Diplomatic Ransom

India’s Constitution forbids state governments to meddle in foreign affairs

Recently the United Progressive Alliance (UPA) government was stupefied when old ally Dravida Munnettra Kazhagam (DMK) asked its five ministers to resign from the Union government remonstrating the Indian government’s reluctance to admonish Sri Lanka over its alleged ‘genocide’ against its minority Tamil population. This hard line DMK stance was fueled partly by a film by Callum Macrae called ‘No Fire Zone: The Killing Fields of Sri Lanka’, which was shown during the UN Human Rights Council (UNHRC) meeting in Geneva on March 1 this year. This film depicts horrific atrocities committed by the Sri Lankan soldiers on Tamils. This resulted in a US-sponsored resolution which holds the Sri Lankan Army guilty of war excesses resulting in the deaths of 40,000 civilians.

It placed India in a quandary. Last year New Delhi had voted against Sri Lanka at Geneva in a non-binding resolution. This had left the Lankans aghast. The reasons for their disappointment are not too difficult to fathom. India had provided crucial intelligence inputs to the Lankans to end their three-decade war against the LTTE. This victory against the Tamil Tigers would not have possible without India’s tacit approval and strategic support.

Regional parties like the DMK have been making deafening noises in the Parliament and Tamil Nadu Assembly demanding that India openly condemn the ‘genocide’ in Sri Lanka. Such a posture by India would be perceived as undue interference in the ‘internal matters’ of Sri Lanka. Colombo may end up being firmly in the Chinese camp. The signs are ominous and New Delhi simply cannot afford more hostility in the region than what already exists.

Sri Lanka has virtually given China control over the Hambantota region in the southern part of the country. China is in the process of developing a port there, which would augment its ‘String of Pearls’ strategy which seeks to fortify the Chinese sea lines of communication extending from the Chinese mainland to Port Sudan. This port along with the Chinese ports in Chittagong (Bangladesh), Gwadar (Pakistan) and Marao (Maldives) effectively surround India. Sri Lanka has allowed India to set up a consulate in Hambantota to observe the Chinese. They may not be as accommodating if India continues to cast aspersions on them in international forums.

Regional parties have a penchant for meddling in foreign policy issues. India’s relationship with Bangladesh is another case in point. The issue of water sharing, especially over the Teesta River has always been contentious. A new bilateral treaty (Teesta River Waters Agreement) was proposed which entailed an equal allocation of the Teesta River. This was to be ratified in September, 2011, when Prime Minister Manmohan Singh visited Dhaka. However the treaty did not materialize as the Trinamool Congress (TMC) opposed it. West Bengal Chief Minister Mamata Bannerjee even declined to accompany the Prime Minister to Dhaka. This has put a severe strain on our relationship with Bangladesh. It should be considered a painful setback considering that the Sheikh Hasina government in Bangladesh has always been a well wisher and a staunch ally of India. This advantage should not be squandered, especially in a South Asian neighbourhood where India lacks reliable allies and its foreign policy is often perceived as being impertinent.

 The Sir Creek issue can be cited as another example of regional interests unduly influencing foreign policy. The dispute lies in the interpretation of the maritime boundary line between India and Pakistan on Sir Creek, a 96-km water body that empties out into the Arabian Sea from the Rann of Kutch. Last year India and Pakistan came very close to signing an agreement to resolve this dispute, till Gujarat Chief Minister Narendra Modi threw a spanner in the works. He stated that it would amount to a ‘sell out’ to Pakistan and demanded that the agreement be put on the back burner. And that is where it went.

Regional parties have every right to put forth their views on foreign policy. Involvement of regional governments in foreign policy is a global phenomenon and has been defined as ‘constituent diplomacy’ by American scholar John Kincaid. While it is true that regional governments and parties need to be consulted and their feedback be welcomed, they should refrain from meddling in foreign policy for populist reasons.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
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Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year

BBA Management Education

Jeckyll and Hyde shades of Hooda...

