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April 2015
Mumbai | Volume XII | Issue 9
Out with the casuals. In with the formals.
Are you geared up for MBA?
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EP
N
LIK
ANG
M EHA
SOUMYADE
AASHISH CHILLAR
UTTAM
KUMAR
6 100%ilers in CAT’14
are IMS Students
HARSHVEER JAIN
VIBHU GUPTA
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editor from the
www.advancedge.com Editor-in-Chief Kamlesh Sajnani
They say every good thing has a beginning and an end. I don’t believe in ends, but
I do believe in beginnings, and this is the beginning of an amazing journey for you, my dear reader. Greetings! You are here because you’ve chosen to walk the path of the most sought after
Editor Aditya Prakash Iengar
individuals in the world today – those with MBA degrees, the managers, the leaders of tomorrow. If you keep a calm and level head on your shoulders, and are willing to constantly keep learning, nothing can stop your onward march to success.
Design Uma Shirke, Satish Yadav
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for you. To that end, we here at Advanc’edge will provide you everything you’ll need to know. How many kinds of MBA programmes are there? What do the different management institutes have to offer? Why do some B-schools rate higher than others? What are your peers across world thinking, as they too prepare to get into an MBA course? Which course is best suited to you? How can you fund the often exorbitant fees of the courses? How do you prepare for the group discussion and personal interview rounds after the CAT? These are only a few of the questions we shall answer and discuss over the next 12 months.
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You will also find here a wealth of information on corporate and business
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for you to remember better. If you read these sections regularly, you’ll be well
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Write to the editor at: editor@advancedge.com Websites: www.advancedge.com, www.imsindia.com
prepared by the time you get to your GD-PI rounds. And for those of you who want to explore other options, we shall talk about other management entrance exams like the CMAT, XAT, NMAT, et al, as well as international MBAs, the GMAT and other related matters. For now, let me tell you that you’ve chosen the right path, and if you follow it through to the end, you will certainly be richly rewarded. Welcome aboard!
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Aditya Prakash Iengar Editor Advanc’edge MBA October 2012 3
C O N T E N T S
APRIL 2015 Cover Story 06 | MBA: Your success begins now 08 | Four most important things about an MBA
MBA Buzz 10 | Cracking the CAT: Prepare, practice, prevail
Countdown 12 | Top 15 best companies to work for in India
22 | Samsung Electronics: Fighting to stay competitive 26 | Maruti Suzuki: Poised high on foresight
Must Reads 30 | Who Moved My Cheese Surely You’re Joking, Mr Feynman! Freakonomics
Study Hour 31 | Test Q&As
B-School Vibe 15 | Life at a B-school: The beginnings
34 | Word Dose: Taste in antique junk 36 | Globescan 38 | SuDoKu
Corporate World 18 | Budget 2015-16: A look at the hits and misses
Disclaimer : The views expressed in the articles by contributors and others are not necessarily those of the Publishers, unless specifically stated therein. While no effort is spared in ensuring the accuracy of the information published herein, readers are advised to reconfirm the current facts before acting upon any such information. The Publishers regret their inability to accept responsibility for any inadvertent errors of commission or omission in this issue. Readers are recommended to make appropriate inquiries before incurring expenses or entering into commitments in relation to any advertisement appearing in this publication. The publishers do not vouch for any claims made by the advertisers of any products or services. The Publisher, Printers or Editor shall not be held liable for any consequences in the event of such claims not being honoured by the advertisers. All rights reserved. No part of this publication may be reproduced, in any form or means, or stored in a database or retrieval system without prior permission from the publisher.
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cover story
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Advanc’edge MBA April 2015
cover story
MBA: Your success begins now Why do you want to pursue an MBA degree? Will it really help you? What does the MBA entail? All these questions, and more, will be answered in this article in brief – everything you need to know as you stand at the threshold of the world of the MBA.
The Advanc’edge Team
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elcome to the world of businesses and corporates. Where careers are made and futures built. Where innovation of every sort is woven into the very fundamental workings, and which utilises all sorts of skills, from the specific to the broad. This is a world where economies are sustained, policies of billion dollar enterprises made, synergies constructed a c r o s s
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Advanc’edge MBA April 2015
geographies. Welcome to the world of the MBA. Now that you have decided to pursue your MBA degree, you will have certainly started formulating strategies on how to go about it. The entrance tests are, of course, of prime importance. Cracking them will require a lot of hard work. But you should know something about the world of management that you’re about to enter.
MBA — What’s the point? An MBA is not just a degree. It is proof that you have the perfect combination of modern business knowledge and the skills and drive to perform and succeed. It tells the world that you can overcome different kinds of challenges and surpass benchmarks where others cannot. In the modern business environment, standardisation of processes and constant innovation are the crucial factors that drive profit
and growth, and it is this quest that has spawned complex, transnational organisations. Naturally, on as large a scale as this, people who can constantly monitor and mentor the progress of the organisation are needed, and that’s where the MBA degree comes in – creating managers and leaders who can handle and control this complex, competitive environment. An MBA helps you gain the requisite employability standards – of the highest quality – and that in turn leads to better pay, better prospects and a better career. During the course of your MBA programme, you will hone to perfection your communication, goal-setting and decision making skills. You will learn to analyse, plan and execute in innovative manners. You will understand the importance of teamwork, leadership and motivation, and how the people with whom you study will help you gain immense cross cultural exposure. To cut a long story short, there are several reasons why getting an MBA will give you a leg up in your career.
cover story Finding the right path
Who is the MBA for?
During the course of your MBA, you will be exposed to a wide spectrum of interests, ideas and specialisations. This will help you identify the career path that most interests you. The various clubs, team events and seminars that are a ubiquitous part of every MBA programme will also help you answer that very important question: “What should I do?” The MBA will force you to stray from your comfort zones and explore, which will in turn help you identify your strengths and weaknesses and make you grow as a leader, manager and individual.
As far as the Indian context it concerned, there is no restriction. People with work experience and those without can do an MBA, in both public and private B-schools. Internationally, however, management institutes expect their students to have a few years of work experience after their graduation. MBA programmes are of different durations and kinds; in India, the most prevalent is the two year full time programme. Of late, several one year programmes are also gaining ground, designed specifically for those who have had more than five years of work experience.
Value enhancement in your industry MBA programmes are quite varied in terms of what is taught and the skills you acquire. This is thanks to the plethora of MBA specialisations available, like finance, healthcare management, IT, accounting, media-marketing etc. If you want to stay in your industry, but want to move up in the hierarchy and handle more challenging roles and responsibilities, such an MBA would be perfect for you.
Career change
What you’ll get from your MBA Even though you’re almost a year away from beginning your MBA programme, you should preparing yourself mentally for the experience. For starters, you’ll have to work very hard, probably more than you have till now. You will be constantly delving into new ideas and contemplations and information you didn’t even know existed. Starting now, learn how to use the resources around you – from your peers, faculty, the libraries, Internet, everything. This will put you in the mode you’ll need to be in during your
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Choosing your institute This is another critical choice that you must make. Any management institute won’t be the right one for you; you must know which college you want to get into and why. There is no point in joining an institute which is known for its HR specialisation when you want
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You might have been working in a particular industry for a while, but now feel the need to change lines. In doing so, you might find that your existing skill sets are not quite matching up. In such a scenario, both general and specialised MBA degrees will open many new doors for you, and give you additional leverage for a career change. In such a situation, you will also gain several skill sets that will help enormously once you make the decision to shift industries.
MBA PROGRAMMES ARE QUITE VARIED IN TERMS OF WHAT IS TAUGHT AND THE SKILLS YOU ACQUIRE.
programme. Network within your own college (for freshers) or your organisation (for experienced candidates). Network with local businesses and entrepreneurs. As mentioned before, you will also find out about your strengths and weaknesses, even while you’re simply preparing and studying for the entrance tests. Learn from them, and try to identify from them what makes you tick and sets you apart from the crowd. This will help you not only during the GDEssay-PI rounds, but also during your course. The MBA itself will also help you differentiate yourself, develop and utilise your talents. It will involve integrated leadership training that includes coursework, executive mentorship, online and peer assessments, and regular coaching support. Your leadership competencies will improve in the areas of teamwork, influence, interpersonal communication, presentation, managing and conflict, for example. Another huge advantage of the MBA programmes is the way they are taught – quite different from undergraduate studies. Here, you will come across experiential learning – where you will explore case studies, work on live projects, and even collaborate with companies, all as part of your studies. Nothing can trump this kind of learning.
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cover story to specialise in Finance – this is common sense, right? So at this juncture, when you’ve just started preparing for the institute entrance exams in earnest, it is good to have an idea of which B-school you would want to study in for the next two years. Your choice will shape your career and your future, so ensure that you make the right one. Evaluate yourself and your interests, your profile, the industry and companies you’d like to work for, the cost of the course. Also try and find out as much as you can about the institutes – its reputation, course structure, faculty, its placement record.
