The Edge

I I L M I N S T I T U T E F O R H I G H E R E D U C AT I O N

Vol-VI, No. 3, July-October 2009

FROM THE VICE-CHAIRMAN This issue of Edge covers that part of the Indian calendar, which includes some of the most important religious festivals: Ganesha festival, Eid and Durga Puja. We at the IILM take this opportunity to wish you all peace and prosperity.

These are, in fact, to be found out from his physical features:

In the Hindu pantheon of gods and goddesses, there is a fair level of hierarchy.

There is the trinity : Brahma, Vishnu and Maheshwar. But there is only one God whose name itself signifies leadership, and that is Lord Ganesha.

■ Large ears: Capacity to listen, be sensitive to the needs of worshippers/ people.

The derivation of Ganesha is Gana+ Isha. In Sanskrit, Gana means a group, a multitude, while Isha means lord or master.

Lord Ganesha is also commonly referred to as Ganapati whose derivation is similar — Gana+Pati. The meaning is identical to that of Ganesha. So, Ganesha by definition is one who provides leadership.

Can we try to ascertain what makes Lord Ganesha a leader? And can this exercise lead us to a theory of leadership taught in business schools, using mostly western literature? While that is a question that will require much more extensive discussion, let’s see what attributes Lord Ganesha has.

EDITORIAL BOARD Mrs. Malvika Rai Prof. B. Bhattacharyya Prof. N.Chandra Mohan Prof. Sapna Popli Prof. Kailash Tuli Ms. Rohini Rode

■ Elephant head: Elephant is associated with enormous power but also gentleness.

■ Large head : Signifies wisdom and knowledge.

■ Large belly: Capacity to digest information to work out solutions and remove obstacles.

■ Small mouth : Speak little , but with authority.

■ Small eyes: Elephants see all things at levels higher than theirs; implication is, never consider anybody as small or do not discriminate.

So the qualities that make Ganesha a leader are: Knowledge, wisdom, strength with gentleness, non-discrimination in behaviour, sensitivity to people’s concerns and offering solutions to their problems.

These are also the qualities that will make an excellent CEO.

B. Bhattacharyya

EDITORIAL TEAM

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Aakriti Bhatnagar Abhijeet Bhattacharya Deepshika Mewati Jyoti Malkani Niharika Malik Parul Khanna Sara Bower

Published by IILM Institute for Higher Education 69, Sector 53, Gurgaon-122003 Mobile: 9350860132, 9350821438 Printed by Avantika Printers Private Limited 194/2, Ramesh Market, Garhi East of Kailash, New Delhi-110065

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CONTENTS INHOUSE MAGAZINE FOR LIMITED CIRCULATION Vol-VI No. 3 July-October 2009

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20

24

IFRS AND CORPORATE GOVERNANCE: WHAT WILL HAPPEN IN 2011?

WHAT IS SPECIAL ABOUT NORDSTROM?

DELHI METRO: A JOURNEY OF CHANGE

05 16

CONVOCATION CLASS OF 2009 - IILM ANIL KULWANT RAII GROUP: VISION STATEMENT

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INFORMATION TECHNOLOGY IN GLOBAL BUSINESS

30 34

THE SATYAM FIASCO: LESSONS FOR FUTURE

40 43

PARADIGM SHIFT IN THE INDIAN BANKING SYSTEM STUDENT CORNER BOOK REVIEW

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CAMPUS NEWS

LETTERS TO THE EDITOR Thank you for sending me a copy of The Edge for April-June.

I must compliment you once again for doing a great job. I am delighted that you were able to give the Award of the Global Thinker to my friend Lord Meghnad Desai who, I rate, is truly brilliant, besides being very interesting. I was also happy to see that President of India visited IILM Academy, Jaipur. You have been doing a tremendous job and anyone can be envious of this. Keep it up.

Sudhir Jalan Past president FICCI, AIMA, Indian Chamber of Commerce

Thank you for sending me the The Edge published by IILM Institute for Higher Education, which contains a lot of useful information. I must congratulate The Edge team for their efforts.

Bharat Hari Singhania Director, JK Organisation

I have received The Edge (April-June) volume and would say that it is wonderful to see its designing and the information that it has.

The feature on Lord Desai's interaction with IILM and its students is very appreciative in the context of his very thoughtful speech and very interesting subject for the participants. Besides, the impressive visit of the Hon’ble President of India to the Jaipur Centre and the visit of Nandan Nilekani would have been very useful to the students. I am thankful to you for sending to me this magazine full of information.

Govind Hari Singhania Chairman JK Business School, Promoter JK Organisation

The Edge is a wonderful publication. Some of the articles give a good insight. Please do convey my compliments and good wishes to the editorial board.

Salil Bhandari BGJC & Associates and vice-president, PHD Chamber of Commerce and Industry

GRADUATING DAY

IILM Convocation Class of 2009 T

he convocation for the Class of 2009, IILM Institute for Higher Education, for Award of Post Graduate Diploma was held on Saturday, September 26, 2009, at Lodhi Road.

As the academic procession led by Dr. Shuchi Agrawal entered the auditorium, all present rose, as a mark of respect, and remained standing until the entourage settled down on the stage.

The chief guest, Shri R.C. Bhargava, lit the lamp. He was accompanied by Chairperson Ms. Malvika Rai, Vice-Chairman Prof. B. Bhattacharyya and Director-cumExecutive Dean Ms. Sapna Popli.

Ms. Sapna Popli sought the permission of the Chief Guest to declare the convocation open.

Thereafter, Prof.

B. Bhattacharyya welcomed Shri R.C. Bhargava, the graduates, parents and other guests. Ms. Sapna Popli presented a report on the PGP Programme.

Dr. Shuchi Agrawal presented the students before the audience while Shri R.C. Bhargava awarded the certificates to them. The students were also felicitated

by Ms. Malivka Rai. Ms. Sapna Popli then requested the Chief Guest to deliver the convocation address.

Shri R.C. Bhargava spoke how the event reminded him of his own convocation and that the students had a long way to go towards a promising career.

After the speech, Ms Sapna Popli sought the Chief Guest’s permission to declare the convocation closed. The procession left the auditorium with the Chief Guest in the lead.

Students who received Diplomas at the convocation followed the procession after Dr. Shuchi Agrawal on their way out of the hall. Later, the students gathered for a group photograph with the Chief Guest.

It was D-Day for students of the Class of 2009, who got certificates of merit from none other than Maruti Chairman Shri R.C. Bhargava

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‘Competition brings out the best’ —R.C. Bhargava Mr. R.C. Bhargava, Chairman, Maruti Suzuki India, delivered the convocation address before an august gathering of faculty, students and parents at IILM Institute for Higher Education

IILM strives to improve its knowledge facets. Starting from a batch with 60 students in 1993, IILM today has grown by leaps and bounds with multiple campuses and programmes catering to over 2,000 students each year.

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rof. Bhattacharyya: On behalf of the IILM community, I have the honour of welcoming Mr. R.C. Bhargava, Chairman, Maruti Suzuki India Ltd, in our midst who has kindly agreed to deliver the convocation address on the occasion of the fourth convocation of IILM Institute for Higher Education. The credentials of Mr. Bhargava as one of India’s leading business professionals are too well known for me to repeat. The automobile revolution that we see on the roads of India is closely linked with the incredible story of Maruti and Mr. Bhargava had and continues to have a symbiotic relationship with that firm.

But what is much more important to this audience particularly, is his close association with the growth and governance structure of management education in India. It is, therefore, most appropriate that he will be the person who will deliver the convocation address a few minutes later. It is customary on this occasion to say a few words to the graduating students. Today is Maha Ashtami, the most auspicious day in India’s religious calendar, at least for the Hindus. It is real-

ly fortunate that you will get your official passport to the professional world on such a day. All of us wish you the very best the world can offer with the blessings of the Almighty.

Mark Twain, the famous American writer, once said: “Some people get an education without going to college. The rest get it after they get out.” Don't take it too seriously. Since you fall in the second category, I hope, the world-at-large will be the best college for your continued apprenticeship because self-learning is a life-long exercise. According to Will Durant, “Education is a progressive discovery of our own ignorance.” I personally believe that there is nothing truer than this. This is also the time when IILM has to put on record its indebtedness to all those without whose support no B-school can deliver on its programmes. The community of stakeholders includes those who have accepted our students for summer internship and provided final placements, those visiting resource persons who shared their knowledge and experience with our students’ body, our partner institutions such as Max Healthcare, and

parents who entrusted the education and welfare of their children to us. Whatever IILM is today is nothing but a personification of this collective effort and mutually reinforced support system. We remain indebted to all of you and look forward to your continued support.

Director: Honourable chief guest Mr. Bhargava, Prof Bhattacharyya, members of the governing council, faculty members, parents and my dear students. It is my pleasure and privilege to welcome you all to the convocation ceremony of the class of 2009. As the Director of the institute, one of the most pleasant responsibilities is to address the outgoing batch. I do enjoy welcoming the batch each year as well but the energy and enthusiasm of the graduating batch is infectious. Each graduating batch leaves with many new ideas, learning, dreams and conviction to change the world. More than 700 students are being awarded their post-graduate awards today, including students from post-graduate programme in retail and hospital administration. This represents an 88 per cent pass rate for the batch of 2007-09. Despite recession,

almost 70 per cent of them have been placed, including a few international placements. Let me take you all to a part of our journey at IILM, more specifically the journey of the last two years.

As a progressive and learning institute, IILM continuously strives to improve its knowledge facets. Starting from a batch with 60 students in 1993, IILM today has grown by leaps and bounds with multiple campuses and programmes catering to over 2,000 students each year.

The post-graduate programme (PGP) in management is our mainstream programme that prepares students for careers in individual enterprise, business and management. For the PGP programmes in the last couple of years, we have tried to focus our energies towards developing a clear approach to our programme offering. The areas which received attention and witnessed significant development are curriculum development, faculty involvement, industry engagement, student involvement in learning outside class and acquiring international experience. The curriculum is matched with the best B-schools in

Prof. B Bhattacharyya, Vice-chairman, IILM, introduces chief guest Shri R.C. Bhargava.

...this is time to work and shine.

Opportunities bring along challenges. It would be important not only to be sensitive to both the physical and social environment, but also take conscious step as individuals and organisations to protect these.

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Ms. Sapna Popli, Director and Executive Dean, IILM Institute for Higher Education, presents a report on the PGP Programme.

The world has been opening up.

India has been opening up. As a result of this, we have opportunities as well as challenges or threats as the world becomes more and more competitive.

Other countries can come and invest in one’s country.

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India and across the world. It is also updated constantly with feedback from the industry. A proactive advisory board and the governing council that meet four times a year to review programme structure, course content and delivery give us continuous feedback in this area. We have offered new electives in almost all areas this year. In addition, we have integrated courses in the life skills area within our core curriculum. These covered over 160 hours of exclusive sessions in the areas of managing self, developing self, influencing others, interpersonal skills, information technology skills and business etiquette. We believe a high degree of faculty involvement is critical to deliver the best to students. The teaching and learning experience of students to a large extent is dependent on faculty and we make all efforts to ensure faculty’s commitment to our learning goals. We today have more than 90 faculty members across the two campuses in Lodhi Road and Gurgaon.

Besides an updated curriculum and an involved faculty group that constitutes the backbone of the teaching-learning environment, the most critical stakeholders are the students and industry. With more than 1,000 students across our campuses, we have taken many initiatives to involve them in learning outside class by means of student clubs, societies and student participation in seminars and con-

ferences organised by CII and FICCI with the objective of giving an opportunity of experiential learning to students. We have also made a conscious effort to engage the industry more actively in programme design and delivery by means of guest lectures, industry focus seminars, sponsored programmes, active feedback in their continual participation in curriculum development. We have found the exercise more than useful and have received positive feedback from the industry and students on these initiatives. We do realise that we still have a long way to make these really embedded in the processes and systems across campuses. In the last two years, 15 distinguished international faculties have offered full credit courses to IILM students, primarily to enrich the content and delivery along with exposure to global culture. With over 25 international partnerships, we also received 20 exchange students from various universities in France, Germany, Austria, Korea and China. Many of our post-graduate students went out for 3-6 months’ exchange programmes to our partner schools in Europe. Besides listing some of our institutional accomplishments, many world-renowned personalities and thinkers have also been honoured by IILM. To mention a few names, we had Prof C.K. Prahalad, Dr. Sreedharan, Wajahat Habibullah, Lord Meghnad Desai and Nandan Nilekani in our campus to

interact with students on a wide range of issues. In terms of recognition and branding, IILM has received recognition from the joint committee of UGC, DEC and AICTE and IGNOU for its various programmes. We are ranked as an A++ category institute and rated among the top 20 by the Business India for the third consecutive year in 2008. We await the 2009 rankings and are positive that we will go up the ladder here as well. Besides management, we have plans to diversify our portfolio into other professional education streams. In this context, we have recently signed a MOU with IGNOU to offer a five-year full-time integrated programme in law.

Before I conclude, a few words for the students who are the reason for our being here today. In the words of Henry Wadsworth Longfellow, “Trust no future however pleasant” but the future does look bright for now. Going by forecasts made by wizards of the economy, the Indian economy is going to double itself in the next 7-8 years. Its per capita income is also expected to touch to $2,000.

Discretionary expenditure by the middle class will also rise exponentially across sectors. It took us 50 years to reach the one-trillion dollar level of Gross Domestic Product and will take only 7-8 to double that. The feverish pace of economic activity will open up thousands of jobs and opportunities. For young India, this is the time to work, progress and shine. Of course, the opportunities bring along challenges. It would be important not only to be sensitive to both the physical and social environment, but also take conscious step as individuals and organisations to protect these. With these words, I wish the graduates the very best for a glorious future for themselves and their organisations.

Associate Dean: Now I present the students of the post-graduate programme of the IILM Institute for Higher Education who qualify for certificate of merit for securing highest marks in elective courses in PGP. I may request they may please be awarded the certificates.

1. Certificate of merit for securing highest marks in Advertising and Sales Promotion is awarded to Akshay Bajaj

2. Certificate of merit for securing highest marks in Consumer Behaviour is awarded to Anamika Bharadwaj 3. For Financial derivatives and Financial Engineering — Guron 4. International Marketing — Pooja Sharma 5. Strategic Performance Management — Surabhi Nigam 6. Management of Banks and Financial Institutions — Lalit Dalal 7. Retail Marketing — Megha Vijay 8. Database Management System — Charu Aggarwal 9. Rural Marketing — Himanshu Sharma 10. International Human Resource Management — Jasleen Bhatia 11. Creativity, Innovation and Organisation Development — Kanika Bhatia

12. Industrial Relations and Labour Laws — Mansi Lalit 13. International Finance and Treasury Management — Meenakshi Saluja 14. Buying and Merchandising — Gurpreet Kaur 15. Global Competitive Environment — Pooja Sharma 16. Compensation Management — Surabhi Nigam 17. Consumer Relationship Management — Mukul Aneja 18. Rural Marketing — Nishith Parida 19. Corporate Tax Planning — Parag Bhardwaj

The task for the others is to better their own performance and not to worry about who wins a prize at any point of time. The task is to compete with oneself more than anybody else.

Chief Guest R.C. Bhargava signs his caricature.

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Moulshri Sharma and Havish Madhvapaty receiving their awards and certificates from Mr. Bhargava.

India needs an economic growth of at least 9-10% a year if we are to provide jobs to all the people who are entering the job market and who are coming out of educational institutions of various kinds and who are aspirants for a better life.

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20. Management Control System — Piyush Mangal 21. Investment Analysis and Portfolio Management — Priyanka Naredi 22. Talent Acquisition and Development — Ridhima Mago 23. Product and Brand Management — Samta Allawadhi 24. Mergers and Acquisitions and Financial Restructuring — Shiv Kumar Agarwal 25. Marketing of Services — Smriti Bhagi 26. Sales and Distribution Management — Vivek Tiwari 27. Management of Financial Services — Lalit Dalal 28. B2B Marketing — Megha Vijay 29. Global Business Strategy — Pooja Sharma 30. Cross-cultural Management — Surabhi Nigam Director: By virtue of the authority vested in me as the Director of IILM Institute for Higher Education, I award the post-graduate diploma to all students who fulfill the requirements of the postgraduate programme and are present here. I pray that ever in your life and conversation, you prove worthy of the same.

Associate Dean: Madam, I now request that the students who are not present may please be awarded the postgraduate diploma in absentia.

Director: By virtue of the authority vested in me as the Director of the IILM Institute for Higher Education, I award the post-graduate diploma in management in absentia to all those successful students who could not receive the diploma in person in this convocation this afternoon.

Associate Dean: I now present those meritorious students who have been awarded the Dr Kulwant Rai Gold and Silver medals for overall excellence in academic and co-curricular activities. I request our Chairperson and Chief Guest Shri R. C. Bhargava to give away the medals and certificates of merit to these deserving students.

1. Dr. Kulwant Rai Silver medal for securing the first position in Marketing is awarded to Havish Madhvapaty 2. Dr. Kulwant Rai Silver medal for securing the first position in Finance goes to Moulshri Sharma 3. Dr. Kulwant Rai Silver medal for Human Resource Management — Neha Sikka 4. Dr. Kulwant Rai Silver medal for Retail — Amanjot Kaur 5. Dr. Kulwant Rai Silver medal for Hospital Administration — Sonali Vats 6. Dr. Kulwant Rai Silver medal for Academic and Co-curricular activities in post-graduate programme in 2009 is awarded to Allen Sharma I now present you the recipient of the

Shiv Kumar Agarwal and Surabhi Nigam receiving their awards and certificates from Mr. Bhargava.

Dr. Kulwant Rai Gold medal for securing the first position in PGP 2009.

1. Havish Madhvapaty This concludes the award and the diploma and the medals.

R.C. Bhargava: Mrs. Rai, Prof Bhattacharyya, all the assembled dignitaries and, most of all, those who have completed their diplomas here and are receiving today a certificate, which signifies that they have successfully completed their course and are now ready to step forth in the world. My heartiest congratulations to them. I would also like to congratulate all the award winners because they have excelled in what they have been doing. This is not to say that others have not done well but in any area of life there will be somebody who will be little bit ahead. The task for the others is to better their own performance and not to worry about who wins a prize at any point of time. The task is to compete with oneself more than anybody else. I'm really very privileged and honoured that I'm given this opportunity of being with you on this fourth convocation of the institute. It brings back the days when I attended my first convocation and it was delivered by Dr. S. Radhakrishnan. It makes me feel that has one come down so much that I’m delivering a convocation address when my convocation address was delivered by Dr. S. Radhakrishnan. He was really a

great man and hearing him was absolutely inspiring. I shall in this convocation address try and put forward before you some of the things that might stand you in good stead as you venture out into the world. I believe that you people today are extremely fortunate that you are entering the world at a time when the opportunities and challenges are far more exciting than they were ever before in this country.

