Patrons

Dr. S. B. Mujumdar, President and Founder Director Symbiosis

Dr. Vidya Yeravdekar, Principal Director, Symbiosis Society

Dr. M.S .Raste, Vice Chancellor, Symbiosis International (Deemed University)

Chief Academic Advisor

Dr. Vivek Sane, Director, SIBM, Pune

Editor-in-Chief

Dr. V.B. Godbole, Prof. SIBM, Pune

Editorial Board

Prof. Amita Shiroor, Dy. Director, SIBM, Pune

Prof. Anjali Abhyankar, IT Faculty, SIBM, Pune

Staff Assistants

Ms. Shilpa Ravalallu

Mr. Rahul Ovhal

Mrs. Madhura Deshmukh

Ms. Amruta Tarate

Editorial Office

Symbiosis Institute of Business Management

Gram: Lavale, Tal. Mulshi,

Dist.: Pune – 411042

Tel. No. : 020-39116000

The opinions expressed in Samvad are those of the authors and not of SIBM, Pune or the Editors of

Samvad.

Any IPR violations in Samvad are the responsibility of the authors and not of SIBM, Pune or its Editors.

All articles in this Journal have undergone a blind review process.

Reviewers

Prof. Amita Shiroor, Prof. Himanshu Kulkarni, Prof. Rajesh Panda and Prof. Kalyanaraman

Cover

Samvad is a formal and serious discussion or conversation. For our cover we have selected a beautiful

painting in a classical Indian style of the conversation between Lord Krishna and Arujuna taking place on

the battlefield before the start of the Kurukshetra war. The conversation is the content of the Gita a deep

religious philosophy and a practical, self-contained guide to life.

Picture downloaded from internet for noncommercial, academic purposes only. This work is in the public

domain in India because its term of copyright has expired.

SAMVAD

INDEX

SIBM, Pune 2010

Sr. No. Name of Article Page Number

1. Forward 1

2. About Samvad 2

3.

Culture & Ethics 5

5. Co-operative Business Strategies: Some Aspects 7

6. The Triple – Principle Of Management Research 11

7. Knowing How To Know 14

8. Mirror Neurons - The Reason Why The Osho 19Chappal Fad Spiked And The Reason Why We Need To Get Ethical With Our Advertising

9. Leadership And Society 23

10. What Are Option Contracts? 30

11. Improve Supply Chain Through Supplier 37Relationship Initiatives

12. Future Of Inorganic Growth 43

13. Communism 45

14. Corporate Governance Challenges 49In Business Enterprises

15. Management: Craze, Maze & Haze 55

15. Work-life Balance – The New Paradigm 58

About SIBM, Pune 3

4.

SAMVAD

stI am very happy to present our 1 issue of Research Journal called Samvad (dialogue). It is collection of research articles contributed by faculties and students from SIBM, Pune as well as from other institutes. It provides an insight into various topics such as:

1. Co-operative business strategies

2. Leadership and society –Revisiting Dandi-March

3. Corporate governance

4. Value of knowledge

5. A model for business excellence

6. The future of inorganic growth

7. Culture & Ethics

8. Communism

9. Principles of Management Research

10. Ethical Advertising

11. Option contracts

12. Improving Supply Chain

13. Work-Life balance I am sure that articles on above topics will enlighten you and it will be a collection issue for academic and to even corporates.

Dr Vivek SaneDirectorSIBM, Pune

FORWARD

SIBM, Pune 2010 1

SAMVAD

“SAMVAD” is a peer – reviewed research 12 font size).journal of SIBM, Pune. “SAMVAD” means

2. The copy should be double spaced, dialogue and SIBM, Pune invites all the

including tables, footnotes, endnotes, management professionals, faculty and

references and bibliographies with 3 students to participate in this dialogue

cm. margins on sides of page.which will contribute towards shaping

3. Number of text page should appear in management thinking in the country.upper right hand corner.

Invitation to Researchers, Teachers, 4. Proper acknowledgement should be Corporate Professionals and Research

made in case of cited material. Students.Permission should be obtained for any

·The articles and papers based either copyrighted material quoted in the

on empirical research experience or on a text or used in preparing tables or

high level of conceptualization are invited graphs.

from faculty and students. They should 5. Footnotes or endnotes and expanded preferably relate to different facets of

list of abbreviations used in the text Economy, Management, Organization of should be typed on a sheet separate Commerce System, Business Practices, from the text.Technology Management etc. The abstract

of theses submitted for PH.D. may also be 6. Each table or graph should be placed

considered for publication (Along with on a separate page and their suggested

Name of Research Supervisor as co.author).placement within the text should be highlighted by a text reference.The Corporate Professionals are also

requested to write their account of 7. The manuscript should be well

experiences, reflexes in the form of Case wrapped and be sent by a Express

Studies for favor of publication in the Courier service/ Speed post with a

Journal.backup copy to be retained at your

· end.All views and opinions expressed in the Journal will be treated as the sole

The papers received for publications (other responsibility of the author(s). Neither the

than PH. D. abstracts) will be sent to Panel of Publishers nor the Editor in any way are

Referees (subject experts) for their remarks. responsible for them.

Their remarks in turn (Involving corrections, resubmission etc) will be communicated to Writer's Manuscript Check listthe contributor. The Paper will be accepted

1. The Manuscript should be prepared for publication only after it gets duly refereed.

on Computer using preferably The papers rejected by referees will be

W i n d o w s / M S Wo r d a n d b e returned to the authors within the

submitted in CD with one hard copy reasonable time.

on A4 size paper (Times New Roman-

SIBM, Pune 2010 2

ABOUT SAMVAD

SAMVAD

SIBM became part of Symbiosis International SIBM at a Glance University because of its excellent academic record. Further in 2006 the UGC vide its

ndEstablished in 1978, SIBM Pune is in its 32 notification withdrew the word Deemed and year of service to the student community. It renamed the University as Symbiosis remains the flagship brand of Symbiosis and International University (SIU). is recognized as one of the best Business Schools in India. In the year 1979, SIBM

Why SIBM Pune?Pune proved its pioneering self by becoming the only institute in Pune to organize a What makes SIBM special?seminar outside the city precincts - in Mumbai. Soon the trend was set and others SIBM has been consistently ranked amongst followed suit. The concept of Internships / the top B Schools in India. With a brand new Summer Training was another offering residential campus and world class made by SIBM to Pune. It was in 1982 that infrastructure at the hill top in Lavale, Pune learning cum training scheme was started. SIBM provides a holistic environment for all

around learning and development.Supplementary training courses were included in the curriculum to supplement SIBM prides itself on being a student-centric the Pune University syllabus. Little wonder institute. Students here are entrusted with that the same year SIBM Pune started being resources and responsibilities early on. They ranked among the top 5 B-schools in India. are encouraged to take important The same year saw SIBM Pune organize 3 administrative and policy decisions that national level seminars all outside the city of sculpt their future and that of the Institute. functioning. It would be interesting to point This facilitates their all-round development, out that the first computer that was over and above academic performance. The installed at SIBM Pune was donated by Students' Council at SIBM is the student body students in 1987. Switch to the completely responsible and accountable for all activities Wi-Fi enabled campus of 2005, also on the Campus throughout the year.incidentally a students' initiative – SIBM Pune has certainly come a long way. In 1990, SIBM has developed unique learning permanent affiliation was received from initiatives which have come to be the Pune University – the only B-school to have hallmark of the institute. These initiatives are ever received it. In 1996 the BASE the outcome of three decades of experience programme was introduced, in addition to in the field of management education. They the curriculum of Pune University. The same have been developed with the help of faculty, year witnessed SIBM Pune shift to its new who are in touch with the industry's current campus with well-equipped infrastructure. needs and the active participation of the

students themselves.The icing on the cake came in 2002 - when

SIBM, Pune 2010 3

ABOUT SIBM, PUNE

SAMVAD

Some of the initiatives that merit a For over three decades, SIBM has been the mention are: chosen management destination for students

aspiring for excellence in the corporate world. Orientation and Teaching Methodology Excellent course content, highly qualified

faculty and contemporary facilities combined SIBM's curriculum lays emphasis on with a unique education model, balancing participatory learning - combining lectures, unwavering career focus with holistic self case studies, projects, games and outdoor development, are reasons why there is a sessions for overall development of SIBM business leader in every corner of the students. All new students go through a globe.week-long orientation programme which includes indoor as well as outdoor sessions, SIBM has been ranked 4th best B-School in to help them settle down, get to know each the country by Business Today and India other and form strong working teams. Today issue dated July 2008 as per the AC

NIELSEN & ORG-MARG study survey. Industry Interaction Recruiters vie for the opportunity to pick from

the perfect mix of business acumen and Throughout the year the students organize academic intellect that our students bring to and participate in various face-to face the table. interactions with leading industry professionals through seminars and guest lectures that prove to be regular 'reality checks' for the students.

Career Impact

S I B M go e s b eyo n d g i v i n g yo u a management degree. It prepares you for a high-flying career as a top corporate leader equipped with the wherewithal to occupy the very top echelons of the corporate world. Scores of SIBM alumni already hold leadership positions the world over.

An SIBM manager is equipped to lead, no matter where he goes. At SIBM we create cognizant, competent and confident business leaders; individuals who will make a difference in their chosen field of work and the society they live in; professionals who will cherish and uphold the values of integrity, efficiency, simplicity and hard work.

SIBM, Pune 2010 4

SAMVAD

The business world across the globe has their authenticity in good times. Our models

started looking at the East, particularly at appeal people at large who are indeed

India, for ethical business models. One of trained to look for an accurate rather than an

the strong reasons why India succeeded in acceptable result. Ethics is not about finding

coming out of the global financial turmoil accuracy or reporting it in the context of an

almost untarnished was its ethical support established framework. Nor is it a justification

system which is ingrained in the culture of of your integrity to an outsider. It is a

this country. The culture of a country is reflection of our morals which we hold for

much more than its beliefs and customs. It is ourselves. If there is one prominent reason

the commonly held philosophy of its people why the East stood this test of time during

towards core values. In this context, the days of financial turbulence that reason lies in

outlook towards money and satisfaction its ability to reflect and introspect. It is this

derived from creation of wealth drives a unique culture of self evaluation that makes

nation in the direction that eventually people in east and India in particular less

decides the fate of its moral standing. Thus prone to actions that expose common pubic

culture and ethics are strongly co-related. A to severe risks.

culture that is conservative in monetary The moral resilience of a country comes from terms attaches very high value to create its deep rooted ideology towards personal wealth. This leads to business practices that

attempt to bring about change in the lives of and social welfare. The culture that embeds

values for reciprocities is self sustaining. many people as well as ensuring that the

process of wealth creation does not blind Wealth that is aimed at expansion of limited few individuals whi le considering number of individuals or groups success distribution of created wealth. The culture diverts money towards narrow goals. These that prioritizes common good and chastises eventually become counterproductive to individualistic development helps in growth. You may look into the history of nurturing business practices that are ethical corporate developments and find that and sustainable. India has proved this organizations which did not divert their phenomenon time and again. resources from larger goal of success for

many towards that of few, have actually Ethics and culture are two sides of the same survived the odds. Ones that were narrowly coin called morals. Much of our modern shaped to squeeze benefits for select few financial literature is silent about the moral have vanished. Ethics does not always means aspects of doing business. We believe that a sustenance because what is moral today may financial model that adheres to the

soon turn out to be an unethical act of feasibility tests is sound and will enrich a

tomorrow. Sum of parts is greater than the society irrespective of its mala-fide side-

whole when we sit back to measure long term effects. We force moral acceptance into

impacts of our actions.such models and in retrospect try to prove

CULTURE & ETHICSBy Prof. Anil KshatriyaAssistant Professor, SIBM Pune.

SIBM, Pune 2010 5

SAMVAD

The world has not only accepted but has and rise from them with splendid

also digested the fact that creating momentum. All this nimbleness comes

elaborate structure to overcome unethical from our culture of accepting our own

behavior is of little help. Behavior may be limits. This culture has given us an

unethical though the thought behind it is extraordinary ability of introspection

prudent and rational. One prime reason for which the developed nations in West have

this dichotomy is that unethical behavior is fai led to pract ice. Free markets

more a result of impulsive reaction to empowered them to the extent that they

exacerbated situations. Unscrupulous acts never sat back to gauge their limitations.

may not always have roots in intentional There was so much noise in celebration

mala-fide vision. Most unethical acts are that we could not hear our own voice. But

encouraged by favorability of conditions we tend to forget that we need this voice

that stimulate individualistic decisions. The time and again to protect the interest of

only way to control such acts is to inculcate a our people and our nations. Blindfold is

better sense of responsibility and good till the time you are playing the game

accountability. whose first rule is the player needs to be

blinded. But once the game is over we The culture in India has fortified this should open our eyes to look around and thought process. It is this culture of see if other players are really the same. It is thoughtful acceptance that makes us less a question of self judgment and not force. prone to such vicissitudes in decisions

that lead to dramatic fluctuation in

wealth and public confidence. Also this

shows our agility to absorb strong shocks

SIBM, Pune 2010 6

SAMVAD

1: Forms of alliances alliances, joint ventures among businesses 'Make, buy or ally' is the key to and their acquisition of equity stakes in other

business growth. Making or doing businesses. It would appear that benefits of everything from scratch on its own brings cooperation outweigh those of pursuing about organic growth of a business while either organic growth or acquisitive growth. acquisitive growth through purchase of In our present- day interconnected, global already existing businesses leads to quicker world, cooperation has no reason to be results. However, synergy which is confined to national boundaries.supposed to result from the coming A brief recount of benefits of cooperation together of two separate organisations goes as below:often proves illusory. Acquisition also 1. R i s k r e d u c t i o n t h r o u g h means buying the whole set up while dispersion of fixed costs, lower capital actually only a part of it may be of profit to investment, faster entry into new the acquirer. So growth through alliances markets and diversification of product seems promising. If alliances fail to deliver portfoliovalue, they can be terminated more easily. 2. Economies of scale and They denote closer relations as compared to rationalisationarms- length spot transactions in the market 3. Technological synergy and but they do not go forward the whole way. exchange of patents and territoriesAlliance partners share risks and rewards 4. C o - o p t i n g o r b l o c k i n g but in a non- permanent manner. Often competitionthere is a time limit within which the 5. Help for vertical integration relationship will be concluded. Even with through providing access to resources, the alliance, partners are free to carry on distribution channels, regulatory their other business independently. So permits, establishment of links with alliances prove to be flexible and are major buyers etc.therefore popular. 6. Fac i l i tat ing internat iona l

expansion and Michael Porter once remarked, 7. O v e r c o m i n g t r a d e a n d

“Alliances as a broad- based strategy will investment barriers in a particular only ensure a company's mediocrity, not its country.international leadership.” Still cooperation among businesses is continually on the rise. Forms of cooperation among businesses are Everyday happenings reported by the of different types.financial press are all about strategic

CO-OPERATIVE BUSINESS STRATEGIES: SOME ASPECTSBy Dr. Vasudha Joshi

SIBM, Pune 2010 7

Cooperation among businesses

Agreements Networks StrategicAlliances (SA)

Acquisitionsof minority stakes

SAMVAD

Differences among these types are summarised in the following table.

