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FEBRUARY 2017 VO L U M E 5 6 I S S U E 2 PAG E S 9 2 r60



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spotlight on budget 12 CUSTOMER RELATIONSHIP

- Nilesh Shah, Kotak Mahindra Asset Management Engage first, sell next 34
Company Limited An engaged customer base is essential for
- Anant Gupta, TECHCELX developing a successful business.
- Ganesh Natarajan, 5F World and NASSCOM Foundation - SHI L NI Y OGI
- Sourajit Aiyer, Motilal Oswal Financial Services Limited

A change of course 38
Financial services KPOs will need to undergo a
Through a different lens 20 major overhaul to sustain in India.
Recalibrate your marketing approach in emerging markets. - DR NIT I N B A LWA NI
Democratising the marketing approach 26 Think before you leap 46
Democratisation of marketing is in tune with the concept of How different is startup marketing from the
value co-creation. mainstream one?

The emerging reality 30

Emerging markets should not be seen through the
cultural-institutional lens of the typical Western context.






Listen to everyone 62 Busting ghosts 82
Feedback is important for establishing an amicable Managers must ensure office ghosts are not created
work environment. instead of trying to bust them.
Get hold of yourself 66 Firm ground 86
What are the essential abilities of extraordinary The impact of demonetisation on the real estate
people? sector.
Fit companies 70
Investing in employee health results in increased
Maximising potential 74
Leaders should find new and efficient ways to keep
their employees at their finest.
A healthy option 78
Challenges facing online pharmacies in India.

Marketing in emerging economies

SUNIL KANT MUNJAL is President, AIMA and Chairman, Hero Corporate Service.

or consumer-facing businesses, the West considerable divergence in income, culture and
is no longer best; households in the US infrastructure. There are also submarkets, which
and Europe are no longer reckless and increase the challengeand sometimes, the
spendthrift. Years of stagnant incomes, opportunityof localisation.
joblessness, and recessionary conditions have Homegrown Indian firmsas also MNCs who
extracted their toll, and consumers are less have cut their teeth in India for many years
inclined towards making discretionary purchases. enjoy a natural advantage over MNCs whose
As a result, most market and brand growth has presence in the country is of recent vintage. They
shifted to previously neglected and underserved have mastered the art and science of competing
markets across emerging economies, especially on price, overcoming infrastructure constraints,
in Asia and Africa, where incomes and have developed innovative practices across
and aspirations have risen the supply chain.
rapidly, leading to sustained They are also used to adapting to different
The key emerging periods of growth. Often, the consumption habits and communication
markets are expected growth momentum is strong cultures. For example, when Hero Honda was
to contribute nearly half enough to withstand setbacks. first launched in the 1980s, the saree guard
In India, for example, even attached to the pillion seat was brought in as an
the GDP growth of after the debilitating impact of important local innovation, and it found ready
the world. demonetisation, the worst case acceptance, especially in the southern and
growth forecast for 2016-17 is by eastern geographies.
the IMF, at 6.6%. Of course, it is important not to underestimate
A McKinsey study projects that by 2025, the challenges that emerging markets pose.
emerging economies will have more than half the Typically, markets in the early stages of
households in the world with an annual income of development tend to lack organised and reliable
more than $20,000the sweet spot that results market information. In India, in the 1990s, for
in disposable incomes for spending. The key example, there was very little knowledge about
emerging markets are expected to contribute aspirational behaviour and the potential that the
nearly half the GDP growth of the world. In mobile market presentedthis was seen as a
recent years, MNCs have started prioritising their market for the elite.
presence in these challenging but immensely Moreover, the level of competition and the
promising markets. presence of media tend to be hyperlocal and
However, they are also learningsome of extremely fragmented. In many categories,
them painfullythat marketing and selling especially in personal and home staples,
templates cannot be robotically transplanted unbranded products rule the roost because of
from developed to emerging economies. Markets limited entry barriers, and the modest role played
across most emerging nations are extremely by technology. Wherever there are significant
fragmented; this makes it very difficult to create local players, it takes years for organised
national brands with large market share. brandsto win market leadership and, more
Unlike the fairly homogenised developed important, to make profits.
markets, emerging markets have not one but An effective way to enter emerging markets
many ecosystems of selling prevalent, with has been to acquire established local brands


and piggyback on their reachboth in terms of has to be aimed at targeting consumers from
consumers and the sales channel. Acquisition of different regions, cultures, incomes, living
local brands is also necessary to consolidate the conditions, and retail infrastructure.
market, build market share, and acquire pricing In India as a result, sales and product
power. However, sometimes, it could also be wise managers have to regularly tweak their marketing
to enter an emerging market by creating a new mixincluding pricing, packaging, point of
category or via an underserved category where purchase displays, etc.each time the product
local players are not as well entrenched. crosses the Vindayas or the Ganges! For
Appreciation and respect for the local culture example, food and beverage marketers have to
is crucial for marketing success in emerging offer the same product in glass, paper, plastic
markets, and marketers must imbibe the local and tetra packaging, depending on where
language, nuances, and symbols. they are selling. Rural areas need tougher and
It is vital to acquire local understanding more durable packaging to survive demanding
and insight before bringing in global brand transportation and storage. Also, at the bottom of
communication (Coke and McDonalds learnt the pyramid, marketers have to offer single-use
this lesson in India after some trial and error). packs at the lowest possible price.
Messages of too many brands are lost in Organising and prioritising marketing in large
translation and, at times, cultural faux pas emerging markets is another challenge. Typically,
even end up offending the local consumers multinationals tend to err by having a country
and politicians. strategy, irrespective of the complexity of the
When Pepsi used their slogan, Come alive market. It is practically impossible to begin
with the Pepsi generation in China by literally marketing to an entire country at the same time.
translating it, they did not know that the literal So what are the options for marketers wishing
translation of the slogan meant, Pepsi will bring to make a mark? Clearly, they have to identify
your ancestors back from the dead! Pepsis rival the more relevant and relatively homogenous
made the same mistake in the same country. markets for their products, at least initially, in
When Coca Cola had to translate its name in order to control costs and logistics. It helps
Mandarin, it chose Ke-Kou-Ke-La, which meant, to identify the most suitable parts of the local
bite the wax tadpole or a female horse stuffed market for introducing a brand and then develop
with wax. the strategy for achieving a reasonably significant
Localising brand attributes is essential to market share quickly. Pinpointing and prioritising
connect with consumers in emerging markets. the relevant areas of the market can allow large
Typically, consumer desires and concerns in growth without spreading resources too thin.
developed markets are focused on sophistication For example, a 2014 projection by McKinsey
and personalisation. In emerging markets, shows that eight high-performing states, namely
it is more about affordability, durability, and Gujarat, Haryana, Himachal Pradesh, Kerala,
status. Also, in developed markets, effective Maharashtra, Tamil Nadu, Andhra Pradesh and
advertisements and celebrity endorsements Uttarakhand, will together account for 52% of
are usually adequate to persuade consumers. incremental gross domestic product growth from
On the other hand, personal recommendations 2012 to 2025.
from family and friends have a higher weightage It will not be surprising therefore that from here,
in emerging markets, especially in new marketers from around the globewith less time
product categories. on their handswill, at least in the near term,
Localising pack sizes and material, product focus much more heavily on growth frontiers such
features, as well as prices, are other important as these, both in India and around the world.
challenges in emerging markets. The fragmented
nature of markets ensures that the same brand The opinion expressed is personal.


F EB R U A RY 2 0 1 7 VO L U M E 5 6 I S SUE 2


S L Rao
Sunil Kant Munjal
Rekha Sethi
Dear Readers, Prof. J K Mitra

Maneck Davar
N Radhakrishnan
s growth slows in the first economic tier of nations, the focus
shifts to emerging markets, especially those with a stable MANAGING EDITOR I Krishnaveni Subramanian
political regime. As the epithet emerging denotes, they have ASSOCIATE EDITOR I Anitha Moosath
been emerging out of their traditional mooringstackling EDITORIAL TEAM I Titash Roy Choudhury

inadequacies, harnessing innate strengths, and catapulting into the global DESIGN

arena. They now make substantial contribution to the global GDP, thereby ART DIRECTOR I Parvez Shaikh
GRAPHIC DESIGNERS I Nikunj Parikh, Payal Sumaya
reshaping the economic hierarchy.
ILLUSTRATORS I Swapnil Redkar, Darshan Sompura
However, doing business in these markets is an arduous task. It demands
a recalibrated approach rooted in the contextual reality as opposed to DIRECTOR Marketing & Sales I Geetu Rai
one shaped by a Western perspective. Such a shift in strategy becomes Tel: 9920023908/9844265885

all the more important when it comes to the marketing of products and MUMBAI Niraj Singh
Tel: +91 9930778393
services. This issue focuses on this particular imperativethe need to Fax: (+91 22) 2481 1021
veer away from the traditional path. Dr Jagdish Sheth of Emory University DELHI Roger Wong
elaborates on the breakout growth strategies businesses could employ Tel: +91 9810927867
in emerging markets; Dr Rahul Singh dwells on value co-creation while BENGALURU Sandeep Kumar
Professor Piyush Sharma drives home the need to push the theoretical Tel: +91 9886870671

boundaries of the marketing discipline. CHENNAI Shoba Rebecca

Tel:+91 9884055523
Emerging markets no more dwell on the periphery; they offer robust

growth opportunities for businesses and are centric to global economic KOLKATA Pulak Ghosh
Tel: (+91 33) 2473 5896
growth. How best can one leverage this opportunity? We seek to answer

this important question in this issue. GUJARAT Sanjay Chawda

Tel: +91 9824043072
We value your feedback and appreciate your role in helping us deliver a

better product. Do write in to KERALA Sivasankaran T

Tel: +91 9947683001

Robert Gomes
Tel: 022-24811024 / 31

Maneck Davar

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Multimedia Private Limited, is printed and published by
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used as a tool. It should levy punitive penalties,
including imprisonment, to create fear of law.
There are multiple tax exemptions that allow


people to avoid paying taxes. Long-term capital

gain on equity shares meant for retail investors
is enjoyed maximum by the richest Indiansi.e.,
promoters selling their stake in listed companies.
On unlisted shares, as per the governments
own admission, R80,000 crore worth of bogus
LTCG is booked. Bonus stripping is a cottage

Managing Director, Kotak Mahindra industry in the capital market. Multiple entities
Asset Management Company Limited. like AOP, Trust, HUF, and LLPs allow rampant tax
avoidance. The government must simplify rules
to levy tax rather than create a complex set of
rules for tax exemption. In a sense, we need to
change the orientation of our tax system from let
100 people run away from paying tax but let one
person not pay unfair tax. Our motto should be,
let not only the salaried class be burdened with
the onus of paying tax. Let other people also pay
their fair share of tax like the salaried class.
do not call for a balance sheet along with
income tax returns. In the absence of wealth
s per latest data available for AY 2012-13, little tax and estate duty, it is difficult to establish

under four lakh people paid income tax above ownership of assets. Due to this loophole, many
R5 lakh, but in the same year more than 39 lakh black assets over a period of time become white.
three-wheelers and four-wheelers were bought. For example, when people contesting elections
The current tax base is less than the number of declare their wealth statement, it is important to
people who travelled abroad in FY 16. A low tax ascertain whether they have paid appropriate tax
base can be attributed to the following factors: on the same or not.
of law is missing in most tax dodgers. The government has Agriculture
remains a taboo. Almost 70% of the
brought amnesty schemes in one form or the other at regular population is engaged in the agriculture and rural
intervals to create this impression. Most amnesty is at a huge sectors. They are not liable to pay tax. While there
discount compared to the normal tax liability, encouraging non tax cannot be a debate about not taxing marginal
compliance. Unless the government is able to create fear of law, farmers, rich farmers and tax dodgers should not
the tax base is unlikely to widen. It must step up efforts to nab tax be able to avoid paying taxes by converting non-
avoiders through an analysis of transactionsdata analytics can be agricultural income to agricultural income.


The government must simplify rules to levy tax rather than create a complex set of rules for tax
exemption. In a sense, we need to change the orientation of our tax system.