The world has been opening up. India has been opening up. As a result of this opening up, we have opportunities as well as challenges or threats as the world becomes more and more competitive.

Other countries can come and invest in one's country. Other people can send their goods and services to compete with goods and services in this country. We have seen in the past how many of our old established industrial empires have been scared about the opening process and have worried that as the barriers to import and invest have come down, they were worried about what would happen to them. What has actually happened is that — as the barriers have come down — the rate of growth of the Indian economy has grown. India has become more and more competitive as compared to what we were in 1991. Because of the barriers which existed then, we had become almost a bankrupt country where we could not export; we could not earn for-

In Japan, decision-making is done from the bottom. In India, decision-making is by consensus and we have to remember the value of democracy in creating acceptable, sustainable decisions which people will not question afterwards.

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I would like to stress the importance of recognising communication among humans in an open society as being of extremely great value in determining on how you will succeed. Those who communicate well will succeed better.

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eign exchange to pay for the basic imports needed to keep ourselves going.

Competition brings out the best and it is the best who survive in a competitive environment. I do believe that Indians are the best in the world. When you have this opportunity today where you face foreign competition, you must remember foreign countries are also open to you and they have to face your competition. You have to see then how you can become more competitive than anybody else in the world and that is the challenge that really should define your goal. When you go out and start looking to make a mark in this world, the question is how do you make this country more competitive? What is it that we need in India? We have a large, young population which is our strength and this makes for rapid growth of our domestic market. It is the domestic market that has driven India's economic growth in the last several years. It is the domestic market that insulated us from the worst of the recession that took place since last year. It is the domestic market that makes us more competitive with the rest of the world. This is an advantage which very few countries other than China and India enjoy. India needs to have an economic growth of at least 9-10 per cent a year if we are to provide jobs to all the people who are entering the job market and who are today coming out of the educational institutions of various kinds and who are aspirants for a better quality of life. This growth is not achievable if we do not have growth in our manufacturing sector. The services sector cannot provide this growth in this country on a sustained basis. It is the manufacturing sector which has to sustain a high overall rate of growth and the services sector.

While the services sector, financial sector and marketing have a great deal of glamour and attraction, we must not forget the basic importance of manufacturing in this country because it is this sector which will ultimately drive us. Along with the manufacturing sector is the agricultural sector.

More than 60 per cent of our population is dependent on agriculture. Our agricultural productivity is low. Our growth per acre is far lower than most other countries are able to manage. There is enor-

mous scope for people to apply skills and management systems and others to make sure that the agricultural sector grows.

Whether it is the policy of the agricultural or the education sector, I believe that both these two key sectors are the areas where the government policies over the last 15 years have failed to deregulate and liberalise whereas it has happened in industry and trade and commerce.

China today is considered to be a much more productive manufacturing country than we are. China will not remain alone in that area. We have other countries in the developing world which are coming up, countries like Vietnam and Cambodia which are going to become very competitive. Therefore, it is all the more important for our country to look at what we can do to bring about a higher level of competitiveness in the manufacturing sector.

Why isn't Indian manufacturing as competitive as China? People say that the Chinese government subsidises their industries. There is no proper financial costing in China. These are similar stories which I used to hear earlier on when Japan became the most competitive manufacturing country in the world. People in India then talked that Japan subsidises, so how can we compete with it? As it turned out, this was nowhere near the truth. Same is the case in China. In China, decision-making is centralised and quicker. But the democratic system that we

The ceremonial procession of IILM faculty members led by Dr. Shuchi Agrawal.

have in India on a long-term basis will prove much more robust than any system that does not involve people in decisionmaking. Having said this, it does not mean that a democratic system should become less competitive than any other system. In China, decisions are made at the top. In Japan, decision-making is done from the bottom. In India, decisionmaking is by consensus and we have to remember the value of democracy in creating acceptable, sustainable decisions which people will not question afterwards. What brings us down in India is the fact that our infrastructure creation is well below the level which is required for a progressive industrial country. The cost of infrastructure certainly adds substantially to manufacturing costs. Fortunately, the present government is better aligned to the need for better infrastructure building and I hope that is one area in the coming years that will get addressed better.

Second part is the high cost of doing business in India because there is a whole lot of transaction costs which are nonvalue adding but they are incurred because of outdated rules, regulations and laws, the need to provide employment to people who have been there in a system for a long time and I think this is the area that the government needs to look at. What I want to emphasise is, when we are trying to become more com-

petitive and more productive, we must not only look at the external factors which add to our cost. We must look inwards because there is much more that can be done if you are looking inwards than what we can do looking outwards. In most organisations, if something goes wrong, there is tendency to find an alibi for that by blaming somebody outside the system. My suggestion to you is that when you are in your employment, don't find scapegoats outside the system. First, look inwards and you will find that in most instances the larger part of the cause for the goof-up would be something which has happened internally and not externally. Second, if we want to make improvements in this country, we must remember the social and political environment in which we are functioning. Business does not function in a vacuum. Any decisions, changes, or improvements must be such that people will accept around you and which can be implemented because of acceptance. Acceptance means recognising what the people around you think; how they behave and how they understand what you are trying to do. Communication becomes the key to getting decisions accepted. Unless you communicate adequately, understand what you are telling people and they understand what you are telling and both sides discuss and understand each other's doubts and clarifications, you will not get to a situation where you will find that you are very effective in decisionmaking. Many excellent things fail because of lack of communication. I would like to stress upon you the importance of recognising communication amongst human beings in an open society as being of extremely great value in determining on how you will succeed in your jobs. Those who communicate well will succeed better.

Then, there is team-building and people involvement. We have had an old tradition in Indian industry and it is something that goes 50-60 years back of unions and labour being adversarial to management. Most managements look upon workers as something which they have to have but wished they did not have to have. They treat workers as a kind of

Socialism is not a bad thing. But it has to be applied keeping in view the fact that individual motivation should not be killed.

My request is to try and build a work culture, educate people, communicate and I think you will find great rewards.

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“Education is a progressive discovery of our own ignorance.� ...there is nothing truer than this. This is also the time when IILM has to put on record its indebtedness to all those without whose support no B-school can deliver on its programmes.

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necessary evil which they have to find means of managing somehow. In any manufacturing organisation, the workforce will be close to 80 per cent of total employees. Just consider what kind of synergies and growth you could get if 80 per cent pulled in the same direction as the remaining 20 per cent of management. When that 80 per cent is often fragmented between different unions and they pull in different directions from the management, you have adversarial relations. One of the reasons why productivity in most Indian industries has not gone up very much and we are far below the productivity of other countries is the fact that there is no involvement of workers in the company. Workers do not think that their future is dependent on the future of the company. They do not believe that each is interdependent on the other. If you really think again, you will recognise that in a company the greatest and most vulnerable stakeholder is the worker. If something happens to the company in today's environment, the managers and engineers will find jobs elsewhere and will not really suffer any economic hardship. Where does a worker go? Where is the job opportunity for a worker who is in mid-30s or 40s? I think what managers have to understand is that if you really

communicate with workers, if you explain to them what is actually happening in the marketplace and in the industry and what their role should be, and if the company adopts practices which are transparent and fair, where the workers can see that the management is actually concerned about their long-term welfare, treats them as equal human beings, then you will get a very positive response from the workers and the whole picture changes.

I'm telling you this because this is what the Japanese did when in the 1950s they found that their country was shattered by the war. They had militant trade unions; there were strikes, cases of arson, and cases of vandalism in the factory. They realised that it required a lot of education, training and communication with workers to turn them around. Today, if you go to a Japanese company, there is no distinction between the managers and workers. This is something we tried in Maruti and I can tell you it works very well. If you look after the workers they will look after you far better. They will innovate, make suggestions for improvements, and improve productivity beyond what you can imagine. When Maruti started, in the project report prepared between the government of India and the Japanese partner it was stated that we will reach

a production of 100,000 cars with 4,000 employees in the company. In a public sector company to reach that kind of target set in the project report is not very common. Today, we are producing a million cars in Maruti per year and we have around 9,000 employees. This happened only because workers and management cooperated and a culture was built up.

We need to bring in a new work culture in India. If we are going to compete with the rest of the world, we need a new work culture and this is the kind of work culture I'm talking about. This work culture cannot come if top management promoters do not set an example for the workers. It cannot come if the workers feel that they are being exploited. It cannot come if they find that the CEO of the company is paid Rs 20 crore a year, while they are subjected to all kinds of indignities when they ask for a raise of Rs 200.

Just remember that there is a great value in what we had earlier thought of socialism. Socialism is not a bad thing. But it has to be applied keeping in view the fact that individual motivation should not be killed. My request is to try and build a work culture, educate people, communicate and I think you will find great rewards. Other two points I wanted to

make quickly is that as Dr Bhattacharyya had said, you have a life-long learning process. Please remember that getting an MBA degree from a prestigious institution does not signify the end of a road. It is the beginning of a road. You must keep learning. The best way to learn anything where you feel that you don't know enough is to get hold of different people who have been working in that area. Never be afraid to say “I don't know”. That is the way you get the other person to open up and give you all his experiences and accept you if he feels that you are learning from him. So, try and learn this little trick by getting people to work with you by saying “I don't know”. The other thing is that try to take a long-term view about any decisions about your life you take. Don't get carried away by short-term decisions.

Consider job changes carefully and see what they will do in your long-term career remembering that the maximum benefit which you will derive in your career growth is if the institution where you are working grows faster than anybody else. Take a holistic vision of what happens and you will go very far.

With these words, thank you very much for having me here and listening to me patiently and I wish you all success for your future. Thank you.

If we are going to compete with the rest of the world, we need a new work culture and this is the kind of work culture I'm talking about. This work culture cannot come if top management promoters do not set an example for the workers.

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GROUP IDENTITY The new logo of the Anil Kulwant Raii Group uses a combination of blue and red.

The blue signifies stability, harmony, trust, confidence and order — the colour of Krishna. Red represents excitement, energy and strength — all things intense and passionate.

The new logo symbolises the way in which the Group relates to itself and the world. Everyone associated with the Group is encouraged to look at themselves not as individuals with limited roles and responsibilities but as members of a team, one family and one organic entity, with shared objectives and vision.

The additional 'i' in the family name 'Rai' represents IILM, which is the Group's most well-known and well-recognised higher education institution. The short form of the Anil Kulwant Raii Group will be 'iGroup'.

VISION The Anil Kulwant Raii Group, though just 10 years old, has a very long and rich heritage under Dr Kulwant Rai. Dr Kulwant Rai, in spite of being born in a wealthy family, ventured out in 1946 at the age of 22 with just Rs. 5000, and in 40 years, built a very large industrial empire. In 1986, he retired from active business and devoted his life to philanthropic activities and education. He always believed that his success in the business was made possible only because of the grace of God and that he must devote his life for the service of the society.

Dr Kulwant Rai’ abiding passion has been education. The Rai School (now known as the Banyan Tree School) was set up in 1986 and the Institute for Integrated Learning in Management (IILM Graduate School of Management) in 1993. Mrs Malvika Rai, the Chairperson of IILM, has been responsible for the day-to-day management of the school and college since their inception. Dr Kulwant Rai has explained his focus on education in the words of Sri Sathya Sai Baba: “The process of education is to render the individual a happier and more useful person; it must also make him a better citizen, able and willing to further the progress of the nation to which he belongs.”

The name “Kulwant Rai” evokes all that is positive and vibrant in business and in life. It exemplifies integrity, quality, performance, perfection and, above all, character. The Group's vision reflects these beliefs.

The Anil Kulwant Raii Group is committed to shape a better future; create a higher quality of life and give wing to a million dreams and aspirations with confidence, energy and passion.

GENESIS The Anil Kulwant Raii Group came into existence in early 2000 following a family settlement. The founder and patriarch of the family, Dr Kulwant Rai, and his younger son, Anil Rai, separated from his older son, Vinay Rai. At that time, the Anil Kulwant Raii Group consisted of the campus at Lodhi Road which housed the

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Institute for Integrated Learning in Management (IILM), the IILM Undergraduate Business School and the Banyan Tree School (formerly known as Rai School). The IILM at Jaipur had just started in rented premises.

MILESTONES In the nine years of its existence, the Anil Kulwant Raii Group has focused on education and has grown manifold. In 2002, the IILM Academy of Higher Learning was set up in Greater Noida on an 18-acre campus. The campus started with the College of Engineering and Technology with specialisation in bio-technology, electrical and electronics, mechanical and computer engineering.

In the same year, the IILM College of Management Studies started, focusing on business studies and management.

In 2002, the IILM at Jaipur shifted to its new campus near the Jaipur airport; and in 2003, the IILM College of Management Studies, Lucknow, was established.

In July 2004, the IILM Institute for Higher Education at Gurgaon was set up.

Located on a spacious 7-acre campus, the institute focused on management education. The institute is recognised by the Distance Education Council, Government of India.

IILM was one of the pioneers in the private sector to set up an institute for design. The IILM School of Design started in August 2004 and works closely with the National Institute of Design and has an MOU with IGNOU to offer design education through the distance mode.

In the year 2005, on-campus housing facilities and a new Bio-Technology laboratory building were added to the IILM Academy campus. In 2006, the Anil Kulwant Raii Group laid the foundation of a new 8-acre campus to house their flagship institute at Greater Noida — the IILM Graduate School of Management.

By July 2007, this campus was operational.

IILM is expanding its educational activities in East India and has been allotted land by the West Bengal government to set up an educational institute in Kolkata. IILM has also recently entered into an MOU with IGNOU to offer 5-year integrated programmes in Law — BBA with Law and BCom with Law. The Banyan Tree Schools have also expanded since the first school in 1986.

New schools have been established in Chandigarh in 2003, in Gurgaon in 2006 and Jagdishpur in 2008. Two schools are under construction in Jaipur and Bhopal and will be operational by 2011 and 2012, respectively.

Source : www.iilm.edu

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NEW REGIME

IFRS AND CORPORATE GOVERNANCE

What will happen in 2011?

Many countries have moved over to IFRS while many are on the verge of doing so. India is also on road to the switchover. But the ICAI and the government has to play a major role to make the transition smooth

C

ompanies manage what they mea- statements. Inadequate financial disclosure. Financial reporting and dis- sures would hinder the implementation closure is an important compo- of any solutions posited above.

Like other developing countries, nent of a corporate governance system since it allows investors and other out- India has also adopted an interventionist development strategy that side parties to monitor firm involves restrictions on foreign performance and contractual ownership and active role of commitments. Globalisation government in key economic necessitates that governance sectors such as oil, natural gas mechanisms in emerging and infrastructure. This develmarkets be augmented. opment strategy in the context Improved corporate goverof weak market institutions nance systems can serve as has not resulted in responsible an incentive for foreign corporate governance. investment.

Some NEETI SANAN The Sarbanes Oxley Act improvements suggested of 2002 has significantly to solve the corporate govAssociate Professor, Finance impacted all direct players ernance problem may be codes of conduct, whistle-blower poli- in the corporate governance mosaic cies, rating agencies to focus on sub- across the world. This is not only in stance over form and penalties for terms of their role and function in the financial indiscipline. They all rely on governance process but also in terms of information presented in the financial how the players interact with each other. Under Sarbanes Oxley, audit committee now has the responsibility to hire and fire the auditor and approve the non-audit services that the

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auditing firm can perform.

Another process with far-reaching implications on corporate governance is the convergence of local accounting standards with the IFRS. IFRS, previously known as International Accounting Standards (IAS), are standards and interpretations adopted by the International Accounting Standards Board (IASB). IASB adopted IAS in April 2001, and renamed it IFRS, International Financial Reporting Standards. The convergence is gaining the attention of companies, regulators and investing community. More than 100 countries have moved to, or base their local standards on, IFRS. In 2005, UK, Australia moved to IFRS. In 2007, China moved to IFRS. Brazil is expected to move in 2010, and Canada in 2011.

In the US, the SEC has laid down the road map for conversion to IFRS starting 2014. India is also on the way to adopting the same. The Institute for Chartered Accountants of India has issued a road map for convergence of Indian GAAP with IFRS by April 2011.

The IFRS is different from the US GAAP in being principal-based rather than rule-based. It requires valuations and future forecasts, which will involve the use of estimates, assumptions and most important, management’s judgements. Harmonisation of existing accounting language with IFRS requires changes not only in the accounting procedures but also in the legal regulatory framework and IT systems. Switchover to IFRS, which will transform the way companies and markets judge performance and value, is beset by many challenges in the Indian scenario. India with its multi-body standard-setting model will have to ascertain one united code of rules for corporates to follow. ICAI, SEBI, RBI, IRDA, etc, will have to coordinate their efforts in developing a uniform, holistic accounting language.

Also, lack of professionally trained personnel to spearhead the move could impede the conversion process. As of now, IFRS seems to be following Heisenberg's Uncertainty Principle. This principle of quantum physics states that certain pairs of physical properties, like

position and momentum, cannot both be known to arbitrary precision. That is, the more precisely one’s property is known, the less precisely the other can be known. To say that, IFRS is expected to undergo change between now and 2011, putting us at a comparative disadvantage as we still don't know what would be the IFRS requirements to apply in 2011. Thus, it is not possible to predict both the position and precision of certain financial requirements as they would exist in 2011.

In wake of the present financial crisis, companies are struggling with unexpected set of problems of credit, job losses, reduced consumer spending and waning margins. Plagued by these issues, it comes as no surprise that the companies don't seem to be in any hurry to implement IFRS. Regulators are also too occupied in grappling with new challenges to keep up the momentum. Moreover, the modification of Income-tax Act, Companies Act and other legislations that run contrary to IFRS is not easy and, in practice, such legislative activity could take years.

Therefore, ICAI and the Government have to play a larger role in addressing these problems to avoid long delays.

Once we tide over the above mentioned challenges at a micro level, adoption of IFRS is sure to boost investor confidence. However, it may not be the panacea it may seem to be. A case in point is Satyam. Satyam was one of the first Indian companies to announce transition to IFRS but the Rs 7,000crore financial fraud shows that the real problem is in the auditing process and the corporate governance framework, not in the accounting standards.

Companies are struggling with unexpected set of problems of credit, job losses, reduced consumer spending and waning margins... it comes as no surprise that they don’t seem to be in any hurry to implement IFRS.

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SALES STRATEGY

WHAT IS SPECIAL ABOUT NORDSTROM? A key requisite for a successful business is an enthusiastic sales force to go out and sell.

