Domination Feb 2014 by Domination, DoMS IIT Roorkee

VOLUME– IV ISSUE- 02

NEWSLETTER FROM DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Managers OR Managers

FEBRUARY 2014

Domination

Editorial

……………………………………………………… ……………………………………………………… Dear Readers,

ple on globalization and its pros

on Private Equity held at DoMS, IIT

and cons. This edition contains a

Roorkee. We hope that the present

It's February, the shortest month of

well written article on the “Mergers

edition of DoMination will be to

the year; bursting forth from the

and Acquisitions”, authored by Su-

your liking. Your thoughts and feed-

romance of Valentine's Day to the

deshna Naskar. The author pre-

back are always welcomed and ap-

auspicious occasion of Basant Pan-

sents an overview of the reasons

preciated. Feel free to write to us

chami the mood swings from ex-

and need for mergers and acquisi-

for any input. Happy Reading...

citement to reverence. At the exo-

tions.

dus of yet another chilly winter, we bring another edition of the DoMi-

It is always good to listen to indus-

nation.

try experts and to learn about their journey. The current edition con-

This edition features a number of

tains an interview of Anupriya Goel.

articles from a diverse range of top-

Anupriya is a DoMS alumnus of

ics. The cover story of this edition is

2000 batch and currently working

on a very interesting topic of

in Samsung R&D, California. The

“Hippocratic Oath for Managers”,

edition also includes the success

written by Kunal Bansal. The author

story of Pierre Omidyar, founder of

presents professional ethical stand-

the eBay.

ards with a different point of view. Another interesting piece is on “Pro

DoMination is never short of the

-Globalization

Anti-

fun quotient. This edition features

Globalization” written by Saurabh

the next round of quiz for them

Singh. It talks about some of the

who love brain twisting. The edition

views from different groups of peo-

also has a report on guest session

vs.

ards - Reg nation i DoM m a Te

02 | DOMINATION, FEBRUARY 2014

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Contents 04

Faculty Adviser Hippocratic Oath for managers

Dr. R.L. Dhar

Team DoMination

09 16

Apurva Sood Arun George Gaurav Mittal Mehul Lala

Pro-Globalization Vs. Anti-Globalization

Chlorophyll

Nilaya Shankar

Rohan Krishnan Sudeshna Naskar Vignesh B

Qutopia

Designing Team Ashish Kumar Jaiswal

Dhruv Kadian Rakesh Ranjan Kumar

DoMS da Evince DEPARTMENT OF MANAGEMENT STUDIES INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

Roorkee- 247 667, India Tel: +91-1332-285014, 285617 Fax: +91-1332-285565 Email: domination.doms.iitr@gmail.com Website: www.iitr.ac.in/departments/DM/Pages/Index.html

Success Story

16 Mergers and Acquisitions

19 26

For private circulation only Spotlight 03 | DOMINATION, FEBRUARY 2014

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Cover Story ………………………………………………………

Hippocratic Oath for managers The oath taken by doctors to

requires a new physician to swear

fulfil their duty in any condition to-

upon a number of healing gods that

That I will honor the Profes-

wards another life and humanity de-

he will uphold a number of profes-

sion of Medicine, be just and gener-

fines a framework that shapes their

sional ethical standards.”

ous to its members, and help sustain

orientation towards society. We are

value and hold most dear:

them in their service to humanity;

living today in a very brittle state of

Generally taken by medical profes-

economy and for that matter politics.

sional during convocation, this oath

Each and every day, managers who

helps them to remember their duty

run the big corporations have to take

towards society. In modern times, it

I now turn to my calling,

decisions beneficial for their organi-

has since changed a lot but the crux

promising to preserve its finest tra-

zations. And in these times, the mor-

remains the same.

ditions, with the reward of a long

al conduct expected by them may

Hippocratic Oath taken in Weill Med-

experience in the joy of healing.”

sometimes be put aside for the

ical College, Cornell University –

“higher good”, as they say. The point

“I do solemnly vow, to that which I

But

the

question

arises,

whether this sort of oath should be

here is whether they should be

included in the management curricu-

forced to take Hippocratic Oath to

la or not. In 1995, Sir Joseph Rotblat,

instil in them a sense of morality to-

in his acceptance speech of Nobel

wards others!

