Death for death, life for life!

While developed nations with high literacy rates and embedded social and moral value systems may choose not to ever impose the death penalty, there is growing logic for supporting capital punishment in nations where there is a significant poor and/or illiterate population that is not sociologically mature enough to understand that killing people is wrong. The IIPM Think Tank scrutinizes this radical, yet damningly convincing ideology

Since the last few years, the debate over abolishment or assumption of capital punishment seems to have simply yo-yo’d between the for and against camps, without any convincing closure or resolution in sight. Yet, in recent haste, the debate has been jump-started out of its reverie in the light of the recent Oslo shoot-out in Norway where Anders Behring Breivik took 77 lives at random. For the uninitiated, Norway abolished capital punishment decades ago – as have all other EU states – and thus, Anders may end up merely serving a prison sentence of 30 years or less for the cold-blooded mass murders. And that too may be reduced once and if Berivik applies for clemency after a few years. In other words, the 32 year old murderer may be out of prison jostling with weekend shoppers and children even before he turns 50. And what if he again grabs a gun and shoots dead a few hundred children more to enstrengthen his schizophrenic ‘apolitical’ cause?

Globally, around 95 countries have abolished capital punishment while around 58 nations are still practicing it. According to the Law Commission of India, India has executed around 4,300 criminals since Independence. However, since August 2004, after Dhananjoy Chatterjee was executed, many other convicts were sentenced to death but their execution is still pending. Since 1976, the US has seen 1265 executions (46 executed in 2010), with 3092 inmates currently on death row.

Looking at this thematically and sociologically, does it mean that in countries like Norway where capital punishment has been abolished, there is a greater propensity for people to commit murders as finally, one never loses one’s life after committing the murder? And vice versa in countries which practice capital punishment? To answer that question, one has to first understand the legacy of the capital punishment debate.

History is testimony to the fact that poverty and illiteracy have had a direct correlation with incidence of crime. Poor and illiterate people are likelier to commit a crime – and eventually get convicted. According to the Hrabowski and Robbi report, published in 1992, there were over 1.5 million Americans imprisoned in adult correctional facilities. Interestingly, out of all 1.5 million imprisoned Americans, around 49% had not completed their high school education. A study by the Arizona Department of Adult Probation in 1997 proved that “the re-arrest rate of probationers who received literacy training was 35%, whereas those who had not received the training were re-arrested at a rate of 46%.” The same research went on to prove that the re-arrest rate of an ‘educated’ prisoner, who cleared GED (General Educational Development) test, is merely 24% while it was found to be 46% for the not-so-educated ones (those who didn’t clear the GED test).

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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
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

The new Telecom Policy 2011 should provide some reprieve and foster healthy

Telecom M&As are waiting to happen, but Archaic Regulations are Preventing them from happening. The new Telecom Policy 2011 should provide some reprieve and foster healthy, and less severe competition in the sector 

Sector analysts and industry experts believe that consolidation will happen in telecom once the cap on M&A, as defined by the NTP 1999, is removed. DoT rules stipulate that an operator can’t own 10% or more in another operator in the same circle. “Current M&A rules have many restrictions, and impose heavy costs on M&A; such as rules, which shorten the license terms of spectrum post-merger. These rules must be relaxed to allow the market to return to healthy & effective competition,” says the spokesperson from Vodafone Essar Ltd. Further, policies like unified license for all services, allowing voice calls on 4G, et al are raising fear of more competition. Hurdles in India have led to players looking overseas for greener inorganic pastures. Bharti acquired Zain’s African mobile services for $ 10.7 billion, 100% stake in Telecom Seychelles Ltd. for $62 million and a controlling stake in Warid Telecom.

Another barrier for M&As is the huge investments in 3G licenses, infrastructure, network rollout, et al, due to which telcos are concerned about return on capital investment. Most telcos including leading operators are under huge debts and price wars do not give much hope of reprieve. With uncertainties and irregularities in regulation, operators are uncertain about more investments and so are banks. Even foreign-backed new entrants like Uninor, Sistema & S-Tel have found it hard to be in the black. The picture does not look so good due to the hyper competition and rock-bottom tariffs. “There are many players looking to exit or sell off. This is also obvious from the fact that many have not even rolled out their services yet” highlights Hemant Joshi, Partner Deloittee Haskins & Sells.

Data revenue uplift is expected to help players, and Credit Suisse projects it to be 50% of incremental revenues in the next three years. However, the competitive advantage would still be with players like Bharti, Vodafone and Idea, who have higher net worth subscribers. That is why Credit Suisse has projected an EV/EBITDA ratio of 6.2 for Bharti and 5.1 for Idea for Q1, FY 2012-13, while it projects only 4.2 for RCom. Without the multiple advantages of these giants, many of the smaller players seem to be only sitting on spectrum and assets or maintaining a comfortable growth rate waiting for an exit. It’s time to let the deals flow.

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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
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Losing An Unfare War?

For The Fifth time in a row, there is no Airline Company in The B&E Power 100 list. Swati Sharma Writes on why there will be none Next Year too.