Nordstrom has just that

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I

f ‘clothes maketh a man,' then per- zine. It was an interesting article on haps shoes make or break the entire how New Balance continued to succeed look. A pair of shoes truly mirrors despite stiff competition from popular the personality of a man. Though not brands such as Nike, Reebok and stylish per se, I, however, value a good Adidas in the United States. The $1.5 pair of shoes for other reasons like com- billion Boston-based New Balance fort, durability, and affordability. The Athletic Shoe Inc., globally recognised as a leading manufacturer of brand or the look of the shoes high-performance athletic come a close fourth. footwear and apparel, has In my visit to the United prided itself in its American States recently, my hunt for a roots since the year 1900 and heritage collection of a New sells its products in more than Balance pair of walking 120 countries, including India. sneakers that carries the tag The company focuses on 'Made in America, Worn by improving technology and prothe World' ended up as a duction methods and it is pleasant experience. In the only athletics products the beginning though I SUJIT SENGUPTA company that still manuwould come across New Associate Professor and factures footwear in the Balance shoes that were Area Head, Marketing United States. The cover all made in China. My persistent search took me to an upscale story prompted me to ask my son who department store chain Nordstrom at resides in the United States to get me a the Stanford Shopping Centre in the Bay pair of this brand of shoes, more out of Area of Northern California where I curiosity, but also as it suited my daily walking habits. He got a pair that was located the product.

Four years ago, I had read made in China, like most things about New Balance shoes as "American" these days. One could harda lead story in Time maga- ly distinguish the newly acquired shoes

from similar priced sneakers that I usually wore except the name of the brand.

My interest in the 'real' American New Balance heritage collection remained.

While taking a look at the different New Balance athletic shoes displayed at Nordstrom's footwear sale counters and curiously perusing the "Made in..." label, I was greeted by a cheerful looking young salesman curious to know what I was looking for. Most of the shoes carried the China tag with prices ranging from $60 upwards to $95. My search ended when he picked up a shoe at the same counter that carried the US made tag — one of the heritage collections. As I was looking at the shoes from all corners, he removed a tiny piece of price sticker that had got stuck on my jacket, glanced at it as $99 and smiled at me. (Believing the price of the pair of shoes to be $99, I calculated it to be equivalent of Rs. 4,800 and decided the pair was a steal considering the shoes were of US origin). He confirmed my foot size as US 7, and left for the storeroom to locate a suitable pair. In the meanwhile, as I was taking a look at the other ranges displayed, a smart looking walking shoe of a different brand with a price tag of $75 drew my attention.

He returned, expressing regret that my size was not available and the only one in stock was one size larger. Nevertheless, he asked me to try it out. Confident it would be a comfortable fit, he explained while measuring the size of my foot once again that he had noticed

though my size was US 7, the ankle size was a shade larger and as a result size US 8 would provide a superior cushioning effect to my ankle. I took a few steps and though it left a gap between my toes and the far end of the shoe, walking was very comfortable. I silently questioned the wisdom of spending $99 for an oversized pair of walking shoes. The salesperson was observant when I asked him to show me the smart looking shoe priced at $75 that had grabbed my attention in the meanwhile. After a while, he returned with a pair of my size (US 7) of this second pair which I wore and took a few steps. The comfort level of the New Balance shoe was superior. The conflict in my mind had disappeared; I decided to buy the New Balance pair of shoes and enquired the final price. The salesman said $139 plus local tax, which would make it around $152. A little while ago the price was $99, how could this pair be different? He cheerfully said “Sir, the $99 sticker was not of Nordstrom but of some other store that might have accidentally stuck on your shirt”. I was in no frame of mind to spend Rs. 7500, an equivalent of $150, and almost prepared to leave. I casually asked him, “I understand Macy’s (another famous US chain of departmental store) was not charging sales tax to foreign visitors to the stores, so is there any possibility of waiving the tax since I am a foreigner?” The salesman retreated saying, “I will find out," and on return after consulting a senior colleague he said Macy's scheme was not applicable at

The salesperson was observant when I asked him to show me the smart looking shoe priced at $75 ... After a while, he returned with a pair of my size (US 7) of this second pair which I wore and took a few steps.

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Customers have a right to be treated with respect in life but selling is all about creating a working relationship with the customer and rising above any negative feelings.

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Nordstrom, though the tax could be waived provided it was ordered online.

But the transportation charges to India would cost $50, he added. By this time, the salesman had spent almost three quarters of an hour with me.

The salesman suggested other quality brands of walking shoes in the price range of $65-$95 and asked me to put them on. He explained why the pair I had tried wasn't suitable for daily walking. “It doesn't offer a cushioning effect, and is good for dressing up on a relaxed Sunday afternoon,” he said. He took pain to elaborate why I find the size 8 New Balance I chose more comfortable than the other brands—it supports my ankle unlike others. Without appearing very persuasive he said, “Size 7 of the same pair would be tight for you. You actually need 7 ½ size, but that wouldn't provide much toe space like you get in size 8.” I admitted to myself that none of these shoes, though of the right size, was as comfortable as the size 8 New Balance.

As I took time to decide, for the price indeed was very high for a pair of shoes, the sales chap patiently waited on me, bringing to me whatever pair I wanted to try.

Finally, I decided to buy the pair for $ 152 and took out my debit card for making the payment.

For some reason, my debit and credit cards were getting declined.

The salesperson then switched on to the manual mode to accept the credit card payment which is not normally the usual practice in the United States where people manning the cash counters are very procedure-bound. I got my first "Made in USA" New Balance shoes.

What persuaded me to buy the pair of walking shoes two times the price of similar shoes? Was it just because it carried the 'Made in USA tag'? During our overseas visit, we are prone to mentally do an arithmetical calculation on how much it would cost us in equivalent rupees and whether it was worth spending the

money when similar products are available in our country. This cautiousness is justified, because we Indians are not a consumer society, but what made me splurge that evening? I admit I had been on the lookout for a USA-made New Balance pair ever since I came across that article in Time magazine, and the more products with "Made in China" tag I saw, the more exasperated I had become, but I also realised this wasn't the only factor behind the purchase.

Indeed, my experience at the store is a lesson in sales management. There are two main requirements for a successful business — a thumping good idea and a really enthusiastic sales force to go out and sell. My experience with the salesperson at Nordstrom was one of how to sell more effectively, satisfying customers, presenting the product and gain a commitment to buy. Confidence increases with knowledge, practice and success.

Let us look at how this was done.

1. Expressed cheerfulness in contact — it helps when a salesperson has a pleasing personality : Customers do not know what kind of day a salesman has been experiencing.

They expect them to be as fresh at 8 p.m. as he/she might have been at 9 am.

2. Presented with confidence — the salesperson was able to convince me that I needed a larger size than my size 7 — consequently I forgot during the course of conversation that my size was out of stock in his store. His confidence comes from his product knowledge Sales people need confidence. This confidence is based on sound retailing and product knowledge. He had complete knowledge about which part of the foot (size of the ankle) needs attention for providing the required comfort level in shoes. They learn about products not in isolation, but in comparison with others in the range.

They ought to know when to talk and when to listen to customers—and manage to achieve a balance between the two.

3. Understood the customer's needs — the salesperson was not an aggressive talker but an intense listener.

Having read about New Balance, my requirement was of a walking shoe that

THE RESULTING COMPARATIVE CHART BELOW WILL CORROBORATE MY EXPERIENCE OF THIS STORE Company

2007 Revenues (000)

No. of Stores

Sales per Store

Nordstrom

$ 8,828,000

157

$ 56,229,299

Neiman Marcus

$ 4,390,076

62

$ 70,806,677

Saks *Wal-Mart

$ 3,282,640 $ 378,799,000

102 7262

$ 32,182,746 $ 52,161,801

(US divisions only)

* For comparison purpose (Source: www.sap.com Top 100 Retailers edition of STORES Magazine)

was made in the US. There were several other higher priced shoes of the same brand but satisfying different needs.

The aim of professional salesperson should be to sell the right product to meet the needs of the customer. This means finding out those needs first.

4. Spoke with the best interest of the customer in mind— neither too pushy nor economical with the truth. He patiently showed other brands within the price range that I had asked for.

Skilled sales persons always try to generate trust by answering questions honestly. Did not make up stories just to motivate one to buy.

5. Persisted till he succeeded and demonstrated resilience.

Customers have a right to be treated with respect in life but selling is all about creating a working relationship with the customer and rising above any negative feelings. When he realised that I would not have bought the pair of shoes because they were expensive and beyond my perceived budget, he considered that as normal and did not give up.

Rather than having kept quiet, he posed a question to let me respond to avoid the main issue: he asked "Would you like to try another pair (pointing towards the display counter)?

6.Looked for the right buying signals.

Buying signals can save a lot of effort if read correctly. He realised the shoes I had tried were very comforting and I did not like the others. He did not talk more than necessary. He was able to close sales in a seemingly natural way through best mix of technique, timing, composure and body language.

7.Followed goals with action.

A sales process is purely speculative unless it results in sales and is best achieved by focusing on the customer's needs. This helps to steer the customer to the "finishing line".

The superior customer service at Nordstrom has lifted it way above competitors. A customer once, unaware that the store had changed hands, returned a set of tyres. Although Nordstrom had never sold tyres since opening, it was determined to show it was not the fault of the customer that the store had changed hands, and the return was accepted. Many Nordstrom customers will attest that Nordstrom will refund items at any time purchased from its store.

Nordstrom has maintained its philosophy of offering a wide selection, exceptionally attractive surroundings, good service and competitive prices.

The key success factors are—getting good people, promoting within and paying them well, a good and up-to-date financial information flow, and its control systems. (Source Harvard Business School case #9-579-218 (rev12/89).

The superior customer service at Nordstrom has lifted them way above competitors. The store has maintained their philosophy of offering a wide selection, exceptionally attractive surroundings, good service and competitive prices.

Quarterly average of unique visitors (2Q ‘07, 2Q ‘08) 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

Bloomingdales

Neimen Marcus

Nordstrom 2Q 2007

Saks 2Q 2008) The

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CHANGING FACE

DELHI METRO A JOURNEY OF CHANGE The new mode of transport has not only changed the lives of commuters, it has also transformed the face of business in Connaught Place

ABHA SADANA Lecturer, Economics

T

he UBS 11 students conducted a study of the 'economic impact of Metro in Delhi with special reference to Connaught Place'. This study sought to understand the impact of demand and supply-side policies in achieving the macroeconomic objectives of increasing employment, exports and employment generation. The study was conducted mainly through surveys of the central Victorian market with special focus on: a) Shopkeepers — enquiring about the change in their sales pattern, product diversification, employment generation, etc. b) Customers and officegoers travelling by Metro — finding how the Metro has altered the frequency of outings and raised expenditures on food, clothing, etc, with special reference to CP. The UBS 11 team comprising 22 students was divided into groups of two.

They were asked to interview owners of various shops, small eateries, jewelers, street-side vendors and metro users.

Each group interviewed their target areas, besides relating the concepts taught in the class to real-life situations.

This experience helped the students to improve their communication skills and learn how business is run in real life.

Some important findings of the study: STUDY OF SHOPKEEPERS The survey was conducted among 34 diverse shops in CP that sold books, apparel, accessories, restaurants, gift items and stationery. A few shops covered were Cottage Arts, Jain Book Agency, Sony Centre, Galgotia & Sons, Gola sizzlers, Nizams, Wenger & Co. Café Coffee Day, etc. Two-thirds of the shops studied were well established in CP for more than eight years, allowing

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us to compare the effects of the Metro, inaugurated on December, 26 2002, in CP on their sales. The sales of more than half of the shops was affected positively by the presence of the Metro.

Since the establishment of the Metro, 47 per cent shops observed a 15-30 per cent increase in sales. Of the rest, 24 per cent were unaffected by the presence of the Metro, while the remaining were adversely affected.

When the shopowners were asked about hiring more employees, it was observed out that 38 per cent shops had taken more workers to meet the increasing customer pressure. This proved our hypothesis that there has been employment generation. But to what extent is this due to Metro?

Approximately 70 per cent of the shops felt the number of customers visiting their establishment had changed since the onset of the Metro.

The results were varied. But shops like Wengers, which have been there since 1926, observed a decline in the share of family customers as compared

The Delhi Metro has brought about a change in the economic environment for shopkeepers, with regards to sales, employment creation, earning of foreign exchange and level of competitiveness...it has also changed the expenditure habits of Metro users. to other customers. This they attributed to increasing competition. However, restaurants like Piccadeli , Nizams, etc, have not noticed much increase in customers. On the other hand, book and stationery shops like Jain Book Agency, Amrit Book Co. and Karachi Stationary Mart observed an unprecedented increase in customers.

Kutch Handicrafts and Galgotia & Sons share a similar experience.

As far as the profile of customers is concerned, most shops claimed it had remained the same. Approximately 70 per cent shops claimed a sharp increase in the number of college-goers followed by working professionals. Half of the shops claimed children, women and families remained the same.

However, seven shops claimed the number of elderly people and families had declined. No shop noticed a decline in women visitors.

On analysing the number of foreigners visiting these shops, we observed that 42 per cent shopkeepers noticed an increase in their visits, resulting in a rise in their

sales substantially. Almost half the shops attempted to diversify their product range to meet the needs of the changed customer profile. 58 per cent of the shops admitted to altering their product composition for attracting customers. Half of them observed a rise in the average expenditure per customer of approximately 15 per cent and more.

The other half observed it had increased by less than 15 per cent. More than 50 per cent of the shops admitted competition had increased the sale of similar lines of products. The extent of the effect of the rise in competition on the shop itself varied. 34 per cent, such as Sikka’s, Mod Fashions, etc, claimed the effect to be 'little'. Approximately 28 per cent of shops such as Sony Centre, Jain Book Agency were ‘not at all’ affected by competition.

According to the shopkeepers, the other changes that the Metro has brought to CP are : First, it has helped to revive the city and its culture, especially various performances undertaken at the Central Park; Second the The

Edge 25

increased connectivity of CP due to the Metro has also attracted terrorists to potentially lucrative bombing sites.

Amit Sundriya, a commuter, filling up the questionnaire.

Interviewees filling up the form.

Vikas Kumar, engineer at NDMC, being interviewed.

Neha Singh getting a questionnaire filled by a candidate.

Animesh Kumar, HCL employee, after the interview.

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STUDY OF METRO USERS In the study, 42 people were interviewed of which 23 were men and 19 were women. All the Metro users were between 20 and 50 years of age. Their There were students, IT professionals, assistant producers, sales and marketing managers, chartered accountants, teachers, engineers, etc.

Their area of residence was in and around Delhi. The users’ earlier mode of transportation before the onset of the metro varied.

About half of the sample Metro users earlier used private vehicles as their mode of transportation and the other half used bus or autorickshaw.

Each individual accepted that Metro had brought about a positive change in the transport sector. The extent of change varied, whereby about 80 per cent of the Metro users claimed it brought about a ‘remarkable’ change.

Among the people interviewed, more than 6o per cent used the Metro daily or on a weekly basis and the rest of them used it occasionally.

67 per cent of the interviewees claimed that the Delhi Metro had led to an increase in the number of outings they undertook before its introduction.

The purpose of the visits of Metro users also varied. About 60 per cent of Metro users visited CP for shopping and eating, while the rest came for work and other reasons.

Within the category of shopping and eating, 43 per cent of Metro users used it to go to restaurants, while less than 5 per cent used it to purchase stationary, gift items or for other purposes.

Moreover, whether the increase in accessibility of shopping areas like CP had affected the household expenditure delivered a mixed response. 55 per cent of the people claimed that Metro had led to a rise in their expenditure while the rest claimed that their expenditure habits remained unchanged.

For about 54 per cent of the respon-

dents, who claimed that their expenditure habits had changed, it was between 30 per cent and more.

In terms of the quality of service, more than 78 per cent of the commuters found Metro services as very good or excellent and were very happy in terms of cleanliness, speed and connectivity. But a few users did comment that it was not fair to carry eatables in the trains as carry packs are not allowed.

For more than 85 per cent of the people, the Metro was a safer mode of transport as opposed to autorickshaws while for the rest it was almost evenly distributed between same and worse.

For 25 per cent of the people surveyed, the Metro was same in terms of safety in relation to a personal vehicle and for more than 40 per cent it was worse than Metro.

Then, for other transport services like car pools like Qualis, etc. more than 80 per cent of the people claimed they were more unsafe than Metro while for the rest they were the same.

Further, when it came to tackling the problem of traffic congestion, 69 per cent of the Metro users believe that it has solved the problem of traffic jams while for the rest it has not resulted in any change.

Lastly, the introduction of the Metro has made CP livelier, with a rise in the number of people visiting the area. It has even allowed a platform that allows people of various classes to come together and travel, thus initiating equality at a certain level. It has even acted as a source of income for many people working as staff members.

In a nutshell, our project helped us to study how the Delhi Metro has brought about a change in the economic environment for shopkeepers, with regards to their sales, employment creation, earning of foreign exchange and level of competitiveness and how the expenditure habits of Metro users has been altered.

Moreover, we were able to observe the social utility of the Metro in tackling problems such as traffic congestion and offering a safe mode of transport.

CUTTING EDGE

INFORMATION TECHNOLOGY IN GLOBAL BUSINESS IT revolution has brought about a tremendous change in the way business is being conducted worldwide. It is not just a tool for change, it is an integral part of the global trading environment

T

he information and technology world. Improvement in technology, (IT) revolution is considered especially communication and transequivalent to the industrial revo- port, was one of the major factors for lution in terms of its pervasive impact this increased interconnectedness and on the world economy. The world took interdependence of national economies.

Globalisation has not only resulted in its first step towards the IT revolution in the post-Second World War period, with increased opportunities but also posed new challenges to the corpothe invention of the first elecrate world. Competition has tronic computer by a team of become fiercer and national scientists at the University of boundaries are getting Pennsylvania. The next 30 blurred, both in terms of years witnessed radical and accessibility to markets and incremental innovations of workforce locations, thus computer-aided design (CAD) making it essential for compaand software engineering. nies to attain global-level effiBusinesses across the world ciencies, country-specific fast began to adopt technologresponsiveness and the ical advantages and the SANGEETA YADAV ability to develop and resultant improved effiAssistant Professor, Economics leverage knowledge on ciencies brought about a worldwide basis. by innovations in the IT field. Economic factors like falling prices These challenges have forced global of technology allowed its easy diffusion. businesses to centralise strategic deciA similar, significant and correlated sion-making, tighten the operational event in the second half of the 20th cen- control and develop a global mindset to tury was globalisation or the deepening operate across the world. They need to integration of products, people, compa- set up processes and organisational nies, capital and information across the structures capable of managing busiThe

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Promotion of products through internet provides immense marketing opportunities.

