The Edge

Vol-III, No. 1,

January 2006

FROM THE DIRECTOR’S DESK Till Simon Kuznet came out with his classic work, we had very little knowledge on how economies changed in terms of output composition as these progressed on their developmental journeys. His studies showed that over a wide cross section of countries, the share of services in GDP rose while those of agriculture and manufacturing declined along the developmental ladder.

India has not been an exception; services already accounts for half of the aggregate GDP. Equally importantly, a bulk of new jobs is originating in the services sector. There is a buzz in the international arena that while China will be the global manufacturing hub, India will be getting this honour so far as services are concerned.

Our success in IT-enabled services has been the primary reason for this hype but there are many other services sub-sectors where India does have the potential to emerge as a global winner. This issue of Edge looks closely at this emerging phenomenon from different perspectives.

Coming to the academic developments at IILM, one of the interesting innovations we will introduce in PG II(2005-07) is a Minor in Entrepreneurship and Family Business Management. Long-term sustainable development in India is crucially dependent on the scale and efficiency of family-owned businesses as these occupy commanding heights of the Indian economy.

Given the high mortality rate of small and medium family-run businesses, it is important that the new ventures are continually launched by our entrepreneurs.

It has long been debated whether entrepreneurship can really be taught in a class-room. While the jury is still out on that, we felt there are certain aspects of entrepreneurship which can be successfully discussed in a B-School environment.

The final view, of course, will rest with our students.

Prof. B. Bhattacharyya

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CHINA VS JAPAN WHO WILL TRUMP ASIA

21

DEVELOP BY BEFRIENDING ENVIRONMENT

23

MANAGING CREDIT RISKS

The www.iilm.edu

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CONTENTS IILM’S BI-ANNUAL MAGAZINE

Vol-III No. 1

January 2006

10

DALAI LAMA AND THE GOODNESS OF BEING

19 26 28 32

THE NEED TO CATCH UP POWER OF CIPHER INNOVATE OR GIVE WAY FOR YOUR INFORMATION

37 40 44 46

04

MANAGING EDUCATION

52

CAMPUS NEWS

MAKING HISTORY WITH HISTORY READING MATERIAL QUOTE UNQUOTE STUDENT CORNER

EDITORIAL BOARD Mrs Malvika Rai Prof. B. Bhattacharya Shree Dina Nath Mishra Mrs. Kakoli Sen

EDITORIAL TEAM Arpita Sarkar Vishal Goyal Anusua Mitra Vibhuti Mall

Design: SUNIL KUMAR

CLASS APART

Prof. R.S. Nirjar President, Indian Society for Technical Education, New Delhi Member, Economic Policy & Reform Council, Rajasthan

MANAGING EDUCATION A distortion has been introduced in our academic world because of market forces. It is a matter of serious concern and calls for steps to ensure a value-based system of imparting knowledge

T

he progress of higher education in a society shapes the advancement of technology and enhances the skill of human resources to scale the peak of human development. It has now been more than a decade since we opted for liberalisation of our economy and are in the process of becoming an integral part of a global phenomenon. The Utilitarian School of Philosophy developed on theories of 19th century philosophers like Jeremy Bentham, David Ricardo, John Stuart Mill and others seems to have won the 'battle of thoughts' and, for the first time in human civilisation, the 'market' has occupied the place of a universal philosophy, which believes that the society as a whole is benefited from the greed and materialism of selfish individuals. The individual in this philosophy is, thus, reduced to an 'econom-

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ic man' and all his attributes are defined in terms of his ever-growing material needs. The purpose of our educational institutions is also, thus, confined to producing such well-informed and efficient individuals who can achieve success in this game of market forces, but without consideration to ethical, moral and spiritual aspects.

My views are addressed to those people (trustees, academicians and students) who desire to establish and develop educational institutions based on a framework of such ideas and ideals which may help our students to lead a life of personal fulfilment and social utility.

Education facilitates the physical, mental, social, emotional and spiritual development of a person. It is education alone that can add value to intellectual, emotional, moral, material, social, spiritual and technological components of the personality of man.

Tension between materialistic pursuits and the quest for spirituality is a global phenomenon and educational systems throughout the world are earnestly seeking to formally respond to the situation. A close scrutiny of the curriculum of various academic programmes will show that except for a little tinkering here and there, it has remained unchanged.

Tremendous distortion has been introduced in our academic world because of market forces. It is a matter of serious concern and calls for effective remedies to usher value-based education that matters,

promotes human excellence and is globally competitive.

Our preparation for excellence has to begin with instruction in our classrooms, training in our workshops and research in our laboratories.

Management education programmes are designed for students to acquire a professional approach to a management career. A professional approach implies that a student should acquire an array of knowledge that could help him analyse business, organisational and human problems and develop a set of ethical norms and personal skills for carrying out managerial tasks.

The problem of higher education is not merely of inadequate finance, or of curricula and syllabi or of expert planning and professional management, but also about creating an integral human being conscious of its moral and social responsibilities.

Hence, value inculcation and integration becomes a challenging task for education.

The educational system needs to be designed and strengthened keeping in mind the 'integral man', not the 'economic man'.

MANAGEMENT EDUCATION According to Attach and Peterson, two central issues facing higher education worldwide are the missing link between education and work and the steady rise of privatisation. Some central issues in higher education globally are: The growth demand for education throughout the life-cycle Technological innovation

Internationaling higher education Access and equity Accountability Differentiation in academic systems ITY ACCOUNTABILI ACCOUNTABILITY Accountability calls for competition. In the Indian context, there is no competition either in attracting students or for attracting faculty and funds. Equity is the norm for everything. Without competition complacency is bound to set in. The clamour is for autonomy — academic, administrative and financial. In fact, autonomy is considered a cure-all. Autonomy is a right that can be sustained only in conjunction with a persuasive demonstration of accountability. Universities must embrace accountability in self-interest. However, a pre-requisite is a reformed system of governance and flexibility in management.

Education is not merely a social responsibility to be fulfilled. It must be linked to improvement of social bases and quality of life if it is to be meaningful. We need act and in a cost-effective manner. Accountability will follow. All players in higher education scene must pull their weight together. They must not only demand accountability from each other but also accountability towards higher education from society and Government. Let us begin by inculcating an institutional value system in every institution of higher learning based on shared ideals, goals, respect, integrity, quality and caring. This would

Education cannot be considered merely a social responsibility to be fulfilled. It must be linked to improvement of social bases as well as the quality of life if it is to be at all meaningful in terms of a socio-economic framework.

We know that are the basic maladies of Indian higher education and possibly also solutions to Indian higher education

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Top management leaders need to know about markets as much about human behaviour and moral responsibilities towards deprived sections. This requires a strategic leadership and less of tactical operational leadership

create a bond of interdependence between all components and create a climate for accountability leading to the internationalization of academic freedom.

LEADERSHIP CHALLENGES It is necessary for leaders to look for new knowledge that is not necessarily contradictory. Top management leaders need to know about markets, information technology, strategic planning, human behaviour and moral responsibilities towards deprived sections of our society.

The other challenge to leadership is that the investments and risks are constantly rising. More investment is required in technology, brand building and human resources. This requires a strategic leadership and less of tactical operational leadership. We now need to take riskier and long-term decisions.

The capabilities as well as the aspirations of employees are rising at all times. They not only expect more compensation and better career prospects, but empowerment

and participative leadership styles. The fierce competition and pressure of innovations require that companies be consistent and reliable in their delivery capability, product mix, quality, quantity, timely availability and safety. As market freedom increases income and wealth disparities, the Government alone cannot deal with the social problems of poverty, jobs and quality of life. The leadership, therefore, must recognise and exercise its social responsibility. What we need more today is moral

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leadership focused on courage, intellectual integrity and sense of values. There is no substitute for a sense of value.

ACCESS AND EQUITY Globalisation has come to stay and meet the challenges emanating from it for higher education in our country, it is to extend the circle to excellence within a framework of equity, in order to enable more and more students to have access to temples of learning and demonstrate their abilities globally.

LIFELONG LEARNING Lifelong learning is a major issue in the discussion of industrial policy in industrial nations. It is the motivated and planned activity of the individual to ensure his or her own professional development. It is a process affecting, through job related education and training, the development of the individual's mental abilities, knowledge and skills. This can be achieved only when the individual and the company have defined their goals and these goals support each other.

ON IN NEED FOR VALUE-ORIENTATIO VALUE-ORIENTATION MANAGEMENT EDUCATION The sufferings of the affluent minority everywhere are brought about by unbridled consumerism and greed which leads to ruthless competition, envy, hatred and fear. Humanity faces the problem of ultimate insecurity, fear of death, of the unknown and reluctance to loosen the grip on the known, attachment to family, property etc. Education must provide two types of knowledge and skills — 'to live on' and 'to live for'. The first is related to the earning of livelihood, the second to quality of life and ultimately the attainment of goal of self-realisation.

Values can be broadly termed as code of conduct or behaviour towards harmony, happiness and progress in a system. An individual belongs to different sets and subsets like universe, nation, region, religion, community, family and profession and each set prescribes values to its members to meet objectives of the set. It can be listed as follows: Universal Values — Truth, Love, Nonviolence, Compassion, concern for others National Values — Civic duties and responsibilities as an honest citizen Social Values and norms

Family Values — Responsibilities towards elders, children and other members.

Community Values — Norms prescribed by the panchayat, village, club, etc.

Professional Values — Norms connected with one's own profession.

As stated, we have a situation where wealth is worshipped as God and pride has become a creed. Selfishness is entrenched in the intellect; the ego is flaunted and desires have become an adornment. Compassion has dried up. Hypocrisy has become the hallmark of life. But if our stress is on improving 'quality of life' rather than 'quality of living', the task of transformation and reconstruction of social order becomes easier and all our educational efforts will flourish in an equitable social order.

We have been concentrating on traditional means to reform, even revolutionise ing the content and methods of study and research viz., attempting syllabus revision, restructuring of courses, introduction of new subjects of study and establishing interdisciplinary links instead of propagating a paradigm shift in concept and vision.

Today’s students are built through books and rigor whereas scholars of tomorrow need to be developed through mind and muscle Current institutions are built on bricks, machinery and mortals, whereas managers of tomorrow need founding on ethics and aptitudes Present day qualifications are built on clocks, examinations and luck, whereas careers are empowered through knowledge, competence and interactive exposure.

Present day teaching is through gurukul concepts of faculty-students, whereas tomorrow's learning is based on sishyakul, where experience of many a faculty is at the disposal of each student through webbased, computer-aided technologies and online learning.

While the need for value education is being realised strongly, the mechanism and modalities to fulfil it are still not clear. Technology can be used for the benefit of society to fight disease, provide timely information to people and improve the quality of life. It can also be used to destroy the society or harm it. The dividing line be-

tween the two is the value that people hold about life, society and everything that contributes to human development. Value orientation is critical for survival.

Values form an important link between two generation. They are the core of a culture. Cultures are distinct because they practise certain agreed traditions and values. Societies are distinguished and respected for their culture and traditions. Values are instrumental determining a code of conduct among people and between nations. In human and business transactions a code is essential for a country. A value code governs global relationships and WTO as well.

Many institutions in India and abroad have been deeply concerned about development of values in their academic programme. This concern has become sharper with opening up of the world economy and in the emerging scenario. The long line of evolution through which life has passed and revealed to man great visions

While the need for value education is being realised, the mechanism to fulfil it is missing.

Technology can benefit society as also destroy it. The dividing line between the two is the value that people hold about life, society

of beauty, strength, power and greatness.

Ages ago, India asked, "What is the highest excellence of man?" This question was tackled early in her cultural history through a creative minority of sages and thinkers. The results of their investigations into this problem have come down to us in Upanishads. The literature is immortal because the theme is immortal. No culture can be continuous in historical expression unless it has kept alive within itself the vision of the eternal and imperishable.

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The foundation of new management ethics should be mutual respect. In our teaching institutions, the value for respect is missing. The result is that our leaders are not willing to think strategically and plan long-term

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Swami Vivekananda had highlighted the need for a spiritual orientation to world religions so that they may be transformed into wholly constructive forces and redeem modern man from inner impoverishment.

Lack of value education has been an important factor in the global scenario of growing violence and terrorism, pollution and ecological imbalances.

CHALLENGES IN MANAGEMENT EDUCATION The Education Commission (1964-66) and National Policy on Education (NPE1986) stressed the importance of value-oriented education in our country and recommended that the imparting of value education be an integral part of the entire educational process. In fact, ancient wisdom says that only two kinds of people are happy — the utter fool and the one who has surpassed him. All people in between are in varying stages of tension, fear and sorrow. But most are not even aware of the state we are in. Our anxieties, fixations and prejudices have shaped our consciousness, "I" in common parlance. We are happy with the sensuous pleasures we get in the world.

Management education is not geared towards a knowledge-based economy. We are not equipped to meet the challenges of globalisation and creation of a global education market for management education. Real reforms in management education take a lot

of dismantling of status-quo. It should encourage learning through autonomy, experimentation and competition.

The foundation of a new management ethics should be mutual respect. In our teaching institutions, the value for respect is missing. The result is that our leaders are not willing to think strategically, and plan for the long-term future. We have achieved great progress in science and technology, productivity and mass production of goods and services. But, we find ecological problems and erosion of family and community values. On one side we have progress, on the other its invisible cost. How are we going to tackle this problem?

Another problem of modern management is the ethical issue. How far can we integrate ethics and human values into management practice? Is profit the sole motive of management or should humanistic values be factored into profitability? The Vedas answered this question long ago. Another problem is that of health. Modern executives may be great achievers, but at an age of forty or forty five years they fail in health.

Ecological and health problems together constitute the greatest challenge to development. All these will have to be looked at from the particulars of a given culture.

Internationalization of higher education is the integration of a transnational element,

which is manifested in educational activities such as student and faculty mobility, institutional collaboration in research, teaching and learning process, development of curricula designed with a global perspective.

CONCLUSION In the face of rapid advancement in science and technology and with increasing competition and globalisation of industrial products, national economical growth and prosperity are highly dependent on technological and management advancement that can be brought about by professionals. The present system of management education is a perfect reflection of our materialistic attitude. It never teaches us how to think, penetrate and explore. Our sages helped us to know how best life could be organised so that each one of us could produce the best.

The entire purpose of education is to realise the inner dignity of man, which ultimately leads to an integral development of personality. The present management curricula are heavily biased towards imparting skills and knowledge. There is negligible input to impart wisdom, inculcate human values and instill a holistic worldview.

Orderliness in creation is the law of nature and it is the task of a 'Manager' to adopt and extend it to life.

Although it is desirable to provide value

education, institutions at large have yet not realised the urgency of this need. All eminent educationists of our country should sit together and develop a new philosophy of education based on ancient culture relevant for present-day circumstances. Religion has to be explained to our students as the growth in character, the virtues of which are self-control, selfless service and practices of prayer, to love all people and to help them in need. To strengthen the social and religious fabric of our country harmony of religions should also be taught.

Teachers should adapt their own individuality. They must also love their subject and teach with a sense of dedication.

Teachers should be imparted value-based education. There is a need to revamp teacher education programme which, at present, are inadequate to do justice to value-based education. Education without values is baseless and values without education are fruitless.

REFERENCES 1.

"Relevance of Ancient Indian Wisdom for Modern Management", Ahmedabad Management Association, 1997.

2.

"Values and Ethics in Technical Education", Hariharan, R., University News.

PP1-3, Vol. No. 23, 2003.

3.

The Eternal Values for a Changing World: Swami Ranganathananda 4.

Unto the Last: John Ruskin

Our educationists should sit together and develop a new philosophy of education based on ancient culture relevant for present-day circumstances.

Religion has to be explained to our students as the growth in character

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VALUE-ADDED LIVING

DALAI LAMA THE GOODNESS

&OF BEING

Kindness and compassion are the only attributes that can channel the entire humanity on to a positive path and lead them to divine enlightenment

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I

f you look at the world with kindness, everything will appear clear. But if you see it emotionally, through hatred and anger, it will have its own implications and grave impact. In fact, a compassionate attitude towards humanity will instill oneness and closeness, paving the way for attaining inner peace. This kind of elevated perception will help the seekers in their future life also. This was the essence of the spiritual discourse by the 45th Tibetan priest His Holiness Dalai Lama that reverberated during the course of his lecture under the banner Indira Gandhi Memorial Lecture held under the aegis of IILM on

His holiness, The Dalai Lama lighting the ceremonial lamp at the Indira Gandhi Memorial Lecture

November 2, 2005.

“Don’t extend VIP treatment as I'm not supernormal or special who knows everything”, the Dalai Lama said. He recalled how he did his traditional schooling at Nalanda University and dubbed his relationship with India as one between a spiritual living master and his disciple. During his education he said he was acquainted with in-depth knowledge of Buddhism and its real essence — a means for seekers to elevate themselves from the materialistic world to spiritual enlightenment.

He cited an instance where a renowned scientist narrated that if anyone develops a negative sentiment, like anger, lust or hatred, the world too appears negative wherein reality is shrouded in myth. To demystify this, one will have to shun hatred and remove negativity. One will have to develop opposite feelings to these negative sentiments and one such powerful feeling is kindness. Those who develop a

compassionate attitude will never meet failure of any kind, he added.

He advocated the concept of patyasampath (treasure of studies). The vast treasure of worldly knowledge attained by constant studying or through introspection, he said, will empower people to see the world in a wider perspective.

He said, there is need for preserving a sense of compassion and love which we imbibe from the womb and we ought to preserve this till our tomb or our final destiny — reaching the Kingdom of God. He spoke on non-violence and emphasised the role of universal love which is interwoven in non-violence. He argued that in primitive societies, violence prevailed to safeguard lives and this was evident in the old and new stone ages. But not anymore. If the world has to emerge as one, people have to overcome negativity. "I see the human body as a vast space of the world", said Dalai Lama, adding, "a

There is need for preserving a sense of compassion which we imbibe from the womb and ought to preserve this till our tomb or our final destiny — reaching the Kingdom of God. Non-violence, the Dalai Lama said, was the essence of life Edge 11 The

The Dalai Lama concluded his 45-minute discourse by calling upon humanity to work hard and attain divine effulgence and lead a happy life with his family, fellow beings and with neighbours with compassion, comradeship and cordiality

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temple of God where everyone is viewed as the Creator's replica" Unraveling the myth of the unending journey in the clutches of births and deaths, he regretted that this state of affairs was miserable and called upon each one to strive to get out of it. He said Indians as a community are peace lovers and stand for tolerance and ahimsa, which is the hallmark of life.

He was proud of India for its popular government, prevalence of democracy, freedom of expression and contrasted it with neighbouring countries Sri Lanka, the Maldives, Bangladesh, Nepal, Myanmar and Bhutan without, however, pinpointing Pakistan which is fomenting incessant violence and cross-border terrorism and said humanity is suffering a lot. He viewed India as an emerging power centre in the world because of its potential, self-confidence and will power.

He concluded his 45-minute discourse by calling upon humanity to work hard and attain divine effulgence and lead a happy life with his family, fellow beings and with neighbours with compassion, comradeship and cordiality.

His spiritual discourse elicited many interesting questions and the audience took part in the

His holiness, The Dalai Lama during the discusse

interaction which went on smoothly. A volley of questions were posed to him and he replied patiently. To a question on the significance of peace, the Dalai Lama said peace is important but also equally important is democracy because many western countries have umpteen internal problems and are witnessing the replacement of democracy with anarchy and dictatorships. But in India, he said, the picture is entirely different where education plays a dominant role. Basic education has made inhabitants here more intelligent and conscious of right and wrong. He said he was overwhelmed by centre's policy of 'education for all' and uplift of rural Indians.

However, he also pointed out the flaws in democracy which, he said, was char-

acterised by unequal distribution of income, widening gap between the poor and rich. The positives, he said, were the assurance of fundamental rights. He pledged his commitment to work for truth, nonviolence and tolerance.

To another question he said constant practice of compassion will reduce the cost of medical expenses and stress. He came down heavily on the attitude of people who in blindly accept that they will follow the path of non-violence and compassion but later forget these basic principles and adopt socially unacceptable attitudes.

He spoke at length about terrorism, the new wave of violence, carried out by a few “scoundrels and ruffians�. He said terrorism was all about the outburst of jealousy, anger and vengeance. He said even

All those claiming they were followers of Prophet Mohammed and were carrying out bloody acts of terrorism in his name were not Muslims at all as by their act of aggression they were blotting the sanctity of the holy Koran and tarnishing the sacred image of the Prophet

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if terrorism arose from differences in economic conditions and religion, socially it was absolutely unacceptable. He said hatred can have no sympathy. He said he is a staunch preacher of Buddhism and respects all religions, but he will deal sternly with all those who possess bad and greedy thoughts.

Replying to another question about the lifestyle of Muslims, the Dalai Lama said all those claiming they were followers of Prophet Mohammed and were carrying out bloody acts of terrorism in his name were not Muslims at all as by their act of aggression they were blotting the sanctity of the Holy Koran and tarnishing the sacred image of the Prophet. He questioned what such individuals gained by bombarding the World Trade Centre at New York. He said it was shameful on their part and they deserved severe punishment.