IT department is far more focussed on existing give certain special favours to taxpayers. For example, a fast
taxpayers. They need to be motivated to expand the tax net track mechanismat airports, cricket stadiums, hospitals,
through suitable incentives and training. The present IT or government departments for various servicesfor those
department process also results in long litigation. An adverse who pay more than R1 crore as income tax. Such positive
order at a lower level is challenged at a higher level for fear of recognition will pull people to be tax compliant.
reprisal. There should be a suitable mechanism to safeguard The
tax base can also be widened by introducing newer
them from taking appropriate decisions so that their energy format taxes like estate duty and wealth tax, on a par with
is not wasted in time-consuming litigation. Instead, they can global standards. We need to draft our tax laws with the
put their energy in expanding the tax net. help of outside experts so that loopholes and shortcuts are
The government must bring in a whistle-blower mechanism plugged. It is also important to educate the judiciary about
with respect to tax non-compliance. The present system of the spirit of the law than just the letter of the law. Many a
rewarding informants is neither well advertised nor attractive. time, economic crime does not receive due attention as it
If it can devise a scheme for whistle-blowersoffering them does not leave dead bodies and blood on the street.
attractive rewards and adequate protectionthen one can India, as a nation, does not have a choice but to expand the
see a massive increase in tax compliance. tax base to create a fair distribution of tax burden between
compliance can also be improved with a positive the salaried and non-salaried class. Modern technology-
approach. Today, other than being rewarded a certificate, led data analytics, proper drafting of laws, and appropriate
taxpayers are not given special recognition. It is important to administration can help expand the tax base.



A STEP IN Promotion Board (FIPB) is also a good sign which

underlines the continued liberalisation intent of
the government; it is good for both startups and
established companies on the lookout for growth

capital. The only additional move this sector could
have benefited from are some new tax benefits to
further safeguard the interests of the IT industry,
which is under tremendous pressure from
anti-globalisation sentiments and new visa reforms
ANANT GUPTA being tabled by the US administration.
But as a wise man said, you cannot have it all.
Hence what the Finance Minister has served this
Founder Chairman and CEO, year should be good enough from the countrys
TECHCELX. overall progress perspective.
At the end of the day, that is all that should
matter anyway.

hile most nations are walking, some stumbling,

into a digital future, India is clearly leaping. The
Union Budget 2017 is a progressive mission
statement that will go a long way in not only
further reducing the digital divide in our country,
but also laying the foundation for new institutions
of the future. With an allocation of R1,87,223
crore for rural programmes, the government seems to be in a mood to
somewhat appease the groups most afflicted by the demonetisation
drive. Well, whatever the motive, it is a step in the right direction and
needs to be appreciated.
Since I am a technologist and a startup evangelist, the Union
Budgets top highlights from my perspective are the expansion of the
BharatNet Project, launch of a new online education platform, boost
to digital payments, and a few but well-intentioned sops extended
to startups and MSMEs. The abolishment of the Foreign Investment


etc. In an increasingly gloomy global environment,

and weak economic growth, it would be appropriate
for large and medium-scale companies to join the
queue for government and public sector IT and

GAINS digital opportunities of the future.

IT startups have something to look forward to, with
the extension of the time period for eligibility of the
three-year income tax exemption from five to seven
years, and allowing carry forward of losses even if

DR GANESH NATARAJAN the stakes of promoters fall below 51% which is

a natural growth process in an entrepreneur-filled
economy. The reduction of TDS on payments to
Chairman, 5F World and call centres from 10% to 2% will facilitate more
NASSCOM Foundation BPO activity and employment generation in Tier II
and Tier III cities. The budget also addresses one
of the concerns of the sector related to tax disputes
abroad, but misses the rationalisation of transfer
pricing safe harbour margins for the IT sector, which
has been pegged at unrealistic levels.
While nothing much was expected for exporters,
a long-standing claim for extending R&D incentives
to this sector is yet to be addressed. But overall, the
budget does point to a more harmonious regulatory
environment with the governments plans to simplify
existing labour laws and increase the period for MAT
credit carry forward to fifteen years.
The IT sector can now be a true partner to new
skills initiatives by enabling technology to provide
nion Budget 2017 has been a well-crafted one support to trainers and mentors and address the

that combines growth with fiscal prudence. gargantuan task of getting 300 million Indians ready
With its expected slant towards agriculture, skills for employment and entrepreneurship through
development, and the less served segments of compelling content served through technology
the country, it can lay the foundations for a period platforms. Digital solutions created by the industry
of robust GDP growth in a truly inclusive India. for manufacturing, retail, insurance, banking, and
Digital India and digital literacy had already healthcare can also enable easy access to the
received a big boost as an unexpected side effect of the best services.
demonetisation drive, and the focus on digital in the budget bodes well Overall, there is much to be optimistic about. For
for Indian IT firms. The expected continued focus on digital payments the IT sector, which is waiting for the Damocles
and the announcement of setting up of the Payments Regulation Board sword of Trump to descend in the form of visa curbs
and strengthening cybersecurity for digital financial transactions are and other potential protectionist moves, there is
welcome signs for an economy that is slowly becoming cash mukht. a sense of satisfaction that in India, we will have a
The technology sector will also get opportunities from initiatives such robust and continuing supply source of talent and a
as SWAYAM, the announced pension platform for defence, Digi Gaon, potential large market in the making.



R10,000-12,500 a year get you? While it will boost

consumption, it can only afford FMCG products, or

low-priced consumer durables, not laptops or HD TVs.
The budget levies a 10% surcharge tax on those

with income between R50 lakh and R1 crore. This
is a segment neither big enough to use investment
vehicles to route monies offshore unlike HNIs,
and yet cannot reduce their tax liability beyond a
point using exemptions. This is another politically
SOURAJIT AIYER correct move to get mileage from small taxpayers
who form bulk of the voting base. The question
is: will an enterprising tax lawyer come up with a
AVP Investor Relations and Corporate Planning, collective offshore routing plan which this segment
Motilal Oswal Financial Services Limited.
can misuse to evade taxes? Additional scrutiny will
determine how much positive this actually yields.
The budget also reduces corporate taxes from
30% to 25% on MSMEs. They employ about 80-
100 million Indians though they contribute only one-
third of the countrys GDP. The sheer labour force
hired shows why this is another politically correct
move. But since MSMEs account for only a small
proportion of corporate tax earnings, the loss is
small. But the argument that reduction in corporate
ndias budget for 2017-18 places fiscal stability tax rate will help generate more employment seems

ahead of growth through spending. Total premature. This is because an accretion to net
expenditure increased a mere 6.5% over the profit after tax positively impacts the promoters who
previous year, showing the governments tight fist. can dividend it out, and it need not be ploughed
This is an antithesis to what many imagine, that back as retained earnings to grow the business
driving growth is foremost in emerging markets. (and hire more workers). Even if incremental profit
But fiscal stability helps keep credit ratings in is ploughed back as retained earnings, it does not
control, which is key to maintain attractiveness to foreign investors. mean promoters will automatically hire more or raise
Increasing government debt to fuel growth is not sustainable now. A wages. Indian listed company data shows financial
stable macro situation also strengthens the case for lowering interest sector companies grew their profit per company
rates, which can partly help in reviving private sector investmentone in the last five years; their CAGR in employee
hurdle in pushing job growth. costs severely lagged while the employee cost to
The budget reduced the personal income tax rate from 10% to 5%, sales ratio declined slightly. Many MSMEs remain
on income in the R2.5-5 lakh slab. This is a politically good move since uncompetitive against larger rivals, and a cut in taxes
a majority of salaried taxpayers in a middle-income nation like India fall in may not be sufficient to improve competitiveness in
this slab. It increases disposable income by R12,500 in the hands of all this age of technology, automation, and innovation.
whose income is R2.5 lakh and above. But those with income only up to In conclusion, Prime Minister Narendra Modis
R5 lakh will see an effective impact of R10,000, not R12,500. They had government is creating an enabling, conducive
earlier got a rebate of R5,000; it has now been reduced to R2,500. climate on which private businesses can capitalise.
The budget also simplifies tax forms and reduces scrutiny for this It seems to have walked the tightrope deftly, in
segment. Nevertheless, the question is: what does an additional terms of keeping Indias financial health in order.


Embassy of India
Abu Dhabi, United Arab Emirates

Under the Patronage of

His Excellency Sheikh Nahyan bin Mubarak Al Nahyan
Cabinet Member and Minister of Culture and Knowledge Development, United Arab Emirates

2 India - UAE Conference
Resetting Globalization: Collaborating in a Fast Changing World
Monday, 20th March, 2017 Hotel Taj, Business Bay, Dubai

Conference Chairman Eminent speakers confirmed to address include

Sunil Kant Munjal Navdeep Singh Suri, Ambassador of India to UAE
President, AIMA and
Chairman, Hero Corporate Service Pvt. Limited, India Tayeb A Kamali, Director General, Education and Training Development,
Ministry of Interior, UAE
Yusuff Ali MA, Chairman & Managing Director, LuLu Group
Interactive Sessions on
BR Shetty, Executive Vice Chairman & CEO, NMC Healthcare
Healthcare Innovation: Recoding Competitiveness
Azad Moopen, Chairman, Aster DM Healthcare, UAE
Reinventing Retail: Beyond E-commerce
Globalization of Business Kishore Biyani, Group CEO, Future Group, India
T V Mohandas Pai, Chairman, Manipal Global Education Services, India
Who should attend Naresh Trehan, Chairman & Managing Director, Medanta - The Medicity
The conference will bring together policy makers, CEOs, thought leaders, Arvind Lal, Chairman and Managing Director, Dr Lal Pathlabs Ltd, India
technocrats, entrepreneurs and investors from both India and UAE to
Adeeb Ahamed, Chief Executive Officer, LuLu International Exchange
discuss strategies to promote cooperation and collaboration between
the two countries and to discuss strategies to win in the Digital World. Ramesh Cidambi, COO, Dubai Duty Free
Suhail Mahmood Al Ansari, Executive Director, Mubadala Healthcare

Registration Details Corporate Contributor Supporting Partners

Participation in the conference is by "Invitation Only"
Pre-registration is MUST, as seats are limited.
Confirmation depending upon seat availability

For further details, please contact

Mansoor Hassan, All India Management Association, Mobile: +91-9540060166, Landline: +91-11-24608524, Email:
To best capture the potential of emerging markets,
businesses need to chart a different path.


Through a
different lens
Breakout marketing is the way companies can
use what a given market offers (culture, values,
systems, and needs) and introduce what it lacks
(technologies, methods/processes, products, and
brands), thereby transforming both themselves
as well as the market. Notably, although brands
usually begin their journey in emerging markets
by converting light users into heavy users, the great
market expansion that marketers aspire to really
comes from large-scale conversion of non-users
to users.
In an exclusive interview, Dr Jagdish Sheth
tells Anitha Moosath how a departure from
the traditional marketing paradigm can help
businesses succeed in emerging economiesa
thought he elaborates on in his book Breakout
Strategies for Emerging Markets.


markets are no longer agrarian economies with a
predominant BoP consumer segment.They comprise
a burgeoning middle class and a growing affluent
class who are becoming increasingly brand conscious
and driving growth in consumption. And technology
is playing the role of an enabler in this context.
Eventually, India and China will definitely grow
as consumer economies, with the largest portion
of their GDPs coming from the consumer sector,
not from the industrial or government sectors.
Given this prospect for growth, it is imperative
for businesses to participate in emerging markets.
However, many multinationals fail in emerging
markets because they go global everywhere, taking
their models as they are. Or, even while going
glocal (global with local adaptation), they do not
do it well.
Emerging markets are marked by a high degree
of heterogeneityan illiterate population, socio-
cultural differences, unbranded competition, poor
infrastructure, scarce resources, and unfamiliar
regulatory structures. Navigating this complexity
demands a paradigm shift from the traditional
marketing approach, and this forms the premise of
our 4As framework.

Could you elaborate on the 4As framework?

