Friday, August 31, 2012

Global Investment Guru Jim Rogers

Global Investment Guru Jim Rogers, who Co-Founded the Quantum Fund along with George Soros (The Fund Returned 4,200% in ten years, as compared to the S&P 500’s 47% in the same duration), believes that commodities are a strong investment avenue for indian firms, and that the govt. should cooperate to make india inc. more profitable

Then again, Indian tourism also has a bright future, as even the Chinese can come to India easily now for the first time in 300 years and tourism can be of great potential especially when there is peace between India and China now. The natural resources in India especially mineral wealth ensure a great future and with reforms coming up in infrastructure and the promises made by the government on infrastructure, therein lies a huge potential. If India finds competent companies to look on and manage these sectors, all of them have a very bright future.

But, India is failing to attract investors because no one wants their money to be blocked, as investors will never want to move their money out of US or Australia to a country like India where their money is almost trapped. Bonds are one of the best investment options and I really want to look up to the bond market in India, but it is not open. India has a huge population and many people can invest in bonds but the problem lies in the fact that the currency is not convertible and rigid barriers to entry of foreign investors does not allow the Indian bond market to open up properly. It is one of the best times to open up the bond market, making India a hot investment destination and Indian companies the biggest profit making corporations in the world.

For that to happen, India must open up to capital account convertibility, which is of great significance to corporates around the world. India should actually develop an offshore bond market as most of the Indian citizens don’t have money offshore, and it’s really strange that India still has a non-convertible currency. Indians are investing all around the world but there has to be some money that should even come to India. And investors will always take it as a great opportunity, if they allow reforms. The politicians in India should actually realise the benefits of currency convertibility in a globalised economy. And with the sovereign debt crisis going on in the Europe, investors are sure to move to countries which are not in trouble, and India is certainly a big destination for these investors, as they will prefer their money to be safe in a developing economy than a debt-shadowed economies like in EU.

There is a strict need of reforms in the Indian system to make it a hot destination for the investors. India has a debt to GDP ratio of almost 90%, which is actually alarming and studies show when you reach that level, you do not grow significantly and you have trouble attracting anyone. In India’s case, debt is going to rise continuously. Even if you look at the government’s budget projections, debt is going to rise for the years to come. Without some tap on debt and the non-convertible currency, its surely a big problem for Indian companies to dream about a windfall of profits, as there would be no investments. So while China will continue receiving all the FDIs, India will have to be satisfied with just FIIs. India as a whole and Indian companies should look at various smart strategies to build upon their bottomlines. But they need government cooperation too. The first thing is to look at core strong sectors and encourage the foreign companies to invest in the country. Believe in core sectors, reforms, equity and bonds, and profits will automatically follow.



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Thursday, August 30, 2012

Do you really believe your colleague’s pretty smile could cost you your promotion?

In some cases it might be even true that women are preferred and a sweet smile goes a long way, but stretching the argument to the extent that women only manipulate and never put in efforts is a lopsided perspective. It’s instead a question mark on the moral fibre of the person harbouring such feelings!

So, what are the precautions taken by the recruiters while shopping for their task force? Do they ask relevant questions so as to hand-pick people with the right mind-set? Are they successful in keeping out over-ambitious people with questionable ways of climbing the corporate ladder? “Well, when we interview our prospective employees, we generally focus on their deliverables and how result-oriented they are. When the HR faces issues of favouritism in an organisation, reality-checks are done and proper reports are prepared with records of performance and growth in line. Sometimes it’s purely insecurity on the part of certain employees. But if a ticket is raised then explanation is duly given and corrective measures are taken, otherwise mostly such cases haven’t been observed in the IT industry as it is still dominated by men,” says Vandana Purswani, Senior Executive – HR in a leading IT firm.

In these times when men reveal their hatred towards their women colleagues, the diagnosis should figure in insecurity, fear of being out of job or a simple mental block, which doesn’t accept the fairer sex in a place where only men used to sweat it out.