Peace Prize, suggested a Hippocratic Oath for scientists. And since then

Hippocratic Oath as Wikipe-

the talk has accelerated to a new

dia puts it is “one of the most widely

level to include it in each profession.

known of Greek medical texts. It

Harvard Business School students

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Hippocratic Oath for managers

……………………………………………………… have already taken a lead in this

will give us a chance to uphold what-

conduct and that of my enterprise.

matter. The oath they have formulat-

ever we held true, and it will con-



ed and its signatories can be seen on

stantly remind us the way our con-

actions, and I will represent the per-

the website mbaoath.org

duct should be in difficult situations.

formance and risks of my enterprise

When the political scenario

I will take responsibility for my

accurately and honestly.



of our country is on the turmoil and

The short version of MBA

economic revolution is on the verge,

Oath is as given below (by mba-

other managers under my supervi-

these kinds of things prepare us to

oath.org project)-

sion so that the profession continues

I will develop both myself and

follow what we stand true. As talked

As a manager, my purpose is

by Ms.KiranBedi in her speech in IIT

to serve the greater good by bringing

being of society.

Roorkee, ethics and moral duties

people and resources together to



should be part of the curricula. A per-

create value that no single individual

economic, social, and environmental

son can oppose this on the basis of

can create alone. Therefore I will

prosperity worldwide.

necessary govt. lobbying, business

seek a course that enhances the val-



profits and cut-throat race to move

ue my enterprise can create for soci-

and they will be accountable to me

ahead but when in doubt, it’s only

ety over the long term. I recognize

the faith that makes us do things

my decisions can have far-reaching

which cannot be done otherwise.

consequences that affect the well-

And if we put the seeds of morality in

being of individuals inside and out-

the school itself, the effect will be

side my enterprise, today and in the

longing. Facing a difficult scenario is

future. As I reconcile the interests of

everyday situation for us managers,

different constituencies, I will face

and if we stick to what is correct in-

choices that are not easy for me and

stead to what is needed defines the

others.

kind of person we are. And it takes us

Therefore I promise:

a long way not only in our career but in personal life too. Recently, we have seen the likes of Phaneesh Murthy – ex direc-



to grow and contribute to the wellI will strive to create sustainable

I will be accountable to my peers

for living by this oath. This oath I make freely, and upon my honour.

I will act with utmost integrity

and pursue my work in an ethical manner.

tor of iGate corp., Vikram Pandit- ex



CEO of citigroup, Ramalingam Raju –

my shareholders, co-workers, cus-

ex Chairman of Satyam Computer

tomers and the society in which we

Services and many more. And it be-

operate.

I will safeguard the interests of

comes evident to not to look away.



So, my view is Hippocratic Oath is

good faith, guarding against deci-

absolutely necessary to put things in

sions and behaviour that advance my

perspective. Each B-School should

own narrow ambitions but harm the

takea lead in determining the con-

enterprise and the societies it serves.

tents of their oath. This might not



help the veterans already there in

both in letter and in spirit, the laws

the field but for newcomers like us, it

and contracts governing my own

I will manage my enterprise in

I will understand and uphold,

ByMr. Kunal Bansal DoMS, IIT Roorkee(2013-2015) kunalbansal17@gmail.com

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Perspective ………………………………………………………

Pro-Globalization Vs. Anti-Globalization In today’s world, economies are

sists of those who think globaliza-

duties, subsidies or quota on the

evolving at a very fast pace and in a

tion is good for the world econo-

import/export of goods or services

very un-predictable manner. Today

mies especially the third world

from other countries. This allows

people are more connected with

economies and have a lot of bene-

consumers to buy goods and ser-

each other because of Telecommu-

fits, they are called Pro-Globalists

vices, at a comparatively lower

nication & Technological advance-

and the others are those who think

cost.

ment. Globalization is the new defi-

globalization is bad and they stand

nition of trade across world in

against it and are called Anti-

Peaceful Relations:

which Good & Services, Capital are

Globalists.

Countries are moving to bilateral

moving from one place to another

trade relations with each other in

in no time and with fewer barriers.