He examined various facets of Buddhism that lead to moksha, the eternal bliss. He cautioned that the crux of all evils is greed and hunger for wealth. He called upon humanity to give up this struggle for wealth and strive for spiritual enlightenment

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which will bless them with the elixir of life.

Earlier in his welcome address, former diplomat and Convener of IILM Forum, Mr. K V Rajan, dubbed His Holiness the Dalai Lama as the messiah of true love and compassion and hoped students will get inspired by his spiritual discourse and true spirit of divine love and affection. “The Dalai Lama stands for truth, he went on to say, perseverance, reverence, healing care, kindness, non-violence and moving all over the world and is the true preacher of divine love,” he said.

He also lauded former Prime Minister Inder Kumar Gujral and called him the Transformer of the New Economic and Foreign Policies which are pillars of Indian polity. He said Mr Gujral believed in the philosophy of 'simple living and high thinking'.

Mr Gujral, in his vote of thanks, said he felt indebted that the Dalai Lama’s vision and insight had given a great deal of moral strength to the audience and inspire everyone in various phases of life.

Compiled by Prof. Nagaraj Murthy

BIG FIGHT

?

CHINA VS JAPAN

WHO WILL TRUMP ASIA China is a sleeping giant. Let her lie and sleep for when she awakens she will tremble the world — Napoleon Bonaparte

N

apoleon’s visionary statement about China resounds nearly two centuries later. Today, the debate is less on whether or Prof.Ilan Alon when China will awaken, but Thomas J. Petters how to come to grips with this Chair of International new global reality. The sleeping Business, Rollins dragon has awakened, and is College, Florida, US jockeying for a position in the Visiting faculty at IILM global political economy.

Is China a threat or an opportunity to Japan? The answer is, of course, yes! China is both a threat and an opportunity to Japan. The answer also depends in part on who is asking this question. The relationship between China and Japan is multidimensional, requiring an examination that cuts across the economic, political and social spectrums. This article examines the dynamics of Sino-Japanese economic and socio-political engagements in a global context, provides evidence from statistics and experts and suggests policy responses to enhance co-operative bilateral ties.

Basic statistics on the Japanese and Chinese domestic and international economy are shown in Table 1, below. After decades of astonishing economic growth during the Cold War period, Japan has taken pride in being an economic miracle and becoming the second largest economy in the world. According to

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Prof Toshihiko Kinoshita of Waseda When measuring on a purchasing pow- "Japan can co-prosper with China since University, "Japan's glorious decades er parity basis, Japan is about 5.57 the two countries have different cost from the 1960 to the 1980s, have been times more expensive and, thus, an ad- structures and complementary indusfollowed by a lost decade from the justment to its GDP is needed for a tries and products." Basing his findings 1990s to 2002 during which time Chi- meaningful comparison. on research by C H Kwan, a senior felna rose to economic prominence." Still, China's population is 10 times larg- low of the Research Institute of Econaccording to Gross Domestic Product er than that of Japan. The top 10 per omy, Trade and Industry, Kinoshita not(GDP) statistics measured in current cent of the population in China earns ed that Japan has the most complemarket exchange rates, Japan's econ- approximately $14,519 per person in mentary market to China in Asia (Inomy is more than triple the size of that PPP terms which is on par with the in- donesia’s was most competitive to Chiof China. "Japan remains a 1st ranked comes of the individuals in industrial- na). However, the ratio of Japanese Sumo, a real Yokozuna," says Mr Kevin ized countries. Thus, the top 10 per goods competing with Chinese goods Newman, Senior Manager with Nathan cent of China makes up a target mar- exported to the United States has Associates Inc. who has previously ket that is equivalent in size and pur- grown from 3 per cent in 1990 to 21 worked with the Japanese Ministry of per cent in 2002.

Home Affairs, the World Bank, the UN The economic interdependence beand other international development tween Japan and China cannot be igagencies. He adds that although batnored. Accounting for 14.9 per cent of tered by 15 years of deflation and ecoChina’s total exports, Japan is the third nomic stagnation, Japan is recovering. largest market for Chinese goods and The country has changed drastically, services, following the US and Hong for the better, and an economic map Kong, China's own administrative reof its per capita wealth, global investgion. Conversely, China buys more ment and value-added goods could from Japan than any other country, demonstrate its present and future about 18.1 per cent of its total imports. strengths as well as its long-term comFrom the Japanese perspective, Chipetitive advantage. Indeed, as can be na is Japan's second largest export cusseen in the table, Japan trumps Chitomer and second largest import supna in its per capita income using marplier after the US, with 9.6 per cent and ket exchange rates by a factor of 32 and 13.0 per cent of exports and imports, using purchasing power by a much respectively. According to Shane Frecksmaller yet substanlington, Manager of the tial factor of 5.7. And American Chamber of Chinese economic prowess looms large and is despite China’s tenCommerce in Shanghai, growing. While Japan is the second largest fold larger populaJapan is the second tion, Japan’s total for- economy based on GDP, China’s economic size in largest investor in Chieign reserves are na with 8 per cent of toterms of GDP measured by PPP is much larger more than double tal investment. "This those of China. investment has been Of course, this economic story is in- chasing power to a developed market. critical to the supply chain of Japancomplete. Chinese economic prowess China has several other economic ad- ese export industries, which have aslooms large and is growing. This vantages over Japan: A substantially sembly and construction factories in strength is manifested in economic and higher growth rate in real domestic de- China," claims Renfield Kuroda, Vicepolitical terms in the global arena. mand, a much lower cost of labor and President of Deutsche Bank. For ChiWhile Japan is the second largest econ- foreign investment inflows that rival no na, foreign direct investments in genomy based on GDP, China's econom- other in the world, including the US. eral contribute 20% of the GDP, 50% ic size in terms of GDP measured by For businesses, the size of the market of total exports, 10% of urban workpurchasing power parity (PPP) is coupled with its robust growth rate force, and 16% of taxes collected. Such much larger than that of Japan and means higher per capita disposable in- a symbiotic relationship conveys a great second only to the US. In Japan, a giv- come and larger markets, while an in- deal regarding the opportunities of this en dollar can buy 85% of the same expensive labor force and investment long-term partnership. goods it can buy in the US. In contrast, inflows create a fertile environment for China and Japan share an economa given dollar in China can buy about production. ic space. If one country falters, it will 4.77 times more things than in the US. According to Professor Kinoshita, affect the other adversely. If one

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prospers, the other can piggy-back. hinterlands, and different ethnic groups experiencing deepening economic conBoth countries face similar problems that now must be forged to achieve na- nection, these are stifled by increasing for which they can seek joint solutions: tional economic integration. Dissent potential for political conflicts. For exBoth are in the process of deregulat- and regional rivalries will increasing- ample, Japan's actions during WWII, ing and liberalising sectors of their re- ly become rife, if not causing major dis- in particular the Nanjing Massacre spective economies and both need to ruptions. China cannot pollute un- (1937-1938), have never been adeoverhaul their banking systems. In oth- abated and discriminate with a heavy- quately addressed by the Japanese er ways, too, the two economies have hand forever." He continues that Chi- leadership. Frequent visits by the pocomplementary needs. While the na's history is marked by "arrogance, litical elite of Japan to the Yasukuni Japanese economy is sluggish, the Chi- belligerence and dramatic downfalls," shrine understandably angers the nese is overheating; while the Japan- and, "without a solid local govern- Chinese, who see it as proof that Japan ese are experiencing asset price de- mental administrative and wealth dis- refuses to renounce its militarist past. flation, the Chinese are experiencing tribution policy." An unstable China is Even worse, according to Mr. Renfield asset price inflation. The two countries very worrisome. Mr Newman is not Kuroda, Vice-President of Deutsche can benefit greatly from multi-layered Bank: "When the president of Fuji Xeco-operation to synergistically solve rox made a comment that the Prime each others’ economic problems and Minister's visits to Yasukuni were bad benefit from their respective strengths for business, right-wingers threw a and know-how.

Molotov cocktail at his house and drove According to Allen Kupetz, President their trucks around his neighborhood of Kpartnerz and a former US State Deblaring right-wing songs at 200 decipartment economic official in Korea: bels." A visit to the Yasukuni shrine war “The current interdependence of Japan museum reveals a much different, if not and China will end within a decade. conflicting, interpretation of Japanese Chinese firms, now dependent on war history. The Chinese have not forJapanese companies for product design gotten or forgiven the harsh Japanese and manufacturing expertise, will occupation of China and its experisoon design more of their own prodmentation with chemical and biologiucts and move up the food chain in cal weapons on Chinese soil and peoterms of their ability to manufacture ple. The bitter past and the present higher-end components." He adds indignation have precluded Japan that "Japan to refrom winning inframain competitive structure development must continue to outbids such as the highChina and Japan share an economic space. source manufacturspeed rails connecting If one country falters, it will affect the ing to China to lower Beijing and Shanghai cost and expand sales and Olympics-related other adversely. within China, exactinfrastructure developly as most US firms ment-an area of experare doing today. But the much larg- alone in his view. A recent controver- tise for which Japan is globally er US consumer spending power and sial (banned in China) book by Gordon renowned. growing trade deficit will give the US G. Chang, The Coming Collapse of ChiChina, however, can carry some of more leverage over China in trying to na, echoes some of the same argu- the blame as well. The ominous politlessen the effects of the asymmetrical ments. Salient among Chang's argu- ical tension between China and Taibilateral relationship. The Japanese will ments are that people are discontent, wan, the US, and its neighbours (innot be able to do this to the same ex- the State-owned enterprises are dying, cluding Australia) may force Japan to tent because the Chinese would be information is not controllable, in- take sides and to jeopardise the ecomuch more willing to lose market share dustrial policies reward the inept, Chi- nomic relations thus far built. China's within Japan." This is clearly a threat. nese banks are failing, WTO accession figures on defence spending are beNot everyone is convinced that Chi- will trigger collapse, and ideology and lieved to be understated, fast rising, and na will remain the economic super- politics restrain progress. comparable to Japan's. But Japan can While the prospects for economic re- only use its military for collective selfpower everybody takes for granted.

According to Mr Newman, "China is lations are promising, at least in the defence. Recent U.S. overtures to simply an amalgamation of provinces, short term, and the two countries are Japan by the Bush administration could

Edge 17 The

7. Non-governmental organizations be aimed at turning Japan into a mil- service industries. According to Mr. itary ally, similar to Britain, by allow- Tabuchi, the leadership in Japan is old- to non-governmental organizations 8. Religious organizations to religious ing Japan to revise its constitution for fashioned, focusing on past glory and a more activist role. The Chinese are missing the point that the economist organizations 9. Media organizations to media orposturing in the South China Sea, mak- Schumpeter championed long ago — ing occasional naval incursions into creative destruction must happen for ganizations Japan's waters, and building oil an economy to cope with changing While no solution can be a panacea drilling platforms dangerously close to global conditions. This can help solve for the economic and socio-political Japanese territory. In turn, Japanese some economic threats of China. Ac- threats that China imposes, the Japanright-wing politicians lash out at the cording to Kim Beng Phar, from the ese people, government and businesses Chinese; and the Chinese allow (per- Asian Center for Media Studies, at the must face the reality and enigma that haps even encourage) popular anger Star, Kuala Lumpur, Malaysia: “On the is China. Engaging China productivetowards the Japanese. Such conly requires internal assessment, willtentious political environment is a ingness to change, and behaviors that threat to bilateral relationships. will encourage China to co-operate usTo say that China violates intellectual ing relationships, diplomacy, patience property rights, including those of and restraint. A sincere apology for the Japan, is axiomatic. The Chinese have Nanjing Massacre is an example of benefited by copying the Japanese ecosuch needed diplomacy. China's prenomic development model, its indusmier Wen recently quoted an old Chitries and its products. "China and othnese saying in a meeting in Laos: "Let er developing nations do not underhim who tied a bell on the tiger take stand intellectual property right issues. it off." Each country must do its part They will continue copying. They do not to take the bell off, release the tensions see anything wrong in doing so," said and make sure no new bells get hung Mr. K. Sam Tabucci, Japanese repreon the tiger.

Author's Biographical Information sentative to Florida and Special Advisor to the Urban Land Institute. By Ilan Alon is the Thomas J. Petters Prosome estimates, piracy accounts for fessor of International Business and Execu92% of all software tive Director of Rollins used on the mainChina at Rollins College.

To tackle the Chinese threat, Japan land, and China acHe is the author, editor, should copy the US model, moving away from counts for two-thirds and co-editor of 10 books of counterfeit goods and over 80 published artraditional manufacturing focus to worldwide. A legal enticles, chapters and conferadvanced and service industries vironment that does ence papers. His two recent not conform to interbooks Chinese Culture, national intellectual property protection political level talks about China and Organisational Behaviour and International standards can threaten investment re- Japan tend to focus single-mindedly on Business Management (Greenwood, 2003) lations and encourage unjust expro- the highest tier of governmental rela- and Chinese Economic Transition and Inpriation of Japanese knowledge-based tions." What may be more useful in ternational Marketing Strategy (Greenwood, resources. As a WTO member, Japan the future is the creation of a multi-lay- 2003) are widely distributed among US recan enforce intellectual property rights ered engagement that promotes dia- search and university libraries. Dr Alon is through international courts, though logue across and between the follow- a recent recipient of the Chinese Marketing the legal maneouvering will not fore- ing nine levels: Award, a dual award from the Tripod Mar1. Government-to-government rela- keting Association (China) and the Society stall active entrepreneurial propertyrights' violations in China for the fore- tions for Marketing Advances (US). He has 2. Thinktanks to thinktanks seeable future. taught in China's top MBA programmes 3. Universities to universities Given the opportunities and threats such as those at Shanghai Jiao Tong Uni4. Cultural organizations to cultural versity, Fudan University and China Euthat China poses, how should Japan respond? According to K. Sam Tabuchi, organizations rope International Business School. He is al5. Company to company Japan should copy the US economic so an international business consultant and 6. Tourism agencies to tourism a featured speaker in many professional asmodel, moving away from traditional manufacturing focus to advanced and agencies sociations.

18 Edge The

NEWAGE CHANGE IIn n the fast-changing age of an information technology fuelled global economy, B-schools need to dev devise vise a balanced skill set in managers

THE THE NEED NEED TO TO

CATCH UP

Look at your syllabi. Are we preparThis has drastically changed ing for tomorrow or the day after? I the business landscape. Market have found that we are really preparentry is no longer dependent on ing our managers only for today and a licence from the Government tomorrow. But we have to provide but purely a business decision. them skills to deal with the future....

Greater freedom from the govGive our people the exposure of the fuernmental control is, however, ture world. Let their visions broaden, replaced by the command of so they are prepared to lead the word the market forces. from the front.

Simultaneously, the inteB.Bhattacharyya gration of Indian economy — L N Mittal at an Economic Times Function with the rest of the world has Director, GSM Even a cursory look at the been increasing by the day curricula of most B-schools in India will with both unilateral liberalisation and confirm the diagnosis of Mr Mittal. The WTO mandated rules. The trade-GDP racurricula essentially comprise the fun- tio of India has more than doubled since damentals of received wisdom in basic 1991 and if the services trade is includdisciplines like economics, statistics, fi- ed, combined external trade in goods and nance and marketing. Many B-schools of- services will come to about $300 billion fer major (specialisation) in some func- in 2005. India is now justifiably thought tional areas. These are mostly standard, of as the 'ITES outsourcing hub' as against such as marketing, finance, OB/HR, IT and China which is recognised as the 'maninternational business. ufacturing hub'.

The Indian economy has been going A look at the list of 20 top corporate through possibly the most fundamental houses, as distinct from the one about a changes in terms of regulatory systems decade earlier, will show the emergence and policies since 1991. The Government of new economy firms. More importanthas retreated from the business field leav- ly, this will also show the spectacular sucing essentially a facilitating role for itself. cess of a new generation of entrepreneurs.

The trade-GDP ratio of India has more than doubled since 1991 and if the services trade is included, combined external trade in goods and services will come to about $300 billion in 2005

Edge 19 The

The Internet has played an important role in empowering almost everybody with access to global stock of information.

But information is to be converted into usable knowledge. That is where Bschool training comes in — to integrate information in analytical frameworks

20 Edge The

This will also reveal a relative decline in the market-holding capacity of the established corporate houses in their traditional domains or inability to diversify into the sunrise industries.

These are fundamental shifts which one would have expected to get reflected in the B-School curricula. However, except for a few B-schools, current curricula do not show any significant deviation from the standard fare offered by these institutions a decade back. One possible reason behind this is the inability of B-schools to inculcate a culture of research. The changes that are taking place are on real-time basis. The teacher has to understand the process of change, its impact and, importantly, evaluate how the curricula need to be amended. This requires a substantial investment of time by the teacher concerned as well as access to relevant source materials which include field-study and infrastructure, such as Internet. This obviously pre-supposes the ability and the commitment of the teaching community which cannot be taken for granted.

In the absence of research, the ability of the B-school academic community to think ahead of time gets necessarily restricted. This, in turn, means that the students’ body will not be exposed to what the future holds and the skill sets required to operate in that environment will not be learnt — precisely the point made by Mr. Mittal which we referred to at the beginning. Contrast this with what Peter Drucker, the godfather of modern management, could do: More than three decades before the IT buzzword hit us, he coined the terminology of 'knowledge worker' and 'knowledge society' and in detail explained what the implications would be. In the preface of Drucker on the Profession of Management, he postulated that future growth would not come from additional inputs but from higher productivity, that knowledge would make resources mobile, that organisational forms would drastically change. These were not predictions, he said, “those are the implications of a future that has already happened.”

While Peter Drucker does not come in

dozens, there is little doubt that there has been a real dearth of Indian academics who have so far investigated how the paradigm shifts taking place simultaneously in global economy, political and economic ideological preferences, production and delivery structures are to be evaluated and integrated in B-school curricula so that a manager is trained to face the world of day after tomorrow.

In the past two years, there has been a vigorous debate in prestigious Bschools across the world as to the relative importance to be given to the development of discipline-oriented knowledge, such as finance or marketing, in contrast to the development of soft skills.

In the preceding decades, the focus on most in ivy league institutions, focus was on the former. A major research by the London Business School, which used its alumni as respondents, found that corporates are more and more demanding managerial skill-sets rather than technical ones. If there is an element of universalism in that study, it suggests a greater attention to development of soft skills.

We are in the midst of what can arguably be called the IT-enabled information century. New ideas and tools are coming up at an alarming rate. The Internet has played an important role in empowering almost everybody with access to the global stock of information. But information is to be converted into usable knowledge. That is where B-school training comes in — to integrate information in analytical frameworks, to develop the ability of critical appraisal of relevance, credibility and completeness of information in a decisional context.

More than a decade back, the book What They Did Not Teach in Harvard Business School made ripples. Last year, Managers Not MBAs was rated by The Economist as one of the best three management books of the year. These books do make stylised statements on the shortcomings of mainstream B-school education. All what they say may not necessarily be accepted but there is no denial of the fact that there is a need for introspection.

NATURAL CONCERNS

DEVELOP BY BEFRIENDING ENVIRONMENT I

ndian business can be classified into two broad categories. Under the first fall those companies who conduct usual business with a goal to make profit. these “business usual” companies are compelled to meet their special and continuing responsibility towards their employees and fulfil their obligations as laid down by regulatory bodies. The social and environmental costs of production seldom influence their decisions.

The second category is of those companies who conduct business unusu- in tandem with enrichment of the enal. Here, the goal is to generate re- vironment and social development. sponsible profit. These companies go This concern also has resulted in mainbeyond the diktats of regulations. They streaming environmental considerado not consider creation of shareholder tions in global business and trade. This value as the supreme goal. They are has, in turn, caused a ripple effect and involved in creating value for the so- Indian companies have begun inteciety. They meet their social grating management of enobligations by integrating vironmental considerations environmental managein their business practices in ment and social considera steady and consistent ations in their business manner. This demonstration processes. Thus, they slow of intent to embark on a down the damage to natjourney towards sustainural and environmental able business practices capital. straddling three dimensions Sustainable S ustainable Business — economic, social and Development - A New Dr. Barin Ganguli environmental — is the Paradigm essence of sustainable Distinguished Professor Widening disparity in business. Many of these income, consequent social tension companies are demonstrating this and the alarming depletion of natur- commitment towards sustainable busial resources has been engaging at- ness practices by institutionalising tention of global leaders. This concern the concept of corporate social rehas been translated into sustainable de- sponsibility (CSR). This desire to extend velopment which underscores that eco- the responsibility beyond shareholders nomic growth will have to be achieved return to society is the essence of sus-

tainable business. This new paradigm in the method of business practices must be captured in business management education. The managers of tomorrow must understand that creating shareholders value is merely a means to realise the broader purpose for creating value for the society.