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Wednesday, August 29, 2012

SIX SIGMA: CRITIQUE

It’s one of the most ultimate management jargons of all time, thanks to its initiation by Motorola and subsequent promotion by Jack Welch! But over the turn 0f the century, companies that swore by this concept have been caught in an abyss. Is the practice worth it any more? by Ashutosh Harbola
 
What went wrong? Vijay Govindarajan, Professor of International Business at Tuck School of Business, comments to B&E, “Six Sigma is about continuous improvement whereas radical innovation is discontinuous change. So they conflict.” Eugene C. Reyes, VP-Business Development North America, BPO International, Inc. gives a scathing critique of the concept to B&E, “Six Sigma, TQM and even ISOs can stifle areas of business where innovation is key.” Quality has merit, but can have a self-limiting effect when it comes to innovation. In a 2003 study, Nitin Nohria (current Dean of HBS), W. Joyce and B. Robertson found that there was “no direct causal relationship” between some specific management techniques (including Six Sigma) and “superior business performance.”

Then how did Jack Welch succeed in implementing Six Sigma and ensuring fantastic success for GE (earnings grew 13% in just two years of implementation)? That was because Jack, despite targeting outstanding improvement in quality, was never fanatical about achieving the “3.4 defects per million” impossible target. His prime rule for any manager implementing Six Sigma was that the manager should “understand Six Sigma is all about customers winning in their marketplace and GE’s bottom line.” In other words, Jack cancelled any Six Sigma programme that had a chance of eating into the earnings – “Six Sigma should just be selectively applied,” were his key words in the Welch Way. Strangely, CEOs of most other Six Sigma companies never realised this necessary connection; as a matter of fact, Jack Welch never let them on to it since the very end of his tenure. But empirical evidence cannot be ignored, and as much as we may not want it, Six Sigma is on a sure path to a silent demise.

Dr. Chris Trimble of Tuck School of Business suggests to B&E, “The solution is not to kill Six Sigma, but to create ‘safe havens’ where a company can pursue disciplined experiments – while simultaneously striving for excellence in day-to-day business.” Chris, we suspect even that point is long gone...
 
 

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Tuesday, August 28, 2012

Bad news for the Congress in 2014

Political jostling and jockeying to try and go one up and a peculiar dependence on bureacrats has badly hobbled the administration of Prime Minister Manmohan Singh. This can spell bad news for the Congress in 2014 and for India right now

Of course, nobody has ever accused Prime Minister Manmohan Singh of eloquence. Or even charisma for that matter. In fact, the absence of eloquence and charisma were supposed to be the strong points of the man when he was Prime Minister during UPA-1. But UPA-2 is an entirely different cup of tea and many analysts are convinced his silence is now becoming an embarrassment. No matter what the reason, two perceptions about the nature and performance of UPA-2 are becoming very strong and widespread. And they should worry Manmohan Singh and the UPA chairperson Sonia Gandhi. The first perception is that this government couldn’t care less about the aam aadmi. That is ironical because UPA chairperson Sonia Gandhi has so brilliantly leveraged the aam aadmi and his welfare as the cornerstone of the strategy to revive the fortunes of Congress. To be widely perceived as the real leader of a regime that trampling upon the livelihood of the aam aadmi would naturally come as a bitter shock to the UPA leader. The second perception-rapidly gaining ground across the country-is slowly but surely demolishing the halo around Manmohan Singh as the man of unimpeachable integrity and honesty. The number of scams-big and small-that have swarmed like locusts on the political landscape since the arrival of UPA-2 in May, 2009 is quite alarming. Sleaze may be a word that is abhorrent to Manmohan Singh; but that term is now being increasingly associated with his government. So many politicians, analysts and pundits are saying the same things so eagerly about UPA-2 that it would be a waste of space to quote them. But the message is unmistakable and loud and very clear: If Sonia Gandhi and de facto heir apparent Rahul Gandhi are to succeed in their strategy to lead Congress to a hat trick of wins in the 2014 Lok Sabha elections, they have to do something about UPA-2. And that something has to be done very soon.