Different shades of cooperation

SIBM, Pune 2010 8

Feature

Focus

Time Span

Sharing ofrisk and reward

Sharing ofcontrol

Agreements

Transaction bound

Short though longer thanspot transactions

Little

Nove

Networks

Relationshipbound

Long

Little or more

Some

SA

Relationshipbound

Medium /long

More

More

Acquisitions

Relationshipbound

Permanent

More or total

More

Since business needs evolve Networks: they are a loose association continuously, within each of the above among usually more than two businesses. As types of cooperation, there is a tendency time passes, a network may take a more towards evolution of more involved forms structured form. Networks are always for greater sharing of risk among partners. changing and nebulous. They exist basically

to share information and to access social 2: Choice of form of alliance capital. Community and caste links have been

important in business networks in India. Over Agreements: agreements and time, a dominated network with a centre of

contracts pertaining to technology transfer, authority, business groups and even subcontracting, distribution, marketing etc. networks might emerge from networks.are legion among businesses. In exploring oil fields and extraction of crude petroleum Strategic alliances (SA): they take the and natural gas from successful finds, form of bilateral agreements and joint a g re e m e nt s a re o f te n s i g n e d by ventures (JVs). Bilateral agreements call for governments with expert international greater cooperation and commitment from firms. Among the usual purchase – supply partners as compared to (unilateral) contracts also more complicated forms such agreements mentioned above. If greater as buy- back, quantity flexibility, revenue commitment is desired then the partners buy sharing and sales rebate contracts exist to equity and set up a new undertaking. That is share risks and rewards. the JV. It may be between local partners or

between partners from different countries.

SAMVAD

Cross-border JVs are more common. be found.Selection of partners, drafting the JV 2. If there is no legal pressure for agreement, monitoring performance and setting up a JV and a business needs a exercising control are crucial aspects which partner because it lacks capabilities, determine the outcome of any JV. In spite of then an acquisition should be the initial high hopes, most JVs last for no considered by it.more than 7 years and many for just about 3 3. When a foreign company wants

thyears. In the second half of 20 century, all to reinvest profits and not fritter them developing country governments insisted away in dividend payout, it should opt on JVs as the entry mode for MNCs. They for a wholly owned subsidiary.expected considerable benefits from these JVs in the form of technology transfer, 3: Practical problems in running a JVe m p l o y m e n t g e n e ra t i o n , v e n d o r Consider the following case which deve lopment and exports . These brings out the importance of serious, genuine expectations have been belied and today problems that arise in a JV. It is no wonder wholly owned subsidiaries are insisted upon that more than half of the JVs fail and that by MNCs for entering new markets. even the successful ones are short-lived. The

French car manufacturing business Renault Acquisitions: for making their and Mahindra & Mahindra (M & M) of India

cooperation permanent, two partners fuse set up a JV in 2005 to manufacture a their existence together. Either a minority or particular brand of a car viz. Logan of Renault a majority stake is bought in the partner which had been very successful in Brazil and business and earlier ties are concretised. Europe. Under the JV agreement, a separate

company – Mahindra Renault Pvt. Ltd. Subsidiary companies: an MNC finds (MRPL) – was set up with 51% equity from M

it most convenient to open a fully owned & M and 49% from Renault.subsidiary company in a new market. It can then enjoy full control of operations and MRPL started selling Logan since 2007. also integrate it flexibly in its global design of The initial response of the market was very activities, tax planning etc. In a JV it faces positive and then sales started declining. In constraints on these scores because the 2007 MRPL sold 44000 units and next year, local partner's ideas are usually different. the figure was just 5332. This happened Some rules of thumb are given below for against the backdrop of a rapidly growing choosing an appropriate form of alliance. Indian car market. Naturally there was

frustration and tension between the two 1. A foreign company should opt partners. The JV lost about Rs. 490 crore in for a JV when its calculations of the year 2008- '09.possible future volume and profit point unambiguously to setting up a Matters reached a flash point when subsidiary company but laws of the Renault decided in February 2010 to set up an host country make it difficult to set up independent production and sales facility for one or an appropriate partner cannot its new models. M & M was bypassed. It felt

SIBM, Pune 2010 9

SAMVAD

humiliated and decided to end the JV by Bibliography:buying Renault out. 1. Beeth, Gunnar: International

management practice, an insider's According to M & M, the problem lay view, amacon (a division of American

with the car exterior and size. Customers did Management Association), N.Y., 1973.not like its edgy styling. Logan was treated as 2. Child, John, David Faulkner: a sedan model, not a small car and the latter Strategies of co-operation, managing enjoy huge demand in India. Medium cars alliances, networks and joint ventures, attract an excise duty of 22% as against only OUP, Oxford, 1998.10% duty levied on small cars. Thus Logan 3. Ramu, Shiva: International was treated as a medium category brand business, governance structure, with medium price. So M & M requested Wheeler Publishing, Allahabad, 1994.Renault to reduce the length of the car and 4. Rao, M.B., Manjula Guru: Joint its engine capacity so that it could fit in the ventures in international business, small car segment. Renault was reluctant to Vikas Publishing House Pvt. Ltd., make this change in only one market. Noida, 2009.

After the dissolution of the JV, M &M 5. The Times of India, news reports th rd

on 17 and 23 April 2010.is going to introduce these changes in the car. Till the end of 2010, the car will sport the

******************************Renault logo which will then be replaced by M & M logo. Within a week of the dissolution, M & M reduced the price of Logan by up to Rs. 80,000 per unit in both its petrol and diesel varieties. In the automobile industry of India, M & M is an established, respected company. It enjoys the largest market share in utility vehicles segment. In passenger car segment, it has no model save Logan at present and it must make it successful. It will be interesting to observe Logan's future progress.

******************************

SIBM, Pune 2010 10

SAMVAD

Research in the area of business data, statistical reasoning, and logically management necessitates a pragmatic and consistent procedures. Research is not an realistic approach based on scientific investigation that is carried out hurriedly on methodology, analysis, consistence and the basis of some survey or facts and figures logical rationality. The role of ethical obtained haphazardly in an irrelevant, procedures in Business Research are of disorganized or erroneous manner so as to paramount importance. arrive at some conclusion which may be

totally false and meaningless.Three fundamental aspects in the domain of research consists of: If a researcher has found a satisfactory (a) The Candidate / Researcher answer to anyone of the questions (i) to (v) (b) The Topic and Research work stated earlier, it is imperative for him to (c) The Guide search for his own preparedness for

embarking on a lively research venture of I. Candidate : much significance. It should be supported by A candidate may develop to desire to do a thorough and appropriate study pertaining some research in an area of management. to the subject / area of his research of a good But he has to find out for himself as to what lot of literature comprising of a number of exactly prompts or motivates him to do the books on the subject by renowned authors, research. research journals, relevant records, reliable

sources through the internet. Discussions (i) Is it due to an unquenchable thirst to with subject / research experts would be

know and search for the unknown quite helpful. He can as well consult features of the problem of his interest researchers world wide who have carried out

(ii) Is it due to curiosity or inquisitiveness research on similar problems.than an idea originated necessitating research In short his quest for literature should be

(iii) Is it due to his observations / studies exhaustive, up to date as well as relating to particular problem in comprehensive. Genuine research qualifies a management candidate's competence.

(iv) Is it due to some suggestions of experts or friends or earlier In regard to research towards a doctoral researchers degree a candidate should always prepare his

(v) Is it for obtaining a Ph.D degree of a research plan on the basis of a time frame for university for furthering his prospects the completion of a valuable research

Research is a search for “truth” in any area II. Research work :of knowledge. Accurate theoretical principles can be formulated on the basis of In Research, it is necessary to take certain scientific methodology, usage of reliable precautions. The following are some of them:

THE TRIPLE – PRINCIPLE OF MANAGEMENT RESEARCHBy DR A.B.RAO (Recognized Senior Research Guide)

SIBM, Pune 2010 11

SAMVAD

(i) The topic should be carefully worded realistically and consistently so as to be so as to convey precisely, clearly and provable and verifiable. Hypotheses appropriately the meaning and the should be adequate in accordance with exact nature of research. It should be the subject matter of research, much based on adequate conceptual care should be taken in framing the knowledge. hypotheses

(ii) The subject matter of research with (iii) The research methodology should which the topic is concerned should involve the necessary tools for be of significant relevance and validating or proving the hypotheses. usefulness in furthering the frontiers Adequate precautions should be taken of knowledge in the relevant in collecting authentic primary data. discipline of management. Secondary data should be very much

(iii) The topic should be timely , lively, reliable.purposeful and necessity oriented. (iv) Necessary steps should be taken to

(iv) It should have relevance with the avoid all types of errors that may creep objectives and hypothesis of the into research. The sample size should research. be adequate and appropriate.

(v) It is on the basis of an appropriate Sampling errors should be eliminated knowledge, factual information from or minimizedmaximum possible sources and after (v) Appropriate statistical testing of the d i s c u s s i o n s w i t h k n o w l e d ge data should be undertaken using t-test, personalities and experts and chi square tests, analysis of variance researchers that a researcher should and other suitable testsframe his topic. (vi) Stat ist ica l Analys is should be

consistent and relevant in interpreting Research Work: Seven Procedural various findings. Conclusions should guidelines: be logical, realistic and entirely based

on the research(i) The objectives of the research should (vii) Suggestions should not be flimsy,

be well defined and should cover the artificial and impracticable. They totality of investigative aims and should be genuine and practical so as connected with the substance of t o b e i m p l e m e n t a b l e . research. The objectives should not Recommendations should provide an generally exceed five. However the authoritative edge to a researcher.number of objectives depends on the extensive and exhaustive features III. Candidate's Guideand as well as on the depth of the research If a candidate is carrying out his research

(ii) Hypothesis/ Hypotheses should be towards a Ph.D degree, under the guidance of consistent with the objectives of a recognized guide, it is necessary on his part research. Hypotheses should be to inform or personally meet his guide and worded meaningfully, precisely, appraise him in regard to the extent of his

SIBM, Pune 2010 12

SAMVAD

research work. However the frequency of book titles, some of which the his meetings would depend on the researcher, perhaps may not have read convenience of his guide. A guide supervises or seenand directs the resourcefulness of his (xiii) An inexcusable error that may candidate. Research should be progressive knowingly or unknowingly committed and consistent. Successes in research by a research is the misuse and abuse depends on the candidate along with the of statistical data.appropriate support, encouragement and (xiv) Unpardonable copying of printed benevolence of his guide. material of certain authors and

unscrupulous and fraudulent usage of Fifteen Errors to be avoided in research research work of others

(xv) Copying is a punishable offence and (i) Defining a research problem without should be avoided at any cost.

clarity and focus. Framing the Plagiarism is a crime in research and r e s e a r c h t o p i c i n c o r r e c t l y, deserves punishmentinconsistently or ambiguously.

(ii) Prepar ing a research des ign Conclusion :unrealistically and haphazardly

(iii) Stating too many objectives without a Research should be guided by purity, dignity, purposeful focus devotion and dedication. Researchers should

(iv) S t a t i n g t h e h y p o t h e s e s strive to carry out genuine and original inappropriately, inconsistently, research through curiosity, enthusiasm, unrealistically or ambiguously. inquisitiveness and pains taking efforts and

(v) Undertaking l iterature survey thereby promote the highest standards of inadequately or improperly research. Research is ten percent inspiration

(vi) Using the wrong sampling design and but ninety percent perspiration The unrepresentative sample size Candidate, his Research and his Guide form a

(vii) Using the scaling techniques wrongly holy trinity – “The Triple Principle sanctity” in (viii) Using inappropriate statistical Management Research should prevail.

techniques in the analyt ica l processes *******************************

(ix) Stating the findings incorrectly and making the interpretations absurdly

(x) Drawing inappropriate conclusions and giving suggestions unrealistically

(xi) Us in g to o many referen ces , quotations from various sources of secondary data, thereby producing a 'compilation of facts' and not any piece of research of originality.

(xii) Usage of too many interned sources and a 'Bibliography' stating too many

SIBM, Pune 2010 13

SAMVAD

If you have an apple and I have an apple and indulgence should seriously consider the we exchange these apples then you and I will price to be paid for ignorance.still each have one apple. But if you have an idea and I have an idea and we exchange It is difficult for organizations to know what these ideas, then each of us will have two they know or how to know what they know. ideas." -George Bernard Shaw, Renowned Even though it is now so vital, knowledge still Irish Author remains an incident, occasional to business

activity rather than an integral resource to be Perhaps, it is because there is so much talk acquired and managed. Considerably less is about knowledge, that there is so much known about how an organization may know clutter and confusion and as a result, 'the more by manipulating and creating an power of knowledge for organizations in the appropriate socio-cultural learning context. 2000s' often gets trivialized as jargon. After The essential mental settings and attitudes all, ours is the age of substitutes: instead of required for learning are hard to acquire for language, we have jargon: instead of individuals, teams and companies. Few may principles, slogans: and, instead of genuine be able to articulate how an organization ideas, bright ideas and incomprehensible could become a more learning, teaching, or

1jargon 'betamaxes ' simple language as the coaching organization and what the value of hallmark of knowledge!!! this is. Often, organizational knowledge exists

with multiple perspectives rather than as This paper deliberates the nature of collective best thinking. Knowledge is often knowledge and the role of leaders in diffused rather than converged and bringing in the appropriate culture and organized. Thus both contribution as well as attitudes required to best leverage access to organizational knowledge becomes knowledge as a resource through setting difficult. expectation and example in an enabled environment. Organizations can consciously make an

attempt to best capitalize on knowledge Knowledge is of course all that is of resources by understanding the nature of this consequence to the business. Knowledge is resource and creating the necessary what gives organizations competitive edge. organizational culture - leaders have a huge It includes documented explicit knowledge role to play.and captured tacit experiences which thrive in a collective congenial environment that The Nature of the Knowledge Resourcenurtures learning. Creativity and innovation Knowledge as a resource has many are key to contending in a new order of interesting characteristics. competition, in which, the critical success vKnowledge is dualistic in nature factors for business are essentially different being both explicit and documentable from the conventional. Those who think and tacit or experiential and difficult to that knowledge and learning is expensive document.