Deciding on the tests There are several entrance tests for management institutes. By far the most famous – and the one you are probably aiming to crack the most – is the Common Admission Test (CAT). It is purported to be one of the most difficult entrance exams in the country, conducted by the Indian Institutes of Management once a year. Almost all B-schools across the country accept the CAT score, so aim for a high score in the test, and once you get it, you will find more options available to you than you can handle! Then there are other institute-specific tests, like the XAT for XLRI, the NMAT
for NMIMS, SNAP for the Symbiosis institutes, the MHCET and the recently introduced CMAT, the entrance tests for TISS, IRMA, IIFT and others. Again, depending on the institute you’d like to get into, aim for those specific tests, but it’s a safe bet that getting a good CAT score opens the door to almost all institutes. As you prepare to crack these tests, you still have a year on hand until your MBA programme begins. Study hard, make sure you know what you’re doing, and above all, have confidence in yourself. Your success begins now. A
Four most important things about an MBA
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In the race to earn an MBA degree, many aspirants lose track of what’s really important. Why should you go after an MBA? What must you look for in your course, and in your institute? Here are some important things to keep in mind. Prof Dr Uday Salunkhe Group Director, WeSchool
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ith the fast paced changes in the global economy bringing innovation and creativity to the centre stage in all walks of human life, there are several factors that need to be questioned and thought over thoroughly by every MBA aspirant. Of them, the following three are, I believe, the most important.
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Why should I pursue an MBA? Have I done a realistic self-assessment to
Advanc’edge MBA April 2015
identify my career goals? Try to narrow down the types of careers you might like to pursue, balanced by a realistic selfassessment of your current abilities and skills. Examine your motives carefully. Determining where you want to work after completing your MBA should be a major part of this process. For practical reasons, most business school application forms ask for career aspirations as they want to see a clear indication of goals and
cover story objectives and how that school can give its support to achieve them. MBA aspirants today have a wide range of choices, with top business schools trying to customise their courses to match the students’ specific career interests. It is therefore critical to study how one’s chosen degree will vary within each institute, and whether the research topics will cover areas that one is keen to explore.
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Look out for the B-school that is “future ready”
International/national level accreditations, rankings and ratings are indicators of quality education that a B-school offers. But more importantly, find out the steps taken by the B-school to foster creativity and inculcate a culture of innovation, digital world, environmental related issues and leadership in its educational programmes. A B-school that has a robust industry interface, strong alumni network, international immersions and global exposure, innovative programmes and cutting edge pedagogy will go that extra mile to mentor the MBA aspirant to become a Citizen-Manager-Leader, someone who will be strong enough to take on the challenges thrown by future turbulences, and yet rise above the narrow confines of self and care for organisation and society. Look for an innovation lab or an incubation centre, where the young minds get an opportunity to interact with peers as well as scholarly, experienced faculty to create solutions for sustainable development of all stakeholders. The B-schools of today have the responsibility of nurturing global citizen mangers with in-depth domain knowledge combined with an overall perspective and exemplary leadership skills with sensitivity to the organisation and society.
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curiosity quotient and make a meaningful contribution to developing the intellectual DNA of the student. Look beyond infrastructure to the “mind structure”, faculty ratio and quality of engagement, whether the B-school has really invested in the holistic personality development of its own students. For instance, as Welingkar Institute reinvented itself as WeSchool, we challenged convention, collaborated with corporates, governments and NGOs to design innovative programme to equip today’s youth to face tomorrow’s uncertainties and challenges and created new paradigms in management education. A teacher must become a leader, and a leader, be it from the corporate world, NGO, government or politics, should be willing to take on the mantle of a teacher and mentor. People from all walks of life – entrepreneurs, spiritually awakened people, adventurers, environmentalists as well as those at the bottom of the pyramid interact with WeSchool students and share the wealth of knowledge and experiences, which works wonders for their overall development.
NARROW DOWN CAREERS YOU WANT TO PURSUE, AIDED BY A REALISTIC SELF-ASSESSMENT OF YOUR CURRENT ABILITIES.
Does the school have a great “mind structure”?
Understanding the important as well.
expectations
is
As the selection process for admission to a management institute is extremely competitive and B-schools are really looking for very specific qualities, qualifications and experiences, you must prepare well on all the counts. Cost can be a deciding factor within this decision process. An affordable possibility that some B-schools offer is working whilst studying through weekend/evening courses, distance education as well as E-Learning mode. MBA aspirants must also ideally conduct a good amount of research, identify goals as well as understand expectations and most importantly, visit the school before choosing, as this can often be a major deciding factor. A B-school should be able to provide many such options to the MBA aspirant that will develop the mindset to learn and relearn through research, experimentation, observation and interaction, and train the individual to look beyond the ordinary. Wish you all the best. A
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Try and find out if the B-school encourages its students and faculty to do research and creates platforms for them to present it at national/international forums. Exposure given to students through competitions, industrial visits, seminars, entrepreneurship networks as well as social outreach programmes add to the
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mba buzz
Cracking the CAT: Prepare, practice, prevail Now that you have taken the decision to pursue your MBA, the first step is knowing how to prepare for the CAT. There is a scientific way to get ready for the test, and in this article, we give you a brief snapshot of how you can prepare yourself and achieve your target score. Vinayak Kudva National Products Head, IMS
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e all know the importance of the CAT, and your reading this means that you must be preparing for the forthcoming test in earnest. In this article, I shall give out a few key points that you need to keep in mind during your preparation, and if you do, I’m certain you will be able to achieve your goal in the next few months. In the meanwhile, I am sure you have been keeping up to date and reading media reports about the CAT and the change in its pattern and structure. Until the year before last, the CAT was conducted by the IIMs, with Prometric as the testing agency. From 2014 onwards, TCS has been selected as the technology partner for the CAT, which was followed by announcements about the change in CAT structure.
Based on data collected from past CATs and Simulated CATs (SimCATs) that are conducted by IMS, we have an analysis of the number of questions students must attempt and get correct to achieve certain percentiles:
Test structure
Table 1: Benchmarks in CAT
The CAT consists of two sections, with a fixed duration of 85 minutes and 50 questions per section. The most important thing to do is to concentrate on both accuracy and speed, and simultaneously showcase equal competence in all sections.
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At this stage, if you have only just started preparing for your CAT, you might realise that you are at one of the above stages, or perhaps even below the 75 percentile benchmark. However, there is no reason to be anxious. If you follow an effective and efficient study plan from here on, Sectional Benchmarks
Percentile # questions
# attempts # correct Minutes per Q
Stage 1
75%ile
50
30
25
2.8
Stage 2
85%ile
50
35
30
2.4
Stage 3
95%ile
50
40
35
2.1
Stage 4
99%ile
50
45
40
1.8
mba buzz
TO ACHIEVE YOUR TARGET SCORE REQUIRES PRACTICE. SO TAKE ONE MOCK TEST PER WEEK, OR TWO AT MOST. it is quite possible to meet your target CAT percentile.
Test sections and pattern The questions asked are usually of school/high-school standards, with Quant basics of Numbers, Arithmetic, Algebra, Geometry and Modern Math being tested. The Verbal Area consists of questions on Grammar, Vocabulary and Reading Comprehension. There are also questions based on interpretation of data and logical reasoning like puzzles, arrangements, series and family tree. The questions revolve around
the application of basic concepts and hence require a thorough understanding of the basics. The key to get a good score is to attempt those areas in which your strength lies. Unnecessary guess work in marking answers will be highly counterproductive because of the negative marking system.
Creating an effective and efficient study plan The objective is to reach your target percentiles in a stepwise manner by achieving the benchmark attempts and number of correct answers at each stage as per Table 1. Ideally, the remaining months from now until your actual test must be equally divided to improve your performance from one stage to the next. So, if you are at Stage 1 (i.e. at 75 %ile) then the remaining time you have should be divided into three periods of equal time duration each to ensure that you reach Stage 4 before actually
To achieve your target requires practice and more practice. To that end, you should take one test per week (or a maximum of two tests per week), especially if you are a working professional. For every test you take, as per the above table, you will attempt only the specified number of questions to ascertain your performance. For the post test analysis and the process of improvement, work on the questions that you got wrong. This is very important, since you had more time per question and still got them wrong. It means either an error of comprehension or a conceptual issue. Next pick the questions you did not attempt and solve these questions without a time limit; once again this exercise will point out your areas of improvement. Doing this process for each test will definitely improve your performance in the next. At the end of each period, take a SimCAT and check your sectional performance. If your attempt and accuracy is greater than or equal to the benchmarked percentile, you are ready to move to the next stage. If on the other hand, your attempts and accuracy are less than the benchmarked percentile, analyse the test to find out where you need improvement. Use the explanatory answers provided to you with each test to aid this improvement. I wish you all the very best! A
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Taking a SimCAT regularly and analysing your performance is a vital part of your CAT preparation.
taking your test. Within each period, target to achieve the stated benchmarks of the next stage by: 1. Working on your conceptual and application skills, and 2. Fine-tuning your test-taking skills.