Things were so dramatically different in May 2009 when a beaming Manmohan Singh and Sonia Gandhi addressed media persons after the Congress staged a spectacular performance in the Lok Sabha elections, winning more than 200 seats after 25 long years of gradual but seemingly irreversible decline. Both Sonia Gandhi and Manmohan Singh scored brownie points with pundits and analysts. Sonia Gandhi for her astute political management and relentless focus on concerns of the poor and the aam aadmi, and Manmohan Singh for his low key but effective style of governance that delivered results. With the Left-that often gave nightmares to Manmohan Singh during UPA-1-being routed and with truculent allies like Lalu Prasad Yadav and Mulayam Singh Yadav being humbled, it was widely expected that a “liberated” Manmohan Singh would make UPA-2 even more successful than UPA 1. By the time the UPA-2 started functioning, the Indian economy too had successfully weathered the worst effects of the global meltdown of 2008 and growth was back on track. Tax revenues were buoyant and everyone knew that-despite huge fiscal deficits-the government had enough funds to funnel towards social sector and welfare schemes like NREGA and Sarva Shiksha Abhiyaan that were the hallmark of UPA-1. It was also clear that a ‘liberated’ Manmohan Singh now had nothing to lose. His so called legacy was secure with the Indo-US strategic deal that enabled India to formally join the club of nuclear powers. He was to ‘rule’ in his typically low key and non controversial and non-adversarial manner till perhaps 2014 by which time Rahul Gandhi would have gone a long way in reviving the fortunes of the Congress in states like Uttar Pradesh, Bihar and Tamil Nadu that together send about 160 MPs to the Lok Sabha. Sure, analysts knew it would be foolhardy to say that Rahul Gandhi would lead more than 272 Lok Sabha Congress MPs in 2014 when he became Prime Minister. But almost everyone agreed that he would come quite close. That was in 2009.



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Rhino Soars

The poachers of Kaziranga National Park are now the custodians of the big beast…

Not many years ago, the people of Assam would wake up to news like ‘Rhinos poached!’, ‘Forest officials fail to protect the species that brought fame to the nation!’ and they would lament on the crumbling state of the Kaziranga National Park, a World Heritage Site. But today, the once pitiful state of the rhino and the National Park has been infused with new life thanks to the Eco-development programs that have been initiated by the forest officials.

The rhino census conducted in 2009 showed 2028 rhinos as compared to 1885 in 2006 (conducted by Assam Forest Department in collaboration with Asian Rhino Specialist Group), indicating a steep rise in just three years. According to the Indian Rhino Vision Plan (2020), the rhino numbers need to be taken to 3000, which before 2008 had seemed like a far-fetched dream due to rampant and uncontrollable poaching. The forest officials of Assam had no choice but to pull-up their socks and save the star species of Assam and of the nation. Majorly poached in Africa and Asia, rhino horns serve as aphrodisiacs and are used for medicinal purposes in East Asia, especially China and Vietnam. It was observed that mostly the tribal youth was involved in poaching, and they earned approximately Rs. 5000 for every kill. The forest officials decided to seek help from none other than the local villagers. In very little time they transformed the locals from poachers to preachers of anti-poaching! In 2008, Eco-development programs were adopted in which 110 villages surrounding the Kaziranga National Park were identified and the local tribes were given the opportunity to establish a permanent source of livelihood. The villagers were shown the possibility of leading a better life and receiving a regular source of income through respectable vocations like weaving, agriculture, bee-keeping, serving as local guides of the park. The villagers in return extended their help in tracking down the poachers, thereby restoring the rhino count in the park.