Increasing use of internet for buying and selling provides the corporate world a chance to leverage tech for Business to Business and Business to Consumer transactions.

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ness on a global scale, giving rise to further complexities in management. For acquiring global-level efficiencies, access to real-time information regarding people, processes and organisation wide data becomes critical. A company with better processes and real-time data has the ability to make more informed decisions than its competitors and achieves a higher success rate in the market. IT has a major role to play for global businesses in overcoming these challenges. The availability and use of information systems and technologies have grown almost to the point of being commodity-like in nature, becoming nearly as ubiquitous as labour. (Dewett and Jones 2000). The present article overviews the broad contours of the relationship between information and technology and global strategies of business firms.

Global Sourcing and Supply Chain Efficiencies: Efficient management of the supply chain for provision of goods and services from the point of origin to the point of consumption gives a competitive edge to organisations. IT helps in integration of the processes of a supply chain by providing access to valuable information like demand signals, forecasts, inventory, transportation, etc.

There are special SCM (Supply Chain Management) software modules that are part of the ERP (Enterprise Resource Planning) systems that help in supply chain transactions, management of supplier relationships and control of associated business processes. A transnational company like Dell has leveraged supply networks to operate a successful online sales model and Wal-Mart has achieved better supply chain efficiencies from the use of RFID (Radio-frequency identification) technology.

Global Marketing Programmes: Global marketing can derive benefits from the existence of global linkages and networked economies. Companies need to watch competitors and customers to keep pace with modern trends and analyse the needs, demands and desires of their customers. IT helps achieve this

by a faster dissemination of such information. Technology facilitates the maintenance of networks with customers and partners inside and outside the firm.

Similarly, promotion of products through the internet has provided immense marketing opportunities to firms. Increasing use of the internet for online buying and selling has provided the corporate world an opportunity to leverage technology for B2B (Business to Business) and B2C (Business to Consumer) transactions. Eretailing has grown as PC density has increased. The world is seen as a unified market and products and services requiring only few weeks/days to fit into any regional marketplace are being produced. It is technology that has enabled businesses to equip themselves with real-time usage and preferences data of consumers to customise their offerings for the local/regional marketplaces.

Global Human Resource Management: Global organisations’ workforce comprise employees of different nationalities, their numbers ranging to few thousands and their presence at numerous locations. This widespread distribution and composition of human resources throw up the challenge of efficient personnel management. Each country has unique labour laws and compensation and benefit structures. It is extensive usage of IT that has made it possible for organisations to manage and control such a diverse workforce. Human resource management activities revolving around workforce planning, recruitment, training and development, payroll management, etc., are managed with the help of IT applications that provide the managers a consolidated and detailed view of employee-related information and data.

Therefore, whether it is resource management at an organisational level or compensation and employee skill development at an individual level, it is IT that has enabled the HR teams and managers to take timely action and achieve favourable results.

Financial Control and Compliance: In

general, compliance means conforming of businesses to defined policy guidelines. With the help of IT, businesses have access to software systems that help them achieve compliance. The absence of proper compliance regulation mechanisms in the past has failed to avert financial scams and breakdowns in the corporate world. The most infamous case has been of Enron in 2001 in the USA, which highlighted the need for stronger compliance regulations for publicly listed companies. The Sarbanes-Oxley Act of 2002 issued significant tighter personal responsibility of corporate top management for the accuracy of reported financial statements in the USA. Thus, it becomes important for firms to strictly follow the regulations and avoid criminal or civil penalties. IT has played a major role by providing financial systems and software programmes that helped companies to adhere to these regulations and the margin for human error has been significantly reduced.

Product and Service Innovation: Innovation is the key to survival for any business area. Organisational innovation is tightly linked to the goals and objectives and competitive positioning of firms. Research and development and

product/service innovation is nowadays of great importance in businesses as the level of competition, production processes and methods are rapidly changing. Kanter (1983) views innovation “as the process of bringing any new problem-solving ideas into use.� IT is an important means of facilitating the innovation process. IT affects many aspects of problem-solving by redefining the way information is stored, transmitted, communicated, processed, and acted upon. It facilitates innovation potential by improving the initial base of knowledge and its availability to each employee and allows them to work together.

CONCLUSION Information availability is vital for the innovative and competitive performance of firms in the global business environment. Information technologies, including process, knowledge, and communication technologies are helpful in enhancing this agility for global firms. It enhances firm performance through organisational capabilities like agility, digital options, and entrepreneurial alertness. IT and global competitiveness of firms have a strong link, thus making IT a strategic partner of a business firm.

Similarly, IT also needs to stay in step where business is headed.

A company with better processes and real-time data has the ability to make more informed decisions than its competitors and achieves a higher success rate in the market. IT has a major role to play for global businesses in overcoming these challenges.

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ETHICS IN BUSINESS

THE SATYAM FIASCO LESSONS FOR THE FUTURE

The Satyam saga, considered one of India’s biggest corporate frauds, brings out the urgent need to plug loopholes in the auditing process and formulate tighter norms to prevent similar incidents

T

he Satyam scandal, termed as perpetrated by Ramalinga Raju reached “India's Enron”, shocked India its climax on December 16, 2008, when Inc. as an organised crime was he announced Satyam would diversify committed by promoters of this compa- into the realty business by acquiring two ny. It raised questions about the inde- business firms, namely, Maytas pendence of auditors and directors, role Infrastructure and Maytas Properties run by his family. of regulatory agencies, corpoSatyam had proposed to rate governance, negligence acquire a 51 per cent stake in of stock exchanges, manageMaytas Infrastructure, a comment of companies by their pany listed on BSE and 100 promoters, pledging of shares per cent privately held by by promoters, etc. Perhaps, Maytas Properties. However, for the first time in India, when institutional investors partners of the auditing firm expressed outrage, he was PricewaterhouseCoopers forced to withdraw the pro(PwC) were arrested for their posal. This was probaalleged role. Satyam HARPREET KAUR bly a way to siphon off Computer Services was Assistant Professor, Business Law cash from Satyam’s incorporated as a pribooks to meet debt vate limited Co. in 1987 for providing software development and repayment and cash obligations two consultancy services to large corpora- Maytas firms had to meet or to replace tions. It was promoted by B Ramalinga fictitious assets existing on Satyam's Raju (chairman and CEO) and B Rama books with real ones. Ramalinga Raju Raju (MD). In 1991, it was converted had acquired large tracts of land into a public limited company. The fraud through these firms. To raise the cash

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for the land, he used his stake in Satyam as collateral. Circumstances changed with the beginning of the fall of realty and stock markets in 2008. Creditors began to call for repayment of their loans as the Satyam stock they held as collateral was falling. Ramalinga Raju had to juggle his stocks and assets to meet the situation so he came up with this last-ditch plan involving Maytas firms, but could not succeed. The deal involved total cash outgo of Rs 7,840 crore, of which about Rs 7,400 crore would have accrued to the family members. The share prices of Satyam fell by 30 per cent after this withdrawal.

This episode brought Satyam, Maytas Infrastructure and Maytas Properties under the regulatory scrutiny of the Securities and Exchange Board of India (SEBI). A lawsuit was filed against Satyam by a British firm, Upaid Services Ltd, an old client, and the World Bank announced its ban on Satyam for eight years over bribery and corruption charges. Class suits were filed in the US against the company. The signs of internal dissension appeared in Satyam's board of directors when independent directors resigned on grounds of moral responsibility as they came under heavy criticism and the company’s corporate governance practices were questioned.

Probably, the end came with the confessional resignation letter of Ramalinga Raju to the board of directors of Satyam and SEBI in which he said the balancesheet of Satyam carried as of September 30, 2008, inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5, 361 crore reflected in the books), an accrued interest of Rs 376 crore (non-existent), an understated liability of Rs 1,230 crore on account of funds arranged by Ramalinga Raju, an over-stated debtors’ position of Rs 490 crore (as against Rs. 2,651 reflected in the books). His letter explained that revenues and profits for seven years were overstated because there was fear that poor performance may result in a takeover, exposing the gap. But despite overstated balancesheets, Satyam’s performance had never matched any of its peers. In early

2000, Satyam had merged with four companies owned by Srinivas Raju, cousin of Ramalinga Raju to raise promoters’ holding, but after a fallout with him, it again fell to its position around 2003. According to the letter, the actual operating margin was Rs 61 crore or 3 per cent of revenue, which was considered to be very low for any IT company and quite unbelievable by experts. The question was whether he could be entrusted for all that he has disclosed or was there more to what he had admitted?

If one analyses the background that led to the fraud, one can easily find that not only there was negligence but deliberate omissions too. Ramalinga Raju had a well-organised scheme for the intentional falsification of books for moving out of Satyam, gradually beginning from 2001 with 25.60 per cent promoters’ holding, reducing it to 8.6 per cent in 2008. There were credible reports that when he resigned, promoters’ stake was 5 per cent. According to Ramalinga Raju, both the receivables and the sundry debtors’ figures were false. Total sundry debtors in Satyam in FY 2007-08 were Rs 2,223.41 crore, compared to Rs 1,650 crore in FY 2006-07, indicating a jump of Rs 573 crore. In FY 2005-06, this figure was only Rs 1,122 crore. According to him, sundry debtors were Rs 490 crore as of September 30, 2008, while the books showed them to be Rs 2,651 crore. This indicated Rs 2,161 crore shown on the books were false. In the balancesheet of FY 2007-08, the debt worth Rs 61.60 crore was shown as more than six months old, whereas other debtors less than six months old were shown as Rs 2,161 crore. The cash flow position of a company was shown by the time period by which debts were kept on the book and this was very closely monitored by the analysts and auditors.

Thus, there

If one analyses the background that led to the fraud, one can easily find that not only there was negligence but deliberate omissions too.

Ramalinga Raju had a well-organised scheme for the intentional falsification of books for moving out of Satyam.

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Directors owe fiduciary obligation, duty of care, diligence, skill, duty to attend board meetings, duty not to delegate and duty to disclose interest in companies in which they are directors. Duties are same for both executive & nonexecutive ones.

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was lack of cash flow in Satyam.

Fictitious receivables were created and transferred to sundry debtors. These fictitious entries accumulated over time as there were no payments to settle them.

However, whether the debtors vanished from the books after six months or whether they were shown as bad debts, it was neither noticed nor commented by the auditors. He said out of the total cash reserves of Rs 5, 312 crore on the book, Rs 5,040 crore did not exist. That meant either these reserves never existed or they were siphoned off from Satyam. Satyam’s 53,000 headcount was inflated and millions of rupees were withdrawn every month in the name of non-existent workers.

Satyam had won an award for best corporate governance. However, the magnitude of the fraud clearly indicated the requirements for effective corporate governance were not complied with.

Even then, the company obtained a certificate from the auditors regarding compliance of conditions of corporate governance as stipulated in the clause with a rider that “In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has complied with the conditions of corporate governance as stipulated in the above mentioned listing agreement. We state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the company”. SEBI ordered an investigation on the basis of Ramalinga Raju’s letter revealing fabrication in the statement of accounts. It is investigating affairs relating to buying, selling or dealing in Satyam’s shares and ascertaining whether any provisions of the SEBI Act or regulations have been violated. SEBI has not been successful so far in checking real compliance of clause 49. The senior management of Satyam sold about 60 lakh shares of the company in 2008. SEBI is probing whether the sale of sizeable chunk of shares by FIs in lieu of debts a few days ago before the confession letter amounted to insider trading. If the suspicion is confirmed, the

sale proceeds can be recovered from them and could be distributed among thousands of investors who lost their money due to the sudden fall in the value of Satyam shares. The role of the audit committee was questionable in this case.

Directors owe fiduciary obligation, duty of care, diligence, skill, duty to attend board meetings, duty not to delegate and duty to disclose interest in companies in which they are directors.

Duties are the same for both the executive as well as non-executive (independent) directors. In this case, independent directors acted negligently in allowing the chairman of the company to take independent decisions. The role of independent directors is to protect the interest of shareholders. As per clause 49 of the listing agreement, independent directors have to periodically review legal compliance reports as well as the steps taken by the company to cure any taint. As independent directors do not have any vested interests in the company, they are supposed to examine, question and take into consideration the protection of shareholders before agreeing to any decision. The problem arises when directors develop vested interests. Thus, it is necessary to have provisions in the Companies Act to restrict reappointment of directors, including deemed reappointments.

Listing agreement has provided a mechanism for performance evaluation of non-executive directors by a peer group comprising the entire board of directors, excluding the director being evaluated. This review could be the mechanism to determine whether to extend/continue the terms of appointment of non-executive directors. The independent directors must have seen numerous indications of questionable practices, but chose to ignore them.

Whether the person appointed as independent director has requisite qualifications or not has to be verified, as in Satyam one independent director was reported ineligible for the directorship.

The practice of giving excessive remuneration for intermittent duties to directors needs some consideration as a person can be a director in 10 companies at

one time. Examination of the extent of the breach of trust and fiduciary responsibility of the directors and the board is necessary. They are bound to be held liable for deliberate omissions and negligence. Minutes of board meetings are prima facie evidence of proceedings. One can have a fair idea about the role played by independent directors in Satyam's case through minutes if they are properly recorded and kept.

Romer J(1924) observed, “...auditor must be honest, i.e., he must not certify what he does not believe to be true and he must take reasonable care and skill before he believes that what he certifies is true...� They owe their duty to the company only. Every auditor has the right of access to books, accounts and vouchers of the company. He may require from the officers of the company any information he thinks necessary for the performance of his duties. PwC, auditor of Satyam, had admitted that its audit report was wrong as it was based on wrong financial statements provided by the Satyam management. The questions that arise here are whether auditors were negligent in their duties, whether they were aware of the real facts or whether it was deliberate omission. It appears auditors believed the facts given to them by the directors and did not verify bank guarantees and books of accounts. Even routine procedures and standards were not followed by auditors.

Independence of auditors, their powerlessness in family-owned businesses and practice of appointing convenient auditors have become important issues in India. As internal audits of the companies are not mandatory in India, statutory audit gains more importance.

After the investigation, the CBI has enough reason to believe the scam involves a much bigger amount, close to Rs 10,000 crore, than what was disclosed. The agency has retrieved over 7,000 fake invoices and forged documents showing fixed deposits and bank balances and their evaluation shows the size of the scam is over Rs 9,600 crore.

These inflated figures were reflected in the form of audit reports that helped the company to cheat the public who were purchasing its shares. Ramalinga Raju

gave false and fabricated statements about the high capital of the company.

He forged documents and created fake FD receipts to the tune of Rs 3,300 crore. The FDRs were shown as available deposits. He allegedly manipulated bank guarantees to show the balance in bank accounts as Rs 1,800 crore. The CBI is investigating the 'digital evidence' about the share transactions at NSE and BSE and has not ruled out the possibility of questioning some officials of SEBI. CBI is probing rotation of funds and the role of front companies used in the rotation of funds. It has found the accused had floated more than 320 companies and nearly 60 had the same address.

The Serious Fraud Investigation Office, which began investigation after reference by Registrar of Companies at Hyderabad, has indicated in its report to the Ministry of Corporate Affairs that the auditors were guilty of falsification of the company's accounts; that directors were mute spectators in the entire process. The company had paid excess taxes to the tune of Rs 186.91 crore on fictitious interest income on non-existent fixed deposits between the financial year 2000-2001 and 2007-2008 to prevent detection of systematic falsification of accounts. There was violation of section 628 in the making of false statements, section 209 which deals with maintenance of books of accounts, section 205 which envisages dividend to be paid only out of profit and also violation of the Indian Penal Code in committing forgery. It is often that law provides little remedy to investors even when they suffer due to corporate misfeasance as shares are accepted as an inherently risk-prone investment. One can only hope delivery of justice would be timely and actually compensatory to the people affected by this fraud. Those who consider the Satyam fiasco a blessing in disguise argue that the scandal would help in plugging loopholes in auditing processes and help make the system more vigilant. The question is should one wait for such a scam to happen and then strengthen its vigilance or one should be proactive to invoke preventive measures?

Those who consider the fiasco a blessing in disguise argue the scandal would help to plug loopholes in auditing process.

The question is should one wait for such a scam to strengthen its vigilance or one should invoke preventive measures?

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SERVICE INDUSTRY

PARADIGM SHIFT IN THE INDIAN BANKING SYSTEM The banking industry in India has undergone a sea change. With competition increasing by the day, banks have started luring people than never before. Result: a banking bonanza for customers

I DEEPAK TANDON Professor, Finance

Ms ASHIMA MALHOTRA PGP 2008-10

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ndia’s service industries, especially banks, face growing competition in today’s times. In such an environment, differentiation is imperative. This article seeks to understand how a bank can achieve differentiation based on a marketing approach. Two questions will respectively examine the three additional Ps of the marketing mix (People, Presentation or Physical Evidence and Process) and the Customer Relationship Management as possible differentiators.

PART I (I) Challenges faced by Indian banks (A) The banking industry in India is undergoing a major transformation due to changes in economic conditions and continuous deregulation. These multiple changes, happening one after other, have a ripple effect on a bank trying to graduate from a completely regulated sellers’ market to a completed deregulated customers’ market. A bank is a financial institution licensed by a government. Its primary activities include borrowing and lending money. Many other financial activities are allotted over time.

(B) MARKETING MIX Marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four Ps, the marketing mix elements are price, place, product, and promotion.

Product: It must provide value to a customer but does not have to be tangible at the same time. Basically, it involves introducing new products or improvising the existing ones.

Price: Pricing must be competitive and must entail profit.

Pricing strategy can comprise dis-

counts, offers and the like.

Place: It refers to the place where the customers can buy the product and how the product reaches out to that place.

This is done through channels like the Internet, wholesalers and retailers.

Promotion: It includes various ways of communicating to customers what the company has to offer. It is about communicating about benefits of using a particular product or service rather than just talking about its features.

(C) THE EXTENDED MARKETING MIX INCLUDES People: An essential ingredient of any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage. Consumers make judgements and deliver perceptions of the service based on the employees they interact with.

Process: Refers to systems to assist the organisation in delivering the service.

Imagine walking into Burger King and ordering a Whopper Meal and getting it delivered within 2 minutes.

Physical Evidence: Where is the service being delivered? Physical evidence is the element of the service mix that allows the consumer to make judgments on the organisation. Physical evidence is an essential ingredient of the service mix; consumers will make perceptions based on their sight of the service provision, which will have an impact on the organisation's perceptual plan of the service.

PART II BANK MARKETING Marketing as it is

Recruiting the right staff and training them in the delivery of their service is essential if the organisation wants a competitive advantage.