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15 TOP
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BEST COMPANIES TO WORK FOR IN INDIA
It is common knowledge that Google offices are some of the best places to work in anywhere across the world. But it is more than just snazzy decor and perks offered that make the companies on this list the best to work for in India. We are usually accustomed to seeing most lists that start with Google to feature other big names like Apple, IBM, Microsoft, and the like. This list is different, though. You will find Microsoft, but at 14. You'll also find tiny companies like Cactus Comm feature among the top 10.
1 ONE
Industry: Technology
Employee
1625
2
Industry: Technology
TWO
Employee
HOTEL
Industry: Hospitality
3644
3 THREE
Employee
5200
4 FOUR
Industry: Finance Employee
8129
5 FIVE
Industry: Technology Employee
6
4635
SIX
Industry: Technology Employee
2553
7
Industry: FMCG
SEVEN
Employee
8
2121
EIGHT
Industry: Technology Employee
Industry: Finance Employee
4096
773
9 NINE
10
Industry: Professional Services (Content)
TEN
Employee
Industry: Technology
297
11 ELEVEN
Employee
1849
12 TWELVE
Industry: Consumer Durables Employee
Industry: Finance Employee
1860
14
9363
13 THIRTEEN
FOURTEEN
HOTEL
Industry: Hospitality Employee
14675
Industry: Technology Employee
6593
15 FIFTEEN
b-school vibe
Life at a B-school: The beginnings Debates, dances, assignments, studies – these are just some of the things one is involved in at a management institute. The first year of the MBA course can be quite daunting, challenging one’s every faculty to the utmost, but over time, the efforts are richly rewarded.
Ankita Singh
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he fact that one is a bona fide MBA student does not hit one till the hapless student finds herself/ himself standing in front of the imposing gates of the B-school he/ she has successfully found a place in. Something like this happened to me too. One moment I was grumbling at the heat and dust of Ghaziabad and the very next m o m e n t I was standing in front o f
the famous white wall with “Institute of Management Technology” inscribed on it. Taking a deep breath and summoning all the 330 million deities, I dived head-first into the experience best captured in the song “IMT Aao”.
Where I come from... Much like the sun and the dry winds that beat down on us during the northern summers,
the course dried up my enthusiasm. I have never used my background to milk sympathy (I am a science graduate. Not just any other science graduate but a Microbiology graduate. Double whammy just got redefined!), but subjects like Micro-Economics and Accounting had me running for cover. However, if there is one thing that an MBA course teaches you, it is survival against the harshest of odds. And all the 330 million deities had just decided to teach me the act of survival by plonking on me an Economics graduate for my roommate. Did I hear a moan of sympathy? Thank you.
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It’s a group thing
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Understanding group dynamics is an essential skill in MBA.
I also experienced what most people mention in their B-school interviews – Group Dynamics. And believe me when I say that a group can become a very dynamic battle of egos. How to accommodate all that and then make sure that the dynamism results in some achievement is what an MBA teaches you — argument by argument,
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b-school vibe
What is Image? Your image is you in the eyes and minds of others. That image then becomes your identity. You are assessed, evaluated and judged based on the image you project or reflect. Here are a few pointers that will go a long way in establishing a good, positive image of you. Clothing • Dress in conservative and elegant clothing, preferably a light coloured shirt, dark trousers and a professional looking tie. You could also wear a matched suit in a darker colour like navy, dark brown or black with a light shirt and tie. • Women could opt for a skirt that ends below the knee along with a suit. Alternatively, they could wear a shirt with enough comfort and ease with a skirt or trousers. Wear skin coloured hosiery along with the skirt. • Pay attention to how the clothes fit and how they make you look, rather than on the brand or price tag. • Dress in clean and ironed clothing. Accessories • Add tasteful accessories, such as a good quality tie or scarf, watch, belt and, most importantly, a well polished pair of shoes. • The colour of your belt needs to match that of your shoes, and your pair of socks has to be of the same colour as the trouser. • Use the tie or scarf to create a contrast, to help hold attention to the face. Women can wear dainty earrings and a simple neckpiece.
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Grooming • Short, clean, well manicured nails are a must. Women should opt for neutral nail paints, and make sure they are not chipped. • Short, well-groomed hair for men. Women are expected to tie up their hair, or at least keep them away from their face. • Women need to wear basic makeup. • You need to smell good, so wear a conservative perfume, not too strong. Body Language • Stand and walk tall with purposeful strides. • Smile confidently and make eye contact. • Listen attentively and respond positively.
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Etiquette Be polite, use words like “please”, “thank you”, “may I”, etc. You also need to be at your best behaviour at all times, as your peers and professors are always evaluating you. assignment by assignment.
No fire, the frying pan’s all in the mind Life at a B-school is all about
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getting out of one’s self-created comfort zone. I got out of mine when I danced solo for the first time on stage in front of a crowd at Passion, the annual
management and cultural fest of IMT Ghaziabad. And I was left wondering at the comfort with which I did it and why I had not attempted it before! I did an encore at another inter-section event, and though I still don’t know to what extent I exceeded everyone’s tolerance levels, I know for sure that the latest chartbusters and I are inseparable on stage. I also let loose my verbal cannons at a debate on the occasion of Independence Day and realised the merit of the words “controlled chaos”. Such are the things one gets involved in pretty regularly in a management institute.
Some everyday things... Some things in life can’t be debated though. And foremost among them is getting up in time for an early morning lecture when all one wants to do is, well, go back to bed again. The task becomes a torture when the northern winters creep in and freeze everything in sight, when all one sees is a thick cover of fog and the vapour emanating out of one’s mouth like a kettle on a stove. Another one of those lessons that one learns to master over time, and something that one learns very well at a B-school! As my first year at IMT drew to a close and the summer internship started winking at me from the not-so-distant horizon, would I have wanted to relive the 365 days gone by? Perhaps. But I would have rather enjoyed it vicariously through the new batch of 2013-2015. After all, experiences are meant to be gone through once, right? A The author talks about her first year as a student at IMT Ghaziabad.
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corporate world
Budget 2015-16: A look at the hits and misses The Budget of any country is of vital importance, giving an insight into the direction the government wants to take the country. The Union Budget 2015-16 has its share of hits and misses, and is discussed in this article. Dr Suresh Srinivasan
T
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he Union Budget presented by finance minister Arun Jaitley is being hailed as “forward looking” and “growth oriented”, but what does it really mean? A budget merely presents a statement of intended receipts and expenditure over the next 12 months and gives a pointer towards the source of such receipts and where the expenditure would be spent. In most advanced economies, budget is not really a big bang event, as major policy reforms are carried out in the routine course of government business and not necessarily as a part of budget announcements! However, it is important that there should be no major surprises in the budget proposals. This means that there shouldn’t be contradiction with the indications and signals the government has been giving over the last ten months since it came to power, with respect to how it plans to address the challenges faced by the Indian economy and how it is proposing to restore India’s competitiveness globally. To that extent, in the 201516 budget presented by the finance minister, there are no major surprises. The budget proposals are in line with the series of initiatives announced by the government over the last 10
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months to turn around the economy and restore macroeconomic stability, fuel investments, enhance job creation, move towards a double digit growth rate and be inclusive. The proposals do not in any way dampen the optimism that had been generated since the new government came to power.
Budget 2015-16: The numbers Basically, the budget projects receipts, expenditures and the deficit for the next 12 months (commencing April 1, 2015). To summarise the Union Budget’s math, the total expenditure of the Government of India stands at `17.7 lakh crore. Of this, `13.1 lakh crore goes towards routine expenditure required to fund the government machinery and departments’ working (this is also called Non-Plan
IN THE BUDGET, THERE ARE NO MAJOR SURPRISES; PROPOSALS ARE IN LINE WITH THE GOVT’S INITIATIVES.
Expenditure), including salaries for the government department staff, defence, pensions, maintaining the police force and subsidies on account of food, fertilizer and fuel. The remaining `4.6 lakh crore are towards various development and infrastructure projects, including power generation, roads, irrigation, science and technology, etc (also called Plann Expenditure), which are budgeted in consultation with Nitti Aiyog (formerly the Planning Commission). Where do the receipts, which will go to finance the above expenditure of `17.7 lakh crore, come from? Primarily, a net amount of `9.2 lakh crore comes from tax collections to the Government of India (`14.5 lakh crore comes from corporate tax, personal income tax and indirect taxes like excise, customs, service tax, etc, of which the Central government passes on `5.3 lakh crore to state governments, retaining `9.2 lakh crore of tax revenue), `2.2 lakh crore from dividend and interest receipts, and an additional `1.7 lakh crore comes from other capital receipts like privatisation of public sector banks, leaving a gap of `4.6 lakh crore, which is financed through market loans and debt.
corporate world How do the numbers add up? If we analyse the above numbers, the government does not have much flexibility, as most of the receipts and expenditure are routine and cannot be drastically cut or enhanced. For instance, nothing can be done with the Non-Plan Expenditure of `13.1 lakh crore, which are salaries and expenses in running government departments, barring around `2.43 lakh crore which relate to subsidies (which the government is steadily trying to cut down). This, in effect, makes up around 60 per cent of the total expenditure, which is virtually impossible to control. The remaining 40 per cent is where the finance minister has leeway to introduce innovative schemes to ensure such expenditure is spent towards economic growth, consistently maintaining spend towards meaningful schemes that spurs economic growth in the medium to long term. Hence, with very little scope to play around and change things around, “overnight” budgets in countries like India are extremely challenging!
