Showing posts with label IIPM EDITORIAL. Show all posts
Showing posts with label IIPM EDITORIAL. Show all posts

Monday, October 08, 2012

Gas them all, we say!

The lethargy to move to alternative fuel seems almost insane...

In Japan, while Honda rolled out its first hydrogen powered car, another Japanese company, Genepax, has gone one step ahead in making a prototype which runs on water by extracting the hydrogen for fuelling the engine. This should be seen in the background that hell-raisers (economists, if we may) now claim that the price of oil could even touch $200 per barrel in months to come. And though it might be too early to prefigure the shape of things, one thing is for sure, that the short journey to a new world where the need to plead and live with a prayer for oil price to come down, has already begun.

Yet, the real question is whether the energy problem is really so grave or is it simply a result of inertia of developing countries to strive for alternatives. And especially so in developing economies like, say, India. A report by the Global Environment Facility of the UNDP on India’s Coal Bed Methane (CBM) extraction potential states, “It is estimated that in India, the largest coal producer in the world, there are around 20,000 sq km of area where CBM capture could be carried out and that the country’s recoverable reserves of methane are 800 billion cubic metres, with a gas production potential of 105 million cubic metres a day over 20 years.” Compare this with Saudi Arabia’s daily production of oil which stands at 9.5 million barrel per day.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Saturday, October 06, 2012

When PIGS Come Out in The Open

Ireland’s Rescue has Failed to Stem off Market Tensions from Euro Zone. B&E talks to Experts, Including the European Central Bank, to Analyse who will be the next Victim of Sovereign Debt Crisis.

If you thought that the recent agreement to provide Ireland with $114 billion to deal with its banking and fiscal problems was the European Union’s (EU) last in the series of bailouts, which started with Greece ($147 billion bailout in May 2010), then you have definitely failed to estimate the fury of the financial storm engulfing Europe. In fact, considering the continously deteriorating strengths of the fiscal and banking systems in nations like Spain, Portugal, Italy, et al, several economists believe that the tornado doesn’t end here. If not, then whose is next?

Though Eszter Miltenyi, Sr. Press Officer at European Central Bank (ECB) finds an excuse to get away from revealing that big name by telling B&E that, “I am afraid we won’t be able to answer this question,” there are still many who are bold enough to speak the truth. Enam Ahmed, the London-based Sr. Economist at the Moody’s Analytics, tells B&E, “The contagion from the fiscal problems of Greece & Ireland is spreading beyond Portugal & Spain, which are clearly next on the market hit list to receive EU-IMF help.”

And why not? The signals sent by Portugal and Spain are almost similar to the ones propelled by Greece and Ireland just before the financial storm hit their shores. Like its distressed Euro-partners, they both have a fragile public finance. In fact, Portugal’s budget deficit is already around 9.3% (in 2009), which is an astonishing 6.3% higher than the standards set by EU. Even the country’s foreign liabilities are close to 108% of its GDP ($225.35 billion), much higher when compared with Greece whose foreign liabilities stood at 87% of GDP ($264.82 billion) at the time of the collapse. Ten-year government bond yields are too hovering just below 7%, a level that Portuguese policymakers too accept as unsustainable.

Considering this, the European Commission’s report on the 2010 fiscal deficits of the EU member states, which is due to be published in January 2011, will be closely followed by investors. If Portugal fails to meet its target to bring down its fiscal deficit to 7.3% of GDP in 2010 the interest rates will shoot up further complicating things for Portuguese policymakers. Though, the economy has a $13.5 billion financing requirement in April 2011, it could be forced to go to the EU-IMF before then. If it happens, a minimum of $67 billion bailout package would be needed to save the nation from defaulting on its debt. Even CMA DataVision, a UK-based research firm that tracks the riskiness of sovereign debt, rates Portugal’s performance during Q3 2010 to be the second-worst in the world after Ireland. As per it, the spread between the starting price of swaps in July 2010 and the end price in September 2010 has widened to 30.4%.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Friday, October 05, 2012

THE GRAND OBAMA BEGGING GAME!

Barack Obama came, he spoke and he conquered. At least that’s what some of the biggest media houses would have you believe. Nothing could be more misleading for the Indian public. Here are the reasons why the trip was only of feel-good value, that too for dumb people.