Globalization is defined as the pro-

Avantages of Globalization.

ing behind any bitter past experi-

cess of international integration

Pro-globalists say that globalization

ences if any. Nations now try to

arising from the interchange of

has lot of advantages for econo-

raise capital and strengthen their

world views, products, ideas, and

mies and its people. It has the po-

position in international trade, ra-

other aspects of culture. Advances

tential to resolve some big eco-

ther than hosting a war. Hence,

in transportation and telecommu-

nomic problems like poverty. Fol-

globalization has induced interna-

nications infrastructure, including

lowing are the positive views of

tional peace and security in a big

the rise of Internet, are major fac-

globalization:

way.

tors in globalization.

Free Trade Economies:

There are two schools of thoughts

Free trade is a policy in which

Global Connectivity & New Mar-

on Globalisation; One group con-

acountry does not impose taxes,

kets:

Pro-Globalist views on

order to boost their economy, leav-

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Pro-Globalization Vs. Anti-Globalization ……………………………………………………… With the use of the Internet, the

its economy.

Child Labour, working in inhumane

world has definitely become a smaller place.

conditions or ignorance of safety 

Disadvantages of Globalization

standards are all consequences of globalization.

This has been further boosted by

High Inequality:

Companies, which have started to

The first and for-most problem ad-

Apart from these, the consequenc-

invest in different countries. The

vocated by Anti-globalists is that

es of Globalization also include ex-

Expending markets have helped

the globalization has increased ine-

ploitation of natural resources lead-

countries to raise money by the

quality .It has made the rich richer

ing to their faster Depletion, defor-

means of foreign domestic invest-

while making the poor poorer and

estation, increased social injustice,

ment.

the gap between them is increas-

etc.

ing. 

Employment Opportunities:

Globalization in my point of

One of the most advantageous fac-

Unemployment in Developed Na-

view

tors of globalization is that it fos-

tions:

Globalization in my view is very im-

ters the generation of employment.

Globalization has increased the Un-

portant tool which nations can use

This happens due to the emergence

employment rate in most of the

for their development by recognis-

of new companies and new mar-

developed nations through the con-

ing their positive terms of trade

kets, requiring skilled as well as un-

cept of outsourcing. The US /UK

and utilising it fully to develop oth-

skilled Labour. This also helps to

have outsourced the Manufactur-

er areas as well subject to not ac-

improve the standard of living.

ing to China and India.

cepting unfavourable conditions of other nations. According to Amart-

Quality Products:

Job Insecurity in Market:

ya Sen, a Nobel-Prize winning econ-

As the companies compete with

Globalisation has given rise to out-

omist, Globalization “has enriched

each other to gain confidence of

sourcing affecting unemployment

the world scientifically and cultural-

the customer, it becomes im-

and job security factors in devel-

ly, and benefited many people eco-

portant for the companies to focus

oped/ outsourcing nations e.g. US,

nomically as well”.

on high quality goods and services,

Europe. Outsourcing has created a

in order to have strong foothold in

culture of job insecurity.

On the other hand, Globalisation

the market. Customer gets good

has not been found favourable for

products at cheaper rates along

Multinationals affect developing

developed economies. Globalisa-

with options to select from.

nations’ political Decision making :

tion has been criticised by econo-

Multinational corporations which

mists who are against the concept

Globalization also has effects on

were previously restricted to com-

of free-market economies. Econo-

Environment protection, boosting

mercial activities are increasingly

mists like Joseph Stiglitz and Ha-

Travel and tourism.

influencing political decisions.

Joon Chang are against globalization. They say that Globalization

The topic is incomplete without

Exploitation of Labour

has been perpetuating inequality in

considering the negative effects of

Globalization has led to the exploi-

the world rather than reducing it.

globalisation on the world and on

tation of labour. Human Trafficking,

Some agree that they may have a

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Pro-Globalization Vs. Anti-Globalization ……………………………………………………… point. The International Monetary