KNOWING HOW TO KNOW By Prof. Amita Shiroor

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vKnowledge is intangible. vBecause of the 'essentially in flux' vKnowledge is multidimensional. nature of knowledge, a list of vKnowledge is transient, ever knowledge characteristics like this one

changing. can go on increasing!vK n o w l e d g e i s i n f i n i t e a n d

exponentiates itself. Enabling Sharing Through Information vKnowledge is non rival and people Technology

can use it synchronously without Knowledge multiplies by sharing and raises depletion. the ambient awareness level in an

vKnowledge is contestable. organization. Knowledge may be likened to a vKnowledge is socially constructed bottle of perfume. If it remains in the bottle, it

and culturally embedded. can fester and loose power in isolation but vThe barriers to knowledge transfer spread around (judiciously!) is enjoyed by all.

are mostly intangible- human By nature human beings enjoy and secure in qualities like custom, culture, ego, power; and knowledge is indeed a base for mindset, desire for power, ambition, power, but it is by far the most democratic of fear of ridicule or competition and all sources of power. The wisdom that, distrust. sharing knowledge brings rewards far beyond

vKnowledge is a power source and what hoarding knowledge can, is difficult to hence a potential source of conflict. realize and is against baser human nature and

vT h e b e n e f i t s o f k n o w l e d g e therefore needs to be consciously promoted. acquisition (by any means) are rather Knowledge sharing must be championed and difficult to appreciate, difficult to knowledge monopoly and stockpile measure and not easily amenable to discouraged by value, process and culture valuation. within organizations.

vNo two people acquire knowledge or learn in exactly the same way due to This difficult challenge has become made less p r i o r i n d i v i d u a l a t t i t u d e s , insurmountable by information technology. experiences, learning or intellectual First by automating and routinizing basic makeup. tasks that can be handled with minimum

vKnowledge can be sticky and may not effort by technology, greater availability of move from one person or set of time and energy is facilitated to concentrate persons fast ,fast enough or at all. on higher order decision making, larger issues

vKnowledge is leaky and moves and innovation. between people or between companies. Technology prompts documentation of

vKnowledge appet i tes can be recent and current actions. Therefore it influenced; Learning attitudes are generates a definite pressure that prevents infectious. people from continuing to do what they did

vKnowledge attainment brings inner before, just because they resist change or do joy, fulfillment and motivation to not want to deal with the change. There has employees. to be a strong motive for people to go out of

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their way and disregard what the computer The leader had a huge role to play in changing is asking them to enter. Thus the culture, or recasting his organization's mental moulds process and technology ease 'stickiness' in because people are incessant leader knowledge transfer and alleviate attitudinal watchers. An effective leader does not know speed breakers in the transfer process. the most; he knows how his company can Technology would help people express what know the most. Watching leaders and they know and access what they need retelling the stories of their actions helps without fear or diffidence. people understand how to get ahead around

here—how to act. If there is a tendency for A most recent example of a technology leaders to keep their cards close to their which promotes easier sharing by creating a chests, people in the organization will believe social context is Vivek Paul's first this is the way to act. The converse is also entrepreneurial venture KineticGlue. Vivek true. Paul earlier led the medical equipment business for GE in India; he helped Azim People often tend to believe that great things Premji grow Wipro from a small firm with and genius happen elsewhere. This type of $150 million in revenues to a $1.4-billion subliminal erroneous thinking is similar to global outfit; he made smart bets at PE firm thinking that accidents happen only to other TPG, a few of which turned multi-baggers in people. It is important to believe, to double quick time... and after 20 years of remember, and reinforce that valuable building businesses for others turned learning, good ideas or innovations can come entrepreneur with KineticGlue which is from any source. No source is too helping hundreds of people at companies unconnected or too humble, so the canteen such as Dell India, Yes Bank and L&T Infotech contractor may well give a great idea to better collaborate better by using an online social the organizational supply chain. medium, an official Facebook to share and increase productivity and retention for An expectation of valuable and democratic companies. This is reportedly a $2.5 billion contribution to the learning and innovation market space (11,750 crore ). process has to be communicated to the

employee (Pygmalion effect) and a self Setting Expectations expectation level (Galatea effect) of greater

achievement and contribution created in An organization's Social capital is integral to employees. The Pygmalion effect was the management of its knowledge. Social described by J. Sterling Livingston in the capital September/October, 1988 Harvard Business includes: Review. "The way managers treat their vpersonal relationships that bind subordinates is subtly influenced by what together members of the organization they expect of them," Livingston said in his vrelationships that bind organizational article, Pygmalion in Management .Once an members to other external resources and expectation is set, even if it isn't accurate, we vreputational capital tend to act in ways that are consistent with

that expectation. Surprisingly often, the

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result is that the expectation, as if by magic, An expectation of greatness creates comes true. powerfully transformational mutual respect

among teams. The leader can set the There is a wonderful story. The abbot of a expectation. once famous Buddhist monastery that had fallen into decline was deeply troubled. Setting ExamplesMonks were lax in their practice; novices were leaving and lay supporters deserting to First hand learning is possibly the best way to other centers. The abbot traveled far to know. All the barriers that exist between the meet a sage and recounted his tale of woe, learner and the source of knowledge need to of how much he desired to transform his be broken, these may be custom, culture, monastery to the flourishing haven it had ego, mindset, fear of ridicule or competition been in days of yore. and distrust. Boundaries between companies

and their cohorts and agencies, between The sage looked him in the eye and said, companies and consumers and between the "The reason your monastery has languished hierarchies within the company are being is that the Buddha is living among you proactively peeled off in the quest for first in disguise, and you have not honored hand information over versions through Him." The abbot hurried back, his mind in intermediates.turmoil.

As an example, through the years The Selfless One was at his monastery! Who organizations have acquired knowledge of could He be? Brother Hua?...No, he was full consumers and consumer preferences of sloth. Brother Po?...No, he was too dull. through research agencies, which are valid But then the Tathagata was in disguise. sources of information. However if people What better disguise than sloth or dull- got out of the ivory towers of their offices to wittedness? He called his monks to him and meet with consumers there would be first revealed the sage's words. They, too, were hand learning which cannot be substituted . taken aback and looked at each other with Recently leaders of several companies - Nitin suspicion and awe. Paranjpe of Hindustan Unilever, Kishore

Biyani of Future Group, Vinita Bali of Britania, Which one of them was the Chosen One? Zubair Ahmed of GlaxoSmithkline, Harsh The disguise was perfect. Not knowing who Mariwala of Marico, Adi Godrej of Godrej He was they took to treating everyone with Industries, Kiyoshi Oike of Yakult and Sanjeev the respect due to a Buddha. Their faces Chadha, like the kings of ancient lore who started shining with an inner radiance that roamed their kingdom to know their subjects, attracted novices and then lay supporters. made visits incognito to consumer homes to

understand firsthand consumers' likes, In no time at all, the monastery far dislikes and aspirations. New product ideas surpassed its previous glory (Source that reportedly emerged from conversations www.spiritual-short-stories.com). with conscientious mothers include Foodles

(a functional food product) and one serving

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packaged flavored milk convenient for better technology or product is beaten school lunches from the Horlicks brand. in the marketplace because of a better Other winning ideas included biscuits in marketed competitor.smaller packs, a hair dye advertisement based on scientific evidence. 2. Times of India, Economic Times

July 2010.In conclusion, leaders need to appreciate the resource value of knowledge and 3. H i s l o p , D o n a l d ( 2 0 0 5 ) . leverage it as an asset. They need to K n o w l e d g e M a n a g e m e n t i n understand that the organizational culture Organizations: A Critical Introduction, has to be orchestrated in different ways Oxford University Press.than in earlier times. Leader involvement and the spirit of learning must be 4. w w w . s p i r i t u a l - s h o r t -orchestrated. Learning thrives when the stories.com. leader demonstrates that barriers can be broken, that genius is expected from 5. Livingston, Sterling, Pygmalion individuals and teams. in Management, September/October,

1988 Harvard Business Review. References:

1. Betamaxed : Business Today, July 25, 2010, Wordsmith (New Words in Business) page 10. When a

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It is difficult to miss a fad. Whether it's the prime discoveries in recent neuroscience: Rubik's Cube craze, or the fad of sporting mirror neurons. These are neurons in key yellow Livestrong wristbands. One may parts of our brain – the premotor cortex think that fads are the stuff of youngsters'. which is the center for language, empathy But adults are also susceptible to the fad and pain. This gets stimulated not only as we mechanism, remember grownups sporting perform certain actions but also when we the Pune born Osho chappals or for that watch someone else perform that action.matter going on the Atkins diet? Fads tend

Mirror Neurons - The Imitation Element of to launch off like missiles and then fizzle out The Brainjust as quickly if they don't manage stay on

and become a trend. Fads could spell In 1996 neuroscientist Giacomo Rizzolatti and opportunity for marketers if companies are his co-workers at the University of Parma in able to quickly home into the fads and add Italy published some extraordinary findings. value to it by turning it into a sustainable They had run an experiment to record business. But what exactly fires up fads? It is electrical activity from neurons specialized the existence of one of the most powerful for hand movement in two pigtail macaques. drivers of human progress and one of the As anticipated, these neurons got stimulated

MIRROR NEURONS - THE REASON WHY THE OSHO CHAPPAL FAD SPIKED AND THE REASON WHY WE NEED TO GET ETHICAL WITH OUR ADVERTISINGBy Prof. Supriya Chouthoy

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when the animals reached for peanuts that your action. This is pertinent because it were placed in front of them. What was reveals why we're programmed to imitate entirely unexpected, however, was that from cradle to tomb. It explains why we these same neurons fired when a scientist in humans pick up fashions and trends and how the lab reached for the nuts instead. The these go on to become part of our culture. It monkey remained stationary. However, explains why showing fashionable hip-bands watching the scientist move had activated of one's underpants can quickly become a fad motor areas in the macaque's brain, just as if or why a rapper's gesticulation can quickly the animal had carried out the action itself. turn into a fad. Imitation is not just a fun

human trait. It's a behavior that's embedded Using functional magnetic resonance in our brains. That's why fashion exists, why imaging (fMRI), Rizzolatti and his colleagues sport is so popular, why we experience the soon documented the same phenomenon playing of it as vividly as we watch a game. in humans and named the responsible nerve cells "mirror neurons" These cells Wharton marketing professor Jonah Berger perform a dual function: they become points out that fads aren't restricted to toys active during any type of active behavior like and gadgets. As per him fads also surface in chewing food, throwing a ball, performing a areas such as education and management. dance, whether we do it ourselves or just For example, Six Sigma, the quality watch someone else do it. Therefore, our management strategy introduced in 1981 by conscious brain generates an inner Motorola, became a rage after it was adopted simulation when we follow the actions of by companies such as General Electric, but another person. Mirror neurons are currently this trend is now passé. Berger also presumed to be abundant in brain regions suggests that fads typically develop around responsible for planning and initiating products that communicate something about actions, including the primary motor cortex, social identity. "Fads tend to arise in the premotor cortex and supplementary situations where people imitate the behavior motor areas. The discovery of this of others. They are particularly likely in mechanism, suggests that everything we situations where one group might have high watch someone else do, we do as well, on a status or exclusivity that others want." mental scale. At its most basic, we mentally Clothes and music are fruitful ground for fads rehearse or imitate every action we because they are a via medium to observe, be it a somersault or a smile. It communicate something about a person's explains much about how we learn to smile, identity and style, while more practical items walk, talk, or swim. At a deeper scale, it like a washing machine would do so to a suggests a common neurobiological energy smaller extent therefore are thus less prone which helps us in understanding others and to setting off trends. learning. It also helps us to figure out why

Mirror Neurons Crucial For Learningyawns are contagious.

Mirror neurons' role in understanding is best From the moment we're born, we are described by Dr V.S. Ramachandran, Director propelled by mirror neurons. Stick your of the Center for Brain and Cognition and tongue out at an infant and it will imitate

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Professor with the Psychology Department consumers. Advertisers often use illogical and Neurosciences Program at the methods of persuasion and communicates to University of California, San Diego. He their consumers more of illusion than truth. believes that the mirror neuron is crucial in This is often coupled with artistic the development of elaborate social skills, photography, exceptional special effects, s o c i a l n e t wo r ks , a n d k n o w l e d g e clever slogans, acting and music. It is truly a infrastructure we call culture. As per him it form of art choreographed to attract and plays a crucial role in our learning, right from keep the attention of its target and make understanding Shakespeare or for that them more amenable to persuasion. Because matter even learning the hip-hop. Mirror we now have an understanding of the role of neurons, are supposed to have allowed mirror neurons in the brain we can early humans to first understand basic, comprehend how advertising plays up on our possibly puppet like actions, which led to brains. This is the reason why advertising has more sophisticated motions and finally b e e n c a l l e d t h e m o s t s i g n i f i c a n t ballooned to become language. As more establishment of modern society and has the complex and abstract communication ability to change a set of values held by evolved, information began to expand and people. It can influence a populace to replace gained momentum to build the intellectual their thoughts regarding things which they and community fabric which we call culture. may have otherwise thought of as morally

wrong , to an attitude that it's morally right or Mirror Nuerons Also the Culprit of Sinister acceptable.Action

Let us look at advertising which targets the Mirror neurons however don't always youth of today. The use of violent imagery is replicate positive actions. Its study has now on the rise and increasingly being used revealed a new, more d isturbing to advertise and market a diverse range of perspective on the dynamics of and lessons goods from sports apparel to shoes, taught by violent video games, for instance. perfumes, computer games, cars, watches, UCLA's (University of California, Los jeans and even credit cards to the youth. Angeles) Iacoboni is studying the subject Fashion companies like Dolce & Gabbana, and suggests that such games reinforce an Louis Vuitton and Jimmy Choo use a lot of association between pleasure and titillating images to promote their products in accomplishment by causing harm. This their markets. This eroticism is also backed up explains growing teenage and student by suggestive violence. As a result we have violence and killings. Iacoboni speculates these ads being seen by our youth and having that the strength of imitative violence in the a deeper effect than intended, thanks to the mirror neuron systems can be so powerful mirror neurons getting powered up in our that it can become difficult to refrain from. brains. Though these companies do not

endorse violence publicly through their Mirror Neurons And Advertisingcompany literature, or in the press, their ads

While on the subject of understanding which directly communicate to consumers mirror neurons let us also look at advertising speak a different language. When a consumer and its role in communication to the looks at a Dolce & Gabbana ad, violence

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against men and women begins to be people mistake familiarity for truth. The idea perceived as a luxury. The effect of this is that we tend to think that things we know violent and erotic imagery is to make violent are the truth and not lies. So, if something and sexual behaviour appear normal and seems familiar then it must be true. Second, even acceptable rather than strange and people misattribute repeated claims to disgusting. It also manages to attract a different sources, and then tend to believe viewer's attention through emotional, something more if multiple sources endorse psychological and startling appeal. Through the claim.their communication, will not these

Finally, isn't advertising supposed to be all companies influence the young to bring in a about communicating benefits to your twisted order of sadists feeding on violence target? Don't we need to understand this as and humiliation? Do you think these ads can an advertising community and begin to actually persuade the consumers to buy monitor ourselves to remain ethically their products? Isnt this kind of advertising responsible?just adding to a visually polluted advertising

order? References:

When we consider that realize that one of 1. http://www.edge.org/3rd_culture/ram the basic traits of an effective marketer is to achandran/ramachandran_p3.htmlhave empathy, we are looking at creating 2. http://www.marketingprofs.com/8/ha long relationships with our customers. rdwired-to-love-brands-lindstrom.aspWhen a company is truly empathetic, the

recognition of value to consumers is just a 3. http://knowledge.wharton.upenn.edu/ starting point. A more critical factor is the article.cfm?articleid=1391continued high level of engagement with

4. “A Revealing Reflection” them. Today we have many consumers

article from Scientific American Mind 17, 22 - walking away from advertising in disgust,

27 (2006)complaining that all ads are untrustworthy.