Murder 1 and Murder 2 had been a hit at the box office. Did you feel any kind of pressure on you because of this?
It is my good luck that I got to do this film. This film is about modern-day relationships defined by power, fame, money and lust; but mostly by love. Murder is a brand name in itself. It has created stars. It has always dealt with modern issues. There is love, lust and sex in all relationships, but Murder 3 is beyond these things. It is not only about erotica. It is a fantastic story, explained well. The first two films were successful. It’s my job to act and I only concentrated in delivering good stuff.

How was it working with a first-time director Vishesh Bhatt and your co-stars Aditi Rao Hydari and Sara Loren?
Vishesh handled the film amazingly. It is his first, but didn’t look like it. He studied in New York and had a clear idea about what he wanted. He is the quietest of the Bhatts and is sorted. Also, it was nice working with the lead actresses. I had the benefit of being the eye-candy with them fighting over me! (Laughs)

The Murder series has also been very bold in terms of the scenes it has had and these days, Bollywood is being blamed for objectifying women.  What do you have to say about this?
I don’t think cinema should be blamed anyway. The problems that women face are socio-cultural. Men who treat women like shit and are biased should be blamed. Not films. The purpose of films is entertainment.

What are your upcoming projects?
I have a lot to do this year. I have a film with Imtiaz Ali and Alia Bhatt. It’s called Highway. The shooting has not started yet though. There’s another film I’m doing called Kick. It’s by Sajid Nadiawala. It also features Salman Khan. Bombay Talkies is again another one. It is an anthology consisting four short films. I am in one of them with Rani Mukerji.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

The great Indian elections

Elections are more about luring voters! 

Unlike many post-colonial nations, which have descended to dictatorships or sham democracies, India has wedded to a reasonably stable democracy unhindered throughout its post-independence stint. However, the success of very essence of democracy in India were largely held off, especially if benchmarked against the best examples of it, because of certain challenges caused by the some basic deficiency in the country’s social and political dynamics. India’s political outfits have time and again exploited the short memories of poor and illiterate (or at best the semi educated) masses that forms the basis of the country’s electoral pattern. Therefore, the inefficiency and status quo of the country’s/state’s incumbent governments are ratified by the voters on the merit of just few months of developmental work before the election. It is an enigma why the voters are such crassly swayed by the otherwise pillaging politicians and cannot see the devil in their stealth! So, projects worth hundreds of crores are announced and brandished before election to tilt the electoral balance in favor of the ruling parties. And such is India’s electorates’ psychographics that in many instances it works too! The best example of it has been in West Bengal, where for 34 years of Left Front rule there were no anti-incumbency factors at all despite their shoddy and slapdash work during the tenure. They derived latitudes by tall talks and announcing projects before elections that were either never implemented or remained incomplete once the election was over. The flaunting of projects and schemes just before election has become a norm throughout the nation in the hope of shaving down opposition’s margins. Before the Surat Municipal Corporation (SMC) election this year projects worth Rs. 519 crores were announced along with major reforms in the transport sector worth hundreds of crores.

To beat these faltering, the Election Commission of India in its model ‘Code of Conduct’ has specified strict Do’s and Don’ts for the political parties: it has banned announcement of new schemes, projects, financial grants and laying foundation stones that are rooted in the sole effort to influence the voters. Yet, the parties escape these rules by announcing schemes just before they come into effect, as has been the case in West Bengal, Gujarat and other places. One of the reasons why the incumbent parties can create firewall by these announcements even though the voters know it to be a bogus is because they hardly have any other options!

The cliché is followed by each and every party, which provides no alternatives for the voters that can crystalize into a realistic change in governance. And most importantly, the election in India in most instances are not fought on developmental issues at all – they are fought on the flimsy lines of caste, creed, religion…et al. The illiterate or semi-literate electoral base cannot believe any paradigm change in their lives is possible at all – so their voting decision is not based on positive signals of developmental issues, but on the regressive demographic matters.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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Frank Kameny to Paul C Jones,

In 1961, four years after losing his job as a U. S. Army astronomer on account of his homosexuality, 36-year-old Frank Kameny saw his latest appeal against the dismissal rejected by the Supreme Court. However, the decision only strengthened his commitment to the wider cause: Kameny went on to become a major figure in the gay rights movement and spent the rest of his life as a full-time activist. The following letter was written to Congressman Paul C. Jones, in an effort to spread the word about the Mattachine Society.