Annual profits are a phenomenon unheard of in the Indian commercial aviation space. After recording losses of $6.5 billion between CY2006 & CY2009, the industry continued swimming underwater during CY2010, despite a rather pleasing domestic passenger count of 52 million. While it is tempting to argue that even globally, airlines have not had a happy outing during the past half-a-decade, one cannot overlook the biting truth that of late, the Indian aviation industry seems to have mastered the art of making losses even when the sector globally records positive incomes. Factor this – in FY2010, globally, airlines earned $18 billion in profits. Indian carriers on the other hand, lost $400 million (loss as per IATA). The fact that Indian carriers today carry a debt burden of $13 billion (the highest in Asia) is another worry.

When former Civil Aviation Minister Praful Patel assumed office seven years back, he had declared that India would become one of the largest aviation markets in the world. It has. But only in terms of footfalls. On the profit-making part, it is today a tale of Christian scientists relying on mere prayers. So who’s to blame?
The largest player makes a loss, and you know everything is not good. Worse, it comes as a confirmation that even after years of famine, none in this industry stand a chance of reaching the oasis called the B&E Power 100 list. True: the hallmark of any sector that has enjoyed an overwhelming presence (like BFSI, Oil & Gas, Power, Metals et al) in the list of India’s 100 most profitable companies, during any given year, has been at least the largest in the category that has made a positive margin on revenues. But look at the negative state of affairs on the P&L sheet of India’s largest domestic airline Jet Airways (market share of 24.8% of the domestic market, as of April 2011; DGCA data), and you will understand why there is no airline name in the ranking.

Despite revenues of $3.3 billion, Jet recorded a net loss of Rs.858.4 million in FY2010-11. A big problem for Jet is its accumulated and ever-increasing debt load of Rs.130 billion. In fact, due to debt issues, employee unrest and continuous losses annually, its stock has also been under fire. Today, the company is valued at $800 million – about 62% lower than in May 2005, when it got listed on NSE. The airline then was purely a domestic player. Today, it earns 58.3% of its revenues from international routes – a fact which should have added greatly to its advantage and profitability thereof, given the much profitable long-haul routes. But no. Structural issues have got the better of Naresh Goyal’s brainchild. The problem with the other two-largest Full-Service Carriers is no different. Together with Jet, Kingfisher (20% market share) and Air India (15.4%) made more than Rs.68 billion in losses during FY2010-11. [While Kingfisher lost Rs.10.27 billion, Air India is expected to have lost more than Rs.57 billion.

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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 WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Irrepressible We are, Irrepressible We will be!

No doubt, Microsoft is Sitting on $40 billion in Cash, and that does make The Skype Acquisition Affordable. But then, does it really makes sense to buy a firm that still hasn’t figured out a way to make Profits?

What adjective would you use to describe the act of paying 30 times the EBITDA (earnings before interest, taxes, depreciation, and amortisation) and 400 times the operating income for the acquisition of a company that hasn’t figured out a way to make profits in the last five years? Irrepressible (difficult or impossible to control or restrain) fits the bill pretty well. Why? Because during the press conference (on May 10, 2011) announcing the $8.5 billion acquisition of Skype (an online phone and video calling service) Steve Ballmer, CEO, Microsoft made everyone believe that there couldn’t be a better reason for the deal than an irrepressible urge when he said: “We are irrepressible in moving forward, and pursuing new things. This Skype acquisition is entirely consistent with our ambitious, forward-looking, irrepressible nature.”

On the face of it, the acquisition looks nothing more than an attempt to project Microsoft as a company in tune with the times. But before we seal our verdict on the viability of this transaction, let us delve into the fundamentals first. Keeping aside the obscene amount that the tech giant has coughed up, what makes this deal a center of speculations & apprehensions is Ballmer’s record with respect to strategy. Apart from losing formidable competitive advantages to Apple in the form of tablets and music players, the CEO’s deal making conscience has not very been very encouraging so far. In fact, while recently speaking at the annual Ira Sohn Investment Research Conference in New York, David Einhorn, President, Greenlight Capital (the company which holds 9 million shares of Microsoft) called for Steve Ballmer to step down. Raison d’être: In 2001 & 2002, Ballmer experimented in the area of mergers & acquisitions (M&As) for the first time in his capacity as CEO by shelling out over $2 billion to take over two ERP software vendors – Great Plains Software and Navision. Microsoft estimated that the businesses would be generating more than $10 billion in combined annual revenues by the end of 2010. Come today and $1 billion per annum is what the two units are actually churning out (as of 2010). That’s exactly $9 billion short of initial predictions.

Again in 2007, the Redmond based company shelled out $6 billion (a premium of 85%) for acquiring aQuantive (an online advertising outfit). The $2.6 billion operating loss incurred by Microsoft’s online services division for the year ending March 2011 signifies that the acquisition hasn’t really paid off as of now. Even the $500 million purchase of Danger Inc. in 2008 resulted in Microsoft withdrawing the disastrous Kin line of phones from the market.

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.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Is The World now Ready for The Indian Style of Management?