5. Therapeutic Reflection; June/July 2007; Consumers would like to have confidence Scientific American Mind; by Ferdinand that ads tell the truth. Besides this we also Binkofski and Giovanni Buccino;have as per Wharton's Marketing professor

Lisa Bolton the "Truth Effect" kicking into 6. Extracts from John Alan Cohan's paper the effect of advertising on the consumer. “Towards a New Paradigm in the Ethics of She states that all marketers should be W o m e n ' s A d v e r t i s i n g . ” truthful, not only because it is the right thing “ADVERTISING;Violence” by Dr C Kay Weaver to do, but because being deceptive can alter (associate professor in the Department of consumers' long-term psychological Management Communication at the perceptions about what is and is not true. University of Waikato) published in The "truth effect" is a tendency for people to Marketing Magazine dated , July 1, 2003. believe in the truth of claims if those claims are repeated. There are two explanations as to why the effect occurs. First, repeating a claim makes it seem more familiar and

by David Dobbs

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Dandi march of Mahatma Gandhi Agitation against land revenue, and iv. protest before liquor shops. Gandhi listened to all

The event described in this article is these suggestions but wanted an agenda that Mahatma Gandhi's historic Dandi march would have a profound impact since nation from Sabarmati ashram to Dandi, a remote, was eager for a decisive action from congress neglected village in Gujarat. In terms of and his leadership. After a few days of application of the principles of, planning churning, a process of incubation in the organizing and execution, it not only subconscious, an image of salt appeared on surpasses the standards of excellence in the map of consciousness. He saw it clearly leadership but also demonstrates the role of that he would pick up a handful of salt. He values in management practice. knew that this simple act had potential to

send multiple messages and interpretations Incubation: generating the right idea in the context of traditional Indian society

where salt had a great symbolic meaning. It is In 1929, the Viceroy of India had rejected important to recognize the rationale of salt as the proposal of a dominion status an agenda for agitation since there were (autonomy within the foreign rule). India many burning issues before the nation then. needed a strong movement for protest and Why did he select salt as an agenda of resistance. In 1930, poet Rabindranath satyagraha?Tagore went to Sabarmati ashram and asked Gandhi. “What are your plans? What is your Gandhi himself had given the explanationnext move?” Gandhi was clear about the governing values that would guide his “The most basic needs of man are water, wind action, but the concrete action plan was and salt, the only ingredient that adds taste to nowhere in sight. It was clear to him that poor man's food is salt. Even cows and only those followers who had deep faith in bullocks cannot survive without it. We use it non-violence would lead the movement in many ways, even as a fertilizer.”and others would follow them. If the movement turns violent, he would There were other reasons as well; If the terminate it. (Mishra , A. 2009) movement was based on land revenue or

taxes, BritishThe idea and the symbol government would have taken away the land

and live stock of farmers. Salt is freely As far as proposal for action was concerned, available in nature and is difficult to various ideas were offered by senior confiscate. There would not be any legal or Congressmen like Vallabhai Patel, Rajaji and practical difficulty that would submit the others. Some of the suggestion included, i. satyagrahis (volunteers) to police action formation of a shadow government, ii. .Producing salt, which is manual work, did marching towards Viceroy's palace, iii. not need additional resources. Above all, salt

LEADERSHIP AND SOCIETYA little lump of salt: Revisiting Dandi- marchBy Prof. Susheel P. KandalgaonkarDirector, IMDR, Pune

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is a product of nature, it surpasses all rupees a day. The percapita income of an distinctions based on religion, language, Indian is less than two annas, it means that region and gender.” your salary is five thousand times more than

the average Indian. I humbly request you to The Dandi march turned into a movement consider the situation in totality. I have because it got a broader reference of referred to a private matter of your salary to ecology and equality. Most importantly, make you aware of the painful truth, though I human civilization had regarded salt as an have absolutely no intention to hurt you. I auspicious symbol from times immemorial. hold you in high esteem, but we have to The folk culture had created sayings, stories, abandon the present system of governing. songs around salt that would appeal directly Organized non -violence is the only answer to to heart of ordinary men and women. the organized

violence of the British rule; if you do not wish This was the symbolic potential of a handful to take any action , I would violate the law of salt. about salt on eleventh day of this month with

some selected colleagues of mine. In case you Preparing the ground and networking wish to discuss the issue with me, I am willing

to postpone my plan of self regulated Once the issue was selected, the next disobedience of the law .”immediate step that Gandhi took was to write a letter to the Viceroy announcing his The letter concludes with a phrase, 'Your plan to protest. The letter used strong words sincere friend' instead of the conventional and logical arguments. It also reveals 'your most obedient servant.'determination and courage to act with conviction. The letter begins with statement Congress leaders were skeptical about the that British rule is a bane to India and agenda of this movement and the press explains it further in following words: ridiculed the idea as 'childish and dramatic

attempt to challenge the British law that “Endless exploitation of our resources have controlled production of salt by Indians'. destroyed the lives of millions of people, the Pandit Motilal Nehru sent a telegram to the country cannot afford the excessive Sabarmati ashram and asked “What would expenditure on c iv i l and mil i tary we achieve by picking up a handful of salt?” administration. British rule has made us Gandhi sent a telegram in reply: “ Just pick it slaves in a political sense. It has weakened and see what happens”.the foundation of our culture, government has taken away our weapons, and it has It was a sharp and decisive reply.made us spiritually weak.”

Planning and executing:Gandhi mentions the exorbitant salary of the Viceroy in this letter. “Your monthly After the announcing of the march, Gandhi salary is 21,000 rupees, plus other worked on details of the event. Two of his allowances, and you are paid seven hundred close colleagues were sent to survey places in

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south Gujarat to find a right location for *Do not trouble villagers for meals or expect protest march. concessions from them.Both of them selected Dandi village near Surat and informed Gandhi accordingly. Clarifying values and purpose: leadingNow the schedule of the historic march was prepared. It would take twenty four days to Gandhi was worried and anxious about walk the distance between Dandi and eruptions of violence during the march since Sabarmati ashram. Daily walk of twelve he had to abandon the non- cooperation miles from morning six to evening six. 'Such protests in the past due to violence. For a walk is a child's play', Gandhi commented Dandi march, he personally selected seventy with a smile! The division of work among eight followers with extreme care .He the volunteers was done. To explain the law explained to them in the best possible way, that denied Indians to produce salt and its the principle of non- violence. The principle implications, Gandhi wrote an article in had moral and pragmatic implications as well.Young India. He announced the following guidelines to the followers in this article . He asked “If I ask people to use weapons in

this movement of freedom, would the Guidelines for Volunteers government let me remain free? If people

challenge the government with violent killing *Protest would be peaceful; it's an act in and destruction, would the government civil disobedience. remain passive? Has it happened anywhere in * If Police indulge in physical violence and the world?firing, we would face it with exceptional courage without violent resistance. “You would not come here if you are afraid of *No indulgence in indecent behavior or being fired at ; you have come because you abusing. have understood and accepted the concept *If there is communal violence, volunteers of voluntary surrender to imprisonment. would make active efforts to stop it. India has seven lakh villages; even if ten *If arrested, do not ask for special persons in each village decide to violate the concessions; follow rules of the prison law of salt production what would the meticulously. government do? Even the cruel dictator *If the prison food is of bad quality or the would not kill those who protest with mode of serving the food is insulting, refuse peaceful disobedience. You have come here to eat it. is a courageous act; you have understood that *Do not ask for family expenses to Congress, British government is confused and in a in case of arrest. dilemma.”*Engage in a dialogue with villagers while on march from Sabarmati to Dandi. Gandhi was right; the British government did *Speak to villagers on the topics of not know how to deal with such a move. It prohibition, cleanliness, education, did not know the details of the march. eradication of untouchability and village Extreme secrecy was maintained about development. critical details of the march. Only a list of

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seventy-eight volunteers was published in kind of a survey and rich data was collectedYoung India. Arresting them or Gandhi was in twenty four days of march.would have been be problematic to the government before the march because of Operations: day to day maintenancelack of evidence against them.

The day- to- day administration of the On 12 March 1930, Gandhi moved out of campaign was done by a group of eighteen Ashram and the Dandi march began, with students of Gujarat University. When the enthusiasm People across the country were volunteers had settled in a village for the waiting to watch what would happen next. evening, this group would move to the next All biographers of Gandhi had written village and select the location for rest, eating, fascinating description of this march. The and prayer. They would clean the place, two hundred miles march had numerous arrange for water, and fuel, dig pits for villages on the way. Villagers welcomed him temporary toilets, and move to the next with rangoli and garlands. People queued village. It made life much easier for the other along the path to see him, watered the volunteers in the march.roads to settle the dust and showered flowers on the path towards Dandi On 6th April, Gandhi went to the seashore in

the early morning with his followers. They dipped into the sea water. After prayer,

Communication and capability building Gandhi lifted a handful of salt gathered on the shore, others followed him. And the rest that

Gandhi would speak to villagers in simple followed is history. People in coastal villages, language on various themes: cleanliness, cities and towns participated in great law that prohibited them from salt numbers in act of nonviolent disobedience of production, un-touchability. In the the law. evenings, he would go back to his daily routine that was unique: writing letters and It happened in many states and cities, Bihar, articles for Navajivan and Young India, Bengal, Peshawar and Chittagaon. After spinning of charkha ,and writing dairy. Even Gandhi's arrest, the movement spread like on the last day of the march, after the much wildfire and brute force was used by the publicized act of picking handful of salt, he British government. Negative news about returned to his daily routine as if nothing pol ice repress ion was reported in had happened. In a way it was a refusal to be international press. The Viceroy made a carried away by publicity or the fame. proposal for discussion with the Congress and During the march, he insisted that the it closed an important chapter in the history volunteers write a diary and note all the of freedom movement. It concluded in a pact details of each village, in terms of between Gandhi and the Viceroy.population , gender and communities, livestock, revenue, the requirement of salt, The representative of weaponless masses schools, number of boys and girls in schools, and the Viceroy of British Empire came on a availability of free land in the village. It was common platform for negotiation. Today, one

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can understand the bitterness and anger of used cultural, religious and social symbols Lord Churchill when he described Gandhi as with combination of modern technology and 'naked fakir climbing the steps of Viceroy's managerial skills. More recent examples are Palace!' political campaigns on Ram Mandir and

Mandal Commission issues. Invariably, they Review and reflections on the event: failed to hold moral center of the campaign by

integrating values of means and end. The Let us synthesize the points that emerge important connection between the end and about the connection between Leadership means values was ignored and principle of and Society from the historic case of Dandi personal integrity was violated. The Mandir m a rc h a n d i t s re l e va n c e to t h e campaign disregarded the sanctity of means contemporary Indian context. and focused on the results and indulged in

realpolitik. Similarly , Mandal campaign 1 Communication : overemphasized means and lost sight of the

end and purpose. Leaders of these campaigns At the level of mass communication, it used had failed to anchor the value based politics the emotive and cultural significance of a that Gandhi could do so well.traditional symbol. The object of salt was elevated to the level a metaphor and an The case is equally relevant for the students ideal. The Indian masses who revered their of management. The mainstream knowledge ancient folk traditions, were illiterate and in management has not come to grips with half-starved, reiterated their faith in this the basic difference between results oriented symbol. Gandhi paved the way of leadership and it also silent on impact of integrating the masses with this cultural leadership on collectivity. Value based symbol that was connected with our day leadership distinguishes itself form the today living It mobilized them for a conventional model of corporate leadership spontaneous action at a national scale. on this dimension . In case of Dandi march, Importantly, the Dandi march distinguished t h e w a y i t w a s c o n c e p t u a l i z e d , itself by absence of violence. communicated, organized and delivered

reveal a close connection between means 2. Moral center of the movement and and ends; process and outcomes, individual leadership : and collectivity, leader ship and society. Let us

understand these finer distinctions in more The principle of non violence was vindicated detail.as a viable instrument with moral and pragmatic potential . In fact, it reinforced 3. Personal integrity and value based the moral center in the leadership of Indian leadershipfreedom struggle.

Communication with the help of symbols has As mentioned earlier in this article, we a power to touch the imagination, feelings have seen political events of protests in and actions of the people. The interpretation post independent India our leaders have of the symbol is based of the meanings

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created and held in the mind of the biographers have pointed out how such a followers. The leader can intuitively leader would be an embarrassment to those anticipate it but has no direct control over it. who lead for results and success. This is the Hence a culturally powerful symbol is a strength and risk in value based leadershipdouble edged weapon. It can go beyond the agenda set by the leader. Hence, there is a 4. Revisiting theory of Value based need for cultural/emotional meanings to leadershipbe moderated by rationality or viveka. Gandhi focused on non violent means to Let us return to our reference to the moderate the energy triggered by the theoretical framework of values to appreciate symbol. Moreover he practiced it to the case of Gandhi's leadership in the context perfection and allowed only those of his of post independent India and the world. followers who believed and practiced (Argyris C 1993) nonviolence. The guidelines for the followers in terms of conduct and action When we say that values are ideas or ideals, reveal his concern for the sanctity of the they refer to abstract concepts like peace, process and not merely the concern for equality, freedom, prosperity (though it is impact and outcome. possible to measure them by reducing it to

operational , behavioral descriptions that is This value based or process based called the process of reductionism.) leadership is a rare phenomenon in politics Moreover, these values or abstract ideas are and business as well. The reason for the not static qualities or property of objects and absence of such leaders is obvious: a lack of persons but are manifested in transactions personal integrity. Such a leader who shows between the person and the situation. equal concern for processes and outcomes Therefore, it is the individual who deploys is tested in times of failures. The later events certain personal qualities and properties like , during partition and post –independence self reliance, honesty, self control as means period in life of Gandhi show that he did not to achieve the ideal end value. Hence it is set give up the value-base even when his of values that includes both end and means trusted followers and the masses disowned held together in a coherent way. This him and his agenda. He listened to his coherence emerge from personal integrity of conscience and carried out processes the individual. Without personal integrity anchored in non violence though it was human values would be inversion and politically disadvantageous to the Congress. distortion of values.(Kripalani K 2000 )This distinguishes him from other leaders in all political parties 5 Contemporary leadership and then and now. In spite of possessing the best Gandhi ta l e nt fo r o rga n i z i n g , m a n a g i n g , communicating and executing, Gandhi To appreciate the point that values are ideals remained free from the trappings of success sustained only by individuals with integrity and the larger than life image and remained the Society that sustains them, let us true to himself and his inner voice. The compare the values of Dandi march with

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those prevalent in the later political where leaders in political and corporate campaigns in the country. In the campaigns spheres have deployed inverted or distorted of Ram Mandir at Ayodhya and Mandal means- values to achieve the so-called end Commissions, the inversion of values was values (espoused ends). They have rarely covertly accepted and held by the leaders shown the use personal integrity and and the followers jointly. Therefore, it is coherence of means and end to influence important to recognize the role of personal people.. In the absence of moral center that integrity and choice making in the include integrity and coherence in values, discussion of these campaigns which were leaders in corporate sector are regulated by used for mass mobilization in post legal means and the in the field of politics independence era. both moral and legal centers are missing.

