Volume 1, Issue 2, (July 2012)
LAL BAHADUR SHASTRI INSTITUTE OF MANAGEMENT, DELHI
SPECIAL CONTRIBUTORS We thank the Industry experts who shared their experiences and knowledge for the Torchbearers’ second edition. Their contribution has certainly added a special value to this magazine.
Mr. Jagmohan Gupta Executive Director (Finance), Indian Railways
Mr. Anshul Gupta Director, Goldfont Learning Private Limited
Mr. Rohit Sinha Head of Human Resources, Larsen & Toubro, Faridabad
Mr. Amit Mishra CEO—Punjab Woolcombers Limited (Oswal Group)
Mr. Ashray Sachdeva Co-Founder & Director - Humour Me
FOREWORD
In the present scenario when the whole world is going through tough times, not only efficient and intelligent management is required but ethical also. We all should remember that change is the only constant. And it is only after going through a lot of changes that the output is remarkable as it is the result that comes after a series of events which survived the test of times. At Lal Bahadur Shastri Institute of Management, Delhi I am proud to say that students as well as the faculty is ready to bring the change in the society. Be it the fact that our institute is student driven or the social activities like Knowing The Real Bharat or introducing newer ways to make the students more knowledgeable about the industry, or guest lectures by eminent personalities from industry; overall institute is approaching the goal of holistic development. I have been in this prestigious institute since its inception in 1995 and I am very proud to say that it has grown to remarkable heights since then, adding a new feather to its cap each year as it comes by. The institute teaches Management and MCA and excels in both. We believe in qualitative development of our students and therefore ethics constitute a major part of our focus. I am very much proud to be a part of this institute. The values and principles of late Shri Lal Bahadur Shastri Ji like honesty, integrity, dignity etc. form the foundation of our development process. These values are imbibed in our students during their tenure in the institute. And it’s no doubt that when our students enter the corporate world, they make us proud. It gives me immense pleasure to announce the second issue of the annual magazine “TORCHBEARERS’. The endeavor of the students is worth an applause. Although a lot has been achieved, but sky is the limit and I wish that this magazine successfully keeps on honing the talent of our students. I wish them good luck for their future.
Dr. G.L. Sharma Head - Administration & New Projects Lal Bahadur Shastri Institute of Management, Delhi
FOREWORD Organizational effectiveness depends on having the right people in the right jobs at the right time to meet rapidly changing organizational requirements. People are the most valuable asset of an organization and managing this resource has evolved from controlling to nurturing and enriching them. The right set of people brings in that valuable edge to the company that differentiates it from its competitors. The Indian companies are still lacking behind when it comes to understanding the importance of the role of HR in an organization when compared to their western counterparts. The western countries understood the importance of HR much earlier and today the Human Resource Manager has come to play an increasingly important strategic role in an organization's success. However, with changing times, the role of Indian HR has changed from that of a protector and screener to the role of a planner and change agent. The knowledge age has moved the basis of economic value to information assets through integrated communications and computer technology. People provide unique knowledge, an inherent component of the valueproposition that people bring to an organization; knowledge gained through education, training, and experience. Investment in people will position organizations for continual innovation in an increasingly diverse, competitive and ever-changing climate. Thus, the future looks bright with the new “Millennial” HR managers, who are joining organizations run by millennial workforce, working in collaboration with the experienced professionals. I wish to congratulate the entire editing team for the splendid success of the second issue of the ‘Torchbearers’. I wish to convey my best wishes to the team for this upcoming second edition and I look forward to see more contemporary issues and developments being discussed through this media.
Dr. Bindu Chhabra Convener - Torchbearers Lal Bahadur Shastri Institute of Management, Delhi
FOREWORD A student’s holistic development is ensured by a proper blend of theoretical and practical knowledge. A student’s mettle is proved when he applies the concepts and knowledge in his daily life and in other activities. We, at Lal Bahadur Shastri Institute of Management, strive to use our talent and abilities to their best use. Several activities and initiatives all round the year ensure that the creative soul within us, the Shastrians remains alive. Rolling out of the institute magazine is just one such endeavour. I feel immense pleasure and pride in announcing the release of second issue of TORCHBEARERS. That feeling which one experiences when one has been a witness to all the handwork and dedication which finally leads to fruition is simply inexplicable! I find myself experiencing the same emotion after the release of this magazine. We at LBSIM believe in collective effort through team work. First of all, I would like to extend my heartfelt gratitude to Vaibhav D.K. Gupta, President, Management Grid for believing in us and for helping us in converting the seedling of our idea into a full grown tree as our magazine. Another name without which this magazine would have not taken its form is Varun Arora, the co-editor. If it has not been the constant push and ever-ready attitude of Varun with us, probably this magazine would still be lying dormant on some paper in some corner. I would also not miss the opportunity to thank all the club-editors and my colleagues for their hard work and dedication from the very beginning. And the lovely juniors also deserve a mention for their enthusiasm and their ayes to every task which we gave them to perform. A special thank you to Mr. Naresh Wadhwa for his unrelenting support and best wishes. But all these “Thank You” will remain incomplete without an appreciation from the readers. I sincerely hope that the second edition of Torchbearers will fully justify the blood and sweat that has gone into it and will make a delightful read for all.
Ms. Kanika Bansal Editor - Torchbearers Lal Bahadur Shastri Institute of Management, Delhi
Content Page
Section
Topic Rendezvous with Mr. Jagmohan Gupta, Executive Director (Finance), Indian Railways
1
Finance
Currency Depreciation: Where will this lead India to? Aditya Jandial (SIBM Pune) National Food Security Bill Ankit Rampuria & Swati Shetty (JBIMS, Mumbai) Rendezvous with Mr. Anshul Gupta Director, Goldfont Learning Private Limited
8
Marketing
Current Scenario at the Bottom of the Pyramid Trisha Pandey (SJMSoM, IIT Bombay) Current Scenario of Brand Management Trends for BOP - A Critical Analysis V.K.Sudarsshan & Ameya Patkar (IIM Lucknow) Rendezvous with Mr. Rohit Sinha Head of Human Resources, Larsen & Toubro, Faridabad
14
Human Resource
Social Media Recruitment Gayatri Priyadarsini & Deba Prasanna Sahoo (XIM-B) Changing Human Practices: Engaging Gen Y Vinesh Prabhu (SIBM Pune) Rendezvous with Mr. Amit Mishra CEO—Punjab Woolcombers Limited (Oswal Group)
21
Operations
Service Supply Relationships in Healthcare Karthikeyan T & Sangeetha V (IIM Lucknow) The Growing Significance of Green Supply Chain Gitanjali Maria (LIBA, Chennai) Is Petrol Price Hike a Bitter Pill for a Mismanaged Economy?
29
Deliberation & Debate
Against the Motion Sylvia Mishra (MSc. International Relations, London School of Economics) For the Motion Bharti Bansal (LBSIM, Delhi) Against the Motion Abhishek Miglani (Analyst, Ernst & Young)
Content Page
Section
Topic
34
Sparsh
Accomplishment 2011-12
35
Alumni
Reminiscence
36
Entrepreneurship
Rendezvous with Mr. Ashray Sachdeva Co-Founder & Director - Humour Me
38
General Management
42
Quizzing
44
Media & Communication
45
Cultural Team
Management Lessons from the Movie : Gung Ho Rajwinder Singh (KJ Somaiya, Mumbai) Management Lessons from the Movie : Ratatouille Priyanka Verma (LBSIM, Delhi) The Business of Quizzing Juby Cherian & Zain Inhonvi (LBSIM, Delhi) LBSIM in Media - 2011-12
CultLBSIM : The Cultural Face of LBSIM
Rendezvous with Mr. Jagmohan Gupta Executive Director (Finance), Indian Railways India is a land of diverse culture and railways play a key role, not only in meeting the transport needs of the country, but also in binding together the dispersed areas, thus promoting national integration. Indian Railways has emerged as the sinew of the Indian economy and has reached out to bring together the great Indian family. Indian Railways an Indian state-owned enterprise, owned and operated by the Government of India through the Ministry of Railways. Indian Railways has 114,500 kilometers of total track over a route of 65,000 kilometers and 7,500 stations. It has the world's fourth largest railway network after those of the United States, Russia and China. It was a pleasure for our students to meet Mr. Jagmohan Gupta, Executive Director, Finance, and Indian Railways, on behalf of Lal Bahadur Shastri Institute of Management. Mr. Gupta graduated in Law from University of Delhi in the year 1985. He cleared the UPSC exam in 1987 and has an experience of more than 25 years. He has also worked at top positions with Ministry of Power and Ministry of Personnel. The main purpose of the meeting was to get the insight of the Indian Railways with respect to its proficiency in its operations, financing, the problems it faces, its future plans in respect to capital expenditures and sources of revenue. Q. The fuel prices have gone up in the past few years. Also the salaries of employees have increased considerably after the Sixth Pay Commission. However the passenger fares could not be increased due to some reasons. How is the management of Indian Railways coping up with this issue? This is a resource related issue. Indian railway is not a commercial player. Its decisions are based on the government policies. Yes, the input costs are rising. I would like to answer it in two parts: First, revenue is obtained from three sources; freight, fares, others (negligible). 65-70% of the revenue is obtained from the freight services which is the bread and butter of the Indian railway. We have been updating th the freight charges as per the circumstances in the past. Last update in the fare prices was on 6 march 2012. Passenger fares account for 20-25% of the revenue. These have not been increased as they are focused towards the common man as Indian Railway is the main transport solution for them. If the passenger fares are increased it would significantly impact the common man, which makes it a very sensitive issue. Also, parliament is averse to handling this issue. The second source of revenue is the financial aid from the government. As the cost goes up, government allocates even higher funds for the railways in the budget, against which, the railways have to pay a dividend of 4% (a drop from the previous dividend of 7%) which it has to pay to the government of India in lieu of the financial grants. Q. Is Indian Railways looking for a non-conventional source of earning? We have recently focused on land commercialization of the railways’ assets but the problem which we are facing is that the majority of the land which is available is in the outskirts of the city and due to the lack of infrastructure facilities in those areas the accessibility to these lands is discouraged. RLDA (Railway Land Development Authority) is an organization established by the Railways to explore the surplus land available. Q. Why is Indian Railways not considering the revenue generated from advertisements as a part of non- conventional source? The total revenue of Indian railways annually is around Rs. 1,32,000 crores whereas when one looks at the figures, the advertisement revenue generated in India is Rs. 1300 crores, of which the railways get
1
Finance
around Rs. 200 crores. The problem faced by the Indian Railways is magnanimous as compared to the revenue that is generated through advertisements which is paltry at its face. Even if this share of the revenue is scaled up to double or triple, which would add 400-600 crores to the bounty, which when compared to the railway’s total revenue of Rs. 1,32,000 crores, stands small and is not worth the efforts. So Railways is trying to focus on other areas to generate the requisite revenue as mentioned previously. Q. What are the CAPEX plans for 2012-13? For this I would like to say that Railways is trying to open up dedicated freight corridors (DFC’s). There will be two corridors: first is the eastern corridor stretching over 1800 Km, from Ludhiana towards Dankuni, second is the western corridor stretching over 1500 Km starting from from Jawahar Lal Nehru Port, at Nhava Sheva in Navi Mumbai to Tughlakabad, Delhi/Dadri along with interlinking of two corridors at Khurja. These regions are the most busy rail routes both for the public passengers and the freight carriers; hence the plan for expansion to dedicated freight corridors, to reduce the congestion and speed up the services. These two routes are a part of the golden quadrilateral, 30% of the network spread is constituted by the golden quadrilateral and it generates 60% of the revenue of the total revenue of the Indian Railways. So there is a huge congestion in this region and hence the main purpose of the DFC’s is to decongest these regions’ traffic for optimum efficiency. The estimated cost of the project is Rs. 1 lakh crores, terminal year being March 2017. The second plan for the capital expenditures is “high speed corridors” which is planned to be constructed between Ahmedabad and Pune. A lot of analysis has gone into the planning and feasibility of the project and the project estimated cost is Rs. 60,000 crores which is too high for the project to be feasible in near future. The third plan is LHB corridors. The bogies in these trains have a superior design, a cash worthy feature. We are in touch with NID (National Institute of Design) to improve the design of the same. Q. The average life expectancy in India has risen, due to which the average time for which an employee receives the pension after retirement has increased from 7 years to 19 years. These pensions are a major source of expenditure for Indian Railways. How is Indian railways coping up with this situation? Yes, the obligation for pensions has increased in the recent past. There are three reasons: life expectancy has increased as mentioned, the number of pensioners has increased and the pension th amount has increased with the 6 pay commission. This year railways have to expense out Rs. 18,500 crores towards the pension accounts. Railways maintain a self sustaining fund to handle the situation. After 2003, the railways has developed a new pension system. Under this system, those who have joined before 2003 will be paid as per the old norms and those who joined after 2003 will be compensated as per the new norms in which the pension is comparable to private pension scheme. According to the new norms there is an obligation for the employee to contribute certain amount towards the pension fund. This has reduced the pension obligation to some extent. Q. Are there any plans to corporatize the Indian Railways in the long term? As of now there are no plans of corporatization of the Indian Railways in the near future. If corporatized, travel fares will take a hit. They will rise enormously which will ultimately affect the common man. Secondly the constraints are huge in the process of converting a government body into a public firm. Moreover, privatizing the organization is not the solution to all the problems. India lives in its villages and Indian Railways is seen as a transport solution for the common man.