1. Obama had a clear-cut mandate. And that mandate was to show Americans that he was taking back jobs for them. He took away business worth $10 billion and 50,000 jobs. These $10 billion could have been used in India to create 200 times more jobs, because for every American job we create in America, we can roughly create about 200 jobs in rural India. It was a classic game of begging that the new America is now seen playing in India and China. With India, it’s about access to its markets and deals with the government. And with China, it’s about the revaluation of the Chinese currency to reduce their foreign debt and make Chinese products uncompetitive in American markets! I would even say that it was indeed sad to see such a weak American President for the first time in history. An American President is expected to speak like a great statesman – whether he speaks to businessmen or to the Parliament. He is expected to talk about America’s role in global peacekeeping and poverty eradication, the latter more so since India has 65% of people below the globally defined poverty line of people earning less than $2 a day. It was a shame that his talks never touched upon any of it.

2. He did speak of the need for Pakistan to bring 26/11 criminals to justice... But that is purely lip service. He never spoke of access to Headley. Just before coming to India, he doled out $2.2 billion military aid to Pakistan. Talking about Pakistan supporting terrorism, yet giving them money to spread terrorism in India; both cannot go hand in hand. It’s typical American double speak. He did not utter a word about stopping aid to Pakistan. He only used cleverly worded stuff about Pakistan to gain brownie points in India without giving away anything.

3. He did not utter a word about China and its role in supporting Pakistan or its illegal occupation of Indian land. But a few months back, he did speak about the need for China to be the guardian of South Asia, including Kashmir.

4. It was really nice of Obama to be so appreciative of Gandhi. But as Americans prepare for a war on Iran – less for security issues and more to revive their economy – I doubt if Gandhi is what he really believes in... Loving Gandhi and bombing countries for financial gains don’t go hand in hand. As a person, I am very sure that he appreciates Gandhi, but as a world leader, he does not display the same in his actions. Signing a memorandum allowing poor African countries to use children for war certainly doesn’t speak greatly for a Gandhian.

5. The big Obama announcement is supposed to have been about his support to India for a permanent seat in the United Nations Security Council. It might be noted that what he said has been said in the exact words by Bush before him and Clinton before that. It’s a shame that as a nation, we get so excited by such lip service. We deserve to be in the Security Council, and without us the Security Council is a sham. Obama’s mentioning the same is not a favour. And there is absolutely no reason to be excited about it. A permanent seat is our due and it is the Security Council’s job to call us and give us this due with appropriate apologies for the delay. And we should then proceed to rip them apart for the delay.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
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Monday, September 10, 2012

Tim, what are you doing?

Former Google key man Tim Armstrong is cutting deadwood, exploring new businesses and being trigger happy like how. But his current assignment at AOL could prove to be a career killer.

March 17, 2009: A crowd of 1000 employees has assembled in a large tent at the original Dulles, Virginia Headquarters of AOL. Tim Armstrong, Chairman & CEO, is about to make his debut speech. AOL founder Steve Case speaks briefly before him; without putting much stress on the bloodied past. Then, a 6 foot 4 inches tall Armstrong rises to the podium. The air is heavy with nostalgia with some employees wiping away tears, hoping that Tim’s speech would be enough to wish the bad years away. Armstrong gets a standing ovation; his speech does better. Happy days are surely here again...

Erm, not so fast. AOL has, after all, been a revelation in the manner in which it has managed to fall, from being an Internet giant to a firm that’s all but out of business. It started with the ill-fated AOL-Time Warner merger, and continued into regular strategic mistakes that the top management kept attempting despite warning signs. For all right reasons, Tim Armstrong, who is former head, Google Ad Sales, US, was the key figure responsible for driving revenues in the search engine’s bread and butter business. He took over the position of Chairman and CEO of AOL even as the giant began its demerger with Time Warner, which culminated in December 2009. For Tim, that time was perhaps one of the worst. Post the demerger, AOL has lost 20 million of its 26 million paid subscribers – even this remaining figure is consistently dropping at the rate of 3% per annum – and has been left with a market cap of $2.68 billion. Still, customer satisfaction has paradoxically increased. Foresee Results’ 2010 American Customer Satisfaction Index (ACSI) had AOL see a 6% y-o-y increase in customer satisfaction and a 32% increase in satisfaction since the same was first measured in 2002 (Foresee Results told B&E through its communiqué that their analysis “suggests that usually when an industry laggard reports increased customer satisfaction, its because all of its customers have left except for the truly loyal and satisfied base...”).