These cases in leadership also highlight the Perhaps we can begin by generating and importance of volition or choice making. In spreading knowledge that deals with the case of Mandir campaign, the Hindu identity success and failure of value based leadership and self esteem was the end value but the in our educational institutions. Education means value were the inversion and and specifically professional education (it distortion of honesty, truthfulness and self- i n c l u d e s m a n a g e m e n t ) i s fo r t h e control. Manipulation of information, development of individual and society and deceit , violence were used, In Mandal that is its primary goal. The growth of campaign, the end value projected was economy and Industries are secondary goals. equality and opportunity for all but the Studies in leadership, in social, political or means of reservation for education and corporate fields require a focus on much employment were elevated to the position needed ethical and societal dimension to as end in itself. It confused the masses for correct the imbalance caused by the inverted short term political gains In short , the values that pervade our institutions. The case Mandir campaign damaged Hindu identity of Gandhi's Dandi march vindicates the value based on long tradition of tolerance, of such leadership. Referenceswisdom and synthesis. Similarly, Mandal by 1. Kripalani, Krishna. Gandhi: a life; over-focusing on means of reservation 2000, National Book Trust, Indiacould not strengthen the underprivileged 2. Mishra, Ambarish. Chimutbhar castes since they lost sight of the ultimate meeth; Mauj, Diwali issue of Marathi purpose or end value of equal opportunity magazine,for all through development of all. The November ,2009personal integrity of the leaders in this 3. Argyris, Chris. (1993) Knowledge for campaigns was not questioned because we Action, California, Jossey-Bass.do not have a coherent framework for 4. Rokeach, M.(1970) Beliefs, Attitudes, analyzing leadership in wider context of Values, New York, Josociety .

Conclusion

After seventy years we live in a context

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An option contract is a derivative which obligation to buy it. The holder has to pay gives the right to the holder of the a price (premium) to buy this right.contract to do 'Something' but without the obligation to do that 'Something'. In the same manner an investor can buy The 'Something' can be either buying the right to sell an underlying asset, say a the underlying asset or selling the company share, at a certain price by a underlying asset. In the world of options particular date in the future by paying the underlying asset, generally, is a some premium. Such an option is called a company share (stock option) or a Put option.foreign currency (currency option). Thus, the holder of a stock option A Put option gives the holder the right to reserves the right to either buy or sell a sell the underlying asset at a certain price particular share, the underlying asset. at a certain future date without an Likewise the holder of a currency option obligation to sell it. The holder has to pay reserves the right to buy or sell a foreign a price (premium) to buy this right.currency, the underlying asset.

Having made it clear that the holder of an The right also specifies the price at option has the right to either buy or sell which the asset can be bought or sold. the underlying asset but no obligation to This is called the Strike price of the do so, it is then necessary to lay down the option. It also specifies the date till circumstances under which he would when the right can be exercised and it is exercise the right and when he would not. called the Maturity date or Expiry date. The assumption is that the investor would The price paid to buy the right is called exercise his right if it is profitable to him the Premium or simply, the Price of the and that he would let go his right if by option. exercising it he would incur a loss.

An investor can buy the right to buy a When would a Call option be exercised?particular share at a particular price by a particular date by paying some The holder of a call option has the right to premium. Such an option is called a Call buy an underlying asset but no obligation. option. Let us take the case of an investor who has

bought a call option where the underlying A Call option gives the holder the right to asset is a company share. The situation buy the underlying asset at a certain can be explained best with a diagram.price at a certain future date without an

WHAT ARE OPTION CONTRACTS?By Prof. Ashok Kanetkar

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Referring to the Fig 1 we can make following buy the option.statements;·The holder of the call option has paid a Situation 2: Stock price Rs. 40

price 'p' to buy the option i.e. to buy the ·The holder will not exercise his right right to buy the underlying asset (share) because by exercising his right he will be at some future date (expiry date). paying Rs. 50 for the share which then

·The price at which the share will be could be sold in the stock market for Rs. 40 bought is 'K'; the strike price. thereby incurring a total loss of Rs. 15 (Rs.

·The x-axis gives the stock price in the 10 on the exercising of option and Rs. 5 on stock market. the premium.)

·The y-axis gives the profit made by the ·By not exercising the right the holder will holder. incur a loss of Rs. 5 only which is on

account of the premium paid.Now let us take a numerical example. Imagine that the investor (the holder of the Situation 3: Stock price Rs. 53option) has paid Rs. 5 for the call option ·The holder can exercise his right and buy where the strike price is Rs. 50. the share at Rs. 50

·Sell the share in the stock market for Rs. 53 Now let us imagine following situations: and make a profit of Rs. 3 on the share.

·This is done to reduce the loss incurred on Situation 1: Stock price Rs. 60 paying the premium. The total loss will ·The holder can exercise his right to buy now be Rs. 2.

the share at Rs. 50. ·If he had not exercised his right the loss ·Sell the share in the stock market for Rs. would have been Rs. 5.

60·Pocket the profit of Rs. 5 after deducting The three situations mentioned above give us

the premium paid in the beginning to an important rule for the Call option. It is that:

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P

K

p

Fig. 1: Profit from a Call Option

P = Profit; S = Terminal Stock price; p = Premium; K = Strike pricet

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A Call option must be exercised if the stock When would a Put option be exercised?price exceeds the strike price.

The holder of a Put option has the right to sell This is so because when the stock price an underlying asset but no obligation. Let us exceeds the strike price it will either lead to take the case of an investor who has bought a a net positive cash flow if the stock price put option where the underlying asset is a exceeds the sum of strike price and the company share. The situation can be premium paid. If the stock price exceeds explained best with a diagram.only the strike price but not the sum of the strike price and the premium paid it will at least reduce the negative cash flow.

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P

K

p

Fig. 2: Profit from a Put OptionP = Profit; S = Terminal Stock price; p = Premium; K = Strike pricet

Referring to the Fig 2 we can make following statements;

·The holder of the put option has paid a price 'p' to buy the option i.e. to buy the right to sell the underlying asset (share) at some future date (expiry date).

·The price at which the share will be sold is 'K'; the strike price.

·The x-axis gives the stock price in the stock market.

·The y-axis gives the profit made by the holder.

Now let us take a numerical example. Imagine that the investor (the holder of the option) has paid Rs. 5 for the put option and that the strike price is Rs. 50.

Now let us imagine following situations:

Situation 1: Stock price Rs. 40

·The holder can exercise his right to sell the share at Rs. 50.

·Buy the share back in the stock market for Rs. 40

·Pocket the profit of Rs. 5 after deducting the premium paid in the beginning to buy

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the option. premium paid it will at least reduce the negative cash flow.

Situation 2: Stock price Rs. 60Two types of options on the basis of when ·The holder will not exercise his right they can be exercisedbecause by exercising his right he will

be buying the share at Rs. 60 in the If an option, either Call or Put, can be stock market and selling it at Rs. 50 exercised on any day before the expiry date it while exercising the option, thereby is called an American option.incurring a total loss of Rs. 15 (Rs. 10

on the exercising the option and Rs. 5 If an option, either Call or Put, can be on the premium.)exercised only on the date of expiry, it is called ·By not exercising the right the holder a European option.will incur a loss of Rs. 5 only which is

on account of the premium paid.Thus on the above basis we have four types:

·An American Call optionSituation 3: Stock price Rs. 47·An American Put option·The holder can exercise his right by

buying the share in the market for Rs. ·A European Call option47 and selling it at Rs. 50 as part of the ·A European Put optionoption contract.

·He will then make a profit of Rs. 3 on the share. Though the above arguments for Call and Put

options are the same for both types the ·This is done to reduce the loss difference becomes apparent when certain incurred on paying the premium. The other properties are studied. These will be total loss will now be Rs. 2.taken up in future chapters.·If he had not exercised his right the

loss would have been Rs. 5.The two sides of an option contract

The three situations mentioned above give There are two sides to every option contract. us an important rule for the Put option. It is On one side is the investor who has taken the that:long position (i.e. has bought the option). On the other side is the investor who has taken a A Put option must be exercised if the stock short position (i.e. has sold an option or price is less than the strike price.'written' an option.)

This is so because when the stock price is The above statement needs further less than the strike price it will either lead to clarification. An investor, when he buys a Call a net positive cash flow if the stock price is option, buys the right to buy the underlying less than the difference between the strike asset but this right has no meaning unless price and the premium paid. If the stock there is someone who agrees to sell the price is only less than the strike price but not underlying asset if the first investor decides to the difference of strike price and the

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exercise his right. Similarly an investor, This gives rise to four positions which are as when he buys a Put option, buys the right to follows:sell the underlying asset but this right has no ·A long position in a Call option: Long meaning unless there is another investor Call (Position of the buyer of a Call who agrees to buy the underlying asset if option)the first investor decides to exercise his ·A short position in a Call option: Short right. Call (Position of the writer of a Call

option)In option trading following terms are used: ·A long position in a Put option: Long

Put (Position of the buyer of a Put Investor who buys an option is said to option)have a Long position and he is called the ·A short position in a Put option: Short buyer or the holder. Put (position of the writer of a Put

option)Investor who sells an option is said to have a Short position and he is called the Figures 1 and 2 show the profit in a long call seller or the writer. and a long put respectively. Fig. 3 shows the

profit from writing a Call option (a short call).

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P

K

p

Fig. 3: Profit from writing a Call OptionP = Profit; S = Terminal Stock price; p = Premium; K = Strike pricet

The writer of a Call option has sold the right Call options and refer Fig 1.)to the holder to buy the underlying asset but ·When holder exercises the right the the holder has no obligation to do so. writer will have to procure a share from Consider following points: the market at the stock price and sell it

·The holder will exercise the right only to the holder at the strike price. The if the stock price exceeds the strike writer will incur a loss equal to the price (recall the arguments made for profit of the holder.

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In the same manner we can examine the case ·If the holder does not exercise his of a short put. The writer of a put option has a right then the writer keeps the short put position and has given the right to premium paid. In this case his profit sell the underlying asset to the holder of the (the premium received) is equal to Put option (long put position). Fig. 4 shows the loss of the holder (the premium the profit from a short put position.paid).

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P

K

p

Fig. 4: Profit from writing a Put OptionP = Profit; S = Terminal Stock price; p = Premium; K = Strike pricet

The writer of a Put option has sold the right It is often useful to characterize the option to the holder to sell the underlying asset but positions in terms of the terminal stock price the holder has no obligation to do so. (S ) or the payoff to the investor on maturity. t

Consider following points: The initial cost (premium) is then not included · in the calculation. If, then, the strike price is K The holder will exercise the right only

and the terminal stock price is S then payoffs if the stock price is less than the strike t

price (recall the arguments made for for the four positions are as given below:Put options and refer Fig 2.)

For long call position:· max (S – K, 0). This When holder exercises the right the t

writer will have to buy the share from means that the option will be exercised if S > t

the holder at the strike price and K and will not be exercised if S < K or S = K.t t

resell it in the market at a lower price. The writer will incur a loss equal to For short call position: min (K – S , 0); t

the profit of the holder.

·If the holder does not exercise his For long put position: max (K – S , 0). This t

right then the writer keeps the means that the option will be exercised if S < t

premium paid. In this case his profit K and will not be exercised if S > K or S = Kt t

(the premium received) is equal to the loss of the holder (the premium For short put position: min (S – K, 0)tpaid).

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We must understand that an option once So, if we do not consider the premium and if bought or sold (written) can not be traded the stock price is higher than the strike price again. However, we can neutralize the the gain in long call will be the loss in short position by going into the opposite call. If the option is not exercised then it is direction. zero. Note that the premiums paid at

different times are overlooked in this So the holder of an option contract can argument.neutralize or offset his position by writing an option contract or vice versa. Thus a long When investors offset their positions it call can be neutralized by a short call and affects what is termed 'Open Interest'. Open vice versa and a long put can be neutralized Interest is the number of outstanding by a short put and vice versa. It is very positions in a particular option of either the important to remember that a Call option long or the short type. If, when an option cannot be neutralized by a Put option. contract is traded neither investor is Imagine that an investor has bought a Call offsetting his existing position then the Open option with a strike price of Rs. 50 by paying Interest increases by one contract. If one a premium of Rs. 5 and he wishes to cancel investor is offsetting an existing position but out his position. To cancel out he will now the other is not then the Open Interest have to write the same Call option. Now, the remains the same. If both are offsetting their strike price may have remained the same existing positions then the Open Interest goes but the premium may have changed. Since down by one contract.we know that the profit of a holder is the same as the loss of the writer our investor's gain and loss will cancel out. However he may either make a small profit or loss on the different prices paid and received for buying and writing at different time. Same argument is applicable to Put options.

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Historically, the buyer-seller relationship essential to make the supply chain strong and has been more akin to master slave flexible. The strength of chain would emerge relationship than anything else. The from the relationships that are nurtured inefficiencies in reaction time and the between the buyer and seller of each link, and associated costs are the result of this the flexibility would be a result of the particular aspect of relationship. The transparency of communication, speed of competitiveness calls for focus sharply than reaction and the focus on core competence. ever on the bottom line to maximize profitabil ity and enable long-term The Emerging Supply Chain competitive advantage. In the context of improving the bottom line means to The purchasing activity is no longer seen as a increase revenues at a faster pace than costs passive, reactive function and – putting an ever-increasing focus on cost reduction. In addition, with the business ----------------------------------------------------------environment continuously becoming more Ketan Gandhi, IIM-Ahmedabad alumni and global in nature, more outsourcing to Chartered Engineer with 17 years of technical developing countries and a supply market and management experience. He is honorary defined by rising raw material costs and visit ing faculty at engineering and limited sources, we need the ability to management institutions, and had published compete. research articles. He has conducted various

training modules in technical and general During last few years, supply chains are management including behavioral, strategy, being challenged to bring in cost operations, systems, human resources, efficiencies, flexibility of operations and learning and development and strategic transparency of communication. With this marketing. He received an executive demand on the supply chains, there is a need education from Harvard Business School. He for the buyer to change his role from only a has been awarded as “Accred i ted service receiver to also a service provider. Management Teacher” by AIMA, India. He This paper elaborates on the need to can be reached at Gandhi_ketan@yahoo. measure the supplier's satisfaction, and com the focus today is increasingly on new then shares how to use the out come as tool roles, skills, organization, and value added to strengthen supply chain. It also highlights contributions – often under the leadership of the improvement areas that will enhance visionary managers who realize the relationship with supplier. importance of sourcing decisions.