House of Representatives,

Washington 25, D. C.


Dear Mr. Jones:

Enclosed, for your interest and information, is a formal statement of the purpose of the Mattachine Society of Washington, a newly-formed organization, devoted to the improvement of the status of our country's 15,000,000 homosexuals.


Included, also, is a copy of our news release, which was submitted to the Washington newspapers and others, and to the various press services.

The question of homosexuality, and the prejudice against it, both personal and official, is a serious one, involving, as it does, more than one out of every ten American citizens, including roughly a quarter-million in, each, the Federal Civil Service, the Armed Forces, and secutiry-sensitive positions in private industry, and at least 10% of your constituents.


We feel that the government's approach is archaic, unrealistic, and inconsistent with basic American principles. We feel, in addition, that it is inexcusably and unnecessarily wasteful of trained manpower and of the taxpayers' money.

We realize that this area presents you with many potential problems, some of them quite subtle and touchy ones of politics and public relations, and that they are not always subject to easy solution, but policies of repression, persecution, and exclusion will not prove to be workable ones in the case of this minority, any more than have, throughout history, in the case of other minorities. This is a problem which must be worked with, constructively, not worked against, destructively, as is now the case. A fresh approach by the Federal government is badly needed.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

A ringside view of politcs

During the last two years, several of India’s veteran editors have penned their memoirs. BG Verghese wrote First Draft: Witness to the Making of Modern India followed by S Nihal Singh’s Ink in My Veins, Vinod Mehta’s Lucknow Boy and Kuldip Nayar’s Beyond the Lines.  Tavleen Singh has joined the gang with Durbar, which brings into sharp focus the contours of Indian politics during the 1980s, particularly when Rajiv Gandhi came to power, and her own journey as a journalist.

Durbar means a public reception held by a prince. Rajiv Gandhi being the prince, his friends were ‘durbaris’, including the author herself. Though part of this small and influential section of Delhi’s society, the journalist in Tavleen Singh wondered how these people could remain unaffected by the perilous state of the nation. Singh, who began her career in the mid-70s, a few months before the Emergency was imposed, comes down heavily on Rajiv following the assassination of Prime Minister Indira Gandhi in 1984. Despite being fortified by a huge mandate for change, the young leader chose for himself a group of advisors, friends and acolytes from the drawing rooms of Delhi, as inexperienced as him and just as unaware of the ground realities of a complex nation. That is the central theme in the book. “…an elected Prince (read Rajiv Gandhi) surrounded by people who could not have been more distant from India’s complexities, he ended up leaving as his political legacy only his Italian wife and their children,” Tavleen Singh writes in the author’s note. Such strong statements recur quite frequently.

But getting gossipy stories from the durbar wasn’t easy for Tavleen. She recalls how Romi Chopra, who counted himself as Rajiv’s close pal, objected when the author asked Rajiv what he thought of the excesses during the Emergency after Janata Government came to power in April 1977. He responded by saying how relieved he was that somebody had asked the question.

Tavleen reveals that the public durbar was initiated by Charan Singh to hear the woes of the aam aadmi. Later Mrs Gandhi too announced she would hold a morning durbar. After writing a piece comparing the three durbars, including the then PM Morarji Desai’s, and extolling Mrs Gandhi, Tavleen was summoned by Desai. Expecting to see a man instead of Tavleen, he gave the young journalist a mouthful for forgetting the Emergency excesses. When he fell silent and immersed himself into his files, a PMO official made gestures that it was time for her to leave.

