IIPM - Student: April 2013

Friday, April 26, 2013

Damn globalisation!

If you are one of those who sits back over a cup of coffee, marvels at India’s growth & takes all pessimism with a pinch of salt; this is a book you can’t miss. It’s a rich account of where we stand & where we’re headed

When I read ‘Confessions of an Economic Hitman’ a few years back, I was shocked to know that the US government has such extensive involvement in private corporations, which further its objective of global dominance. What I understood from the book was that underdeveloped or developing economies with vast amounts of natural resources were exploited by the US, which did so by embroiling them in a debt trap. However, as I sat through Aseem Shrivastava’s and Ashish Kothari’s Churning The Earth – The making of global India, I realised that global politics has moved much beyond and globalisation is now a grand scheme through which powerful nations wish to achieve global dominance. Shiravastava (an economist) and Kothari (an environmentalist) weave an intricate and comprehensive account of the social and environmental changes that have brought about unprecedented development (or so it seems) in India over the last two decades, at a horrible cost. In summary, the book is about India’s unbelievable growth story, why it is a sham and how millions of people suffer everyday at the cost of a few elites ending up better off. The writers have managed to assimilate a great deal of data to substantiate their arguments. For instance, to prove that the increase in Foreign Direct Investment (FDI) has done more harm than good, the authors use the Government of India’s Economic Survey – data which is easily available in the public domain. As per statistics churned out by the survey, India managed to finance its investment from domestic sources between 2002 to 2008 because domestic savings equalled domestic investments. This implies that FDI worth $120 billion during this period generated massive returns for investors without adding any new productive capacity. The more important question is what was all this money used for? It piled up in the form of RBI’s dollar reserves, which were in turn used to finance surplus imports. In short, India was tricked into spending beyond her means even when she could have done without it.

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Source : IIPM Editorial, 2013.
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

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Wednesday, April 24, 2013

Barack Obama’s Kony capitalism

Ugandan Joseph Kony’s past is reason enough to target him as a crime perpetrator; but the grand involvement of United States in such a myopic issue clearly seems to be only with an objective to capture oil resources in the Ugandan region than for any other altruistic reasons

Joseph Kony. By some accounts, he’s a raving lunatic. By other accounts, he’s purely a cult religious fanatic. By almost all independent and reliable accounts, the man is a cut-down-to-size erstwhile extremist on the run who might previously have had fair resources under his command, engineering random killings, ethnic cleansing and abductions not only in Uganda – his former homebase from where he used to lead the Lord’s Resistance Army (LRA) – but also in South Sudan, Congo and Central African Republic. But by no sane account is the man currently worth the title of a global terrorist.

Of course, two decades ago, Kony was a different man, with a larger-than-life persona, commandeering armed men under the LRA umbrella ostensibly fighting for “freedom”. But over the years, the LRA – which sources claim had above of 100,000 fighters during the 1990s, including a significant number of children – has been decimated quite impressively by Ugandan forces. As of date, some estimates mention that the LRA – if it at all exists anymore as an entity – couldn’t have more than a hundred so-called fighters, and those too operating discretely without any central command. And the reason for that is that Kony’s been on the run for quite a long time; and his motley LRA crew – which Uganda strongly claims is being ‘supported’ by Sudan – wouldn’t even have been known in countries outside Africa had the US not decided to get in their spin doctors into the act and brand Mr. Kony as the new Osama bin Laden.

In other words, Kony – who is often now referred to even as a plain vagabond criminal – is not worth betting your grandmother’s Edward shilling on. Far lesser is he worth creating a Lord’s Resistance Army Disarmament and Northern Uganda Recovery Act (which Mr. Obama created in May 2010) or demanding more funding from Congress primarily to target Kony and his coterie (which the US President again did in November 2010) or sending “combat-equipped” US defence forces into Uganda with a prime objective to remove Kony and destroy LRA (which Mr. Obama again managed in October 2011). And to top it all, the spin doctors even released a Youtube video called Kony 2012 in March 2012 (it’s been viewed more than 100 million times on Youtube and Vimeo as this magazine goes to print). The video documents Kony and LRA’s various ‘atrocities’ and demands action.

The gaumless ridiculousness of Mr. Obama’s so-called altruistic moves got highlighted to worse levels when on March 21, 2012, the US Senate passed a resolution against “the ruthless guerrilla group” and backed efforts to target Kony and LRA. Seriously, is all of this for a man who has, as per the US government’s own admission (Donald Yamamoto from the US State Department revealed the figures), just 150 fighters left? Kony had been operating for decades and the US did nothing. Then why now, when Kony is already almost extinct?