The eight breakout strategies we have proposed
in the book are based on the 4As framework
acceptability, affordability, accessibility, and
Emerging markets have offered the biggest awareness, the four essential values sought by
growth opportunity in the history of capitalism. customers. It entails an outside-in customer-
So how strong is a case for entering and centric approach as opposed to the traditional
competing in an emerging market? inside-out product-centric approach. These 4As
I think it is as strong as the survival of a company. have immense potential to effect transformative
All advanced countries are ageing much more change. They can also spark reverse innovation
rapidly than we ever imaginedthere is hardly for instance, a product/service developed for an
any growth left in these countries for businesses. emerging market could have global opportunities
Also, at a time when growth is moving away from as well.
product to services, the only place where one To ensure optimal customer outcomes, there
can seek growth would be in an emerging has to be a joint mix of the 4As and the traditional
market, primarily. marketing mix of the 4Psproduct, price, place,
Converting non-users into users in emerging and promotion, along with people and processes.
markets is the biggest game one can play instead Each of the 4As is linked to the 4Psfor instance,
of fighting for market share. Moreover, emerging affordability demands evaluation of pricing and




Starbucks cafes in large cities like Beijing and Shanghai mirror those in the West, but as Starbucks expands
into second or lower tier Chinese cities, they are blending regional elements into their in-store experience. In
Chengdu Taikoo Li, the cafe features Sichuan-inspired tiles, silk artwork by local craftsmen, and warm colors
in the interior (Starbucks 2014). In Taikoo Li Sanlitun, a modern, upscale shopping area, Starbucks features
works by local graffiti artists (Burkitt 2012). In Fuzhou, a small town with a population of 7 million, Starbucks
drew heavily from the local culture and came up with a local courtyard home design with sliding doors,
soaring ceilings, and a screen with black and white pieces of the chess-like Chinese game Weiqi (also
known as Go). At the cafe entry, a large stone, taken from the mountains nearby, bears the Starbucks logo.

Thus, Starbucks has had to create fusion by retaining its basic cafe design but avoiding its standard white
look, which signals affluence in the West but indicates quite the opposite in Chinaa product no one wants!
Such tactical approaches are important as companies move from large, affluent, Tier 1 cities like Shanghai
and Beijing, which have optimistic, affluent, more Westernized consumers, toward Tier 5 towns with lower
income, thrifty, rural consumers; in these towns, fitting in is more important than standing out, and smaller-
sized establishments are steeped in local cultural cues (Wentz 2012).*

The biggest mistake product, and accessibility of the Western concept of a wine lifestyle into
many MNCs make is products and processes. Indian culture.
A good example of functional fusion is
focusing only on the Functional fusion and cultural Whirlpoolto address the water shortage problem
upper echelons of society, fusion... in India, they made a fully automatic, top-loading
ignoring the potential Each of the 4As has two washing machine that restarts the washing cycle
dimensionsfor example, from the point it cuts off, instead of restarting from
offered by the BoP the beginning.
acceptability can be functional
segment. and psychological. Marketers
often overdo psychological How best can you democratise your offer in
acceptability and underdo functional emerging markets?
acceptability. The biggest mistake many MNCs make is
It is not just about localisation. In emerging focusing only on the upper echelons of society,
markets, one has to take into consideration the ignoring the potential offered by the BoP
physical environment, culture, climatic conditions, segment. Instead, they should develop multi-tier,
genetic differences, etc., and ensure functional multi-segment strategies and target consumers
fusion and cultural fusion. from different socioeconomic backgrounds with
At Hong Kong Disneyland, the park design suitable value propositions. The health industry
and landscaping incorporate many elements of is a case in pointmany pharma companies
Chinese culture. This kind of blending has been are investing heavily in R&D to develop new
happening in literature, arts, fine arts, and so on. It technologies/breakthrough drugs for diseases
is now beginning to come into consumption too. rampant in emerging economies such as malaria,
McDonalds is another vibrant exampleits India tuberculosis, and HIV/AIDS. Companies should
recipe avoids pork or beef, taking into consideration democratise their offer in emerging markets
the religious sentiments of the local populace. by ensuring affordability, both economic
Sula Wines has gone a step further by assimilating and psychological.


If a foreign multinational There is also this whole companies but also collaborate, on home turf;
succeeds, it is a good phenomenon called reverse and they learn new strategies, technologies, and
brand cycle with respect to processes.You can clearly see that in the Indian
wake-up callyou feel emerging marketsinstead of context. E-commerce companies such as Flipkart
that your familiarity with going to a premium market with and Snapdeal are learning so much from Amazon.
the socio-political system a top invention first, you start They are now learning how to do business totally
off in an emerging market by
and local realities do not introducing a low-end product.
differently from what they were doing earlier. It
seem to work for you. is evident in the automobile industry toothere
Because priceaffordabilityis
are so many foreign firms now wanting to come
the key bottleneck here.
Many automotive companies such as Toyota and to India and they are crowding out. So, either
Volkswagen have done this in India. So, they are Indian manufacturers will go out of business,
able to reach across all price points and appeal to not as a whole company but product line by
different segments of the market. product linethat is how they exitor they will
learn how to survive. If a foreign multinational
How does the entry of foreign players succeeds, it is a good wake-up callyou feel that
transform domestic companies? your familiarity with the socio-political system
Foreign competition will clearly bring in and local realities do not seem to work for you.
different processes and approaches to marketing, It motivates a local company to think differently,
merchandising, etc. It definitely brings about a to compete. This is true of many industries
transformative change for domestic firms. They consumer electronics, airlines, and so on. The
learn to not only compete with international success of Indigo Airlines is a case in point.


Levi Strauss, the maker of Levis jeans, developed its Denizen brand of low-cost jeans for China. After eight
months of experience selling this brand to Chinese and other Asian shoppers, they brought Denizen to
their home market in the US, where they retailed for one-third to one-half the cost of a pair of Levis. Having
learned how to launch a value brand and nurture it in China, Levis has become one among a handful of
multinational firms to leverage the growing influence of emerging economies for reverse product innovation.
Launching in India and China, which are two very different cultures with consumers who have different body
types, style, and customs, gave us a chance to learn about how to make a brand relevant for the market,
said Lance Diaresco, vice president of marketing for Denizen. We learned about fit and how to work with
our franchise and wholesale customers to help them select the fits most relevant for their consumers
(Zmuda 2011).

Although China has been home to many global apparel manufacturing companies, consumers in China
have had little influence on global design and marketing. Clothing has lagged behind sectors such as
telecommunications and beverages, where multinationals have boosted their R&D in emerging markets and
local rivals are producing a growing volume of innovations. According to Aaron Boey, president of Denizen,
Levis had learned to produce affordable jeans by working out which features consumers were most
sensitive tothe stitching, the way the fabric feels, or the wash of the denim. Its not about taking costs
out, its about deciding what costs to put in to deliver the value that consumers appreciate, he said. Weve
gotten that validation in emerging markets were currently operating in. So, we now we can nail it as well as
in the US.*



The demographic dividend Need to adopt stakeholder patterns, and so on. The government needs to
factor is true for the orientation as opposed to look at the ageing aspect too.
customer orientation...
next generation. Now, Marketers have generally Does the Make in India initiative make our
we also have an ageing been thinking about only one market more attractive?
population; we are stakeholderthe customer. I think Make in India is a highly viable project.
expanding on both sides. But marketers need to adopt a There are several industries that hold immense
more holistic view. Marketing scopeautomotives, appliances, aircraft,
is not only about customers, infrastructure, defence, etc. The country
but also the customers ecosystem, which means can harness its innate advantages too, such
the community in which the customer lives. as availability of raw materials, agricultural
Customers expect businesses to be socially expertise, and technological expertise. Also,
responsible too, taking into consideration all the India would be a good base to reach out to
entities (including the environment) affected other emerging markets in the regionsay,
by them and their activities. This is what Porter automobile companies could use India as a
advocated through his concept of shared value manufacturing hub and sell their products in
as opposed to shareholder value. The Tata Group Southeast Asia and West Asia.
is a good example of a company that has a social However, I strongly feel that although started
responsibility and a business responsibility. with manufacturing in focus, Make in India will
end up being more to do with serviceslegal
As an emerging market, where does India services, accounting services, risk management,
stand in comparison to China? and R&D, areas in which India is already
The Indian scenario necessitates almost eleven establishing itself as an important hub.
intermediaries between a producer and a * Breakout Strategies for Emerging Markets.
consumer. Too many middle men creates
several frictionsdelays, a lot of waste, lack of
economies of scale at each step, and thinning of
margins. The challenge is how to compress the
cycle from eleven steps to zero steps, or one or
two steps. Ecommerce is becoming the biggest
change agent in this respect because it does
away with middlemen and facilitates a one-step
distribution systemfrom the manufacturer to
the ecommerce firm to the consumer.
Compared to India, China and Russia have
better infrastructure and a better supply function.
India lags far behind, especially in terms of
physical infrastructure like roads and ports. Many
Dr Jagdish Sheth people talk about demographic dividend as Indias
is Charles H strength. But the fact is that the demographic
Kellstadt Professor dividend factor is true for the next generation.
of Marketing at the
Goizueta Business Now, we also have an ageing population; we are
School of Emory expanding on both sides. And aged people are set
in their waysfood preferences, consumption


Democratising the
marketing approach
How will marketing evolve in a dynamic and challenging business environment?




set-up of thinking, which is not design

thinking. Companies such as Apple, Google,
and Facebook have focused more on innovation
and marketing and have observed extraordinary
growth. In a quick survey by the author, the
respondents (informed users) could not spot
the product(s) of Facebook but they have been
using it and spreading it further. Facebook has
won the democratisation with engagement
of its customers adding great value; this is the
process of co-creation of value. For long, many
companies have wandered around marketing
their products than marketing the purpose
of the product and service to society. Many
top companies still do not rate marketing and
innovation as one of their priorities, but finance,
sales, production, etc. Perhaps, it is time to
review this again.

Evolution of thought
While strategy is changing and becoming a
common discussion than an elite club activity,
marketing is showing signs of moving from
a product approach to a utilisation approach
although the pace of change is delayed. The
marketing approach is already changing and
democratising with the dramatic pace of
digitalisation. A Gartner study on Digital

Marketing Spending Survey 2013 shows that
the annual spending on digital marketing is
ecause the purpose increasing, and 80% of the digital or marketing
of business is to technologists report to the marketing
create a customer, chief*. With the change of context from
the business the physical market towards e-market and
enterprise has slowly towards m-market (mobile market),
twoand only marketing approaches need a revised or evolved
twobasic understanding. Companies have a higher
functions: marketing and innovation Peter propensity to die as well as succeed in this era
Drucker made this thoughtful statement long of transformation. For sure, they may remain
ago. We have tested this school of thought stagnant for not more than a particular gestation
many times when we broke the bureaucratic period but it is difficult to estimate the duration.