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Monday, August 27, 2012

RELIGIOUS FREEDOM: THE WORLD

The new Ambassador needs to introduce the right thought process

Even region-wise, while North and South American states have low restrictions on religion freedom, Middle Eastern and North African nations have strict restrictions. In 75 countries, governments have limited the efforts of religious groups to proselytise. Interestingly, while India has moderate to high levels of government restrictions but high level of social hostility, China has high level of government restrictions but moderate or low level of social hostilities.

Moreover, it has become extremely important to bring world’s most widely followed religions on one platform. This, in a way, can reduce restrictions over religious practices, curb human rights abuses and help mitigate inter-religious hostilities. Unfortunately, the ambassador of the US IRF plays more of a diplomatic role with countries like Iran, China, Burma et al, rather than playing the religous role. It is important for the US IRF now to stop acting as yet another front to fulfil the diplomatic initiatives of the US government; it has to focus on the larger goal that justifies its existence.



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Thursday, August 23, 2012

SBI’S EXERCISE TOO SUFFERED FROM THE SYNDROME

THE VRS LAUNCHED BY PSBS IN 2000 LEFT MANY EMPLOYEES DISGRUNTLED. THOUGH SBI’S EXERCISE TOO SUFFERED FROM THE SYNDROME, IT WAS CONSIDERED ONE OF THE BETTER MANAGED ONES AMONG PSBS

SBI only accepted applications of 21,329 employees against the total of 35,380 that had applied for VRS. Interestingly, out of the dejected lot around 11,000 were of the officer cadre who even went on to form an association – SBIVRS Optee Officers’ Association – to oppose this move. “I was among the lucky three from our branch whose applications for VRS got accepted so we were happy, but those who were denied of it were furious and were questioning the credibility of the management,” recalls N. C. Sanwal, a former SBI employee to B&E.

But, had SBI accepted even half of the number of officer applicants, the bank would have been forced to close down a substantial number of its branches in rural areas. Further, in a circular dated January 2, 2001, State Bank specifically disallowed dealers in money and forex operations and employees related to some specialised functions like treasury operations, syndicated financing, risk management, asset management, et al, from opting for VRS. It was also not open to employees who were doctorates, MBAs, CAs, CWAs, CFAs or MCAs.

However, there were other problems too. While SBI marketed the VRS as a “Golden Handshake,” some of its employees perceived it to be a retrenchment scheme. “They are propagating the VRS in such a manner that the employees are being compelled to opt for the scheme,” stated V. K. Gupta, former SBI employee’s union leader in December 2000. The unions alleged that VRS was really not needed and that the real problem which deteriorated the bank’s profitability were NPAs. The unions also accused that the VRS decision was taken without proper manpower planning. “There’s no doubt that the VRS process was managed badly by the management. For instance, in several cases, managers had to share some clerical functions, which led frustration among them and in turn chaos in that particular branch,” a former SBI employee who tells B&E. Though the VRS process resulted in minor problems (like understaffing, delay in clearance process, et al) in some regions, they were tackled efficiently by SBI by rotating the administrative staff to various branches wherever there was a need to do so.

No doubt, SBI faced a lot of activism from employee unions when it came to the implementation of the VRS, but that does not mean that it can be labeled as failure. In fact, the state of affairs that SBI went through was inevitable; even the best-planned VRSs have an impact on employee morale! But the way the public sector banking behemoth managed the whole process certainly taught other PSBs a lesson on how they should have gone if they really wanted to implement a golden handshake.


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Wednesday, August 22, 2012

Will ‘Profit’ ever have a conscience?

Many years ago, the ‘legendary’ GE CEO Jack Welch proclaimed in virtually as many words that CEOs who spent money on corporate social responsibility were morons and deserved to be sacked because their primary function was to reward shareholders. Of course, when Jack Welch delivered this central tenet of capitalism and ‘free’ markets, America and the world were celebrating the triumph of capitalism over socialism and Francis Fukuyama had even announced the end of ideology. There were many in India who wildly cheered the triumph of capitalism as the magic wand that would solve India’s economic problems. They even hectored, bullied and ridiculed policy makers who did not want India to adopt what George Soros and Joseph Stiglitz have so brilliantly described as ‘financial capitalism’ and ‘free market fundamentalism’. That breed has of course gone relatively quiet after the 2008 meltdown.