Consumers make judgments based on the employees they interact with.

viewed today is a way of managing a business so that each strategy is evolved with foreknowledge of the impact of such a decision on the customer. Banks have broadly three dimensions, i.e., deposits, borrowings and other allied services. The concept of bank marketing encompasses: ■ Identifying the most profitable markets now and in future; ■ Assessing the present and future needs of customers; ■ Setting business development goals and making plans to meet them; ■ Managing the various services and promoting them to achieve the plans; ■ Increasing importance of marketing mix in the banking industry.

Marketing was not that popular in services industries as it was with manufacturing firms. Many service businesses are small and do not use management techniques such as marketing as it is considered expensive or irrelevant. There are also service businesses like law and accounting firms that believe it is unprofessional to resort to marketing. They rely more on their knowledge and efficiency than marketing their services.

In India, the services sector has grown significantly. Its growth is also quite important for India. The employment elasticity to GDP growth in the services sector is higher than in the case of both agriculture and manufacturing sector. Second, the services sector by providing complementary inputs to agriculture and industry acts as a catalyst in the overall growth of the economy. Third, with its greater flexibility in location, low capital intensity and personal nature are ideally suited for the small sector, which is the most important area for the overall development of the Indian economy.

Accordingly, the services sector has grown faster than the commodity sector.

(D) MARKETING MIX IN BANKING INDUSTRY 1. PROMOTION: Promotion mix includes advertising, publicity, sales promotion, word-of -mouth promotion, personal selling and telemarketing.

2. PRICE: The price must be high enough to cover costs and make a profit but low enough to attract customers. There are a number of possible pricing strategies.

Main being the penetration price of The

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In India, the services sector has grown significantly. Its growth is also quite important for India. The employment elasticity to GDP growth in the services sector is higher than in the case of both agriculture and manufacturing sector.

charging a low price, possibly not quite covering costs to attain a position in the market. This is popular with new businesses trying to get a toe-hold.

3. PRODUCT: The business has to produce a product that people want to buy.

They have to decide which 'market segment' they are aiming at — age, income, geographical location, etc.

4. PLACE: Banks need to take into consideration the place factor as it decides the volume of business for them.

5. PEOPLE: Sophisticated technologies, no doubt, inject life and strength to a bank's efficiency but the moment there is a lack of productive human resources even the new generation of information technologies would hardly produce the desired results.

6. PROCESS: All the major activities of banks follow RBI guidelines. There has to be adherence to certain rules and principles in the banking operations.

7. PHYSICAL EVIDENCE: The physical evidences include the logo, the layout of the branch, the passbooks, cheque books, the furniture, the reports, punch lines, other tangibles, employees’ dress code, etc.

CASE STUDY OF ICICI BANK LTD with

reference to Ps of Marketing (i)Introduction ICICI Bank is India's second largest bank with total assets of Rs. 3,674.19 billion (US$ 77 billion) on June 30, 2009 and profit after tax of Rs. 8.78 billion for the quarter ended June 30, 2009. The bank has a network of 1,485 branches and about 4,816 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI was established by the Government of India in the 1960s as a developmental financial institution to fund large industrial projects. ICICI was not a bank per se as it could not take retail deposits, nor was it required to comply with regulation.

ICICI Bank now has the largest market share among all banks in retail or consumer financing. ICICI Bank is the largest issuer of credit cards in the country. It was the first bank to offer and have a wide network of ATMs. ICICI Bank now

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has the largest market value of all banks in India and is widely seen as a sophisticated entity that can take on global banks in India. (ii) 7 Ps of marketing for ICICI Bank (I) PRODUCT MIX 1. Personal Banking a. Deposits b. Loans c. Cards d. Investments e. Car/ Health/ Travel Insurance f. ULIP/ Pension Plan/ Hospital Care g. Demat Services h. Wealth Management 2. NRI Banking a. Money Transfer b. Bank Accounts c. Investments d. Property Solutions e. Insurance f. Loans 3. Business Banking a. Corporate Net Banking b. Cash Management c. Trade Services d. FXOnline e. SME Services f. Online Taxes g. Custodial Services h. Agri/ Rural Business Banking (II) PRICING MIX The pricing decisions or the decisions related to interest and fee or commission charged by banks are found instrumental in motivating or influencing the target market. The RBI and the IBA are concerned with regulations. The rate of interest is regulated by RBI and other charges are controlled by IBA. The pricing policy of a bank is considered important for raising the number of customers' vis-à-vis the accretion of deposits. Also the quality of service provided has direct relationship with the fees charged. Thus, while deciding the price mix customer services rank the top position. The banking organisations are required to frame two-fold strategies. The first strategy is concerned with interest and fee charged and the second strategy is related to the interest paid. Since both the strategies throw a vice versa impact, it is important that banks attempt to establish a correla-

tion between the two. It is essential that both the buyers as well as the sellers have a feeling of winning.

Pricing Bank Products Starts With Three Basic Questions.

1. What rate does the bank need to meet its financial objectives?

The answer is, "it depends."

Some considerations for loan and deposit pricing are: ■ ROA or ROE objectives ■ Related income taxes ■ Earning assets to total assets ■ Equity-to-asset ratio ■ Cost to service earning assets being funded or deposits funding an earning asset ■ Pricing for the activities and risks associated with the product ■ Rate tiers based on product balances ■ Asset and liability mix Another element to consider in the pricing of earning assets is the risk of loss. Most notably, this is relevant in loan pricing. Many banks assign a risk weighting to individual loans over a certain size or based on loan type and assign a credit risk charge based on those ratings.

Customer relationships are difficult to

ICICI Bank now has the largest market share among all banks in retail or consumer financing. ICICI Bank is the largest issuer of credit cards in the country.

It was also the first bank to offer and have a wide network of ATMs. The

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Pricing is key for associates who sell bank products. Lenders want lowest rates, and people dealing with depositors the highest rates.

You need the right balance of fee income, strategies to reduce operating costs, and a healthy asset...

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assign a value to in the pricing process.

Customers will generally press for some price concessions in consideration of other relationships they have with the bank.

Asset and liability mix also impacts pricing results. Generally speaking, banks operating with higher loan-toasset ratios can afford to pay more for deposits. Likewise, banks can afford to be more competitive on certain deposit products if they have fewer maturities in a particular timeframe or less total outstanding balances in a product line.

2. What is the market rate for the core product?

Customers have more distribution channels available to them today than at any other point in history. In the past 10 years, the number of bank locations has increased by 20 per cent. Of course, there are the mortgage bankers, the Internet, and a host of other financial service providers competing for your customer's loan and deposit business.

The point is, the competitive marketplace always ensures that if a financial institution is charging too much for loans or paying too little for deposits, its share of the market is likely to dwindle as existing and prospective customers find alternative providers. One can do all the math one wants to determine required pricing points, but if pricing is uncompetitive market share will shrink.

3. What would the bank have to do to sales and operations to make its rates the most competitive in its market?

Pricing is a key issue for the associates who sell bank products to your customers. The fact is, lenders want the lowest rates, and people dealing with depositors want to pay the highest rates.

You need the right balance of fee income, strategies to reduce operating costs, and a healthy asset and liability mix to

change your required pricing.

(III) PLACE MIX This component of marketing mix is related to the offering of services. The services are sold through the branches.

Two important decision-making areas are: making available the promised services to the ultimate users and selecting a suitable place for bank branches.

The number of branches of ICICI: 1,900 in India and 33 in Mumbai.

(IV) PROMOTION MIX ■ Advertising: Television, radio, movies, theatres ■ Print media: hoardings, newspaper, magazines ■ Publicity: road shows, campus visits, sandwich man, sponsorship ■ Sales promotion: gifts, discount and commission, incentives, etc.

■ Personal selling: Cross-sale (selling at competitors place), personalised service ■ Telemarketing: ICICI one source Call centre (mind space) (V) PROCESS Flow of activities: All the major activities of ICICI Bank follow RBI guidelines.

There has to be adherence to certain rules and principles in the banking operations.

The activities have been segregated into various departments accordingly.

Standardisation: ICICI Bank has got standardised procedures and typical transactions. In fact not only all the branches of a single bank, but all banks have some standardisation in them. This is because of the rules they are subject to.

Besides this, each of the banks has its standard forms, documentations, etc.

Standardisation saves a lot of time behind individual transaction.

Customisation: There are specialty counters at each branch to deal with customers of a particular scheme. Besides this, the customers can select their deposit period among the available alternatives.

Number of steps: Numbers of steps are usually specified and a specific pattern is followed to minimise the time taken.

Simplicity: ICICI Bank’s various functions are segregated. Separate counters

exist with clear indication. Thus a customer wanting to deposit money goes to 'deposits' counter and not elsewhere.

This makes procedures not only simple but consume less time. Besides, instruction boards in national and regional languages help customers.

Customer involvement: ATM does not involve any bank employees. Besides, during usual bank transactions, there is definite customer involvement at some or the other place because of the money matters and signature requirement.

(VI) PHYSICAL EVIDENCES Physical evidence is the material part of a service. Strictly speaking, there are no physical attributes to a service, so a consumer tends to rely on material cues.

There are many examples of physical evidence, including the following: ■ Internet/web pages ■ Paperwork ■ Brochures ■ Furnishings ■ Business cards ■ The building itself (such as prestigious offices or scenic headquarters) The physical evidences also include signage, reports, punch lines, other tangibles, employees’ dress code, etc.

Signage: Each and every bank has its logo by which a person can identify the company. Thus, such signages are significant for creating visualisation and corporate identity.

Financial reports: The company's financial reports are issued to the customers for emphasis or credibility.

Tangibles: Bank provides pens, writing pads to internal customers. Even passbooks, chequebooks, etc, reduce the inherent intangibility of services.

Punch lines: Punch lines or corporate statements depict the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers.

Employee’s dress code: ICICI Bank follows a dress code for their internal customers. This helps the customers to feel the ease and comfort.

(VII) THE PEOPLE All people, directly or indirectly, involved in the consumption of banking services are an important part of the

extended marketing mix. Knowledge workers, employees, management and other consumers often add significant value to the total product or service offering. It is the employees of a bank who represent the organisation to its customers. In a bank organisation, employees are essentially the contact with the customer. Therefore, an employee plays an important role in the marketing operations of a service organisation.

To realise its potential in bank marketing, ICICI has become conscious in its potential in internal marketing — the attraction, development, motivation and retention of qualified employee, etc.

Internal marketing paves way for external marketing of services. In internal marketing, a variety of activities are used internally in an active, marketinglike manner and in a coordinated way.

The starting point in internal marketing is that the employees are the first internal market for the organisation.

The basic objective of internal marketing is to develop motivated and customer-conscious employees.

A service company can be only as good as its people. A service is a performance and it is usually difficult to separate performance from the people. If people don't meet customers' expectation, then neither does the service. Therefore, investing in people quality in service business means investing in product quality. ICICI understands the needs of customers and, therefore, it is leveraging technology to service customers quickly and conveniently. ICICI aims at providing and enabling favourable environment to foster growth and learning for their employees. Hence, the bank must develop an effective marketing strategy in consonance with 7 Ps formula, which should be used to continually evaluate and re-evaluate business activities.

A service is a performance and it is difficult to separate performance from the people. If people don’t meet customers’ expectations, then neither does the service. So, investing in people quality in service business means investing in product quality.

The

Edge 39

STUDENT CORNER The dark truth about NREGA

SHIVANG MAHAJAN UBS 2007-19

I

ndia, a land of farming, witnessed revolutionary polices in the post-independence area that boosted the agricultural sector.

The abolition of the zamindari system and the green and white revolutions meant India had announced to the world about its food security and that it was no longer dependent on other countries. But as time passed by, there is a gradual need to face the truth.

73 per cent of India’s population reside in rural areas and more than 78 per cent of them can’t spend more than Rs 20 a day. This has led to large-scale migration to urban areas in search of employment and often these people find themselves in undignified and petty jobs where they are exploited and paid minimum wages.

India is poised to become one of the superpowers in the near future and overtake China's population by 2032. This spectacular growth is taking place against the backdrop of a ruralurban divide and a society that has to fully come to terms with equality. The large hue and cry of ‘India Shining’ does not reflect the rural scenario.

The mere doubling of stock market, construction of malls and expressways only reflects the increase of income in the urban sector. Rural The

40 Edge

electrification, irrigation technology, education, roads and transportation are areas that need to be given due importance. India has the largest school dropout ratio and 80 per cent of them work in the unorganised sector for Rs 20 to Rs 40 a day. The rest fall into the hands of criminals and flesh trade or become thieves and and beggars. North India alone has a population of 89 lakh beggars.

If we take the case of transportation and storage of foodgrains, a mind-boggling 40 per cent of foodgrains get spoilt or destroyed before reaching the wholesale markets. Another 20 per cent is damaged by pests. This is mainly due to poor storage facilities and transportation. The government needs to invest more time and money for developing a mechanism that addresses these problems at a macro level. The UPA government had passed an ambitious rural employment guarantee scheme. The intention of the government needs to be respected and their continued endeavour to extend the programme to all 614 districts is highly commendable. The programme, better known as NREGA, gives manual jobs for 100 days. The wages vary from Rs 50 to Rs 80 in different states.

According to figures, around 20 per cent of the annual budget would be spent if the pro-

gramme is extended to all the districts, which is creating fictitious names.

There are interesting facts we need to notice. around 2 per cent of the GDP. It is hard to digest the fact that so much is spent and there is no There are more than 325 Members of Parliament in the present Lok Sabha who have creation of any economic asset.

The work the desperate labourer gets is filling more than Rs 1 crore in immovable and movable assets representing a population of potholes, mending river embankments, whom 78 per cent spend less than clearing irrigation channels and digIndia Rs 20 a day. ging landfills. There is no developis poised to India should take cue from ment of the skills of the labourbecome one of the the Chinese, who have taken er. This work could have been superpowers in the near the path of high public and done with highly mechanised machinery. Unskilled and future and overtake China's private investment in the population by 2032. This economy. hungry workers The cancellation of Rs cannot adjust with the idea spectacular growth is taking 75,000 crore worth of loans of good roads, potholes that place against the and these type of schemes can are filled to be recreated by the backdrop of a ruralonly impede progress. The govmonsoon, river embankments urban divide... ernment needs to invest in genuine that are destroyed with the first rural infrastructure, all weather roads, drop of rains and irrigation channels that silt up within weeks. Coming to the imple- electricity supply, agricultural technology, skills mentation part, according to a survey, only 20 management and primary education.

India is going to equal the world's population paisa reaches the labourer and the rest is allegedly pocketed by politicians, collectors, by 2050 and there is a need to take these issues sarpanchs, police and administrative officials by in a fast-track mode.

Experiential marketing is the latest fad ARUNA

I

PGP 09-11

Involving consumers in the brand's key objective and marketing efforts adds significantly to relationship building and brand recall."

As we know NestlĂŠ's noodle brand Maggi has just turned 25 years and in celebration, it has been featuring an advertisement "Me and Meri Maggi".

Each television commercial tells the story of a consumer's most memorable Maggi experience — real people with real stories.

When Pepsi introduced its My Can for youth, the advertising featured John Abraham and Shah Rukh Khan being slighted by a young boy. The message was that today's youth believe in creating their own style rather than imitating celebrities.

Pepsi extended the message in an online contest.

Youth were invited to share their thoughts on why they should be on the Pepsi My Can -- a special edition that would feature 10 lucky winners, 20 shortlisted youth were shot on video and the final 10 winners were selected through an online vote from site visitors who saw the video.

There are increasing instances of brand marketing initiatives where the consumers are included in the marketing process itself, engaging with the brand in experiences that become part of the marketing effort. Experience is in.

"Experiential engagement marketing is the first purchase trigger to sustain a brand's regular purchase. It is the end customer's sustaining connects to the brand."

Aver's Suman Srivastava, CEO of ad agency Euro RSCG India, says experiential marketing is the future" He sites the example of a bus stop in Delhi that was made up to look like a living room, which had an Airwick room freshener providing the fragrance experience.

The aim of the experiential marketing is to connect with the consumer at the various touch points of his/her life. The idea is to create an experience of the place the brand wants to occupy in that life. All brand messaging and positioning then dovetails into the management idea. Godfrey Phillips smoking lounges, and Pampers World where you see and feel the world from a baby's perspective, are examples.

"Consumers talk about brands that talk to them."

The

Edge 41

STUDENT CORNER Change must only be done by us ARCHITA KHANNA Class 11, The Banyan Tree School

I

t has been 62 years of Independence. But India still conveys the image of being one of the poorest nations — a country that also reports crimes and mishaps everyday. Reason?

Ignorance and lack of initiative of people. But now, ENOUGH! Now, there is a desperate need to rise and change. It’s high time we address the issue of development of our nation.

We as citizens of the country are responsible and accountable for everything that goes on within our boundaries. What India needs most is something we school students do usually at the end of every academic session— an ‘introspective session’, a SWOT analysis!

We need to identify our ‘strengths’, our ‘weaknesses’, our ‘opportunities’ and our ‘threats’. The uniqueness of India is that it is rich in all four.

There may be a host of problems but we have the obligatory solutions. The objective of a SWOT analysis is to discover our threats and convert them into opportunities for progress.

The present face of India is of a nation that — despite being rich in culture and diversity — somehow lacks unity. We stay together but fail to live together. There is crime, corruption and

red-tape—all social evils that arise due to greed, envy and materialism. We sit together and watch television news and curse the predicament.

But when our chance comes, why do we step back from making a difference? We are so insensitive that we overlook mishaps on the road to be on time for a party. That’s ridiculous.

It is high time we realise that we are not only individuals. We are, above all, Indians. And we have certain responsibilities towards India. We cannot sit back with a combo of popcorn and cola in our hands waiting for a miracle to happen. We have got to realise that the miracle would come from nowhere else but from within ourselves. We have to mould our nation into a place that is much more social and united. We need to capitalise on our strengths, work on our weaknesses, identify our threats and convert them into opportunities.

We need to identify problems and look for appropriate solutions, but our work does not end there. It is our prime responsibility to ensure proper enforcement and supervision of these solutions and this can be done only by us — the hoi-polloi of India. A day must come when we give to the world an India that has risen from the heap of troubles and is much stronger and united.

Why did India suffer so little in the recession?

NARESH NARULA PGP 2008-10

F

irst, Indian banks and financial institutions had almost entirely avoided buying mortgage back securities and credit default swaps that turned toxic and felled western financial institutions.

Second, India’s merchandise exports were indeed hit by the recession—they declined by 30 per cent. But service exports did not fall—computer software and BPO exports held up well. This provided an important cushion to Indian exports.