Her proximity to the durbar not only fetched Tavleen stories but also assignments. Soon she began writing for Sunday magazine edited by MJ Akbar and was instrumental in getting Rajiv Gandhi’s first interview to Akbar. Later Akbar, then close to the first political family, joined the Congress and became an MP too. One wonders who shaped whose career? Was it Akbar who shaped Tavleen’s career or was it vice versa? The author claims to have got interviews with Rajiv and Sonia Gandhi and invitations for lunches and dinners for her editor!
Tavleen was an omnipresent journalist covering the action, whether it was Turkman Gate, the 1984 riots, troubles in Kashmir, Operation Blues Star and Black Thunder, the IPKF interventions in Sri Lanka, innumerable political meetings and elections, and even critical developments in Pakistan. Mind you, she did all this and more while sipping drinks and zipping from one party to another.

Thanks to Sonia Gandhi, Tavleen and her colleague Madhu Jain got to interview Amitabh Bachchan, Gandhi’s family friend. The book also reveals that Maneka Gandhi wanted to feed her pet the same biscuits that Sonia had obtained for her dog.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
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IIPM : The B-School with a Human Face

BBA Institute

Royal Enfield rides into the mass terrain

The past two years have seen an unparalleled rise in sales numbers for the niche brand in India. But will this jubilation last long, asks Bachan Thakur
It is hardly surprising that in an era where two-wheeler companies are trying hard to woo the fairer sex, the Royal Enfield has maintained a cult following among Indian males. While initially it was mainly a machine for the police and the military, it went on to become quite the male icon.

However, the high prices of these bikes have kept them confined to a niche category. Sales figures in the motorcycle/step-through category in India illustrate the same. Royal Enfield sold 45,915 units for the April-August 2012, an impressive growth by 51.53 per cent year on year (yoy). However, this pales in comparison to the likes of market leader Hero MotoCorp (23,12,551 units), Bajaj (10,14,117 units), Honda Motorcycle & Scooter India (4,59,882 units), TVS Motor Company (2,18,287 units) and India Yamaha Motor (1,32,704 units). It is indeed not an apple to apple comparison, considering the price of a typical Royal Enfield product, but it is quite clear that the bike has performed below par compared to its potential. When they are operating in a two-wheeler dominated market like India, they certainly have struggled to account for a greater share and need to push the envelope; a view that even a company insider would willingly endorse, in all probability.

And this kind of a push cannot come at a better time. Off late, the leisure riding culture is quickly gathering pace in India. Consequently, the premium two-wheeler segment is rapidly gathering steam. A report by Hem Securities makes an interesting comparison in growth rates in various sub-segments of the motorcycle market in 2011 over 2010. While the economy segment (less than 125cc) registered a growth of 15 per cent yoy, the executive segment (125cc to 249cc) registered a growth by 20 per cent yoy. In contrast, the premium segment (more than 250cc) registered a phenomenal growth of 71 per cent yoy. With the visibly growing interest in this area, the marketing top brass at Royal Enfield senses an opportunity.

Campaigns like “The Himalayan Odyssey”, “Leave Home”, “Tour to Bhutan” et al have been launched to enhance the brand's recall and appeal in the minds of its target audience. It is trying to reach the youth, which was illustrated in the “Leave Home” campaign. It encouraged youngsters to leave the comforting confines of their homes and embrace the spirit of adventure and also included a hero theme-based comic strip. The campaign reinforced the attributes of masculinity, thrill and adventure. In fact, these are the most common themes for the bike

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year

BBA Management Education

CAN HE SAVE THE WORLD?

But more importantly, Graham was not an evangelist who limited himself to preaching religion – one reason his influence and reach grew exponentially. In the 1950s, Graham was amongst the first white religious leaders to revolt against racism and the segregation of blacks and whites during religious sermons in America. The extended amount of backlash that he then received from communities on both sides of the divide did deter him initially; but he revived strengthened crusades against racism and religious segregation after support and advice from one of his closest associates during those times, the great Martin Luther King, Jr.

To say that Graham was perhaps one of the leading reasons why segregation of blacks and whites stopped in American religious congregations would not be an exaggeration. Graham’s influence consistently grew; more because Graham went beyond religion to concepts of humanity. And the telling evidence for that is that all American Presidents – from Truman to Obama – kept Graham at close quarters. In fact, from President Eisenhower onwards, Graham has served as an advisor to each US President. In 2007, he even published a sparkling book titled The Preacher and The Presidents: Billy Graham and the White House, documenting his Presidential experiences.