Businesses and Environment In the future, India's environment will comprise both rural and urban population who will demand clean air, safe drinking water, better living conditions and improvement in the quality of environment. This will be enhanced by policies that will encourage both public and private corporate investment in the management of environment. In the future, India's environment must provide on sustainable basis a range of goods, services and values that contribute to community well-being and economic opportunities for rural as well as the urban community. Jammsedji Tata had said that in a free enterprise, the community is not just another stakeholder but the

Edge 21 The

purpose of existence. Sir Dorab Tata sources to promote this agenda will be- grounds: (i) link between poverty and on J.N Tata's ideals had said that “to come critical in future. Resource rural environmental degradation (ii) my father the acquisition of wealth was scarcity will be pressing and technol- farmers are unable to get better subordinate to improving the industrial ogy and management infrastructure prices for their produce due to limitand intellectual condition of Indians. would be needed. All these would re- ed access to infrastructure (iii) reThe impact of business unusual quire a new breed of managers whose moving rural poverty and rehabilitatabroad has also influenced Indian com- core competence needs to be aug- ing rural environment will require enpanies. Since 1999, the Tata Council mented with environmental concerns. ergising rural economy.

Business Strategy: Inclusion of a comfor Community Initiatives (TCCI)) has Integrating environmentt management assisted Group Companies to integrate in core disciplines ponent on Sustainable Business StratCurrently, core disciplines in man- egy as it impacts environment in the different aspects of business unusual — social initiatives, environmental agement education can be grouped in- Business Strategy discipline is justified management, biodiversity restoration to these categories: (i) finance and ac- because: (i) promoting sustainable and work place safety into a holistic counting; (ii) marketing; (iii), business business practices requires preserving process of corporate social responsi- strategy: (iv) economics; and (v) human and nurturing environment; (ii) intebility. The TCCI has also helped inter- resources management. Since man- grating management of environment nalise the global convergence on cor- agement of environment (ME) is a and social development in business porate sustainability and has integrated cross-cutting issue, it would be nec- processes is a pre-requisite for global it in the overall perspective of business. essary to integrate it in the core disci- competitiveness; (ii) orientation on a TCCI has formed the Tata Group Enroad map for sustainable business devironment Network (TGEN) and 18 velopment is crucial for managers of Tata companies as members have protomorrow. conomics: Inclusion of a component Economics: E posed an integration of all aspects menon Environment and Natural Retioned above in their business pracsource Economics in the Economics tices. There are other companies who discipline is justified because: (i) need are involved in meeting environmenfor management students to have funtal responsibilities. These include Voldamental knowledge on environmenta's, Nestles, Bajaj and others.

Sustainable business development tal and natural resources economics; and the need to craft new managers (ii) knowledge base on economic issues on emerging subject of sustainability; In the development of business and (iii) need to strategies, envian appreronmental issues In development of business strategies, environmental develop ciation that the have come to the issues have come to the forefront. Hence, there is an economy rests upforefront. The new on the functional ethos of peopleurgent need for crafting a new breed of managers integrity of the centred, growthecosystems. oriented goverHuman Resources Management: Innance and management of environ- plines. A short justification for this inclusion of a component on Environment has raised questions on the need tegration is provided below.

Finance and Accounting: Inclusion ment orientation in this is justified befor crafting managers who would be aware of the concerns of the commu- of a component on Accounting for En- cause: (i) providing a newer orientanity on environmental issues, techno- vironment in the Finance and Ac- tion in HRM discipline so that the delogically competent, managerially ef- counting discipline is justified on fol- mand for forward-looking managers fective and trained in legal and envi- lowing grounds: (i) mandatory re- of business enterprises can be met; (ii) ronmental regulation aspects. The quirement of environmental auditing training thrust should help understand role of the corporate sector will become and compliance of environmental reg- Triple Bottom Line; (iii) provide new increasingly important to promote the ulations in business practices; and (ii) orientation to green-centred, brandGovernment's social development and benchmarking practices and tech- name seeking business philosophy.

It is very heartening to note that IILM environmental agenda. Many private nologies consistent with Global Reis considering the possibility of intecorporations in India are willing to porting Initiatives (GRI).

Marketing: Inclusion of a component grating environment management in partner this social development and green agenda. Tapping resources of the on rural marketing in the Marketing the core disciplines of its PGDM and private sector to augment public re- discipline is justified on following PGDBM Programmes.

22 Edge The

BANKING

MANAGING CREDIT RISKS Banking operations suffer from credit risk, which may be defined as the possibility that a borrower may not pay the interest or repay the principal amount of a loan on time. In the past, banks have used other means to reduce this risk, including refusal to make a loan or insist on guarantees. However, in times of economic recession when most businesses suffer from loss of revenue and profits, these methods may not be so effective in dealing with credit risk and a large number of loans may suffer from defaults. That is where credit derivatives come in, as an important alternative for managing credit risk.

Credit derivatives are a mechanism for transferring the credit risk among possibly a large number of financial institutions, so that even in an economic downturn, the losses get widely spread out among those who are willing and ring the credit risk (called capable of bearing the risk. protection buyer) may be a The credit derivatives marbank which is worried ket that was virtually that one or more of its non-existent in the earDr. N.L. Ahuja clients may default on ly 1990s has grown Professor of Finance paying interest on loans rapidly in several developed countries in the past few years, or repaying the principal amount. The to the extent that it is likely to exceed party accepting the risk (called proUS$ 7-8 trillion by 2006 end. Not on- tection provider) may be an insurance ly have the volumes soared rapidly, the company that undertakes to compennew types of credit derivative products sate the bank for any losses caused by have also been introduced at a breath- default on specified loans. Thus, credit derivatives serve a purpose similar taking pace.

What are credit derivatives? to that of credit insurance. Of course, Credit derivatives are instruments the protection provider offers this serused to transfer credit risk from one vice for a price, and in this way the latparty to another. The party transfer- ter gets to share the risks and return

Credit derivatives are the soundest tool for banks to guard against loan repayment defaults. In India, however, the adoption of this system has been sluggish and hesitant. The good news though is the regulatory authorities are working on removing the obstacles

Edge 23 The

Credit derivatives were developed as hedging tools for banks to mitigate their credit risk by transferring the same on a loan to another party without actually selling the loan itself

24 Edge The

of a portfolio without actually making the loans. The 'price' or premium of a credit derivative depends on the degree of risk as reflected by the credit rating of the original borrower.

Types of credit derivatives There are a variety of credit derivatives to suit different risk profiles of the protection seekers. Three main types of credit derivatives are: Credit Default Swaps (CDSs): CDSs are more like a pure insurance contract, whereby the protection seller provides protection to a bank (protection buyer) against the risk of default on a specified 'reference asset' (bank loan).

A reference asset is the asset on which the Protection Buyer buys credit risk protection.

A CDS is basically a non-funded credit derivative, which means that no cash or other compensation flows from the protection provider to the bank except in the case of a credit event (default). If a credit event occurs, the bank receives a compensation for the loss on the specified single loan or a portfolio of bank loans.

A disadvantage of the CDS is that while it provides protection against the default on original loans, at the same time it exposes the bank to counter party risk — the possibility of default on the part of the protection provider in honouring its commitments.

Credit Link Notes (CLNs): In contrast to CDSs, the CLNs are funded credit derivatives whereby the bank gets payment for the reference asset upfront from the protection seller. CLNs, therefore, remove the counter party risk involved in CDS. The advantage of CLNs over the CDSs is that it reduces credit risk as well provides liquidity to the bank. For this, of course, the protection seller would expect a higher return than on a comparable CDS. Total Return Swaps (TRSs): A TRS credit derivative is suitable when an investor wishes to receive the total economic return (defined as income plus/minus any change in the market value) of an asset without actually buying the asset. TRSs involve the bank paying the total economic return on a notional

amount of principal to another party (protection seller) in return for periodic fixed or floating rate payments. The underlying reference asset can be a credit (such as a single bank loan or a bond issued by a company), basket of credits (such as bank loans) or an index. Maturity of these swaps runs from one to three years.

The Role of Credit Derivatives Credit derivatives were developed as hedging tools for banks to mitigate their credit risk by transferring the credit risk on a loan to another party without selling the loan itself. Since hedging does not work without a counter party that would be willing to accept the risk, credit derivatives also provide investment opportunity for protection providers such as insurance companies.

The credit derivatives market also provides the most objective tool for pricing of credit risk.

Many a time, banks provide loans at lower cost than would be warranted by the client’s credit rating. This might be done to maintain a good relationship with clients. As a result, there is a mismatch between the interest charged and the credit risk assumed. Such mismatches are brought to the forefront by the transparent market pricing mechanism of credit derivatives.

Credit derivatives can be used to transfer credit risk in respect of any type of debt or credit including bank loans, corporate bonds and certificates of deposits or debtors.

RBI Guidelines In March 2003, the Reserve Bank of India (RBI) issued draft guidelines for introduction of credit derivatives by banks in India. These draft guidelines recognise the fact that 'effective management of credit risk is a critical factor in comprehensive risk management of banks', and acknowledge: Banks can derive many benefits from the credit derivatives such as transfer credit risk and hence free up capital, which can be used in other opportunities, diversify credit risk, maintain client relationships, and construct and manage a credit risk portfolio as per their risk preference and appetite unconstrained by funds, distribution and sales effort.

However, these guidelines have placed several restrictions on the objectives, types and extent of using credit derivatives in the initial phase of their introduction by banks in India. These restrictions include:

Hedging vs. Trading activities: Initially, banks in India would be permitted to use credit derivatives only for the purpose of managing their credit risk, and not with the intention of trading.

Types of credit derivatives allowed: In the first phase, banks would be allowed to use only the simple credit derivatives, namely credit default swaps and credit linked notes.

Exchange Control issues: The RBI intends to initially allow the credit derivatives as a domestic product for the domestic loan and investments market only. In this phase, nonresident entities are not allowed to be parties to credit derivative transactions in the domestic market.

Underlying assets: For the purpose of credit derivatives contracts, the underlying assets can be either the rupee denominated assets or foreign currency denominated assets originated by domestic entities and having resident entities as the obligors.

The Future Scenario Even after two years of the issue of draft guidelines on credit derivatives by the RBI, the credit derivative market in India has remained a non-starter but not without good reasons. The restrictions on the use of credit derivatives imposed by the draft guidelines might not be very encouraging from the viewpoint of participating banks. Even a bigger hurdle is the issue of legality, as at present credit options contracts are not legal in India. Also, for objective and fair pricing of credit derivatives, it is imperative to have a detailed reliable credit rating system, which is still evolving in India. Finally, inexperience of insurance companies (and other protection sellers) to provide credit protection to banks (and other protection buyers) is another obstacle.

Indications are that the regulatory authorities are working on removing the above obstacles to pave the way for healthy introduction of credit derivatives in India. From the banks' point of view, there is no doubt about the need and importance of credit derivatives in the Indian economy which has a fairly good sized debt market, including corporate debt and bank loans. Several banks in India (both of Indian origin and international) have shown keen interest in using credit derivatives as a tool for managing credit risk.

In particular, the State Bank of India, ICICI

Bank and some foreign banks such as Citibank are expected to lead the way to development of a market for credit derivatives in the subcontinent in the coming few years.

About the author: Dr. N. L. Ahuja is a Professor of Finance at the Institute for Integrated Learning in Management (IILM), New Delhi.

He can be contacted at: dr_ahuja@rediffmail.com REFERENCES Gillian Tett, "Credit derivative swings hit hedge funds", Financial Times, London, May 26 2005.

Vinod Kothari, Credit Derivatives, IIM-Calcutta Finance Club.

Richard Beales and Gillian Tett, "Greenspan warns on credit derivatives", www.FT.com, Financial Times, New York, May 5, 2005.

Bidani SN, Mitra PK and Kumar P: Credit and other banking Risks, www.mckinseyquarterly.com www.bba.org.uk, 'Global credit derivatives market', 22 sept. 2004. www.celent.com, 'Credit Derivatives: Friend or Foe?', Boston, MA, USA, January 30, 2004.

Cavanna MAM and Lopez SA, 'Financial Services: Will the Boom Continue', www.towersperrin.com/Emphasis_2004_1.

Sunil K. Aggrawal, 'Credit Derivatives Move Beyond Plain Vanilla' http://pages.stern.nyu.edu, 1999. www.dbresearch.com, 'Credit derivatives: effects on the stability of financial markets', Deutsche Bank Research, Frankfurt, June 9, 2004.

Tim Backshall, 'Improving Performance with Credit Default Swaps', The Barra Credit Series, 2004, www.barra.com.

ICICI Bank, Symposium on Risk Management and SME Lending, 11 Feb 2002, Mumbai.

Reserve Bank of India, Draft guidelines for introduction of Credit Derivatives in India, March 2003. http://corp.bnpparibas.com/Credit Derivatives.

The curbs on use of credit derivatives might not be encouraging for banks. The bigger hurdle is the issue of legality, as credit options contracts are not legal in India as of now

Edge 25 The

GROUND ZERO

POWER of CIPHER

CIPHER

and a standard in the measurability of qualities whose extremes are as yet unknown to human beings, such as temperature.

Zero the most Powerful Tool Ancient Indians used a versatile scheme of symbolic numerals to represent and calculate numerate values anywhere from zero to infinity. Using just 10 digits from '0' to '9' one can perform any conceivable calculation and write any conceivable number. In normal parlance '0' refers to nothing. Yet '0' is a most powerful number in the number system. In fact it is a supreme, divine and magical number and not just an ordinary number. Zero by itself is nothing, but when We owe a lot to the Indians, who taught it is placed next to '1', it becomes us how to count, without which no '10'. As we keep on placing more worthwhile scientific discovery could and more zeros next to 1, then have been made — Albert Einstein we head towards "infinity". The power of zero is that, it possess INDIAN mathematicians origino value for itself, yet when it is nated the concept of 'zero', which placed repeatedly next to "1", it is the foundation of today's binagives infinite value to unity. ry computing system. The conRemember zero is able to confer cept of zero is referred to as infinite value, not just to "1", Mrs. P. Malarvizhi shoonya, in the early but to other numbers as Sanskrit texts of the 4th well. Even when zero is Associate. Prof. Accounting & Finance Century BC. In Sanskrit, multiplied by infinite times, shoonya stands for perfecstill it continues to be zero. It tion, emptiness, nirvana which translates as cannot be divided, nor subtracted. extinction. Zero as a concept and symbol Zero and Infinity that connotes nullity, represents a qualita‘Zero’ is an infinite. In Sanskrit, it is called tive advancement of the human capacity of anantha that is infinite. "If infinity is immeaabstraction. In absence of a concept of zero surable, so is zero". Mathematically speakthere could have been only positive numer- ing, one could define 'zero' to be 'anti-infinals in computation. The world of mathemat- ity'. If infinity is immeasurable plenitude, ics made infinitely easier with the invention zero is immeasurable emptiness. A deep of zero by the ancient Indian astronomer look in to this would reflect 'Zero' and Brahmagupta. The inclusion of zero in 'Infinity' to be two sides of the same coin. mathematics opened up a new dimension of Indian philosophy has beautiful concepts negative numerals and gave a cut off point like the material world being an illusion

26 Edge The

(maya) which is shoonya the act of renouncing the material world (tyaga) and the goal of merging into the void of eternity (nirvana) that is anantha. Herein could lie the reason why the mathematical concept of zero got a philosophical connotation.

Let us take a close look at the supreme relation between shoonya and anantha, that is between zero and infinity. Any quantity divided by shoonya is equal to infinity. Let us take a value like 16 and divide it with progressively decreasing divisors. It is interesting to observe that the quotient progressively increases. How? 16 divided by 4 = 4; 16 divided by 2 = 8; and eventually when 16 is divided by 0 = infinity! As ancient Indian Mathematician Bhaskaracharya said, "Every quantity, every value in the world, when divided by shoonya, results in the same quotient or result viz., infinity — anantha".

Even though mathematics regards zero and infinity as two extremes of the number system, they are different from ordinary numbers. Zero and infinity have no quantitative aspect to them. They can be referred to only qualitatively. Each is an indivisible whole. They do not depend on other objects for their meaning.

In other words, they are absolute and not relative. Any number multiplied by zero or infinity loses its identity and merges into the multiplier. Any number divided by zero yields infinity, and when divided by infinity yields zero. Zero and infinity exist parallel. The same idea is expressed in Vedanta from a different perspective.

Vedantic perspective of Zero and Infinity Vedantic In Vedanta, zero and infinity are regarded unknowable and, therefore, explaining or defining them is out of question. Even in mathematics, zero and infinity cannot be arrived at; a variable can only tend to either.

Looking for the smallest number greater than zero or the largest number smaller than infinity is futile. For any unknowable we cannot say what it is; it can be described only in terms of what it is not. The Sanskrit

word shoonya means void or emptiness, a concept that the mind cannot grasp unless it is itself empty (the initial premise of yoga philosophy). The same is true for infinity. In Sanskrit there is no single word for infinity.

Several words like anadi (without beginning), ananta (without end) are used.

Upanishads characterise Brahmam as 'smaller than the smallest and larger than the largest'. Small and large are a pair of opposites, which according to Vedanta are two sides of the same coin. Small is contained in the large and large is contained in the small in a latent form. As Kabir, a great Indian mystics said: "The drop merges in the ocean, where do you search for the drop? The ocean merges in the drop, where do you search for the ocean? The end of the search is the realisation that each is in the other" .

Conclusion As we have seen, zero and infinity are indivisible.

The concept of undivided wholeness is basic to Vedanta and it expresses the omnipresence of God. Again the Upanishads say: 'He moves and remains still at the same time; He is near as well as far; He is inside and outside'.

Everything in the universe is God because it is simply a manifestation of that Ultimate Reality. Thus the existence of reality is an infinite emptiness (shunyata).

REFERENCES ◆ Sudheer - "The Concept of Zero or Shunya" - Ancient India - Mathematics. ◆ Raji Sharma - "The divine unity and zero" - Swayamprakasha Trust at SreeMath, Hariharapuram, Karnataka, India. ◆ Sudarshan - mail communication ◆ Svetashvatar Upanishad, 3-20, Kathopanishad, 1-2.20 ◆ Kabir Granthavali (Complete Works of Kabir), pp. 169-170, ed. R. K. Sharma ◆ Ishopinashad, 5,6 ◆ Dharmbir R. Sharma - "Cosmic Singularity-A Vedanta Perspective" Hindu Perspective

Even though mathematics regards zero and infinity as two extremes of the number system, they are different from ordinary numbers. Zero and infinity have no quantitative aspect to them. Any number divided by zero or infinity loses its identity and merges into the multiplier

Edge 27 The

SCHOOLING A CHANGE

INNOVATE OR GIVE WAY

THE WORLD is changto share glory with othing fast and business ers, fire in the belly, quick even faster. Today, the thinking ambition and business corporate has enthusiasm. realised that the value Often the big business of complex products houses are looking resides not in factories beyond academic briland machines but in liance in search of some people’s minds. In other core competence that can words, people and add value to the Dr. Surabhi Goyal human resource pool planet are as imporAssistant Professor , tant as profit. of the organisation.

Marketing In this millennium, The demands of a therefore, no organisation big or prospective employer have necessmall, old or new can afford to sitated creativity and innovation in compromise or sacrifice a scarce management education, which is resource like a creative mind. In going to become more pronounced fact, many business organisations in coming years. have evolved new methods For a long time, business schools to screen and select have been a large reservoir of managers in order managers but in the to get the best intensely changing enviminds and their ronment they too need choices rotate to evolve new techaround prenology and a new dictable, novel breed of knowland abstract edge managers. parameters like Reading the leadership, ability writing on

28 Edge The

the wall 'innovate or die', management schools have resolved to introduce non technical programs that can cultivate creative minds.

In fact, nurturing creativity of an individual becomes a strategic and differentiating tool for both academic and management organisations.

Taking cue from latest developments, some management schools have given a fresh look to their campuses and revolutionised the education technology.

There is a perceptible difference in the academic curriculum that has changed the focus of education. It was surprising to note that the management professionals of many business schools are going through rigorous sessions of yoga, Art of Living or meditation, while at

some schools they are sitting creativity often destructs proven made by behavioural scientists, through religious discourses of the academic excellence. Such oppos- creativity of an individual at the Upanishads. At the orientation or ing beliefs have been culled out by school level is most evident and induction sessions, too, crash Edward De Bono in his celebrated flourishing, but as one moves up courses on personality develop- article Management of creativity: the ladder, creativity becomes evament are being held preparing stu- Appointing a champion of ideals to sive and one loses his ingenuity dents to read, speak and write oversee the creative aspects in and spontaneity. The power to well. Also, the students are put business, which is reproduced think and act differently is hamthrough heart warming sessions below: pered by time-encapsulated sylhelping them overcome inhibitions That creativity is becoming an labus driven programs and lack of and taking them to a comfort zone essential ingredient in business, conviction in educators, to change. where they interact and share because competence, information This trend is observed in all disideas with ease. There are some and technology are becoming com- ciplines and management is no schools that stress on learning a modities available to everyone. exception. Though management foreign language as part of acade- Value creation is becoming central education has initiated many theomic curriculum in anticipation of and that demands creativity. ries on creativity that are well docmultinationals coming in for final That creativity is a mental skill umented, yet it continues to rear placements. To chisel their corpo- that can be learnt and developed absolute conformist educators rate etiquette and finetune their by everyone. Some people will be who lay stress on academic brilsocial graces, they are trained to better at this skill than others. liance rather than holistic developmake social calls, sit in the confer- That the creativity technique is ment of an individual. There is an ence room or at the urgent need to shed There are some B-schools that stress on learn- this growing comdining table and to roll a piece of bread ing a foreign language as part of curriculum in placency in the with vegetables or management educaanticipation of MNCs coming for placements. make adept the use of tion system and revchopsticks.