Finance
2
Currency Depreciation: Where will this lead India to? Aditya Jandial Symbiosis Institute of Business Management, Pune “Indian Currency is the most undervalued in the world” -Big Mac Index Decline in the Indian currency highest amongst major BRIC nations
Currency of an economy defines its earning power at the global stage and so in the world of globalization where a government works on global funds, an industry craves for global resources and an individual longs for global quality products. For the purchase of these foreign goods, a country requires foreign currency and the conversion factor for the currencies define the purchasing power of an economy. Just as inflation reduces the purchasing power of a country; decline in foreign currency also reduces the purchasing power of currency in foreign terms. Hence, as a consequence currency devaluation further aggravates the problem of inflation to which our country is succumbing to. So at a time when the CPI in country is hovering in double digits, it also becomes important for us to understand the exact reasons of currency devaluation and how it affects the economy, the measures the government is undertaking and how efficient they have been. The following are a few reasons for a country to devalue its currency: 1) Higher exports
2) Lower imports
3) Maintain a floating exchange rate
4) Price Stability
Here, we have tried to calculate the value of Mac Index: A Maharaja Mac burger in India costs
:
Rs 89
Taking exchange rate at the minimal point(Rs/$)
:
56.5
The price in dollars for the Big Mac in United States
:
$ 4.2
PPP for Maharaja Mac
:
20
So the Mac Index says that the currency is devalued at
:
64%
* http://www.exchange-rates.org/history/INR/USD/G/30
Road to Devaluations It’s pretty much clear that the demand-supply mismatch of the Indian currency has more to do with the rising hostility towards the Indian political climate. The following are the basic reasons according to us which have contributed to a plummeting exchange rate:
3
1)
Global Reasons
2)
Policy Paralysis
3)
Credit Degradation
4)
Global sentiment of hostile business environment
5)
High Inflation and hence high interest rates
6)
Crowding effect of the private industry
Finance
Authority into action The RBI looks into stabilizing the price range for the currency. India follows a dirty float system where the currency is allowed to move freely under the forces of market. But an excessive fall in the price can hurt the free fall. Some of the measures are given below: 1)
Currently, the major oil companies collect their dollar requirements from a number of companies which again projects an exaggerated demand of dollars and raises a negative sentiment in market. The government has asked the oil companies to take 50% of their dollar demand from State Bank of India. This will give a better picture of the actual Forex demand in the country.
2)
RBI has asked the banks to limit their exposure to overdrafts in order to stabilize the fall in the value of rupee. The banks have been under strict mandate by the RBI on their holdings.
3)
RBI has hiked interest rates on dollar-denominated foreign currency non-resident deposit schemes and allowing exporters to easily get foreign currency loans. Under the current rules, interest rates on FCNR deposits were limited to 125 basis points above the prevailing Libor/Swap rates. This has been raised to 200 to 300 basis points
4)
India has been trying to get government procedures on track which would enable higher foreign exchange inflow to the country through the FDI policy.
5)
The government announced a hike in FII limit in government bonds to USD 20 billion, while allowing up to USD 10 billion from overseas borrowings by India Inc. for financing new projects and refinancing of rupee loans.
Path Ahead No doubt Indian currency is undervalued but in a longer run an undervalued currency under the pressure from the importing partners, who lose because of higher import prices in the domestic market, India would gradually have to appreciate the currency and this would be done by increasing the demand of rupee in the market. Now in the near future we can have the following alternatives for getting our currency up to the global markets: 1)
Providing incentives to park foreign capital in India which would make investors buy rupees
2)
Selling dollars to gain back rupee, but this alternative could have been viable if we had Forex reserves to handle them, but our Forex has fallen from $400 billion to $ 292.5 billion in last 6 months
3)
Allow capital convertibility which would allow free inflow of foreign exchange and help raise the rate
4)
Depreciation in the value of the rupee increases the burden of servicing and repaying of foreign debt of the Indian Government and those companies that have raised dollar denominated debt. This drawback is all the more amplified in the case of short-term debt as the burden is immediately felt. Although short term debt is a small amount of the total burden on Indian Economy (3.7%). A high cost of financing would lead the government to opt for higher period foreign borrowing which would lead to more debt burden.
So, an undervalued currency seems to have long term benefits for the economy, although in a longer run it would equate itself to the actual price.
Finance
4
National Food Security Bill Ankit Rampuria & Swati Shetty Jamnalal Bajaj Institute of Management Studies, Mumbai INTRODUCTION The NFSB was introduced in the Lok Sabha in December, 2011 and aims to provide legal entitlement over subsidized foodgrains to 63.5 per cent of the country’s population. As per the draft of the bill, it is “An Act to ensure public provisioning of food and related measures to enable assured economic and social access to adequate food, for all persons in the country, at all times, in pursuance of their fundamental right to live with dignity.” SHARING OF THE RESPONSIBILITIES The Central government shall provide to the State government the following: 1) Food grains free of cost, including cost of storage and transportation or the cash equivalent of the procurement cost borne by the State Government. 2) Administrative expenses of a minimum of six percent for the implementation of the act. 3) All the other costs would be borne between the Central and State Governments in such a way that Central Government bears at least 70% of all costs CONTENT OF THE BILL Right to access of food security According to the Bill, Every person shall have physical, economic and social access, at all times, either directly or by means of financial purchases, to quantitatively and qualitatively adequate, sufficient and safe food, which ensures an active and healthy life. No denial to any child Any child below the age of 14, including those that are out-of-school, may approach any feeding facility such as Anganwadi centre, school mid-day meals, destitute feeding centres etc., as defined under this Act, for a freshly cooked nutritious meal; no such institution may deny a freshly cooked nutritious meal to such a child on any grounds whatsoever by modalities that will be notified in the Rules. Right of persons living in starvation The State Government shall make all reasonable efforts to ensure that all persons, households, groups or communities living in starvation or conditions akin to starvation are provided appropriate food to restore them with immediate effect to a condition of good health of the body and mind. Analysis The Bill intends to cover 75% of the rural and 50% of the urban population. It relies on a complicated three-way division of the population between 'priority', 'general' and excluded households. This division, we feel, is problematic for several reasons. There is no clarity as to how these different groups are to be identified, and we have serious doubts about the possibility of devising a practical, fair and effective method of doing it. With PDS benefits largely restricted to priority households, this approach would have many of the
5
Finance
weaknesses of 'BPL targeting', which has proved so unreliable and divisive in the past. Also, this rigid framework, based on selection criteria and other parameters prescribed by the central government, would undermine the positive trend towards a more inclusive PDS in many states. The Problem In its current form (let us call it "Plan A"), the NFSB is confusing, impractical and divisive. It rests on an artificial division of the population into three groups ("priority", "general" and excluded), without any clarity as to how these groups are to be identified. All recent attempts to devise a sound methodology to identify priority households have failed. The Socio-Economic and Caste Census (SECC) is unlikely to perform much better than earlier BPL Censuses in this respect. Exclusion errors are likely to be large, and the entire process is very divisive. Also, Plan A lacks simplicity and transparency - these are essential for the success of this crucial legislation. Proposed Solution The proposed solution ("Plan B") is essentially a simplification of the Bill, as follows: i.
Use "exclusion criteria" only.
ii.
Merge the general and priority groups (let's call them "aam log").
iii.
Give every "aam" household a "National Assured Minimum Entitlement" (NAME) of 25 kgs per month at Rs 3/2/1 per kg for rice/wheat/millets.
iv.
Retain and strengthen the Antyodaya Programme, as it is.
Resource Requirements If 25% of rural households and 50% of urban households are excluded (as in Plan A), the annual resource requirements (including the required provision for the Antyodaya programme) are as follows (for details see Annexure). The grain requirements of Plan B are marginally lower than those of Plan A, and the financial requirements are marginally higher. Even after adding a provision for "other welfare schemes" (about 8 million tonnes of grain), these figures are well within the bounds of feasibility, especially if the National Food Security Act is "rolled out" over, say, two years. Annexure "Plan A" And "Plan B" Compared Coverage Figures in brackets indicate absolute number of households (in crores ) PROPORTION COVERED(%) Plan A
Plan B
Rural
Urban
Rural
Urban
Excluded
25 (4.2)
50 (3.6)
25 (4.2)
50 (3.6)
General
29 (4.9)
22 (1.6)
0 (0.0)
0 (0.0)
Priority/ 'Aam Log'
46 (7.7)
28 (2.0)
75 (12.6)
50 (3.6)
Total
100 (16.8)
100 (7.2)
100 (16.8)
100 (7.2)
Finance
6
ENTITLEMENTS ENTITLEMENTS (kg/month/
household) Plan A
Plan B
Excluded
0
0
General
15
0
Priority/ 'Aam Log'
35
25
GRAIN REQUIREMENTS GRAIN REQUIREMENTS (million
tonnes) Plan A
Plan B
Excluded
0
0
General
11.7
0
Priority/ 'Aam Log'
40.7
48.6
Additional provision for Antyodaya
0
2.9
Total
52.4
51.5
SUMMARY OF RESOURCE REQUIREMENTS
Plan A
Plan B
Grain requirements
52.4
51.5
Total subsidy (crores/year)
77,927
81,524
17,927
21, 524
Additional Subsidy (over and above current subsidy of approx Rs 60,000 crores)
7
Finance
Rendezvous with Mr. Anshul Gupta Director, Goldfont Private Limited Q. What is keeping you engaged currently? We are in the pre-launch phase of our website GOCTET.COM. It is an education venture wherein we are targeting an opportunity called CTET, Central Teacher Eligibility Test. It is born out of the Right of Children to Free and Compulsory Education (RTE) Act, 2009. It states that every kid has a right to education till class 8th and that requires a similar inflow of quality teachers so every teacher has to clear this benchmark examination. We will be providing both online content as well as offline classes for the same. Q. What motivated you to become an entrepreneur? The idea of starting something of my own just charmed me. Listening to entrepreneurs interested me far more than listening to consultants or career professionals during seminars at my B-school, ISB Hyderabad. So after attending a 3-day workshop on serial entrepreneur, I decided that I don’t want to take up a job and I pulled myself out of the placement process. Q. Why you entered in this sector? How easy or difficult it was for you to venture into this business? In one word it is just something I understand. When you jump from the corporate world into the first few months of entrepreneurship it is very difficult when you don’t know from where your money will come from and you are left only with your ideas and things which do get tricky at times. Working with startups for a few months I had some feel of what’s going to come and so it helped. Q. While you were in your initial stages of your business, what do you think helped you in your success? I think getting more stakeholders. The worst thing in a business is to stay alone. When you get more stakeholders, get people who have complementary skills and assets. Also getting people with resources and monetary support always helps. Q. With so many people around you, how do you managed when there were conflicts within the walls of the business? I had a fairly smooth ride but in such cases you just need to hang in there. Whatever the situation is just don’t loose your calm and keep yourself motivated. In a nutshell, people and stakeholders are the most important and when it gets challenging you just have to face it. Q. What was the tipping point for your business? I think there is never one tipping point. As per my experience, for me the tipping point has always been joining of the key people. Whether that is joining of key employees or joining of key partners and stakeholders. That changes the dynamics quite significantly. Q. How is this industry keeping up with the economy and your viewpoints on current trends related to BOP? BOP is a lot more complicated topic than most people think it is. If you are involved with something social, slowly it turns into commercial. When something is linked with social it will always be politically
Marketing
8
motivated. It sounds very exciting and the volumes look huge from the outside but my personal guess is that it is a lot more difficult to get 5 Rupees from 1000 people than getting 5000 Rupees from 1 person. So commercially speaking it is always easy to opt for the latter option. Q. What are your views on CSR activities and do your company believes in giving back to the society through these activities? CSR requires a very important element and that it depends a lot on how secure the donor himself is. And typically in India the biggest donors are those who feel very secure and that is the biggest driving factor. But in todays times CSR is abused a lot. These day’s some companies only do social work to have commercial gains. I find that western organizations are lot more philanthropic than Indian companies and that’s because they feel more secure. Q. So what is your take on the same thing for Indian companies? According to you is it an indirect marketing approach or a real societal responsiveness? Everything is grey to a certain extent. Everyone wants to draw mileage out of his or her social initiatives. Many people are involved in frauds but I don’t think we should paint everybody with the same brush. There are companies, which are doing work, which is totally philanthropic in nature. Q. What are your objectives for the next year and how will you measure your success? An entrepreneur should never look beyond one quarter and no matter how successful he gets he should never look beyond a year at most. So I am sticking to my quarterly targets. But yes, by next January we will have the next CTET and that’s is where we are putting in all our energy into. Depending on the response we get we will decide on our future course. Q. Give three tips to become an entrepreneur. Kindly elaborate each. Firstly, entrepreneurs come with a staying power, 6 months or so is too less and will just fly off before you break your ice. Second is get useful partners. Get other resourceful people with complimentary skills. And do not get people who are exactly like you. And third is stay very close to your customers. Everything else is dispensable but not your customers. If you continue to work with your customers, he will tell you over time what he really needs. And to top it all, I would say this to first time entrepreneurs, “Whatever is your plan, its highly likely to be crap, but go for it.” Because whatever is your idea, there are big flaws in it, but don’t let anybody put holes into it and pull you down. Every big idea had flaws but there is no way you can fix it without running for it.