ver, the creation of wealth would

to deal with crises like Unemploy-

Fund admitted in 2007 that ine-

not be restricted to capital gains

ment, Poverty and Human Traffick-

quality levels may have been in-

alone but would also benefit those

ing. It will help us to raise the glob-

creased by the introduction of new

who produce goods and services

al economy only when the involved

technology and the investment of

for consumption. This will up-lift

power blocks have mutual trust

foreign capital in developing coun-

other sectors of the economy as

and respect for each other's opin-

tries. Others, in developed nations,

well, which in- turn increase the

ion. The way we have developed in

distrust globalization as well. They

national consumption and also the

the

fear that it often allows employers

GDP. This positive effect can be

seems to have given us good re-

to move jobs away to cheaper plac-

seen in cities like Bangalore, Delhi-

turns. Globalization has made the

es. In France, “globalization” and

NCR, Gurgaon ,Pune etc. where the

life of the third world citizens a

“delocalization” have become de-

presence of multinationals and In-

completely different story. There

rogatory terms for free market poli-

dian service sector companies has

are so many foreign companies

cies. An April 2012 survey by IFOP,

led to a flourishing economy for the

that have made way to Orient and

a pollster, found that only 22% of

locals.

have made India a brand name all

French people thought of globaliza-

over

tion as a “good thing” for their

We can say that the impact of glob-

country.

alization is visible and affects large-

last

decade,

globalization

the

world.

ly the politics and the economy of If we take the example of the iconic

the country but its effect on the

Indian IT company, Infosys, which

mindset and the culture is noticea-

believes that when market opens

ble gradually in the way people

for trade with developed countries

think and react. Now our counter-

then jobs will be created for the

parts in other nations or people in

middle class or the educated, the

other countries have started ac-

process would also benefit the en-

cepting Developing nations’ views,

tire system of support services for

their Ideas, culture and have fully

these employees since they have to

understood our strength.

spend money on their basic necessities and everyday needs. Moreo-

Globalization has helped the world

ByMr. Saurabh Singh DoMS, IIT Roorkee(2013-2015) singhsaurabh88@gmail.com

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Chlorophyll

……………………………………………………… Its wise to learn, its GOD like to create

ByMs. Archana Singh DoMS, IIT Roorkee(2013-2015) archana.singh999@gmail.com I loved the silent hour of night, Sitting by the river side Staring your eyes in the moonlight, Was it you that made the night or the moon that made the night seem so bright. Look at me now, I am there, where it all began . The moon is still at her full, and, riding high, Floods the calm fields with light . The airs that hover in the summer sky , Are all asleep to-night . But now I see this moonlight unfold a mystery , I see You with me Illusion and reality, a rare symphony . Now there are no seasons to wail, There is no rain in winter pale. There is nothing here just the Moon and me , With this universal surround And the pitch black of light In this dimension of sound. I look at this Moon and make a wish , May your slumber end on a shiny night , May the Moon be shining bright and you be riding high , Just a possibility how it might , There is only space for the images in mind . I wish to be with you..atleast in your dreams I wish this moon to be by our side But it’s not to be, it’s not to be Somehow it seems, you made up the life in me Now I find this moon staring at me Eyes fixed, motionless it leans

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Qutopia ………………………………………………………

It’s Exquizite, Kills your Quriosity and adds to your Quizdom. Need we say more? ‘Qutopia’ – A Utopia of the

best Biz Quiz Tidbits to wreck your brains! Rush in your answers to domination.doms.iitr@gmail.com before 21st March 2014. The winner will have their names published in the next issue. Also, person getting the highest score in the current quarter will get a gift voucher. Answers in the next issue of DoMination.

Section A (1 Point for each correct answer)

1. Which brand has retained its spot as India’s most valuable brand, according to Brand Finance Global 500, an annual study conducted by a brand valuation consultancy called Brand Finance? 2. Which smartphone maker last week of February launched 5 models under the new ‘Kochadaiiyaan series’? 3. Which state has unveiled a 20km free Wi-Fi zone, the longest across the globe? 4. The Corporate Affairs Ministry has directed the Registrar of Companies to ensure that no company be registered with which word as part of its title unless it is a Government company? 5. PepsiCo Inc has moved the Delhi High Court against the release of which film on trademark violation? 6. Which company will hive off its products, platforms and solutions (PPS) business into a separate subsidiary called Edge Works at the beginning of the next financial year?

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Qutopia ……………………………………………………… Section B (2 Point for each correct answer)

1. Identify what is different about this currency.

2. Name the company that uses this add.

3. Identify the connect in the collage.

4. Name the company that used this advertisement to encourage women to vote.

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Qutopia ……………………………………………………… Answers for January edition

Section A

SECTION B

1. INS Vikramaditya, Admiral Gorshkov

1. 2.