Others chisel their social etiquette and finetune olutionise the learnThis science of runing process in a social graces as part of final grooming ning a successful more integrated and business, in manageholistic manner. ment parlance, is called a soft- based on an understanding of the Since there is clear indication that skills workshop. The main philos- human brain as a self-organising our business graduates need to be ophy of these programs is to pull information system with a need better prepared for realities of out management students from for lateral thinking. work, it is crucial that educators the stereotype role of an ideal That being different for the sake make learning process more manager and make them cascade of being different is not the same intense, introspective and inventheir unique talents into dynamic as creativity. tive. The knowledge they impart Corroborating De Bono's views, must make an individual an intelskills of managers and later convert into business value for their Clark (1986) too believes, "holistic lectual asset for business organisaapproach is the best way to tion and have a personality that employer.

Creativity — Natural or Nurtured? expand potential, since the left turns uncertainty into inspiration There is no denying that creativ- side of the brain is most responsi- and obstacles into opportunities. ity is crucial for survival yet it is ble for linear thinking and the Creativity revolution in B-schools unfortunate that educationists are right hemisphere is responsible Innovation in education system not fully convinced that creativity for spatial, holistic thinking. The has been a continual phenomenon can be generated and managed. need for integration is apparent in but the meaning of innovativeness There are many who still believe the structure of the brain itself" has been different at different that creativity is the power of (Clark, p.62). phases of its evolution — from tradivine. It just happens and needs It is therefore, well-established ditional classroom teaching to no human intervention while oth- that while creativity can be gener- experiential learning and now to ers hold the view that creativity is ated but to manage and sustain electronically interactive learning. an expensive proposition and is through individual's life, it In present times, hi-tech delivery better left for first movers. The requires a lot more passion and process has become synonymous most disturbing is the opinion that effort. According to observations to quality education. In fact,

Edge 29 The

introducing a sophisticated plays, hands on learning, simula- internships, international tie-ups, method of imparting instructions tion exercises, case studies or student-driven activities and paris thought to be the most innova- threaded discussions. A dynamic ticipation in opportunities like Live tive and has become an important mix of these methods has become Projects, Consultancy Programs, source of competitive advantage a challenge for the knowledge Start-up firms and other such venamong schools. A huge investment leaders who have to take risks and tures. They collaborate with prois being made to bring in latest investigate new methods that work fessors or alumni outside classtechnologies to enrich the delivery best for each topic. For students, rooms, taking risks and trying out process. Undoubtedly, the impor- this translates into full engage- new ideas, thus, gaining an invalutance of technology-driven learn- ment with both the theoretical able experience with the support ing processes like web café, online frameworks of effective manage- of experienced mentors. research database or video archivTo add to this, knowledge is ing cannot be undermined as it made interdisciplinary because helps share enormous amount of innovations take place in spaces information unconstrained by the joint-degree programs in technoboundaries of geography and time. logical management, international But as floods of information course business, entrepreneurship, through, the learners start to healthcare management, legal introspect — 'Does this informastudies and liberal arts are being tion alone help to create personal introduced as an integral part of value and is this the best way to the business curricula. get it '?

These structural changes would The answer to these questions is remain cosmetic till it is coupled qualified as 'yeses'. In fact, it is with a positive mindset. A student sad to note that B-schools have may be academically brilliant but increasingly come in the line of if his adaptability and inner self is fire. The over-emphasis on sophisnot balanced, his knowledge may ticated delivery tools have made not necessarily be an asset for an educators indifferent towards the organisation. It is necessary to creativity that lies within an indidevelop and implement an vidual. Professor Henry Mintzberg expanded concept of competence of McGill University, author of the that fosters the development of the controversial consciousness of book Managers the student. It is B-schools are sidestepping fundamentals such as Not MBAs says, here that fresoft-skill development. Most B-schools focus on “B-schools are quent workshops sidestepping on self-manageanalytical skills and don't equip students with fundamentals ment skills and emotional and personality attributes such as soft-skill other soft skill development. labs have a far Most B-schools focus on analytical ment and the tools to put it into reaching impact on the overall skills and don't equip students practice. They gain the skills need- personality of a student. with emotional and personality ed for pragmatic implementation Of course, it has something to do attributes.” While the disagree- — understanding both the context with how achievement or success ment is on, there are few excep- and the impact of strategies and is perceived. Business perfortions to this and is surprising to decisions across all functions of mance studies have clearly shown note that world's best B-schools the organisation. that management professionals are going back to basics evolving a Experiential learning is yet who exhibit a high degree of team new system of education called the another means of acquiring spirit and humanistic approach hi-touch-low-tech learning. knowledge which is both intellec- have a stronger sense of purpose.

Hi Touch, Low Tech learning tools tually stimulating and result pro- Such managers are light hearted, This kind of knowledge creation ducing. Here, students are encour- have buoyancy and gratitude. is addressed by inexpensive and aged to put hands-on coursework Even when in trouble, they simplistic methods such as role into practice through access to demonstrate calm and, in the long

30 Edge The

run, make successful entreprecredit course or make it as an evalneurs. They are full of life and creuative criterion. Thus, the imporate a contagious atmosphere for tance of personality development The only unfortunate liveliness. Happy people work programs which need to be part of the such soft skills’ harder and are more likely to addressed with conviction both stay in their jobs. Such manby the management and the development programs is that agers are believed to have a individual. The initiatives professional gains from such courses more humanistic and holistaken in this respect by cannot be measured or realised. As a tic approach. business schools should not result, students lose patience or interest To cultivate such a perremain as an academic fad and treat it as low priority sonality of management or a tool to gain competiagainst academprofessionals values tive edge over other instilled through courses schools. Instead, these proic courses like Art of Living, Yoga and grams must be adopted in Meditation are gaining letter and spirit and treated worldwide importance in the at par with the technical submodern management education jects of management. and in no way must be ignored by The relevance of soft skills any education system. These are must be clearly stated to rejuvenating exercises that grant educators so that a stustudents an opportunity to dent's performance and express their feelings, affirm achievements are calculated their identity and strengthen as the sum of intellectual, their self-esteem. emotional and spiritual quoBut the only unfortunate part of tient. This will help the busithe such soft skills development ness schools to nurture creative programs is that professional minds with a well-rounded pergains from such courses cannot sonality ready to face rigors of the be measured or realised as a corporate world. result students lose patience or The creativity thus fostered will interest and treat it as low priorhelp an individual to realise one's ity against academic courses. core competencies that later conThe blame of such a casual verts into organisation's most approach falls on educators too valuable asset. who are reluctant to treat this as a

BIBLIOGRAPHY 1. Creativity in Management - M.J. Arul, [www.geocities.com/Athens/5503/create.html] 2. How to manage more creativity - by Stephen Manallack, (May 2003). [www.connectionsmagazine.com/articles/3/040.html] 3. Managing Creativity - Mathew Stibbe, [www.stibbe.net /writing/games_industry /Managing_creativity.htm] 4. The 12 Major Themes common in all fields of creativity and innovation. [www.managingcreativity.com/12.html] 5. Management Intelligence: Edward de Bono: Management of Creativity: Appointing a champion of ideas to oversee the creative aspect of business. [www.thinkingmanagers.com/management/creativity-

management.php] 6. The real meaning of creativity: Creativity under control. (Keynote speech given at the Technical Communication Seminar, October, 1991, Australian Society for Technical Communication, NSW) [www.oio.upp.so-net.ne.jp/Tech.com/docs/create.htm] 7. Creativity and Management Development : Sheelagh Lipell.

8. A History of Western Philosophy (London: Allen & Unwin, 1945). P.52.

9. Fielker, D.(1997). Extending Mathematical Ability.

Hodder and Stoughton.

10. De Bono.E., (1972) Lateral Thinking: A Textbook of Creativity. Allen Lane The Penguin Press Penguin Books.

Edge 31 The

RIGHT TO KNOW

FOR YOUR

INFORMATION

CUSTOMER SERVICE as tions are not met, the seller a management concept will make good on the must be explored and the promise. best beginning is providRelated to the Albrecht ed by Karl Albrecht: and Dunckel and Taylor "Service management approaches to customer is a total organisational service is a third concept approach that makes devised by Leslie Harps, quality of service, as perwhich adapts perfectly for ceived by the custhe information serShantanu Ganguly tomer, the number vices manager in one driving force Librarian and Information Manager today's dynamic Library and Information Center for operation of information environbusiness." ment. Harps outlined three key conJacqueline Dunckel and Brian cepts: 1. Customer service must be treatTaylor have created a definition that, although prepared for the business ed as part of marketing strategy. community, works well for the infor- Good customer service and satisfied mation services field: customers don't just happen. You Customer service, or good cus- have to work at them.

2. Your frontline people can be an tomer relations, can be described as expectations: incredible resource for you, if you The expectation that a product select, train and support them propwill produce the benefits promised erly. Do you hire frontline people for The expectation that the service their customer relation skills, or for will be of the standard promised their data entry skills?

3. You need to determine how easy The expectation that, if expecta-

32 Edge The

you are to do business with, from the customer's point of view.

With these concepts, it is appropriate to proceed to the role of a customer service philosophy in the delivery of quality information services. While most ideas originated in the business community, there is no reason to deny their applicability to library or information services. It is accepted that quality customer service is based on two requirements — a formal strategy for quality customer service and a commitment to hiring frontline people selected trained and supported with customer service goals in mind.

The information services manager has to play a proactive role to examine customer services programs and make recommendations for improved services. It is necessary, for effective maintenance of library or information services programs, that the goodwill of users be maintained and the problem be seen as a business or support related. Without

customers, there would be no need journal article, film, manuscript, acknowledged for many years. One for the library or information ser- database entry etc. of the first thinkers to posit the com5. Information extracted from the ing of the Information Age was econvices unit to exist. So the basic questions to be asked are: carrier or carriers and presented omist Fritz Machlup and his predic1.. How good is your customer ser- without comment.

1 tions included the proposition that 6. vice?

Intelligence: Information information was an important com2. How easy are you to do business processed and digested and present- modity which would form the basis with? ed in an analysed form to meet spe- of a new economic force.

3. Why information is considered cific needs.

For quite some time, there have 7. Advice: Information that is been attempts to identify the inforto be a consumer-driven commodity? interpreted and presented, together mation component of products and 4. What is Information? with appropriate experience, to meet to cost out their value. Peter Drucker, First, information: Theoretically, a specific application. the management guru, has pointed What is a Commodity? any signal that can be transmitted out that in new industries informaand received is information and, as The New Oxford Dictionary of tion, as opposed to parts and labour, far as humans are concerned, any- English defines commodity as: is increasingly forming inputs to 1. A raw material or primary agri- products. The cost of an automobile, thing that can stimulate any of the senses is information. Information for example, is 40% material and can be transmitted for purposes of 25% labour, whilst for silicon chip’s culture, leisure, work, research and cost is 1% materials 10% labour and The realisation that everyday life. I shall mainly consid70% information. Even in the case er the use of formalized textual of an automobile, the proportion information has become a information, produced and of information that is input to commodity dates to the transmitted for a definite purits manufacture is rising pose. Within this paper, any of moment when information, as rapidly. the following categories can The realisation that inforopposed to financial and scientific mation has become a combe included in the concept of information: data, went online. Before then, the modity dates to the moment 1. Listings: A list identifying when information, as purchase of a book or journal was opposed to financial and scivarious carriers of information (i.e. books, journals, jourvirtually the purchase of rights entific data, went online. nal studies, videos, films, Before then, the purchase of a in information within that records), without much digestion book or journal was virtually of the information contained in the purchase of rights in informacarrier for the entire them and with little or no classification and ideas within that carrier time period tion. for the entire time that it was in your 2. Bibliographic references: These possession. With online information, are detailed descriptions of informayou are presented with the possibilition carriers. The descriptions are cultural product that can be bought ty of a charge every time you access standardised and allow for easy or sold, such as copper or coffee that information.

2.. A useful or valuable thing such 2 identification of carriers in question.

Online had its beginnings in the There may or may not be keywords as water or time".

1960s with the introduction of the The Concise Oxford Dictionary or classification to indicate the conservice - then called MEDLARS - now has: tent of material. called MEDLINE. Ironically, the pro1. An article or raw material that gram behind MEDLARS was first 3. Organised references: This category covers indexing and abstracting can be bought or sold, especially a conceived as a computer-aided typeservices and contains sufficient product as opposed to a service. setting program to provide the print2. A useful thing. information to select the carriers ed indexing service "Index Medicus", According to me, information is a but, to all purposes the printed verrequired. Abstracts, especially, frequently have sufficient information "useful and valuable thing". I intend sion was superseded by the electronto be used as surrogates for the to define a commodity as "an item ic version because of improved cost, that can be bought or sold". searching efficiency and flexibility information carrier itself.

4. The information carrier or a Information, knowledge and wisdom (which allows a variety of services to copy thereof: i.e. the actual book, have financial value has been be generated from the single

Edge 33 The

database). These, of course, are at Los Alamos, for example, are one Whatever the size or efficiency of three of the characteristics that make of the most common places for searching, progressively more and electronic services preferable to physicists to try out new ideas. more of the world's information, in print-based ones for a great many The opening-up of the Internet has both primary and secondary forms, users. accelerated growth in the availability is going online and more people are There was a sudden spurt in the of online information and in its use paying to access it. The changed provision of online databases mostly at unbelievable rates and this is model for charging for information derived from existing secondary going to accelerate. may actually turn out cheaper online publications (i.e. abstracting and Incidentally, it is a good question than in the printed form, especially if indexing services) and this was the as to how large is the information the much quoted "every journal artibeginning of electronic publication. resource that is on the Internet. We cle has one reader" is true. That Soon afterwards, full-text machine information is not only a commodity readable databases started to but one in which trading will probecome available — for instance duce a profit is evidenced by the LEXIS (legal material) and NEXIS frantic maneouverings seen over the (newspaper material). past few years by firms that own Surprisingly, in view of the fact information in their efforts to extend that computers had been used for their holdings of content, including many years in the production of in visual and aural domains, and by books and journals, publishers were the firms that own electronic distriboriginally wary about the possibiliution networks to purchase content ties of full electronic publishing. too.

Free vs Fee-based Information They feared loss of income, especially from advertising and also feared Despite the fact that a large part of that electronic versions would not be the information business can, and as profitable as the does, treat informaInternet has accelerated growth in the availability tion as a commodiprint ones.

They were also of online information and in its use at previously ty, there is still a afraid that there huge amount of unbelievable rates and this is going to accelerate information that is would be illegal down-loading of provided free. material for which they held the know there are about two million Nowhere is this truer than on the copyright and for the use of which host computers on the Internet and Net, where a large number of users they required payment. All this has getting on for about 45 million web- would be surprised by the concept of changed drastically over the past sites and that millions of new pages paying for information. Most magadecade and there has been an accel- are being added every few months, zines and newspapers on the Net eration in the rate of transition either ranging from personal websites to offer content for free. Statistics and from print to electronic version or university archives. Yet, how much advice are provided free by business the production of both electronic and does this add up to? The only other service companies and by share print versions — a process known as recent estimate that I have seen is in dealers and even lawyers and "parallel publishing". a recent article on the database accountants publish some free mateThe major types of publication that TerraServer which states that it con- rial. The user can download filmcome under electronic publishing tains half the information stored on clips, free music and even full novels are databases (especially banking), the web and that it currently stores by the best of writers and artists. It is geophysical data, information 950 gigabytes. (i.e. leading to an esti- also possible, of course, to get some retrieval systems (abstracting and mate of l 5.2 trillion bits). Due to this useful software free on the Internet. indexing services), full text databases information explosion, it is getting True, much of what you can access and reference materials (like ency- difficult to retrieve information effi- for free is rubbish but equally much clopaedia). Other, less formal, publi- ciently from the Web. Research car- of it is useful. The Internet is a marcations are growing in importance — ried out over the past two years by ket place that illustrates that "cost is subject-specialised bulletin boards, the NEC Research Institute indicates no indicator of value". for instance, which may replace the that retrieval on the Net has become The reasons why potentially very more traditional journals. The High less effective during the years the saleable material is available at no Energy Physics bulletin boards run study has been carried out. charge are varied. A major one is

34 Edge The

that some public-spirited cyberciti- who do not have the complex infra- cheaper alternatives. Information zens make their information avail- structures of the traditional hosts. providers have attempted to combat able free for public good. Other infor- Perhaps more important is the value this process by establishing fixed mation comes free as an inducement of the information to the purchaser. cost subscription services offering to buy other services. Other free When there were only a few sources unlimited information across the information is put up to establish a for obtaining information online, and business for a significant annual "presence" on the Net. In some accessing these required advanced payment. The ease of finding inforcases, the collection of relatively search skills, the value of informa- mation on the web means there is small sums of money for information tion was high — providers could likely to be very little customer loyaldownloaded would be too tedious charge accordingly. Today, many ty. Customers will use the most information sources are free. It is appropriate source for their needs, and too expensive to administer.

However, in this era, where profit possible to obtain current informa- and as cheaper sources appear, is the bottomline and where there is tion at a price of, perhaps, $5 or these will often be chosen to the no such thing as a free lunch, we more per item, from an online host detriment of higher priced providers, shall soon see charges introduced for supplier such as Dialog and the same unless such providers offer additionmany services which are offered free information for nothing from the al advantages. Although time and source provider, such as a national ease of use will be factors, the nature now.

Information is a commodity that or regional newspaper's website. of the Internet reduces the imporcan be traded for profit. It is still, Furthermore, there is usually no tance of these elements, leading to however, also provided free even in requirement to pay an up-front sum information cost becoming an overestablished organisations. For for access to the free site, unlike with riding factor. Further it becomes easinstance, a beneficent management traditional providers. Also important ier to compare the prices of services purchases information from is the fact that free information can —effectively pricing becomes more providers and then makes that infor- even have additional value as the transparent, further increasing competitive pressures mation available, free of charge, to its The dictum "Knowledge is Power" is only true if Essentially information is becoming a staff.

Good that knowledge is shared and put to use. commodity — and colleagues will Knowledge that is hoarded is useless providers who conreadily exchange centrate on their role information for as information suppliers rather than mutual benefit and researchers, emphasising their specific brand whether from the same organisation strengths are likely to lose out. An or not, will supply information to one object lesson here is the another. The dictum "Knowledge is Encyclopaedia Britannica. With a Power" is only true if that knowledge business model reliant on a direct is shared and put to use. Knowledge sales force, and charging $1,500 for that is hoarded is useless.

Information as a Commodity: How to its 32 volume set of books, value information Encyclopaedia Britannica was losThe value of information can be ing sales to newcomers such as broken down into a number of comMicrosoft's Encarta despite having the best brand name in the busiponents: 1. Cost of production ness. In 1997, Britannica switched 2. Cost of dissemination to a CD-ROM version and started 3. Value to the purchaser newspaper story may include graphs recovering ground. Around the same This last element — information's or pictures and link to other stories time, Britannica launched an online added value, has historically been on the same topic from the same product with an annual subscription the driving force for pricing informa- source. Thus, the information pur- price of only $85. This was taken a tion. However, with the rise of the chaser may save time purchasing stage further, when Britannica Internet, two elements in this value information from traditional suppli- announced a free web version, chain have changed. The cost of dis- ers but obtain lower value. This including links to relevant web-sites. semination has reduced dramatically alters the consumer's perception of The key involves returning to the for web providers — giving a com- the value of information and will information value chain - drastically petitive advantage to new providers prompt the purchaser to look for reducing the cost of dissemination

Edge 35 The

and looking at ways of adding value. and new approached, including the In some cases, this may even mean commercial approach, came to the re-inventing the business. management of information.

The challenge ahead Nevertheless, in terms of cusGood customer service is the tomer service, in meeting the needs lifeblood of any business. One can of user influences from the history bring out promotions and slash of librarianship continued to play a prices to bring in large new cussignificant role in information tomers, but unless one gets some of management. As the information those potential customers back to the services field continued to evolve pavilion, the assignment may not be and change and grow, certain attiprofitable so long. Good customer tudes and concepts prevented service is all about bringing cuslibrarians from exploring the full tomers back and sending them away benefits to customer service. happily enough to release positive There are basic and pragmatic feedback to other customers too. reasons for looking at information The essence of services in terms good customer serof customer serGood customer service is about bringing cusvice is forming a vice. They are tomers in and sending them away happily relationship with primarily tied to customers, a relatwo concepts enough to release positive feedback to others tionship that that being emphathe customer would like to pursue. source for that information. Today's sised in management these days, The tips are: enquirers are not interested in being quality and accountability.