Although Armstrong has been trying hard to bring the beleaguered giant back on track, his various restructuring attempts are resulting in further reds in the balance sheet. For the quarter ending June, AOL posted revenues of $584.1 million, a drop by 26.54% yoy. AOL’s US display advertising was down by 7% and the international counterpart of the same went down by almost 52%. This was as a result of Tim shutting down AOL offices in Germany and France. But the more surprising blow came from the search and advertising business, which Tim is trying hard to not lose – the quarter ending June saw a business downfall of 27% yoy. This was despite the fact that Internet advertising revenues in the US during the same quarter were up by 14% (as per PwC). In all, AOL slipped to a loss of $1.6 billion compared to a profit of $153.7 million the previous year. The key factor was the goodwill impairment cost of $1.4 billion arising out of the $10 million sale of social networking site Bebo, which AOL had bought for $850 million! Armstrong still put on a brave face, as he said, “In the second quarter, we continued our efforts to successfully reposition AOL for growth and the company is getting healthier every day.”


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Tuesday, September 04, 2012

“Retail banking is dominated by customer satisfaction”

For IDBI Bank retail banking is a game controlled by the customers, which can only be won by satisfying them. In an interaction with mona mehta, C. S. Jain, Head – Personal Banking, IDBI Bank, talks about the growing importance of retail banking in India and discloses how the bank is planning to reach the pedestal by winning ‘the game’...

B&E: The BFSI segment in India and abroad is running after innovations in terms of products and technology. How is it helpful to the consumers? And, how is IDBI Bank planning to benefit from similar new trends?
C.S.Jain (CS): When it’s about retail banking, innovation is a trend in products. What is more important for a consumer is the easy accessibility to such products and services of the bank. On the other hand, consistent and smooth delivery of the same means a lot to the bank. And this is where technology comes into the picture. Fulfilling all the above requirements are the hallmarks of technology. So for a bank like us, which is already on its way to universalisation and thus is focussing on retail banking in a major way, innovative products with an efficient technological support plays a very critical role. It helps the bank in drawing a large number of customers. See for yourself. With only 700 branches, IDBI Bank today has almost 40 lakh retail customers. And the reason behind it is an easy guess keeping in mind that despite being one of the youngest commercial banks, IDBI Bank has won the award for Best Bank in technology.

B&E: While the country’s economic environment is still not very clear, how are you planning to embed technology in your core strategy to create a competitive advantage for yourself?
CS: Keeping the economic upheaval in mind, IDBI Bank is waiving charges on savings account and current account (CASA) services in order to attract more business and achieve goal in lowering costs of deposits. The services in which the bank has waived or reduced fees include account closure, ATM interchange, issuance, cash services, new cheque book, ECS, EFT, new card issue, outstation cheque collection, account statement, standing instructions, stop payment and so on. Under present circumstances this has proved to be extremely beneficial to the bank in strengthening the relationship with its customers.

B&E: This year has already witnessed IDBI Bank’s aggression in terms of marketing and promotional activities. What kind of return are you expecting from the same?
CS: In order to acquire substantial increase in customer base by March 2011, IDBI Bank is not only using advertising campaign and multi-media campaign, but also harnessing its staff strength to maintain a better relationship with the customers. IDBI Bank has asked its staff to build and upgrade relationship by enabling customers to open more accounts with their family and friends. Our ongoing advertisements with the theme ‘Friendship’ and the tag-line – “For us, customers are more precious than their money” – are taking off well.