Jaguar

Dena Bank 2. Tesco

3. K. Radhakrishnan, Chairman of ISRO 3. World Wide Fund for Nature

UCO Bank

Winner of January edition

Agam Gupta DoMS, IIT Roorkee (2013-15)

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

DoMS-da-Evince ……………………………………………………… Anupria Goel is a 2000 batch pass out of DoMS and presently working at Samsung R&D, San Jose, California.

1. Please give us a little insight

roles in HR i.e. Training, Staffing, and

direct indication of spending for mo-

about your journey prior to joining

Vendor Management etc. I am cur-

bile division or its focusing on other

DoMS?

rently leading one of the recruiting

sectors as well?

I pursued my degree in commerce

teams at Samsung Research America

from Meerut University after com-

(R&D) in the Silicon Valley.

Samsung is an industry leader not only in the Mobile segment,

pleting my schooling from the Modi

but also in Smart TVs, Home appli-

School. In January 1998, I visited

I still remember, Prof Harish Midha,

ances, Wearable, tablets, Cameras.

Roorkee for the very first time and

our visiting Organizational Behaviour

Samsung

instantly fell in love with the UOR

professor from Canada, once told me

Healthcare, Education and many

campus (Well that’s what it was

“Anu, you are cut out only for HR

more new areas.

called back then!) The only thought

roles” J - Well, I cannot agree more!!

(On a separate note, did you know, the primary contractor for Burj Khalifa was Samsung C&T of South Korea )

that crossed my mind was “Wish I could study here”! In the summer of

3. How is R & D different from other

1998, UOR introduced its first MBA

areas in terms of work environ-

program and well, I got a chance to

ment?

live my dream, I started my journey at DOMS in July!

venturing

into

5. What advice would you like to Being a part of Samsung R&D

gives me a feel of working in a startup

environment,

where

give to students who are interested in joining this field?

things

If you genuinely feel ‘People’

2. What different type of roles have

around you are very ambiguous, and

are the most important assets of a

you played (been a part of) after

people are just stumbling upon vari-

company, if you value relationships

your journey from DoMS?

ous ideas to design, innovate and

more than your targets, and if you

Being the first MBA batch to

develop crazy concepts and innova-

love talking to people, then explore

graduate from IITR, we were put to

tive products, that enhance the com-

the wide field of HR. Recruiting is an

strict programs or regime, as I recall!

petitiveness of a company. Just to

integral and one of the most im-

DOMS prepared us for the tough cor-

give you an example – I hire for

portant and highly visible area of HR.

porate world outside! After gradua-

teams that came up with the idea/

I recruit great professionals for one

tion, I joined the Citigroup in Mumbai

concept/design of the Samsung Gear

of the largest industry giants in the

and worked in their Finance Opera-

and now, Samsung Fit! It’s fun to be

world and one thing that keeps me

tions division for 2 years. After com-

a part of such innovative teams!

going is my passion and love for my

ing to the US in 2003, I switched my

job! (Trust me; I don’t hate Monday

career to Human Resources and ever

4. Samsung topped in R&D spending

since then, I have played various

as per the industry report, Is this

mornings J!!)

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

DoMS-da-Evince ……………………………………………………… 6. How has IIT Roorkee and in partic-

days I spent at IITR, all the memories

ular DoMS has helped in your ca-

come rushing by! I can never forget

Special thanks to Dr MP Jain, Prof

reer?

my wonderful professors / men-

Nangia / Prof Midha / Prof Saini / Dr

In a world, where you are

tors, my amazing batch mates, the

Bhattacharya, Dr Rahman, Prof Vivek,

competing with millions of qualified

late night group discussions – (well,

Prof Shiri and everyone who made us

professionals, you definitely need a

more gossips and crib sessions than

strive to excellence. We planted the

USP! In my recent conversation with

GDs), Sarojini Bhavan and the friend-

seed of DoMS in 1998 and feel so

my managers, she revealed that they

ly hostel inmates, the music section,

happy to see it getting nurtured by

hired me over other great candidates

the lush MBLs, Satkar, Thomso, our

all our rock star juniors! We feel

just because of the fact that I am an

winning trips to IIML and IMT …

proud to see our alums creating an

IIT graduate. IIT is recognized across

memories are endless …memories I’ll

impact in India and across the globe.

the globe for its prestige and high

cherish forever!