9
Marketing
Current Scenario At The Bottom Of The Pyramid Trisha Pandey SJMSoM, IIT Bombay The definition of market underwent a gradual change over the ages from being just a physical place to any media that can support any form of transaction. The markets of today can exist over internet, emails, and telephone lines. Markets are broadly of two types: Industrial markets and Consumer Markets. The scope of this article is limited to Consumer Markets. Consumer markets are directed to buying and selling of goods and services for private consumption. These markets can be categorized on the basis of different parameters. The most used parameter for classification is household’s income on the basis of which Tier1 to Tier4 customers are defined. It is not a hidden fact that market catering to Tier1 and Tier2 consumers has either saturated or is on the verge of saturation. In order to further scale up profits, the companies have to look for ways to penetrate the untapped market. There are however certain roadblocks which prevent companies from tapping the gold mine at bottom of the pyramid (BOP). Some of the business myths that companies still carry with themselves are: Myth#1: People at the bottom of the pyramid are neither interested nor can afford latest technologies/products/services Reality: The success of Grameen bank whose approximately 95% users are rural women; one who had never before used banking services is an evident example that the above myth does not hold ground. Adding to the list are initiatives like SELF rural electrification system for villagers who are willing to bring electricity to their homes and small businesses and CorDECT ‘s telecommunication services for people who have never before made single phone calls in their lives . Myth#2: The only concern for people at bottom of pyramid is to meet their basic necessities and they use their savings only for meeting these needs. Reality: People at BOP are more concerned about their present consumption rather than savings for future. They tend to indulge in buying products and service from their disposable income sometimes at higher the price than is available to someone at top or middle of pyramid. Myth#3: The Company’s current processes and cost structures cannot be made robust enough to support this set of customers. Reality: Disruptive innovation in product, process and distribution is the key to contain costs and scale operations to support huge volumes at low cost and high quality. Disruptive innovation requires a company to be open to organizational readjustment whenever required and sometimes a willingness to cannibalize the business of its mainstream product to give way to its disruptive product in the market. Warden Road
Dharavi
Cost of Credit
12-18%
600-1000% (Moneylenders money minting machine )
Phone-Cell per minute
~$0.025
~$0.04
$2
$20
$0.24
$0.28
Diarrhea Medication Rice per Kg.
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Myth#4: BOP market is not suitable for long term viability of business Reality: The only market that can sustain a business in future decades to come is the BOP market as the premium and super premium segments already stand at verge of saturation. The need is not to see poor or lower middle class people as people in need of charity rather as potential customers. Charities or aids are inherently not sustainable . “Like the tip of an iceberg, the opportunity remains invisible to the corporate world.” —Dr. C. K. Prahalad and Prof. Stuart Hart Dr. C.K Prahalad and Prof. Stuart Hart, the articulators of the term “Bottom of Pyramid” , have talked about four core elements that are sure shot keys to thriving profitably and successfully in Tier 3 and 4 markets. They are: 1.
Creating Buying Power
2.
Shaping Aspirations
3.
Improving Access
4.
Tailoring local solutions
And many companies have successfully done this. For instance, Cemex, world’s third largest cement manufacturing company has brought about an innovation in “affordable housing for poor” through its initiative Patrimonio Hoy. It sells cement to poor people in small quantities (1 bag at a time) along with technical advice so that they can build one room at a time for themselves. HUL, India’s largest consumer goods company started Project Shakti which successfully incorporated all the 4 keys together i.e creating buying power by providing income generating opportunities to rural women, shaping aspirations through educating consumers and sustainable development, tailoring local solutions through strategic changes and packaging innovations and improving access by penetrating deeper into the rural markets. Godrej and Boyce came up with a breakthrough innovative cooling solution Godrej Chotukool, a low cost, low power, noise-free and easy to maintain product that not only brought comfort and convenience to owners but also helped in improving supplementary income of small entrepreneurs like florists, milk vendors, small sellers of cool drinks etc. This product not only helped these small entrepreneurs in reducing their wastage but also brought down their daily transportation costs of procuring materials. CONCLUSION BOP market stands currently at the monstrous number of 4 billion and is forecasted soon to rise to 6 billion. This huge chunk of market which represents two-thirds of world’s population currently cannot be left unthought-of. Operating in BOP market comes with its own set of risks in businesses, one of the most important of which is Cannibalization. There are possibilities that the new disruptive product cannibalizes the market of the mainstream product of the company; but that essentially would mean replacing one cash stream by another one which is more sustainable. The greatest managerial challenge in serving a BOP market is to manage costs while providing with good quality and that too sustainably and profitably. This requires disruptive innovations and wiping out of inefficiencies in scale and scope of operations and management knowhow. Innovative strategies like pay per use, group ownership and accountability etc have proved extremely successful in catering to BOP markets. Organizations need to remodel their businesses and strategies and think innovatively to succeed in these markets.
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Current Scenario Of Brand Management Trends For Bottom Of Pyramid (BOP) – A Critical Analysis V.K.Sudarsshan & Ameya Patkar IIM Lucknow Bottom Of Pyramid : An Introduction Bottom Of Pyramid (BOP) has gained prominence mainly due to C.K.Prahalad’s book “The Fortune at the Bottom of the Pyramid”. It is a misnomer that lower price is the differentiating factor for purchase. Relevance to the consumer combined with the usefulness of the product contributes to the success. This can be achieved via innovation and creating differentiation. First steps in this direction were taken by players outside the mainstream in the industry. For instance, M-Pesa (Mobile Money) was developed for Safaricom, Kenya’s mobile network operator and Microfinance was started by NGO’s. Opportunities in BOP are humungous, provided the company get its marketing strategy right in product and service offerings. There is tremendous potential in the market considering its size (4 billion people) representing US$5 trillion of purchasing power (figure 1 alongside). FMCG sector is highly competitive due to the presence of large number of multinationals. In early eighties, a relatively unknown FMCG company CavinKare revolutionized the industry by launching shampoo sachets. It allowed the product to be affordable for all socio-economic classes. Factors contributing to success for the company and consumers were less investment, with reduced risk of buying. The entire dynamics of the industry changed post the introduction of Re 1 and Re 2 packets. Gillette – The BEST for the REST (BOP) Another example worth considering is that of multinational Gillette (P&G) known for doing nothing without research. Being a soldier is a dream of the youth in villages. A survey by Nielsen indicated that armed forces were the well groomed profession in India. Acting on the research, Gillette introduced novel marketing events such as “Shave India Movement” to encourage frequent shaving habits and “Shave for the Soldier” to connect with the BOP market segment. Gillette launched its first made-forIndia product; Guard. It was aggressively priced at Rs 15, the razor promised five shaves @ Rs 1 each. It along with Series Gel @ Rs 2 a shave was one of the cheapest Gillette experiences around the world. Continued focus on the loyal urban consumer base resulted in the launch of Fusion. Gillette has been able to compete effectively in the market place by having a control over the entire shaving experience from blade to lotion. Gillette has also been able to successfully target the value conscious & aspirational consumers at the same time.
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Product Design - Tailored to the needs of the consumers 1) Minimal water usage 2) Hang hole to for drying (based on consumer’s lifestyle) Common phrase at P&G - “As common as possible, as different as necessary” FMCG Biggies Targeting the BOP Big FMCG firms like HUL and ITC have devised innovative ways to target the BOP. We can say HUL is the frontrunner; it has been successful in building its brands in the rural markets with the help of influencers who are one among the target audience. Khushiyon Ki Doli initiative of HUL has reached many villages which portrays its brands by putting forth some virtues of usage of their products for them and their families’ well-being. HUL had increased its popularity of the Lifebuoy soap by keeping it less costly and at the same time conveying the benefits that the users can get from its usage. HUL found a great opportunity in the tea segment wherein it found out that only 40% of this market is tapped by the country’s top 2 brands HUL and Tata Tea. As per the statement by a top official from HUL to the Financial Chronicle, creating a network of Shaktimaans and Shakti ammas has helped increase their rural reach three times in the FY10-11. Here, the members from villages with population less than 5000 take the role of Shaktimaan and Shaktiamma and cover the villages to sell the HUL products. As per an article from Financial Chronicle, the Project Shakti has helped HUL a lot to penetrate in the rural, media-dark regions. HUL has sought significant benefits by increasing its rural reach. To create awareness among the small villages and initiate the usage, HUL has played with the packet sizing. It came up with Rs. 2 Kissan Jam and Re. 1 detergent sachets.
Hul’s Offerings Across Segments Premium
Popular
Mid-Market
Taj Mahal Tea
Red Label
Taaza
Economy ? ? ? (Gap Identification)
To address this gap, HUL came up with Brooke Bond Sehatmand. This brand catered to the needs and requirements of the undernourished and taste conscious population of the BOP segment across the country. It manufactured the tea with different smell; color etc for different regions of the country, thus making it popular. For this to be a success, HUL tied up with several NGOs and ran awareness campaigns in schools. ITC is another big company which is working towards communicating its brand in the BOP segment in a unique way. It started e-Choupal to reduce the exploitation of farmers and helped them get a fair price for their produce by setting up ITC sponsored kiosks. Thus launching suitable products and initiatives for the BOP segment worked in favor of these big firms in creating and managing their well established brands.