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Monday, September 03, 2012

“THIS BUSINESS EXPECTS YOU TO COMPLEMENT & COMPETE”

Manish Agarwal was hired to drive UTV’s ambitions in the mobile space. He defends some critical factors, including fall in revenues and employee retrenchment

“When I met Ronnie, I was surprised with his clarity of thinking and the sharpness of comprehending a situation and articulating it. It was a 45 minute chit chat session, wherein his whole concern was how I, coming from Microsoft, would fit into UTV,” says Manish Agarwal, who has spent one year as the CEO of UTV New Media. Excerpts:

B&E: The 3 year old UTV New Media is in a budding phase. What are the expectations from this vertical?
Manish Agarwal (MA): Broadly there are two expectations from us, one is how do we dominate the mobile screen; which has 500 million users and growing and secondly, how do we become the biggest player in that vertical like UTV Motion Pictures is in the movie space. This is the screen that is going to touch maximum number of consumers. So how do we create cutting edge innovative content and think of new products, which allow consumers to think of our content.

B&E: Who do you consider strong competition and what are you doing to stay ahead of them?
MA: This is a very interesting arena where we have competition from Hungama, Cerebrum, et al. This business requires you to complement and compete in the simultaneous phase. For instance, Hungama can partner with us on something and we compete in a different segment in the market at the same time. In the last one year, we have zeroed on a few business principles. We realized that we are not just in the business of content aggregation but creating content IP and at the same time we ought to add value to the content. So basically we are not looking at taking content from X and giving it to Y. Secondly, we aim to provide consumers innovative products that they can leverage on. Thirdly we need to create IP on the web point by building our own unique platform in social graph and consumer profiling systems et al.

Read more....

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Saturday, September 01, 2012

COURSE CORRECTION

It was a stellar year for M&M, as the company saw sales & profits surge phenomenally. But M&M is now equally concerned about where its numbers come from, as it diversifies into new segments & geographies via M&As and alliances. by Pawan Chabra

Ever since the Mahindra Group initiated the process of bringing the renowned Jeep to the Indian market two years before the nation got independence in 1954, the brand developed a strong association with being a tough, rugged & quintessentially Indian jeep maker.

By the time I got to see a Mahindra product for the first time (in the 1980s), a lot had changed in the Indian automobile circuit (although small fry compared to the changes happening today). For instance, by that time, Indians were preferring the Maruti 800s over the Premier Padminis and the Ambassadors, Mahindra had became a market leader in the tractors segment (a position it retains). But the one thing that remained intact was the image of M&M. However, by then, Anand Mahindra, the current MD and Vice Chairman of the Mahindra Group, was all set to take the Group to the next leap of growth. In all these years, the Harvard graduate has taken the group to new fields like IT, hospitality, retail and more recently into aerospace.

Meanwhile, M&M posted standalone net profit of `20.87 billion for the year ending March 2010, a phenomenal growth of 150% yoy; which has catapulted it to rank 34 on the B&E Power 100 list (from 64 last year). The performance was buoyed by unit sales of 2,86,713 vehicles during the year, a growth of 30% yoy. Even as UVs and tractors continue to be its mainstay in the automotive sector, M&M is attempting to taken a more holistic view of its potential and trying hard to expand its portfolio and reach.

If one analyzes the moves made by the company, over the past few years, it doesn’t takes rocket science to figure out that the strategy to acquire companies to expand its presence into new segments within the automotive industry has been an integral part of its strategy. For instance, the acquisition of the Kinetic’s assets in 2008 was done to enter into the two-wheeler segment with the latter’s infrastructure, product brands and distribution network. While the deal gave a sigh to relief to Sullaja Motwani, who was trying her level best to save a sinking ship. “Mahindra acquired the assets of Kinetic with a view to get a lap ahead in the race in the Indian two-wheeler segment,” said Pawan Goenka, President – Automotive & Farm Equipment Sector, M&M. The recently announced acquisition of Reva Electric Car Company has given the company an entry into the nascent electric car segment. The latest buzz in the domestic circuit is that the company will deploy the electric technology in a couple of SUVs in its portfolio apart from incorporating it in its LCVs range. “Mahindra and REVA now have access to Mahindra’s vehicle development technology and distribution network, significantly enhancing its ability to launch a state-of-the-art electric vehicle for global markets,” said Chetan Maini, the founder of Reva, to B&E after the deal was signed.


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Friday, August 31, 2012

INDIA’S 100 MOST PROFITABLE COMPANIES WHO’S THE NEW NO.1?