IITR / DoMS is an amazing place –

quality education. I truly owe a great

enjoy your experience!

part of my success to IITR/DoMS.

I am a part of the IITR Alumni asso-

7. Which thing do you miss most

ciation in the Silicon Valley and keep

about IIT Roorkee?

meeting folks who graduated in

Roorkee is not an event or an

1960s to those who graduated like

instance of my life, it’s an experi-

last year – such is the heritage of

ence! Whenever I look back at the

IITR!

“Formal education will make you a living; self-education will make you a fortune.”

Jim Rohn

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Success Story ……………………………………………………… Pierre Morad Omidyar is a French-born Iranian American entrepreneur and philanthropist, who is the founder and chairman of the eBay auction site

Pierre Morad Omidyar is a

censing deal to offer airline tickets

for three consecutive years.[14] On

French-born Iranian American entre-

online, the site had hosted 250,000

September 4, 2013, Honolulu Civil

preneur and philanthropist, who is

auctions. In the first month of 1997,

Beat started a partnership with The

the founder and chairman of the

it hosted 2 million. By the middle of

Huffington Post, launching the web-

eBay auction site. In 1995, at the age

that year, eBay was hosting nearly

log's latest regional addition, Huff-

of 28, Omidyar began to write the

800,000 auctions a day. In 1997,

Post Hawaii. In 2013 Omidyar an-

original computer code for an online

Pierre Omidyar changed the compa-

nounced the creation of First Look

venue to enable the listing of a direct

ny's name to eBay and began to ad-

Media, a journalism venture which

person-to-person auction for collecti-

vertise the service aggressively. The

launched February 10, 2014 with The

ble items. He created a simple proto-

word "eBay" was made up on the fly

Intercept, and includes journalists

type on his personal web page, and

by Omidyar when he was told that

such as Glenn Greenwald, Laura Poi-

on Labor Day, Monday, September 4,

his first choice for his web site,

tras, Jeremy Scahill, Dan Froomkin,

1995 he launched an online service

"echobay", had already been regis-

and Jay Rosen.

called Auction Web which would

tered. Not wanting to make a second

According to Forbes, Pierre Omidyar

eventually become the auction site

trip to Sacramento, he came up with

is worth $8.5 billion (US) as of Sep-

eBay.

"eBay".

tember 2013, making him the 123rd

It was hosted on a server Omidyar

In September 1998, eBay launched a

richest person in the world

had created for information on the

successful public offering, making

ebola virus. The first item sold on the

both Omidyar and Skoll billionaires.

site was a broken laser pointer.

As of July 2008, Omidyar's 178 mil-

Omidyar was astonished that anyone

lion eBay shares were worth around

would pay for the device in its bro-

$4.45 billion. Omidyar is also an in-

ken state, but the buyer assured him

vestor of Montage Resort & Spa in

he was deliberately collecting broken

Laguna Beach, California.

laser pointers. Similar surprises fol-

In 2010, Omidyar launched online

lowed. The business exploded as cor-

investigative reporting news service

respondents began to register trade

Honolulu Civil Beat covering civic

goods of an unimaginable variety.

affairs in Hawaii. The site has been

By 1996, when Omidyar signed a li-

named Best News Website in Hawaii

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Regardez I’economie ………………………………………………………

Mergers and Acquisitions Most companies desire to

control of innovative components

engines, dashboard system and other

grow by offering better product, ser-

and systems that enhances their

car components.

vice and customer care. Those com-

product or service line. For example

panies with more insight into cus-

recently facebook bought whatsapp

tomer needs and preferences and

for $19 billion.

ally consider whether to continue a

who utilize more innovative thinking is likely to attain growth they seek.

Every company will occasionmarket based relationship with an-

Why Acquire or Merge

other company or actually take it

No company can be success-

over or even consider a merger. An

Yet some companies also

ful alone. Organizations will always

acquisition consists of taking over

give thought to accelerating their

have to relate to other organizations

absolute ownership or a controlling

growth and using their capital better

in one way or another. They have to

share of another company and either

by turning to acquisitions sometimes

buy from suppliers and sell to and

absorbing it or letting it operate on

buying a company seems a better

through distributors. They must re-

its own with some changes. However

solution than competing with it. Ac-

late to a number of government

a merger requires two companies

quisitions are often essential for en-

agencies and regulate tax or send out

that decide to form a new legal com-

try into related product. BHP Billi-

bids. The selectivity and care with

pany which is the merged company.

ton’s acquisition of Petrohawk for

which a firm forms relation with oth-

Some successful mergers are Exxon

$12.1 billion strengthens the mining

er firms determine its success. Gen-

Mobil and JPMorgan Chase and the

giant’s quest for natural gas asset.

eral Motors for example works with

troubled merger of Alcatel and Lu-

Companies frequently seek exclusive

different companies those supplies

cent.