Price Offering Price : Rs 5 or Rs 10 Premium : 15-18% over loose tea CONCLUSION Differentiation and innovation has several advantages and companies have reaped rich rewards by implementing them as cited in the examples above. But there is a word of caution. Care should be taken not to dilute the image of the existing products and protect them against cannibalization by products for BOP. Thus a well-crafted and executed strategy would give the desired results. 13
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Rendezvous with Mr. Rohit Sinha Head of Human Resources, Larsen & Toubro, Faridabad Q. There is an ongoing enthusiasm about Employee Engagement in business parlance. What is your take on it? Employee Engagement according to me is ‘the’ thing because we are in this world to do something worthwhile and we can only do a worthwhile job when we engage ourselves to the cause and the means of any job that we do. However, I would like to clarify that different people understand engagement in different manners. I understand it as being about 3S – Say, Stay and Strive. ‘Say’ is what the person actually says about the organization, i.e., in an informal setting (and not in formal environment). The second ‘S’ is ‘Stay’, i.e. is the person staying long enough with the organization even in the face of offers from elsewhere. Third S is ‘Strive’, which is the extent to which a person is ready to walk the extra mile for his/her organization. So, if your employee is positive on these 3 S’s, you are on the right path. So, engagement is the ‘thing’ that can make things happen. At L&T, Faridabad we have undertaken robust employee engagement interventions. These initiatives have been enlightening. They reinforce our belief in employee engagement being a critical success factor in an organization. Q. What is the one key Employee Engagement initiative that you’ve taken at L&T Faridabad? There are number of initiatives that we’ve undertaken, the most significant and recent one, involves 12 understanding the formula of employee engagement of Gallup’s Q fully. We have had employee interactions leading to inputs for improvement for their Managers. Subsequently, we are helping the managers develop their individual development plan. This is a change initiative we have undertaken that is rooted in the fact that the heart of employee engagement lies in the one-to-one relationship between the immediate superior and his/her direct reportee. It is all about the perception a Manager / Immediate Superior has about ‘Casting’, ‘Tasking’, ‘Caring’ and ‘Growing’. Q. What are some of the other employee engagement initiatives taken at L&T Faridabad? We have various employee engagement modules in place which include a well knit induction program called ‘Woh Saat Din’ inspired by the classic movie by the same title. During this seven day period, the person is first inducted by the HR manager and once the formalities are done, he/she undergoes an orientation program about L&T and then joins his/her department where a buddy is assigned to him/her. This ‘buddy’ tells him/her about the things that are perceptible in nature viz; leadership / management styles in the team etc. After one and a half month the new joinees are invited to ‘First Lap’ wherein the new joiners share their experiences so far and voice their opinion. We also have a learning club called ‘CREST’ to engage Gen Y people. Some of the initiatives taken by ‘CREST’ include Enlightenment (e-magazine), Quizzila (Quiz team), and ATL (Any Time Learning) which encourage people to use this platform to share learning amongst one another. Apart from this, we have an elaborate employee recognition program which is held every quarter, called ‘ICONs’ (Immense Contribution of Noteworthy Significance) wherein employees are given trophies and certificates by the senior leadership of company for any worthwhile job they’ve done. Then we have ‘Dhanush’, the socio cultural club of our campus. It covers the areas of
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sports, music, dance and social responsibility and involves the families of employees. Q. What is the role of HR in engaging the employees? Engagement is all about the relationship between the IS and employee. Educating both the entities about the nuances of employee engagement and then equipping them to carry out activities in a preferred way and creating a culture of engagement is the role of HR Q. Who engages HR people? A very interesting question which has made me think. HR function is always viewed as a critical part of the management and sometimes more like the owners of the company. More often than not, it is assumed that the HR people are a self motivated lot who are from a different planet altogether. However, HR people also need equal inputs for their own motivation and we are fortunate that our line of leadership has been very encouraging & supportive of our work. They always encourage us to learn more, become even more effective and keep learning & growing continually. They always acknowledge our efforts and talk positively about us which keeps us motivated. Q. Advise for students who are budding HR managers? In the various conferences that I’ve attended recently, they say that there is going to be leadership vacuum by 2020. I look at it positively. It presents a sea of opportunity for you all. I’m sure that in the coming time, you will be seeing people with 5-6 years of experience heading the HR function of leading companies. I believe in what Sir Francis Bacon once said “Reading maketh a full man, conference a ready man and writing an exact man” You must ‘read’ to enrich yourselves, ‘interact’ among yourselves and others to be in readiness. HR students also need to interact more with practicing managers. The professional fora like NHRDN shall provide you this opportunity. Invite professionals to your institute, form teams and have interactive sessions on relevant HR / business topics. Also, you need to broaden your horizon by reading books apart from those in your syllabus such as The Seven Habits of Highly Effective People, Magic of Thinking Big, Now Discover Yours Strength, First Break all the Rules etc. to start with. Q. A book which is a must read for every business student? ‘The Seven Habits of Highly Effective People’ by Stephen Covey, is my personal first choice.
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Social Media Recruitment Gayatri Priyadarsini & Deba Prasanna Sahoo Xavier Institute of Management, Bhubaneswar Social Media Sites: A social media site is a platform that focuses and facilitates on building social networks or relations amongst people who have a common ground, for example, share interests, activities, backgrounds, or real-life connections. It assists in nurturing human associations on an online platform. In the current scenario, sites like Google, Facebook, Twitter, LinkedIn, etc. are not new to any one. The tentacles of social networking have extended to engulf the corporate sector as well. Businesses look for revenue generation and cost reduction. In addition, businesses also look for a welcoming impact, both non-financial and financial, of their investments. The nonfinancial impact includes impressions, click-through, positive press, re-tweets, customer complaints, positive word of mouth, employment applications, employee participation, blog comments etc. This impact is becoming a major concern for organizations. This is where social media comes into play, which primarily enables connections, conversations, collaborations and co-creations. HR as a strategic business partner can leverage the power of social media for business development in the areas of Recruitment & Selection, Employer branding, Employee engagement & collaborations and Performance improvement. The social networking sites such as LinkedIn, Facebook, Twitter, Mywalkin, Orkut, Google Groups, and Yahoo Groups are used by organizations as an e-recruitment tool. According to a survey in 2011, more than 56% of the organizations use social networking sites for recruitment into potential jobs. Among the surveyed organizations LinkedIn is the most used site (95%), followed by Facebook (58%) and Twitter (42%). Social Media vis-à-vis the stages of Recruitment and Selection Attract talent: By building lucrative and interactive websites, companies not only post vacancies and job descriptions but do self-branding. Other ways of Employer branding or branding of the organization can be done through various ways like direct communication, communication catalyst, cooperative communication, participatory definition and brand embodiment. Each of the above tools has one thing in common which are people, narrowing down to employees in the organization. Social media gives employees a voice in the brand community, which comprises of customers, influencers, fans, prospects, company and employees. However, employer branding can sometimes become potentially scary as dicey topics like staff reporting structure, incentives paid, performance rating are discussed openly. Sometimes personality of the individual employees and cumulative culture of the employee affect the organization’s brand. Judge talent: Social Networking sites are used for purposes like Gamification, where in people perform a sort of role play in a virtual world designed by the company. By using this platform, companies make the candidates face the real life challenges of the job, on a virtual ground, and thus, test their mettle. Not only does gamification give an absolute measure of the candidate’s talent, but it also helps in gauging groups on a comparative basis. Marriot, the global luxury hotel chain uses gamification intensively for recruitment purposes. It has its own game called “My Marriot Hotel” build along the lines of Facebook’s Farmville and Citiville, which introduces prospective candidates into the
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hospitality business. The gaming environment asks candidates to set up and manage their own virtual hotel, by implementing key business skills, to set up infrastructure, hire people, satisfy customers and ensure profit. Similarly, Siemens also has its own gaming platform called “Plantville”, which allows potential engineers to enter into the routine world of a Plant manager. Apart from job applicants students, employees and customers are invited by companies to play and showcase their talent. Many competitions are organized and flaunted by the company on their website as these competitions act as a measuring rod to gauge prospective talents. Immerse talent: New-hire engagement programs can be carried out to make the candidates know the company and its culture, even before they join it. This acts as an ice-breaking session, and also, makes the work culture more interactive. Candidates can interact with each other as well on company blogs, etc. Pros and Cons of Social Media The benefits of using these sites are many, such as: •
Tapping highly skilled passive job seekers in the market, who might not apply directly for the job openings in the company.
•
Effectively mapping companies as people from similar skill-sets are usually connected to each other through these social networking sites.
•
It is very effective in hiring for niche requirements.
•
No or marginal cost of using the services of these networking sites.
•
Building a talent pool of candidates.
•
Retaining potential and speculative candidates and contacting them when appropriate vacancy is open, which means, effectively generating appropriate candidates for free.
•
Improved experience of the potential candidates with the company.
•
Makes the recruitment process faster, more accountable and standardized.
No boon is absolute. This applies to social media as well. It has its own share of limitations, as listed below: •
These sites depend on the user based access, provide limited information about the candidates and have no procedure to rule out fake or forged candidates.
•
Companies diving in without a strategic plan may target the wrong audience. Not only may the posts be inappropriate, but they may also target the wrong tools and applications.
•
Idle websites can back fire, affecting a company’s brand image. Websites with limited interaction or no activity drain into the visitors a sense of boredom, which negatively affects the brand name.
In a short span, social media has become central to many organizations’ recruiting strategies. Thus, HR professionals should use social media platforms to reach out to wider and diverse potential applicants. Wise use of the offerings of the social media would help HR professionals to develop an integrated talent acquisition system.
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Changing Human Practices - Engaging Gen Y Vinesh Prabhu Symbiosis Institute of Business Management, Pune “You have your way; I have my way, As for the right way, the correct way and the only way, It does not exist.” Friedrich Nietzsche (German Philosopher) Take your guess! Doesn’t it sound like a ten-second breakup conversation? Yes it does! The only difference is that this conversation is between today’s generation and their dream organization. At a time when Gen-Xers are proudly showcasing their long term service momento, it will be interesting to examine the reasons for short engagement period of Gen-Y workforce. Reasons for Breakup Gen-Y is different in different ways and so are their expectations! Expectations about workplace, work and life at work is what sets them apart from the earlier generations. Gen-Y today is very vocal and very particular about choosing their employers based on the way they see themselves growing in the organization and on the way they are treated in the organizations. Need for now is mobile workplace, task based timing instead of office timing, digital communication with no time lag, which itself is too much for any organization to satisfy, and much more. Are they asking for too much? They are not, as per the recent survey conducted by Society of Human Resource Management to investigate what matters most to employees in organizations. Find below the survey report about the key aspects that Gen Y(born from 1980 to 1995) and Gen X (born from 1961 to 1979) employees find important for job satisfaction with respect to the key aspects that the HR department values. In the 2006 survey conducted by Gallup and the Council for Excellence in Government, it was revealed that only 35% of Gen-Y respondents listed job security as a very important factor in terms of job satisfaction as compared to the present scenario where Gen-Y finds job security as the quintessential factor to job satisfaction. Importance given to job security and financial stability of organization in current economic turmoil clearly suggests that Gen-Y engagement factors keep on changing over time. Top Five Important Aspects of Job Satisfaction Gen-Y Employees
Gen-X Employees
HR Professionals
Job Security - 69%
Job Security - 66%
Relationship with immediate supervisor-72%
Benefits-60%
Benefits-62%
Job security - 69%
Opportunities to use
Compensation/pay, Organization’s
Communication between employees
skills/abilities - 58%
financial stability - 59%
and senior management - 65%
The work itself - 56%
The work itself - 55%
Organization’s financial stability - 64%
Organization’s financial
Opportunities to use skills/
Opportunities to use skills/abilities - 62%
stability - 54%
abilities - 53%
Source : Society for Human Resource Management 2010 Employee Job Satisfaction Survey
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At the same time, it is interesting to look how successful HR and in turn organizations are also realizing pulse of the employees’ expectations. It misses out on factors such as benefits and work for Gen-X employees. Time has come for organizations to sense the change and correct the equation. HR needs to set a culture with HR policies on three major fronts i.e. what is valued, what are future roles and what is normal in current time. Setting Culture with HR Policies
In recent times Gen-Y is showing more inclination towards benefits than earlier. According to a study by PWC, Indian CEO’s feel the same vibe when they prefer ESOPs instead of deferred cash. Still, as per 2010 SHRM study, 18% of the organizations have reduced employee benefits as a means to cut costs. There is a conflict and the solution also lies within. Below are some of the benefits that Gen-Y longs for:
Benefits
%age of Gen Y employee long for this
Supplemental health
15%
Major medical
12%
Long–term care
11%
Critical illness
11%
Life
10%
Disability
10%
Cancer
9%
Accident
8%
Source: Colonial Life, Harris Interactive survey, June 23-27, 2011 So if an organization wants to retain employees, it needs to offer benefits as mentioned in the above table.