A positive investment climate is key
Hotstar Within three months of launching, Htstar has become the fastest application to cross a million downloads, in just six days flat. It has already crossed 10 million downloads since its launch and has actually beaten other digital media products like Facebook, Instagram and Twitter. Owned by the Star India network, Hotstar has been developed specifically for mobile phones and tablet devices, where it streams videos and live telecasts. Especially with the ongoing ICC Cricket series, it was the right time to launch this product. Hotstar can operate in low bandwidths, which is highly conducive for the Indian mobile Internet scenario. When Internet speeds are low, the application stops the video and streams only the audio, until the speed strength increases. Both this thoughtfulness about the Indian mobile Internet condition and the free content availability has helped the app’s success. Congress Party’s take on NDA’s Budget 2015-16 Former Union Minister P. Chidambaram commented that the recently presented Union Budget 2015-16 has failed in one of the most important components — being unable to contain fiscal deficits below the targeted levels of 3.6 per cent of the GDP. By allowing the fiscal deficit to balloon to 3.9 per cent, finance minister Arun Jaitley has flouted the measures that are required to achieve fiscal consolidation. More importantly, this is where the shrewdness and innovativeness of any finance minister lies, and of course his challenge, and it needs to be achieved for a good budget. Such an act by the current finance minister has resulted in additional borrowings to bridge the incremental deficit, and there is a possibility that many schemes intended towards rural poor could be axed. More importantly, if the inflation figures for 2015-16 increase above the current forecasts, which is very likely, the deficit figures could further increase, seriously impacting the health of the economy!
creates the necessary infrastructure to support such investments. And this is where the Plan Expenditure takes prominence — it is a chickenand-egg story and that is where the challenge lies!
Improving climate
the
investment
A number of market and policy reforms to improve the investment climate have been proposed. Some of these include bringing commodity regulations also under the purview of the SEBI, set up a public debt management agency, bringing in a new bankruptcy code and revamp management of
public sector banks. New laws on black money, enactment of social security, deepening national skills mission and rural employment guarantee schemes have also been announced. More importantly, the government has clarified it will avoid the retrospective tax amendments that had earlier seriously dented India’s image as an investment destination. Corporate tax will also be progressively cut down to 25 per cent from the current 30 per cent over the next four years, and is expecting to implement the Goods and Services Tax (GST) by April 2016.
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Rather than controlling expenditure to draw up a positive budget, a smarter way would be to see how income can be steadily and sustainably enhanced. Around 65 per cent of the of the total receipts comes from tax and, leaving out a very small component from personal income tax (`3.27 lakh crore), the rest are all from corporates. This means that the government should focus on growth through creating a positive investment climate and more foreign investment to flow in for creating production capacity and jobs, which will automatically increase the output from corporates and thereby increase tax revenues to the government. However, this will happen only if the government
INDIA INC: AT A GLANCE
Advanc’edge MBA April 2015
corporate world towards infrastructure for the current year. In order to finance the enormous capital required for building the nation’s infrastructure, covering rail, roads and irrigation, the government is proposing to issue tax-free bonds. Five new ultra mega-power projects have also been proposed.
Deficit and growth
Infrastructure allocation In parallel, the government is ensuring sufficient allocation of resources for infrastructure creation that will sustain higher level of investments into the economy. `70,000 crore have been allocated
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With these measures, the government is projecting the 201516 budget to show a fiscal deficit of 3.9 per cent of the Gross Domestic Product (GDP), although such deficit figures are higher than the fiscal target of 3.6 per cent. The government expects the economy to grow between 8.0 per cent and 8.5 per cent, and is focusing on achieving double digit growth in the coming years. The markets were flat in reacting to the budget, as a number of uncertainties still remained. For example, the inflation today seems to be under control, due to which
GE buys into ‘Make in India’ Although India has been one of the fastest growing nations over the last few years, its manufacturing sector had been actually ignored; most of India’s growth came from the services sector. Especially with the Indian middle class exploding in terms of size, per capita income and their aspirations for superior lifestyles have spurred the need for more luxury and lifestyle products. This resulted in large scale imports, putting pressure on India’s scarce foreign currency reserves. With the ‘Make in India’ campaign, international companies should set up shop and manufacture in India, so that valuable foreign currency can be saved. This will also improve the employment situation, which is housing millions of youth in the productive age group. General Electric (GE) is now setting up a flexible “multi-modal” factory in the outskirts of Pune towards translating the “Make in India” dream into reality. The plant is spread over 67 acres, where different products for multiple businesses can be built using shared infrastructure, equipment, and people. GE is investing around `1,200 crore in the facility. We need more MNCs to take this route!
Advanc’edge MBA April 2015
the Reserve Bank of India (RBI) has been reducing interest rates in the economy, thereby spurring investments. This has been possible only because global crude oil prices have remained under US$50 a barrel for quite some time. However, if there is any increase in the global crude oil price in the coming months, and India being a larger importer of crude oil, there can be significant inflation impact to the economy, which will force the RBI to make a change in its monetary policy stance, which eventually will result in a much lower level of investment and growth as compared to the budget forecasts! This will also drive up the fiscal deficit to much higher levels, and substantially weaken the economy. Most importantly, the budget is a mere spelling of intent. The actual on ground execution during 201516, reacting to dynamic global and economic changes, will hold the key for India to regain back its lost competitiveness. A
Alibaba moving towards acquisition of Snapdeal E-commerce giant Alibaba is seriously contemplating acquiring India’s Snapdeal. The Chinese e-retailer recently listed itself in the United States market with a valuation close to US$ 200 billion, becoming one of the most highly valued global companies. It is now seriously contemplating entering the Indian market and is choosing to take the acquisition route, rather than build a nut-and-bolt organic business. Its target is the Indian e-retailer Snapdeal, which has been aggressively growing over the last 15 months. The potential stumbling block for this transaction seems to be the valuation of Snapdeal; while Alibaba sees the valuation at close to US$5 billion (around `30,000 crore), Snapdeal shareholders are expecting a valuation close to US$7 billion (around `42,000 crore). If the parties are able to narrow down to a mutually acceptable value, the acquisition could create an e-commerce giant in India. In this context, it would be interesting to see how Flipkart, the largest Indian e-commerce player, reacts to such a development!
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Samsung Electronics: Fighting to stay competitive Once a behemoth in the smartphone space, Samsung seems to be slowly losing its grip. Newer players like Xiaomi and Micromax are bringing the fight to Samsung, which has to now look at banking on its focus on innovation to win back its competitiveness.
Dr Suresh Srinivasan
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hen Nokia was the largest hand phone company in the world during the mid 2000s, Samsung was getting its act together, and by 2010, Samsung became the largest handset maker in the world. Over the last 10 years, it has transformed itself as one of the most innovative companies in the world — today, it is the largest LCD display panel and flat panel television manufacturers. Samsung has come a long way, taking the most innovative companies in the world like Apple and Google head on to establish itself successfully.
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Threats to Samsung: New and old The year 2014 has seen competitive rivalry in the handset space really heating up. Samsung’s market share stands dented not only by Apple, but also by other emerging competitors. Micromax claims it is now the largest handset maker in India, which Samsung disputes, and Xiaomi is claimed to have displaced Samsung in the Chinese handset market.
Advanc’edge MBA April 2015
It is interesting to compare Samsung, Apple and Micromax in the Indian market, which was once Samsung’s forte. Today, Samsung has roughly around 70 models, with around 3 of them priced above `40,000 and 40 priced in the range of `1,000 to `10,000. The remaining models are between `10,000 and `40,000. Micromax has invaded the low-end segment — today it has around 145 models, all
below `20,000, and 130 out of them below 10,000. In fact, 9 of them are even below `1,000. Apple, on the other hand, is squeezing out Samsung from the high end segment. Samsung lost out on its S5 range of phones, which substantially underperformed against its own expectations and forecasts. On the other hand, Apple’s iPhone 6 was a runaway hit, substantially moving up on high end market share.
Survival tactics Samsung’s strategy in the handset market over the next 12 months will be extremely crucial. Some analysts believe that if it has to survive, it cannot continue to be present in all the three segments, i.e., low, mid and high end, and compete against focused competitors like Apple and Micromax. Instead, Samsung should shift its focus to the mid segment by deepening its capabilities. But the company does not seem to have given up. Its high end S6 and S6 Edge, releasing next month in India, is likely to be priced between `50,000 to `70,000. A contrary view is also important — if it loses out on the high end segment, the repercussions will be felt across all segments, denting its competitiveness across segments. So, what is the best way forward for Samsung?