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Mergers and Acquisitions

……………………………………………………… Cemex have consolidated their

other company is not always consid-

industry worldwide for greater

ered a friendly move in fact one can

efficiency)

distinguish between a friendly takeo-

Increase its economy of scale or

ver and a hostile takeover. In a

pliers.GM acquired several compo-

scope (United Airlines’ merger

friendly takeover the acquiring com-

nent companies of Delphi Automo-

continental Airlines to become

pany notifies the target companies

tives worldwide steering business.

the world’s largest airline)

owners or board of directors that it

Enlarge its brand portfolio (Coca-

would like to buy the company. If the

vital electronic supplies to fit its long

Cola has grown by acquiring car-

board believes that selling the com-

range plans. Acquiring and a supplier,

bonated soft drink brand like

pany would serve the stockholders’

distributor or even a competitor

Sprite as well as juice brands like

or owners’ best interest they will

gives the company ownership power

Tropicana and water brands like

then negotiate an agreement.

instead of jus relying on market pow-

Dasani

General Motors has made many acquisitions over its lifetime buying both its competitors and sup-

This move gave GM more control of

er.



Increase its profits by opportun-

In a hostile takeover howev-

Followings are the specific reasons

istically buying actual or poten-

er the board or owner is unwilling to

why a firm might want to acquire or

tially profitable companies (The

sell the company. The acquirer then

merge with another firm.

holding company of Berkshire

engages in number of tactics to

Increase its sales revenue market

Hathaway under Warren Buffet is

achieve the sale in spite of the target

share or profitability by taking

constantly seeking profit making

company’s resistance. The acquirer

over a competitor (GM’s acquisi-

opportunities. It has acquired

can make a tender offer in

tion of Cadillac, Pontiac, Chevro-

100 percent ownership of over

let, oldsmobile and another auto

40 companies in diverse indus-

public to pay the company much

brand)

tries like Acme Brick, Dairy

more price than current market

Enter into a new business or

queen, Netjets, Helzberg Dia-

price. If the company still resists then

market (Proctor & Gamble’s

monds etc.)

acquirer can engage in proxy fight to



persuade enough share holders to

takeover of Gillette)



Enter into a new geographical area (Cadbury had very strong

The desire to take over an-

vote in a new management that will

Picture Source: Bearingpoint.com

presence in UK and common wealth countries where Craft had weak presence)



Increase in ownership of supply inputs (Sany - china’s leader in construction) acquired German concrete

pump

manufacturer

Putzmeister to improve its product quality)



17 | DOMINATION, FEBRUARY 2014

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Mergers and Acquisitions

……………………………………………………… approve the takeover. Alternatively

clients and suppliers? What are the

purchase to another firm. The reason

the acquiring company can quietly

technology risks? Will the acquired

to go for mergers or acquisitions is to

purchase enough stock in open mar-

company be broken into parts to sell

capture synergy that happens when

ket to vote in new management that

off?

two firms may compliment each oth-

is receptive to the takeover. The

ers in skills such as technical, mar-

problem with the hostile takeover is

One must think over all this

keting or financial. One should exer-

that the acquirer does not gain all

before going for an acquisition or

cise care in choosing a partner, mak-

the information about the target

merger. To overcome such kind of

ing sure that terms are spelled out

company creating vulnerability to

situations an acquiring company

and are understanding in order to

hidden risks. A few famous hostile

must perform due diligence that

minimize the chance of conflict or

takeovers include HP’s hostile takeo-

goes all the way from checking with

misunderstanding.

ver of Compaq and Krafts’ hostile

acquired firms’ customers and sup-

takeover of Cadbury

pliers, and making sure that acquired firm is not carrying any hidden in-

Whether friendly or hostile

debtedness, responsibilities or com-

there are questions in any takeover.