Micromax improved the Given that the intelligence of part of the value (V) creation process. This is
existing products and the marketing team is constant, V-marketing where demand is a proxy or absent
there must be something else on economic principles (exchange). However
innovated new ones responsible for the failures of value creation continues.
to move on to higher these programmes and launches D-marketing: Democratisation of
bands and contributed which are not captured accurately; marketing starts when products or services
to marketing through else, there is a need to review the meet the employee quotient of marketing,
constant factor. ecosystem quotient of marketing, product
reverse branding.
Based on the examples and quotient of marketing, and consumer quotient
evidences from the market, we of marketing. Company employees, partners,
may categorise marketing approaches into and stakeholders become great communicators
four groups: in the whole marketing design. The ecosystem
P-marketing: When companies improve will include a large audience including the
their products from the existing product media, consulting/research firms, academia,
categories and scale, they tend to improve their and other market movers. The product will
marketing strategies in incremental mode, include the physical and emotional aspects and
like Nokia, Samsung, and Unilever did. This promises of the need; and brand ambassadors
approach may be referred to as P-marketing, and consumers will possess the soft powers of
which is product based. This matures at a the product/service which helps in creating a
threshold and kicks off innovation. Many reference network through formal and informal
companies die in this approach as they grow feedback and expressions. Futuristic and needs-
their brand ego to an unapproachable height. based innovation, confidence in innovation and
C-marketing: Micromaxa technology utility, perception and critique, and real usage
solution company to telecom service providers of products or services make a complete picture
in its prior avatarinnovated a product by of the democratisation of marketing. Patanjali
studying the needs of users in the remote areas Ayurved, a new company with many new
in India. The marketing features and language products and an umbrella brand, has used these
was the outcome of the personal interactions features to make the most of democratisation
with users and the pilot of the product was a which includes democratisation of marketing
marvellous success. Micromax improved the too. In a second example, the marketing
existing products and innovated new ones to strategy of Dabur is led by a corporate strategy
move on to higher bands and contributed to based on the Vision Cycle (VC) coupled with
marketing through reverse branding. This consumer opportunities. Dabur also brings
is C-marketing, which is consumer needs- in the experiences of all direct and indirect
based marketing. channel partners as well as consumers. It has
V-marketing: Facebook and Google gave new not only managed to fend off challenges and
assumptions to outline the marketing approach. continued to grow, but also became stronger
The former connected the world without selling by addressing the issues through a robust
any product in exchange of money, and the latter marketing mix of the marketing Psproduct,
offered information without any exchange of packaging, promise, and personality (different
money. Both the ideas effected a revolution and than the usual).
changed the way the marketing programme was Richard Bagozzi, in 1975, developed the
designed; and consumers of the digital era are construct of marketing: exchange is a central



addition to society in the form of corporate social

Brand Moving beyond corporations, we have already
and Consumer started receiving constructive signals from
Marketing social enterprises on their marketing strategies
Quotient that are no less than a large firm in their design
and implementation, but different in their
approach. They do not spend large amounts of
money but are able to co-create value based
on dire need, high purpose, and emotional and
Product Democratisation Ecosystem spiritual quotient; Genesys Works, Embrace
Marketing Marketing Innovations, Ignia, Jaipur Rugs, Narayana
Quotient of Marketing Quotient
Hospital, and Sankara Nethralaya are such
examples. These organisations have created most
innovative products and services challenging the
institutional structures of marketing and are one
Employee of the lowest priced and profitable too.
Marketing Companies can also learn democratisation
Quotient from the way countries market their tourism and
business. For instance, Singapore has trained its
taxi drivers and restaurant employees to treat
their foreign guests in a highly professional way
Values are core to high- concept in marketing, and talk to them in designed methods to exert
purpose institutions and and it may well serve as maximum influence. This is in addition to what
the foundation for that the government does at national and international
economic entities are elusive general theory of levels to market itself through various institutions
included in that space. marketing. Marketing has integrated with the Singapore Tourism Board
Democratisation ensures travelled a long journey with Marketing Group.
that these last long in an unchallenged approach, Values are core to high-purpose institutions
with minor modifications and economic entities are included in that space.
the journey.
though. American Marketing Democratisation ensures that these last long in the
Association formally revised journey. In the present context, democratisation of
the definition (and understanding) of marketing marketing will outline a design of the organisation
in 1985 and 2004, which spurred a scholarly that is moving from value exchange to value
debate. Dr Jagdish Sheth came up with the co-creation.This will also ensure an increasing
concept of the 4As of marketingacceptability, confidence in marketing as against a negative
affordability, accessibility, and awareness; each picture due to information asymmetry between
of these is divided into physical and emotional organisations and consumers and excessive weight
ABOUT THE AUTHOR variables, based on co-creation of value rather to sales. D-marketing would develop its own
Dr Rahul Singh is than as value creation or value exchange as metrics aligned with co-creation.
Associate Professor,
Birla Institute of the foundation of marketing. Michael Porter
* Key Findings from U.S. Digital Marketing Spending Survey,
Management proposed similar approach of shared values 2013, accessed at
as against the existing model with a little value research/digital-marketing/digital-marketing-spend-report.jsp.


The emerging reality
A Western approach to consumer research and marketing will fail you in emerging markets.




institutional theory, transaction cost theory,

resource-based theory, and agency theory)
to highlight significant differences between
developed and emerging markets in the way
businesses are created and managed (Wright et
al. 2005). In contrast, marketing researchers have
lamented the obstacles and technical difficulties
in applying research techniques in less-developed
countries, for a long time (Boyd Jr et al. 1964).
With the recent advances in information and
communication technologies, including the
popularity of the internet, email, and social
media, marketing researchers and managers are
showing a renewed interest in exploring the
differences between consumers in developed and
emerging markets along with the challenges and
opportunities posed by these differences for both
local and foreign marketers. (Sharma 2011; Sheth
2011). A comprehensive review of literature on
a wide range of topics relating to consumers,
brands, and marketers in emerging markets
reveals the following major streams of research:
Comparative consumer behaviour: This

research stream focuses on how consumers in

emerging markets are different from those in
developed markets due to a variety of cultural
and socio-economic factors (Maheswaran

and Shavitt 2014; Jones Christensen et al.
2015; Michaelidou et al. 2015; Morgeson III
merging markets are those et al. 2015). Most of these studies show that
lower income countries that are consumers in developed and emerging markets
using economic liberalisation are significantly different from each other in
to trigger rapid growth in their terms of their characteristics, values, attitudes
economic output; these include and behaviours, such as materialism, value-
developing countries in Asia, consciousness, and price-sensitivity.
Latin America, Africa, and the Comparative marketing strategy: This

Middle East and transition economies in the research stream explores the differences in the
former Soviet Union and China (Hoskisson et impact of marketing strategies in developed
al. 2000). Past management research has used and emerging markets, including advertising
diverse theoretical perspectives (for example, appeals (Zarantonello et al. 2014), product-


A stronger focus on market strategies (Wei et al. (Strizhakova et al. 2012), role of country-
emerging markets will 2014), use of the internet and market characteristics (Bahadir et al. 2015),
social media (Berthon et al. growing importance of new middle-class
thus help us push the 2012), loyalty management consumers (Kravets and Sandikci 2014), and
theoretical boundaries of programmes (Kumar et al. differences in attitudes towards local and
the marketing discipline, 2013), and the role of product international brands (Tanusondjaja et al. 2015).
and also provide innovation (Sok et al. 2015). In this context, there is a clear need to
Most of these studies show not only further extend but also develop a
significant practical
significant differences in the conceptual framework to guide and structure the
benefits. way various marketing actions rapidly growing research on the challenges and
and strategies affect consumers opportunities faced by marketers in emerging
in both the markets, possibly as a result of markets. Moreover, it is important for the future
differences in their marketing infrastructure of the marketing discipline that we reflect the real
and consumer expectations. picture of consumers and markets in emerging
Emerging markets perspective: In economies because they represent a large share
this relatively scant research stream, a few of the worlds population as well as economic
papers examine consumers and marketers growth. A stronger focus on emerging markets
in emerging markets for who they are and will thus help us push the theoretical boundaries
not necessarily compare them with those in of the marketing discipline, and also provide
developed markets. These cover topics such significant practical benefits and managerial
as emergence of a global cultural identity implications (Burgess and Steenkamp 2013).



It is important for the More specifically, most Psychology 2014; 9 (2): 59-66.
Michaelidou Nina, Reynolds Nina, Greenacre Luke, Hassan
future of the marketing concepts and theories in Louise M. Cross-cultural and cross-national consumer
consumer research and research: psychology, behavior and beyond. International
discipline that we reflect marketing strategy have
Marketing Review 2015; 32 (3/4).
Morgeson III Forrest V., Sharma Pratyush Nidhi, Hult G. Tomas M.
the real picture of been developed and tested in Cross-National Differences in Consumer Satisfaction: Mobile
Services in Emerging and Developed Markets. Journal of
consumers and markets developed markets and some International Marketing 2015; 23 (2): 1-24.
Sharma Piyush. Country-of-Origin Effects in Developed vs.
in emerging economies of these have been replicated in Emerging Markets: Exploring the Contrasting Roles of
emerging markets. However, Materialism and Value-Consciousness. Journal of International
because they represent Business Studies 2011; 42 (2): 285-306.
this is a limited perspective Sheth Jagdish N. Impact of emerging markets on marketing:
a large share of the because it colours our Rethinking existing perspectives and practices. Journal of
Marketing 2011; 75 (4): 166-182.
worlds population. perceptions about emerging Sok Phyra, O'Cass Aron, Miles Morgan P. The Performance
markets as seen through Advantages for SMEs of Product Innovation and Marketing
ResourceCapability Complementarity in Emerging Markets.
the cultural-institutional lens of the typical Journal of Small Business Management 2015.
Western context in which major marketing Strizhakova Yuliya, Coulter Robin A., Price Linda L. The young
adult cohort in emerging markets: Assessing their glocal
journals and their contributors operate. This is cultural identity in a global marketplace. International Journal
of Research in Marketing 2012; 29 (1): 43-54.
in stark contrast to the professional marketing Tanusondjaja Arry, Greenacre Luke, Banelis Melissa, Truong
community and multinational companies who Oanh, Andrews Taylah. International brands in emerging
markets: the myths of segmentation. International Marketing
are able to keep pace with the rapidly globalising Review 2015; 32 (6): 783-796.
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of consumer and market knowledge from the product strategy on firm performance in an emerging market.
developed to emerging markets and vice versa. Journal of the Academy of Marketing Science 2014; 42 (1):
Wright Mike, Filatotchev Igor, Hoskisson Robert E., Peng Mike
Bahadir S Cem, Bharadwaj Sundar G, Srivastava Rajendra K. W. Strategy Research in Emerging Markets: Challenging the
Marketing mix and brand sales in global markets: Examining Conventional Wisdom*. Journal of Management Studies 2005;
the contingent role of country-market characteristics. Journal 42 (1): 1-33.
of International Business Studies 2015. Zarantonello Lia, Schmitt Bernd H., Jedidi Kamel. How to
Berthon Pierre R., Pitt Leyland F., Plangger Kirk, Shapiro Advertise and Build Brand Knowledge Globally: Comparing
Daniel. Marketing meets Web 2.0, social media, and creative Television Advertising Appeals across Developed and
consumers: Implications for international marketing strategy. Emerging Markets. Journal of Advertising Research 2014; 54
Business horizons 2012; 55 (3): 261-271. (4): 420-434.
Boyd Jr Harper W., Frank Ronald E., Massy William F., Zoheir
Mostafa. On the use of marketing research in the emerging
markets. Journal of Marketing Research 1964; 1 (4): 20-23.
Burgess Steven Michael, Steenkamp Jan-Benedict E. M.
Editorial: introduction to the special issue on marketing
in emerging markets. International journal of research in
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Mike. Strategy in Emerging Markets. Academy of Management
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Piyush Sharma Marketing 2014; 78 (4): 125-140.
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in Global Consumer Psychology. Journal of Consumer


It is important to acquire customers before selling a product.