Introduction: Conventionally, whenever the activity of purchasing has been taught or discussed

To emerge ably as winners in global “make or buy” has been one of the major competitive business environment, it is points of understanding. A time has come

IMPROVE SUPPLY CHAIN THROUGH SUPPLIER RELATIONSHIP INITIATIVES By Prof. Ketan Gandhi

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when purchasing has to be viewed Focus on core competenceholistically, integrating the purchasing department with the rest of the firm and In new business scenario, increasingly, the then integrating this firm with both the businesses rely on the aspects of core suppliers and the customers in the supply competence. Th is means that the chain. development of proto types, new products

and at times technology, which will be Supplier today is to be seen as if he is a staff otherwise be performed internally, are not function to the buyer. As inbound work-in- being increasingly shifted to the suppliers process, and outbound inventory decrease, who have this as a core competence.the purchasing and manufacturing functions are becoming increasingly visible Role of Relationshipand transparent to customers and suppliers.

This new approach requires collaborating The purchasing function has been efforts in planning, forecasting, consolidating historically responsible for optimum quality demand, and sharing information both within and lowest possible total cost, which the firm and with the supplier. The generally meant lowest price, developing relationship between a firm and its supplier and maintaining reliable and competitive must be capable of being modified as price, supplier, contributing to low inventory and cost and other factors impact either firms smooth flow, and cooperating and business. (England and Leenders, 1975) integrating with other functions.

Relationship based purchasing requires new Buyers would need to emerge as strategic skills, decision making approaches and partner at higher level in the value chain performance measures. A spectrum of buyer-instead of merely as back-office purchase supplier relationship has evolved in recent function. Buyer's goal would be striving for times. From a time when purchasing was a reducing costs while improving adaptability, inquiry-quotation transaction, the system speed and innovation – and sourcing and has passed through different stages involving procurement operations are becoming a three bid lowest quotation; discussing the engines to drive cost reductions and profit delivered price in terms of total cost, shipping increase. Buyers have recognized they can and transportation terms, payment terms, improve the effectiveness and lower the rework and other cost associated with low cost of running procurement and sourcing quality, and external failure costs once the by minimizing the staff allocated to product is in the customers' hands. This has transactional activities and by optimizing resulted in a relationship where both buyer staffing in the areas of expertise and and seller seek to gain a benefit in the market strategy related activities. Buyers need to at the expenses of outsiders (rather of each focus on developing more effective, other) (Cavinato, 1994) eff i c ient and innovat ive suppl ier relationships. Key trends in areas of supplier relationship

management and procurement

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Several research and benchmarking study effective procurement and sourcing has revealed four key trends in this area. functions are the ones that achieve the Quote highest levels of spend reduction. These

“First, the prominence of sourcing and companies share a number of common procurement organization is on the rise traits, chief among them the use of in the corporate structure, and these technology to enable best practices, the organizations are being viewed as enactment of formal spend management strategic partners at the highest levels of and strategic sourcing programs, and the the corporation instead of merely as close management of indirect and services back-office functions. Indeed, the study spending.shows that over 25% of companies have elevated the role of the procurement In short, the study found that in top-function to report directly to either CEO performing companies, sourcing and or CFO. p r o c u r e m e n t o r g a n i za t i o n s a r e

increasingly important in the drive to Second, companies are looking more and reduce costs and increase profitability. more to their procurement organizations Companies are developing more effective, to reduce costs, bringing to bear efficient, and innovative supplier mounting pressure to meet year over- relationships and they are implementing year cost reduction targets. This is technological Solutions in a more complex evidenced by study findings showing env i ronment . And sourc ing and that 76% of companies have formal procurement organizations are evolving s t r a t e g i c s o u r c i n g a n d s p e n d into strategic partners at the highest levels management programs in place with a of the corporation, while focusing more on specific focus on achieving cost value-added activities and less on reduction goals. repetitive transactional activities.”

Third, there is a growing recognition that Un Quotec o m p a n i e s c a n i m p r o v e t h e (ASUG/SAP benchmarking survey)effectiveness and lower the cost of running their procurement and sourcing Is Buyer a service provider? organizations by minimizing the staff allocated to transactional activities In the new role of this buyer, a question that is (procure to pay) and by optimizing their asked often is: Are the goods and services staffing in the areas of expertise and flowing only from the supplier to the buyer or strategy-related activities. In fact, top the supplier also recipient of monies and performers in the study allocate 73% of services from the erstwhile buyer? Thus, their procurement staff to strategic, while the supplier, in the supply chain is value-added functions and only 27% to providing goods and services to the buyer, the transactional activities. buyer in return is providing monies and

services to the supplier. If this were the case, Fourth, companies with the most it becomes obligatory on the part of the buyer

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to measure his performance for the quality components (especially OEMs) as part of of services rendered by him to the supplier their supply chain in which engineering, bills (Partnership sourcing, 1991) of material, tires of suppliers for supply of

components, production, and quality Vendor Rating System assurance functions are involved, from one of

more approved suppliers, measure of Historically, as buying organizations mature, supplier satisfaction would be necessary. they tend to measure the vendors' performance and start maintaining records Supplier satisfaction survey:of promises kept, quality supplied and prices offered. The outcome is often termed When ever manufacturing is outsourced for as 'vendor rating system'. Industry experts full or part of assemblies, supplier satisfaction raise concern on effectiveness of vendor survey needs to be designed covering rating system and it's usefulness in deriving following broad parameters; conclusions of vendor's performance.

A) Transactional activitiesVendor Satisfaction as measure of Buyer's performance: a. Request for quote or tender process

b. Activities related to release of Is changing scene of global supply chains, purchase orders to suppliersthe buyers will have to measure their own c. Timely Payments to suppliersperformance by measuring the strength of d. Communication with suppliersthe services rendered by them to their e. Quality System and Quality Assurance suppliers? This is a shift in buyer's behavior Plan and practice which is must in today's f. R e w o r k a n d d e s i g n c h a n g e competitive scenario. implementation

Identifying the parameters to be measured B) Expertise based activitiesa. Drawings, Bills of Material and other

The measurement of satisfaction, being a documents to suppliervery subjective element, needs to be b. Prototype development Processconverted into an objective exercise (like c. Development of new vendorsany other survey). The biggest milestone is d. Vendor Rating System and it's to figure out the parameters which need to implementation be measured during the course of vendors' satisfaction measurement. The survey C) Strategy and Complianceneeds to be designed based on nature and a. Business Forecast, and Macro level type of transactions, interaction with planning i.e. capacity planningsuppliers and issues coming-up in dealings. b. Future expansion and long term

association W h e n b u y e r s a r e o u t s o u r c i n g c. Buyer team's competence, efficiency manufacturing of assemblies, customized and approach towards suppliers

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d. Participation of supplier in change 6) Stereo type Vendor rating system if i n i t i a t i v e s ta ke n i n b u ye r ' s doesn't capture real contributions of organization suppliers

D) Any other points customized to different 7) Responsiveness of buyer for new ideas, industries products and technologies, design and

other features being suggested by Methodology: suppliers for better product and

servicesSurvey questions need to be designed for above parameters and measure present 8) Frequency of Meetings with suppliers status on a scale of 1 to 5 (1 being poor and 5 and transparent sharing being Excellent). Based on feedback from suppliers, an action plan needs to be worked 9) Prototype development process, out for improvement of various services design change management (for that buyer will have to extend to suppliers in engineering products) and supplier's response to goods that supplier has been involvementsupplying. Repeat surveys half yearly or annually depending on nature and volume 10) Consider supplier as part of buyer's of transactions would help buyer in tracking value chain improvements . Based on sur veys conducted by author, following areas have If these areas and any other buyer transaction emerged as top 10. specific areas (as per findings of supplier

survey) can be improved at buyer's end, it will 1) Very little strategic discussions for improve supplier satisfaction for short and

long term planning by buyer and medium term.more focus on transactions

L o n g Te r m S u p p l i e r S a t i s f a c t i o n 2) Business forecast accuracy and timely Recommendations:

communication of changes Buyer could also consider improving

3) Reduction in variation in monthly following actions for long term view of order flows, if deliveries are regular supplier satisfaction. These are in addition to

improve transactional parameters that 4) Communication of purchase order include communication, sharing, supplier's

changes and from plant stores on involvement in development process and goods receipt feedbacks.

5) Quality assurance plan and quality 1) Shift allocation of purchase staff to assurance system including buyer expertise and strategy related inspections activities from transactional activities

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2) Focus on value added activities such 6) Reduce process costs due to increase as category management, spend compliance, efficiency and integration analysis, supplier evaluation and on along with reduced complexityg o i n g s u p p l i e r p e r fo r m a n c e management 7) Compress cyc le t ime through

automation and faster execution of 3) Propose IT system and e-commerce sourcing activities

which can improve transactional activities with minimum human 8) Strengthen best practices deployment interface, automate processes and – category management and supplier gain efficiency with out sacrificing evaluation and negotiationeffectiveness

4) Invest more in strategic sourcing programs

5) Rationalization and optimization of the supply base and better access to supplier performance data

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Growth is what all companies are craving for savings. Future of mergers and acquisitions in this rapidly changing economy. It is no will depend on the very fact that whether longer marked by a mere desire to expand they actually fulfil the purpose or is it that our but has become a necessity for survival and lack of significant research in the field has with the onset of the international made us nonchalant towards the post merger competition post 1991, it is all the more effects. In US overall rate of failed mergers applicable to the Indian scenario. As a result and acquisitions is estimated at between 74% of globalization the private sector has and 83%.As per a study by Amie J Devero on become more aggressive every passing year why so many American acquisitions of and thus gradually shifted towards Caribbean companies failed he talks about inorganic growth. Before delving further the two kinds of mentalities prevailing in the into the issue it is equally essential to industry, namely the integration mentality understand the organic growth and why and the deal mentality. For those with a deal there has been a change in the trend. mentality, the point of the exercise is to close

the deal for the best price and generate the While Inorganic growth is fast and more highest stock value in the shortest amount of fulfilling, organic growth on the other hand time. Those with an integration mentality see is a slow and limiting process but a lot safer the process of acquisition as a long-term as it is a tried and tested model. The Indian project that starts with a due diligence and economy has undergone a major isn't over until the merger, including transformation and structural change integration, is complete -a process that may following the economic reforms, and “size take several years. Since deal is just the initial and competence" have become the focus of stage of an acquisition it is incomplete business enterprises in India. Indian without an integration process which absorbs companies realised the need to grow and not only the operations of the acquired expand in businesses that they understood company but also the human resources and well, to face growing competition. thus their culture which is a task even more

daunting. When Yegen Associates, a fifty-There are primarily three objectives behind year-old finance company was purchased, every M&A transaction-Improving revenues the acquiring company had a traditional, and profitability, faster growth in scale and conservative banking culture. According to quicker time to market, acquisition of new Louis Lorio, the VP of Yegen, the deal was technology or competence. As per the made on the basis of analysis of historical survey by Grand Thorton among Indian data through which it was concluded that managers, 33% had the motive of increasing going national would grow the business, but revenues, while 28% were banking on Yegen dissolved in 5 years due to cultural economies of scale and quicker time to clash. According to a study by American market,22% wanted to acquire new Management Association, one out of four technology,11% for increasing market share executives leave within a quarter of merger and 3% for tax shields and investment and 47% of the seniors managers do so within

FUTURE OF INORGANIC GROWTHBy Ashish Gupta

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a year. In addition to it, the acquirer adds on Vidyadhar Reddy, Professor, Osmania to its liabilities from the acquired company. University on pre and post merger effects

across various sectors it was found that Now coming to the Indian scenario, very change in net profit margin was dependent little research work has been done to study on the type of industry. While Agri products, the post merger effects. As per a study done chemicals, textile, banking and finance, by Surjit Kaur (in ”A study of corporate pharmaceutical companies registered a takeovers in India”), using eight financial decline of 3.75%,2.09%,3.16%,7.97%,1.59% ratios on 20 companies and studying pre- in net profit margin respectively, electrical merger and post-merger effects for three equipment registered a meagre 0.09% consecutive years, it was concluded that increase. Overall there was a 2.73% decline in both profitability and efficiency of targeted net profit margin. Although this data was companies declined in post- takeover taken only for a period of 3 years post and pre-period, but the change in post-takeover merger but the slow rate of recovery in profit performance was stat ist ical ly not margins is evident and thus raises questions s i g n i f i c a n t . B e e n a ( i n ' To w a r d s on the very fact that companies consider understanding the merger wave in the organic growth to be a slower process Indian corporate sector – a ignoring its zero risk aspect .Although there comparative perspective') analysed the pre are exceptions like ICICI Bank and M&M and post-merger performance of a sample which prefer organic growth over inorganic. of 115 acquiring firms in the manufacturing Chanda Kochhar in one of the interviews said sector in India, between 1995-2000, using a that their bank will prefer organic growth set of four financial ratios. The study could over inorganic one as many hidden liabilities not find any evidence of improvement in the could come in along with cheap valuations of financial ratios during the post-merger the troubled foreign banks.period, as compared to the pre-Merger period, for the acquiring firms. Pawaskar Taking into consideration the data from the ( 'Effect of Mergers on Corporate research work and common belief in the Performance in India') analysed the pre- industry, the credibility of acquisitions is yet merger and post-merger operating to be proven and thus requires more research performance of 36 acquiring firms during work. Quoting from the book “Black Swan” by 1992-95, using profitability, growth, Nass im Nicholas Ta leb , “greatest leverage, and liquidity, and found that the achievements to worst disasters are acquiring firms performed better than unpredicted and undirected” and thus undue industry average in terms of profitability. faith in inorganic growth may give rise to Regression Analysis however, showed that another black swan.there was no increase in the post-merger profits compared to main competitors of the acquiring firms.

As per a recent research done by Pramod Mantravadi, Engagement Director, ISB and A

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Preface a proletariat. In that case this individual is While respected economists like Adam categorized as Bourgeois.Smith provided the blue print of capitalism, liberty and the western way Bourgeois: A class in the capitalist society of life as we know it, Karl Marx provided that employs more than one MoP. the one alternative: Communism. Example: An entrepreneur.