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Friday, April 19, 2013

“Linux doesn’t have an ideology... and I don’t think it should”

With a 61% market share of the global servers market, and running 75% of stock exchanges worldwide, the Linux operating system today powers the servers that delivers Amazon, Facebook, Twitter, Ebay and Google. Linus Benedict Torvalds, the Helsinki-Born creator of the OS, speaks out his mind on the merits of open source, open collaboration software systems

Q: In 1991 you were a student at the University of Helsinki and a self-taught hacker. What got you thinking about creating a new Operating System?
Linus Torvalds (LT): It wasn’t really a conscious decision; it was more a confluence of factors. Part of it was simply that I was interested in Operating Systems and had been working on low-level issues for a long time. I’d been doing assembly language programming and messing around with device drivers with my previous machine – a Sinclair QL that had very little support in Finland. So although I was only 21, I had something of a background for it. Another thing was that I wanted to run Unix on my newly-acquired PC, so rather than running DOS and Windows, I had gotten Minix for my machine, which was a small Unix-like OS built for educational purposes. But it was much more limited than the Unix I had gotten used to at university. At the same time, I was working on a ‘pet project’ to teach myself all about the innards of my new machine. This is what ended up expanding to become the first version of Linux.

Q: Linux doesn’t seem to have an ideology – or does it?
LT: Linux doesn’t have an ideology, no, and I don’t think it should. The important part of the question is the word ‘an’; I do think there can be many ideologies: I do it for my own reasons, other people do it for their own reasons. It’s really refreshing to see people working on Linux because they believe they can make the world a better place by spreading technology and making it available to people more widely. That’s one ideology, and I think it’s a great one. It isn’t really why I started Linux myself, but it warms my heart to see it used that way. But I also think it’s great to see all the commercial companies that use open source simply because it’s good for business. That’s a totally different ideology, and I think it’s a perfectly good one, too. The only ideology I really despise is the kind that is about exclusion of other ideologies. That’s just small minded and stupid. So the important part about open source is not the ideology – it’s just that everybody can use it for their needs and reasons.

Q: Before long, you began to encourage input to your system’s coding from other members of the IT community. Given how hard you worked on it, how did feel about the ‘loss of control’?
LT: To me, inviting other people to become part of the project wasn’t about me losing control; it was about getting lots of new ideas for further improvements. I would almost certainly have become bored with Linux rather quickly if it hadn’t been for this decision – that’s what had happened with the earlier projects I worked on in private. In fact, the initial impetus for making the Linux source code available publicly was not because I wanted others to help me write it – it was because I was proud of what I had done and wanted feedback on where to go next. The early interactions were less about other people writing code, and more about asking others what they thought the project needed, and then me writing the code myself. When people started actually sending me suggested code changes, that became a very natural extension of it.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Monday, April 15, 2013

The agony & hope for India’s domestic airlines: call it ‘FDI’

B&E analyses the outcome of allowing foreign carriers to invest in India’s domestic airlines. Finally some good news, many presume. The reality is actually quite the opposite.

If North American carriers have set standards of growth over the years, so have airlines in India. Only difference is – for India’s domestic industry, growth has always come in a package of losses. And over the years, despite optimism galore, all we can discuss aloud are the canyons of losses which have been etched into their financial books. Exaggerated? Turn the clock back to 2006, when airlines around the world returned to their profit-making ways after half-a-decade-long patch of drought. Since then (leading up to FY2010), global airlines have recorded profits amounting to $18.70 billion. [This is despite the $25.90 billion in losses they suffered during downturn-struck 2008 & 2009.] Of this, North American carriers contributed $5.7 billion. The Indian carriers on the other hand, have been living on a prayer. Despite a 48.83% jump in total passengers carried (domestic & international; to touch 64,522,662 in FY2010-11), a 64% increase in the number of operational airports (to 82), and a 158.13% jump in fleet size, their losses have only escalated. During a five year period, when global airlines made billions, India’s domestic carriers lost $5.43 billion.

To make more sense of how our domestic carriers are stuck between the devil and the deep sea, here is a forecast from IATA. Given the recovery in the industry since 2009, airlines globally, after returning a record $18 billion in FY2010, are scheduled to record $6.9 billion in profits in FY2011. Even better, all the broad geographies are expected to make money. Carriers in North America will make $1.5 billion, Europe: $1.4 billion, Asia-Pacific: $2.5 billion, Middle East: $0.8 billion, Latin America: $0.6 billion & Africa: $0.1 billion. And India? A negative $3.0 billion in FY2011 (forecast by CAPA). Shocking.