Third, remittances from overseas Indians continued, hitting $46.4 billion in 2008-09, up from $43.5 billion the previous year. The 2008-09 flow was 4 per cent of GDP. To put this in perspective, remember that India's entirely merchandise exports were 5 per cent of GDP in the mid-1980s. So, emigration (including the so-called brain drain) plus policies to eliminate the black market premium on the dollar now provide a huge balance-of-payments

The

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cushion. Back in the 1991 crisis, India turned to the IMF as lender of last resort for a structural adjustment loan of $4 billion. Remittances now make the IMF (and World Bank) look puny.

Fourth, foreign direct Investment remained high at $27.3 billion in 2008-09 despite the global financial crisis. Financiers reversed flows into India, but long-term investors in plant and factories completed their ongoing projects. Lesson: foreign direct investment is a stabilising force.

Fifth, monetary policy played a role as RBI raised bank rates and cash reserve ratio. This sucked out liquidity and interest rates skyrocketed. This checked the run on the rupee but was terrible for industry. By contrast, the RBI in 2008 did not tighten money to save the rupee, which was allowed to fall from Rs 40 to Rs 52 to the dollar. Instead, the RBI lowered interest rates and expanded credit. The Government cut excise duties to stoke demand. This combination of easy fiscal and monetary policy cushioned the shock.

BOOKMARK

A just idea from a Nobel laureate

T

he genius of Economics coming out with an ‘Idea of Justice’ is indeed a great work of philosophical and challenging thinking and delving into an issue which is at the heart (consciously or unconsciously) of perhaps all the people on this Globe.

When irrationalities are explicitly terrible leading to intolerable, unbearable miseries, pains and sorrow from all over the world, then this kind of super scholarly work can come out with a ray of light in the utter darkness.

Especially in these contemporary periods, we are witnessing turbulent times, though it does not imply that the world had always been free from such syndromes.

Utopian societies remain a dream or mirage-like concept, but yes, inching towards these dreamy concepts is a positive dream and endeavour needs to be done to achieve these. This book is very rightly a monumental work in this direction.

The contemporary world is suffering from acute poverty, inequalities, terrorism and violence, health-related issues, exploitation of various shades and hues and innumerable problems for majority of six billion people of this Globe. Amartya Sen has touched many issues, including happiness and welfare economics.

This scholarly work comprises 18 chapters divided into four parts namely; i) The Demands of Justice (6 chapters), ii) Forms of Reasoning (4 chapters), iii) The materials of Justice (4 chapters) and iv) Public Reasoning and Democracy (4 chapters). Further, the book has 13 pages of Preface and 28 pages of acknowledgements and an Introduction chapter.

It is well-documented and rich in bibliography, notes and other rele-

BOOK REVIEW KAILASH TULI & PARUL KHANNA

Title: THE IDEA OF JUSTICE Author: Amartya Sen Publisher: Allen Lane an imprint of Penguin Books Pages: 468 (+28) Hardbound, 2009, Price:£25

vant links. For researchers in this area, the book is no less than a goldmine.

Amartya Sen has intellectual synchronicity with John Rawls who was in a way his mentor at Harvard at the time when he left Delhi University for Harvard University. But Sen has gone beyond that in the exploration of justice for human beings and human societies.

He searches for meaning and deeper concepts from Niti, Nyaya, Mahabharata (Bhagwad Gita), Ramayana, and Buddha and Buddhism, etc. This is something unique which some scholars from the West have attempted but the depth and quality of understanding that Amartya Sen elicits is definitely far more authentic, crystal

clear and an eye-opener.

Sen has tackled the unique and very vital topic of Justice in a unique way. This theme involves amalgamation of Philosophy, Jurisprudence, Economics, Sociology, Anthropology, Health, Technology and Psychology, etc.

For instance, Chapter 13 is titled as 'Happiness, Well-being and Capabilities'. This chapter is an exceptional reading, especially when a super scholar of Nobel Laureate stature writes on such a pertinent topic. He quotes Richard Layard, (Happiness: Lessons from a new Science) in his words, “There is a paradox at the heart of our lives. Most people want more income and strive for it. Yet as Westerner societies have got richer, their people have become no happier.” This coverage on welfare economics is a notable contribution by Sen for the welfare of the entire mankind, especially for those regions and pockets in our world where still people live in utter inhuman conditions.

His book takes into consideration Martha Nussbaum’s capability approach, and gives a clear relevance to disability in understanding the deprivation, which usually is underestimated, and feels in one certain argument that needs to be given attention. People with disability are not only one of the most deprived human beings but also a victim of injustice.

There are some remarkable quotes which have fascinated us and we thought it appropriate to share with the readers. Following are the original quotes with corresponding page numbers.

“What Akbar called the ‘path of reason’ does not exclude taking note of the value of instinctive reactions, nor ignore the informative role that our mental reactions The

Edge 43

often play. And all this is quite consistent with not giving our unscrutinized instincts an unconditional final say.” (Page: 51) “An observational statement is not necessarily a statement about the special working of a person’s mind. It identifies a phenomenon that has physical qualities as well, independently of anyone’s mind; for example, it is precisely because the sun and the moon have the same visible size from the earth that a complete solar eclipse can occur, with the small mass of the moon obscuring the large mass of the sun in the special perspective of the earth, and a solar eclipse can hardly be seen as having ‘its source in the mind’. If predicting eclipses is the job in which we are involved, then what is particularly relevant in talking about the relative sizes of the sun and the moon is congruence of their positional projections from the earth, and not — that is, not directly — their respective body masses. --------- Positional objectivity can indeed be the appropriate understanding of objectivity, depending on the exercise in which we are involved.” (Pages; 158-9) J. Robert Oppenheimer, who led the American team that developed the atom bomb during the Second World War, was moved to quote Krishna's words from Gita, “I am become death, the destroyer of the worlds” as he watched, on 16th July 1945, the amazing force of the first nuclear explosion devised by man. Just like the advise that Arjuna the 'warrior', had received from Krishna about his duty to fight for just cause, Oppenheimer, the 'physicist', found justification, at that time, in his technical commitment to develop a bomb, for what was clearly the right side. Later on deeply questioning his own contribution to the development of the bomb, Oppenheimer would reconsider the situation with hindsight: “When you see something that is technically sweet, you go ahead The

44 Edge

and do it and you argue about what to do about it only after you have had your technical success."

(Page: 211) "There are, in fact, various types of contingencies which result in variations in the conversion of income into kinds of lives that people can lead. There are at least four important sources of variation, viz.

(1) Personal heterogeneities, (2) Diversities in the physical environment, (3) Variations in social climate, and (4) Differences in relational perspectives.”

(Page: 255)

“There is a paradox at the heart of our lives. Most people want more income and strive for it. Yet as Westerner societies have got richer, their people have become no happier.”

“Justice is an immensely important idea that has moved people in the past and will continue to move people in the future.” (Page 401) “Because of these human basic human abilities — to understand, to sympathize, to argue — people need not be inescapably doomed to isolate lives without communication and collaboration. It is bad enough that the world in which we live has so much deprivation of one kind or another from being hungry to being tyrannized); it would be even more terrible if we were not able to communicate, respond and altercate. (Page: 415) However, Amartya Sen does not provide any technology or modus operandi to get Justice in the world and to make the world an ideal justice place.

His bold way of thinking and sen-

sitising mankind in itself is a great step forward. Perhaps there could be some other political consultants or expert professionals who could transfer this theory in action, who have some say and credibility in the world affairs and those who are in the right positions and places and with a very deep genuine motive to make the world a just place.

Effectiveness of organisations like UNO, WHO, ILO, International Court of Justice, and various other similar and effective bodies may carve out a way to reshape the world into more humane and considerable place for billions and other billions to come in the future. But the brilliance and passion of this concept is a torchbearer for those who want to tread on this path of creating a just world.

Amartya Sen provides a philosophy, a blueprint on which social architecture can be shaped prudentially.

Interestingly, a Google search for term 'idea of justice' reveals wonderful correlated names and these are like; Aristotle, Plato, Rawls and Arrow and in this galaxy now “our India's” Amartya Sen will be the most brilliant star to shine and watch. He has integrated this concept with wisdom of East and perhaps that will go a long way in formulating it into a perfect theory of social justice. It is hoped that the philosophy which he has propounded would be taken in its deeper and sensitive spirits by numerous nations and the global organisations to make this planet Earth friendlier, beautiful and happier place to live, and here nobody would be denied or deprived of justice. Would it not be a great and universal dream comes true?

In decades to come, this genius, monumental and philosophical work by the world renowned Indian-born economist will remain as a source of guideline to think, conceive, inspire and visualise optimistically to implement in the global arena.

KAILASH TULI, Professor, OB & HRM PARUL KHANNA, PGP 2008-10

Web analytics made easy for you

I

t gives me immense pleasure to write a review for a book which is the best among the handful of books on this subject.

Although “Web Analytics” as a subject was born only a few years back, the author has written the book with loads of experience and full of practical advice. It’s a book for beginners as well as experts because it takes you from the beginning towards the advanced concepts with expert tips on each and every topic.

Right from the start, the author gets you focused on the right way to think about analytics from the top down.

With Web Analytics, it's amazing just how much you can do to improve the performance of your site when you dive in deep and start digging through your data.

One of the hardest parts about it is figuring out how to focus on the right data that gives you insight into what is happening with your website. It is really easy to get lost in the reports provided by the tools and not derive any critical new meaning.

One of the first questions the author gets you focused on is: What is the purpose of your website? Much of your analytics strategy should emerge from the answer to this question. In addition to this, the author helps us understand a broader vision of analytics and how it can be helpful to an organisation from customer/visitor acquisition to retention to ultimately getting ROI from web analytics.

The author clears the phobia and tradition surrounding clickstream data tracking. He tells us that there is so much more we can do than just tracking clickstream data. He tells us that clickstream data can help us "infer the

BOOK REVIEW ABDUL MAJID KHAN Assistant Professor, IT

TITLE: WEB ANALYTICS An Hour a Day Author: Avinash Kaushik Publisher: Wiley Publishing Inc, Indianapolis, Indiana Price: $29

intent" of our users/visitors/customers, but ultimately, "inferring" is the best we can do with this type of data. That's not to say these inferences are not valuable; they are, but there is much beyond the clickstream data in web analytics which we should pay attention to and which we generally tend to forget because of our obsession with clickstream tracking.

The author tells that beyond clickstream we should look at an important aspect: that is "Outcome". In other words, how is the website performing in terms of achieving its purpose?

Are we getting the revenue, leads, or whatever we are expecting?

What are the conversion rates?

Early in the book, the author

identifies this as your top priority in analytics.

The author is also a big advocate of understanding the mindset of the customer, and why customers do what they do, which organisations generally tend to forget in their web ventures. This takes you into a wholly different direction in web analytics. The author also makes it a point to mention in many places that organisations need to build a data-driven culture in order to reap the benefits of web analytics.

The author recommends that companies should spend only 10 per cent of their analytics budget on the tools, and the rest 90 percent on the people who will use those tools.

This book is written in an easyto-understand manner, which is useful because web analytics as a topic is very complex. The book is broken down into three main sections with the first describing the background and history of analytics. The next section is about understanding the various metrics, and the final section is about improving your results. It is written in a way where you can easily find the information you need without having to read the entire book to find it.

Although the subject is such that changes take place in a very fast pace regularly, but the author has done a tremendous job in writing the book in such a manner that it will continue to be relevant in the coming years.

If you are looking for a place to learn about analytics from the ground up, and also get into lots of specifics and details, this book is an excellent resource. Also if your website is a serious part of your business, you would require this book.

The

Edge 45

TOP SCHOOLS IN RANK Specifications Academic rigou r Co-curricular Moral & social values Spor ts educati on Competence of faculty Individual atten tion* Value for mone y Infrastructure pro vision Reputation

Total

1

GURGAON 2 3

Shri Ram, DPS Moulsari Ave Gu rgaon

7.5 8.1 7.6 7.8 8.6 8.7 6.7 8.3 7.7

7.8 7.3 7.4 7.1 7.8 7.1 7.7 7.8 7.1

71.00 67.10

Individual atten tion: number of students

4

Pathways School

7.3 7.4 7.5 7.6 7.6 8.2 5.0 9.0 7.2

66.80

Shri Ram DLF Ph-4

7.2 8.3 7.2 7.3 8.1 7.2 7.3 7.0 6.8

66.40

per teacher

HT GIVES HIGH FIVES TO BANYAN TREE The Hindustan Times Top School Survey for Top Schools ranked The Banyan Tree World School, Sector 53, 5th among all schools in Gurgaon. The school is also ranked the best in terms of competence of its faculty. This is indeed a big honour for the school.

The survey was conducted in two phases by the market research agency C-Fore. In the first phase, a perception-based survey was conducted to zero in on the top 10 schools across the four satellite towns of the National Capital Region-Gurgaon, Faridabad, Noida and Ghaziabad. In the second phase, a similar survey was carried out, asking parents and teachers to rate the schools on a scale of 10 on various parameters.

The

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5

6

Banyan Tree

Heritage School

6.3 7.7 6.7 7.3 8.8 7.0 5.3 7.8 6.0

62.85

6.1 7.4 6.3 7.1 7.6 7.2 5.5 7.6 6.3

61.10

7 Scottish High Int’l

6.0 6.8 6.5 7.5 7.4 7.1 4.1 7.9 6.6

8 Blue Bells

6.7 6.6 6.0 6.3 6.4 6.5 5.8 6.9 6.4

9

10

Amity Int’l School

Summer Fields

6.6 6.1 6.5 6.7 5.7 6.5 5.7 7.5 5.9

59.00 57.60 57.20

6.2 6.5 5.3 6.1 6.1 6.7 5.4 6.7 5.9

54.90

IGNOU-IILM MoU for law courses

From left to right Mr. Anil Rai, Mrs. Malvika Rai, Mr. M. N. Krishnamani, Senior Advocate & President, SupremeCourt Bar Association, Prof B. Bhattacharyya, Prof O.P. Mishra, Pro Vice Chancellor IGNOU, Mr. U.S. Tolia, Registrar(Administration), and Prof Srikrishna Deva Rao, Director Law School, IGNOU

IILM Institute for Higher Education (IILM) has taken a decisive step in the direction of convergence of educational disciplines with a unique law programme. The proposed course aims at equipping the student with a working knowledge of management systems together with the professional skills of a lawyer. With degrees such as BBA, LLB (Hons.) and B Com., LLB, this programme provides a professional degree in law coupled with a degree in management and commerce courses.

The historic MoU was signed between IILM and IGNOU on 9 July, 2009 and is another major landmark in the growing partnership between the two institutions. It was only in February 2009 that IILM and IGNOU tied up for a course in design education. Approval from the Bar Council of India is under process. IILM is a forerunner in these innovative courses, which is currently being offered in very few institutions. To achieve this purpose, a MOU was signed with IGNOU to take forward these

unique courses in a collaborative effort. The courses are visualised as a combined effort of these two institutes of excellence, drawing and synergising the combined intellectual strengths and experience in moulding a new breed of lawyers and management professionals.

Planned as a five-year integrated programme in law and management and law and commerce, respectively, these courses are to be made available to learners from all over India, including the SAARC region.

Strategically located in the IILM campuses at New Delhi and the commercial hub of Gurgaon, these courses aim to draw in the available expertise and integrate it into the programme, thus providing the much needed interface in this very much specialised and innovative course.

To be initiated in July 2010, the course will be offered in Gurgaon in the beginning, but will then move forward to the three more geographical corners of India, thus

catering to a wider outreach of students. So the course's outreach will be for centres in India and subsequently SAARC countries. The courses are planned as full-time programmes with constant curriculum improvement.

IGNOU's experience in providing cutting-edge technology courses will be useful in providing the extra edge to the course, while IILM's infrastructure and expertise in management programmes will be of immense help in launching the course and taking it forward.

The curriculum of the courses will be a combination of pedagogical classroom instruction, workshops and seminar courses, clinical legal education and practical training programmes. The unique and distinct feature about this programme is that it will provide a unique platform for important sunrise areas like corporate governance, good governance and intellectual property regulatory systems to be a part of a professional degree course.

GIRISH SAXENA Joint Director The

Edge 47

IILM signs MoC with Global India Foundation IILM has signed a memorandum of cooperation with Global India Foundation (GIF) to organise various events, both at the national and international level, on areas of current concern, including international relations, education, energy and business.

Under the GIF-IILM collaboration, the following programmes and seminars are were held and

proposed to be organised.

■ The inaugural function kicked off the collaboration at IILM's Lodhi Road campus with Dr Karan Singh delivering a speech on “The Four Pillars of Education” on October 5, 2009 ■ "Right to education to quality in higher education" in the last week of October 2009 in New Delhi.

N. CHANDRA MOHAN

Prof., Economics, International Business

Marketing Kurukshetra: A unique quiz

Green move by environment club

“Kurukshetra-A Marketing War” organised by the Marketing Club on August 22, 2009, saw a huge participation. Mr. Sujit Sengupta and Ms. Pallavi Ghosh graced the event. There were eight teams and as the quiz proceeded to the 2nd round (visual), 5 teams were left and in the final round (clue), 3 teams survived. The winners were Tarun Shekhawat, Tarun Khandelwal and Sameer Punhani from PG 2 Batch, 1st runners-up Sahil Gupta, Sumit Tripathi and Jatin Verma from PG 1 Batch, and 2nd runners-up Jai Khosla, Sumit Verma and Varun Bansal from PG 2 Batch.

The environment club, under the banner of SAVE, took its first step in an effort make the world a better place with its pioneer initiative, “Miniature Garden”. The event took place on August 3, 2009.

Dr. Padmakali Misra, Ms. Rakhi Singh, Ms. Vandana Shrivastav and Ms. Cleta Vales started the event by planting saplings. Students also planted saplings to add to our campuses’ greenery, a small token contribution in making our environment clean and green. Around 150 saplings, along with grass, were planted which will be maintained by the student community.

VINI KIRTANI, PGP 2008-10

JIGAR RATHOD, PGP 2009-10

‘Who Wants To Be A Mathonaire?’

Integrating learning and fun

OIM Club’s Mathonaire quiz was a first-of-its-kind ever held in IILM. Teams were selected on the basis of scores in the preliminary round in which over 70 students participated. The college website was launched at this event. The Chief Guest was Mrs. Vandana Srivastava and Judge Mr. Jasdeep Chaddha.

On the final day, 5 teams contested. The first two rounds had a buzzer round followed by elimination of teams. The last Rapid Fire Round threw up the Winner Team, Deepak (PGP 08-10) and Khushboo (PGP 09-11), and Runner-up Team, Ankush Soni (PGP 09-11) and Ankit Gupta (PGP 09-11).