The objective of the article is to Karl Marx was influenced by Darwin's u n d e r s t a n d t h e m e a n i n g o f theory of evolution, and incorporated the Communism and the nature of its theory in his understanding of social evolution. In order to do so one must be structure. Marx maintained that disparity familiar with terms like: between classes in society has been

responsible for the failure of society. He Means of Production (MoP): This term proposed that the only solution to this means ownership of commodities or problem was to form a classless society, tools capable of creating a product and and this principle formed the basis of generating wealth, e.g., ownership of Communism. During our lifetime m a c h i n e r y t h a t h e l p s i n t h e however we have passively observed the manufacture of a product is defined as a failure of Communist States. Those in MoP favor of the principle have long argued

that the failure does not lie in the Proletariat: Refers to a class in the principle as much as it lies in its means of capitalist society that depends on applying. exchange of labor as the only means of generating wealth, owns no other This article is neither in favor nor against Means of Production (MoP) and has no the principles of communism, though I share in the product it produces. would like to share, by quoting Leonard Example: A laborer working on a Peikoff, that “art is the recreation of construction site exchanges his labor for rea l i ty according to an art i st ' s wages but has no share in the final metaphysical value judgments' and not product (constructed infrastructure) is a require or tolerate an explanatory proletariat, but if the same construction preface. It's a self contained universe worker owns property through which he beckoning the reader to enter and earns rent, that is this ownership helps respond” him generate wealth in ways other than simple exchange of labor, then he is not Marx believed that man cannot work,

COMMUNISMBy Saahil Rohmehtra

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forever, with the object ive of b) Ancient Society (Masters and maximizing wealth, and that someday Slaves) man will evolve to work for his people. c) Feudalism (Warlords and Marx thus created a utopian society Serfs) where each produced according to one's d) Capitalism (Bourgeois and ability and consumed according to one's the Proletariat)need. Marx's work has worked to show e) A brief period of Proletariat the path to this society. dictatorship

f) Socialism andThis utopian society is Marx's recreation g) Communism of reality, it is now time for the reader to beckon and respond. ·Primitive Communism refers

to a state of pre agrarian human Communism and the Nature of its society that produced whatever

evolution was consumed and what was not consumed, example tools, was

Definition of Communism: More than shared equally amongst the just an economic principle, Communism communes. This society neither is a way of life - a philosophy that owned private property nor created advocates a stateless, classless, utopian surplus as their only production society, in which man will strive to was the food they hunted.evolve through association than through competition. ·Ancient Society: The advent

of agriculture (agrarian economy) This philosophy was the brainchild of led to the ownership of land Karl Marx, alongside Frederick Engels, (private property) and productive who envisaged a state of pure forces (labor). This era is identified communism post a brief period of by the two prevailing classes: Proletariat dictatorship. “Master” and “Slave”, and the

brutal (physical) exploitation that Marx's reasoning was the product of his the latter was subjected to by the interpretation of the then prevalent former. This sowed the seeds of a Capitalist society, and the influence of violent uprising and laid the class structures in the functioning and foundation of the Feudalistic evolution of societies. As per Marx, the Societyevolutionary path of societies, in order,

·Feudalist Society: A feudalist is as follows:state refers to a “state at war”, a) Primit ive Communism which quiet aptly summarizes this (Hunters and Gatherers) –

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era. During this period man either power and therefore a greater inherited position or usurped it. demand. The increased demand This spawned uncertainty and would logically be followed by an widespread instability to both life increase in supply, which would and property. Consequentially imply a further increase in territorial integrity was reinforced production and which in turn would to safeguard lives (example employ further utilization of assets several provinces united to form and MoP. generating still greater the empire of England) and wealth for the bourgeois. This cycle property (productive forces). would continue, and would lead to Additionally the economic and the the development of a collective physical exploitation of the serfs c l a s s c o n s c i o u s w i t h t h e by the landlords led to a class of proletariats now identifying town dwelling merchants, who themselves as the exploited class. provided products and services While the production process is with the objective of maximizing socialized the ownership remains wealth and there by laying the in the hand of the bourgeois and foundation of the Capitalist hence Marx argued that the class Society. struggle between the bourgeois

and the proletariat is inevitable, ·Capitalist Society: This and if this struggle is successful, in society was marked not only by the favor of the proletariats, it the ownership of assets but also would create a new social order; o w n e r s h i p o f M e a n s o f Socialism. Production (MoP). Here M.O.P

implies inclusion of all those entities required for design, ·S o c i a l i s m : K a r l M a r x manufacture and sale of products. maintained that socialism was the Example of MoP are tools, first stage in the transition to a machines and (most importantly) purely Communist society that is a labor. Since the objective of this classless society. In order to society was to maximize profit, the understand the gravity of Marx's owner of assets and MoP (the interpretation we must understand Bourgeois class) would try to the meaning of Social Class and its minimize costs. This in turn would significance in the evolution of mean lowering the wages of the society.labor class (the Proletariat). By Class is the function (relation) the adoption of this method the between the productive forces bourgeois class would become (labor) and their stake in the wealthier, with greater spending product. Each socio-economic era is

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recognized by a class structure Marx therefore argues, in the specific to its period, example the communist manifesto, that “The freeman and the slaves, lords and history of all hitherto existing serfs, patricians and plebians were society is the history of class specific to the feudal class with struggles” where a class struggle bourgeois (entrepreneur) and the will be inevitable as long as there proletariat (labor) being specific exists an economic and social to the capitalist society and so on. disparity, and the nature of this In any society the role of each class struggle will be violent, as there will in the governing economics is be an obvious resistance by the equally significant, and hence benefiting class to any social economic prosperity must be transformation. Marx maintained equally shared amongst each that this phenomenon of class existing class. If however there is struggles would come to an end an economic disparity between when the proletariat would any classes then it implies a eliminate all other classes thus will failure of the social system. lay the foundation of Communism. Consequentially the classes would restructure their roles and shares in the final product thereby reforming the socio-eco structure.

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INTRODUCTION commitment of the employees, and when The last few years have seen some major there is a commitment of employees, the scams and corporate collapses across the employees will become more creative. In the globe, be it Enron, WorldCom or Satyam. All current competitive environment, creativity these events have made stakeholders is vital to get a competitive edge.realize the importance and urgency of good corporate governance. People are Good corporate governance makes for good concerned how companies are being business sense. It increases the confidence of managed; after all it 's the public shareholders in the company. This leads to money/investment which is at stake in most better stock prices. Research by A Hasan,

of these companies. International (2009) has shown that good corporate organizations like IMF, WTO and World Bank governance brings down the cost of capital are also insisting on transparency. Efforts for the company. Good disclosure practices are being made to have a common set of lead to a more liquid market for the company. disclosure policies and norms. All these This lowers cost of debt for the company. have moved Corporate Governance & Thus for CEOs of today, it has become quite transparency up the social agenda. essential to comply with principles of good

corporate governance.Everyone is involved with a company in one way or other; either as an investor who RECENT DEVELOPMENTSseeks for returns from investments as part of income; as an employee who spends a In the early 2000s, the massive bankruptcies number of hours with his employer; as a of Enron and WorldCom, as well as lesser customer who buys products in the corporate debacles led to increased supermarket. Corporate entities are shareholder and governmental interest in actually the largest consumers of resources corporate governance. This is reflected in the & essential drivers of economy. The Sarbanes-Oxley Act of 2002 in US. accountability, transparency, fairness and responsibility of these companies on legal, In India, Corporate governance practices social and economical grounds are crucial have gained a greater impetus after the for well being of every civil citizen in today's adoption of the Securities and Exchange economy. This is ensured by Good Board of India (SEBI) appointed Kumar Corporate Governance. Mangalam Birla Committee (KMBC) Report

o n C o r p o r a t e G o v e r n a n c e . T h e Corporate governance and ethical recommendations are supposed to be behaviour have a number of advantages. enforced through provisions in listing Firstly, they help to build good brand image agreements by local stock exchanges where for the company. Once there is a brand the companies are listed.image, there is greater loyalty, once there is g re ate r l oya l t y, t h e re i s g re ate r Some key KM Birla Committee, 2002

CORPORATE GOVERNANCE CHALLENGES IN BUSINESS ENTERPRISESBy Ankit Gupta

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recommendations were: affirm reviewing its affairs.üAt least 50% non-executive members. üPerformance evaluation of non-üFor a company with an executive executive directors by all his fellow Board

Chairman, at least half of the board m e m b e rs s h o u l d i n fo r m a r e -should be independent directors¨, else appointment decision.at least one-third.

2Voluntary guidelines, 2009ü by the ministry Non-executive Chairman should have of corporate affairs cover topics like:an office and be paid for job related üBoard of Directorsexpenses.üü Responsibilities of the BoardMaximum of 10 directorships and 5 üAudit Committee of Boardchairmanships per personüü AuditorsThe board should decide on the üSecretarial Auditremuneration of non-executive üInstitution of mechanism for Whistle directors and all remuneration

Blowinginformation should be disclosed in annual report

MAJOR CHALLENGESüAt least 4 board meetings a year with a maximum gap of 4 months between any 2 meetings. Minimum information ÞUnlisted Corporate Not Coveredavailable to boards stipulated. One of the major problems with respect to

a p p l i c a b i l i t y o f r e g u l a t i o n s & Some key N Murthy Committee, 2003 recommendations are that they are restricted recommendations were: to listed entities only, if mandatory. This üTraining of board members suggested. makes small & mid size companies to perform üThere shall be no nominee directors. All those activities which may be legal but are

directors to be elected by shareholders not ethical.with same responsibi l it ies and accountabilities. For example, companies in chemical industry

üIndependent directors should be are allowed to pollute environment within treated the same way as non-executive certain limits. Many small companies do not directors. even try to reduce pollution, just because

üThe board should be informed every they are allowed.quarter of business risk and risk management strategies. ÞDisclosure of Off Balance Sheet

üBoards of subsidiaries should follow Transactionssimilar composition rules as that of There are many transactions which either parent and should have at least one cannot be disclosed in balance sheet or even independent director s of the parent if they can be, then they cannot be in company. monetary terms.

üThe Board report of a parent company should have access to minutes of board For instance by creating Special Purpose meeting in subsidiaries and should Entities, companies transfer financial assets

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involving transactions that have off Balance of enterprises.Sheet implications. Apart from the common ØQuite often, especially during the early, type of assets like customer receivables, start-up stages of the family business, notes, mortgages, and bonds, the transfer the company and family relationships of more complex financial assets like are not clearly distinguished. This is derivatives, cash reserve accounts, particularly true with respect to guarantees, and servicing obligations for financial relations and accounts — the underlying assets is resorted to for availing company's and family's assets are not advantage of opportunities in financial legal ly separated. This causes markets, and, at times, achieving specific problems in distinguishing company-accounting results. Keeping certain financial owned assets, and how company assets off the balance sheet firms can owned assets can be used by the family increase their liquidity and also can obtain as a shareholder.low-cost funding. As the Accounting Standards AS-30, AS-31 and AS-32, relating ÞMultiplicity of Regulationsto measurement and disclosures of financial In India, there are many regulatory bodies like instruments, are waiting to be mandatory, Company's Act 1956, Securities Exchange firms can easily structure transactions using Board of India (SEBI), Reserve Bank of India Special Purpose Entities. (RBI), Insurance Regulatory Development

Authority (IRDA), etc. The main problem with What is to be disclosed & how it is to be all of them is that there is lack of co-disclosed is at discretion of management. ordination or there might be over regulation. Even if mentioned, it may not be sufficient Many a times there are two or more or show the true picture of the situation. treatments for a similar event/transaction. Also some information like exposure to sub This duplicity gives companies opportunity to prime securities' exact value can't be r u n a w ay f ro m t h e i r m i s t a ke s & ascertained. It can just be indicated, but responsibilities.again then it's just indicative & not exact information. Also regulations have been reactive & not

proactive. It is only when a scam takes place; ÞFamily Owned Enterprises regulatory bodies take actions, which if would In India, majority of business enterprises are had been taken earlier could have avoided family owned. Though it has advantages for the pecuniary loss of innocent investors and family members, it also has some limitations public in general.with respect to minority shareholders like:-ØThere is minimum or no dilution of ÞCorporate Social Responsibility &

powers. Ranging from Directors to Sustainability Reportingemployees, one can notice presence Triple Bottom Line is gaining importance but of family members in all significant still because of its Voluntary status, positions. companies are not adopting it. Many

ØThey do not allow institutional companies especially small & mid size investors to participate in ownership companies can not afford to do CSR from their

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minute profits. But the main problem is not But unfortunately in Asian countries, mandatory regulation, but on ethical nepotism plays crucial role in recruitment. In grounds; which is difficult to report. majority cases the selection of a candidate for

a job is on the basis of reference instead of his For example, a cigarette manufacturing past performance & values.company like ITC may carry out its social tasks through e-Choupal but it is nothing if ÞChallenge of Existing Practicescompared to the harm caused by its core Some existing practices of corporate product, cigarette. governance are faulty in themselves. Some of

the common loopholes in the existing Þ practices include:In a recent Supreme Court order, in case of a. Failure by Board of Directors to the bounce on cheque, Managing Director understand the risk their firm is taking.of a company has to be held responsible. To b. Conflict of interest and lack of a certain extent it is justified but it should ' i n d e p e n d e nt ' ( i n d e p e n d e nt l y not be limited to Managing Director. There minded) Board members or senior is a need of commitment at all Levels of executives.Corporate ladder and should not be treated c. Corporate culture which does not as responsibility of finance functionaries promote to raise questionsand CEO only. Each and every employee d. Problems in Whistle blowing – must be made aware of his duties & held Whistleblowers may often be wrong in responsible for the said task. After all it is their accusations and their motives are not a one man army. not always pure. Their actions can

disrupt a workplace, and may cause serious harm to individuals wrongly ÞSubjectivityaccused.It's critical for any company that the people

they recruit believe in the company's values and imbibe those values. This is an area ÞImpediments Due to Sectoral Naturewhere major stress should be laid. For This can be explained with an example of example: the Indian business group –'TATA', public sector, in which many countries are lays lot of emphasis on its values-Integrity, underperforming (Especially airlines-Air Sincerity and transparency, while recruiting India, British Airlines, China Air, etc). Of people in its group companies. The course it's due to poor governance, some of interview process should be used to judge if which includes:the candidates' value system match with a. Political interference in the working that of the company. The candidates past management & many a times in Board.record will also give some indication about b. Government as a shareholder have him and can be used to judge the fit of the different risk, return appetite which are candidate. The personal value system not same as retail or institutional should be of such strength that the investors.candidate is immune to opportunistic c. Last mentioned but most felt reason is actions. corruption (Red Tapism).