Yet, the recent verdict in the Bhopal gas homicide (yes, I am deliberately using the word because Bhopal will always be a case of corporate homicide) has raised many fundamental questions about banally used terms like Capitalism, Free Markets and Profits. Most people – and very rightly so – have condemned the entire event as a travesty of justice. Thinking people have again raised red flags about the pathetic state of the justice delivery system in India. Politicians, as usual, have sputtered, fumed, raved and ranted on TV news channels.

If you are an optimist, you might be tempted to think that the uproar triggered by the Bhopal case might result in some legal reforms whereby companies and CEOs will actually be made to pay for corporate crimes that endanger and damage human beings and society (I personally think that Bhopal would have disappeared from TV screens by the time you read this). If you are an angst filled cynic like me, you might wonder if that Utopia will ever been seen. Look at what is happening in the fountainhead of Capitalism – America. More than 20 years ago, there was a disastrous oil spill and the culprit was the giant Exxon. I still remember – as a young journalist – reading wise columns in The Economist arguing for better regulation of ‘Free Markets’ and ‘Capitalism’ as the way to avoid the similar tragedies in the future. (By then, the failure of Socialism to protect human lives from industrial disasters had been cruelly exposed by the Chernobyl nuclear disaster in the erstwhile Soviet Union). More than 20 years later, it is another giant BP that is the culprit and another oil spill in America is causing monumental damage.

Cynical it may sound, but for someone like me with a very modest understanding of economics, it seems clear that the pursuit of profits (the sole reason of existence of companies in a capitalist system) will always cause human misery and deprivation. It also seems to me that the word ‘Free Market’ is a farce because a truly free market means all participants have access to information. You must be joking if you still think the underprivileged have access to information in a capitalist system wile making transactions.


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“The State’s GDP will increase by 110% this year”

Chhattisgarh’s principal secy. of finance & Planning defends his state’s policy of growth and expenditures during a talk with B&E’s anu warrier

B&E: Chhatisgarh’s treasury is full and massive amounts of funds are being released for various schemes. However, such expenditures to run after scripting a high-growth tale may lead to a dangerous situation, don’t you think?
AS: Firstly, the situation is what I would call a “balance between social spending and financial discipline”. The government took effective decisions in favour of the poor and funds were never a problem. Statistics show that we have balanced spending and revenues. Although last year’s expenditures have increased, they will be controlled soon. Therefore, atleast till as far as I can see, there is no need to worry about any dangerous situation that will arise of our actions which come about as a result of running after high growth targets.

B&E: So, the government will never face paucity of funds?
AS: We believe that the public money should be used for the welfare of the public. In the most recent Monsoon session of the State Assembly, a complimentary budget of Rs.13.44 billion was approved post which, the State’s budget has expanded to Rs.250 billion. If that is not a secure treasury, what is?

B&E: Recently, there were incidents that showed a poor or deteriorated state of financials of the Chhattisgarh. For instance, a ban was a imposed by the government on foreign travel of ministers and bureaucrats. Even the Municipal Division Presidents were not given status of Ministers of State. Your justification...
AS: No. Foreign travel has been banned to avoid unnecessary expenditures and it is being strictly followed. As far as giving Municipal Division Presidents the statis of Minister of State, the government has to decide that. Also, steps are on to stop reckless expenditure in administrative departments.

Read more.....

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Tuesday, August 21, 2012

Desperately seeking Johnny

After having worked with some of the hottest men in Hollywood, JLo is desperate for more! Her quest won’t end until she works with Johnny Depp. The Monster in Law actress is even ready to go toothless, wear a pirate’s hat and an eye-patch if that meant she could work with Depp! We’re sure Depp must be floored!


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