Answer

phone calls educated in how to find the informa Don't

make promises unless you tion. They want the information, all REFERENCES keep them else just gets in the way. http://www.nii.ac.jp/publica Listen

to your customers Which explains the evolvement of tions/kaken/HTML1999/99Perry02 Deal

with complaints other forms of information man- E.html Be helpful, even sans profit agement — information services as http://sbinfocanada.about.com/cs/ Train

staff to courteous and we generally refer to this over all marketing/g/custserv.htm knowledgeable. umbrellas like structure — and the http://www.marketing-intelli Give

something extra patterns in which these forms have gence.co.uk/pubs/papers/info2000b.

If you apply these rules, your busi- evolved from traditional librarian- htm ness will become known for its good ship. Librarianship and dispersal of http://sbinfocanada.about.com/od/ service. The irony of good customer knowledge through libraries was customerservice/a/custservrules.htm service is that over time, it will bring based on the twin concepts of storAlbrecht, Karl. 1988 At America's in more customers than price slash- age, as in a warehouse, and educa- Service: How Corporations can ing ever did! tion. In some libraries, the concept Revolutionise the way they treat Why is the subject of customer ser- of the librarian as a gatekeeper and their customers. Homewood, Ill.: vice coming to our attention only moral arbiter for knowledge stored Dow Jones-Irwin now? The answer has to do with two in the library over which he or she Dunckel, Jacqueline and Taylor, changes in society both of which are had full control was a third consid- Brian. 1988 Keeping Customers connected to easy availability of eration, but by and large it was the Happy: Strategies for Success. information and broad-based accep- storage activity and education func- Vancouver, BC: International Self tance of information as a commodity. tion which defined traditional Counsel Press Ltd These two changes are the evolve- librarianship.

Harps, Leslie 1992. Using cusment of other, more discreet methAll that changed when enquirers tomer service to keep subscribers. A ods of information management, began to lose interest in doing the presentation to the newsletter pubsome of which have grown out of tra- searching themselves. Suddenly, lishers association, Washington, DC ditional librarianship. For most for many who were seeking only a January 21 (unpublished) enquirers, the route to information is particular fact or a specific point of Paul Meg 1990 Improving service irrelevant. What they want is the enquiry, the barriers of traditional provision. The Australian Library specific information or a referral librarianship were too inhibiting Journal \. February p 65

36 Edge The

BLAST FROM PAST

MAKING HISTORY WITH HISTORY THE RELATIONSHIP core strategies used by between strategic manmodern businesses and agement and history has those used by prominent been rarely measured or emperors in the past and to documented in acadestudy the results of these mics and scant informastrategies. The success or tion is available on the failure of historical events linkages between of strategic imporVijesh Jain historical events tance, can predict Assistant Professor, Business and prediction of the sustainability of Strategy and International Business the outcome of present business IILM Institute for Higher Studies, broad strategies houses.

Gurgaon being used by modAnother important ern regimes or business houses to area of such comparison is to study run their empires. Since, history is a the leadership qualities of historical set of packages of information personalities who used unique tacreplete with actions of historical per- tics to implement key strategies and sons or groups and their outcome, those of modern political or business events within their context can serve leaders. In this context, the writer as a benchmark to study and predict has chosen to compare the leaderthe outcome of similar actions of ship style and key strategies adopted present day business leaders. From by prominent rulers of Mughal the point of view of strategic com- dynasty. parison, the most important area for The key strategies used by the study seems to find the links Mughals and modern business between the historical events or houses can be classified into three biographies and the actions of the core categories. Each of these modern business houses. The aim is strategies may be used with posito find out the similarities between tive or negative results in con-

junction with the compatible leadership style. A regime exercises three kinds of powers (coerced, consensual or cooperation) for regime maintenance and, thus, three kinds of strategies to govern: Destructive, productive and integrative.

Destructive strategies like coercion, arbitrary decision making, repression, manipulation, negative politics and use of religious differences have been frequently used by regimes as

Edge 37 The

well as large business groups. vis-à-vis those used by the modern the reigns of Jehangir and Productive strategies are profes- day corporations some interesting Shahjehan. Integrative strategies sional approach towards the use of foresight can be drawn. In addition, have inherent disintegrative or cenincentives and rewards for good comparing the leadership qualities trifugal tendencies which can be work to achieve broad goals of the of various Mughal rulers, a bench- minimised by leadership charisma. ruling class. mark of leadership qualities most Akbar’s successors could not conIntegrative strategies tries to cre- effective in the Indian context can tain these inherent disintegrative ate the sentiments of love, affection, also be established. tendencies. loyalty, devotion, discipline, alle- Mughal Strategies and Leadership Aurangzeb had the same potengiance through the use of charisma, The prominent role of integrative tial, charisma and leadership qualiexpert power, influence, unique ide- strategies used by Akbar has been ties as Akbar, but he did not continology and sometimes with the use of frequently discussed by many schol- ue with his predecessor’s. He used institutions. ars and historians. Like Asoka of his own "destructive strategies", the The Mughal period saw an inter- Maurya dynasty, Akbar gave a outcome of which was a negative esting array of personalities and a strong direction to the decision- one for Mughal sustenance in India. diverse range of strategists in the making process. His strategies car- His strategies earned him enemies form of various rulers, the promi- ried forward by his successors. and resistance from the polity. nent leadership was most visible in However, Aurangzeb reversed or Aurangzeb had the kind of leaderreigns of Akbar and Aurangzeb. created his own ones. Akbar is ship qualities which Akbar had but While Aurangzeb caused the start as widely believed to have used strate- he did not have the will to do likewell as the acceleration of the disin- gies which aimed at creating the wise and follow Akbar's integrative tegration of Mughal rule in India, his secular character of the polity and strategies. strategies and policies We now come to the brought in seismic start of the discussion By comparing strategies used by Mughal changes, the kind of of various core straterulers and modern corporations interesting gies and leadership which was seen in the reign of Akbar styles being employed foresight can be drawn. Leadership comalthough the nature of by modern business parisons can be a benchmark too Akbar’s strategies was houses.

Reliance Group: quite different from the ones used by Aurangzeb. In maintaining harmony in an environWidely known for its innovative between Akbar and Aurangzeb, the ment of diametrically opposing and expansionist policies, the reigns of Jehangir and Shahjehan views and beliefs. Hindus were approach used by Reliance group were the extension of same strategic given high positions in his court and specially in the time of Dhirubhai moves used by Akbar but not as administration as was the case with Ambani is widely recognised in effectively, due to lack of a compati- Muslims. Akbar even created a per- Indian business circles as the most ble leadership style like Akbar’s. sonal bonding with Hindu royals. "integrative strategies". Dhirubhai Policies of most of the prominent Throughout the Mughal period, was a self-made person starting off Mughal rulers were highly offensive emphasis was given to military as a small time trader in Gujarat and ruthless and they aimed at gameplans as also to political and (after working abroad as a petrol achieving their political and military geographical expansion of the pump attendant for some years). goals.

Empire either by solicitation or Dhirubhai rose to become India's This was particularly true of coercion. The leadership of Akbar is most powerful businessman using Aurangzeb. For the purpose of the characterised as charismatic and he strategies of business expansion and study of strategic management, it was successful in creating sustain- succeeding in all his new ventures. may be noted that the outcome of able loyalty, allegiance, love, affec- He is widely believed to have collabthe strategic management of Akbar tion and peace. The strategies of orated with the Government and is widely treated as positive in con- incentives and rewards were used political who’s who and could even trast to the rule of Aurangzeb, abundantly. influence economic and industrial whose policies are widely believed Similar strategies used by his suc- policies in his company's favour. He to be the basis of the disintegration cessors proved too costly for the was most successful in creating loyand weakening of the Mughal rule in exchequer. Further, the leadership alty, allegiance and devotion of the India. By comparing the chief strate- styles and lack of charisma could not right persons (including big time gies used by the great Mughal rulers sustain many of these strategies in Indian leaders) at the right places. In

38 Edge The

his own words, business is nothing but the gameplan of relationships and obligations. He was quick to identify opportunities and take advantage of them before others could do so. He rose to set up a giant business empire which split in a feud among his two sons, after his death. His successors still have to prove themselves and seem to have continued the integrative strategies used by their father.

Dhirubhai's charisma and enlightened leadership was the main reason of the effectiveness of his integrative strategies and in the containment of inherent destructive and centrifugal tendencies emanating out of these integrative strategies.

Whether his successors can prove they have the same charisma is still to be seen. In the absence of such an imposing leadership, the two parts of this group may be heading for turbulent waters.

Tata Group: Fully aware of the inherent ills of integrative strategies and the dependence of integrative strategies on a charismatic leader at all time (which is difficult to always ensure), the Tatas seems to have largely gone for productive strategies based on professional business administration with moderate expansionism and a right mix of bureaucracy and agility in administration. Always hunting for compatible talent within or outside the organisation, the Tatas have focused on personnel training and development of strategists to sustain business operations in all sectors of operations.

While JRD Tata was a charismatic leader, he seems to have realised well in time that his group may not have the same kind of leadership after his death. Therefore, he seems to have gone for a more pragmatic approach in Tatas corporate strategies for long-term sustenance of the group.

The recent bold approach of Ratan Tata has certainly given a slight

twist to the group’s direction.

However the approach towards productive strategies has been retained.

While it may be difficult to talk about the future growth of Tata Group which depends on its future leaders, one can be certain about the group’s sustainability.

ITC Group: Like Tatas, the ITC group has also given preference to a sustainable model of running business using productive strategies. Emphasis on

In strategic management, the goal is how to be effective and a result achiever. Historical events and biographies of great personalities can help blending multiple competencies within the group to create new avenues of growth is a major productive strategy of the group.

Needless to say, the impact of leaders does have a prominent place in this formula to sustain the business. However, the approach towards productive strategies can insulate the group from major upheavals in the absence of charismatic leaders. Awareness of social responsibility, real action towards environmental protection and echoupal initiatives are some of the most useful productive strategies which are likely to contribute to the sustenance and legitimacy of the existence of the ITC group for a long

drawn future place in the Indian business. International recognition of these initiatives can go a long way in this contribution to the natural and sustainable growth of the group. Being the first company in India which is CG (Corporate Governance) rated, ITC has been able to draw a most durable path for its sustenance.

Conclusion: A great deal of treasure is available in history books to derive strategic lessons for corporate strategy formulation and implementation. The Mauryas and Mughals are the two important historical empires, the studies of which give great insight into the working of great rulers and their approach towards achieving strategic goals effectively.

While one may be efficient he may still not be effective. In strategic management, the goal is how to be effective and result achiever.

Historical events and biographies of historical personalities can give a better picture of tactics of becoming effective. A lot more studies are needed to derive benefit of such historical treasures.

REFERENCES: 1. Management of Diversity through Integrative Strategies

by Swarna Rajagopalan (http://www.acdis.uiuc.edu) 2. "Dhirubhai Ambani and Reliance" Business Strategy Case Studies Volume-II, ICFAI Center for Management Research, Hyderabad 3. New Initiatives by ITC (Information available at http://www.itcportal.com) 4. New Initiatives by ITC (Information available at http://www.itcportal.com) 5. New Initiatives by ITC (Information available at http://www.itcportal.com) 6. New Initiatives by ITC (http://www.itcportal.com)

Edge 39 The

READING MATERIAL

THE TRUTH ABOUT AMERICA

O

ne good point about Western writers is that they are eminently eligible to pen the subject. They research extensively and devote enough time for a thorough study of the subject. This is applicable to the recent book The Great War for Civilisation: The Conquest of the Middle East by Robert Fisk.

Writing about himself in the Preface, Fisk says: “I have spent much of my life in wars. They, too, were fought 'for civilisation'. In Afghanistan, I watched the Russians fighting for their 'international duty' in a conflict against 'international terror'; their Afghan opponents, of course, were fighting against 'Communist aggression' and for Allah. I reported from the front lines as the Iranians struggled through what they called the 'Imposed War' against Saddam Hussein-who dubbed his 1980 invasion of Iran the 'Whirlwind War'. I've seen the Israelis twice invading Lebanon and then reinvading the Palestinian West Bank in order, so they claimed, to 'purge the land of terrorism'." (pp xix) He goes on describing his war reporting at great length and ends his Curriculum Vitae in the following words; "On a mountaintop in Afghanistan, I sat opposite Osama bin Laden in his tent as he uttered his first direct threat against the United States, pausing as I scribbled his words into my notebook by the paraffin lamp. 'God' and 'evil' were what he talked to me about. I was flying over the Atlantic on September 11, 2001 — my plane turned round off Ireland following the attacks on the US — and so less than three months later I was in Afghanistan, fleeing with the Taliban down a highway west of Kandahar as America bombed the ruins of a country already destroyed by war. I was in the United Nations

40 Edge The

Dina Nath Mishra

BOOK REVIEW THE GREAT WAR FOR CIVILISATION THE CONQUEST OF THE MIDDLE EAST Author-Robert Fisk Publishers: Fourth Estate, London Pages: 1366 Price: £15

General Assembly a year after the attacks on America when George Bush talked about Saddam's nonexistent weapons of mass destruction, and prepared to invade Iraq.

The first missiles of that invasion swept over my head in Baghdad." (pp xx) If one goes through the book, one can conclude that after managing the collapse of Communism, the Anglo-Saxon West is taking on the Islamic world, particularly the middle-east, systematically and relentlessly. After the advent of Books of Religion, mankind has not lived in peace. Semetic religions have been continuously either converting their fellow beings for their God's empire or annihilating them altogether.

Huntington, by his book Clash of Civilizations has convinced Snglo-

Saxon strategists about the inevitability of war between the civilizations. That is what runs as an under-current throughout the pages of Fisk's narrative. Thinker and Writer George Bernard Shaw commented, "War fever is like any other epidemic. What the patients say or do in their delirium is no more to be counted against them than if they were all in the bed with brain fever".

One can find scores of characters in Fisk's book suffering from brain fever.

Two quotes from chapter 'Why' may explain what Fisk wants to convey; "Dershowitz was -I tried to think of the right word as I listened to his uncontrollable, hysterical anger -frenzied. Fisk was a bad man, a patronising man, a dangerous man; Fisk was anti-American and 'anti-Americanism is the same as anti-Semitism...' Dershowitz shouted at me and shouted Dunphy who eventually switched him off the air. But I got the message. Only one line was going to be allowed after these massacres in America. Any opposition to US policy -especially in the Middle East -was criminal and 'pro-terrorist'. Anyone who criticised America now was an antiSemite. Anti-Semites are Nazis, fascists. So America was sacrosanct, so was Israel, of course, and those of us who asked the question 'why' were the supporters of 'terrorism'. We had to shut up. On the night of September 11, the BBC's 24-hour news channel, reviewing the next morning's British newspapers, produced a pro-Israeli American commentator who remarked of my article that 'Robert Fisk has won the prize for bad taste.' (pp 1034) "The idea that the US 'deserved' such an assault, that more than 3000 innocents should pay some kind of death price for America's

sins abroad was immoral. But without any serious examination of what had caused these acts of mass murder — political, historical reasons — the US and the world might set themselves on a warpath without end, a war on terror which, by its very nature, had no finite aim, no foreseeable conclusion, no direction except further war and fire and blood. The credo now set up by the US and embraced by the world's statesmen and media, that September 11, 2001, changed the world for ever, was a lie. Countless massacres of far greater dimension have occurred in the Middle East over the previous decades without anyone suggesting that the world would never be the same again.

The million-and-a-half dead in the Iran-Iraq war, bloodbath set in train by Saddam, with our active military support elicited no such Manichaean observation." (pp1036) In fact, in an atmosphere like this the world needs civilisational harmony more than anything else.

The key players of harmonious civilisational relations cannot be from the traditions of war-mongering nations and ideologies. We, as a nation can claim that through out our history of five millennia we never invaded any people of other civilisation. We have been the practitioners of civilisational harmony. We cannot hope effective harmonious relations from those people who destroyed ancient Inca, Maya, Aztec civilizations of South America just within a decade through genocidal invasion. Those who survived, first got converted, similar is the story of aboriginals of Australia who were hunted like Kangaroos. Civilizing the human societies is a long process of evolution. Single super power mind set cannot aim at civilisational harmony. It is prone to civilisational clashes only.

BOARDROOM DITTIES concept of stakeholder concept rather than just talking about the orporate Governance and its shareholders' value. The book goes regulatory framework gained into details of obligations of direchigh momentum in industry tors and how to make and sustain as well academics in the ’80s and an effective board for the organisa’90s. In the coming years too, tion. It also goes into detail and interest in this topic is not likely to give tips to boards to organise their wane. The interest in corporate work effectively. governance is primarily due to two The chapters include CEO comfactors: Curious happenings in the pensation which has been of much corporate world and the debate. The latter part talks of Sarglobally mobile capital banes Oxley Act and this flows which are highgives a good lighting differences in insight to a beginCorporate Governance ner. systems in different Finally, the book parts of the world. In highlights how withthe past two out corporate goverdecades, many businance the directors nesses have coland boards can get lapsed. Scandals into trouble due to such as BCCI, financial jeopardy.

Maxwell commuMany a time, the direcnications and tors are in trouble due to Polly Peck incompetence and dishonappear to be less esty. The book highlights important today the reasons for this only because — like conflict of BOOK REVIEW Enron, Aurthur interests in direcWHAT IS CORPORATE A n d e r s o n , tors or Board memGOVERNANCE world.com and bers, lack of indescores of other pendence and failPublished by Tata McGraw Hill, Edition 2005 businesses have ure to execute duty plummetted into John L Colley Jr.; Jacqueline L Doyle; with care.

George W Logan; new depths of The book which is Wallace Stettinus fraudulent pracjust 100 pages, is tice. The Econogood for those trymist (May, 2002) has started divid- ing to understand the concept of ing various happenings in this field Corporate Governance and the role into two periods — pre-Enron and of directors. Though it is not compost-Enron. prehensive by itself, it can be a This book on CG covers a range good reference for students. Also, of topics like The Board-CEO rela- the focus of the book is entirely on tionship, CEO compensation, the United States and the mention Board's role in management and of other developed and developing Sarbanes Oxley Law. The book countries is missing. But as indiexplains the concepts simply and vidual chapters are fairly brief in with a Western perspective. Unlike their coverage, students will find it many books, this brings out the easy to read and assimilate.

Sandhya Prakash

C

Edge 41 The

READING MATERIAL

WINNER’S PUNCH

J

ack Welch knows how to succeed in life and in business. During his 40-year career at General Electric, he led the company to success around the world, and against brutal competition. His honest, bethe-best style of management became the gold standard in business as did his relentless focus on people, teamwork, and profits.

If you want to succeed in life and business, read Winning. This is his second book after his autobiography Jack: Straight from the gut.

Reading this book is a pleasure as it is authentic and comes straight from the heart. It took quite long for Jack Welch to succeed in life and business. For a transport company conductor’s stammering son to become CEO of General Electric was quite an experience.

The book teaches management with folk wisdom and common sense, and that’s what makes it authentic and straight from the gut. The book is in four parts — underneath it all, your company, your competition, your career and tying up loose ends.

To get the feel of the book and the directness with which it has been written, I quote Welch: "If there is one of my values that really pushes buttons, it is differentiation. Some people love the idea; they swear by it, run their companies with it and will tell you it is the very root of their success.

Other people hate it. They call it mean, harsh impractical, de-motivating, political, unfair-or all of the above... obviously, I am a huge fan of differentiation. I have seen it transform companies from mediocre to outstanding, and it is as morally sound as management system can be. It works.

42 Edge The

Rahul K. Mishra

BOOK REVIEW

WINNING BY JACK WELCH Jagdish Bhagwati

Harper Collins Price: Rs 653 Companies win when their managers make a clear and meaningful distinction between top and bottom performing businesses and people, when they cultivate the strong and cull the weak. Companies suffer when every business and person is treated equally and bets are sprinkled all around like rain on the ocean."

After a few pages, he backs his management idea with common sense and real examples. He writes: "People sometimes ask where I came up with the idea. My answer is, I didn’t invent differentiation. I learnt it on playground when I was a kid. When we were making a baseball team, the best players always got picked first, the fair players were put in easy position usually second base or right field, and the least athletic ones

had to watch from the sidelines.

Everyone knew where he stood.

The top kid wanted to desperately to stay there and got the reward of respect and thrill of winning. The kids in the middle worked their tails off to get better, and sometimes they did, bringing up quality of play for everyone. And who could not make the cut usually found other pursuits, sports or otherwise that they enjoyed and excelled at. Not everyone can be great ballplayer, not every great ballplayer can be a great doctor, computer programmer, carpenter, musician, or poet. Each one of us is good at something, and I just believe we are happiest and the most fulfilled when we are doing that. It's true on the play ground and it's true in business.”

The book is replete with such examples. That’s what makes it interesting and unputdownable.

One can go on and on with these ideas. This makes it an idea rich book. The ideas have been put into practice successfully. That’s what differentiates it from ordinary management self-help books.

One other commendable chapter is on "Hiring". It teaches you more than many human resources book can teach you. Welch writes about three acid tests before hiring a person. The first test is integrity.

“People with integrity tell the truth, and they keep their word.

They take responsibility for past actions, admit mistakes and fix them.”

The second test is intelligence.