Is a corporation meant to look at the larger good or just at profit maximisation? the debate continues to catch the imagination of executives and academicians. Virat Bahri wonders whether the debate is relevant at all

“Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it... because it is good for our business”
Niall Fitzerald,
Former CEO, Unilever

A corporation’s primary goal is to make money. Government’s primary role is to take a big chunk of that money and give it to others.
Larry Ellison,
CEO, Oracle

Corporations are known to be in existence since the Roman empire. But as far as defining their role in society is concerned, it remains a work in progress. When the father of modern economics Adam Smith expressed his support for free markets, he wouldn’t have imagined that corporations would evolve to the extent that they have today. However, one does get a brief idea from his writings that he was against untethered power in the hands of companies, and advocated increasing competition. The debate on their role and relevance really took centre stage with Milton Friedman’s treatise on the virtues of free markets, when he proposed that the “social responsibility of a corporation is to increase profits.”

When we talk of present day corporations, we tend to have two extremely strong points of view – we dread their growing power and influence (like Smith) and also tend to wonder whether Friedman was actually justified in his simplistic assessment. As blatant misuse of power and influence, especially by the large MNCs came to light, the alternate view of ‘stakeholder responsibility’ gained ground; championed by academicians like Darden School of Business Professor R. Edward Freeman.

The debate rages on, in classrooms and corporate boardrooms alike. It’s visible in how BP continues to be penalised for the Gulf of Mexico oil spill, for ‘being the big bad corporate that compromised on safety systems (payout has reportedly reached $6.1 billion till date). One part of this debate is obviously the legal perspective – the fact that companies must not “be evil or unethical” in pursuit of profits; which could mean various practices like duping customers, engaging in unfair competition, harming communities or environment or exploiting employees. The second perspective is about companies being epitomes of nobility and contributing to the social causes as a responsibility. Now the question is whether investing time and money in such causes is right; especially in public listed companies, where the money belongs to a large group of shareholders. In other words, should CSR only be strategic in nature?


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Wednesday, August 29, 2012

The UN declares water a basic human right. You mean it wasn’t one till now?!

With this problem soaring year-after-year, authorities speculate that India, too, will soon be among those countries where water will be available for a price higher than that of other beverages. Already several areas are experiencing acute shortages in the supply of clean water. Feuds over water are getting more frequent. About two months ago in Bhopal, three people allegedly drawing water ‘illegally’ were brutally murdered by a group of people in broad daylight. In such a grim scenario, the recent diktat by the UN is critical and should provide the poor and middle class much-needed relief.

As water is fast becoming a premium commodity, bottled water companies are jubilant but also sympathetic for the poor people, for whom water threatens to become a luxury product. “With the recent declaration by UN about people’s right to clean water, the government would make conscious efforts to provide clean water. This will give those people, who are deprived of regular supplies of water, a reason to smile”, said the marketing manager of a bottled water company.

Although gallons of water exist in the form of oceans, converting saline water to consumable drinking water is a procedure that is extremely expensive and requires advanced technology.

Life without water is impossible to imagine. It’ll thus be good to remind ourselves that all rights come with duties, so that every individual does his bit to conserve this precious resource in ways we need no more coaching on. Let’s amend our ways and allow one less reason to people to kill each other over!


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Wednesday, August 22, 2012

M&M: REVA ACQUISITION

Despite promises, Reva has been struggling over the past decade to strike gold when it comes to sales. But with M&M acquiring a controlling stake in the electric carmaker, much is expected to change in the near future. So has Anand Mahindra placed an electrifyingly winning bet? by Pawan Chabra

There is also another interesting talk doing the rounds amongst auto experts. When Reva entered the UK market, it did so sans dealers, sans showrooms, sans advertising and sans salesperson – in short, like a bull skydiving sans a parachute! And guess what it had in mind – to sell its products through the online route. However, with M&M coming into the picture, Reva will find due sense being knocked into its head, as it goes on to become a mainstream automaker, thanks to M&M’s widespread distribution network. Just a niche manufacturer, no more! As for M&M, the excitement is no less. Apart from getting aggressive with the upcoming launch of Reva NXR & NXG, M&M is now looking ahead to sell the electric car in US. But what about India? Is there really a market for electric cars?