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Employee Value Proposition for Gen Y -
Why Engagement is Important One of the challenges for today’s organization is aging workforce i.e. 43 % in public sector and 26% in private sector who needs to be replaced in the next 5 years. (Source: Deloitte Millennial Model: An Approach to Gen Y Readiness Report 2010). The millennium generation who will walk in future would bring in many desired factors such as innovation and high risk taking abilities which every organization is striving for. Hence organizations are trying hard to convert these relations into prosperous wedlock. Engaging employee is not only a part of employee retention but also it gives production boost which can be the secret of organization success in near future. Finally, engagement for Gen-Y will only be possible when they get involved as if they are playing Xbox games, show commitment similar to checking their Facebook status and get satisfied as they get after eating vada pav (sorry that’s my favorite being diehard Mumbaikar)!
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Rendezvous with Mr. Amit Mishra CEO—Punjab Woolcombers Limited (Oswal Group) Cashmere wool, usually simply known as cashmere, is a fiber obtained from Cashmere and other types of goats. The word cashmere derives from an old spelling of Kashmir. Cashmere is fine in texture, and strong, light, and soft. Garments made from it provide excellent insulation. Cashmere is characterized by its fine, soft fibers. It provides a natural light-weight insulation bulk highly adaptable and easily spun into light to heavy-weight. The original undyed or natural colours of cashmere wool are various shades of grey,. It is actually the fine (dehaired) undercoat fibers produced by a Cashmere goat (Capra hircus laniger). The fiber is generally non-medullated and has a mean maximum diameter of 19 microns. The co-efficient of variation around the mean shall not exceed 24%. There can be no more than 3% (by weight) of cashmere fibers over 30 microns. One of the few such companies that work with the Cashmere wool is PWL (Oswal Group). We are grateful to Mr. Amit Mishra for sharing his experience and knowledge with us. Q. Would you like to share your industry experience with us? I have been in the Industry for the last 26 years with 21 years in Operations alone. Q. Can you share with us the recent trends you have observed in the Operations Industry? There has been a slow, gradual but a significant change in the way the things are executed. Execution of work is done in the minimal time, standards have been increased with the advent of Standard Operating Procedures (SOPs) but at the same time the commitment level has gone down. Thanks to the Automation. Q. What according to you is Operations Management? I would list 2 of the things that I consider as the most important in any Operations Firm. One is “Man Management”. “Man management skills” are important to you because some of the men (and women) in your organisation need careful managing. The other is “Commitment of Deliveries”. As I mentioned earlier there is a decrease in the commitment of the companies. So there is an urgent need to understand the importance of customer satisfaction and work on the commitments. Q. Kindly share the past and the future prospects of textile business? Future of the textiles industry in India is bleak as the Government is least supportive. In coming 10 years there is high possibility that business may shift to Mongolia. Garments/Textiles industry as a whole is suffering in India due to poor infrastructure and troubles from the government agencies. Q. Explain demand planning process you have handled or handling? As far as Cashmere is considered, there is already a very high demand for the same and I do not see any need to market a product that has a high demand. Q. What are the risks in procurement ? How do you minimize these risks? Our main concern used to be with the health of the goats. To keep them healthier we are having regular inoculation of goats.
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Q. What is the process time for the production of the finished goods starting from arranging Fibres and so on? Can you please throw some light on the Process of Cashmere Production? It takes on an average 120 days for the complete process. Then it takes about a week each for the imports and the custom duty for any country. Lastly, it takes 4 days to distribute it to the retailers. The process is as follows:
Q. What are the GL postings in procure to pay cycle? It’s all in advanced Cash. Q. What are different inventories Valuations? No Inventory. This is because all the raw materials are consumed the moment they arrive. There is only work in progress inventory. Q. How would you evaluate the inventory performance? What is Inventory Turn over ratio and what would you recommend to increase it under a set of assumptions. Conduct a Thorough Analysis of Current State of Shrinkage within Stores, Reveals preliminary or directional ROI and Standard operating procedures for all stores as well as continually refine and monitor. This ratio is a relationship between the cost of goods sold during a particular period of time and the cost of average inventory during a particular period. Inventory turnover ratio measures the velocity of conversion of stock into sales. Q. Explain Scrap Sales process and the GL postings during the process Scrap Sales process: - Key Process Steps Customer returns scrapping: goods issue to CO-PA General stock scrapping: goods issued to cost center Block material - stock transfer unrestricted to blocked Unblock material - stock transfer blocked to unrestricted Unblock material - stock transfer blocked to quality inspection stock.
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Service Supply Relationships in Healthcare Karthikeyan T & Sangeetha V IIM Lucknow INTRODUCTION In India, Healthcare is estimated to be around a whopping 80000 crores. There are millions of products moving along the supply chain every day. Supplies are the second leading cost to hospitals after labour in providing patient care. Revenue can be generated by concentrating on the area which accounts for nearly one third of all hospital operating budgets – the Health care supply chain. Lack of data standards and lots of paper work makes it error prone and results in redundancy. Cycle time increases and lack of data accuracy results in increased supply chain costs which ultimately affects the patients. Critical Components of a Supply Chain Purchase Activity Since a huge portion of revenue is devoted to purchasing, the purchase department should concentrate on the source, quantity, quality, price and right time for continuous supply of all types of materials. Vendor Management At this stage wherein the hospitals undertake vendor analysis, important factors like quality, quantity, pricing, reliability, speed, financial position, production capacity, process capacity, and transport facilities available with the vendors ought to be given precedence. Stores Stores involve acquisition, receiving, evaluation, warehousing, and maintenance of supplies to the entire hospital. Logistics Medicines should be categorized based on their shelf life. They should be maintained in a temperature controlled atmosphere and issued on a FIFO basis. An early warning report should automatically be generated to alert the doctors on the anticipated expiry. There should be contractual arrangement with the vendors for drugs supplied to the hospitals without the loss of shelf life. Digitization of Health Records Outsourcing ERP would also help a great deal in improving operations. For example, in Apollo Hospitals, TCS takes care of IT implementation. Gain Sharing Hospitals reward efficient doctors by sharing some of the money saved. Improving health sector supply chains requires physicians, hospitals, and others in the healthcare field to reassess their roles and collaborate their efforts. ERP implementation in Health Care Supply Chain
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ERP Implementation in health care targets the following areas of improvement namely data standardization, integration of supply chain and revenue cycle, integration with core clinical systems, billing, demand forecasting, inventory hoarding, material handling time by medical staff and disaster recovery in supply chain. Data Standardization One of the major problems that health care industry is facing today is the difference in the costs of medicine across suppliers and countries. To make it uniform, a global data standard method can be used. The health care industry came up with GS1 to provide a central global repository which stores up-todate information along with secondary information like serial number, lot number, expiry date, name of manufacturing, the location etc. Integrating Supply Chain and Revenue Cycle through ERP Supply chain deals with back end operations which include procurement, inventory management and the like whereas Revenue Cycle management deals with patient related records, accounting, billing, and charge sheet and so on. Integrating these two fields will help in optimizing patient related information like reimbursement and create greater transparency, reduce risks and increase flow of information. Demand Forecasting By having an ERP solution for demand forecasting will help the industry save time. It has direct access to the centralized database and can interpret trend and seasonality factors and reduce the margin of errors. ERP maintains detail level real time data and thereby predicts more accurate forecasts. With the reliable forecasts, inventory levels and purchasing time can be optimized resulting in reduced costs. Finally this solution will help in having increased collaboration with the vendors. Inventory Hoarding Hospitals in health care industry kept on hoarding inventories to avoid stock out and to give better service to the customers, despite the fact that the inventory holding cost is one of the reasons that is affecting the profit. With ERP, one can predict the demand and reduce the level of inventory by having access to the different levels of data that they are storing in the central data warehouse. Material Handling There is a lot of time getting wasted by staffs going after unused equipments. By fixing RFIDs one can track whether equipment is in use or under service, thereby increasing the efficiency of staff and reducing unwanted time. This will help in increased customer service and run backend operations effectively. Bar Code Reader Bar code reader helps in identifying and capturing the information from the point of arrival to the point of use. It provides inventory transparency required to achieve maximum efficiency in inventory replenishment. This reduces the time and cost involved in logistics. Additionally, barcode scanning at the bed of a patient can help stem errors.
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Benefits for Stakeholders Benefits for health care professionals and patients Better patient safety Quality care Benefits for Hospitals Effective replenishment of order Improved inventory management Benefits for Manufacturers and Distributors and Shipping Precise pricing Better Delivery/Shipment tracking Faster recalls CONCLUSION Health sector has comparatively lower rates of change and demand. However, different departments and speciality are characterized by distinctive demand. Cardiology implants require an agile supply chain, while mental health services change slowly. Hence, supply chain practices ought to specifically conceived. Researchers have detailed the mistrust and misunderstanding to have characterized relationships between hospitals and surgeons. Getting hospitals, doctors and other interests in healthcare to coordinate their efforts is a key to improving supply chains and saving money. The New Age hospital should completely be a virtual organization. Inventory should be completely computerized, vehicles should become warehouses, order status ought to be visible along the entire supply chain, and database should get updated automatically subsequent to each and every issue of medicine.