Samsung’s businesses To answer this question, understanding the profile of the company, Samsung Electronics Co. Ltd., is important. Mobile phones handsets and network
corporate world business, where it currently holds around 30 per cent global market share, make up around 65 per cent of its total business. Around 20 per cent of the company’s business comes from consumer electronics like flat panel television sets, refrigerators, washing machines and air conditioners. The remaining 15 per cent comes from display solutions which include display panels, dynamic random access memory and flash memory modules and LED business. It is interesting that over the last 10 years, Samsung has steadily entered a portfolio of related businesses and has built enormous capabilities in each of these. It currently holds around 30 per cent global market share in TV sets, close to 40 per cent market share in the memory business, 10 per cent in the LED business and around 15 per cent
in printing solutions. Within each of these businesses, it is among the top three players in the world.
Apple taking the fight to Samsung? Financially, Samsung and Apple are more or less poised on an equal footing. Samsung has a top line of around US$220 billion and achieving a return on capital employed of around 25 per cent, while Apple with a top line of around US$175 billion boasts a similar level of returns. However, the market capitalisation of Apple is around four times that of Samsung, which leads to the point that investors believe Apple to have a larger pipeline of innovative products that could translate into profits and cash in the near term future, far superior to Samsung!
Although there were a number of questions and doubts surrounding the innovative capability of Apple after the demise of CEO Steve Jobs, the recent introduction of Apple Watch and Apple Pay solutions seems to have restored investor confidence in Apple’s innovation pipeline.
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INDIA INC: AT A GLANCE Indian steel output India has overtaken the United States to become the third-largest steel producer in the world, with a production of close to 15 million tonnes (MT) in first two months of the year. Today, the largest steel producers in the world are China, Japan, India and the US. This is also a testament to show that the global economic growth is shifting from the West to the East. Steel production is one such index that closely mirrors an economy’s GDP growth. With Western economies flattening out in terms of GDP growth, many of their steel mills are steadily closing down, as it may not be viable to produce steel in these high-wage economies. Hence, the production shift happens towards the East, which is not only a low cost destination, but also has large markets for steel consumption where future growth is likely to be anchored. A similar trend is also happening in oil refineries, as demand for fuel is now tapering out in the West, and the Eastern nations are going to be the gas guzzlers for the future. Most of the crude oil refining capacity in the West is closing down and such refineries are moving to Asia Pacific regions.
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Tata Motors global operations Jaguar Land Rover Ltd (JLR), the international division of Tata Motors, announced that it is recalling more than 36,000 Range Rovers that had faulty gear boxes. This was done only after the local media exposed JLR in the television media, which does not go very well, given the ethical standards and culture of the company. JLR is also being investigated by the Chinese authorities for possible anti-competitive behaviour in their market. It is to be noted that the Chinese market is the largest for JLR and today, around 90 per cent of Tata Motor’s revenues and profits have been coming out of JLR sales in the Chinese markets. Any disruption or dilution of its brand in such an important market could play havoc and be a threat to the financials of the company, and pose challenges to the long term sustainability of Tata Motors as a corporate.
Advanc’edge MBA April 2015
corporate world Understanding Apple, a key competitor With Apple extremely focused on its digital hub strategy on consumer driven market that covers phones, wearables, iPads, laptops and desktops, cloud and other entertainment and associated services, investors and the market will continue to expect a faster pipeline of innovative products in these narrowly focused businesses. How much Apple satisfies the investors and for how long remain key questions. Although there are rumours that Apple is even currentyly contemplating an electric driverless car as well as Tesla being a potential candidate for acquisition, these efforts still seem to be in early stages. Due to its sheer focus, Apple is able to deliver such superior value to its customers, but it does understand the risk in such a narrow business focus and the potential drying up of opportunities in the short to medium term. Keeping this in mind, the company recently announced a tie up with IBM on the enterprise solutions side of the business, entering the corporate handset market, which used to be Blackberry’s forte in the past. Selectively moving resources away from consumer to corporate businesses is one such strategy that could de-risk Apple!
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Challenge for Samsung Contrarily, Samsung has spread its tentacles quite wide in pulling together a portfolio of related digital products targeting a wide array of industrial and consumer markets in each business; the objective of their portfolio of products is to satisfy a wide range of segments, from high
Advanc’edge MBA April 2015
EXPERTS ARE NOT WRITING OFF SAMSUNG BECAUSE OF ITS CONSTANT FOCUS ON INNOVATION. to low end. Of course, it will find it difficult to compete with focused players entering each of its businesses, particularly if said competitors are focused on a particular segment (Micromax competing in the handset business, specifically in the low end segment is a good example). In such cases, Samsung will have to take a call as to which segments it will withdraw from over a period of time, and in which segments it will take the competition head on through large resource allocation towards innovation.
Samsung’s innovation
focus
on
maturity in markets could potentially change the game significantly. Innovation that brings new experiences to consumers beyond the current limits of markets and technology will be the name of the game. The amount of research and development is one such factor that demonstrates the innovation quotient of companies. Samsung channelled close to 6 per cent of its revenue (top line) into innovation, which seems to be almost double that of Apple. Its commitment to innovation and transformative technologies that it believes will shape the future seems to be second to none; being in the consumer business, Samsung’s focus on creating a superior experience for the customer is of paramount importance. With enormous convergence happing in telecom, entertainment, healthcare, financial services, broadband, education and what not, we will have to wait to see who will spearhead the next round of the innovation wave, and which corporates benefit and which are caught off guard! A
Everything said and done, experts still don’t believe that Samsung can be written off so easily. From being a mass low cost producer of Japanese drives during the mid 90s, the way Samsung transformed itself into one of the most innovative companies in the world is proof that it can, and is well poised to, reinvent itself for handling the next round of competition. More importantly, competition in the electronics industry is likely to intensify further, and growth in the smartphone and other consumer markets Samsung CEO Dr. Oh-Hyun Kwon is likely to slow down; such has a lot riding on him.
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Poised high on foresight Despite a bad year for the Indian auto industry, Maruti has been riding a high. Having captured the essence of the “Make in India” dream, the company aligned itself accordingly, and is poised to become one of the most profitable auto companies in India. Dr Suresh Srinivasan
T
he last year has not been a very good year for the Indian passenger car segment. The industry witnessed a negative sales growth of more than 5 per cent for the first time in the last decade. This trend is expected to continue this year as well, before the market gets back to reasonable growth.
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Robust growth prospects
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The passenger car industry’s growth is closely linked with the country’s economic growth. Now, with a new growth-focused government in place, there is an
environment of opportunism in the Indian auto industry. Furthermore, infrastructure spending has taken a front seat, as witnessed in the latest budget, where more resources have been allocated towards highways and expressways. International investor communities also appear to have bought into the concept of “Make for India”, if not “Make in India”, which means more investments are likely to flow in for setting up manufacturing bases in India that could go towards import substitution. Given the lowest per capita car ownership, at
Maruti’s rural focus has helped it retain its competitive edge
Advanc’edge MBA April 2015
around 7 per 1,000 of population (as compared to around 800 in developed economies) the long term prospects of this industry are robust. With this backdrop, the Indian manufacturing sector, especially the auto segment, is likely to move closer towards becoming globally competitive. More importantly, a company like Maruti Suzuki, which has been building robust capabilities over the last 30 years, is well poised to take on this opportunity and convert it into shareholder value.
Maruti Suzuki’s competitive position Today, Maruti holds close to 42 per cent share in the domestic passenger car market. This has increased by more than 4 per cent over the last 15 months, in spite of the very aggressive entry of popular models from players like Renault-Nissan, Mahindra, Ford and Hyundai. Over the last five years, Maruti has been focusing on the rural market, one of the main reasons that the company grew ahead of the industry and its peers. More than a third of Maruti’s business is coming from rural areas; to that extent it is uniquely positioned vis-
corporate world à-vis its competitors in reaping the benefits of the Indian rural market, which although growing has not seen much penetration. Maruti’s rural infrastructure for sales and service is unmatched — this is the result of a deliberate strategy that Maruti has been pursuing over the last five years.
Maruti’s success The biggest testament for any auto company is whether its product delivers the intended value proposition to the customer. If yes, production translates into market share and models are successfully received by the customers. It is interesting that out of the nearly 140 models in the industry, only five models had sold more than a lakh units during the year, and four out of these top five blockbuster models belonged to Maruti — Alto, Swift, Dzire and WagonR.
Maruti vis-à-vis competitors For a successful auto company, the number of models, the periodicity in which new models are released (higher number of models and larger size helps R&D costs to be spread across many new models), how the older models are refurbished and the size of the overall volumes of production (the size of operations gives advantage in terms of reduced unit cost per output) are all important for being ahead of the competition.