mitments. Some uncertainty will al-

Is the price fair? What are the esti-

ways exist about a variety of matters:

mated costs? Can the acquirer afford

whether the acquired firms’ manager

the acquisition, raise the necessary

and employees will stay with the

money, and reintegrate the money

new company and be easy to man-

and the acquisition if the company

age and whether the acquired firm’s

goes badly? Will the acquirer be able

customers will continue to work with

to keep the acquired firms talent,

new management or switch their

ByMs. Sudeshna Naskar DoMS, IIT Roorkee(2013-2015) 145arks145@gmail.com

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Spotlight ………………………………………………………

Private Equity/ Venture Capital: In Context of Funding Options Every entrepreneur wants to

experience in different roles in com-

it was the turn of the speakers to

see his company making it to Fortune

panies such as Tyco electronics, Gen-

take the stage. Mr. Inamdar started

500 list one day but to achieve that

eral Electric etc. He has done me-

off by clearly stating the difference

they need appropriate funding at the

chanical engineering from Mumbai

between Angel Investors, Seed fund,

right point of time. For management

University and Post Graduate Diplo-

Venture Capital and Private Equity.

students and future entrepreneurs, it

ma in Management (PGDM) from

He then went on to explain the

is vital to have a sound knowledge

Indian Institute

of Management

strength and weakness of three

about this aspect of business. Fortu-

(IIM), Calcutta. Mr. Samir Inamdar

types of capital markets viz. Public

nately, students of DoMS, IIT Roor-

was accompanied by his colleague

Capital Market, Internal Capital Mar-

kee got such an opportunity to learn

Mr. Hemchandra Javeri. Mr. Javeri is

ket and Public Capital Market. It is

about the same. A Guest Lecture was

co-founder of Forum Synergies along

under the aegis of Private Capital

organized on the topic “Private Equi-

with Mr. Inamdar. Mr. Javeri also has

Market that Angel Investors, Venture

ty/Venture Capital: In Context of

over 25 years of corporate experi-

Capital and Private equity fall. He

February

ence. He has held many roles across

also stated that Angel Investors, VC

2014 in DoMS. Lecture was delivered

wide ranging industries in the past.

and PE come into different stages of

by Mr. Samir Inamdar and Mr. Hem-

Mr. Javeri completed his Bachelors in

business and are related to risk pro-

chandra Javeri. Students were eager-

Commerce from Sydenham College,

file of the business. Speaker also

ly waiting for this session and were

Mumbai and then went on to com-

touched upon different risk such as

excited about it.

plete PGDM from IIM, Calcutta.

Regulatory Risk, Operational Risk,

Funding Options” on 5

Market Risk etc. that come into picCurrently, Mr. Samir Inamdar

The session took off with a

ture while investing into PE. Next,

is working as MD & CEO, Forum Syn-

welcome note from students. It was

Mr. Azeri took students through the

ergies PE Fund Managers. Previously,

followed by showing the Batch

internal process that a PE firm goes

he has over 25 years of corporate

presentation to speakers. After this,

while deciding to invest in a particu-

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Spotlight ……………………………………………………… lar company. He stressed that Under-

dents a real hand feel of the whole

were presented mementos for their

standing Business and Due Diligence

process.

valuable time.

are the two most important tasks in

This marked end of the session. It

the whole process. Mr. Zaveri also

was quite energetic and interactive

pointed that personality and value

session with students asking ques-

system of the owner of business also

tions and clearing their doubts

plays a key role in making decision.

throughout the process. A note of

Lastly, both of them shared some of

thanks was delivered by Dr. Santosh

their recent investment in startups

Rangnekar, Head of Department,

such as JustEat, Ampere to give stu-

DoMS IIT Roorkee and the speakers

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Department of Management Studies, IIT Roorkee Roorkee - 247667, INDIA Comment/Feedback Mail to : - domination.doms.iitr@gmail.com Contacts: Mehul Lala (+91-9927081098 ) Nilaya Mitash Shankar (+91-9415580227) Follow us :Blog Page- http://domsiitroorkee.blogspot.com/ Twitter Page- http://twitter.com/#!/doms_iitroorkee Facebook Page- https://www.facebook.com/pages/DoMS-IIT-Roorkee/156383884413349