“Intelligence means the candidate has a strong dose of intellectual curiosity with breadth of knowledge to work with or lead other smart people in today's complex world... with experience I learned that smart people come from every

kind of school. I have known many extremely bright people from places like Harvard and Yale. But some of the best executives I have worked with have attended places like Bryant University in Rhode Island. GE was lucky to have all these people on its team.”

The third ticket to the game is maturity. Welch writes about the 4 Es and 1 P framework to identify and hire people and make winning teams. The first E is positive energy. The second, ability to energise others. The third, edge, the courage to make tough yes-or-no decisions. The fourth, execute — the ability to get the job done. If the candidate has the four Es, then you look for that final P — passion.

A chapter on "The Right Job" is just as good. The caption says it all: "Find it and you will never really work again". It makes extremely good reading for young managers in their initial years of job.

The book talks about a lot about business strategy. Managers, students and business thinkers learn a lot from these pages While reading this book, I had a question in mind: "Why is winning important? What hell lot of difference does it make if I lose?"

In his characteristic forthrightness, Jack Welch says: "I think winning is great. Not good, great.

Because when companies win, people thrive and grow. There are more jobs and more opportunities… winning companies and the people who work for them are the engine of a healthy economy, and in providing the revenues for government, they are foundation of a free and democratic society.

That's why winning is great."

This sums up the role on winning individuals and companies in society. This is a winning book by the great winner himself.

A LOOK DEEP WITHIN wrong; dramatic effects often have distant, even subtle causes and long with his co-author experts from criminologists to real Stephen Dubner, a journalist estate agents, use their informationby profession, Steven Levitt, al advantage to serve their own an economics professor at the Uni- agenda. The book aims to explore versity of Chicago, has written a the hidden side of everything. book called Freakonomics, which Most books put forth a single details his innovative and brilliant theme, crisply expressed in a senway of looking at the world. Levitt's tence or two and then tell the entire book works in the following manner: story of that theme. This book boasts First he asks questions that of no such unifying theme. It uses few have the creativity to tools of economics to satisfy the ask; then he follows a rigfreakish curiosities of orous statistical analysis the author. It delves to find the answers. into the decidedly Levitt's omnipresent unconventional eco"Why?" revolves nomic territory of around different interhuman frailties such esting questions as cheating, corrupThis book handles tion and crime. Other issues such as art of economists may labour parenting to the over inflation rates and mechanics of fiscal deficits. Only Levitt cheating, from has figured out how sumo inner workings of wrestlers throw games to the Klu Klux Klan improve their tournament to legalised abortion causing rankings; why drug dealers a fall in the crime live with their mothrate. What this book ers; how estate BOOK REVIEW is about is striping a FREAKONOMICS: A ROUGE agents cheat their layer or two from clients and which ECONOMIST EXPLORES THE school teachers fidthe surface of modHIDDEN SIDE OF EVERYern life and seeing dle exam results to THING what is happening. meet test standards.

Published by Freakonomics It asks a lot of quesThe Penguin Group unfolds much less tions, some frivolous like a typical deep and some about life and death issues. The answers may economic thesis and more like a detective story that has you reading seem odd but also obvious.

Steven Levitt has managed to use late into the night. The authors have the information about jobs and real managed to bring regression analyestate and banking and investment sis to the masses. He does not rely on and applied the tools of economics to fancy statistical techniques but on answer interesting questions. This lateral thinking. Levitt has managed book has been written from a very to convert a dry pile of statistics into specific worldview, based on a few exciting theories about how the fundamental ideas, i.e. incentives world works. This book will stimuare the cornerstone of modern life; late, provoke and entertain. Now, the conventional wisdom is often how many books can do that?

Disha Dubey

A

Edge 43 The

QUOTE UNQUOTE

If I was asked what is the greatest treasure which India possesses and what is her finest heritage, I would answer and unhesitatingly - it is the Sanskrit language and literature, and all that it contains. This is a magnificent inheritance, and so long as this endures and influences the life of our people, so long the basic genius of India will continue. If our race forgot the Buddha, the Upanishads and the great epics (Ramayana and Mahabharata), India would cease to be India.

Jawahar Lal Nehru Sanskrit has moulded the minds of our people to the extent to which they themselves are not conscious. Sanskrit literature is national in one sense, but its purpose has been universal. That was why it commanded the attention of people who were not followers of a particular culture.

S. Radhakrishnan Sanskrit is thus for India the symbol and the substance of its national unity and as a connecting bond with Asia and the world‌‌. To study and disseminate Sanskrit among the people, not as an ideological fetish but as a living and rich language would not only be a tribute to Kalidasa but a way of preparing ourselves for the future.

K. R. Narayanan

44 Edge The

Without the study of Sanskrit one can not become a true Indian and a true learned man.

Mahatma Gandhi Sanskrit language, as has been universally recognized by those competent to form a judgement, is one of the most magnificent, the most perfect, the prominent and wonderfully sufficient literary instrument developed by human mind.

Sir Aurobindo Sanskrit is the greatest language of the world.

Max Muller The language of Sanskrit is of a wonderful structure, more perfect than Greek, more copious than Latin more exquisitely refined than either human life would not sufficient to make oneself acquainted with any considerable part of Hindu literature.

Sir William John The child is taken to school, and the first thing he learns is that his father is a fool, the second thing that his grandfather is a lunatic, the third thing that all his teachers are hypocrites, the fourth that all sacred books are lies! By the time he is sixteen he is a mass of negation, lifeliess and boneless. And the result is that fifty years of such education has not produced one original man in three presidencies‌‌.We have learnt only weakness.

Swami Vivekanand

Edge 45 The

STUDENT CORNER YOU CAN BANK ON THEM

THE BULL IS HERE FOR YOU

"Larger participation by non-Indian banks will help strengthen the financial sector," US treasury secretary John Snow said recently. The history of Indian banks says that the biggest milestone in the path of reforms was the deregulation of deposit interest and lending rates that gave Indian banks the opportunity to price their products competitively.

AAKANSHA MEHROTRA Low Cash Reserve Ratio and Statutory Liquidity Ratio created more funds for lending and focused more on controlling Non-Performing Assets. Coming up of UTI bank in 1994 announced the entry of private banks into industry and forced public sector banks to fight global standards. Industry today is focusing on retail banking, which involves a consumer credit risk of 100%-125%. The major problem lurking the Indian banks is of NPAs. This huge threat to industry can be tackled only by a sound NPA disposal mechanism by RBI which will offload these loans from balance sheets and tackle the stock (existing NPAs) and flow (new NPAs). The Indian government’s move to allow FDI in asset reconstruction companies for huge NPAs is just a drop in the ocean. The investment unfriendly and play safe nature of Indian banks is showing losses because a large chunk of bank holdings are maintained in government securities. Though Indian banks are not big in size and scale, their efficiency is comparable to the rest of the banks in India.

According to RBI reports, top 5 Indian banks make up a humongous 40% of gross assets and deposits of all banks combined, while the corresponding figure for the UK and US is 30%.

This indicates that India is not that bad off. The Indian banking industry is more consolidated in comparison to developed countries. Extensive use of technology in Indian banks has enabled that they effectively reach out to more customers at lesser cost. The hitech delivery channels like net banking, ATM, telebanking and mobile banking have created a win-win situation by extending greater convenience and multiple options for customers. The efficiency of banking services, through the effective use of technology, will be essential for banks to retain customers. The future of banking is promising, but there are critical bottlenecks that Indian banks have to overcome in order to gain global competitive edge over longer time horizons.

The rise and fall in stock market works on two principles — people’s sentiments like a healthy news gives rise to the stock and artificial accentuation where people buy in a hurry.

One should continue on the secondary market since there is momentum. The markets will scale higher. One should trade in midcap since there are many stories there ANKIT JINDAL now. Analysts believe that the markets could meet some resistance but will make newer highs.

So while markets will meet temporary resistance, they will make newer highs. However, one should not book profits at this moment, since we see the markets going much beyond the 9000 level. The quality of investors has also been changing as far as FII investment is concerned. You have investors from pension funds and countries that have never invested in India.

Japan, Korea, Taiwan and Germany have come in to invest.

This ensures a steady inflow as every new investor invests a base amount after registration.

With such a scenario, Sensex is poised to cross the 10000 mark early 2006. The other drivers would be stable interest rates with a 50 basis points rise over the next year and positive FII flows.

The depreciation in rupee value is also beneficial for inflows. The only negative is crude oil prices continues, with oil around $5758, lower than the $70 mark but still very expensive.

The demand for Indian goods in foreign market has increased.

Therefore, exports have been increasing at an alarming rate which is good for the market. The biggest driver for growth, however, is infrastructure development and consumption.

The growth of India Inc is dependant on rtail India and companies in this sector would be big gainers. Corporate India's performance has been robust and profits have doubled over the years. With such a performance and access to international markets and funds, our companies have become self-reliant and strong. The other areas that will soar are the banking sector, sugar units, power equipment manufacturing and capital goods manufacturers. The software sector can never be left out of any investment list. Infosys, TCS and Wipro become the best picks, but there is lot of value in the mid-cap IT sector too. A great year ahead for investors, but do be cautious.

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SERVICE SECTOR DRIVERS

CHANGE AGENT’S NOTE

The growth in the services sector has taken the country on a higher growth trajectory. Our recent economic performance has placed India on the World Development Report 2004’s list of highest growth performers in the world. In line with global trends, the services sector in India has emerge as a leading services hub of the world. Services or SOMYA JAIN the tertiary sector of economy covers a wide gamut of activities like trading, banking and finance, infotainment, real estate, transportation, security, management and technical consultancy, among others.

Some sectors that have contributed to the success of the service sector are: India's high capabilities in Information Technology and its booming software exports account for a good percentage of the GDP. The increasing number of mid-size and small enterprises signing IT services and BPO deals would make the IT sector one of the most important constituents of the service sector. The domestic IT services market grew by 26.7 per cent in 2004-05, the strongest in Asia Pacific. Competition in the sector and awareness about strategic benefits of IT deployment, government initiatives as a facilitator for IT deployment and increasing business development activities of global and local service providers in the Indian market were the other factors that propelled growth in the sector Indians spend around Rs 1, 03,000 crore a year on healthcare. India's health services (manned by qualified and experienced personnel), super-specialty hospitals specializing in both modern and traditional Indian medical systems supported by state-of-the-art equipment, are attracting patients from across the world and constitute a significant segment of India's services sector.

There seems to be no stopping the tourism sector boom.

Not only are foreign tourist arrivals expected to touch the 4.5 million mark but domestic travel is also going to witness a big jump from 368 million travelers in 2004 to 400 million. Indeed, the service industry have been growing at a rapid pace, contributing majorly to our country's GDP.

Every corporate giant says it wants to change. Few can do it. Every young company starts as a natural force for change. Few can sustain it. It's not that the business environment is changing. Change is the business environment. And it's not that every company is undergoing change. Change has overtaken every company. Creating change, SHREELA BAJORIA managing it, mastering it and surviving it is the agenda for anyone in business today.

The idea of a change program sounds hopelessly artificial. Instead of an external program, change is intrinsic to business, an integral expression of how any successful business operates. It has escaped from the narrow confines of human resources and become an issue of personal responsibility. People who are uhers of change are individual agents, leveraging their experience and talent to make things happen. They have real jobs, real work — and driving change is built into how they do their jobs.

Creating change is a skill. But getting things done and moving the business is a passion. The real challenge of change is not just to come up with a brilliant idea — it's to implement it. The successful change agent can say, This idea is alive in the company.

If you read the academic literature, too often change comes across as a bloodless activity: Establish a vision, find a mentor, design the program, paint by the numbers. Like a law of corporate physics, people have an instinctive reaction to the news of change: resistance.

According to successful change agents, the key to making change happen is to create an environment where people gravitate in the direction you want them to go. The most important thing for change agents to remember is: it's just business. If you're going to get something done, you're going to discomfit people, interrupt routines and make more work. Change has a considerable psychological impact on human mind. To the fearful it is threatening because it means things may get worse. To the hopeful it is encouraging because things may get better. To the confident it is inspiring because the challenge exists to make things better.

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STUDENT CORNER TELECOM: A HOT SECTOR

IN YOUR SERVICE

India, like other countries,has adopted a gradual approach to telecom sector reform through selective privatization and managed competition in different segments of the telecom market. To begin with, India introduced private competition in value-added services in 1992 followed by opening up of cellular and basic services for local area to priANKIT SINGHAL vate competition. The Telecom Regulatory Authority of India (TRAI) was constituted in 1997 as an independent regulator. Competition was also introduced in national long distance and international long distance telephony at the start of the current decade.

India is the fourth largest telecom market in Asia after China, Japan and South Korea. The Indian telecom network is the eighth largest in the world. At current levels, telecom intensiveness of the Indian economy measured in the ratio of telecom revenues to GDP is 2.1 per cent as compared with over 2.8 per cent in developed economies, showing that the Indian Telecom sector is fast catching on its competitors in developed countries of Europe and North America. With 37% growth in the subscriber base in 2003-04, revenues from the telecom sector are expected to touch $21 billion by 2008, from the current levels of $8.3 billion, making it the "hottest " sector in the service industry.

Considering that there is a major difference in the teledensity in urban (31.1%) and rural areas (1.9%), there is immense potential in rural areas for the telecom players. Keeping the potential that the rural market holds, Airtel has already invested Rs 125 crore. The strategy is to cover all towns with a population of 10,000 or more in major States of lndia.

Seeing the growth rate, the foreign shareholding limit has been increased to 74%. This would not only attract global heavyweights to invest but also help bring in better technology. GSM and WLL enabled phones are basically responsible for the dramatic growth rate of this sector. As Indian consumers are offered the lowest talk time rates more and more are joining in. Prepaid connections make up for 80% of the revenues for telecom players, which is in line with the international consumer pattern.

The Indian economy is dominated by the service sector and there is growing optimism that India will soon become the service factory of the world. Besides this fact, the contribution of the service sector in job generation is lower than its contribution to GDP, which is almost 50%.

During the 1990's while GDP accelerated there was no commenSWATI JAIN surate growth in employment.

The service sector cannot directly draw any surplus labor from agriculture and create employment for masses. Although services like IT and BPO can generate jobs but it would be only for those people who have a basic level of literacy.

The skill requirements for such services are of a specialized nature and the emergence of somewhat inexplicably protectionist. It cannot help in generation of mass employment, as a large part of our labor force is still uneducated. Even if BPO services were to continue at the rate exhibited in the recent years as estimated they would account only for 0.1% of workforce in future.

Economy as a whole is dependent on efficient delivery of services. There should be an attempt to not only create employment opportunities but also to improve quality of employment, its sustainability and skill levels.

More employment opportunities can be created in areas like tourism, information technology, construction, communication, insurance, certain categories of transport, printing, electronic media, hotels and restaurants, education and health etc. India has enormous potential for both domestic and global tourism. But this area though upcoming, is unexploited.

In traditional consumer services like retail shops, low income restaurants, hair cutting saloons, tailoring, photographers, taxies and small truckers where most of the establishments are small in terms of employment size i.e. employment being not more than one or two including the proprietor.

If these opportunities can be explored, we can expect that services would continue to power the growth of our economy on the back of India's global competitiveness as well as a growing domestic demand.

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SERVICE SECTOR & GDP

VAT IS NO MONSTER

Economies evolve from an agriculture base to a manufacturing one and then go on to the services sector. India's success in IT and service sectors, however, has made people think that this paradigm is changeable. They believe it is not necessary for a country to go through this cycle for development and that India can also leapfrog from agriculture RUCHI SINGHAL to a service-based economy.

Services constitute around 50% of India’s GDP. India’s service exports have recorded the highest growth rate among all countries in the past five years. India accounts for 1.4% of world services trade compared to 0.9% of world merchandise trade.

With over 50 per cent contribution to the GDP, services are the mainstay of our economy. We expect that Services would continue to power the growth of our economy in future on the back of India’s global competitiveness as well as a growing domestic demand for services.

There has definitely been a services revolution in India and the sector has played an important role in integrating India with the world economy. But should we be so complacent about service-dependent growth in the Indian economy? While we could appreciate the country's progress in the services sector, there is an issue to be addressed here: Can services alone drive India's growth process?

To achieve a growth rate of 8% or more would require services to grow at 12% per year which seems unlikely to be realized on a sustained basis, especially since services like IT are susceptible to changes. While further deregulation may spur growth in transport and energy, they are unlikely to raise the overall service sector growth rate to 12%.

All developed economies have earned their stripes due to their prowess in engineering-led manufacturing. A strong Indian engineering industry is must for self-reliance in Defence, Aerospace and Nuclear sectors. Developing indigenous engineering capability will reduce dependence on foreign sources. No country has been a growth performer through services alone. Hence, there has to be more emphasis on boosting industrial growth.

VAT (Value Added Tax) covers 550 commodities and has come into effect after all State Governments were asked to do the spadework for its smooth introduction in during the financial year 2005-2006.

Till date, Sales Tax is one of the taxes being levied, collected and usurped by the State Governments for which the State adSAHEB SAHNI ministrations have respective sales tax laws. The Centre tried to introduce a uniform sales tax for all commodities across the country. VAT seeks to tax the value added at every stage of manufacturing and sales. In other words, tax already paid can be claimed at the next stage of value addition. For instance, if a manufacturer purchases raw material worth Rs 1000 and sells the finished good at Rs 1100, then in real terms he will be liable to pay VAT on value addition of Rs 100 only and can claim a refund in his return which he has already paid on raw materials. If a good is bought for Rs 1500 by the wholesaler and is sold for Rs 1700, then the incidence of VAT will be at Rs 200 only and not on the entire sale price.

There has been a lot of hue and cry by the business community, wholesalers and retailers, the big and small shopkeepers about the introduction of VAT. They seem apprehensive that with the introduction of VAT, there will be a steep inflation. The common man in India who is by and large unable to understand the rationale behind VAT is afraid that he will have to pay tax at every stage from manufacturing to purchasing of goods. But, I feel it is an unfounded fear that VAT will adversely affect the general public.

The government has been making an all-out effort to dispel the misconception about VAT. Any sane person would agree that VAT is good for the nation, for the economy and from the point of view of the common man also.

As Sales Tax is being done away with, the people who are demonstrating against VAT have their own vested interests and are trying to befool the gullible masses against VAT.

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STUDENT CORNER STRESS MANAGEMENT

WITHER B-SCHOOLS?

The word "stress" has been defined

by Oxford dictionary as "a state of affairs involving demand on physical and mental energy."

A condition or circumstance, which can disturb physical and mental health of an individual. In medical parlance "stress" is defined as a perturbation of the body's homeostasis. These demands on SHARAN MAHAJAN mind and body happen when it tries to cope with incessant changes in life.

At one point or the other everybody suffers from relationship demands, pressure at work, traffic snarls, meeting deadlines, growing up problems..etc. All these cause stress.

When we fail to counter stress, our hormones and chemicals fail to reach the blood stream resulting in tense muscles, dizziness and anxiety. Accumulated stress increases the risk of acute and chronic psychosomatic illness and weakens the body’s immune system. Stress can cause problems like headaches, irritable bowl syndrome, eating disorders, back aches, fatigue, frequent colds, hypertension, diabetes, heart ailments and even severe problems like cancer.

Job stress is a chronic disease caused by conditions in the workplace that negatively affect an individual’s performance.

In some cases, job stress can be disabling. In chronic cases, a psychiatric consultation is required. Symptoms of job stress depend on situations. How long the individual has been subjected to the stressors and the intensity of stress. Typical job stress symptoms are insomnia, loss of concentration, anxiety, depression, anger and frustration, migraines, stomach and back problems.

Some of the most visible causes of workplace stress are job insecurity and high demand for performance. Technology, computer, pager, cell phones and fax machines have resulted in heightened expectations for productivity with which many are unable to cope. Coping with stress could be as simple as making changes in lifestyle, physical exercise, meditation, soothing music and deep breathing. On the flip side, moderate stress is necessary. In a risky situation, body releases stress hormones that make us more alert. The body gets prepared to act with increased strength and speed.

India today boasts of 850 B-schools.

But if one examines the course content of B-schools across the country, the dearth of Indian content is astounding. One encounters a carbon copy of Western thoughts and paradigms. This is despite the fact that India has a long and distinguished educational tradition.

Management education in India is SUPREET KAUR over four decades old.

The lack of indigenous content is baffling. More than 90% books are by foreign authors; all theories and paradigms discussed in class are of American (sometimes European / Japanese) origin. In leading B-schools, over 90% of case studies are Harvard Business School cases.

No doubt, some cases are universal bringing out issues and situations that may have a general bearing on any economic scenario. Many may argue that case studies promote decision-making skills and, therefore, location has no bearing on them. But the fact is that Indian academicians have failed to produce world-class cases of Indian industries.

An Indian perspective works in two ways: First, participants can relate better if cases are from their own country. Second, while all cases written by IIMs may not be as classy as HBR cases, there are those which are comparable with the best in the world. Even if some cases are not comparably good, it may still make more sense to discuss them as a good management teacher can bring the best out of them.

Few text books on Indian management are available. However, Financial Management by Prasanna Chanda is one book which is in no way inferior to any other foreign author. There is much talk about the Gita and the Upanishads being applied to management practices. Unfortunately, there is more research outside India on these scriptures than by us. It is imperative that Indianness be induced into the curriculum.