Till date, Graham has reportedly preached in around 185 countries to about 215 million people. Barry M. Horstman wrote in the Cincinnati Post in 2002 that Graham’s “lifetime audience” was around 2.2 billion! That’s the power of one individual, who has gone beyond preaching religion to preaching about life and living.

Unfortunately, a man who could have been used quite strategically by the US administration to improve American relations with defiant nations, and to change anti-American public opinion – which has been growing globally – has been left strangely unutilised in the past many years. There’s no doubt that if Graham had been given the mandate by the US government, his reach and massive following – combined with his humane approach to issues – would have influenced global opinion in ways better than the ridiculous campaigns manufactured by the spin doctors at Langley. Yes, age is taking away more from this man now than before. But despite that, the legend is championing a worldwide outreach programme that culminates in a global event in November this year. It’s titled ‘My Hope with Billy Graham’. That’s passion! Here’s to many more years of a man who is trying his hardest to make the world a better place – with or without our help.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
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America’s unrelenting hope against hope

Not much changed for the US in 2012. Obama stays President, Republicans continue to control the House of Representatives and Democrats retain their hold on the Senate. While American citizens should continue to hope for a lot from the Obama administration on the domestic as well as the international stage, but what they will actually get in 2013 may be much less

After a hard-fought election campaign, costing well in excess of $2 billion, it seems to many observers that not much has actually changed in American politics: Barack Obama is still President, the Republicans still control the House of Representatives, and the Democrats still have a majority in the Senate. With America facing a “fiscal cliff” – automatic tax increases and spending cuts at the start of 2013 that will most likely drive the economy into recession unless bipartisan agreement on an alternative fiscal path is reached – could there be anything worse than a continued political gridlock at the moment?

In fact, the election had several salutary effects – beyond showing that unbridled corporate spending could not buy an election, and that demographic changes in the United States may ultimately doom Republican extremism. The Republicans’ explicit campaign of disenfranchisement carried out in some states – like Pennsylvania, where they tried to make it more difficult for African-Americans and Latinos to register to vote – backfired: those whose rights were threatened were in fact motivated to turn out and exercise them. In Massachusetts, Elizabeth Warren, a Harvard law professor and tireless warrior for reforms to protect ordinary citizens from banks’ abusive practices, won a seat in the Senate.

Some of Mitt Romney’s advisers seemed taken aback by Obama’s victory: Wasn’t the election supposed to be about economics? They were confident that Americans would forget how the Republicans’ deregulatory zeal had brought the economy to the brink of ruin, and that voters had not noticed how their intransigence in Congress had prevented more effective policies from being pursued in the wake of the 2008 crisis. Voters, they assumed, would focus only on the current economic malaise.

The Republicans should not have been caught off-guard by Americans’ interest in issues like disenfranchisement and gender equality. While these issues strike at the core of a country’s values – of what we mean by democracy and limits on government intrusion into individuals’ lives – they are also economic issues. As I explain in my book ‘The Price of Inequality’, much of the rise in US economic inequality is attributable to a government in which the rich have disproportionate influence – and use that influence to entrench themselves. Obviously, issues like reproductive rights and gay marriage have large economic consequences as well.

In terms of economic policy for the next four years, the main cause for post-election celebration is that the US has ably avoided measures that would have pushed it closer to recession, increased inequality, imposed further hardship on the elderly, and impeded access to health care for millions of Americans.

