate reforms to augment domestic coal supply.

At a time when over 50% of the country’s energy demands are met by coal, India is still struggling with issues related to its production and supply. Every year, the Planning Commission comes out with an estimated target of coal production and, interestingly, every year the figure is scaled down considerably. Even the final output lies nowhere near the revised estimates. What’s more? Coal or black gold, as it is often called, is about to become dearer and the ramifications are certainly going to be felt all around. The reason is simple. A risk of shortfall in production targets, the proposed pay revision in the sector, and an increased share of washed coal may put an upward pressure on coal prices and place energy companies at the losing end.

When it comes to a change in policy regime, there have been visible attempts to liberalise the statutory & regulatory framework in order to promote investment in the coal sector. These policy initiatives have come in the form of allowing captive mining by power, steel & cement industries; allowing foreign direct investment (FDI) of 100% for the power sector, 74% for the steel, cement & coal washing; creating a competitive market for sale of coal; progressive reduction of customs duty on coal & the import of Heavy Earth Moving Machinery (HEMM); and the introduction of contract mining. Despite all this, there really hasn’t been too much forward movement in the sector. In fact, since 1993, over 208 coal blocks holding around 50 billion tonnes reserves have been allocated for captive users. However, still only about 30 blocks have started production, mining just about 40 million tonne (MT) of coal against the potential of over 200 MT. This indicates that the domestic production has never been able to meet the industry demand. Even for the current Plan (2007-12), the Commission had earlier estimated that coal production will reach 680 MT by 2011-12, but the figure was later revised to 630 MT in a mid-term appraisal, and was further scaled down to 554 MT. In fact, production shortfall in the current fiscal is projected at 142 MT, with domestic output likely to touch 554 MT.

No doubt, as per Planning Commission estimates, domestic coal production will grow to 770 MT by 2017 (on the basis of projected annual growth of around 7%), but by then the demand too would soar to 1,000 MT, requiring companies to import 200 million tonnes. For the uninitiated, over 60% of India’s commercial energy need is met by coal (India’s proven reserves of coal currently stand at 110 billion tonnes). Although, as per estimates, the share of coal in terms of India’s total energy needs would drop by 2024-25, the fall would be marginal 4-5%.


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Thursday, July 12, 2012

US housing market report

With US facing the fears of a double dip recession, investments in real estate remains sluggish. However, continuous fall in home prices and mortgage rates have brought in a great opportunity. Though the post-crisis over-cautious approach of lenders and borrowers is still playing spoilsport, current valuations and demographic dynamics may soon change the scenario.

Housing crisis continues

Housing boom in the US that began in the late 1990s led to an exponential growth in home sales. In fact, the demand remained quite strong during the period and outpaced the supply of new built as well as old homes on sale. As per reports, average sales of houses stayed at around five million per year. But with the economic crisis coming into picture, demand dipped thick and fast from over five million to less than four million. Since then, inventories have been on a painfully slow drift downward as a drop in demand offset much of the impact of the collapse in home building. However, by August of this year, combined new and existing homes listed for sale have fallen to 3.6 million units, having completed roughly 70% of the journey back to normal.

Mortgage payment at record low

With a sharp dip in mortgage rates, US Families have to leash out very low rates out of their income to pay for mortgages. As per Freddie Mac, by October 7, 2011 mortgage rates have fallen to an average annual level of 3.94%. Assuming the use of a fixed rate mortgage with 20% down, it will make the median mortgage payment on a single family existing home just 6.9% of per household personal income, compared to an average of 14.4% since 1966. While this presents a downside market, it also emphasises on the long-term gain that one can achieve by investing in the cheaper than average houses locking in cheaper long term financing available at present. Because, any demand pull in future will also pull these prices up.


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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. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting




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