The carnage on Indian airstrips for years now, has been visible from miles away. Woebegone tales of the big three – Air India (AI), Kingfisher (KFA) and Jet Airways (Jet) – requiring urgent cash infusion have become a daily back-fence talk in the aviation circles. [A fast fact: since FY1997-98 the big three have recorded losses and debt to the tune of $3.186 trillion – roughly three times India’s GDP in FY2010.] So have strikes by pilots and other staff, winding up of operational arms to reduce losses, and problems with ATF prices and taxes levied on it by various States (ATF currently contributes to 40% of the cost-base of Indian carriers, much higher a proportion as compared to global standards – in 2010, total fuel bill globally, amounted to $176 billion, which was 30% of industry costs, as per IATA). That the big domestic airlines got into a mode of unceremonious self-slaughter by trying to outdo each other played against them. The stifling environment did the rest.

So what is the Ministry of Civil Aviation’s (MoCA) last resort to keep the industry afloat, especially the big three? Attract investments by foreign carriers through the FDI route – MoCA suggests the limit should be 24%, while the Department of Industrial Policy and Promotion (DIPP) recommends that it should be anywhere between 26% to 49%. A piece of smile-winning news after long it seems. But will this prove manna to the ailing Indian carriers?

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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

Moving towards ‘Mobile 2.0’

B&E: With the latest initiative of brand integration under Tata DoCoMo, what is it that you want to achieve?
Deepak Gulati (DG): The world of telecom is changing from pure voice to a lot of data, which includes browsing and e-mailing, applications, content and solutions for customers to do things beyond simple telephony. Tata DoCoMo is strategically moving towards ‘Mobile 2.0’. Secondly, the move will ensure the upgradation of Tata Indicom to Tata DoCoMo. It’s a logical thing to put your every offering under one brand. Spreading your media spends or confusing customers with multiple brands from the same organisation, doesn’t really make sense. Tata Indicom customer will get all the benefits like per second tariff plans, et al. But it’s not about pricing, it’s how we treat our customers. And it is the customer feedback that we look forward to.

B&E: Any change in organisational structure and job cuts due to the new restructuring?
DG: Our stores have become larger, all of them now being Tata DoCoMo stores, offering the entire set of services that we have across all platforms. As of now we have multiple platforms which we can leverage beautifully under one brand. Brands have nothing to do with jobs, so no cutting on jobs. We are now integrating and unifying across all our 4-5 brands. We have also integrated the operations. Now, it is all in one website, one store, one customer care centre.

B&E: Will there be different verticals for CDMA and GSM customers?
DG: The verticals are based on consumer solutions. If it is home solutions, there will be a vertical to offer products based on needs and product construct, which can be on various platforms and not necessarily CDMA, GSM or 3G. The product what the customer needs is important. Everything is integrated.

B&E: You have recently lost almost 2.6 million customers in the month of June-July. What was the reason?
DG: We are in the cleaning mode — shedding customers who don’t use our services beyond 6 months. But we have some additions on the CDMA side. Currently, out of our 90.1 million subscribers 40-50% are of Tata Indicom (CDMA) network.

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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

Friday, April 12, 2013

The Truth behind America’s Population Growth Agenda

Started by The US Administration and Promoted by Economists The World over, Population growth Programs became one of The Most Vital aspects of Developments in The 21st Century. Much to The Dismay of Governments, The Plans have actually backfired...

I have spent more than forty years of my professional life telling economists, business people, academics, politicians, government officials and the public at large that population growth can be one of the most positive factor in the attainment of long-term sustainable human development. My advocacy of a culture of life was actually prompted by the scientific studies of one of my professors in the doctoral program in economics at Harvard in the early 1960s, the famous Nobel laureate Simon Kuznets. As the father of national income accounting and a notable economic historian, he showed through empirical research that population growth was a major stimulus in the industrial revolution and economic growth that happened in the more advanced economies during the 19th century and the first half of the 20th century. With data pertaining to almost a century of economic development, he convinced us (his students) and many of his colleagues in the economics department of Harvard that there was no truth to the Malthusian theory of development and that population growth was a very positive contributor to long-term economic growth.