Commitment At All Levels

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Some of the ways which might help to Þovercome the challenges of governance in Even transparency has its own limits. business enterprises are: Management often argues that everything

can not be disclosed just for the sake of 1) Compliance costs which in the initial d i sc losure & t ransparency. Much

phase seem to be huge, can prove to be information if disclosed may be used by investment in long run if appropriated at competitors. Thus, 'how much is enough', right time & suitable place. Simplified & will always be a question which will have a unambiguous regulations will encourage relative answer.high standard of corporate governance and help to reduce compliance cost. ÞDependence on Independent Directors

This has much to do with the choice of 2) Corporate Governance extends beyond directors and the skills that they bring to the

corporate law. Its objective is not mere board; the conduct of board meetings; the fulfilment of legal requirements but qual ity and quantity of f inancial , ensuring commitment on managing operational and strategic information t r a n s p a r e n t l y f o r m a x i m i z i n g supplied by the management to the board; shareholder values. As competition management's appetite for independent increases, pronounced technology evaluation and criticism of strategies and shortens the distance and speeds up performance. It also depends on the extent communication. In this dynamic to which promoters and management truly environment the systems of Corporate want healthy debate and independent Governance also need to evolve, upgrade oversight; the de facto role of the various in time with the rapidly changing committees of the board; and, of course, economic and industrial climate of the how much a company is willing to pay for country.the experience and skill sets of professional

independent directors. 3) Standards and incentives are required for Independent directors should maintain

the mid size new entrants of capital objectivity and stand firm on some issues, market. Large pool of unlisted companies although it is a difficult task.They should also should also be bought in the purview of have the will and courage to say no when governance for healthy competition and things are not moving in the interest of the better quality goals.company and its stakeholders.

4) Directors should have integrity and CONCLUSIONindependence of thought; the courage to express their independent thought; a There is no doubt that Corporate grasp of the realities of business Governance, if implemented properly, has operations; an understanding of the immense benefits for all stakeholders, changes taking place regionally, majorly shareholders, management, nationally and internationally; and an employees, customers, and community at understanding of business and financial large.language.

Relative Transparency

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5) Many a time's promoters play with REFERENCESinvestors' money, gain from market & disappear from country. Watching the Organisation for Economic Co-operation and recent scenario, regulators vigilance should Development, “Corporate Governance of be made stricter and if anyone is found Non-Listed Companies in Emerging Markets” guilty, the culprit must be punished. OECD, 2006, Pages: 167-186

6) Cost Accountants should statutorily be A. C. Fernando, “Business Ethics: An Indian made more responsible like Chartered Perspective” Pearson Education 2009. Accountants. This in turn will help in Pages: 142-246better presentation and disclosure of s e g m e nt - w i s e & p ro d u c t - w i s e

Linda S Spedding, “Due Diligence and information (AS-17).

Corporate Governance” Lexis Nexis, 2004. Pages: 83-163

Quality of governance depends upon competence and integrity of Directors, who

N. Gopalsamy, “A Guide to Corporate have to diligently oversee the management Governance” New Age International, 2008while adhering to impeccable ethical

standards. Strengthened systems and enhanced transparency can only further the

WEBSITESability. Transparency about a company's g o v e r n a n c e p r o c e s s i s c r i t i c a l .

en.wikipedia.org/wiki/Corporate_governanceImplementing Corporate Governance structures are Important but instilling the

http://www.nfcgindia.org/reports.htmright culture – work culture is the Most Essential. After all, well defined governance is just 'Artificial Legal Entity'.

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In the somber, tight lipped corporate & closely [because it is easier than pronouncing academic corridors, some humor is a the word] you might like to add I OR E to the welcome breeze. So here it comes- acronym and coin a new jargon: POSDCORB].

Isn't it more pronounceable? By the way I If you are in the business world & don't wish stands for IMPLEMENTATION.to appear dumb in the board rooms or cocktail circuits, you must be able to flaunt So you see, if you are smart you can coin your the latest management gizmos and own jargon.gimmicks. If you have to impress an audience dumber than you, you must Is management Science, Art, Craft or bombard them with the latest management Philosophy?jargon. Never mind if the essence is trivial. Never mind if it's the same old, stale wine in I am sure if you are a practicing manager or a a jazzy new bottle! pragmatic academician you will agree it is a

combination of all. It encompasses all Business and Management have co- existed disciplines. So why not define it as CASPfor more than two centuries. And yet there is so much confusion about these Craftfundamental concepts. If you wish to define Management would you define it by an Artacronym: POSDCORB [a mouthful word, isn't it?]: Science

Planning Philosophy

Organizing And of course it is a lot easier to pronounce and really grasps you.

StaffingThere has been a crazy haze of jargon and

Directing new jargon flooding the market place. Every year a new Management Guru appears on the

Coordinating scene & the corporate world puts him on a pedestal.

ReportingMuch before BOP became a cliché people

Budgeting were already selling bicycles, pickles and sickles to large consumer bases. But they did

If you are a successful manager, you may not know that there was a fortune at the wonder if you are actually doing all these Bottom of the Pyramid. Or did they? What functions. If you look at the acronym more was the very basis of the Sears business

MANAGEMENT: CRAZE, MAZE & HAZEBy Himanshu Kulkarni

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model? But you needed a new jargon & CKP Let me just take you through the ever gave you BOP. changing management jargon. What is your

management style? Autocratic? Dictatorial? Now-a-days it is the in thing to sprinkle Democratic? Benevolent? Do you follow Execution in your cocktail circuit discourses. MBO? By the way it stands for management I am amazed to see how execution which is Beyond Organization. MBC? It is not so fundamental to business success can management by crisis, it is management by become a nuance and the latest fad. The chance. And have you not yet practiced first time when I heard it I thought it was a MBWA? It is not management by walking new painless method of delivering the around. Which bosses would like to walk? So death penalty. But later on I realized that it stands for- Manage but without suddenly all the honchos of the corporate Achievementworld woke up one fine morning and shouted Eureka! They realized that without What sort of an organization do you have? Is it execution vision is futile. What a revelation! a pyramid or an inverted pyramid? Is it

functional , divisional, flat or de- layered? Are Then I looked back over my career as a you confused? Then try the Matrix version. Managing Director of companies in India And finally the anti- climax-apparently the and abroad. How come, I led these Japanese corporations do not have a formal companies successfully without execution? organization chart!Isn't execution commonsense? But then, isn't commonsense most uncommon? But if Then suddenly the Quality Tsunami hit us and you have to impress the galaxy of your peers the cocktail circuits were abuzz with Quality & subordinates you must know about Ram Circles SPC (Statistical process control). Charan and Execution. Whatever you were Suddenly Deming and Juran attained doing effectively to achieve results, if it is Godhood. But if you wished to pretend to be called execution, it will sound impressive. smarter, how could you miss six- sigma? You Have you heard of this story? : thought that with all this scotch induced

Quality- Mantras, consumers will be thrilled. A US- educated, sophisticated young man Are they? Just look at the power – failure marries a beautiful but unsophisticated every time it rains. Just find out how much village lass. They go to Switzerland for their real tomato you get in the instant soup. Of Honeymoon. After a week the girl asks the course the Toyota recall is too complex, isn't husband – What about the Honeymoon, it?when are we going to taste the honey and see the moon? The husband explains – The Japanese jargon like a dragon speedily whatever they were enjoying doing is called engulfed us. Kanban to Kaizen to Zen was not Honeymoon. The disappointed village girl in vain. You had to focus on waste. How says - Oh! These simple things? We used to revolutionary! Bosses started to wear the enjoy these in the fields in the village. So same corporate uniforms. Common much for the jargon! cafeterias sprung up. But bosses never

stopped bossing and managers never

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Are you with me so far? Are we on the same attempted to be leaders. Did it improve the page? I offer my simple 3-P Model for Bottom – line? Who knows, because Business Excellence:already the craze has moved on to

TBL(Triple Bottom Line).

CSR & Sustainability became the hottest topics over cognac & Exxon – Valdez OR now BP were discussed in hushed tones. Innovat ive F inance & Accounts – Reengineering caught our fancy. Never mind we got Enron & Satyam in return. Lehman, Morgan vanished. Ford, GM collapsed. But the jargon prevailed.

You want to build a great business, try this out.Times are changing , will ever change. Of

course, change is the only constant. And yet the eternal fundas of Business will never ever change. My only request to practicing managers is go beyond the jargon. Capture the essence. Keep it simple.

So here are a few suggestions or jargons if you like ;

1 KISS : KEEP IT SIMPLE, STUPID2. 1. NOCUNOBU : [sounds Japanese isn't it] No customer No Business3. 1. FCUK : Foster Change Unleash Knowledge4. 1. PF : [ Not Provident Fund]

People First5. 1. TOMALTOP : Too Much Analysis Leads to Paralysis6. 1. UCOMSENSE : Use Commonsense and finally7. 1. PISS : PLEASE IMPLEMENT STRATEGY STUPID

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Work-life balance has become a by word to plan it, it just happened. Now they have to

these days and rightly so. And although find time. We have given it a nice name as

people are beginning to realize its well. We call it “quality time”. Imagine making

importance, it takes to two to tango. Hence a special note in a diary “on spending time

if only the employees think about it and not with children”. The pressure of costly living

the employers then it is end game. We find and the advent of materialism has not

today that organisations are getting helped. Women have to work as hard as

increasingly aware of the business case for everyone and are caught in the spiral called

work-life balance. “EMI”. What the “busy go getting executive”

gains by making that extra money, he loses on In his book Managing work-life balance his/her health. The life style diseases such as David Clutterbuck defines work-life blood pressure, diabetes, heart ailments are balance as: becoming 'younger'. It is high time to realize

that the body and mind can take only so much ·being aware of different demands and no more. It is almost a fashion to stay

on time and energy back late as if that's the only time real work

gets done. This becomes a habit and ·having the ability to make choices in everyone around such people suffer too.

the allocation of time and energy Time spent in the office should be strictly

need based. The famous mail which did the ·knowing what values to apply to rounds, asked a pertinent question – are you

choices “working late” or “staying late”?·making choices.

Today even commuting has become a work-Ever since our globalization, the Indian life balance issue. The time spent commuting Industry has begun to face the problem of could be easily better utilized. The less said work-life balance. This is specifically true about the stress caused during commuting with the boom in the IT, BPO and KPO the better.sectors. Unfortunately this has percolated

into the lives of school children, what with A lot can be done to solve this major issue. As the new shift system (a necessity). People the saying goes, if there is a will, there is a have begun to lose their childhood very way. Needless to say the involvement of all quickly. They face the pressure of doing concerned is a must. This cannot be an better and better in this fiercely competitive individual show.world.

Let's look at the some of the things that can There was time when parents spent leisure be done.time with their children – they did not have

WORK-LIFE BALANCE – THE NEW PARADIGMBy Shrirang S. Abhyankar

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1. Flexible timings 3. Developing a hobbyHow many times it has been found that once

This is not a new concept anymore. Some people retire they have plenty of time on companies have also started this system. In their hands but nothing to do. The reason is this system a certain time slot is decided as that either the person has no hobbies at all or fixed when all employees need to be has not developed one. Perhaps he thought present. The remaining working hours can he would never need a hobby. A hobby is be adjusted individually as long as 40 hours something which will stand you in good stead, or whatever the office hours have been not only now, but even more so during your specified are clocked each week and the retirement years. There have been cases team and company work gets done in time. people aging very quickly after retirement The advantages are as follows because without a hobby, there is vacuum,

more so in 'empty nest' situation. If someone a. An employee is empowered as he can does not have a hobby then it would be

decide his convenient time and he can advisable to develop one now. Don't ever still attend to some personal work forget that we all have to retire at some point such as weddings, banks, school etc of time.

b. It has been found that the meetings 4. Financial planning in advance are more effective because everyone is aware the time zone for the Many people over-work for money not meetings knowing how much is enough. It is necessary

to sit down and see what you really need, so c. It helps in commuting as the rush that one does not 'run after it' and repent

hour traffic is avoided later because one ends with a lot of wealth but no health to enjoy it. This entails looking

2. Telecommuting at investment options at the beginning of the c a r e e r, a f t e r c o n s i d e r i n g a l l t h e

It has been in operation in the developed responsibilities to be taken care of.countries. Already some companies in India have started adopting this method 5. Know your true capacity especially in software companies where the tasks are well marked out so that an Most of us really do not know our capacities. employee needs to come only once or twice This is applicable both ways. Some people a week to the office. The advantages are as have huge capacities of work and they are not follows: aware of it and vice versa. It is very important

a. Commuting is reduced to know how much one can do and what one b. Saves time cannot and with it the assertiveness to say NO c. Saves on fuel when they cannot. This penchant of chasing d. Contributes to “Global Cooling” more and more work when one does not have e. More quality time at home especially the capacity has direct bearing on the results.

with kids Also it can tell on health of the person.

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As Ralph Waldo Emerson has rightly said, starting on the first one.” Mark Twain.“To be yourself in a world that is constantly trying to make you something else is the Use technologygreatest accomplishment.”

It is necessary to use technology to help 6. Looking after your health balance professional and personal life. It is Health is wealth. Nothing could be truer true that technology when overdone can be than this statement. So looking after your counter productive. For example it is health is of prime importance. Lost health important to know when to turn the cell cannot be made by paying more money or phone off because it is becoming too attention later. Health is not the most intrusive. As Albert Einstein had saidimportant thing; it is the only important “It has become appallingly obvious that our thing. technology has exceeded our humanity.”

7. Organize 9. Don't say yes when you want to say noThere is a tendency to take many things on our plate and end up creating clutter and A lot has been said about this concept in chaos. It is necessary to organize one's books and magazines. schedule so that time can be utilized to its maximum. Please remember time is not a We can look forward to following benefits if renewal source. work-life balance is achieved:

Johann Wolfgang von Goethe had said, O n corporate level“Many people take no care of their money till they come nearly to the end of it, and a. Increased productivity others do just the same with their time.”

b. Possibility of attracting better talent8. Prioritize It is very essential to prioritize your work for c. Better teamworkthe day. A task may be urgent but is it important? One must be very brutal in d. Improved moraledeciding what is important to the organization you are working for, what is e. Lesser attritionimportant for you personally and what can wait. This will help reduce the number of f. Goodwill for the organization'bad days at the office' as also help spend good personal time. On individual level

“The secret of getting ahead is getting a. Reduced stressstarted. The secret of getting started is breaking your complex overwhelming tasks b. Better relationships on the job and in into small manageable tasks, and then personal life

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c. Increased productivity 2. http://www.worklifebalance.com/

d. Look forward to nurturing a hobby 3. http://www.adelaide.edu.au/staff/ balance/benefits/

May we conclude the quote by the great management guru Lily Tomlin that “The 4. http://www.theworkfoundation.com/ trouble with the rat race," once observed, difference/e4wlb.aspx"is that even if you win, you're still a rat."

5. http://www.cipd.co.uk/subjects/health References: /worklifebalance/worklifeba

1. http://www.microsoft.com/smallbusin ess/resources/management/leadership_training/need_work_life_balance_7_tips.mspx

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