This is where Maruti is beating its competitors hands down. Although Hyundai, Renault-Nissan, Toyota and Honda are inching forwards, players like Tata Motors have been unable to keep pace with Maruti in the domestic auto market. The domestic passenger car market share of Tata Motors, for instance, has dwindled from double digits five years ago, to as low as 6 per cent currently. It has significantly lost ground to Maruti and the new breed of auto competitors. Although Tata Motors still continues to maintain a higher market share in its light and heavy commercial vehicle segments, it has failed to keep pace with new models in its passenger car segment. Furthermore, due to its large presence in the luxury car segment (Jaguar Land Rover), most of its resources (skills and money) are diverted to this business, and the domestic passenger car segment has lost focus and competitiveness; its domestic cars are also perceived to be of poor quality. Understanding this, the Tatas are now firefighting and working on improving customer satisfaction, especially the after sales services. Unfortunately, such efforts are long term and will take years to fructify! While successful players like Maruti, Hyundai and RenaultNissan are pouring in resources to strengthen their capabilities, Tata Motors seems to have lost the plot.
A strong foresight Given the petroleum products policy of the government, the gap in the price of diesel and petrol is steadily narrowing, resulting in a steady increase in the petrol vehicles’ share of total vehicles over the last 15 months. Maruti had assessed, foreseen and understood the trend well ahead of the competition, and had created the right capabilities in the choice between diesel or petrol engines. Today, its share in the petrol segment has increased to 61 per cent, by more than 4 per cent over the last 15 months. Its share in the diesel segment continues to be around 25 per cent.
The future: Maruti 2.0 Having been successful since its inception, the scenario 30 years ago is very different from what the future holds for Maruti, as both industry and consumer are transforming at a rapid pace. Maruti fully understands this. Maruti 2.0, its strategy for the next 30 years, has been recently spelt out. Maruti’s 2.0 strategy clearly states the company’s priorities for creating capabilities over the medium to long term. It will continue to excel and maintain a leadership position in compact cars, but is already investing in its plan to tap the entire bandwidth of sports utility and multi-utility vehicle segments in a big way. It is also foraying into the light commercial vehicle space, which it had kept out of for the last 30 years.
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Four out of five top selling cars belong to the Maruti line-up. Advanc’edge MBA April 2015
corporate world The diesel factor
R&D at Maruti
Another major capability building initiative has been the design and development of new compact diesel engines for the company’s diesel vehicles. Maruti has been using Fiat’s outsourced 1.3 litre diesel engine all along in all its diesel cars in the country. As we speak, Maruti’s diesel engines are entering the markets, and this can significantly improve its competitive position in the diesel segment as well, enhancing its market share from the current 25 per cent (in the diesel segment). Its auto gear shift models are already available in the market, and are backed by years of research and development. It remains to be seen how many of the competitors have a focused strategy to keep pace with Maruti!
Maruti has been spending close to 1.5 per cent of its revenue on research and development (R&D). India is emerging as Suzuki Japan’s research hub; its R&D centre in Haryana is comparable to the best in the world and is Suzuki Japan’s first global R&D centre outside Japan.
Goodwill is important Maruti’s 2.0 strategy emphasises on engaging dealers and employees in mutually beneficial relationships. With labour relations reaching a new low a couple of years ago, Maruti witnessed lockouts, large scale disruptions to its production and a plunge in its share price. The management has learned from this incident; going forward, the company is today interacting with
the government of Haryana to establish low cost housing for the employees of the company. Overall, Maruti Suzuki seems well poised to take on the emerging auto sector opportunities not only in the country, but globally as well. Even though there are a number of doubts being cast as to whether the “Make in India” dream could become reality, Maruti Suzuki is one such company that is capable of achieving this. In fact, India needs thousands of Martuti Suzukis to build the “Make in India” reality! A Dr Suresh Srinivasan is a Chartered Accountant, has an MBA (Bradford UK) and a Doctorate in Strategy. He is a Professor of Strategy in Great Lakes Institute of Management and a management consultant.
INDIA INC: AT A GLANCE
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Coal auctions Currently, the bids for coal auctions are underway, with a number of private sector companies actively bidding for gaining access to the coal mines on a lease basis. India has one of the largest reserves of coal, and these had remained unexploited for long, since the public sector companies like Coal India and Singereni collieries primarily had the rights to mine coal. Moreover, the alleged wide spread corruption in the previous UPA government in allocating coal blocks to private sector companies created a number of controversies and such licences were cancelled; the power sector and the Indian economy bore the brunt due to lack of coal supply. Now, with these mines being leased out, the Government of India is likely to get revenue to the tune of around `15 lakh crore, which will be shared with the state governments where such coal mines are located, like Odisha, Jharkhand, West Bengal and Chhattisgarh. In addition to one time revenue, the states will continue to get royalties over the life of the mines. Therefore, it can significantly enhance the poor finances of these states, but also position the Indian economy better in terms of power generation, which is vital for economic development. Amazon drones Commercial drones are finally to be spotted in American skies! Amazon has been requesting the permission of the US government to deploy drones that will deliver its packages across the US. The government had been reluctant for years, but finally, Amazon has now been allowed to use drones for delivery of its packages across the US, albeit first on an experimental basis. These drones could range from smaller in size to unmanned light aircrafts, which Amazon had been experimenting with for a while in the past. The approval to Amazon comes with some caveats, however. Flights can only be operated during the day, within an altitude of 400 feet from the ground and within the range of an operator who has a pilot’s licence. This is an interesting development, as emerging markets like India and China, which have a vast potential for e-commerce, is suffering due to poor infrastructure and logistics in terms of roads, warehouses and companies specialised in delivering packages. These companies successfully sell on the Internet, but find it extremely difficult to deliver within committed timeframes. Drones, if successful in the US, could turn out to be a major breakthrough for such emerging e-commerce companies.
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Advanc’edge MBA April 2015
must reads Since you’re planning on doing your MBA, you need to be well read, and not just on current affairs. In this section, we offer you some choices of books that will broaden your perspective, and you will find that you will never be at a loss in a discussion!
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ho Moved My Cheese has been a phenomenon since it was released. eese Title: Who Moved My Ch The story is about two mice, Scurry and n Author: Spencer Johnso Sniff, and two “littlepeople”, Hem and Haw. They g hin Publisher: Ebury Publis have found a huge source of their favourite food Price: `125 — cheese, and it has becomes the centre of their ess Genre: Non-fiction, Busin lives. They are devastated when they arrive one morning and find the cheese gone. This is where the story splits in two. Scurry and Sniff quickly accept the loss of the cheese and go off. The littlepeople, because they have built their lives around the big cheese, cling to the loss and go hungry. Johnson’s message is to see change as a beginning, not the end. What they discover is that breaking through your fears makes you free. The book is old, but its valuable lesson is easily remembered: Do you have a “cheese” in your life that you believe will last forever?
, Title: Surely You’re Joking Mr Feynman! Author: Ralph Leighton Publisher: Random House Price: `374 ur, Genre: Non-fiction, Humo e enc Sci hy, rap iog Autob
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hile picturing a Nobel Prize-winning theoretical physicist, one inevitably imagines a bespectacled, unfocused, absent-minded individual who lives more in the abstract world of science and theory than in the real, material world. And yet, this is exactly what Richard P Feynman, the said theoretical physicist, was not. He was a genius, no doubt, with a prodigiously scientific bent of mind, something that became apparent when, as young boy, he figured out how radios work, and went around
repairing them where he lived. The book follows Feynman’s journey from New York to MIT in Massachusetts, Princeton to the Manhattan Project, from Brazil to Japan and back again. The narrative is filled with evidence of Feynman’s scathing wit and penchant for pranks. From cracking safes containing top secret US military documents, just because he was bored, giving advice on best ways to pickup girls at a bar, to learning to play the drums for a ballet, the reader finds ample evidence on the esoteric, and yet grounded, practical character of the Nobel Prize winner. This is a book that can be enjoyed anytime, anywhere, and by anyone.
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W
hich is more dangerous, a gun or a swimming pool? What do schoolteachers and sumo Title: : Freakonomics wrestlers have in common? Why do drug dealers and itt Lev Author: Steven still live with their moms? How much do parents really Stephen J Dubner matter? How did the legalization of abortion affect the rate Publisher: HarperCollins of violent crime? Price: `256 These are just some of the questions that, in an unusual Genre: Non-fiction pairing, University of Chicago economist Steven Levitt and New York Times journalist Stephen J Dubner try to answer in the enormously successful Freakonomics, a book that melds pop culture with economics. Levitt is something of an economist, but more of a social scientist using the tools of Microeconomics applied to other fields that happen to catch his interest (often having something to do with cheating, corruption, crime, etc.) Even though this may sound dull, it is quite the opposite, as the authors use straightforward analysis to turn conventional wisdom on its head. Freakonomics is not an in depth analysis of the issues presented, so you needn’t expect to see any technical economics in there, but the book will certainly give you plenty to talk about, as well as a fun read.
Advanc’edge MBA April 2015
study hour
Are you a Brainiac? In this section, we shall explore several different types of questions from the various areas of entrance exams like the CAT, CET, GMAT, etc, and how to best solve them.
QUANT 1.