Sounds harsh, but critics argue that with around 3,000 electric vehicles on the Indian roads, it’s not Reva alone that is struggling. Players like Honda have also tasted the salt, bitter to the tee. Even the much-hyped Civic hybrid gained such a lukewarm response in the Indian showrooms that the company was forced to empty its inventory at a massive discount of Rs.800,000 on the marked price. However, there are optimists who expect that 20% of cars sold in India by 2020, would be electricity-run. Considering this, the bet placed by M&M on Reva seems to be a winning one. Further, as far as synergies between the two are concerned, Mahindra’s past record and its love for alternative fuel engines (Scorpio Micro Hybrid, for instance), the two seem to be a well-matched. “As a result of Mahindra’s investment, the new company Mahindra Reva will be able to scale, innovate and accelerate for greater electric vehicle access to consumers,” explains Maini. In fact, an internal research on past Indian mergers by B&E’s research desk supports Manni’s claim. The study conducted over a period of a decade, reveals that whenever an Indian company has acquired a “controlling stake” in another Indian firm for over $10 million, the shareholders wealth on an average, has increased by over 135% within two years of the deal; that’s a buy for the M&M stock! With a running cost of Rs.0.40/km, Reva has a clear edge in a market like India. Even the Pulitzer Prize winning Thomas Friedman has praised Reva to no ends in an op-ed column in The New York Times early this year. And are we forgetting this – M&M has just laid its hands on the top-selling electric car in the world! So whether we see a new record-breaking hybrid model from M&M (like the Toyota Prius, the largest selling hybrid) or we see the deal falling flat on its face, expectations and critics are a part of any new deal package. Surely, Maini’s got his money and M&M has got the marked “environmental” touch now, and both Anand and Maini know that India will take time to warm up to the hybrid game, but Europe and Americas are waiting!


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Tuesday, August 14, 2012

If this is how you treat martyrs...

Many of you might dismiss this as a plug; but believe me, this one comes straight from the heart. If you can spare some time, please read the cover story of The Sunday Indian magazine that is available in the stands. You will read about a police constable Pratima Rout, one of the few who survived the Maoist massacre of Nayagarh (Orissa) in 2008. She was hospitalised with four serious bullet wounds. Forget adequate care, appreciation and compensation, Pratima realised that a senior cop of the IPS cadre actually stole some of the money allotted to her for treatment. The police department of Orissa now wants to recover the money from her. The same police department kept sending her notices demanding why the bullet riddled Pratima is not reporting for work. You will read about Mase, the widow of martyr Ganga Madkami, a policeman killed during a Maoist mine blast in Orissa in 2008. Mase and her eight year-old son Sunadhar, stay in a tribal village in the Malkangiri district – far away from the state capital Bhubaneswar. She is crestfallen and defeated by India’s bureaucracy; the illiterate widow has to go every month to Bhubaneswar and bribe a gang of ghouls (office babus) before she can lay hands on the pension due to her.

There is yet another case in which the Chief Minister of Orissa Naveen Patnaik personally intervened; or so the media reported. Sub-Inspector Ajit Bardhan was abducted and butchered by Maoists in July 2009. His retired father Jaykrishna Pradhan suffered a heart attack. The CM personally visited their house and issued categorical orders that the father and the widow (who incidentally went into labour on hearing of her husband’s death) be taken care of. Today, the retired father is doing the rounds of government offices because even the provident fund and family pension of his martyred son is yet to be released. There are numerous destroyed families of martyrs in Orissa – and everywhere else in India – who are going through more state-sponsored trauma.

Just forget all the hogwash about India Shining. How in God’s name can a nation and society even have the temerity to lay claim to greatness, when it so callously treats the families of those who laid down their lives to protect the nation and the society?

I could be biased because many of my close family members serve in the Armed Forces. But really, the shame is searing and scathing. I recall the summer of 1999 when India was fighting the Kargil war. My brother-in-law who belongs to The Rajputana Rifles, was sent with his unit to Kargil, leaving my sister and two young kids behind at Faizabad where he was posted. At the height of the war, I actually saw my sister being heckled by the railway reservation clerk at Faizabad who mocked at the fact that her husband had been sent to fight a war and she needed a train ticket that was her right as a citizen. I realised that day that the most destructive legacy the British had left behind was the bureaucracy. 