Theory“I” talks about how Global Management concepts are now getting Influenced Significantly by lessons from The Indian Context, both Culturally and Professionally. With more and more Indians taking up Global Leadership roles across the World in Varied Areas of Society,polity and Industry,is The World getting Enmeshed with and finally Accepting The Indian style of Management? By Arindam Chaudhuri

What should you then call the Indian style of management? And even before that, why should one even accept the hypothesis that the simple ascendance of individuals with a heavy Indian lineage to global positions is the finalistic evidence that the Indian style of management is gaining prevalence in power corridors? Isn’t the Indian “style” atypically laced with the capitulating negative tint of the wheeler dealer variety; of the manager who believes in being effective than on simply being efficient? Yes, that may be true. But even though in discussions pertaining to how Indians ‘manage’ issues, while one might be more prone to straddling the critical cynicism laced fence, look a little deeper, with an honest openness to the happenings around the world, and however much you might wish to, it might not be possible anymore to disregard the slow but sure rise of these very Indians in the power corridors that run the world.

Some say it’s simply the law of averages. Throw a handful of chewing-gums on a wall and simply by the law of averages, a few would stick on. The corollary, shove a few million Indians into Europe and US, and some would eventually become leaders. Well, that may be true too; but only at levels and in groups that are more driven by hard labour than by skill and intellect. The moment one talks about societies based on meritocracy – a factor that drives many Western nations – then all these debates can be dismissively rejected as then, it doesn’t matter whether the individual came from a large demographic group or an insignificant one, what matters is simply the person’s personal capability, capacity and competence.

So while a few years back, one simply boasted of Google having Indians as amongst the largest ethnic groups of workers, today one boasts of people like K. Ram Shriram (member, Google board of directors) and Nikesh Arora (Chief Business Officer, Google), whose names are listed just below the likes of Eric Schmidt, Larry Page, Sergey Brin on their corporate listings. The growing number of people of Indian origin at the helm of leading companies and top B-schools is another sure evidence of this hypothesis being forwarded. Adobe CEO Shantanu Narayen, Citigroup CEO Vikram Pandit, PepsiCo CEO Indra Nooyi, Sun Microsystems co-founder Vinod Khosla, Motorola Inc. Co-CEO and Motorola Mobility CEO Dr. Sanjay Jha and more recently, Reckitt Benckiser CEO Rakesh Kapoor, represent the growing and fruitful aspirations of Indians in global companies. Similarly, South Carolina Governor Nikki Haley, USAID administrator Rajiv Shah, Solicitor General of United States Neal Katyal, Chief Information Officer of United States Vivek Kundra, Satveer Chaudhary in Minnesota and Upendra Chivukula in New Jersey. Louisiana Governor Piyush Amrit (nee Bobby) Jindal top the politico-bureaucracy list too.

The 2000 US Census had already given the initial pointers to this by mentioning that Indian Americans had the highest median income of all groups. A Duke University-University of California Berkeley study showed that from 1995-2005, Indian Americans had started more engineering and technology companies than British, Chinese, Taiwanese and Japanese immigrants put together. All this simply could not have been possible if we were purely considering the gum-on-the-wall theory to assess individual advancement. Clearly, there’s something that Indians are doing right, which is allowing them to advance to leadership positions in various streams of society. And this has to directly do with the management and leadership skills that they are practicing on their teams, companies and peer groups, much of the skills which I am convinced have developed due to their connect with India – in terms of their cultural upbringing, family background, educational focus, objective oriented approach in life and similar aspects.

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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 WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Embrace Innovative Business models or go under

For The Music Industry, Buffeted by Declining sales of Albums and Slowing Digital Downloads, The Writing on the wall is clear. Embrace Innovative Business models or go under.

At a fundamental level, the music industry’s woes can be ascribed to its inability to come up with new alternative music products tailored to keep pace with the changing face of music. Another is the failure of traditional music companies to alter their existing business model, largely based on physical distribution of music (selling CDs), which still accounts for almost 73% of their total revenue pie. Crispin Reed, Managing Director, BrandHouse, a UK based brand consultancy, fully agrees. “Although, sticking to conventional business models might have been a conscious decision, it’s equally likely that this was due to inertia, which is typical in well-established sectors. It’s often easier to create a new paradigm than change a long established one” says Reed. Thankfully, a few big players seem to have accepted the harsh realities of file-sharing, music downloads and independent do-it-yourself market taking over. According to an industry report, both Universal and Sony are using digital music downloads to build buzz around a particular album, which will follow the single months after.

iTunes stores have also shown the industry a way to monetise the digital platform. Introduced by Apple in 2004, users are charged a nominal downloading fee per song. Today, iTunes accounts for 70% online digital music sales and is the largest legal online music retailer in the world. Johnny Ryan, Senior Researcher at The Institute of International and European Affairs (IIEA) offers some ideas on how the industry can buoy up sales of music. He tells B&E that “the lesson for the music industry lies in the gaming industry. Computer game sales have risen as the music industry’s have fallen, and a part of the former’s success is a result of its approach to piracy and community”. The most successful computer games offer players online communal experiences that allow them to compete against each other, and to leverage the community and social strengths of the internet. At the same time, they also require players to connect via online subscription services that make software piracy impossible. Transferring this concept to the music industry might actually be a good approach.

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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