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The Growing Significance Of Green Supply Chain Gitanjali Maria Loyola Institute of Business Administration, Chennai INTRODUCTION The oft quoted statement by most operation professors is that the real competition today is not between companies but between supply chains. The profit and revenues of a company over other competitors lies in how efficient its supply chain mechanisms are. Eco-conscious consumers too question the environment friendliness of a company’s supply chain. McDonalds came under the fire when reports unearthed the news that the sub-suppliers of the burger company were cutting down Amazon forests for poultry feed cultivation. Newspaper headlines screamed ‘McDonalds eating away the Amazon’. The brand name of a company is either marred or upheld by it supply chains, especially when sensitive issues like exploitation of nature and its scarce resources are involved. SUPPLY CHAIN A supply chain is process-oriented, integrated approach to procuring, producing and delivering endproducts and services to customers. It includes sub-suppliers, suppliers, internal operations, trade customers, retail customers and end-users. It includes trade, exchange, logistics management and collaboration among suppliers, agents and customers and covers the management of materials, information and funds flow. SUPPLY CHAIN AND PROCESS IMPROVEMENT Process improvement is a series of measures taken to improve existing business processes like manufacturing, service, product design, development, marketing and distribution. The various steps in the supply chain complete and complement the various other departments within the company and also are a link with the external stakeholders like suppliers, wholesalers, retailers, end customers and ultimately the shareholders. GREEN SUPPLY CHAIN Green supply chain management can be defined as integrating environmental thinking into supplychain management, including in product design, material sourcing and selection, manufacturing processes, delivery of the final product as well as end-of-life management of the product after its useful life. It includes following both green design of products and green operations in product manufacture, distribution and return. The concept of green supply chain has evolved from the concept of extended production responsibility, wherein the manufacturer is responsible for the product all throughout its life cycle and after. GREEN SUPPLY CHAIN PRACTICES Some of the practices practiced in greening a supply chain are: •
Reduction of wastage of raw materials and intermediary products
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Better Network Design
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Minimization of pollution through means like reduced/improved storage of hazardous chemicals, shorter transportation distances and consolidated shipments
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Cleaner Product and Process technology
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Shrinking Packaging
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Shift to Greener Suppliers
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Reverse Supply Chain and taking the complete lifecycle of product into account
A green supply chain aims at confining the wastes within the industrial system in order to conserve energy and prevent the dissipation of dangerous materials into the environment. Improvements in transportation efficiency, operations, raw material selection and packaging, all top the list of “green” supply chain initiatives. Green supply chains should be integrated wholly with the corporate strategy of the company. DRIVERS OF GREEN SUPPLY CHAIN External factors – External factors such as stringent government norms to reduce carbon and other toxic emissions often force companies to innovate and make their supply chain greener. Additionally, pressure from competitors who have adopted green strategies and production practices can also make a company tread the green path. Carbon footprint conscious consumers, whose numbers are growing every day, also necessitates a company to implement green technology to retain its market share. Internal Factors – For some companies, sustainable growth in tune with the environment is a motto strongly embedded in their vision, mission and values. These strongly lead them to adopt greener supply chain practices more easily and quickly than the others in the market. ECONOMIC BENEFITS OF GREEN SUPPLY CHAIN One of the most immediate benefits of a green supply chain is reduced operation costs. The whole operation cycle becomes leaner and more efficient due to excess flab cutting in the form of reduced transportation costs, lower raw material procurement costs (as a result of use of recycled material), lower energy consumptions and lower wastage costs. Implementing green initiatives in a company’s supply chain can raise productivity; enhance customer and supplier relations and support innovation and growth. It is no longer exclusively about green issues alone but also about better efficiencies and cost reductions. Green supply chain also leads to improved company image. Also with increasing awareness among the customers about the need to reduce carbon footprints, greener companies with green products, technologies and operations gain an advantage and a better image. This in turn leads to higher sales and larger markets. It also minimizes regulatory burdens and litigation risks. The biggest benefit of going in for green operations, could probably be, innovation. The company learns to constantly innovate to bring in greener designs, cleaner processes and efficient distribution systems. New greener products and process innovations can also give the company patent rights and royalty from the same.
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EXAMPLES Wal-Mart, world’s largest retailer, has taken bold steps to make its supply chain green and to be in tune with the Carbon Disclosure Project and has requested its over 1,00,000 suppliers worldwide to adhere to carbon emission limits. It has also announced its plans to cut 20 million tonnes of greenhouse gases emissions from its supply chain by 2015. This assumes significance as Wal-Mart operates many retail stores and has a massive fleet of trucks for store replenishment. Xerox was one of the earliest companies to take steps towards greening their supply chain. In the early 1990s they launched an initiative to take back used copiers as a source of material for new copiers. They have saved several hundred million dollars annually through this programme. By source reduction, recycling and reuse of packaging material, Texas Instruments has been able to reduce its transit packaging budget by almost $8 million each year. In India too, the idea of green supply chain is fast catching up. The ITC group of hotels has initiated greening of its supply chain by taking simple steps to rectify its systems and procedures and to work towards cleaner processes and technology in conjunction with their suppliers. CONCLUSION Striving towards putting in place a green supply chain is a long task and has to include all the stake holders concerned. It may be a little painful to get rid of old practices and put cleaner and efficient systems in place; but the payoffs for this are certainly going to be high. With more government rules and international body norms coming into place and consumers becoming environment conscious, the brand image of the company is at stake and it makes huge significance to be seen as a green company. Hence greening the supply chain is as much a marketing tool today as it is an operation expertise.
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Is Petrol Price Hike a Bitter Pill for a Mismanaged Economy? Against the Motion Sylvia Mishra MSc International Relations, London School of Economics Geo-economics, among several other converging factors is a primary reason for petrol price fluctuations. The year 2012 is carrying the burden of an unusually eventful year of 2011 in global energy. The tumultuous events of the ‘Arab Spring’ shook energy markets and has underscored the importance of maintaining spare capacity and strategic stockpiles for dealing with supply disruptions. The earthquake and tsunami in Japan was a humanitarian disaster with immediate implications felt in Japan and around the world for nuclear power and other fuels as oil prices hit an all-time record high. The loss of Libyan oil supplies along with smaller disruptions in a number of other countries have pushed oil prices higher sharply despite a large increase in production among other Organization of Petroleum Exporting Countries (OPEC) members. With all of these issues in play, global energy consumption has grown by 2.5% in 2011, broadly in line with the historical average but well below the 5.1% seen in 2010- as recorded by BP Statistical Review of World Energy June 2012 Report. It is observed once again that the emerging economies- Brazil, Russia, India, China and South Africa (BRICS) have accounted for all of the net growth in energy consumption. With the rise of India as an oilhungry nation striding the paths of industrialization, the oil needs have risen substantially. Over the decade, India’s consumption of oil has increased from 2,130,000 barrels/day to 2,980,000 barrels/day – a 40% increase. A consistent rise in the demand for oil globally has placed the price of crude oil in the free markets over the decade on an all time high-from $23 to$87 which sums upto a 278% increase. Rising prices is not new to the Indian economy and has been a recurrent phenomenon ever since economic planning began in India in 1951. One of the most disturbing features of the recent economic situation is the pace at which inflation is accelerating. The UPA government has been blamed for ‘policy-paralysis’ in decision-making contributing to decreased GDP growth and inflationary pressures on the economy. The opposition parties have demanded that the price increase in petrol should be rolled back. This clamour to roll-back petrol prices is indeed short-sighted as the government fiscal consolidation targets should be understood in a wider and a long-term perspective. With a free-float price being determined by demand and supply, the increase in oil prices has hurt countries worldwide. Rent control, a policy previously used by the Indian government has been abandoned to free the fiscal responsibilities of the government. India carries a fiscal deficit of 5.9% and a target to reduce it to 5.1%. Subsidizing the oil prices would mean an increased pressure on the government’s fiscal policies and would thus create hindrances to sustain a GDP growth. With a projected slowdown in growth to 7% (as reported by the IMF), the government’s decision to not combat the rise in petrol prices is a calculated move. Nonetheless, the government still continues to control the prices of diesel, kerosene and cooking gas to protect the poor, bring relief to the common man and to keep a check on inflation. The dual impact of currency depreciation and inflation was due to oil price rise and it did hurt the economy and taxpayers. Although, an independent Reserve Bank of India holds the opinion that inflation targeting cannot be accomplished in an emerging economy like India. With the Indian engine losing steam due to the global slowdown, inflation has proved to be like
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an untamed horse. It has been on the rise and the contractionary monetary policy has failed to contain it. This seems to be counter-intuitive with GDP growth slowing down and interest rates rising and yet, inflation rising too. The government has the option of trying to sustain growth while not adding debt to the country’s treasury. With an increasing middle-class (from 5%-40% over 20 years), India’s consumption rate has been booming. With little increment in the country’s treasury, subsidizing petrol prices could prove harmful for the country in the long-term. India imports around $150 billion worth of crude oil which continually increases our trade deficit and reduces the value of rupee in dollar terms which in turn makes petrol more expensive in rupees. Thus, effectively the subsidization of petrol would make the Indian currency bleed as it would entwine in a vicious cycle of currency devaluation. Also, as long as petrol prices are controlled the search for alternative fuels or encouraging natural gas would never receive impetus. It is important in today’s global energy system that all of us –producers, consumers, along with our governments, address energy security challenges to build a safe and sustainable energy future together bearing in mind the longer term implications without losing the sight of slower-moving structural changes. What makes headlines today definitely concerns us. Nevertheless, we cannot neglect the importance of those factors that could make headlines tomorrow. In this light, the rise of petrol prices is ought to be seen as a benefaction.
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Is Petrol Price Hike a Bitter Pill for a Mismanaged Economy? For the Motion Bharti Bansal Lal Bahadur Shastri Institute of Management, Delhi There is a need for reforms in India to bring back a GDP growth rate of 8-9%. Increasing Fiscal and current account deficit and the depreciating rupee is causing the FIIs to withdraw their money. All these are signs of a mismanaged economy. As a panacea, government has deregulated petrol prices. Most people would argue that petrol is mostly consumed by middle class and upper class, so it wouldn’t affect the poor. However, the reality is quite different. The rich have started buying diesel cars. So, this is affecting the middle class and in some ways the poor class as well. The poor is affected by the stubborn inflation. Now, let’s consider the oil companies, who say they have huge under-recoveries in the balance sheet. These under-recoveries cannot be brought down by price hike. These so called under recoveries are notional and not real losses to the company. Under recovery is the difference between price of petrol if it had been imported and the local selling price. Why should we use the cost of importing fuel for calculating under recoveries, when we import only crude oil? The cost of importing crude oil, and refining and marketing it in India, costs less than the import of the fuel itself. The government’s tax collections from petroleum products far outweigh the subsidy provided. The government gets a lot of revenue in the form of excise duty and custom duty from the petroleum sector. Moreover, the sudden shock of the petrol price hike would have been mitigated if the government had increased petrol prices in a phased manner over a period of few months. The government, which faced the state elections, did not allow the prices to be raised when the global oil markets were on a rise. This increase in price has further skewed the dynamics in the passenger car industry. The Government also has to deal with hike in diesel prices that would again worsen inflation. There is a political paralysis in the country. Government is making policies that are uncertain and investor unfriendly, such as GAAR, which is confusing. Coalition politics has made the government unable to take any concrete steps. The current depreciation in rupee however has handicapped both the government as well as the RBI. With inflation increasing day by day, deregulation of diesel prices, kerosene etc. will only give a push to it. The government should first focus on making the business environment investor friendly and attract FDIs and FIIs which will stabilize the rupee and help in GDP growth.
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Government’s Move to Hike Petrol Price: Paving Way for Fiscal Consolidation Against the Motion Abhishek Miglani Analyst, Ernst & Young Before starting with the hike in petrol price debate, let’s visit the basic underlying factor behind the current economic turmoil both in US and Europe – DEBT. Whether it’s sovereign or leveraged balance sheets of corporate houses, it has spared none. Government of India, already dealing with a slowing economy, hiked petrol prices by Rs.7 a litre recently to reign in the burgeoning fiscal deficit which stands at roughly 8% (both central and state governments) as a percentage of GDP in fiscal year 2012 (FY12). With international crude prices above $100/barrel and rupee falling to 57/$, it hardly made any sense for the government to not pass on the higher fuel prices to customers. Clearly the government seems to have taken lessons from crisis in the west and would not allow itself to get into a debt trap. (Fiscal deficit and international crude prices trend)
Source: Planning Commission
The chart above shows that international crude prices have been increasing since FY06 and only took a dip in FY09 when US was officially in midst of a recession. However, this didn’t help India much in controlling its fiscal deficit as Government rolled out many tax sops and stimulus packages to spur growth. Vicious Circle
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Higher Subsidy: More Inflation! Among all the opposition to fuel price hike by opposition political parties, the logic that subsidizing fuel is the most dangerous step in a vicious cycle which will further deteriorate the financial health of a country, was lost. Keeping fuel prices distorted by providing subsidy ultimately leads to a weaker economy. When higher crude prices don’t translate into higher domestic fuel prices, it increases subsidy provided by the government which leads to a higher fiscal deficit. Any increase in deficit essentially means more borrowing by the government and hence higher interest rates. This increases the cost of capital for corporate which slows down the investment cycle, resulting in lower GDP growth. The combination of higher fiscal deficit and lower GDP growth weakens the rupee against dollar and other global currencies. This makes our import bill inflate and hence higher fiscal deficit again. Costly import would not only include fuel, but also other necessary food items like pulses, sugar etc which would further fuel inflation. The never ending vicious cycle would break only when fuel prices are adjusted to market prices. It is important to note here that the argument is to deregulate fuel prices and not to increase them. A deregulation would also imply decrease in petrol/diesel prices as and when international fuel prices drop. Deregulation would make the markets more efficient. Any change in crude prices would be mirrored in change in the domestic fuel prices which would directly affect demand. Hence if the petrol prices were to be deregulated globally, it would lead to international crude prices adjusting to falling and rising demand, quickly making the price more stable. Attracting Private Investments There is no doubt that India’s energy consumption would increase many folds by middle of this century. With less than 20% of oil produced domestically, it is necessary to rope in private players who could invest in exploration, refining and distribution to meet the growing demand. As long as prices remain distorted, it would never be a level playing field for private players and they would refrain from investing in additional capacity. This further justifies deregulation of fuel prices.