Beyond that, here is what Americans should hope for: a strong “jobs” bill – based on investments in education, health care, technology and infrastructure – that would stimulate the economy, restore growth, reduce unemployment, and generate tax revenues far in excess of its costs, thus improving the country’s fiscal position. They might also hope for a housing program that finally addresses America’s foreclosure crisis.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year

BBA Management Education

There’s much to fix between the piers

A raft of infrastructure issues is affecting the growth and prospects of our ports. In the face of capacity constraints, lack of connectivity and inadequate mechanization, ports are burdened with excess traffic they can’t handle

India’s vast coastline, stretching around 7,500 kms, is home to 13 major ports and around 200 non-major ports. These are spread across the nine maritime states that stretch along the country’s western and eastern corridors. Considering that about 95% by volume and 70% by value of the country’s international trade is carried on through maritime transport, ports in India are expected to demonstrate efficiencies to sustain the demands of growing international trade. Even otherwise, modern seaports the world over play the role of logistic hubs in the global transport system, integrating the supply chain and offering a competitive edge to exporters and importers.

Historically, ports were measured on their ability to accommodate ships and other modes of transport effectively and efficiently. Contemporary developments in transportation, however, dictate that emphasis shift to the ability of ports to fulfill new roles in the logistics era in the context of operating within integrated global supply chain systems. Ports are therefore expected to demonstrate efficiencies that help to cut total logistic costs and improve the overall competitiveness of exported and imported products.

Unfortunately, even in the wake of India’s growing maritime trade in the world market and the unprecedented growth in bulk commodities and containerized trade, major ports in India have failed to expand capacity and develop facilities commensurate with the growth in trade. In FY2011-12, Indian exports accounted for $303.7 billion, logging an annual growth of 21%. Meanwhile, imports grew to $488.6 billion, a 32.1% growth. This rapid growth in trade can be sustained only if the port infrastructure keeps pace with the increasing volumes of cargo. Indian ports, over the past decade, have seen a sharp surge in traffic, which has almost grown four-fold to 9.7 million TEU (One TEU represents the cargo capacity of a standard intermodal container, 20 ft. long and 8 ft. wide) in 2011, from 2.4 million TEU in 2001 - a growth of 395%. But our port-handling capacity is way short when compared to the throughput of major ports globally. Even the 9.7 million TEU handled by Indian ports last year represents just 8% of the global benchmark ratio for economic output and one-twelfth of global container traffic averages. Given that the Indian economy grew 7.8% for fiscal 2012, ports in India are in urgent need of capacity augmentation in order to meet the country’s growing economic needs and also to grow our share of international trade.

Over the last decade, our average annual growth rate of port cargo volume has been about 10% and container traffic is projected to grow to 40 million TEU by 2025. But India’s ports are ill-equipped to meet this surge in demand as they have not been able to significantly ramp up their capacity and efficiency. As a result, our ports are congested and lack cutting-edge facilities. Till date, no Indian port is capable enough of handling large container vessels. Thus, most of international cargoes are off-loaded at Colombo or nearby ports and then transported to India in bits and pieces. This very incapability robs Rs.10 billion from traders. Even the custom clearance at ports increases the transport time by an average of 84 hours. Not surprising that the World Bank has ranked India’s port infrastructure at 3.86 in 2010, where 1 stands for extremely underdeveloped and 7 for well developed.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Can these deals succeed?

A host of companies have sold their stakes out in distressed situations in the recent past.

It was 4:00 am on March 15, 2010. Some 15 pints of Häagen-Dazs’ Rum Raisin & Rocky Road ice-cream flavours were being carried into the fourth floor office of Peter J. Solomon Co., on 520 Madison Avenue in New York City by a catering staff, which was understandably oblivious to the sensitivity of the discussions going on. Peter J. Solomon was advising Philips-Van Heusen (PVH) on its acquisition bid for Tommy Hilfiger. Some three hours and fifteen minutes later, the world knew – Tommy Hilfiger had been sold-off by Apax Partners to PVH for $3.1 billion. For a brand that fell from grace over time and was first rescued by a PE infusion from Apax, it was a new lease of life. At the time of the deal, Tommy’s debt stood at around $695 million. On similar lines in the technology space, the acquisition of Sun Microsystems by Oracle in a $7.4 billion transaction in 2010 was a distress deal that leveraged the recession to the tee. Sun had been finding it difficult to sustain its toplines post the dotcom bust and competition from larger players like IBM (which was incidentally a suitor as well), and found the perfect foil in Larry Ellison.