Engage first,
sell next
ccording to Geofrey Four-E framework
Moore, organisational The Four-E framework ensures that the
theorist, we have evolved customer too gets value from the relationship.
from systems of records This engagement enables a prototype to become
to systems of engagement. a minimum viable product and further evolve
The cycle times are to get to a maximum value point. To maximise
getting shorter because output from every customer interaction, there
companies are adapting faster, and those that are four key types of engagement components
take time to adapt are losing out. Companies or engagement interactions between the
that succeed today are those working towards entrepreneur and the existing/prospective
customer satisfaction and focusing on educating customer: educate, enable, effect, and engage.
customers, enabling them, effecting change, and Educate: Shows entrepreneurs how to
engaging them. better understand customers and their unmet
The lines between product development, needs. It also helps them educate patrons about
marketing, and sales functions are becoming new products planned by the organisation, and
thinner, particularly with evolving minimum gather meaningful feedback from clients.
viable products and different pricing Enable: By enabling prospective customers
methodologies. What do you sellthe vision or to know more about products and their uses,
the manufactured product? Is selling a product entrepreneurs incrementally prepare them
more important than acquiring customer to make a decision. Continued enabling helps
interest? With the changing priorities of them get closer to the needs of the customers.
customers, keeping them engaged has become It allows them to test whether their business
the most important ingredient for success. can provide the public with what they need in


The easiest way to grow a manner and at a price that increase the lifetime value of customers.
your business is to not work for both. Engaged prospects and customers are also a
Effect: This aspect focuses target group for entrepreneurs to test any new
lose your customers on an entrepreneur identifying idea or minimum viable products (MVP). As
and prospects. whether his firm is helping a result, modern day entrepreneurs are ready
the customer or not. Are the to go the extra mile to create value and engage
product functionalities or delivery standards prospective customers by giving them freemium
meeting key unmet needs? Is the product type services or try-and-buy products.
bringing any value to the customer, and if not, The engaging zone is where entrepreneurs
how can it be changed? and their customers create value for each other.
Engage: Staying engaged with the client The educator finds out what the customers
before the sale and beyond it are crucial really value. The enabler builds the product,
for creating and sustaining a solid business prices it, and distributes it per the findings. The
relationship that can lead to more sales and effecter closes major sales contracts as well as
good word-of-mouth publicity. assesses whether the product still provides the
value customers were looking for. The engager
Engaging zone provides other solutions to help close any
The easiest way to grow your business is to not value gap or address a new need. This cycle of
lose your customers and prospects. The cost of educate-enable-effect-engage continues with
losing customers is staggering, but few businesses the engaged customer. For customers to remain
truly understand the implications. engaged, entrepreneurs should constantly assess
Traditionally, we had assigned more the value that both parties are getting out of
importance to sales; and subsequently, metrics the relationship. With the engaged customer,
were crafted around tracking sales growth. educators identify other unmet needs and new
However, modern entrepreneurs understand priorities. To bring more value, they also reveal
that one sale is not enough and that an engaged some of the new products the entrepreneurial
customer base is the key need. It is the only firm is working on. Subsequently, enablers and
way to grow the business consistently and effecters play into the relationship not only to
monetise immediate transactional opportunities
but also to increase the lifetime value of
these customers.
Let us look at a swimming pool analogy.
When an entrepreneur educates prospects,
he gathers the dimensions of the pool from
them. When the entrepreneur enables them,
he actually builds the swimming pool with
the dimensions gathered. When he effects the
change, he attracts people into the new pool.
And when he engages with them he keeps the
patrons entertained.

How can a company attain value fast?

The customer-engaging entrepreneur needs
to take value creation to new heights, through



new customers and retain them in the engaging

zone, in the most seamless way.

How does product lifecycle get impacted by

lean customer engagement?
During the introduction phase of the product
lifecycle, the activities are focused on raising
awareness about the new product and seeking
early adopters. In the growth phase, marketers
activities help expand the market in the same
segment or in new segments and geographies.
When a product reaches its maturity phase,
the marketing activity and expenditure levels
get lower than earlier in the lifecycle, as the
product sells itself due to the established
brand and relationships. When the product is

in its decline phase, its existing reputation and

customer loyalty produce revenues but there is a
gradual disinterest. Marketing teams often tend
to put either too few or too many resources in
this phase. They do not consider development
When the product is in its better procedures, and build of a profitable replacement product or an
decline phase, its existing competencies to support that. extension of the existing product line to cover
It requires entrepreneurs to new customer interests and changed priorities.
reputation and customer revisit their way of conducting In all this, the traditional entrepreneur does
loyalty produce revenues business and identifying the not look at increasing the lifetime value of
but there is a gradual engaging zone. This will customers by keeping them engaged throughout
disinterest. also help them to look for this cycle.
opportunities in adjacent Now let us see how the Four-E framework
categories, or new value keeps the customer engaged through the
pockets in existing competencies. product lifecycle. Educators can help in the
Educators can help identify insights about introduction phase of the product lifecycle, as
customers that in turn drive marketing and sales that is when the entrepreneurial firm seeks ideas
decisions. Enablers can help build efficiency as well as builds product awareness. Enablers
to deliver the right product efficiently in a expand the market and make the product usable
way the customer wants. Effecters can help by more prospects, during the growth phase of
extend necessary competencies to increase the product lifecycle. When a product reaches
value for customers. Engagers can use these its maturity phase, the effecters assess gaps in
ABOUT THE AUTHOR newly developed competencies to improve how the value created for the customer and address
Shil Niyogi is customers are served and how they get the best that. In its decline phase, the engagers keep
Senior Director, possible experience, across all product lines the customers in the engaging zone and help
Engineering, at a and services. them with other products (or better
healthcare firm All these facets, when combined effectively, version of the same product) through the
in Chicago.
within the entrepreneurial firm can acquire engaged relationship.


Charting a road map for financial services KPOs in India.

A change
of course
inancial market KPOs started
with a lot of fanfare, but lost sheen
over a period of time due to the
impact of various market forces.
More importantly, what they
considered as their competitive
advantage proved to be their
nemesis. The need of the hour is for KPOs to
reinvent themselves and become relevant again.
The availability of a large talent pool
engineers, post-graduates, MBAs, CAs, PhDs,
lawyers, and doctorsat salaries that are
only a fraction of those in the western world
makes India an ideal location for setting up
a back office for the services industry. The
influx started with IT services (primarily body
shopping) as demand exploded, moved on to
Business Process Outsourcing (BPO), and then
moved up the curve to Knowledge Process
Outsourcing (KPO).
With the collapse of financial markets came
the first shock, as big banks and investment banks


As the US financial services market exploded
in the early 2000s, it generated a heady mix of
demand for professionals. Salaries went through
India the roof and attrition rates reached unforeseen
Australia levels. Financial services businesses in the US
started looking at other markets that could satisfy
their needs and India figured high on the list.
Canada India, by then, was already a preferred
South Africa destination for IT and ITeS services. Most
large investment and retail banks were already
Ireland making susbstantial saving by outsourcing their
Wales services to India. The delivery capabilities were
Low Moderate High
well known in other spheres as also the pain
points. In fact, some of them had already set
Source: Adapted from KPMG / Swamy and Associates, Knowledge Process Outsourcing, February 2008
up their back offices in India to support their
international offices.
PIPELINE AVAILABILITY OF TALENT While it was one thing to let the back office
or support services be run from India, it was
an entirely different matter to have customer-
facing high-end operations being run from a
India remote location. The financial marketssupport
Australia required advanced analytical and technical skills
to complement the market skills of professionals.
There was no surety that India would be able
Canada to supply the same. The initial outsourcers
South Africa were mostly Indians, who knew talent was
Ireland abundant in the country. Their business success
became showcase examples for others to follow.
It helped that a few of the people who were
Low Moderate High
earlier working in international offices of these
investment and retail banks set up companies
Source: Adapted from KPMG / Swamy and Associates, Knowledge Process Outsourcing, February 2008 here to run the show. They spoke a familiar
language, were accessible, and had references
who could vouch for their work.
The business case was impeccable. Significant
crumbled. Business became a single industry/ cost reduction, command of English language,
segment driven and growth became difficult. 24x7 support, little or no upfront investment,
Seeing the writing on the wall, several companies flexible and ample supply of professionals
sold out. Others are waiting to either branch that can be increased or decreased as the
out or sell, with no buyer in sight. The future business demandedall worked in favour of
roadmap is hazy and fraught with challenges. The the outsourcing to India. These positives were
path these financial services KPOs should take is more than enough to counter the negatives
a matter of debate. of data security (that companies were quite



The 2004-2008 period finicky about), talent retention control over the operations and ensure their data
were sunshine days for (outsourcing companies were security needs are met. Organisations that took
willing to bear the cost of the captive route included Citibank, BNY Mellon,
the financial KPO industry replacement), and quality of HSBC, UBS, Credit Suisse, etc.This still allowed
in India with growth work (only basic work was several third-party players to flourish and grow,
touching 100-300% YoY. outsourced). including Evalueserve, AMBA Research, Copal
Evalueserve was an early Partners, Irevna, etc., to name a few.
entrant on the scene. It was established in 2000, The business was basic data entry in the
closely followed by Irevna Research in 2001. This initial phases but scaled up on the value curve
was followed by Copal Research in 2002, AMBA to include highly sophisticated modelling and
Research in 2003, and Adventity in 2004. Apart analytical work, over the years. The gamut of
from these, several other small and specialised services offered was huge and expanded in a
companies set up shop to cater to a single client short span of time.
or a handful of them and offered niche services. As the complexities of the work grew, the
There were a few organisations that outsourced expertise requirement grew exponentially. To
and were happy doing so while others saw merit in find a resource that could develop a detailed
setting up their own captive centres to have more financial model and write an equity research
report on a company that is 10,000 miles away
with little access to management and the markets
FINANCIAL SERVICES KPOS VALUE PROPOSITION required considerable skills. Skills that are
not easy to teach or develop in a short span of
Value Drivers Concerns time, unlike updating a financial model, which
Unreliable data security especially with is easy and can be taught in a matter of days.
Large availability of well quali-
fied and trained professionals
smaller vendors; unethical practices KPOs got around this by paying fancy salaries to
related to handling of crucial data experienced resources that could then be trained
English language Rising wages and attrition of trained fast to focus on international markets,
proficiency personnel and achieve the desired level of efficiency to
Supply shortage of profession- Inadequate intellectual property rights satisfy international clients.
als in developed countries protection The 2004-2008 period were sunshine days for
Well-established outsourcing
the financial KPO industry in India with growth
Shortage of high-level skills, limiting touching 100-300% YoY; a significant rise in
4 practices evident from IT
the work scope to basic support
services and BPO sectors salaries and profiles were the order of the day.
Lack of growth and cross Business was flowing faster than the KPOs could
Supporting government
5 employability reducing the supply of recruit and train. Enough talent was not available
skilled people to the KPO sector
with the right focus on analytical skills and an
Adherence to quality eye for detailthese two aspects put off clients
High cost of training and retention
6 standards and data security
issues in the developed world. People with 3-5 years
Tendency to lose the most
of experience were leading teams of 50-100
7 Reasonable billing rates professionals, most of them fresh out of college,
experienced employees to clients
Time zone advantages; trying to take care of an almost unsatiating
8 organisations can run their demand for support. The business was reference
business 24x7 driven and the clients were chasing the sales
Scope of expansion into relat- team, rather than the other way around. Pricing
ed areas like data analytics was top of the line at the time with $60,000 per


Domain High Complexity Moderate Complexity Low Complexity
Customer domain and distribution Product and channel
Insurance and actuarial Company valuation
channel analysis profitability analysis
Profit/capital management Claims modelling and estimation
Capital adequacy/solvency
Asset/liability modelling
Long-term liability modelling Expense analysis and benchmarking
Integrated reserving and pricing Product line projections

Product design, profit testing Discounted cash flow modelling

Equity research and Preparation of thematic industry Presentations and profile tem-
New company initiation reports
investment banking reports plates for institutional investors

Creation and support for mergers

Presentations and pitch books for Update and maintenance of
and acquisitions (M&As)
institutional investors product models
standalone valuation models

New idea generation Valuation models Update of valuation models

Market research for fixed interest, in-
Corporate credit, structured
Feasibility analysis dex linked, credit interest rate swaps Presentation and graphics
and project finance
and asset backed markets
Library, knowledge management,
Cash flow modelling
and general research

Credit quality analysis

Loss protection calculation
Stress testing
Scenario modelling
Fair value reporting
Asset-pool performance
Market research and
Product profitability analysis Budgeting analytics Competitor analysis
internal support
Framework development GAAP reporting support Sector analysis
Shareholder return analysis SOX 404 support Market research support
Capital management analytics Activity based costing
Risk management support
Strategic customer or domain
Retail banking Fraud analytics Documentation support
Delinquency analysis Product marketing support
Attrition modelling Mortgage underwriting
Propensity modelling
Product profitability analysis
Credit scoring
Underwriting algorithms