The HR Club was established to integrate learning and fun. Activities provide students a platform to evolve their talent and nurture their interests. Its first event Management Quiz competition was to motivate students in their academics. The event was hosted by Yogesh and Swapnil Arora and presided over by faculty members, Dr. Sujata Shahi, Dr. Sanyukta Jolly, Ms. Cletta and Ms. Monica Mor. The winners, Vicky Daswani and Adhar Gandhi, took home a reward. The runner-up team, Tapan Jain and Anurag Pol, was also awarded.

RAJAT MAHAJAN, PGP 09-10

The

■ "Global Commons" in November 2009 in New Delhi ■ "India-ASEAN relations" in December 2009.

■ "Emergence of India as a Global Player", an international conference to be held in Delhi in February 2010 in collaboration with IGNOU and MAKAIS.

48 Edge

SUJATA SHAHI, Associate Professor, HR

Student exchange with Austria, Brazil IILM Institute for Higher Education and Upper Austria University of Applied Sciences, Austria, have signed an academic agreement for exchange of students.

The Upper Austria University of Applied Sciences is a vocationallyoriented higher education institution that provides academic programmes at the university level to over 4000 students. It a decentralised institution, comprising four schools in four different towns of the region of Upper Austria: Hagenberg, Linz, Steyr and Wels.

IILM Institute for Higher Education has also signed an agreement for student exchange with Coppead Graduate school of Business, Federal University of Rio de Janerio, Brazil.

Coppead has been listed seven times, since 2001, in the global rankings of the top 100 full-time MBA programmes published by the Financial Times. It is EQUISaccredited.

SUCHI AGRAWAL

Associate Dean, PGP

Programme on challenges of management education Professor Sanjay Kallapur visited IILM Gurgaon on May 28, 2009, for a one-day Faculty Development Programme (FDP).

The programme began with an interactive session on the challenges of management education in the current scenario.

The dominant theme was the relevance of management subjects in the context of the radically changing business environment and the required changes in styles and techniques of management pedagogy.

Professor Kallapur gave some suggestions to IILM on how to synchronise class-room teaching with industry demands of leadership development, business perspectives and skill enhancement in future managers. The postlunch session focused on the role of academic research in B-school pedagogy. The accounting and finance faculty got a chance to exclusively interact with him.

Professor Kallapur is the Associate Dean for faculty development at the Indian School of Business (ISB). He is a Professor of Accounting at the School. Before joining ISB, he was a tenured associate professor at the Krannert School of Mangement, Purdue University, United States.

He teaches financial and managerial accounting and conducts empirical research on financial and managerial accounting, auditing, and corporate governance. His recent research has focused on the economics of the auditing profession. He has published articles in The Accounting Review, Contemporary Accounting Research, Journal of Accounting and Economics, Journal of Accounting Research, Journal of Accounting and Public Policy, and the Journal of Business, Finance, and Accounting.

LEENA HANS

Assistant Professor and area chair, Finance

Prof Saraswat on global financial crisis A monthly series has been started with the idea of inviting people of high accomplishment and credible international recognition to share their views with IILM's students and faculty. The aim is to provide students and faculty an opportunity of firsthand learning and sensitise them on the issues modern India is facing, besides making them aware of our cultural heritage and rich and glorious past.

The first lecture of this series was delivered by Prof. (Dr.) Satya

Prakash Saraswat, Professor of Information and Process Management at Bentley University, Massachusetts, USA. Prof. Saraswat talked about "Global financial crisis and the emerging challenge of management education" wherein he established the relationship between MNCs and ethics. While discussing the challenges of management education, he said human greed causes all our ills. How do we make people less greedy?

Drawing from experiences all

over the world, he emphasised the re-designing of the curriculum and teaching methodology to address the problem. He discussed the relationship between business and human dignity.

Responding to a question whether it is poverty that causes more deaths or degradation of environment, he pointed out that poverty deaths are less common.

The degradation of environment kills more people, he argued.

MEGHNAA SHARMA

Lecturer, Economics

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The HR Club takes a walk The HR Club organised a Corporate Walk in late September in which 38 students both the junior and senior batch of PGP participated. They were three rounds —Individual Round, Pair Round and Question and Answer Round.

Each round had different criteria. In the first round, the contestants were judged on the basis of their personality, the way they carried themselves and their dressing sense.

There was then was a filler round where the audience were asked to identify the name of the company with the help a tagline or an audio-clip. A chocolate was given to the person who guessed right. In the second round, the participants walked in groups of three. They were judged on the basis of their confidence and team walk.

Lastly, there was a question and answer round. The judges asked each participant a question on the basis of the clothes they were wearing and fashion dos and don'ts in the corporate world. The participants were judged on the basis of their confidence and responsiveness.

The first runners-up for this event were Sahil Taneja and Naina Mishra and the winners were Ankita Tomar and Varun Pahuja.

A takeaway from the evening was that a positive attitude makes for the right attitude. The judges for this evening were Prof. Sujit Sen Gupta, Ms Sahana Dey and Mrs. Mohini Tulli.

PARUL KHANNA PGP 2008-10

The

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Ambassador K V Rajan, Convenor, IILM India Forum, received the ‘Parliamentarians’ International Forum Award’ for his diplomatic work towards the cause of peace and development, from the President of Nepal, Dr Ram Baran Yadav, at Rastrapathi Bhawan, Kathmandu on July 18, 2009.

Students get a taste of virtual stock trading The Finance Club's event, "Dalal Street", in the college premises gave students practical experience of trading in a virtual stock market thereby helping them to successfully correlate their experience with the actual market.

Under the guidance and supervision of faculty coordinators, Dr P. Malarvizh and Mr. Vipul Goyal, President of Finance Club Sumit Suneja and Vikas Bansal, this event was stimulating. 32 participants were divided into teams of four. Four teams were from PGP 09-11 (one from each section) and 4 were from PGP 08-10.

Each team was given a predecided set of securities along with their respective Beta and initial market price attached to them and a virtual cash of Rs 20 lakh.

The game was divided into two parts of 45 minutes each. Before the first session, each team was asked to make its own portfolio out of the cash keeping in mind

certain rules and regulations.

When the first session started, the teams were asked to trade among themselves on the basis of news flashed on a screen every 57 minutes. This was on the discretion of the students and their grasp of market conditions.

In the second session, new market prices were made accessible to the teams. A similar procedure of displaying news was followed. In the end, the team with the maximum value of portfolio was declared the winner.

The runners-up teams were from PGP 09-11 batch from Sec D, Aditya Jain, Kavish Arora, Naveen Kumar and Rajib Kumar Pal. They won a cash prize of Rs. 2000. The winners were from the PGP 09-10 batch, Ashish Narang, Sachin Bhardwaj, Vikas Sharma and Vishal Kashyup, who took away a cash prize of Rs. 3000.

AAKRITI BHATNAGAR

PGP 2008-10

Blood donation camp in Gurgaon IILM Gurgaon organised a blood donation event on the campus with the support of college officials and, most importantly, the Indian Red Cross Society. The Red Cross is a voluntary humanitarian organisation, with a network of over 700 branches throughout India, providing relief in times of disasters/emergencies and promoting healthcare of vulnerable people and communities. It is a leading member of the largest independent humanitarian organisation in the world, the International Red Cross and Red Crescent Movement.

The mission of the Indian Red Cross is to inspire, encourage and initiate all forms of humanitarian activities so that suffering can be minimised and even prevented and thus contribute to creating a more congenial climate for peace.

The event was a huge success with the young generation. Around 500 students donated blood. About 2,00,000 ml of blood was collected, i.e., around 350 ml per student.

Unfortunately, blood supply is not always adequate for those who need it. According to studies, someone needs blood every two seconds. A pint of blood

saves up to three lives. There is a myth that it is not good to donate blood. But that is not the truth. When blood is donated, new blood cells form. The body recovers in 24 hours with limited side effects.

Blood donation is a gift of kindness. It's beneficial to both the donor and recipient. It may take hardly 30 minutes for you to donate blood but for the patient it may mean a second life. So people, "donate blood, save life"

SARA SAMRUDHI BOWER UBS 2007-10

‘ZEST’ for talent Zest, once again, afflicted IILM for two days in mid-september.

The inaugural event was an exclusive play by Lodhi Road campus students, spreading understanding and awareness about AIDS. The play depicted the everyday attitudes, lives, habits of students. The motto of the play—’Disha’—was to show students the right way. The main event was a competition between the two campuses.

Participants showcased their talent in singing, instruments and group dance. The first position was bagged by Shireen from the Gurgaon campus, who impressed the judges with "mahiya mahiya". The second place was bagged by Raghav, a Lodhi road participant, who sang beautifully along with his guitarist.

Moving on to instrumental play, Sunny Sachdeva from Lodhi Road campus won everyone's heart with his instrumental heart beat. The second position was taken by another Lodhi Road

A lively scene from a play that promotes HIV awareness.

contestant, Aditya Garg, who played a great medley of songs.

The much-awaited event was the group dance, for which students had practised for days. A good mix of innovation and creativity was seen in dances like salsa, or dancing to the tunes of a famous videogame Mario forever, or dancing with props like chairs. The judges—Ms. Sahana

Dey, Mrs. Pallavi Ghosh and Mrs. Saumya Shrina—declared the Black team from Gurgaon campus, who performed on ‘Jai Ho’, the winners. The runners-up were a combination of Red and Black, Taniya and group a.k.a.

Black Studs from the Lodhi Road campus.

SAHIL TANEJA

PGP 2008-10

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National Competition for Management Students

Clash of the titans

was "Is India secular only on papers?". The finalists had to speak for three minutes. Faculty members Mrs. Sharlete Mendoza, Mrs. Kakoli Sen and Mrs. Neha Behl were the judges. Other faculty members, Mrs. Rakhi Singh and Mrs. Tanuja Kaushik, also witnessed the event.

The finalists were judged on the same criteria on which they were judged in the elimination round.

After the main session in which finalists gave their own views, the rebuttal round took place.

Here, each finalist asked direct questions to the other finalist.

This gave participants a very tough time and the judges as well.

Naman Oberoi of section 'I' was declared the winner and won a prize money of Rs.1500.

The second position holders were Aakanksha Verma and Geetika Kasturi, who won the prize money of Rs. 750 each.

While Naman Oberoi and Geetika Kasturi spoke against the motion, Aakanksha Verma spoke for the motion.

The 6th National Competition for Management students was organised by the All India Management Association (AIMA). The co-sponsors was Dalmia Cement and the knowledge partner was Deloitte.

The event kicked off with the welcome of Dr. M. S. Singla (IT professor, FMS), Professor Kamal Singh and Dr. Surbhi Goyal (Associate Dean, IILM Lodhi Road).

The theme for the contest was Innovate, Re-organise, and Restructure: Challenge for India Inc. The event saw eight teams that had come after competing with 170 teams across India.

In the grand finale, each team (consisting of 2 members each) was asked to make a presentation: 10 minutes for the presentation and 10 for questions and answers. Dr. M.S. Singla, Dr. Kamakshi Raman, Dr. Monojeet Majumdar and Dr. Ravi Shankar were the judges.

The first team to fight for the final stage was St. Xaviers College, Kolkata. They were followed by Welingker College. Then came Symbiosis Institute Of International Business, G.L. Bajaj Research Institute, XIME, Saintgits Institute of Management, IISWBM (Kolkata) and IMI, New Delhi.

The results were announced with Welingker occupying the winner's position followed by XIME and IMI as the 1st and the 2nd runners-up. The award for the Best Budding Manager was jointly shared by Ramya from Welingker and Arjun from XIME. All the winners were awarded cash prizes along with trophies.

SRISHTI SINGH

SWARNADEEPA MAJUMDER

Ms. Tanuja Kaushik handing over the prize to Naman Oberoi.

The Debate Club, Gurgaon campus, organised a debate on cricket, prostitution and secularism in September. The elimination round was held on September 23 and the main event on September 29.

There were 10 participants from various sections out of which six were selected for the main event. The topics for the elimination round were "Should cricket be made the national game of India?" and "Should prostitution be legalised in India?"

The participants were supposed to speak for two-three minutes on any topic. They chose their own motion, for or against.

Most of the participants spoke on the topic of prostitution.

Out of 10 participants, six — Naman Oberoi, Dhruv Awasthi, Aakanksha Verma, Geetika Kasturi, Shikhar Srivastava and Rohan Pachisia — were selected for the main event. The six finalists were given the motion by the club for the final event; three of them had to speak for the motion and three of them had to speak against the motion.

The topic for the main event The

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PGP 2009-11

PGP 2009-10

The magic of teaching A one-day faculty development programme (FDP) was organised at IILM Gurgaon on "The Magic of teaching". It was attended by 38 faculty members from IILM Gurgaon, Lodhi Road, IGSM and CMS. Most faculty found the programme informative, motivating and value enhancing.

In his opening remarks, Prof. S. Das defined the profile of a true academician. He emphasised the importance of knowledge enhancement of the teaching fraternity on a continuing basis. Dr. Mukesh Chaturvedi conducted the FDP on the topic of “Making magic of teaching”. He emphasised the need for meticulous preparation by the faculty before academic sessions, especially when the schedule involved long hours.

He demonstrated the need for the faculty to look fresh and energetic during the entire session in order to keep the attention of the audience. He said possible distractions can be avoided by setting up sessions and making advance changes in class management before the start of each session.

Dr. Chaturvedi demonstrated that effective class room teaching, whether it is the case study method or lecture method or any other format, consists of 10 percent content and 90 per cent deliv-

THE IILM EXPERIENCE FEEDBACK FROM INTERNATIONAL STUDENTS

Prof. S. Das defined the profile of a true academician.

ery. However, this 90 per cent delivery requires intelligent and sincere preparation. It requires long experience with teaching, right attitude for teaching and academic orientation. He emphasised the need for accurate understanding of the audience requirement, topic focus, ability to say no to any question out of his subject area if he can't give the expert answer.

Right attitude should be complemented with the aim to serve the needs of students, he said.

The distinguished speaker concluded the FDP with the statement that a teacher must say — I WANT TO TEACH rather than I HAVE TO TEACH in order to reach a flashpoint in the career beyond which the life of a teacher is full of opportunities, learning and self-advancement.

VIJESH JAIN

Associate Professor, International Business and Alumni Coordinator

Myriam Kalde: “I remember the first day at IILM like it was yesterday: We had just arrived in India and everything was new for me. I was excited to get to know India and wondering if I would make friends here. By entering the college people started talking to me and ask questions. Everyone was so interested and friendly.”

Katharina Schulz-Ebert: “To see the difference between the study in Germany and in India was really interesting. I enjoyed the interactive classes and the motivating atmosphere here.”

Julian Smitter: “To get in contact with our Indian fellow students was easy, because all the people at IILM are so open and helpful. Back in Germany I will miss the interactive classes and the teamwork.”

Charlotte Weitz: “Studying at IILM was a great experience that I would not like to miss.

Thanks a lot to the professors, the students and all the other helpful people here.”

Iris Ehrenbrand: “I really appreciated the friendliness and helpfulness of the students when I came to IILM college!

They help me out when I have questions of any kind and are very enthusiastic about interacting. The conversations I have with them are very interesting as they give me a new perspective to some things and the time spent with them is a lot of fun. India really is a great experience for me and I'm enjoying it a lot!”

Iris Ehrenbrand from Germany was at IILM during OctNov 2009.

Faculty members at the FDP. The

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Pachauri speaks on climate change Tulsi pots adorned the corner table of the IILM auditorium at Lodhi Road that witnessed an interactive session with Nobel laureate Dr RK Pachauri on “Climate Change: How on earth can we make a difference?” organised by the Young FICCI Ladies Organisation (young FLO).

On a lighter note, Pachauri expressed his surprise at the number of men being a part of the young FLO. More seriously, however, he spoke about the role of intergovernmental panel on climate change (IPCC) in mobilising scientists the world over to come together with an agenda to deal with global warming on a war footing. The thrust of the panel's efforts is to ensure no government walked away saying that they were not a party to decisions taken globally. The scientific expertise of 2,500 professionals has been harnessed apart from the lead authors and others who have contributed to IPCC’s report.

Global warming is an unequivocal fact as temperatures are rising faster than earlier, especially during the last five decades, argued Dr Pachauri. For starters, the volume of ice has declined in the Himalayas as the glacier mass is melting rapidly. The partial loss of ice sheets on polar land imply a rise in sea levels, major changes in coast lines and inundation of low-lying areas. The key vulnerabilities are in Asia. Heat waves have become more frequent. The proportion of tropical cyclones reaching higher intensity has also increased over the past three The

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Shipra Chatterjee, Executive Director, FLO, asking a question.

decades. More intense and longer droughts have been observed with a wider spatial spread since the 1970s. The frequency of heavy precipitation events has increased of late. Climate change is clearly behind these abrupt and irreversible developments.

What is to be done? Dr. Pachauri said that people should not leave their cars with air-con-

ditioners on. The government has to provide incentives for the utilisation of solar energy, besides encouraging other sources of renewable energy. Car pool and public transportation should be prioritised. Also, there was a need to diversify lifestyle patterns, away from meat consumption towards greater use of local, seasonal organic food. Recycling and composting organic waste also helps. So does selecting low packaged food. We should also opt for fuel-efficient cars, walk where possible, use public transportation system and fly less. At home, we must lower air-conditioning and heating, insulate roofs and walls.

He ended his address by quoting Gandhiji's words: "live simply so that people can simply live".

ROHINI RODE

Lecturer, Business Communication

Dr. Tharoor on women’s empowerment

Vandana Kohli, a member of FICCI young ladies association, asking a question.

The auditorium at IILM’s Lodhi road campus was jam-packed in anticipation of the address of Dr. Shashi Tharoor, Minister of State for External Affairs, on Women's Empowerment: A Global Perspective at the request of FICCI Ladies Organisation (FLO). Ranjana Agarwal, senior vice-president of FICCI, invited the minister to speak on this important matter.

At the outset, Dr Tharoor expressed his concern for not being qualified to speak on the chosen topic. However, he argued that the true mantra for women’s empowerment was the education of the girl child. Studies conducted by the World Bank and UN have, in fact, revealed the significance of education for the girl child. With education, women are more empowered to take decisions about when to get married;

when to have children; how the space them and take crucial decisions on their up-bringing.

After his talk, Dr Tharoor interacted with members of FLO and the audience. Priya Hingorani raised the issue of extradition treaty not being clear or being non-existent in some cases and how it proved to be a disadvantage for women. Dr. Tharoor

acknowledged that not having treaties does backfire. But he also gave the example of a woman who benefited by default for not having such a treaty. He suggested lawyers could get together and bring it to the notice of the minister concerned so that measures could be taken to protect women.