The road to hell is paved with good intentions. But call it good karma, a late flash of brilliance, divine intervention or plain good luck, corporate history is riddled with stories of companies that erred magnanimously, faced the music, and yet managed to wriggle out of the mess they found themselves in. Their saving grace – M&A. What was common in both the transactions mentioned above was that they were, what the Wall Street investment banking hedgers sipping the ‘bucks coffee in their pinstriped suits would sniggeringly call ‘distress deals’ – a tactical option that has suddenly found increasing usage globally in the recent past, encouraged odiously by the numbing economic slowdown. Distress deals clearly are a last resort help-us-from-drowning callouts by the company selling out. While that’s a fair call for the one over the cliff – a do or die option, if you may – the question is, do such deals really work out? Specifically, for the acquiring company’s balance sheet?

Some momentous cases marked the inevitability of the distress deal trend in the contemporary era.

The bankruptcy of Lehman Brothers had left the financial world speechless. Even the Fed was clueless till Bob Diamond, CEO, Barclays, emerged as a saviour. Till then, the Fed had two ideas. Plan A was to find a buyer for Lehman – and if they failed, Plan B was to run Lehman on their own. By the time Diamond surfaced, Fed had already given up on Plan A. But far away from the worried Fed officials, Bob was in his element. They had no clue till the deal makers met them at the 31st and 32nd floors of the Lehman Brothers building, hours before the news became public. Barclays bought Lehman’s investment banking and trading unit for $250 million and its New York headquarter and two data centers for $1.5 billion. The Fed breathed a sigh of relief, and so did many employees.

Most still remember the Duke Energy-Progress Energy merger in July this year as a case of, some say, extremely deceitful corporate behaviour. But Progress Energy was a company in deep trouble with unmanageable costs and debt, especially since it accidentally damaged the containment structure of the 860 MW PWR Crystal River reactor in 2009. The $26 billion deal, which included the takeover of a humongous debt load of $12.2 billion on the books of Progress, was indeed a face saver for the latter. Unfortunately, the same can’t be said of its erstwhile CEO Bill Johnson, who was – with artful chicanery – offered a $45 million package and shown the door by the board within two hours of becoming the CEO of the merged entity. Jim Rogers, CEO, Duke Energy, eventually took over the top job.
 

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

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Is Toyota's comeback for real?

Japanese automaker Toyota has bounced back from safety recalls and natural calamities, selling 4.97 million vehicles globally in the first half of 2012, to reclaim its throne as the world’s biggest automaker by sales from General Motors. But can it sustain the status quo?

Just three and a half years ago this Japanese giant (according to the grandson of the company’s founder) was “grasping for salvation” and stood “on the brink of irrelevance.” From being the world’s most valuable automaker by market capitalisation, and No.1 in terms of vehicle sales, Toyota had reached an inflection where it was ending a year without profits, for the first time in its history of over 70 years. In the year ending March 31, 2009, Toyota-based automaker had reported a net loss of $4.6 billion, and looked as if it was headed for corporate graveyard.

Many believed that Akio Toyoda, President of Toyota Motor Company and grandson of Kiichiro Toyoda, was correct because the problems for this Japanese automaker didn’t end there. Toyota soon had to recall over 14 million units (between 2009 and 2010) for issues surrounding the safety of its vehicles. Then in 2011, the company faced serious supply chain disruptions, thanks to Japan’s devastating earthquake and wrecking floods in Thailand. It was no surprise, then, that by the winters of 2011, Toyota’s stock price had tanked over 70% from its early-2007 peak (from 8,090 Japanese Yen on January 4, 2007 to 2,376 Japanese Yen on November 24, 2011; closing prices of Toyota’s stock at Nikkei), and its arch rival General Motors (GM) had once again surpassed it in terms of sales.