Read more.....

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Monday, August 13, 2012

Is Subhash Chandra finally passing on the sceptre?

As subhash chandra plans a gradual exit, B&E catches up with him and his two sons to discover more of what’s going on at work

It’s strange that someone who’s worth $2.5 billion has “poverty” on his mind; Subhash Chandra does! And it’s a tale that even you would have never ever heard before, or at best, would have discarded, as just another dig from the grapevine. As a young lad, Subhash Chandra wanted to become an engineer. He found the first step in the dark and managed to make his way through the gates of an engineering college. But much before he could justify his faith in Newton, he was asked to empty his hostel dormitory; the reason: Nandakishore Goenka’s pocket (Chandra’s father) wasn’t deep enough to keep his son’s engineering dreams alive. Chandra isn’t too shy about it, as he tells B&E, “I still remember the day I was asked to leave the engineering college, as my family could not afford the fees and the expenses thereof. Otherwise, life would have been different.” This Hissar-born, seventeen year-old lad had to leave college, as his father considered his education a big liability and preferred that Chandra came back to his father’s rescue in the family agricultural business; Chandra’s future, a big black question mark!

Mechanics to agriculture is a transition that few would embrace with a happy heart, but Chandra had no choice. Then, everything changed. Within a year of his joining his father’s business, he had proven the turnaround CEO for dad. A year later, he started a vegetable oil unit and he bloomed yet again. This once self-proclaimed dreamer of hi-tech machines, had heard his calling!

Today, Chandra easily finds a handsome position in any list that would feature the world’s billionaires. Technology’s loss proved media’s gain, and for the past three decades, Chandra has steered his brainchild – the Essel Group. This November he will also turn 60, and as any seasoned lion, in the course of natural progression, he has been in the thick of succession planning activities at work. And he has been gradually passing on the baton to his two sons: Punit and Amit Goenka. Chandra himself has been making public his intentions to give up control over his company for quite some time now. Punit Goenka, Chandra’s elder son, says, “He has given a time of two years, but I don’t think he will ever retire completely.” The younger lad Amit’s response (on when he expected Chandra to retire) was dramatically different. “What?” was his exclamation!

Punit however says, “Five years ago, my father was actively taking all key decisions in the company, but today I see his transition into more of a non-executive Chairman. He doesn’t interfere in the day-to-day business.” Today, Chandra doesn’t even attend the monthly meetings of the company. “I send him a report about these meetings today, but I don’t know whether he checks it or not. But two years down the line, I think we will just see him at board meetings or at dinner tables.”

Meanwhile, the GenNext at Zee and other businesses of the Essel Group looks all charged up and ready. Punit Goenka is spearheading the group’s flagship company Zee Entertainment Enterprises Ltd. (ZEEL), while Amit Goenka is the vanguard of the technology frontier of the Essel group and is responsible for evaluating and identifying innovations. Amit is the CEO of Pan India Network Pvt. Ltd. He is actively involved in managing the affairs of the lottery business of the group.

Incidentally, Punit’s first love was also technology. In fact, it was Punit who was actively involved in the launch of Dish TV. But later, he was convinced by father to get more involved in the media business. Thus, Punit joined Zee TV in March 2005, a time when the company was struggling hard to retain viewers & advertisers. Even its revenues were falling dangerously. “After KBC happened to Star Plus, it destroyed other channels. But Zee TV made an unbelievable comeback after 2005 and since then, they have been growing steadily. I think they have been lucky to finally get Punit Goenka as their captain. Hope he can keep the momentum going in the face of stiff competition,” said a senior executive working with a General Entertainment Channel.

Today, Zee TV is running neck-to-neck with the top two GECs (Star Plus and Colors). Sample this: the average channel share of Zee TV in the GEC category during the last four weeks has been 19%, just short of the top two – Star Plus (23%) and Colors (22%; refer table). But quiz Punit about competition and he says with a characteristic calm, “My view is that a lot of cheap money has come in, and they have tried hard to capture market share. But we at Zee, are frankly not in this business to raise money from third parties. In terms of profitability, no one can match Zee. So that way, I am already number 1. Number 1 in rating terms is of no use, if you don’t monetise!”




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