Source: Adapted from KPMG / Swamy and Associates, Knowledge Process Outsourcing, February 2008



analyst on an average in 2005, which was still at Global investment banks realised that their
a 50% discount on the price that would be paid captive units were not strategic and were only
onshore for someone equipped with similar skills. supporting their select global operations (some
Significantly, the manpower cost was less than of which were already in the process of winding
30% of the billing rate even for an experienced down). This could have been easily monetised
analyst with 4-6 years of experience. Everything and there were instant cost savings that they
was going great for the business and then the could have had if they outsourced it. Global
financial crisis of 2008 happened. investment banks started selling their captive
units to Indian IT giants, promising them steady
Changing landscape led by financial crisis business and options to bundle both strategic
of 2008 and operating units of IT, BPO, and KPO
In hindsight, growth in financial services was operations. Lured by the incentives, TCS bought
driven by the greed for the global captive unit of Citibank in 2008 for
short-term profits from both $505 mn and Cognizant bought the Swiss Bank
With the credit crunch investment and retail banks. UBS Indian outsourcing arm in 2009 for
and business downturn This had also driven the need $75 mn. The deals not only helped Indian
happening, suddenly a lot for talent to manage the IT giants expand their services into financial
of people were redundant processes. With the credit domains but also opened up new pathways to
crunch and business downturn provide integrated financial, consulting, and
in the system. happening, suddenly a lot of technology solutions to the BFSI segment that
people were redundant in the was a major component of their portfolio. This
system. With losses looming at their face, most also allowed cross-selling of similar services to
of the retail and investment banks started looking their other clients, expanding their business and
at rationalising their operations and paring their cross-domain expertise.
cost base. This led to several effects, primary While the deals between captive units were
amongst them was reduction of workforce, fructifying, several independent outsourcing
both onshore and offshore, and disposal of companies realised that the business would
non-strategic units. remain tough and there was no point in them

Global KPO Industry-Projections vs Actuals

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Actual Original Projection Revised Projection

Source: Evalueserve and Industry Sources


continuing in it. Everyone started looking for growth rate in outsourcing as well.
buyers, Adventity was sold to Sutherland Global These KPO growth rates were not of the
Services in 2010, Pipal Research was taken financial services KPOs per se but for the KPO
over by CRISIL in the same year, and Moodys industry as defined loosely and included all sorts
acquired Copal Partners and AMBA Research of services (some were performed by financial
in 2011 and 2013 respectively. Each case was services KPOs and the rest were performed by
justified on the basis of niche capabilities or other entities). For example, Evalueserve has
client base that the target had, something that service offerings ranging from financial services
was difficult to develop on their own or sell to legal support and from market research to
in the market without proper collaterals and analytics.
client testimonials. While some of them did As the market exploded, the term KPO
come with a top-notch client list or niche also expanded to include other industries
capabilities, several were acquired just because and segments. It started to signify all kinds of
the promoters had decided to get out of the research and information processing, including
game while they were still ahead and reasonable legal, intellectual property, medical services,
valuation could be achieved. training, consultancy, research and development
The heady growth rates that were projected in pharmaceuticals and biotechnology, and
at the start of the boom was moderated to an data analytics, apart from financial services
extent. Even then, it was difficult to achieve constituents like investment banking, equity
those projections as the global financial markets research, credit research, and market research.
moderated and every one of the investment/ India was not the only market offering these
retail banks was on a constant manpower- KPO servicesit was competing with other
reduction spree. There were banks who had markets on several fronts, primary among them
announced reduction in manpower five years were the Philippines and China.
in a row and still continuing to shed divisions,
geographies, and manpower. All of this led Challenges ahead
to significant manpower surplus (though not Years of low growth and mounting competition
with the requisite skills set) available across by big players backed by global credit-rating
developed economies, leading to a reduction in majors/captive units of IT majors have spelt

Indian KPO Industry-Projections vs Actuals







2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Actual Original Projection Revised Projection

Source: Evalueserve and Industry Sources




KPO Segments India Philippines China Russia New Zealand


Engineering services

Content development
Financial services

trouble for the small players. This is exacerbated they can dictate terms and have been asking for
by the following factors: their pound of flesh citing business pressures.
Overdependence on a single line Discounts on billing rates, demand for higher
of business efficiency, and/or better qualified manpower is
As most of the financial services KPOs are common among peers.
in a single line of business, expansion into Manpower availability

any other line requires a skills set that is not Every professional looks for career growth and
available with them. Without this, a ready set enhancement.While the billing rates have been
of client testimonials, and a sales team that can constant over the last few years and business is
reference and sell those services, it is difficult in non-expansion mode, it has become difficult
to expand in any area. to attract talent as the salary to billing ratio has
Business growth gone up drastically. Promotion avenues are also
Dependence on a few clients has become a non-existent as movement of senior people,
bane as new clients are hard to come by and either within the industry or to other industries,
existing clients are not in an expansion mode. has been very slow.The choice is two-fold
Replacement mode is quite active and so is either invest significantly in new lines of business
poaching others clients. Smaller vendors are or sell the business.There is no third option,
hit particularly hard as their average client is there?
billing is small and need a lot more effort to
maintain and sustain.
Billing rates NASSCOM Annual Strategic Review, 2015
KPO Growth Industry Impacted by Great Recession,
The average billing rates have been either Evalueserve, August 2010
frozen or are showing a downward trend. Captives in India - Is the Honeymoon over, Evalueserve,
November 2009
Poaching by providing attractive billing rates Knowledge Process Outsourcing, KPMG / Swamy and
is a common practice and does not let anyone Associates, February 2008
Dr Nitin Balwani is Indias Knowledge Process Outsourcing (KPO) Sector: Origin,
Dean, Planning and hike the rates easily. Current State, and Future Directions Evalueserve, July 2007
Knowledge Process Offshoring: A Win-Win Situation,
Development, IFIM Client pressure Evalueserve, May 2005
Business School.
Like the IT industry, clients have realised that Growth of the Indian KPO Sector, Evalueserve, July 2004


Startups need to create infrastructure before advertising their products or services.



Think before
you leap
he co-founder of a startup
walked into my office and
discussed his plan to raise funds.
I asked him a simple question,
Why do you need investors
money? For marketing,
advertising, and brand building,
he replied. I knew the background of startups
they have more demand for their services than
their ability to serve customers. To the best of my
knowledge, this one-year-old startup had amassed
a good customer base. Its founders had built a
compelling value proposition and a sound business
model. What was then the compulsion to spend
on advertising?
This scenario is common in many ventures,
particularly those started by MBA graduates.
Business education equips them with the necessary
tools and techniques. Typically, they tend to
treat new ventures as miniature versions of large
corporations, which is not the case. Similarly,
corporate employees who turn entrepreneurs also
do not get it right. Steve Blanks idea that a startup
is not a smaller version of a large company is often
ignored while starting a new venture. Early-stage
startups differ significantly from large corporations
as well as heavily funded unicorns in terms of their
strategic approach, marketing, sales, and overall
management. Strategic priorities of these unicorns

and large companies are different from those of be effective for startups. Here is a case in point:
startups which are in the process of achieving SuperJam, a 100% fruit jam company was started
product-market fit and building the initial by Fraser Doherty. Instead of relying solely on
customer base. digital media and social networking, the company
The question is: do you really need to spend organises and sponsors SuperJam Tea Parties
on advertising? Let me make this point clear. I for elderly people who live in care homes. The
do not deny its power to reach out to the masses company tries innovative methods to market in
and its ability to shape consumer psychology. different markets and countries.
However, startup marketing takes different forms What does it take to cut through the clutter
as compared to the marketing of an established and get noticed in the market? Is there anything
organisation. Their constraints and challenges remarkable around the product being marketed?
are different. The founders need to understand How to build substance rather than just a shiny
the importance of customer equity over brand surface? Could the novelty of the idea and
equity. This shift in orientation from generating innovation be the focal point? For example, in
awareness and building recent years, Hector Beverages (PaperBoat),
perception to building a Happily Unmarried, and Chumbak have achieved
Startup marketing satisfied customer base involves this successfully. Indigo avoided expensive
takes different forms a mindset change. advertising in the initial years and focused on
as compared to the It is often said that a product customer excellence. Starbucks was built as a
marketing of an which does not sell without great company one cup at a time. It is critical
advertising will not sell with to build something remarkable in the product,
established organisation. advertising. Usual methods which gets noticed and serves as the base of
Their constraints and of advertising and brand marketing. Paul Grahams simple advicemake
challenges are different. promotion are not found to something people wantremains the core of



Customer acquisition is startup marketing. Have you A product launch event is a great marketing
the key challenge in the achieved the product-market opportunity. How do you wish to build viralilty
fit? Can the right features be around this event? The idea is to create a buzz
early stages of venture the marketing point? In the for the applicable segment, and this buzz
creation. Advertising may early stage of venture creation, builds momentum gradually. How about using
not be the only solution startups are looking for a testimonials, case studies, and white papers
to this challenge. repeatable business model, and as marketing messages? Would you like to
mass advertising may adversely capitalise on the thought leadership of your
affect their process of pivoting startup team? This is suitable for those targeting
from who they are to what they should be. B2B enterprise customers. Technology startups
What is your conscious choiceprofitable could leverage the expertise of founders,
growth or fast growth? Startups need to decide testimonials from lead customers, and thought
on the direction.Would they go for sustainable leadership marketed through white papers. Is
profitable growth or prefer leveraged fast growth, there any possibility to create a marketing idea
which might not sustain and lead to cumulative around your first customer or the set of first
losses. In the recent past, the risk capital was customers? Can your startup story be a point
tightened and investors are now moving to unit of marketing your startup? Have you crafted
economics-based metrics. Can your product the startup story? Marketers often use a well-
speak for you? Have you earned word-of-mouth crafted story around the origin of the product,
publicity? Have you created any communication entrepreneur, or the business idea as marketing
to generate virality? At times, below-the-line tool. It is a well-established fact that story sells
(BTL) activities are suitable for assessing consumer when it comes to marketing a product. Some of
response on certain startup ideas. Is there any the great brands which are reckoned with now
certification which could be your marketing have capitalised on this.
tool? Direct and digital marketing work relatively Advertising is crucial. The question iswhen
better for running experiments at the startup is the right time for that? Do you really need
stage. Startups that need to create market and to spend on advertising? Startup marketing is
educate potential customers need more than just different. It is all about innovative marketing
traditional mass advertising.This is more applicable ideas. Startups do not have any legacy issue
for the consumer internet startups are looking at which confine their ideas to the market and
altering the habits and building the stickiness of. restrict them to few proven tactics. They can
With respect to funding, a majority of the experiment with innovative marketing ideas
startups are bootstrapped. At times, advertising which are beyond advertising and expensive
splurge straining the limited resources not only campaigns. Relatively, the cost of venturing
affects the burn rate but also defeats the purpose. out is coming down but that of acquiring
And if the advertising works, do they have the customers is going up. Customer acquisition is
capacity to serve the leads generated through the key challenge in the early stages of venture
ABOUT THE AUTHOR mass media advertising? Do you need those creation. Advertising may not be the only
Rajiv Joshi is few hundred customers to test your idea and solution to this challenge. Startup marketing
Associate Professor, iterate further or a few thousand? The question is different than the mainstream marketing. It
Entrepreneurship and might sound similar in terms of the concept
General Management,
remainsshould you advertise before building
Institute of the critical mass? Even if you are a well-funded but it is different while practising. It is not
Management startup, you may like to spend money on building just a functional approach. It is a well-thought
Technology, Nagpur.
product and team. business strategy.