The strength of hydrogen peroxide produced in a chemical company is 54% (the remaining is water). But the open market needs hydrogen peroxide of strength 50%. If the producers have to add 240 litres of water to each batch of the chemical produced to make it 50%, then what is the volume of each batch? (Assume that each batch is produced in equal volumes and in equal strength of 54%) 1] 1000 litres 2] 3000 litres 3] 5000 litres 4] None of these Let the volume = V Amount of H2O (water) = 0.46V Water added = 240 litres, then × 100 = 50
0.46V + 240 = 0.5V + 120
V=
= 3000 litres. Hence, [2].
Alternatively, By alligation
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So x : 240 = 50 : 4 => x = 3000ℓ. Hence, [2].
2.
[x] stands for the greatest integer less than or equal to x, then what is value of
1] 498
2] 499
Since,
= [0.5 + 0.5] = [1] = 1
The values of ,
,
3] 500
...
is zero and that of ,
4] 501
,
....,
is 1. The value of the given sum = 500 × (0) + 500(1) = 500. Hence, [3].
3.
\ x = 12. Hence, [3].
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At a get-together, it was found that a total of 66 handshakes were exchanged at the conclusion of the party. If each guest shook hands only once with all the others, how many people were present? 1] 33 2] 22 3] 12 4] 13 x If there are x persons, then total number of handshakes = C2 = 66, x2 – x – 132 = 0 (x – 12) (x + 11) = 0
Advanc’edge MBA April 2015
study hour
VERBAL DIRECTIONS for question 1: Four alternative summaries are given below the following text. Choose the option that best captures the essence of the text. Q-1.
Throughout the Classical Period and the Middle Ages, writers constantly confused carrots and parsnips. This may seem odd given that the average carrot is about six inches long and reddish-orange while a parsnip is off-white and can grow 3 feet, but this distinction was much less obvious before early modern plant breeders got to work. The orange carrot is a product of the 16th and 17th centuries. Its original colour varied between dirty white and pinkish purple. Both vegetables have also got much fatter and fleshier in recent centuries, and parsnips may have been bred to be longer as well. In other words early medieval carrots and parsnips were both thin and woody and mostly of a vaguely whitish colour. This being the case, almost everyone up to the early modern period can perhaps be forgiven for failing to distinguish between the two, however frustrating this may be for the modern food or agriculture historian.
1] In the past, carrots and parsnips looked similar – i.e. thin and woody and vaguely whitish – as opposed to their fatter, fleshier and more colourful modern forms.
2] It is understandable that until the 16th or 17th centuries, writers used to mix up carrots and parsnips, as the two looked similar back then, as opposed to the modern orange carrots.
3] In the Classical Period and the Middle Ages, writers used to confuse carrots and parsnips, because though the two vegetables look different now, they looked similar then.
4] While it may seem odd or frustrating that pre-early modern writers confused carrots and parsnips, it is understandable given that the two looked much more similar then.
Ans: Option [1] misses one of the main points of the passage i.e. writers constantly confused carrots and parsnips. Option [2] mentions that the confusion lasted until the 16th or 17th centuries, but this is not inferable from the passage, which says the confusion lasted until the ‘early modern period’. Between [3] and [4], the latter is a better summary, as it also mentions that the confusion is understandable, though it may seem odd or frustrating to modern eyes. Hence, [4].
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DIRECTIONS for question 2: The sentences given in the following question, when properly sequenced, form a coherent paragraph. Each sentence is labelled with a letter. Choose the most logical order of sentences, from among the given choices, to construct a coherent paragraph. Q-2.
A. Pale stone arches marched off into the fog, reaching the river’s western bank.
B. As the boat made its way down the river, the bridge ahead grew larger.
C. As the boat drew closer, the boat’s passengers could see the shapes of men moving in the light, shuffling aimlessly around the lamps like slow grey moths.
D. Half of them had collapsed, pulled down by the weight of the grey moss that draped them and the thick black vines that snaked upward from the water.
E. The broad wooden span of the bridge had rotted through, but some of the lamps that lined the way were still aglow.
1] BADEC
2] BACDE
3] ECDBA
4] EDBAC
Ans: Judging by the options, either B or E is the first sentence. B is more suitable, as it introduces the bridge described in most of the other sentences. So options [3] and [4] are ruled out. The EC link is clear: E introduces the lamps on the bridge, and C describes the men moving around these lamps. This link is found in [1] but not [2]. Therefore [1] – BADEC – is the correct sequence. Hence, [1].
Advanc’edge MBA April 2015
study hour DIRECTIONS for question 3: For the word below, a context is provided. From the alternatives given, pick the word that is closest in meaning in the given context. Q-3.
Cogent: In his book, Descent of Man, Darwin did not offer any cogent reason as to why ancient man had started to walk upright, and it was not until 1889 that Wallace suggested it could well have been an adaptation to a new environment.
1] cognizant
2] consistent
3] convincing
4] congenial
Ans: Neither ‘cognizant’, meaning aware, nor ‘congenial’, meaning friendly or compatible, can fit into this context. While ‘consistent’, meaning in agreement with, could fit into the context, it is not a synonym of ‘cogent’. Only ‘convincing’, meaning persuasive, means the same as ‘cogent’. Hence, [3].
DIRECTIONS for question 3: The following question has a paragraph from which the last sentence has been deleted. From the given options, choose the option that completes the paragraph in the most appropriate way. Q.4
The idea that our mental terrain decides what information survives in our heads and what gets killed off finds a parallel with a venerable biological theory: Darwin’s theory of natural selection. When we see lions and polar bears, we marvel at how well these animals have adapted themselves to the savannah and the polar ice caps. But no committee of lions sat down and decided that the African savannah would be home. No electoral bear-college voted for a leader who called for polar bears to move to the Arctic.
1] These animals adapt to their environment by instinct, unlike humans, who do so with intelligence.
2] The savannahs and polar regions of our mind exist unknown to us, directing the way we adapt.
3] Our mental terrain has a topography that is as varied as the geography of the Earth, constantly directing us to adapt.
4] These animals did not adapt to their environment; their environment adapted them to it.
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Ans: The paragraph is about the idea that it is the terrain of our mind that decides what survives inside our head and not we. To support this the author cites the examples of bears and lions and their respective habitats. The author says that the animals did not consciously decide or deliberate over their habitats. Since the main idea is about how our mental terrain or our mental environment decides what information survives, the concluding statement has to be about the animals’ environment and not they themselves deciding or choosing their habitat. Only option (4) does this. Option (1) is incorrect as the author is saying that we might in reality be using our intelligence. Options (2) and (3) make generalizations about human beings adapting and do not capture the specificity of the paragraph, which is the information surviving in our minds. Hence, [4]. www.advancedge.com
Advanc’edge MBA April 2015
study hour
Taste in antique junk I was in Venice, sauntering through its cobbled streets, steering clear of the waterways for which the city is famous. It was there, at the end of an alley darkened by age beyond the reach of sunlight,
that I chanced upon an old antique shop whose unreadable name was extolled on its frontage upon a faded sign. Inside the dimly lit interior of the dingy hovel, my eyes were met with a menagerie of objects arranged precariously on dusty shelves. It was a bizarre collection of costly and curious objects that perhaps indicated not so much a consistency and refinement of taste as a desire for ostentatious opulence. I knew that if I took a perverse fancy to one of those shameful remnants of past distraints on the possessions of destitute families, and proffered an interest in the price, the proprietor would have given me a figure that
WORD DOSE
would have deterred even the most eccentric collector of antiquarian teratology. Nevertheless,
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I spent an intriguing hour browsing through the labyrinthine shop, examining with morbid fascination the various bric-a-brac that lined shelf after shelf. Inspired by Umberto Eco’s The Prague Cemetery
MAT CH T HE W O R D S W IT H T H E IR M EA NING S 1. Sauntering (sawn-ter-ing) (v)
6. Ostentatious (os-tuhn-tey-shuhs) (adj)
3. Menagerie (muh-naj-uh-ree) (n)
8. Perverse (per-vurs) (adj)
2. Extolled (ek-stohl-d) (v) 4. Precariously (pri-kair-ee-uhs-lee) (adv) 5. Bizarre (bih-zahr) (adj)
a. – Not securely held or in position; dangerously likely to fall or collapse b. – Characterised by pretentious or showy display; designed to impress
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c. – Showing a deliberate and obstinate desire to behave in a way that is unreasonable or unacceptable
7. Opulence (op-yuh-luhns) (n) 9. Distraints (dih-streynts) (n) 10. Proffered (prof-er-d) (v)
11. Eccentric (ek-sen-trik) (adj) payment of money owed, especially rent f. – Walking in a slow, relaxed manner g. – Like a labyrinth; irregular and twisting; winding pathway h. – Relating to or dealing in antiques or rare books
d. – Miscellaneous objects and ornaments of little value
i. – (of a person or their behaviour) unconventional and slightly strange
e. – The seizure of someone’s property in order to obtain
j.