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SPARSH—Accomplishments 2011-2012 SPARSH exuberates the parallel extension of simplicity, cooperation, and unwarranted support/kindness laid down as formal principles of late Shri Lal Bahadur Shastri Ji. It is a student body of LBSIM which works for the welfare of the underprivileged sections of the society. Sparsh, in its own little ways, tries to lift up the lives of the browbeaten of the society-and bring back the precious and refreshing smile on their faces. SPARSH was founded initially to serve the blind. It had an association with NAB (National Association of Blind) in RK Puram, Delhi. Sparsh team used to go there and spend time with them. Currently, they are working in collaboration with an NGO named Jaagriti to provide education to the underprivileged children. The team dedicates their Sundays for these activities to help the children learn new skills. Blood donation camp is organized each year by the SPARSH team and different festivals are celebrated in their own unique styles. This year the team had celebrated the Independence Day at a school nearby. Lohri was celebrated at an old age home in Najafgarh in a traditional way. Christmas was celebrated with children; the teammates came dressed as Santa Claus and taught Christmas carols to them. Sparsh team visited a re-habitation center to meet the people staying there and make them understand the ill-effects of Alcohol and drugs. They had organized cloth donation week just before the advent of winter season and the clothes were distributed in the nearby slums to help people fight severe cold. They also conducted a workshop with small children in Dwarka, informing them about traffic rules and use of Helmet. They hosted an online photography competition based on social theme, “Flutter Ur Shutter” between 23rd, Jan 2012 to 5th, Feb 2012 with Over 120 wonderful entries, likes from all round the globe totaling to over 3000. Sparsh have plans afoot to start a helpline service for injured birds too. This helpline will guide people to locate the nearest place where they can get injured birds treated. With the tremendous response shown by its team towards this initiative, SPARSH will change more than just a few lives. Such initiatives are also backed by the institute’s administration as they are in consonance with the vision of Late Shri Lal Bahadur Shastri Ji. Despite a heavy schedule packed with classes and mid-term examinations, a good number of students set their foot forward for these noble causes.
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Reminiscence A management institute is known not only by the quality of education it puts into its students, but also by the entrepreneurial spirit it illuminates in their hearts. Lal Bahadur Shastri Institute of Management, since its inception, has encouraged the same in its students. We have seen our esteemed alumni embark upon a journey to fulfill their dreams of starting up their own ventures with full faith and support from their Alma Mater. Humble beginnings form the foundation for a strong future. Humble beginnings of our alumni gave them a platform to chalk out their path, work out their plans and go for their dreams eventually. We illustrate here the journeys of few of our alumni, we reminisce their dreams. The very first batch graduating from LBSIM, 1995-97, saw students coming out with entrepreneurial ideas they wished to work on. Among them, was Mr Samit Kampani who, after specializing in Marketing & Finance, got a hands on experience in sales, marketing, procurement (local and from overseas) and merchandising across diverse industries for 14 years. The IT Factory, of which Mr Kampani is a co-founder, guides and assists consumers to buy the right product at the right price. The following years saw LBSIM develop and nurture the seed of entrepreneurship. From the batch of 1996-98,we have Mr Digvijay Bhandari and Mr Pankaj Bajaj. While Mr Bhandari is the owner of GD Products that provides hand-made paper, handmade paper products, gift paper bags, white paper bags, recycled paper bags, handmade paper bags, decorative paper bags, eco friendly products to its customers; Mr Bajaj is a promoter for “Kshitz… The Horizon”, a management consultancy firm – both these ventures based out of Jaipur. Mr Bijoy Kr Majhi, a 1999 graduate, is a chef and co-founder of “Angels in my Kitchen”, a bakery currently functioning successfully in Delhi and NCR. He started with The Taj Group of Hotels as a chef and later, worked towards his dream of owning a national chain of bakeries in India. Way to go Mr Majhi! We can never forget to mention a name that has been a shining star in the world of entrepreneurship for quite some time now – Mr Vineet Bajpai, Founder and Group CEO, Magnon Solutions and Magnon International and the President of LBSIM Alumni Foundation. He has been awarded with the Asia Pacific Entrepreneurship Award 2011 and CNBC TV Mercedes Benz Young Turks Award which recognize and celebrate excellence in entrepreneurship. The companies, Magnon Solutions and Magnon International were ranked among the Top 25 Internet companies in the country. Both companies have been widely appreciated by the media as a powerful entrepreneurial growth story. Mr PA Shameel Sajjad, a pass-out of 2007, launched Zirva Business Solutions - a single-window Shariah-oriented business and investment consultancy provider. Zirva Business Solutions, based in Malappuram district, focuses on three distinct verticals of business, investment and educational services. We also have 2004 graduate, Mr Vishesh Bajaj, co-founder at GeoBeats, a start up in the travel industry, which is reaching new heights with every passing day. GeoBeats is an interactive media company whose mission is to inform travelers about international destinations through the use of short-and-informative videos. Mr Manish Grover, a 2009 graduate from LBSIM, founded Shaadimagic.com, a wedding planning portal, one of its kinds in India – providing todays to-be-weds with comprehensive wedding planning information, quality vendors listing, interactive tools, and resources with a real-world sensibility. Names abound of our alumni who decided to follow their dreams and make a mark in the world of entrepreneurship. Lal Bahadur Shastri Institute of Management is proud of each one of its alumnus.
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Rendezvous with Mr. Ashray Sachdeva Co-Founder & Director—Humour Me Q. What motivated you to start your own venture? I am one of the partners of “Humour Me” along with my brother, Dhruv Sachdeva. He was heading the marketing division at a place called Comedy Store in Mumbai, and I on the other hand was working with RBS in Delhi. When Dhruv came back from Mumbai nearly six months ago, he came up with the idea that creativity should be met with corporate. For any organization it is very important that the employees are satisfied and when they go back home they have a smile on their faces. A company may be reaching new heights in the corporate arena but the employees might not be happy. Like when you watch a play or movie you don’t get to see the backend team or what has happened in terms of production. We don’t get to see who is behind the scenes but at the end what we get to see is a beautiful product. So that’s when we decided to start this company and give similar vibes to the corporate suites. In December he came up to me and said this is what the idea is, and that was when we decided to sit down together and chalk out a business plan and devise a strategy to implement the same. Q. What were the challenges you faced as an entrepreneur? I believe that everyday is a challenge for an entrepreneur. We sell happiness to organizations and its very important that we maintain the same culture at our organization. In order to ensure the same, we start everyday with a very simple exercise called "Check in" at our organization wherein all the team members and interns come together and talk about what happened the previous night and what kind of mindset they start their day in the office with. So when you know that your colleague or boss has come in with that kind of a mindset you can share things with other members, as it adds to the energy levels and brings a smile to every face. Q. Do you think life as an entrepreneur is more challenging compared to working for an organization? An entrepreneur has a lot of challenges; he has to play multiple roles every day. From operation to finance to marketing to sales, you undertake various roles as you are an entrepreneur. You tend to do everything from being a peon and managing the clericals to the smallest job role in your business. This is what you are not supposed to be doing when you are working in an organization. Q. With what Mission and Vision did “Humour Me” came into existence? Our Mission is to be an authority in the entertainment sector in the coming 3-5 years. We call ourselves a creative consulting firm because we are a one stop shop for all the rejuvenation workshops and the entertainment needs of an organization. Q. How do you plan to grow as a creative organization in the global arena? Currently we are working with lot of external agencies and have many expansion plans. We are planning to open up offices in Bangalore and Mumbai in the coming year as these are the locations in the country where the corporate sector are and also where the top B Schools in the country are, so
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that’s where the market is. Right now we are working with McKinsey, Coke, Pepsi and we have also undertaken an event for NHRDN. Q. What exactly does your business do for these brands? For every organization we create tailor made entertainment needs or consulting needs. Like McKinsey needed an improvisation, which is actually 5 actors coming together and doing an improvisation show for about 200 consultants from McKinsey. We did a workshop for Coke, where we enacted different scenarios between a team leader and the employee. The findings of which were very helpful in understanding the expectation between the two groups at Coke. So we work with different organizations as per their needs and we don’t sell something which is not needed by the organization. We understand their needs and create something very tailor made for them. We are a creative entertainment solution firm, that understands the corporate needs and create entertainment solutions in terms of how their products or how their employees can be treated better. Q. Are there any tips you would like to share for budding entrepreneurs? You have got to keep up with the challenges, have a smile on your face no matter what the circumstances are because every day is not an upward graph. There will be moments when the graph will go down but you’ve got to take everything in your stride and look forward to the next day and hope that “tomorrow is a better day”.
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Management lessons from the Movie - Gung Ho(1986) Rajwinder Singh KJ Somaiya Institute Management lessons can be learnt from little-little activities in your daily life, like playing a team sport, meeting a new person etc. likewise a person can also get management lessons from a lot of movies like The boiler room( About cold calling ) , Tin men ( Door to door salesmen). But the movie which has left a lasting impression on my mind is the 1986 Hollywood movie Gung Ho. Gung Ho is a 1986 Ron Howard film, released by Paramount Pictures, starring Michael Keaton Gedde Watanabe about a Japanese management’s takeover of an American car manufacturing plant. Plot of the Movie Gung ho a slang in American English meant "enthusiastic" or "dedicated" originally used in slang. The local auto plant in Haleyville, Pennsylvania, which supplied most of the town's jobs, has been closed for nine months. Former foreman Hunt Stevenson (Michael Keaton) goes to Tokyo to try to convince the Assan Motors Corporation to reopen the plant. The Japanese company agrees, and upon their arrival in the U.S., they take advantage of the desperate work force to institute many changes. The workers are not permitted to form a union, are paid lower wages, are moved around within the factory so that each man learns every job, and are held to seemingly impossible standards of efficiency and quality. The Japanese executive in charge of the plant was Takahara Kazuhiro, on becoming the strict manager his superiors expected he gives Hunt a large promotion on the condition that he work as a liaison in the Japanese management and the American workers, to smooth the transition and convince the workers to obey the new rules. More concerned with keeping his promotion than with the welfare of his fellow workers, Hunt does everything he can to trick the American workers into compliance, but the culture clash becomes hard to manage and he begins to lose control of the men. In an attempt to solve the problem, Hunt makes a deal with Kazuhiro: if the plant can produce 15,000 cars in one month, thereby making it as productive as the best Japanese auto plant, then the workers will all be given raises and jobs will be created for the remaining unemployed workers in the town. However, if the workers fall even one car short, they will get nothing. When Hunt calls an assembly to tell the workers about the deal, they balk at the idea of making so many cars within such a short time. Under pressure from the crowd, Hunt lies and says that if they make 13,000, they will get a partial raise. After nearly a month of working long hours toward a goal of 13,000—despite Hunt's pleas for them to aim for the full 15,000—the truth is discovered and the workers go for a strike. Because of the strike, Assan Motors plans to abandon the factory again, which would bring misery to the town. Hunt observes that the real reason the workers are facing such difficulties is because the Japanese have a work culture that is very different from Americans. Hunt, and Kazuhiro, go back into the factory and begin to build cars by themselves. Inspired, the workers return and continue to work towards their goal, and pursue it with the level of diligence the Japanese managers had encouraged. The ruse fails when the car that Hunt had supposedly bought for himself falls apart and he attempts to drive away, but the strict CEO is nonetheless impressed by the workers' performance and declares that the goal was met, acknowledging them as a good team.