But what is surprising many in the industry is the company’s astonishing return from the ashes. Despite a strong yen (the yen has appreciated by more than 33% against the US dollar since January 2007 and almost 13% since January 2010) and a weak global economy, Toyota has reported the highest quarterly profit (for quarter ending June 2012) in four years - $3.7 billion. And not just profit, it has also bounced back from safety recalls and natural calamities, selling 4.97 million vehicles globally in the first half of 2012, to reclaim its throne as the world’s biggest automaker by sales from GM.

In fact, the Japanese automaker sold about 300,000 more vehicles than GM and about 520,000 units more than what Volkswagen did in the first half of the year – perhaps a lead big enough for GM and Volkswagen to catch Toyota in the second half of 2012. Interestingly, while Toyota’s global sales rose 34% in H1 2012, GM and Volkswagen saw their sales increasing by just 2.9% and 8.9% to 4.67 million and 4.45 million respectively during the period. Sounds good so far, but a stroll down memory lane and one can easily question the sustainability of this crown. Is Toyota’s comeback for real?

It was 2008 when Toyota first overtook GM to become the world’s largest automaker by sales (the Detroit based company held the top slot for more than 70 years before losing it to Toyota in 2008). The US market had collapsed and GM had filed for bankruptcy protection, requesting the US government for a bailout to survive. As they say, one man’s meat is another man’s poison, it was argued that the Japanese automaker too had gained out of GM’s agony.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year

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“I am not prepared to pay for market share”

Neil Mills, CEO, SpiceJet, on how route rationalisation and other decisions were key to moving the budget carrier into the black, and why he doesn’t care about market share

B&E: SpiceJet recorded a profit in Q2, 2012 (Rs.560.2 million) after five quarters. Was it an outcome of you benefitting from supply problems at Kingfisher and Air India?
Neil Mills (NM): I don’t agree. There has been a growth in the number of seats deployed as compared to the same quarter last year. The brains that have provided the seats may have changed but the total market supply has risen. So how can anyone claim that we made profits because the others failed? The logic doesn’t follow.

B&E: But numbers make the objections strong. Air India saw a 9.30% y-o-y drop in flight count in the Q2, CY2012, while Kingfisher saw a 71.80% fall. Your comment.
NM: The reality is much different. If you look at the two airlines, Air India’s issues have affected its international network. Not its domestic network. Our international deployment is only 3-4% of our total flight volume. So how can I benefit in a space where Air India didn’t have problems? As far as Kingfisher is concerned, the capacity has been replaced by everyone. I don’t see how only we benefitted from its problems.

B&E: So are you pointing towards a plan that has started paying off?
NM: Yes. It’s active management of business that is at work. Particularly, the route deployment being done on a far more commercial basis. And that actually means that we are turning around to become profitable.

B&E: Two years since you joined SpiceJet – what has been the most important change in the airline’s strategy since then?
NM: Most specifically, we have rationalised our routes. We don’t fly loss making routes any more. At the end of the day we are there to deliver returns to our shareholders.

B&E: We spoke to the IATA Chief Tony Tyler. He believes that India will remain an aviation market that will continue to have a mix of LCCs and FSCs. You think so too?
NM: If you look at major airline markets – be it Australia, US, Europe – the major chunk of volume consists of LCCs. LCCs is a value for money proposition. It suits a market like India. If you look at Network strength, On-Time Performance (OTP) and Load Factors, ours is actually better than FSCs. The FSCs have to ask, what is it that they are offering extra in terms of value for the extra price they charge?

B&E: Since January 2011, IndiGo’s market share has risen from 14.1% to 27%. Your growth has been slower – from 12.2% to 17.8%. Doesn’t market share bother you?
NM: Not at all. The airlines’s fuel bills can’t be paid with market share. My employees want to be paid with cash, not market share. I just want to be big enough to be relevant. In this industry, a bigger market share gives you no advantage, as no player, not even the largest in India possesses pricing power! I am not prepared to pay for market share. It’s a nice metric. But it is not everything.

B&E: When you were at easyJet, you changed its fleet from a Boeing one to an Airbus-Boeing mix. Is that a possibility at SpiceJet?
NM: We’re not considering any change at present.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
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Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
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IIPM Links
IIPM : The B-School with a Human Face