Advanc’edge MBA April 2015
– A collection of varied objects
12. Antiquarian (an-ti-kwair-ee-uhn) (adj) 13. Teratology (ter-uh-tol-uh-jee) (n)
14. Intriguing (in-treeg-ing) (adj) 15. Labyrinthine (lab-uh-rin-thyne) (adj)
16. Bric-a-brac (brik-uh-brak) (n) k. – The scientific study of monstrosities and abnormal formations l. – Arousing one’s curiosity or interest; fascinating m. – Praised enthusiastically n. – Great wealth or luxuriousness o. – Held out or put forward (something) to someone for acceptance p. – Very strange or unusual
study hour
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Advanc’edge MBA April 2015
study hour
A quiz to boost your General Knowledge 1. The Attukal Pongal festival has been featured in the Guinness Book of World for being the largest single gathering of women for a religious activity. In which of the following states is the festival celebrated? a. Tamil Nadu b. Kerala c. Andra Pradesh d. Telangana 2. The world’s largest and tallest Indian tricolour flag is 96x64ft, with a weight of 48 kg. It is hoisted at a height of 250 feet. Where is the flag located? a. New Delhi b. Mumbai c. Faridabad d. Ahmadabad
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3. The World Health Organisation has recently approved the ReEBOV Antigen Rapid Test Kit for quick testing of which of the following diseases? a. HIV/AIDS b. Swine Flu c. Ebola d. Malaria
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4. The annual BRICS summit 2015 is slated to be held in Ufa, the capital city of Bashkortostan. In which country is Ufa located? a. Russia b. China c. Afghanistan d. Kazakhstan 5. Which of the following cricketers was inducted into the ICC Hall of Fame in February 2015? a. Rahul Dravid b. Anil Kumble c. Mohammad Azharuddin d. Javagal Srinath
Advanc’edge MBA April 2015
6. Which of the following countries kicked off a military drill called the “Great Prophet 9”? a. Syria b. Israel c. Iraq d. Iran
11. Who among the following has been appointed India’s first chief of cyber security? a. B.J. Srinath b. Gulshan Rai c. Amardeep Chawla d. Sukhdeep Singh
7. In March 2015, which of the following space agencies launched the world’s first satellites fitted with lightweight electric engines? a. NASA b. European Space Agency c. SpaceX d. China National Space Administration
12. The Government of India has launched an online grievance portal for Indian living abroad. What is that portal called? a. Raksha b. Sankalp c. Sahay d. Madad
8. The Sahityakar Samman and Sahitya Rachna Samman are awarded to writers for their outstanding contribution in which of the following languages? a. Sindhi b. Gujarati c. Marathi d. Oriya 9. The World Innovation Summit for Health (WISH) is an initiative launched in 2014 that aims to promote innovative means of delivering healthcare around the world. It was held for the second time in 2015 in which of the following countries? a. US b. UK c. France d. Qatar 10. Which of the following players won the 2015 Dubai ATP Tennis Championship? a. Roger Federer b. Rafael Nadal c. Novak Djokovic d. Andy Murray
13. Which of the following member countries of the UN Framework Convention on Climate Change is the first to submit its action plan on Intended Nationally Determined Contribution? a. Australia b. US c. Switzerland d. Thailand 14. The 49th literature festival of the South Asian Association for Regional Cooperation (SAARC) was recently held in February 2015, witnessing the participation of nearly 200 poets, writers scholars and artistes. Where was the festival held? a. New Delhi b. Agra c. Colombo d. Mumbai 15. Which of the following countries recently banned its surrogacy service, which had become a highly lucrative “rent a womb” industry? a. Thailand b. Philippines c. Singapore d. Vietnam
study hour 16. Which of the following states has been awarded the Krishi Karman Award for 2013-14 for producing a record amount of grains? a. Punjab b. Odisha c. Meghalaya d. Tamil Nadu
22. Which of the following countries is the world’s largest producer and exporter of cocoa? a. Ecuador b. Ivory Coast c. Malaysia d. Indonesia
17. The World Wide Fund for Nature India has recently launched an elephant conservation project called “Friends for Life”, in collaboration with which of the following companies? a. Aditya Birla Group b. Reliance Ltd c. Tata Group d. Muthoot Group
23. Which of the following Asian countries in March 2015 successfully launched Burraq, its first indigenous developed armed drone and test fired its laser guided missiles? a. Kazakhstan b. India c. Pakistan d. Sri Lanka
18. Which of the following countries has the highest recorded air pollution in the European Union? a. Germany b. Greece c. Poland d. Belgium 19. Which of the following scientists has been conferred the prestigious American Chemical Society Award for 2015 for his work on developing an environment-friendly field analyser that checks toxic arsenic levels in water? a. Navin Patnayak b. Purnendu Dasgupta c. Abhijit Bhosle d. Iqbal Kalam
24. International Mother Language Day has been instated since the year 2000, to promote awareness of linguistic and cultural diversity. On which day is it observed? a. September 21 b. March 21 c. January 21 d. February 21
20. Which of the following states has won the Ranji Trophy 2015? a. Tamil Nadu b. Uttar Pradesh c. Maharashtra d. Karnataka
26. As per March 2015 ending, which of the following states has recorded the highest number of registered swine flu deaths in India? a. Rajasthan b. Maharashtra c. Gujarat d. Uttar Pradesh 27. Recently, India signed an agreement on mutual protection of classified information with which of the following countries? a. France b. Spain c. US d. China
29. Evan Spiegel (24) and Bobby Murphy (25) are the world’s youngest billionaires, with an estimated net worth of US$1.5 billion each. They are the cofounders of ____________. a. Whatsapp b. Viber c. Snapchat d. Tumblr 30. The Finance Bill 2015 has proposed that the commodity markets regulator Forward Market Commission be merged with which of the following entities? a. Finance Commission b. Securities and Exchange Board of India c. Planning Commission d. Reserve Bank of India
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31. The English word “jiffy” means “a moment”. What was its original meaning? a. Time taken by light to travel one centimetre in vaccuum b. Time taken by an average individual to eat a banana c. One-tenth of a second d. There is no such quantitative meaning 32. Shadow banking refers to the activities of financial institutions that operate outside government-regulated banking systems. Which country has the largest shadow banking market in the world? a. Switzerland b. Russia c. China d. US 33. The national award for creating awareness about child trafficking
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21. Recently, NASA’s Cassini unmanned spacecraft has detected evidence of the presence of hydrothermal activity on which of Saturn’s moons? a. Enceladus b. Titan c. Io d. Europa
25. Which is the only regenerative organ in the human body? a. Skin b. Pancreas c. Kidneys d. Liver
28. According to a UN report, which of the following countries has the highest percentage of women parliamentarians in the world — 63.8 per cent? a. Rwanda b. France c. Vietnam d. Belgium
Advanc’edge MBA April 2015
study hour is conferred by the National Institute of Gender Justice. Who is the first film personality to have received the award, after the likes of Anna Hazare, Pratibha Patil and Pandit Jasraj? a. Kajol b. Madhuri Dixit c. Rani Mukherji d. Mahesh Bhatt
and more fuel efficient than conventional engines? a. Japan
b. Australia c. US d. China
34. In which of the following states is the Gramin Gaurav Path, a major road building project, being carried out? a. Madhya Pradesh b. Maharashtra c. Rajasthan d. Gujarat 35. Which of the following states has emerged as the most entrepreneur-friendly state in India, according to the India Entrepreneurship Report 2014? a. Maharashtra b. Gujarat c. Punjab d. Haryana
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36. India has been assisting in the building of the Sampur Coal Power Project in which of the following countries? a. Sri Lanka b. Nepal c. Myanmar d. Vietnam
How to Play Fill in the grid so that every horizontal row, every vertical column and every 3x3 box contains the digits 1-9, without repeating the numbers in the same row, column or box. You can’t change the digits already given in the grid. Every puzzle has one solution. Hint: Don’t fill in numbers at random. While filling a particular square, write numbers 1-9 on a pad and start eliminating those numbers that already appear in the same row, column or 3x3 box.
37. As of March 2015, how many SAARC countries have sent satellites into space? a. Two b. Five c. Seven d. Eleven
ANSWERS
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38. Which of the following measures the value of a currency against a pool of other currencies? a. Real Exchange Rate b. Effective Exchange Rate c. Nominal Exchange Rate d. Real Effect Exchange Rate 39. Which of the following countries has developed the world’s first 3-D printed jet engine, which are believed to cheaper, lighter
Advanc’edge MBA April 2015
SuDoKu
GLOBESCAN 1. b
2. c
3. c
4. a
5. b
6. d
7. c
8. a
9. d
10. a 11. b 12.d
13. c 14. b 15. a 16. a 17. d 18. c 19. b 20.d 21. a
22. b 23. c 24. d
25. d 26. c 27. b 28.a 29. c 30. b 31.a 32. d 33. c 34. c 35. b 36. a 37. a 38. d 39. b
For more similar puzzles, visit: www.sudoku.com
1.f 2.m 3.j 4.a 5.p 6.b
WORD DOSE
7.n 8.c 9.e 10.o 11.i 12.h 13.k 14.l 15.g 16.d
/ 2003 / 11493 Total pages 40
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