A guide for organizations to maximise wealth creation and build governance
best practices.

a companys

he innumerable scandals
stemming out of the failure
of Corporate Governance,
which include downright
fraud and mismanagement
in many geographies, have
shattered the confidence of
the investors of resources in the basic fabric
of an enterprise as a JSC. An impression has
been gaining ground that those in the active
management by the virtue of the authority
vested in them, treat the interest of other
THE ESSENTIAL stakeholders with utter disregard, mismanage
BOOK OF the enterprise, siphon off the resources and
GOVERNANCE even organize and undertake daylight robberies
Author: on the wealth of the stakeholders. The disgust
G N Bajpai emanates from the fact that such irresponsible
Publisher: behaviour is being reflected by those who are
SAGE India expected to be the trustees of the interest of all
ISBN: stakeholders.
Governance failures created an uproar in the
364 financial markets, which made the governments
Price: and regulators sit up and take notice. There
R595 was a rethink on the role of the state, which


is expected to provide basic support services Adrian Cadbury, CEO of the Cadbury
such as law and order, a conducive legal Confectionary empire.
environment, a decent and potent supervisory Back home in India, the following committees
and regulatory infrastructure, a reliable have been appointed:
accounting system, a vibrant securities market Kumar Mangalam Birla Committee on

and so on, while the private economic agents Corporate Governance (2000)
carry on the economic activities. Even the Naresh Chandra Committee on Corporate

allocational efficiency of the resources by capital Audit and Governance (2002)

markets has been questioned. Discipline of N.R. Narayana Murthy Committee

capital markets itself came under severe attack. (SEBI, 2003)

It was felt that the rules and canons of market Naresh Chandra Committee Report of 2009

discipline were inadequate and even the existing (CII Taskforce on Corporate Governance
code of conduct was not effectively enforced. formed post Satyam episode)
This led to the formation of a number of The corporate misdemeanours consequenced
committees and commissions and enunciation by greed, hubris and delinquencies have incited
of codes around the world (noted amongst a global approach to bringing an order in
those have been mentioned below), beginning the management of enterprises, particularly
with the Cadbury Committee chaired by Sir those which are publicly owned, where the

List of Committees and their Country

Name of Committee Country/Organization
1 Sir Adrian Cadbury Committee on Financial Aspects of Corporate Governance (1992) UK
2 Mervyn E. Kings Committee on Corporate Governance (1994) South Africa
3 Greenbury Committee on Directors Remuneration (1995) UK
4 CaIPERSGlobal Corporate Governance Principles (1996) USA
5 Business Round Table (BRT)Statement on Corporate Governance (1997) USA
6 Hampel Committee on Corporate Governance (1998) UK
7 Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees (1999) USA
8 Combined Code of Best Practices (LSE) (1998) UK
9 OECD principles of Corporate Governance (1999) OECD
10 CACG Principles for Corporate Governance in Commonwealth (1999) Commonwealth Secretariat
11 Derek Higgs Committee (2002) UK
12 Sarbanes Oxley Act (2002) USA
13 Kumar Mangalam Birla Committee on Corporate Governance (2000) India
14 Naresh Chandra Committee on Corporate Audit and Governance (2002) India
15 N.R. Narayana Murthy Committee (SEBI, 2003) India



Corporate Governance number of shareholders is Blend of law, regulation and appropriate

mirrors the companys large and widespread and has voluntary private sector practices
a complement of minority Which enables the corporation to attract
integrity, efficiency and shareholders. The orderly financial and human capital, perform
long-term growth. management of an enterprise efficiently, and
has been christened as Perpetuate itself by generating long-term

Corporate Governance. economic value for its shareholders,

Many pundits in the field have defined While respecting the interests of stakeholders

Corporate Governance in many ways and and society as a whole.

it ranges from managing and maintaining A complex definition has also been provided
financial health of an enterprise to including by the advisory board of the National Association
optimal wealth creation, maximizing wealth of Corporate Directors (NACD), NewYork:
management and most efficacious sharing of Corporate Governance ensures that long-term
wealth amongst all the stakeholders. strategic objectives and plans are established in
Innumerable definitions of Corporate place to achieve those objectives, while at the same
Governance have been laid down by the various time making sure that the structure functions to
committees, commissions and organizations. maintain the corporations integrity reputation,
The excerpts from some of the definitions could and responsibility to its various constituencies.
be described as follows: In one of the many books published since
The system by which companies are directed 1992, the Corporate Governance consists of
and controlled by Cadbury Committee, 1992. five elements, which the BoD must consider:
The relationships among the management, Long-term strategic goals

Board of Directors, Controlling Shareholders, Employees: past, present and future

minority shareholders and other stakeholders, Environment/community

states International Finance Corporation (IFC), Customers/suppliers

Washington. Compliance/legal and regulators

The Organization for Economic Cooperation Taking a world view of the definitions, I
and Development (OECD) defines Corporate would like to sum up Corporate Governance
Governance as: as the philosophy that a company practises in
involving a set of relationship between a companys its relationships with its shareholders, lenders,
management, its board, its shareholders and other employees and other stakeholders, including
stakeholders. Corporate Governance also provides the society at large. It mirrors the companys
structure through which the objectives of the company integrity, efficiency and long-term growth.
are set, and the means of attaining those objectives Corporate Governance must assure the
and monitoring performance are determined. investors and lenders alike that the companys
Good corporate governance should provide proper dealings with its stakeholders will be fair and
incentives for the board and management to pursue transparent, the CEO and the BoD will be held
objectives that are in the interests of the company accountable, the company will be responsible in
and shareholders and should facilitate effective its business transactions and will create wealth
monitoring, thereby encouraging firms to use resources optimally, maximize wealth substantially and
more efficiently. share wealth efficaciously.
According to the World Bank, Corporate Excerpted with the permission of Sage Response from
The Essential Book of Corporate Governance. Copyright 2016.
Governance is: GN Bajpai. All rights reserved.


12 Global
Disruptive Innovation &
Open Business Models
in the Changing Global

25 June to 01 July, 2017

at Silicon Valley, USA.

Programme Director
Solomon N Darwin
Executive Director, Center for Corporate Innovation
Haas School of Business, University of California,

Programme Framework
i Class Room Lectures and Interactions
ii Keynotes by Silicon Valley Startups and CEOs
iii Visits to companies like Google Tesla Motors Standard Chartered Bank Intel Cisco Systems Inc
IBM Research PayPal VISA GE Co-Innovation Lab Stanford Medical Centre Wells Fargo Bank
Kaiser Permanente UC Berkeley Campus amongst others

Programme Certificate
Upon the successful completion of the programme, participants will be conferred a Global Advanced Management Programme.
Certificate awarded by All India Management Association

Participation Fee
Delegate Fee per participant: INR equivalent to USD 8500 per Participant
Inaugural Discount: USD 750 per participant for registrations received along with participation fee by 31st March, 2017.
Early Bird Discount: after 31st March, 2017 a discount of USD 500 per participant available for registrations received along with
participation fee by 05th May, 2017.

Nitin Saxena
All India Management Association, Management House, 14 Institutional Area, Lodhi Road, New Delhi - 110003
Tel: +91 (11) 43128100, 24645100, Extn.-528. Mob: +91 9811675559 | Fax: +91 (11) 24608503 | Email id:
Understanding customer jobs and not customers drives innovation.


ata shows that for every Harvard Business Reviews best article, and the
seven innovation projects cofounder of four companies. He has twice been
(product/service), four named the worlds most influential business
enter the development thinker by Thinkers50.
stage, two are launched,
and only one succeeds. The theory of jobs
Why is innovation so The legendary economist Theodore Levitt
difficult to master? saidPeople dont want to buy a quarter-inch
For many companies, innovation is still hit drill. They want a quarter-inch hole!
or miss. Most managers follow one or more The authors primary premise is customers
of these in their quest to innovate: product do not buy products or services, they pull them
attributes (the features, the technology, and the into their lives to make progress. Clayton calls
bells and whistles), customer characteristics this progress as job to be done. Understanding
G Lakshmanan is (the demographicsdo we have an offer for customers does not drive innovation success, he
Senior Principal,
Infosys Limited. digital natives?), trending data (do we need a argues. Understanding customer jobs does. Let
gluten-free product?), or competitive response us look at a few of the ideas with examples.
COMPETING AGAINST (those guys have one, we need one too).Yet, the
LUCK: THE STORY failure rate is high. Progress, not products
OF INNOVATION AND How to avoid the frustration of hit-and-miss Successful innovations enable a customers
innovationleaving the fate to luck? desired progress, resolve struggles, and fulfil
Clayton M Christensen, In Competing Against Luck:The Story of Innovation unmet expectations. In many innovations, the
Taddy Hall, Karen Dillon, and Customer Choice, Clayton Christensen and focus is often entirely on the functional or
and David S Duncan his co-authors offer a unique technique on how practical need. But in reality, consumers social
Publisher: companies can develop and market products and and emotional needs can far outweigh any
Harper Business
services that customers actually want and need. functional needs.
288 (Hardback) Clayton Christensen is a professor at Harvard For example, BMW had long described itself
Price: Business School, author of eleven books, as being in the business of high performance
R599 five-time recipient of the McKinsey Award for cars. But with the auto industry in a


nosedive at the start of the 2008 recession, the most successful companies have become
BMWs leadership team took a step back synonymous with the job they help doXerox
to assess consumer behaviour. What they (I need 2 Xerox copies), Google (Just
found changed the companys view of the Google it) are cases where names (nouns) have
competitive landscape. BMW was competing become verbs.
with traditional luxury cars, but it was also I need to furnish my apartment tomorrow.
competing with Tesla (Electric -Green fuel Is there a brand (purpose brand) that pops into
efficient), Uber (ride hiring) and Zipcar (car peoples mind when they realise that is the job
rental). BMW started benchmarking outside to do? Over 95% of them say Ikea (Swedish
their category and realised the real job was multinational). Ikea exists to do a jobfurnish
efficient mobility. That led not only to the the apartment quickly. Nobody could copy Ikea
launch of the electric and hybrid lines of BMW, in the last 50 years.
but also to BMWs DriveNow service. The authors cover a number of techniques
such as integrating around a job, how to hear
Purpose brand what customers do not say, and identifying ways
When people have a need, there is a job to be to compete against non-consumption.
done. Innovative companies focus on developing This book helps look at innovation with
products that do the jobs customers want, no different perspectives, different competitors,
matter what form they take. different priorities, and most importantly,
That is the reason why the names of some of taking the uncertainty out of the innovation.



Top management must-reads

Legacy of Wisdom Rise Like a Phoenix: Win-Win Corporations: Deep Work: Rules for
Author: Gabrielle V Taylor
Scripting Corporate The Indian Way of Shaping Focused Success in a
Publisher: Taylor Strategy Turnarounds Successful Strategies Distracted World
Partners LLC Author: Pradip Chanda Author: Shashank Shah Author: Cal Newport
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The author takes the Price: R499 Price: R399
readers on a journey When ailing companies
into the development of are on the brink of Why did Ratan Tata decide The book talks about
wisdom, and the path collapse, the owners are to pay for all the victims how professionals of
of that legacy through faced with the question of 26/11 whether injured today have started valuing
generations, as seen whether a turnaround in the Taj or anywhere quantity over quality, and
through the lens of a effort is worth shedding else? Why did HDFCs how this has turned them
profound relationship their blood, sweat or Aditya Puri insist that into puppets who try
between a grandmother tears for. The employees, employees leave for home to indulge in extensive
and granddaughter. The the labour union and the by 5.30 p.m.? What do multitasking, dealing
book gives a look at what ancillary units believe that Taj Hotels, HDFC, HUL, with multiple emails and
the word wisdom truly a turnaround is possible. L&T and BPCL have in projects. Newport uses
represents. The world's The shareholders and common? Each of these principles of psychology
greatest thinkers and the the lenders are sceptical companies has exceptional and neuroscience
world's greatest grandmas about allocating further practices when it comes to while explaining how
are on the same page when funds and resources. This stakeholder management. to improve a persons
it comes to the impact of book explains how smart This book gives an inside cognitive abilities and
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lives. Those two worlds of hidden or neglected exceptional companies and encourage workers to
now come together in assets to successfully turn how they are a cut above not take shortcuts for
Legacy of Wisdom. basket cases around. the rest. completing projects.


3rd National Leadership Conclave
The New World Order: Will Asia Dominate the Next 10 years?

22 23 March, 2017 : Hotel Taj Palace, New Delhi

All India Management Association has helped Indian enterprises to adapt to changes through the past six decades and it continues to
be thought leader in bringing about change in leadership vision and strategies. It has set up the National Leadership Conclave as a
platform for Indias leaders from the government, business and intelligentsia to deliberate on the most urgent issues facing the country.
This edition of the Conclave aims to assess the countrys preparedness as part of an economic modeling exercise to forecast global
economic trends over the next 10 years.