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Management Lessons from the Movie The Japanese management came to America and at once took it for granted that the American workers would abide by the Japanese work ethics and culture. They did not try to learn about the American culture and integrate with it; instead they tried to thrust their beliefs, and value system on the American workers, which caused a lot of discord between the workers and the management. In International Business perspective, as we know that globalization is going on at rapid speed. A new country and a new working condition, brings in a lot of changes for an organization and the management should be cautious that the change does not affect their efficiency or their productivity in a negative way. Organizational culture represents a common perception held by the organization members. It affects the day to day working of the organization. You just cannot thrust your beliefs, your culture on others and expect them to quietly accept them, both in letter and in spirit. In many examples from the Business world, we can see Culture being a Barrier to Mergers and Acquisitions in many cases. Merging the cultures of two organizations can be difficult, but not impossible, if some restraint is practiced by all the parties involved. The Japanese management could have bought a smooth transition to the plant’s culture, if they would have tried to affect a gradual change and had not acted in an authoritarian manner. They could have used various HR practices like Changing the reward system to encourage acceptance of a new set of values. Replace unwritten norms with formal rules and regulations that are tightly enforced. Shake up the prevailing subcultures through transfers, job rotation, and/or terminations. As an employee's performance depends to a considerable degree on knowing what he should or should not do, defining the culture of an organization can lead to an amiable working environment that is conducive to greater efficiency and productivity, leading to a positive connection between the organization and the employee.
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Management Lessons from the Movie: Ratatouille Priyanka Verma Lal Bahadur Shastri Institute of Management Ratatouille is an animation (Disney-Pixar Classic) which offers loads of management lessons for everyone but specifically the MBA students. It is a story of a rat, named Remy, who rises from being just a rat in a rut to becoming a renowned chef in a country like France. The story revolves around this unusual protagonist and how he gains acceptance not only from his ancestors but also from the human species to work/cook like a human. The story crucially hinges on his attempts to be different from the other rats and to gain access to a better living just like the humans. He strives for a better life and a higher standard of living which he ultimately achieves through courage, perseverance and belief in himself. There are various incidents in the movie worth highlighting in order to put across the characteristics that he possessed and how he dealt with these crisis situations. Lesson 1 : Passion rules the roost! Profusely inspired by his idol, late Chef Gusteau, Remy made sure to gatecrash an old lady’s house every now and then to read the book, titled, ”Anyone can cook” and if lucky could even catch a glimpse of his shows on TV. The determination and passion with which he experimented with raw food coupled with his highly developed sense of smell and taste made him stand out of his clan. This shows, no matter who you are, if you have the will, determination and most importantly the passion, you can achieve the impossible. In business, when you are faced with a crisis or any kind of rejection (because of the background you come from), what you need to hold on to is, your passion. Lesson 2 : Social betterment makes success sustainable! Remy overcame all the obstacles and hurdles that came his way to become what he really wanted. It didn’t matter to him as to how he would ever be accepted by the superior species (humans) and even by his own clan to pursue this dream. He, for a matter of fact, didn’t ever dream of becoming a great chef. He always wanted to enhance his clan’s standard of living so that they eat well as compared to what rats are supposed to eat (i.e. leftovers and garbage). We can draw a great lesson from this that success has no meaning if it is not accompanied by a social objective. Companies now-a-days indulge in CSR (corporate social responsibility) activities not only to have a respectable standing in the market but also to have long lasting ties with people. Though businesses are realizing this, there is still a lot to be achieved in this field. Lesson 3 : Anyone can innovate! Though he belonged to a rodent family, Remy was always on the look-out for finding new herbs he can add to his food to make it a wholesome experience. He never wanted to settle with what he had. He found no harm in sneaking into an old lady’s house and raiding the spices rack in search of one of the particular herbs he wanted. Even at Gusteau’s restaurant, he always experimented with dishes with absolutely no support coming from the far more trained individuals working at the restaurant. And those experiments were well appreciated by customers making his art of experiment ever more laudable. In businesses, there mostly exists a need of conformity amongst the employees. Ideas and innovation are hardly thought of and a safer route is adopted to achieve the set goals. A well known
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thought that “change is the only constant” should be inculcated in employees in order to make them come up with new innovative ideas and break free from the existing ones. This will bring better returns to not just the company concerned but also to the individual at a personal level. Lesson 4 : Connect with people at an emotional level This goes for both the employees at your firm and the customers (both existing and potential) you have. At the end of the movie there is this wonderful scene when the big bad critic guy tastes the dish of ratatouille prepared for him by Remy and memories of his childhood start flooding his mind where he is a boy being comforted by his mother after hurting himself from falling off the bike. The food connected to him emotionally. Your products can do this too. A firm can do this for its staff and consumers. Listen, empathize, connect, guide and then inspire. Lesson 5 : Ethics for a long term success There have been so many instances where it is demonstrated how Remy had chances to steal food to satiate his hunger but he always restrained himself from doing so. He never stole food. “A cook makes and a thief takes” the teaching given by Gusteau (who was just a figment of his imagination helping him all the while with his pearls of wisdom) rested with him till the end. His only weakness was his family that wanted him to steal food from the restaurant for them for which he did give in, but never liked the idea. Also, the sanitation and cleanliness he maintained all through before/while cooking conveyed that he was true to his ethics. A lesson that can be learnt from this is that, to stay in business, one not only needs skills and passion to push the business forward, but also strong ethics to make it sustainable and noble to its truest sense. Lesson 6 : Crisis Management In the end, it is shown how Remy along with his entire clan manages the entire restaurant when the staff refused to work in the restaurant when the truth (regarding a rat making food all along in the disguise of Languini, the character) surfaced. He took it up on himself the responsibility of not disappointing the Gusteau Restaurant’s customers. He gets into action and divides the entire clan into different sets and assigns a task to each one of them. He doesn’t sit back and accept defeat. Companies can learn a lot from this in the sense that, when there is actually a crisis, many companies just give up and blame the external factors for their fall. Strategy and presence of mind play a crucial role in managing crisis and it is very explicitly shown in the movie at various instances, such as the time when he observed the problem with Linguini and strategized the plan of action with the given resources (the hand and hair pulling movement) in a way that Linguini passes his test of cooking abilities at the restaurant and becomes a part of it.
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The Business of Quizzing Juby Cherian & Zain Inhonvi Lal Bahadur Shastri Institute of Management, New Delhi I don’t know when the first ever quiz took place in the world and I guess this is one question which shall forever remain unanswered! However, if we search the world wide web (1990), we get to know that professional quizzing in India started in 1967 when one (okay, we know who he is) Derek O’Brian organized India’s official, first formal quiz event, and since that day it has only increased its expanse across the fertile minds in our country! In fact, if we scan the quizzing scene in India today, we see not only a greater number of quizzing enthusiasts, but also a lot of corporate tapping into it for multiple purposes such as building brand equity and even to engage their employees! Also, a large number of educational institutions are getting serious about quizzes (something which should have happened earlier but then, 35 years aren’t too much I guess) as is evident in the high rewards at stake in various quizzing events at academic and corporate level. All this has led to a frenzied demand for ‘quiz-masters’ in Delhi and other metros has shot up considerably and there is a severe ‘talent’ crunch in this segment. The fact that most quiz masters prefer setting up their own companies adds to this scarcity! Yet, every avid quizzer knows that there is no dearth of questions, nor of talent! A simple search on ‘facebook’ reveals hundreds of quiz-groups which inspite of being non-commercial are very active and could give many professional sites a run for their money! Prominent Quizzing Companies
Quizworks GreyCaps Dare2Compete Contests2win MnA
So, what’s the business scene all about? Well, the trend these days is that many free-lancing quiz masters are utilizing this gap in supply-demand and are setting up their own ventures to earn while they have fun. We also see working professionals leaving their jobs and becoming quiz-masters and entrepreneurs as was the case with Rohit Nair, one of the main brains behind ‘Quiz Works’, India’s leading professional quizzing company. His journey in the corporate world started off as a software engineer but that didn’t stop him from continuing with his passion. Then one fine day, a Eureka moment happened and the light from the heavens and……….. he realized that Quizzing was his real calling! Understanding the Financials I’ve elaborated on my enthusiasm for quizzing. Now it’s time to get the basics clear. The bottom line in this business is that if you love quizzing and you’re okay with traveling, you can earn big bucks. However, please note that you need to have strong credentials if you want the dough! And how do you build your credentials? The answer is pretty simple: •
Participate in as many quizzes as possible (and win)
•
Organize quizzes at college level
•
And you could try for even corporate level quizzes
Quizzing
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Compensation Structure: Per Quiz (excludes traveling charges) Schools, Local quizzes, etc
B-Schools, Engineering Colleges, etc
Corporate
Rs. 5000 – 15000
Rs. 15000 – 50000
Rs. 50000+
The capital required to start up your own Quiz Co. isn’t much, with most of the cost involving setting up of a website and purchase of equipments such as buzzers, et al. A motivating story for those who are a bit short on cash goes something like this: A quizzing enthusiast named Rajeev Kondapalli wanted to spread quizzing but didn’t have the resources to do so at a professional level, but that didn’t dissuade him from his goal and he started a free quizzing blog ‘Biz Quizzard’ which focused on weekly current affairs/business news based on the events of the week gone by, and compiled from various sources. It was also co-posted on Quinkie, an online quiz group dedicated to business quizzes. With the first edition posted in March 2004, Biz Quizzard has not missed a single week till date and has been featured in the Limca Book of Records 2011 & 2012 editions for this achievement! So, if you have the passion, nothing can stop you! ROLES There are a few roles which you can play in this business. Please see the figure mentioned below:
Quiz Master : This is the ‘face’ of the business and is also the most glamorous and well paid job! Content Creators : For all those quizzers who prefer their own space over the stage, there’s always the need for ‘content creators’ who could prepare content for ‘quiz-masters’! So, you may get paid less, but you’ll have your peace of mind and build some amazing rapport with your circle! Manager : You can also be a manager at a quizzing firm. The pay would be less but you can learn the tricks of the trade and perhaps start your own venture some day! (Yes, I’m promoting idea poaching!) Owner : You may not be interested in quizzing but you can still earn the maximum if you use your business acumen to let the right people do the right work at the right time! CONCLUSION “There are two sides to every question, because, when there are no longer two sides it ceases to be a question” – Anonymous Quizzing is picking up in India at different levels and there’s a business opportunity in every segment. Think out of the box and never forget the rule of simplicity. And most importantly, keep the quizzing on! Warning: Quiz-masters and content creators are a fragile lot. Handle them with care!
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Quizzing
Editorial Team (2011-2013 Batch) Kanika Bansal Editor
Varun Arora Co-Editor
Gayatri Muralidharan Debating
Piyush Chandan Finance
Shallu Aggarwal General Management
Sana Naqvi Alumni
Mansi Jain HR
Kamlesh Dharamchandani Media & Communication
Zain Inhonvi Quizzing
Akansha Sharma Sparsh
Debashish Paul Marketing
Vishwam Agrawal Cultural Team
Nishant Ajitsaria Entrepreneurship
Mihir Mathur Operations
(2012-2014 Batch) Surbhi Bhardwaj
Akanksha
Soumya Jayakumar
Sahil Sayal
Juby Cherian
Amit Attrey
Shubham Singh
Shruti Patra
Prakriti Nautiyal
Naveet Kumar
Rupesh Jain
Amanpreet Singh
Rishabh Tiwari
Neha Khanna
Nishant Sharma
Rashmi Sharma
S. Priya
Srishti Tekriwal
Kanika Monga
Husein N Harniswala
Neetesh Bansal
Ankit Galundia
Pulkit Bhalla
Deepshikha Dutt
Ansh Gupta
Hema Sehgal
Disclaimer : The editorial team does not bear any responsibility for violation of any copyright or patent considering that it is personal contribution from all the authors.
LAL BAHADUR SHASTRI INSTITUTE OF MANAGEMENT, DELHI Plot No. 11/7, Sector 11 Near Metro Station, Dwarka New Delhi-110075 Phone: 011 25307700 , Website: www.lbsim.ac.in