This could be done by introducing separate courses like Political & Economic History of India, Business Ethics: the Indian Way, Great Economic Leaders of India, Indian Scripture and Management Principles and so on. Education is in a metamorphosis. The key to success is not in getting from the West but in giving to it.

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BANKING SERVICES FOR YOU

RURAL CREDIT REVOLUTION

Services have become an integral part of the business community. Many businesses are purely service oriented. The banking sector is one such example.

Today's fast life demands quick solution to all problems. Hence the customization of services. With stiff competition and advanced technology, bank services have become more URBASHI MUKHERJEE convenient. Previously, one had to wait for hours to withdraw cash from his account. A cheque from the north took close to a month to get cleared in the south.

The banking sector has undergone a massive change in terms of services being provided by them. This change has been pioneered by private sector banks.

The value additions have come through internet banking, phone banking, anywhere banking, mobile banking, debit card, credit card, ATMs etc. Money transfers across the globe can now happen at the click of a button. Banks generally issue Demand drafts, Banker's cheques, money orders or other such instruments for transferring the money. It has been only a couple of years that banks have jumped into the money transfer business in India.

Visa recently introduced the Visa Money Transfer option for its savings and current account holders of any bank with a Visa debit card. This facility helps customers to transfer funds from his bank account to any Visa card within India.

Then there is the loan segment which has become easy to apply for. In personal loans, one can get a sanctioned amount between Rs 25,000 to 10,00,000 depending on the profile of his pay packet. The SBI, ICICI, HDFC and HSBC are the leaders in personal loans. Auto loans are sanctioned to the extent of 85% on ex-showroom price of the car. Credit cards in India too are gaining ground. A number of banks in India are encouraging people to use credit cards. The concept was started way back in 1950 in the US by Diners Club and American Express.

Credit cards in India became popular with the coming of foreign banks. The deregulation of the banking industry coupled with the emergence of new technologies has enabling new competitors to enter the financial services market quickly and efficiently. This, in turn, has given consumers better options.

The next big thing for the Indian banking sector could be rural consumer credit. This would encompass corporate credit as well as consumer credit. Rural credit is not to be confused with Government-directed lending. Rural lending would create a rural consumer credit revolution that would have the potential to drive our economy as a majority of our VARUN SAHNI population lives in rural areas.

The lending to rural markets has four segments — loans to corporates who cater to rural markets, loans to vendors who supply to those corporates, rural entrepreneurs and farmers, and self-help groups or those who micro finance rural poor. Green produce, for example, is witnessing a 33% growth and about a 30% wastage. There are several layers of intermediation before it reaches the market and hence the farmer loses value. If we address the supply chain, the entire chain from the farmer to consumer would benefit.

This is one example of rural opportunity. Of course, there are infrastructure bottlenecks. But these are the challenges to be overcome.

Once this rural credit revolution starts, there would be demand for home loans, consumer goods loans etc., similar to what has happened to the urban consumer. The impact of this is unknown. Whenever we talk about micro financing — be it for the rural or the urban poor, the key challenge is distribution. The challenge is to make it available to the needy. There are some organizations addressing the urban poor by way of personal loans but interest rates are high. The challenge is to make working capital available to a flower or vegetable vendor on a daily basis.

To quote an example, the UK-based HSBC has identified potential for micro-finance lending in 11,000 privately-owned schools in Hyderabad and Chennai. The programme, initiated as a corporate social responsibility activity, has blossomed into a commercial lending activity. The borrower schools need to be registered as a 'trust' or 'society'. Funds could be disbursed for purchase of computers, furniture, library books, sports equipment and infrastructural requirements. One can say rural finance holds a lot of promise.

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LODHI ROAD

Academic Achievements

ASHITA AGGARWAL

■ Presented a paper titled "Learning Style across culture: A study on learning style of MBA students in India", at International Conference on Cross Cultural Competence, under ECCP Project of European Union, held at Singapore on October 67, 2005. The paper was co-authored by Dr. Irfan A. Rizvi.

■ Case study titled "Environmental Sensitivity: Waste Treatment at Government Hospital" published in a book titled Corporate Social Responsibility: Concepts and Cases, Excel Books (pp 440-460)

Public Administration.

■ Invited to contribute to Economic Times’ Tuesday Debate on WTO at Hong Kong Cross Roads in The Economic Times, November 1, 2005.

■ An Entrepreneurial Development Workshop on How to Start Export Business was organized by IILM, in association with Export-

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HARSH SHARMA

■ Presented a paper titled 'Focusing on Training Climate For Effective Training Programmes' at the Seventh International Conference on Destination India organised by DSPSR and SHTR in association with GGS University Delhi at India International Centre (January 3-5, 2006) ■ Conducted an MDP on 'Cross Cultural Communication' along with Prof. B. Bhattacharyya on December 9, 2005 in association with Exim Bank at Ahmedabad

PROF. B. BHATTACHARYA

■ Invited to address the 4th National Agricultural Business Summit (AIMA) on Value-Creation through Marketing Innovation (13th August 05) ■ Invited to address the Govt. of Haryana officials on the Current Status of Agricultural Negotiations in WTO by Haryana Institute of

Import Bank of India and Institute of Entrepreneurship at Guwahati during 9-11 Sept.2005. Prof. B. Bhattacharyya, Director GSM, IILM direted the programme. The Programme was well received.

More than 40 entrepreneurs from the North East Region participated.

Prof. Romie Littrell, Faculty of Business, Auckland University of Technology, Newzeland , Visiting Faculty at IILM

P. MALARVIZHI

■ Presented a research paper ti-

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RAJAT SETHI

■ Presented a Paper titled "Beta and Its Relationship with Financial Leverage: A Study in Indian FMCG Sector" and "Proactive Management Education: Teaching the Falls Due to Decision Traps and its Management" presented at Third AIMS International Conference on Management (AICOM-III) hosted by Indian Institute of Management (IIM), Ahmedabad, India and organized

by AIMS International — The Association of Indian Management Scholars during January 1-4, 2006

SAPNA POPLI

■ Presented a paper titled "Cross Cultural Learning Preferences: A Perspective on India" at the 1st International Conference on Intercultural Communication Competence — Implications for Business, Education and Politics, organized

by Asean-EU University Network Programme (ECCP Project) in association with Singapore Management University, Singapore, 67 October 2005.

■ Delivered a course on Marketing Management at the MBA center, Shanghai University, October 2005

sonality at work at the University of Lueuneburg - Germany from May 20 - 23, 2005 on "Dealing with stress in organizational lifeare there gender Differences in Personality." Presented an Invited Paper at the Manchester Metropolitan University Manchester Work Family Conflict: India at multiple cross roads in an international conference on community, work and family, Manchester; from March 16-18, 2005

VINEETA DUTTA ROY

Presented a paper titled "Critical Skills for success in travel and tourism sector" at the National Conference on Human Resource Development Practices in Travel and Tourism Sector, held in Rishikesh, March 19-21, 2005

SHALLEY DASH

■ Presented a paper entitled "Determining India's Edge in IT Outsourcing: A Cross Country Analysis of Comparative Advantage in IT", jointly with Dr Ranjana Agarwal on Dec 15, 2005 at the 11th International Conference Of Productivity and Quality Research (ICPQR) 2005,organized by Indian Institute of Technology (IIT) Delhi jointly with International Society for Productivity and Quality Research (ISPQR), University of Miami, US. ■ Presented Paper entitled "Determining India's Lead in Services Outsourcing : Human Capital as a Basis of Comparative Advantage Equations" forthcoming in Abhigyan, Special issue on BPO Sector.

TRIPTI P. DESAI

■ Presented and Invited paper at International symposium on per-

■ Presented a paper on Dec 14, 2005 at 11th International Conference Of Productivity and Quality Research (ICPQR) 2005, organized by the Indian Institute of Technology (IIT), Delhi, jointly with International Society for Productivity and Quality Research (ISPQR), University of Miami, US. ■ Organised a workshop on Corporate Social Responsibility held at British Council, Library, Bhopal on the Sept. 12, 2005.

The aim of the workshop was to sensitise the participants on various dimensions of the subject, provoke thought and debate on various issues concerning corporate social responsibility or corporate citizenship.

■ Co-ordinated the second competition on Corporate Social Responsibility and Leadership, being jointly organised by British Council, IILM, New Delhi and Association of Sustainability Practioners, UK. Its aim is to promote understanding of CSR issues amongst students and faculty to enhance the knowledge of future business leaders of India. The competition would also help develop relevant caselets and case studies that document CSR practices in the Indian Context.

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INDUSRTY

INTERFACE

MEDIA: THE GOOD, THE BAD AND THE UGLY

with her. She noted that when public interest is at stake the challenges faced by the media were enormous.

Mr Cherian said the media takes us to a world where we do not go.

He emphasized the importance of exploration and courage for good media to flourish.

The consensus that emerged was that the media plays a significant role in shaping the society. The media has to be responsible to the extent that it does not merely portray reality, it has the potency to shape our dreams and fantasies.

CONSUMER BEHAVIOUR SEMINAR Panelists (L-R) Mr. Dilip Cherian, Ms. Seema Mustafa, Ms. Fatima Khader & Ms. Nafisa Ali

THE Undergraduate Business School and the Film and Media School of IILM organised a panel discussion on Sep. 30, 2005 to focus on media-related issues. The distinguished panelists were Social activist Ms Nafisa Ali, Advertising guru Mr Dilip Cherian, Editor Asian Age Ms Seema Mustafa and Ms Fatima Khader. A summary of the discussion: The panel discussion began with a clip of the Film and Media Students interviewing Mr Shivraj Patil, Home Minister, and Ms Sheila Dikshit, Chief Minister of Delhi. Mr Patil stressed on the importance of criticisms of Government policies by the media, as well as the need for informing the masses on Government policies by the media. Ms Dikshit pointed out that the good side of the media was the instant dissemination of information. According to her the bad side of the media was the 'sensationalizing' of information. She said that it was also important to report on 'good' news in order to create a happy society. The ugly side of the media, according to her, was

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that the veracity of information was often not considered because of competition within the media industry for reporting a story first.

The discussion started on this note and Ms Ali said she had a high regard for the media, although there was political interference in reporting stories. She added that media had a responsibility towards society. Ms Mustafa said good media is characterized by courage. Political interference was also an issue

THE IInd year Undergraduate Business School students organized a seminar on consumer behavior on November 24, 2005. Three industry experts from varied fields shared their thoughts on how the consumer markets have developed and consumer expectations raised and what is in store for marketers ahead.

Mr. Sathish Subbarya from Shoppers Stop, Mr. Deepak Pandey from ING Vysya Life Insurance and Mr. Deepak Bansal from Standard Chartered Bank were the panelists.

Overall what emerged was that consumers today have taken the market by storm with their short lived

IILM students interviewing Hon’ble Chief Minister of Delhi, Ms. Sheila Dixit

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EW WS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS loyalties, high brand switching behaviors and complex decision making. Dual income families have changed the traditional way of selling and buying decisions are equally taken by both the spouses. Children have become an important source of influence and are becoming the hub of all promotional tools. Marketers need to learn a lot here in terms of targeting and planning their marketing efforts. Unsought products like insurance are being sold to customer emotions where fear from an exigency is the biggest catch. Banks are emerging with new dimensions beyond just money keeping and interest giving.

They are also becoming fund managers and with liberalization the competition has been not to attract the customer but to keep him. Customer loyalty is being equated to profitability and customer lifetime value is the latest buzzword. Dejavu indeed customer is the king.

OPERATIONALISING SAFTA: THE WAY AHEAD

THE IILM International Business club students organized a panel discussion on "Operationalising SAFTA: The Way Ahead" on Nov 25, 2005. A summary of the discussion: Mr. Basant Raj Bhandari, Famous International Trade Expert; Dr. Beni Prasad Agarwal, Former Ambassador, and President, Association for Asian Union; Mr Ajay Sahai, Director General-International Trade service, Federation of Indian Export Organisations; Mr. Sanjeev Duggal, Steel Authority of India; Prof Romie Littrell, Auckland University of Technology, New Zealand were the distinguished panelists. Prof B. Bhattacharyya, former Dean -Indian Institute of Foreign Trade & Director, Graduate School of Management, Institute for Integrated Learning in Management initiated

The OBHRM Area with Students

and moderated the discussion.

Mr Bhandari was cautiously optimistic on starting SAFTA in Jan 2006.He insisted on sorting out the issues of rule of origin and revenue compensatory mechanism for an effective SAFTA. Mr Agarwal discussed the political aspects and stressed on looking at the problems of South Asia from macro perspective and advised for an Association for Asian Union. Mr Sahai discussed the trade aspects and lamented on the low level of intra-SARRC trade.

He highlighted the Indian trade surplus with SARRC countries and suggested for more imports from these countries. Mr. Duggal discussed the industry perspective and emphasized on increasing the intraSARRC trade. He pinpointed the lack of intra-SARRC infrastructure. Prof.

Littrell discussed it from New Zealand-Australia trade perspective and highlighted the benefits of free trade. Prof Bhattacharyya stressed on the strategic perspective of intraSARRC trade. The participants raised a lot of questions on scope of SAPTA, lessons for India, benefits to India, help in solving Kashmir issue through SAFTA etc.

South Asian Free Trade Agreement (SAFTA) to be implemented on 1st Jan 2006 offers a big opportunity for the countries in the region from economic, political and strate-

gic perspective was the consensus reached in the panel discussion on the topic.

HR CONCLAVE

THE OB & HRM area organised an HR Conclave on December 7, 2005, the major focus of which was to bring out the latest recruitment practices in the Industry and the two sessions provided an opportunity for the students to understand the requirements of the industry and interact with practitioners from the industry.

The panelists for Session 1 were Mrs. Ratna Pande, Head - HR Training, American Express, Mr. Vipul Prakash, CEO Elixir Websolutions, Mr. G.P. Rao, VP- HR JK Industries, Mr. Vivek Gandhi, GM - HR, PVR Cinemas & Mr.S Varadharajan, Ex-VP - Talent Management & Development, Wipro Spectramind Services Ltd. The speakers deliberated on Attitudes, values and expectations of recruiters in the panel discussion moderated by Prof. Mirza S. Saiyadain, distinguished professor at IILM .

All the speakers stressed the importance of a positive attitude and ability to adapt to the dynamics of workplace. They opined that the recruiters look for internal drive, willingness to learn, reliability and sincerity in the potential

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IILM Resource Persons with IAS officers at the Training Programme at IILM

employees. The panelists also appreciated the fact that IILM students performed better than students from other premier institutes and were keen to come back for placements down the line.

The second session had speakers sharing their thoughts on Drivers for Success at the Workplace.

The guest speakers were Mr Vijay Krishnan, Country Manager, Haskoning India, Mr. D. Bhattacharya, GM-HR, IFFCO, Mr. SN. Ghosh, Director Home, Small & Medium Business segment, Dell India Pvt.Ltd. Ms. Brinda Balakrishnan, Ex-DGM -HR, SAIL moderated the session.

Some factors outlined by the speakers as success factors at workplace were, Emotional Quotient, Time Management, positive attitude, hard work, loyalty towards the organisation, commitment to work and workplace and enduring relationship with the organisation. Both the sessions had very interactive question and answer sessions.

FINANCE INC. THE finance club of IILM, 'Finance Inc." organized a presentation session on "debt market" by Chirag Gupta, a IInd year PG student on November 22, 2005. The

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presentation dealt with the basics of debt market. Chaired by Finance professor Mr. Rajat Sethi, the 1st year students benefited from the same.

Finance Inc. also organized a presentation on "Basel II" on December 1 by Dean and Professor, Dr. Kamal Ghosh Ray. Basel II deals with the risk management in Banks. RBI has been aligning its policies to the best of international practices. Basel II norms have to implement by the Indian banks by 31st March 2007. Hence, these norms hold a lot of relevance for the people in the field of Finance.

It also organized a panel discussion on the 'Future prospects and challenges for the insurance companies in India' on December 9, 2005. The distinguished speakers were Mr. S.K. Mukherjee , exdirector of LIC , Mr. Anil Verma , vice-president ICICI Lombard, and Mr. Deepak Jain, Sales Manager, ING Vyasa. All the speakers, with their experience and vast knowledge, made the discussion interesting.

The discussion covered the impact of the factors affecting insurance, pressure from global economy and competition, innovation of new products coming up for the Indian consumers and much more.

MANAGEMENT DEVELOPMENT PROGRAMMES

IILM, as the knowledge partner of the Export Import Bank of India, organised a one-day management development Workshop on Effective Communication and Cross Cultural Skills for Export Business at Ahmedabad on December 9, 2005. Eighteen senior and middle level executives from different sectors of the Industry participated. The programme was highly appreciated by the participants. Prof.

B. Bhattacharyya was the Programme Director and Prof.

Harsh Sharma the other resource person.

Under the continuting programme of colobaration with PHDCCI-KAF Project, IILM organised a two-day Management Development Programme on Costing and Pricing for Exports during 15-16 December at the PHD House New Delhi. 12 middle and senior executives took part in the programme. Participants evaluated the programme as very useful. Prof. B. Bhattacharyya was the Programme Director and Prof. N.L. Ahuja and Ms. Pooja Talwar were the other resource persons.

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Civil Services Training Programme

IILM organized three programmes for IAS/IPS officers in a series of civil services training programmes in the current year. The programmes are sponsored by Department of Personnel and Training, Government of India and Bureau of Police Research and Development, Ministry of Home Affairs, Government of India. These programmes are designed and conducted by the faculty of the institute as per the requirements of the sponsoring bodies. These programmes are conducted in the guidance of Mr. K. Rajendran Nair (Director IILM).

The first programme in the series was conducted for IPS officers on Human Resource Management and was organized on August 22-27, 2005. Dr. I. A. Rizvi was Course Director for the programme. Distin-

guished Faculty from the institute as well as outside experts like Mr. R S Gupta (former commissioner of police) Mr.D. R. Kaarthikeyan (former Director CBI), Mr. R C Sharma( former Director, CBI), Mr. H. V. Krishnamurthy (Advisor PWC) and others interacted with participants. The training was focussed on issues in recruitment and selection of appropriate personnel for the police force. In all 27 participants attended the programme. The' feedback was very encouraging.

The second programme was conducted for IAS officers on Team Building under the supervision of Dr. I A Rizvi from October 3-7, 2005.

The programme was structured to imbibe practical team building skills. . Exercises and practical orientation were appreciated.

The third programme in the series was conducted on Project Formulation and Implementation for IAS officers under the supervision of Prof. Murli Mohan from November 21-25, 2005. This highly technical subject was dealt with finesse by the expert faculty from the institute and distinguished outside experts. The highlight of this programme was an interactive session with Dr. E. Sreedharan, (MD- DMRC) and an educative ride of Delhi Metro. The practical issues highlighted by this interaction were much debated during a follow-up session and also informally during the discussions in the break between participants and the faculty. The valedictory address was delivered by Mr B. B. Tandon, Chief Election Commissioner of India.

UPAMANYU CHATTERJEE : A PROFILE The IAS officers’ training held from Oct 3 -7, 2005 was special for IILM. Among the high-profile civil servants who walked the corridors of IILM was talented Indian writer Upamanyu Chatterjee, author of the famous novel English August; An Indian Story, published in 1988, reprinted several times and made into a film.

For anyone interested in modern India, it is an intelligent and entertaining novel which follows Agastya Sen, a young westernized Indian civil servant, posted to Madna, away from friends and comforts of New Delhi, for a six-month training in a place reputed to be the hottest in India. He survives by keeping his distance from his job, finding new friends and spending a good deal of his time stoned. The novel presents an unflattering portrait of Indian governance with

a style that is irreverent, candid and punctuated with dark humour.

Upamanyu’s second novel The Last Burden, appeared in 1993. This one recreates life in an Indian family at the end of the 20th century.

It is a fascinating portrayal of the middle class. Mammaries of the Welfare State was published in 2000 as a sequel to English August.

Born in Patna, Upamanyu attended the St. Stephens College in Delhi. He joined the Indian Administrative Service in 1983, moving to the UK to serve as the Writer in Residence at the University of Kent. He was appointed Director (Languages) in the Ministry of Human Resources Development in 1998.

Upamanyu started by writing plays at school. Later on, he started sending his writings to various publications, including The Illustrated Weekly of India which were promptly returned. In 198485, his short stories were published by the London magazine. He began writing his first novel in 1985-86 with a vague idea of what he would be eventually doing with it.

This was in the early days of his posting.

Though Upamanyu denies that his first novel is biographical, one cannot deny that it is heavily borrowed. He says English August is not about bureaucracy but about growing up. Upamanyu had difficulty finding a publisher for his novel in the US be-

cause of its Indian setting. It was Amitav Ghosh who helped with an agent.

Upamanyu laments that today the reading and writing habits of Indian youth are on the downslide with too few contemporary Indian writers making any global opinion. He wishes the youth read more and watch less TV. He believes that the biographies of Gandhi and Nehru along with the Autobiography of an Unknown Indian" are must reads for the young generation.

Upamanyu’s fourth novel Weight Loss got released in January 2006. He is writing his fifth book which is also on the same lines.