Another matter of concern was expressed by a lady in the audience, who said the requirement of a reference to open a bank account was a disadvantage for rural women. More so in cases where the toil is put in by women, and where men step in to do the price negotiations and take control of the finances. Dr. Tharoor pointed out the existence of cooperative banks that did not have any such requirements.

Ritika Sood was applauded for pointing out that it is important, apart from educating the girl child, to teach the boy child to respect women. Dr. Tharoor agreed and responded by saying that the educated boy is not necessarily the enlightened boy. He said the government cannot be expected to formulate laws to bring all the possible changes. It is also the responsibility of the civil society to increase awareness and be a catalyst for change.

Kalpana Dutt Chitturi elaborated on the accomplishments of the august gathering, which included ladies like Shyama Chona and beauty icon Shahnaz Hussein.

Sapna Popli presented his caricature to him for his signature.

ROHINI RODE

Lecturer, Business Communication The

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Orientation Day for IILM UBS students

The Orientation Day for IILM UBS students was held on August 13.

After the registration formalities and completion of documentation, Ms. Sujata Khandai, Associate Dean (Student Affairs), welcomed the new batch.

Thereafter, Ms. Merlin Mythili, Assistant Professor (OB & HR) gave a brief introduction about

Students registering on orientation day.

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each faculty member, after which she extensively discussed the various aspects of the undergraduate programme with them.

The students were apprised of the pedagogy adopted at IILM UBS. The importance of attending lectures and tutorials was stressed upon by Ms. Mythili.

The students were also made aware of the system of mentor-

Merlin Mythili elaborates on mentoring.

ing that is successfully followed here and which leads to overall development.

Ms. Shivani Khurana, Assistant Professor (OB & HR), conducted a psychometric test on students — Myers Briggs Type Indicator— to help them understand their personality traits and assess their strengths and weaknesses.

Based on their responses to the questionnaire, the personality assessments of the students were made. The results were provided to the students' respective mentors. This would help mentors understand their mentees better.

Meetings were scheduled with the mentors so that the students got to know their mentors well.

The students were issued their identity cards. They all appeared very enthusiastic to begin a new chapter in their lives.

SUJATA KHANDAI

Associate Dean, Student Affairs

Budget & its implications for industry Cashonovas conducted an intellectually stimulating debate on the budget and its implications in the industry and the Indian economy.

The event was graced by the presence of the guest of honour, Prof. B. B. Bhattacharyya, Vice-chairman, and chief guest Dr. Atmanand, Dean, Executive PGP, MDI. The audience comprised faculty members like Ms. Rakhi Singh, Ms. Leena Hans, Ms. Mamta, Mr. Navneet Saxena, Mr. Abhijit, Mr. Harsvardhan and Mr. Subhash Kalra and over 75 students. Five teams, each comprising 2 members, debated the pros and cons of the union budget. In the closely fought competition, Samrat Ray & Servjaeta Verma went back home with a cash prize of Rs 2,500.

These five finalist teams were selected from eight teams through a preliminary round held on August 17 and the participants were judged by Prof. Deepak Tandon, Ms. Leena Hans and Mr. Aakash Goel.

The presentations by the five teams lasted for about an hour with each team anchoring around a different key argument, ranging from supply versus demand side factors, sectoral discussions to fiscal deficit.

There was ample food for thought

Dr. Atmanand, Prof. Bhattacharya, Prof. S. Das and Rohan Sehgal listening to the debate.

Dr. Atmanand addressing the students after the debate.

for everybody -- from the novice budget knowledge seeker to avid readers of the pink press.

The event concluded with a speech by Dr. Atmanand, who shared his views on the budget and its economic impact. He rated it 6 on a scale of 10, making the overall point that the budget left a lot to be desired, including but not limited to

Students brace for world of work Final-year students of the PostGraduate Programme in Management got an opportunity to interact with Mr. Abdul Khan in a workshop on techniques to be followed for using social networking sites and job sites more effectively to receive calls for job interviews.

The main focus of the faculty was on educating the students on how to use famous sites. The applicant must make sure that the

key skills in the resume are welldefined so that it can attract the recruiters' attention.

Also, editing the resume twice or thrice a day would help the applicant to be in the top 50 and the chances of recruitment /screening become bright.

Another technique is that the applicant must view the job description and the key areas wanted by the target company and include

the need to accelerate privatization and disinvestment of public sector units.

Prof. Bhattacharyya appreciated the finance club's efforts in conducting this event and advocated the need for hosting more such events for the holistic development of the student community.

This event was an unforgettable experience for the organising team as well — Ankur Goyal, Rohan Sehgal and Sonali Arora coordinated the entire event. Anurag Batra, Anchal Sood, Kusumanjali, Navneet and Nancy helped with logistics support.

AAKASH GOEL Adjunt Faculty, Finance

them in the resume.

Use of mash-up sites can be of great help as they use two or more sites to create new services.

The other important job sites mentioned by the faculty are www.vasjobs.com, which is meant for value-added services, and www.firstnaukri.com, which is purely for freshers. The students can extend their job search and actively promote their skills online.

JYOTI MALKANI PGP 2008-10 The

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IILM SCHOOL OF DESIGN LAUNCHES ITS BRAND LABEL

IILM School of Design Launched its brand label: ONE-OFF on April 18, 2009 during the annual design school festival ‘Design Connect’ at IILM Gurgaon Campus. Ms. Anju Modi, an accomplished designer, unveiled the brand. Mr. Anil Rai, Mrs. Malvika Rai and Ms. Aarti Rai honoured the occasion with their presence.

The label was designed to give identity to the products designed by students of IILM. The brand was labeled as ONE-OFF since each piece was unique in itself.

The products under the brand were sold through Design Haat, a platform to display the creative talent of IILM design school in the form of products designed and made by individual students.

These products included tie and dye T- shirts, bamboo and wooden lamps, dish-serving trays made out of MDF, handmade jewellery, flower pots, designer bottles etc.

The brand ONE-OFF demonstrates the true spirit and hard work put in by the students in The

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Ms. Anju Modi with Mrs Malvika Rai, Ms. Aarti Rai, Mr. Anil Rai, Mr. A. Balasubramaniam and design faculty members.

Inauguration of Design Haat.

every product designed by them.

The Brand provides an identity to the products designed by the students and also gives them an opportunity to earn rewards. All the products kept in the Design Haat represent the ultimate result of the learnings acquired by the students during the workshops organised as part of pre-fest activities.

These special

workshops were part of their curriculum.

Most of the products at Design Haat were sold during the Design Festival. Students, faculties from different schools, colleges and other visitors were delighted to buy the products under the label ONE-OFF.

PUJA ANAND Lecturer, Design

Tie and dye backdrop designed by students.

Tie and dye T- shirts designed by students.

Bamboo lamps and MDF Trays designed by students.

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LSE summer school expands students’ horizons

ACADEMIC ACHIEVEMENTS

LSE Summer School offers over 60 intensively taught three-week courses in accounting, finance, law, economics, international relations and management.

Courses are attended by students and professionals alike.

This year, the course was held during July 6 and August 14, 2009.

This year, IILM had sent 22 students to attend this programme. And the feedback was extremely positive.

DEEPAK TANDON

RISHI

Professor, Finance

"LSE experience is very good.

We have been attending all the classes regularly. We have students from all over the world so it is a different experience attending classes with them. We were given three pieces of homework and I submitted them, even scored an A+ in two. The third result is pending."

❚❘❘ Presented a research paper duly accepted at the Institute of Productivity and Management Ghaziabad in the 2nd International Conference on “Leadership and its Role in Preparing the Organization for Unprecedented Change” on May 23, 2009. The paper was titled "Loan Portfolio Risks Management In Banking Business—Non-performing Assets Management in Indian context — (An empirical study of Andhra Bank). This has been published in a book, Excel Publishers, New Delhi, Rs 1800. ISBN no 93-80043-24-4 Pp 277-297.

Prof Tandon was a Keynote Speaker and the Conference Chairperson was Dr Kiran Bedi, India's first and highest-ranking woman police officer.

SHIVANSHU RATRA "The summer school programme is good although in the beginning it was quite difficult.

Lectures over here don't have any attendance but the tutorials do have and which is even quite interesting. Participation in the class is good as we get to know new people from all different countries"

KUSHAL SURI "My courses are very interesting.

I took bargaining and negotiations. There are about 1600 students who have come for Summer School from across the world. A lot of Indians also...in my class of 90 there is only 1 British and 23 different nationalities and of various age groups."

Dr. BHAWNA AGARWAL Assistant Professor, (QT & OR)

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❚❘❘ Paper accepted and presented at the second National Conference on Finance & Banking (NCFB 2009) that was held during August 27 and 28, 2009, at Saintgits Institute of Management, Kottayam, Kerala.

The research paper is titled

"Money Laundering, Hawala and its implications in the performance of Indian Banking - An insight to AML at Axis Bank." The paper will be published and the book will have an ISBN number. ❚❘❘ Paper accepted for oral presentation for the International Conference on Indigenous Management Practices (ICIMP2009) during July 2009, 16-18, at Annamalai University, Tamil Nadu. The paper is titled "Credibility and Delivery of Services envisaged to the customers in Indian Banking - An empirical analysis at ICICI Bank, HDFC Bank vis a vis SBI ". The paper will be published.

Ms. MERLIN MYTHILI S Assistant Professor, OB and HR

❚❘❘ Participated and presented a paper titled "Symbolic Icons of Empowerment: A case study on the Organisational Challenges that Ordinary Indian Women face in Unconventional Jobs" at the 27th Annual Standing Conference on Organisational Symbolism held at Copenhagen Business School, Copenhagen, Denmark and Malmo University, Malmo, Sweden from July 8 to 11, 2009.

IILM ALUMNI

IILM alumni discuss importance of research Over 30 IILM alumni participated in a one-day workshop on "Corporate research methods, analysis and application" at IILM Gurgaon. Speakers from the Indian industry and overseas made sure the interest levels of the audience remained high.

What emerged from the brainstorming sessions in the workshop mainly related to the increasing importance being given to research and research techniques in the Indian industry to meet the expectations of the ever-demanding Indian customer, increasing professionalism in all domains of business, achieving business excellence through serious continuing research and maintaining research quality by

reporting facts without errors.

Mr. Aryan Vishwakarma, AGM, Business Excellence, GMR-Delhi International Airport Ltd. (DIAL), gave an insight into the seriousness and complexities involved in achieving business excellence through continuous research in his own company which is highly global and customer-centric.

Prof. F. Kasidi from Tanzania University argued if corporate research is full of research misconduct in terms of data errors and fabrication of data, Indian industry will do better by doing no research at all. Therefore, Indian industry needs to be sensitised to "checks and balances" to ensure data integrity and truthful data reporting with genuine research results.

Prof. Vijesh Jain endorsed the views of Prof. Kasidi by demonstrating how an international marketer can manage the croscultural environment using simple research methods and secondary data, avoiding costly primary research overseas.

Mrs. Shilpa Saxena, AGMMarketing, New Horizon Ltd., concluded the workshop, demonstrating the importance of doing its own research and deriving a competitive advantage in a competitive educational market.

The IILM alumni student cell is thankful to the entire support team of IILM, including the A2S team, Col. Man Mohan Bhatia for their meticulous support to conducting this important alumni event.

Student-alumni interaction at Lodhi Road A student-alumni interaction was held on September 9, 2009 at IILM Institute For Higher Education, Lodhi Road Campus.

Distinguished alumni interacted with students and provided career and sector tips. They gave an insight into their businesses and the expectations companies have from new business graduates.

Harbinder Narula, VicePresident, Aryty and Director at Mansai Media Services Pvt. Ltd., (IILM LR Batch 1994-96 PGDM) discussed career opportunities in online services and the fast emerging Internet industry. He discussed the merits and demerits of such a career and the expected skills required in this industry.

Anuj Taneja, AVP and Regional Head-HR (North & East), HDFC Nank, (IILM Batch 1998-2000 PGDM) provided insight into the nature of work and career tips in the banking industry. He cleared several myths. Mr. Taneja shared his experience with students.

After doing his MBA from IILM he got placed in a reputed company. After gaining experience he joined HDFC. Rajeev Kumar, Chief Manager, MerchandisingRevlon, (IILM Batch 1994-96 PGDM) highlighted the nature of retail marketing and visual merchandising in his company and the industry as a whole. He was highly forthcoming on the secrets of success in a retail marketing career. According to

him, IILM students have great potential to make headway in this domain with their innovative thinking. Mr. Kumar shared his knowledge of the cosmetic industry with a focus on his company Revlon.

Shweta Batra, Founder and Director, www.clickperfect.com, (IILM Batch 2004-06 PGDBM) discussed following topics for the benefit of current students ■ Internet marketing ■ Future of digital marketing ■ Why you should join digital world.

■ Importance of Learning Google, Yahoo and MSN Tools.

■ Demand of such courses in Industry in today's time.

■ Her experiences in the industry.

VIJESH JAIN Associate Professor, International Business & Alumni Coordinator The

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IILM ALUMNI

IILM alumnus makes the institute proud seeing a company starting. I was IILM’s alumni cell randomly offered the post of Head of the selects a lucky alumnus every Bakery and was asked to directmonth from its updated dataly report to the owners of Subase.

Kam. Viresh Kesri of PGP I accepted the chal06-08, Gurgaon Batch, lenge of heading the was selected as the bakery and convert it lucky alumnus of into a full fledged sucAugust. His short processful company. file is given below in I started understandhis own words. ing competition.

“I joined SU-BAKE, To make a strategy, I a sister concern of SuViresh Kesri, PGP 06-08 visited almost all the Kam power solutions, bakeries operating in Gurgaon on June 15. I was selected to region and started working on a work in Su-Kam but I expressed system. I felt I became the capmy interest in working in Sutain of Indian cricket team at a Bake as the company was in its very young age. initial formative stages.

My achievements: I was very much interested in

1) We worked on our tie-up with Nestle and thus started to deliver our bakery products in fifteen Nestle counters which were operating in Gurgaon and Delhi.

2) We worked with CDX (Coffee Day Express) to finalise our rates and delivery will start from the first week of August.

3) We even deal with DLF golf course and started delivering the products to them.

4) In just two months, our sales has gone up four times ever since I have taken the charge of the bakery.

We have taken a target that we will move to 10 times our bakery business of today.”

UPWARD MOBILITY Surender Yadav of PGP 06-08, Gurgaon batch, has joined Vertex Aviation, Gurgaon, as team leader. He was earlier with Viva Travels Institute, Gurgaon.

Akhouri Amit Ranjan of PGP 06-08 batch has joined UTI Mutual Fund as relationship executive (institutional sales). He was earlier working with HDFC Bank.

Gaurav Singh of PGP 05-07 of Gurgaon Batch joined India Infoline Ltd as relationship manager two months ago. He was earlier with Kotak Mahindra

FIRST JOB

DOUBLE PROMOTION

Omraj Singh of PGP 07-09 Gurgaon batch has joined 1589 Manor (a four-star Clarke Hotel Group property in Gurgaon) as senior sales executive Megha Goyal of PGP 07-09 Gurgaon batch joined Massoutreach, Manesar, (a Netherland-based company), Omraj Singh, PGP 07-09 as business development manager.

Sandeep Chaubey of PGP 07-09 Gurgaon batch joined UniByte Systems, New Delhi, a channel partner of Airtel, as assistant manager (marketing).

Sandeep Rathore of PGP 06-08 Gurgaon batch got promoted to the position of associate relationship manager at Indiabulls. He completed 17 months in a highly competitive and volatile stock broking company. He joined Indiabulls as a management trainee through campus placement in February 2008. He recently got married. The IILM family congratulates him on his achievements and wishes him a very happy married life.

The

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Unsolicited contributions for alumni pages may be sent to vijesh.jain@iilm.edu

INCULCATING EMOTIONAL INTELLIGENCE umerous factors influence business world in which the role of human behaviour, and particularly the emotions they demonstrate, are very significant. A person’s behaviour, especially in work life, can effect his/her emotional regulation and can win and lose the influence on people to a great degree.

According to Freedman et al. in ‘Handle With Care: Emotional Intelligence Activity Book’, “Emotional Intelligence is a way of recognising, understanding, and choosing how we think, feel, and act. It shapes our interactions with others and our understanding of ourselves. It defines how and what we learn; it allows us to set priorities; it determines the majority of our daily

N

actions. Research suggests it is responsible for as much as 80% of the ‘success’ in our lives.”

Emotional Intelligence (EI) is a relatively a new term used by Daniel Goleman in 1995 and got into rapid circulation, especially in business and interpersonal relationships. Obviously, our cultural wisdom and contemporary scholars have emphasised EI in various phrases and usage of quotes, sermons, poems and writings.

However, they did not use the term EI, but their depth of the spirit of EI is far deeper in sense and action.

Some of their quotes are fascinating to read as well as to practise EI with the wisdom of past in the present real life.

“Non-violence in thought, word and deed, truthfulness and geniality of speech, absence of anger even on provocation, disclaiming doership in respect of actions, quietude or composure of mind, abstaining from malicious gossip, compassion towards all creatures, absence of attachment to the objects of senses even during their contact with the senses, mildness, a sense of shame in transgressing against the scriptures or usage, and abstaining from frivolous pursuits; Sublimity, forbearance, fortitude, external purity, bearing enmity to none and absence of self-esteem — these are the marks of him, who is born with divine gifts.”

KRISHNA “You will not be punished for your anger; you will be punished by your anger.”

"Whatever is begun in anger, ends in shame."

BENJAMIN FRANKLIN

BUDDHA "When one door of happiness closes, another opens; but often we look so long at the closed door that we do not see the one which has been opened for us."

“Anyone can become angry — that is easy, but to be angry with the right person at the right time, and for the right purpose and in the right way — that is not within everyone’s power and that is not easy.”

HELEN KELLER "It is very important to understand that emotional intelligence is not the opposite of intelligence, it is not the triumph of heart over head — it is the unique intersection of both."

ARISTOTLE “An eye for an eye would make the whole world blind.”

MAHATMA GANDHI

DAVID CARUSO “The important thing is not to stop questioning. Curiosity has its own reason for existing. …It is enough if one tries merely to comprehend a little of this mystery every day. Never lose a holy curiosity”

“In sorrow after sorrow it is his steps that press upon my heart, and it is the golden touch of his feet that makes my joy shine.”

"The light is within you, the dungeon too. I know what to do and what not to do. I won't open that rusty door; I'll show you how you locked it...Nothing more."

ALBERT EINSTEIN

RABINDRANATH TAGORE

FRANK RUBENFELD

Conceptualised and compiled by Prof. Kailash Tuli The

Edge 63

Institute for Higher Education