This experience at Harvard greatly influenced the way I taught my first course on Economic Development in the LIA-COM program of De Salle University. During the second half of the 1960s, I had some of the most brilliant undergraduate students at DLSU then. I presented the empirical evidences of Simon Kuznets and other economists and economic historians about the positive dimensions of population growth. I think I was able to convince a good number of them that birth control – an issue already being discussed in countries like India and China then was not a solution to the problem of mass poverty. I presented the same case in favor of population growth to my students in the Economics 11 course at the University of the Philippines in the late 1960s and early 1970s.

Not too long after that, the debate on population control started to heat up. First, there was the best-seller of Paul Ehrlich and his wife who were both resource economists in the US, entitled “The Population Bomb”. It resuscitated the much-discredited Malthusian theory that the world will run out of resources if the population continues to grow and that there could be widespread famine. A good number of leaders in the developing world believed the Ehrlichs. In India and China, there were government-sponsored programs of population control, many of them extremely coercive. Forced sterilizations were common in India. In fact, such programs were responsible for the eventual downfall of Indira Gandhi and her clan. Under the communist regime of Mao Zedong, the Chinese citizens had no alternative but to kowtow to the one-child policy. In the first years of his Presidency, Ferdinand Marcos had a very pro-life attitude. After reading the Humanae Vitae, he used to quote in public speeches a phrase lifted from the Encyclical, “we will not limit the number of participants in the banquet of life.”

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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, April 1, 2013

Continental and United – A Marriage Gone Wrong?

Jeff Smisek is a Turnaround Guy. He did that to Continental. But The Merger of United-Continental is Proving a Tougher “Trench Warfare” to win. Will The Fight for “Survival” end up as a Slugfest gone Wrong?

Talk of regrets. Not with Jeffery Smisek, the CEO of the $8.43 billion worth United Continental Holdings. An economics major from Princeton University, he was on the run to get a Ph.D at MIT. He dropped out and joined a bank in New York instead. After working for two years there, he joined Harvard Law School in 1979. Main reason? He wanted to be near his girlfriend Diana Strassmann, who was then studying in the Economics department at Harvard. Three years later, romance got the better of him again. With no employer’s card in his pocket, he decided to follow Diana to Houston (who had joined the Economics faculty at Rice University). Many advised him against doing so, but it turned out to be a good choice. The Harvardian soon found his fair share of luck in the corporate law market. Over the years that followed, Smisek became a successful M&A and Securities lawyer. But it was not until the summer of 1995 that Smisek’s career took the right course. A friend helped set up an appointment with Gordon Bethune, the-then CEO of Continental Airlines in May that year. The airline was in a mess – financial & operational – and Smisek had hoped to win a client account. To be fair, Bethune turned out to be a better salesman. He convinced Smisek to quit his cushy ‘Partner’ position in the famous Vinson & Elkins law firm and join the struggle of existence at Continental as the Senior VP & General Counsel. Again, many suggested that it sounded too risky – why leave the ground and leap into a dry well? But for Smisek, to play Captain America to Continental was not difficult a choice to make. He was a believer. He was the one who had once got lucky in love – running after Diana & winning her hand for marriage. 16 years later, he finds himself as the CEO overseeing yet another marriage – that between Continental & United Airlines. Only this time, chances of this marriage working out is slim.

Slim? Yes. Agreed that the $3 billion merger (closed on October 1, 2010) between US’ 4th & 5th-largest airlines (United & Continental resp.), has created the world’s largest airline by revenues and the 3rd largest by fleet count (707 as of April 30, 2011; after Lufthansa’s 746 & Delta’s 744). Even its topline of $32.72 billion for FY2010 was the highest for any airline globally. But size alone guarantees nothing. Beneath the hubris, even Smisek can sense a closet full of troubles. And it comes in the name of bleeding bottomlines. During the past two years, when US carriers made a combined $3.7 billion in profits, the two partners lost a total of $1.27 billion (United – $1.17 billion and Continental - $107 million). There is also the problem of falling footfalls. During the 12 months leading to January 2011, the combined passenger count for the two parties saw a y-o-y net reduction of 4.77%. The situation assumes an alarming status when seen in the light of absolute numbers. While the combined entity witnessed a fall of 3.69 million in passenger count, others like the #2 Delta & the #3 Southwest saw their numbers rising by 32.49 million (growth of 56.46%) & 5.04 million (growth of 4.94%) respectively. So, with all balloons being burst in the name of size, suddenly, the leader’s hat seems to have caught fire. Smisek is aware of it. He had walked into a similar situation 16 years back. That time, he had saved the ship. This time, the sea is rougher. Is Titanic being retold?

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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