Good luck to you Upamanyu!

Interviewed by Ms. Kakoli Sen

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MOSAIC 2005 SHOWCASING TALENT

THE much awaited annual cultural festival of IILM Mosaic 2005 was inaugurated on December 15, 2005 by IILM Director Mr K Rajendran Nair who lit the ceremonial lamp.

Two students, Ms Priyanka Sharma and Ms Jyoti Negi from BA Journalism course, invoked the blessings of Sarawati, the Goddess of learning, through a fusion dance of Oddissi and Bharatanatyam.

This was followed by the unveiling of the most well kept secret of the year, the first ever newspaper of IILM brought out by students of the Department of Journalism and Mass Communication.

Mr K Ranjendran Nair released the first issue of this newspaper aptly named Perspective. The students worked hard to bring out a copy worthy of appreciation anywhere in the world. This was done by diligent collection of information, editing, filing stories, writing, re-writing and designing the paper. It was a huge hands-on learning experience for the students.

Thereafter, the theatre show set the ball rolling for the festival. This year's theatre presentations were remarkably different from previous years. In addition to the regular

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students' theatre show, this year also showcased a fantastic theatre show by the faculty members of IILM. The students’ team presented a one-act play called Ande ke Chhilke written by famous Hindi playwright Mohan Rakesh. The play dealt with family politics and the theme of hypocrisy and resorting to lies to assert one's importance in the family.

The play was directed by Ms. Anamika Bhatnagar and student actors included Akriti Sinha, Lagan Kapoor, Amrita Singh, Naresh Dharamwani, Mallika Diwanwalla and Harsh Sharma. The play evoked commendable response from the audience and was praised widely.

The star of the day was the faculty theatre presentation called Bimaar written by acclaimed Pakistani

playwright Saadat Hasan Manto. The play showed the miserable situation of a middle class person called Kumar who, although suffering from common cold, reaches a far worse condition due to faulty suggestions given to him by his friends in an attempt to cure him. The play was directed by Sumit Kumar and the actors included faculty members Manish Mishra, Joydeep Ghosh, Arvind Upadhyaya, Dimple Grover, Rishikesh, Sangeeta Yadav and Disha Dubey. The play was a resounding success and drew tremendous response from the audience.

RANGBIRANGI RANGOLI December 16, 2005 saw the campus being painted in all hues, sporting a riot of colours. Fourteen teams from different colleges of Delhi & NCR were at their creative best, giving finishing touches to their Rangoli. Lord Ganesha was the most prominent figure this year with one of the modern Ganesha enjoying a burger with coke complete with a computer mouse. The winning team had drawn a Lion that looked as real as one could be, their theme being wildlife conservation. Some participants made use of natural colours only and that was well appreciated.

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EW WS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS Musicology Those with a good musical sense headed to the auditorium and won hearts strumming their guitars in the popular event on campus — Musicology. It had various categories of Indian Vocal, Western Vocal, Instrumental Solo & the Band Competition.

The entire event was well-managed by student coordinators: Manigsansu, Vasundhra, Abhishek, Urbashi and Rajdeep of PG 1st year.

The judges were accomplished people in the field of music — Mrs. Uma Stiaraman (a master in Karnatic Music) and Mr. Anuj Khandori (a scholar in western music).

Participating colleges were Miranda House, IP College, CIE, KMC, IILM, Gurgaon and IILM, Lodhi Road.

MANPOWER QUEST As part of college festival MANTHAN, the HR Club organized Manpower Quest, 2005 which received an overwhelming response from the students of different B-Schools.

Themes based on the current HR situations in the organizations were given and the teams were asked to enact them. The participants were evaluated on various parameters like Creativity in emoting, Time management, Team dynamics, etc. The event was made interactive as the audiences participated too.

The judges invited for the event were Ms. Harpreet Datta, Head Training, TERI, and Ms. Koyal, Country Manager, IDSA, who ap-

preciated the students' efforts.

Souk The Marketing Club, PRISM, organized the event Souk and two games were hosted: MARCHAMP ADMAD CONTEST Prominent colleges like DSE, IILM, Gurgaon, the FORE Institute and IILM, Lodhi Road participated. Mr. Vinod Dumblekar, Head of Mantis India, and Mr. Pankaj Mathur, creative director of Madison India, were the prominent judges. IILM, Lodhi Road & DSE bagged the 1st and 2nd prizes, respectively. The groups were given a problem about an FMCG company and asked to increase the market share of their respective firms.

SENSEX SENSIBILITY Those with a knack for numbers and a keen interest in the Stock Market played "Sensex Sensibility — the Simulated Stock Market Game" on December 17, 2005. Twenty teams participated, including Department of Commerce, DU, Delhi School of Economics, St. Stephens College, Delhi, IILM, Gurgaon and IILM, Lodhi

Road.

The preliminary round shortlisted four teams for final round — DSE, Department of Commerce (DU) and IILM Undergraduate Business School and Graduate School of Management.

The teams played around with a notional amount of Rs 10 million and developed a portfolio of stocks depending on the supplied individual stocks. There was a simulated stock market trading and the participants had to rebalance their portfolio on arrival of various news, in order to protect the fall in value of their portfolio in a declining market (negative news), or trade aggressively in order to enhance the value of their portfolio in a rising market (positive news).

The value of portfolio of each team was disclosed at the end of each session. Each session witnessed a set of news flash and carried out transaction after each news flash. The transactions (buy and sell) were reported in pre-designed formats supplied to them. The IILM Graduate School of Management emerged winner and Department of Commerce (DU) team were the runnersup.

To judge this absorbing game, the event organizers had Mr. Kavi Kumar of India Bulls as the Chief Guest and Dr. Kamal Ghosh Ray, Sr. Professor and Dean (Academics) GSM, IILM as the Jury.

In between, the team organized Su-Do-Ku, a Japanese numbers’

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game that was an instant hit.

St. Stephens College students emerged winner and runner-up.

WORDSMITH: CREATIVE WRITING CONTEST Creativity took another shape with words in "Wordsmith" the Creative Writing Contest on December 16, 2005. The event had very interesting rounds viz. caption writing, where the participants were given a cartoon and asked to write a caption in 10 minutes. This was followed by a round of subverting the proverb which saw some hilarious entries.

Round 3, called the Wordsmith Round, had participants write about 250 words on a given topic.

LSR, Miranda House and KMC took part in this event. Mrs. Nilima David; News Editor of The Pioneer & Sarvesh Kumar Tiwari, PRO - DMRC and also the sub editor for Metro Newsletter were among the prominent judges for the event. The first and second prizes were bagged by Ms Jayati Ghosh and Mr. Amborish Baruah, final year students of the IILM, and the third prize by Ms. Nisha of LSR. GUNJAN - THE ANTAKSHARI 'Gunjan', the reverberating sound of music lived, up to its name in the entertaining event "Antakshari," on the evening of Dec 16, 2005. Various colleges participated in this hugely popular event and made it an evening to remember.

Business Quiz Day three was devoted to quizzes starting with the Business Quiz. Participation poured in for this intellectually stimulating event from DSE, IIT Kharagpur, YMCA, Deptt.

Of commerce, IIFT, FMS, SRIM, KMC, IILM Gurgaon and IILM New Delhi. Six teams made it to the finals.

Quiz master Shreedhar, with 14 years of experience in Advertising, made it interesting for participants and the audience as well. Audience prizes kept them glued to their seats and asking for more. The DSE team

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emerged the winner; followed by IIT, Kharagpuur and IILM, New Delhi.

Bookmark stores sponsored the quiz. They also provided 30 gift vouchers which were distributed to the winners and the audience.

GLOTRADE The International Business Club students organized the simulation game GloTrade, perhaps India's first business simulation game in international business. Specially developed for MOSAIC 2005, it has several carefully selected elements that had been blended for students majoring in International business and others having knowledge of the same. It was conducted by MANTIS, an organization devoted solely to business management education through the application of simulation and other experiential techniques.

GloTrade had elements of international politics, culture, Forex, MNCs, global competition, cartels and competitive bidding. Participating teams were from Faculty Of Management Studies, Jamia Hamdard, Delhi School of Economics, Sri

Ram Center and Jamia Milia Islamia.

The Chief Guest for GloTrade was Dr. Ilan Alon, Associate Professor of International Business, Crummer Graduate School of Business (ranked No.1 MBA college of Florida, Forbes Aug, 2005).

Adding to the ambience was the request stall which played everything from Bollywood hits to techno beats, latest remixes to soulful melodies.

The campus was filled with laughter and fun, thanks to DJ Sumit and his team manning the request stall.

The much-awaited JAM session was the icing on the cake replete with a dance floor and laser lights where students danced the night away, the December chill unable failing to dampen their spirit.

VIVEKANANDA MEMORIAL DEBATE SANSAD — the IILM Debating Society of Integrated Learning in Management (IILM) — organized the Fifth Vivekananda Memorial Debate, 2005 on December 17-18, 2005.

The Debate is one of India's most respected and sought-after debating

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Mr. Rohan Dutta from Delhi School of Economics was judged the Best Speaker. He won a cash prize of Rs. 7500 and the Best Speaker Shield. The Best Interjector was Joseph Mathew from IIT-Delhi who got a cash prize of Rs. 2500.

The Grand Finale ended with the inspiring words of Mr. Shiv Khera and a closing note from Sansad team members. grounds for debaters from prestigious education institutions. More than 30 teams from across the country compete for the VMD Trophy every year. The Vivekananda Memorial Debate is a platform for cross pollination of ideas related not only to management and the economy but also to burning socio-political issues.

This year 15 teams from prestigious colleges, including IIM-Ahmedabad, TISS, SCM-HRD IIT-Delhi, Delhi School of Economics, St. Stephens and LSR, participated in the preliminary rounds. The topic for the prelims was "The Spirit of Law is more important than Letter of Law".

Six teams from the above made it to semi-finals and debated on "Right to Privacy is bigger than Freedom of Press". The adjudicators for the semi-finals were Mr. J. Garg, General Manager, Indian Bank, Mr. Prabhakar Sinha, Business Editor, The Times of India, Mr. S.K. Lalwani, Director, CDC and Mr. Narang: Joint Secretary, Labour Department, Government of India.

The grand finale was held on Sunday, December 18, 2005. Delhi School of Economics, IIT-Delhi, Jesus & Mary College, St. Stephens competed for the trophy. The topic of the debate was "Religion is a necessary evil".

The jury for the finals was Mr. Shiv Khera, world famous orator and thinker on Leadership and Self Development, Prof. Bannerjee, Consultant and Advisor, National Dairy Development Board, Dr. N. Bhaskara Rao, Chairman, Center for Media Studies, Prof. Prarthana Saran, Directorial Board, Chinmaya Mission, Mr. Naresh Narad, Member, Public Enterprise Selection Board. After the heated debate and fury of interjections, adjudicators shared their experiences on the topic.

Delhi School of Economics was judged the Best Debating Team.

They were awarded the cash prize of Rs 25,000, gold medals and the VMD Best Team Running Trophy.

IIT-Delhi won the runners up team and awarded cash prize of Rs. 15,000, silver medals and the

ALUMNI LUNCH The morning of December 18 also saw another huddle, this time of the IILM Alumni. On a bright winter morning with the sun shining brightly, as the invited alumni started arriving for a luncheon get together, the IILM back lawns brought back many fond memories of the yesteryears spent at the IILM. With coffee in hand, most conversations began with "we used to do‌", "we used to sit ‌.." and the like. "We used to be" becoming the most common startup phrase.

They came in all kinds, some with wife, some without, some due to be married, some were very curious and wanted to revisit the favorite hangouts while some preferred to catch up with friends and faculty members; some others went down to the auditorium to enjoy the finals of the IILM annual VMD national debate competition.

Mr. Sujoy Basu, Secretary and Treasure IAA and a very prominent alumnus thanked the college for all the support to the alumni committee and talked about the future events. Ms. Neethi Nair specially thanked the alumni for their support in preparing students for interviews and placements.

It was also the birthday of 1994-96 batch alumnus Mr. Sandeep Jain which was celebrated in style. About 140 alumni attended the occasion and were very happy to be associated with the college and were thankful for the reunion.

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INTERNATIONAL OFFICE DESK

■ MS.KANIKA MARWAHA, Country Representative, University of Warwick, addressed the IILM students on higher education options at Warwick on September 28.

■ MS SKYE WARD, Manager, Summer Session UCLA, Berkeley visited IILM on November 17, 2005 and addressed the students on summer sessions at Berkeley.

■ DR. G. HARINDRANATH, Senior Lecturer in Management Information Systems & Director, University of London External MBA in International Management Royal Holloway University of London visited IILM Campus on Nov 23 for exploring collaborations between the two institutes.

■ MS. SARA AVERY , Director of International Relations visited IILM Campus on Nov 25 as part of a continuing dialogue for partnership between the two institutes.

■ IILM signed a student and faculty exchange MOU with Shanghai University. Four students from Shanghai University would be visiting IILM as exchange students in the month of January, 2006.

■ MS. SAPNA POPLI represented IILM at the AACSB confernce on World Class Practices in Management Education, Sydney Australia, Oct 30-Nov 2005 ■ Continuing with its endeavour to bring global exposure to its students to make them world class managers, experts from their areas were invited for teaching a part of the course for the Post Graduate Students of IILM : ■ Prof. Romie F. Littrell, Faculty of Business from Auckland University of Technology, New Zealand, taught Cross Cultural Marketing to PG 1st year students.

■ Prof. Ilan Alon, Thomas J. Petters Chair of International Business, Executive Director of Rollins, China

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Center, Crummer Graduate School of Business, Rollins College, Florida, United States of America (ranked No.1 MBA college of Florida, Forbes Aug 2005) taught a paper on International Franchising to PG IInd year students.

As part of the Student Exchange Programme with various universities, select PG II students are being sent to the Grenoble Graduate School of Business, France and the Burgundy School of Business, France. IILM will also host students from Grenoble, Burgundy, University of Lueneberg, Germany, as part of the exchange agreements with these Universities.

REFLECTIONS OF A STUDENT AT THE BERKELEY SUMMER SESSION

Sreela Bajoria (2nd from left) with fellow students at Berkeley

AS a student, I always dreamt of going abroad for studies. But the fear of leaving home for tow-three years scared me. I was looking for options that would realize my dreams of studying abroad and would also not involve staying away from home for such a long time. This is when I came across the summer session programme offered by IILM to various foreign universities. I opted to attend summer school in the University of California, Berkeley. I had heard a lot about San Francisco being the most beautiful city in California. I had also heard that UCB's Haas Business School was one of the

best schools for management in America. I enrolled my self into the six-week summer programme and studied subjects like Business Communication and Social Welfare. The summer session started in July letting me enjoy and view the American Independence Day on July 4. I went to San Francisco for Independence Day, took a cruise in the night, the ship taking us in the middle of the sea to see the fireworks. The view was just spectacular. The International House where I stayed is located next to the campus.

My first class was at 10:30 am on Monday at Haas Business School. I got up all excited to attend it, grabbed a quick breakfast and ran for the class as I did not want to be late. As I entered the class, I could feel butterflies in my stomach. I was greeted by my professor Dr David Robinson, his smile was pretty warm but I knew from his expression that he was a no-nonsnese teacher. During the introduction session, I was surprised to discover that except an American guy and me everyone in the class was Korean. Initially, I had difficulty understanding their ascent but they made me so comfortable when I spoke to them that not even once did I feel I was with Koreans. Koreans are very friendly and understanding people.

Our business communication class involved a lot of group activities like role-plays, group presentations and assignments. It was a good experience altogether, because every time we had to work with a set of new people. At the time of giving presentations and doing role-plays we used to shoot our videos and then see it in the evening at our dormitory together and have a good laugh at each other. I used to look forward for the Business Communication classes. I managed to get

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EW WS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS decent grades in the subject. Apart there are many Indian food outlets The best thing that I liked about from grades, I learnt a lot from the in Berkeley. The attire was Indian these busses was that the ride was class. Business communication is a and we danced to good Hindi numfree for students. As my stay in subject which we all should take as bers. Likewise, I attended Mexican Berkeley drew to a close it amazed it plays an essential part in a human party having Mexican theme. me how in such a short time, I came being’s life personally as well as proAs I am a movie buff I used to go so close to the palce and its people. fessionally. In Social Welfare classto Freemont, which is an hour away Even though the last few days ines, we had to write a self-assessment from Berkeley, to watch Hindi volved a lot of studies and I had exi.e. everything about am on the last day it did ourselves and the not stop me from havroles we play in sociing fun with friends, as ety. This made me we formed groups and learn a lot about mystudied late nights, self as a human being making Maggie nooand also involved dles at 2 in the mornwriting social history ing. of a person having at During my last week least two degree of in Berkeley we had separation from you. farewell party where This exercise every body bought food taught me how to be and drinks in the class a patient listener and and that included our Ms. Skye Ward, Manager-Summer Session UCLA, Addressing IILM Students made me aware of professor and GSI. life's harsh realities. It was a unique movies. Watching a Hindi movie in Finally, it was August 14, my last subject.

America is a different experience day in Berkeley. With a heavy heart, Apart from classes, I used to atthat too with English friends. After I packed my stuff, bid farewell to my tend campus parties; the parties our class, we used to go to San Franfriends and returned to India, with were restricted to college students cisco for shopping and sightseeing an experience that changed my perand always had a theme. Like all Inas it is just half-an-hour away. We spective on things in so many ways. dians staying in International house used to catch the F line bus shuttle organized an Indian eve, where we which is considered the safest mode SHREELA BAJORIA -UG3 arranged for good Indian food, as of communication for students.

UNDERGRADUATE BUSINESS SCHOOL CONVOCATION The IILM-Undergraduate Business School collaborated with the School of Management (SoM), University of Bradford, UK, in 1996 to impart quality education in the field of Management at the Undergraduate level. The IILM, in collaboration with SoM, offers a three-year degree programme in Business and Management Studies. The IILM follows the same curriculum as SoM with minor adaptations in Law and Taxation.

This year on the 25th October, 2005, IILM had its 7th Graduation Ceremony where degrees were

conferred to 86 Graduands by Prof Christopher Taylor, Vice-Chancellor, University of Bradford. Every year, IILM students bring laurels to IILM and UoB. This year again two of our students received First Class Honours Degree. Dipika Goyal and Yachi Julka were awarded the Dr. Kulwant Rai Gold and silver medals, respectively. The Bronze Medal went to Amit Bhartiya for securing the third position.

The convocation procession was led by the Director-IILM Undergraduate Business School, followed by other professors of IILM

and UoB. Next came the Chairperson of IILM, University of Bradford Mace, Pro Vice-Chancellor and lastly the Vice-Chancellor. The ceremony lasted for an hour where degrees are conferred on students, Certificate of Honours were awarded to those who got the highest marks in a particular subject and to Medal Winners.

The UoB also awarded a certificate and cheque of 100 pounds to the best project of the year which went to Ripunjay Aggarwal for his project on Strategic Ananlysis of Moser Baer.

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COMMITTEE: a group of men who individually can do nothing but as a group decide that nothing can be done.

COMMITTEE RULES ◆ Never arrive on time, or you will be stamped a beginner. ◆ Don't say anything until the meeting is half over; this stamps you as being wise. ◆ Be as vague as possible; this prevents irritating the others. ◆ When in doubt, suggest that a subcommittee be appointed. ◆ Be the first to move for adjournment; this will make you popular - it's what everyone is waiting for.

WHO'S THE BOSS? A man goes into a pet shop to buy a parrot. The shop owner points to three identical looking parrots on a perch and says, "the parrot on the left costs 500 dollars".

"Why does the parrot cost so much," asks the man.

The shop owner says, "well, the parrot knows how to use a computer".

The man then asks about the next parrot to be told that this one costs 1,000 dollars because it can do everything the other parrot can do plus it knows how to use the UNIX operating system.

Naturally, the increasingly startled man asks about the third parrot to be told that it costs 2,000 dollars.

Needless to say this begs the question, "What can it do?"

To which the shop owner replies, "to be honest I have never seen it do a thing, but the other two call him boss!"

ROW!ROW!ROW! The Americans and the Japanese decided to engage in a competitive boat race. Both teams practiced hard and long to reach their peak performance. On the big day the Japanese won by a mile.

The American team was discouraged by the loss.

Morale sagged. Corporate management decided that the reason for the crushing defeat had to be found, so a consulting firm was hired to investigate the problem and recommend corrective action.

The consultant's finding: The Japanese team had eight people rowing and one person steering; the American team had one person rowing and eight people steering. After a year of study and millions spent analyzing the problem, the Americanteam's management structure was completely reorganized. The new structure: four steering managers, three area steering managers, and a new performance review system for the person rowing the boat to provide work incentive.

The next year, the Japanese won by two miles!

Humiliated, the American corporation laid off the rower for poor performance and gave the managers a bonus for discovering the problem.

MANAGEMENT REVISITED The first myth of management is that it exists. ◆ Some people manage by the book, even though they don't know who wrote the book or even what book. ◆ Give all orders verbally. Never write anything down. ◆ Management by objectives is no better than the objectives.

CORPORATE

JOKES