The conclave is being chaired by Sanjiv Goenka, Past President, AIMA and Chairman, RP-Sanjiv Goenka Group

Eminent Speakers Include

Jayant Sinha Amitabh Kant R C Bhargava Ritesh Agarwal

Minister of State of Civil Aviation, CEO, NITI Aayog Non-Executive Chairman Founder and CEO, OYO Room
Government of India A S Kiran Kumar of the Board, Maruti Suzuki India Ustad Amjad Ali Khan
Sunil Kant Munjal Chairman ISRO & Secretary DOS Limited Sarod Virtuoso & Composer
President, AIMA & Chairman, D Shivakumar T V Narendran Amaan Ali Bangash
Hero Corporate Service Ltd Chairman & CEO India Region, Managing Director Sarod Master & Composer
T V Mohandas Pai PepsiCo India Holdings Pvt Ltd Tata Steel India and South East Asia
Ayaan Ali Bangash
Senior Vice President, AIMA & Sanjeev Bikhchandani Vir Sanghvi Sarod Master & Composer
Chairperson, Manipal Global Founder and Vice Chairman Print and Television Journalist &
Manish Singhal
Education Services Columnist
Founding Partner, Pi Ventures
Harshavardhan Neotia Vanitha Narayanan Vipul Parekh
Vice President, AIMA & Chairman, IBM India Private Limited Co-Founder, Big Basket
Chairman, Ambuja Neotia Group

For more details please contact: Surajit Bit, Deputy Director CMD
All India Management Association, Management House, 14, Institutional Area, Lodhi Road, New Delhi 110003.
Tel: +91-11-2460 8511, Fax: 011- 24608503, Email:,
A thorough guide to understand, design, and implement competency models.

Square peg, round hole?

The Handbook of Competency Mapping is a hands- competencies across all functional and
on book that a large number of professionals behavioural competencies. This will be helpful
have been using for developing competency for those who want to develop a framework
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be effective in a given job or role. They form Another challenge is identifying commonly
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By understanding the competency model framework for academic institutions have
for a position or organisation, an employee been included or revised in this edition.
becomes aware of the outputs/products/ Competency-based interviewing is an important
services delivered through the position and tool not only for the assessment centre but also
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The previous edition of this book focused for organisations to deliver superior
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OF COMPETENCY that professionals keen on developing the and establish a clear link between individual and
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Seema Sanghi address those challenges. available models might be a good starting point,
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Global ideas and insights. Latest trends, opinion, and practices. Innovative thinking from
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Management Association, its what leaders in India read to succeed.

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Companies should nurture a culture of two-way communication, where both
employees and leaders can engage in open discussions.

Listen to
eedback, in any system or Regular feedback is what appeals to
organisation, forms the most millennials the most. Given that this generation
essential element of growth is proactive, eager to learn continuously, and
and establishes the base for loves to offer ideas, they need seniors and
continuous improvement. A leaders who take the time to converse on equal
work culture that welcomes terms. It is important to reverse the dialogue
feedback as a way of life creates from go ahead with this to do you think this
more opportunities for collaboration, builds is the right thing to do? Communication is a
trust, and most of all generates fresh ideas. One two-way street.
of the best forms of feedback is guidance since it It is crucial for firms to make individuals
is based on mutual respect, confidentiality, and aware of their potential as future leaders. Quite
trust. Organisations are increasingly recognising a few organisations have a reverse mentoring
the importance of how people achieve their model in place, whereby the mentoring roles
goals, not just what they achieve. are flippedpositioning a young professional
Every firm aims for a culture that engages as the mentor and the seasoned professional
people and reflects the firms values. At as the mentee. This helps employees engage in
ZS, a consulting firm born from academic conversations by taking the lead and thinking
roots, continuous feedback is part of the ahead, which in turn boosts confidence and
DNA, boosting employee satisfaction, enables them to see themselves as future leaders
productivity, and creativity. It is natural for in the firm. At ZS, for every new employee,
people then to feel involved and identify with a mentor is assigned for the first six months,
their organisation. someone who has preferably been in the



Regular floor connects are also organised,

wherein senior members of the firm not only
interact with employees on a specific floor
and share updates, but also take questions and
hear important updates and ideas from those
present. Keeping track of what is happening
beyond project work and staying updated can
help one innovate and even think of new ideas
to accomplish routine tasks. Such practices help
build camaraderie across areas of work and firm
levels, too.
Finally, establishing transparency and open
communication in the performance review
process plays a crucial role in trust-building,
productivity, retention, and overall progress.
At ZS, the review and appraisal process is based
on a competency model, which moves away
from the traditional bell curve. This model is
Team leaders need to same role before and could embedded in every aspect of the employee
take the first step and effectively guide the employee lifecycleinterview process, learning
and help with integration. programmes, and review. The review is then
encourage their team However, the most against individual constructive actionable goals,
members to have an significant mentoring happens keeping in mind continuous improvement,
open dialogue. on every project, where the which speaks of the firms culture of learning.
model is of 360- degree The power of the model is that it describes
mentoring instead of a one- expected behaviours all the way to the
way or two-way approach. leadership level, thereby demystifying the path
The way it works is; teams consisting of people to the top.
at all levels of the organisation involved in All in all, feedback and open expression
different degrees, and preferably with a wide need to be a way of life versus a programme.
cross section of the organisation. The teams Employees need to be made aware that their
meet in group settings as much as possible for feedback is welcome. Firms need to look
free exchange of ideas. Leaders learn from fresh beyond formal feedback sessions. Team leaders
perspectives that new associates and cross- need to take the first step and encourage their
functional team members bring, and the leaders team members to have an open dialogue and
mentor by contributing benchmarks and domain share their ideas and aspirations as well. They
ABOUT THE AUTHOR expertise. The Socratic method of asking need to connect with their teams not only when
Abhijit questions dominates. Asking relevant questions issues come up, but on a regular basis. Soliciting
Nimgaonkar is to understand the pulse and expressing a point feedback as a whole is important as it builds
India CEC Head and
Office Managing of view to them becomes an effective way of a trust and rapport, too. When everyone on the
Principal, ZS strong two-way communication between the team works to the best of their ability, the team
leaders and the rest of the team. is at its productive best.


Nurturing the primary qualities that define ones personality is the first step
towards becoming an extraordinary person.

Get hold
of yourself
We are what we repeatedly do. Excellence then is not an c) The bottom of the pyramid represents those
act, but a habit. basic qualities which form the foundation
-Aristotle of success. These have to be imbibed and
While working towards success, people err cultivated over a period of time.
when they look for quick fix solutions. Many While most training programmes focus on
believe in the dont work hard but work smart the top two levels, some just address the top
ideology.You may work efficiently and optimise of the pyramid and covers techniquestime
your efforts, but you cannot take shortcuts and management, teamwork, communication skills,
become successful. conflict management, and handling stressthat
Human excellence is a complex entity and I are essential to become more productive. These
would like to explain it through my concept, the are popularly known as soft skills. The next level
pyramid of human excellence. It has three clearly is addressed through education; the process is
demarcated sections: rigorous and the focus is on building domain
a) The top of the pyramid represents the knowledge.
capability to organise oneself, learn, and While the top two levels of the pyramid are
apply skills to achieve goals and become more important, it is the bottom of the pyramid
efficient. which is essential. It signifies qualities that form
b) The middle segment represents knowledge the basic foundation and need to be gradually
and education, which one needs to acquire or imbibed.
learn in order to be successful. These are the While heading a premier bschool, I got an
abilities which one learns and acquires through opportunity to be a part of the corporate world
rigorous education and other knowledge tools. and deal with aspiring managers. There, I realised


Understand and Practice

and Managing Techniques

Learn and Acquire Applying and

Learning Skills


Education / Knowledge
Imbibe and Cultivate

Critical Qualities of Winners

The bottom of the that the focus has shifted from 1. Will Power/mental toughness/resilience
pyramid, the basic human the bottom of the pyramid 2. Integrity/dependability
to the soft skills on the top. 3. Empathy and human touch
character, has been totally Not only has the bottom 4. Delayed gratification
ignored in the value chain. eroded, but the middle of 5. Pride and self-esteem
the pyramidthe rock solid 6. Initiative and value addition
foundation of knowledge 7. Making friends/being humble
gained through educationhas also taken a 8. Positive attitude
beating. Looking at the quality of manpower 9. Self-discipline
being churned out by undergraduate colleges, 10. Adaptability and flexibility
one gets alarmed. Barring the top institutes, the 11. Believing in yourself
graduate exit level domain knowledge is far 12. Moral courage
below the desirable level. Companies struggle I analysed eleven successful peoplean Army
for months together to train and retrain General, a national leader, a top cricketer, an
them and the cost of this repair is colossal. industrialist, a specially abled person, a top
Unfortunately, India pays for it. The bottom actor, an inventor, a global CEO, and a scientist.
of the pyramid, the basic human character, Instead of displaying an exact figurewhich may
has been totally ignored in the value chain. become too judgmentalI have assigned grades
To sum up, the pyramid has been inverted, of A, B, or C. Not surprisingly, most of them
ABOUT THE AUTHOR upside down. This is the single most important scored A and the rest scored B, none received C.
Virender Kapoor reason for leadership failure and poor industry The analysis brings out two important
is an educationist, performance across the world. inferences. First, these qualities are all important
and author of 12
Essential Abilities Hence, it is time to lay more emphasis on and essential for success in all fields. Second, all
of Extraordinary building the essential qualities that would help great people need not have a top-end score in all
create a strong base. These are: the qualities required for success.



The skills that are These qualities are instance, a number or a value to a persons
acquired at educational embedded in humans and degree of integrity. It is also equally difficult to
are often called nature or quantify somebodys will power, or adaptability.
institutes may enable an character, meaning these It would be futile to gauge these as laws of
individual to find a job. are the basic characteristics physics or chemistry. For example, every
But the actual journey of individuals. Our sun signs action has an equal and opposite reaction as
begins thereafter. are indicative of some of our per Newtons laws of motion. But in case of
very basic characteristics. One human reaction, every action may or may not
would appreciate that people have a reaction, leave aside equal. Traits such as
born under a particular sun sign do share a pride, caring nature, mental toughness, and self
common thread vis-a-vis their characteristics. belief are closely associated with our sun
This would appear to be truer if you look at it signs. In fact, none of us can accurately
from a device, I call macro scope rather than define ourselves. People take a life time to
with a microscope. understand what they are and what they want
It is better to look at these from this from themselves.
perspective because the things we are looking Progress is difficult if an individual is not
at are intangibles. It is difficult to assign, for ready to accept his or her weaknesses. For
instance, one needs to accept that one does not
have many friends but look at it as a gap in life
rather than viewing it as a weakness. The next
step is to fill the gap. If one changes 20-30%
in each of these twelve essentials, there will
be a transformation.
The skills that are acquired at educational
institutespertaining to the top two layers of
pyramidmay enable an individual to find a
job. But the actual journey begins thereafter.
There is a quantum shift in the job profile in
most cases, after a while. The role becomes
wider, more serious in nature; the stakes are
higher and responsibility increases manifold.
At the same time, expectations from peers,
bosses, and subordinates soar pretty high.
There is a shift from managerial expertise to
high-order leadership. That is the time when
the gems at the bottom of the pyramid play a
critical role. In fact, those who have not cared
to develop these qualities find themselves
losing ground among their peers. It is therefore

essential to focus on these aspects as early

as possible.
Keep on sowing your seed, for you never
know which will growperhaps it all will.
- Albert Einstein


Investing in employee health programmes is an economic imperative for businesses.

Fit companies

oday corporate wellness Moreover, excessive pressure leads to higher
programmes have become an instances of disengagement and absenteeism. To
integral part of businesses overcome these problems and help employees
more and more companies manage stress, organisations are now thinking
are taking employee beyond the obvious to develop the right solution
wellness seriously. But the that targets the root causes of stresslack of
truth is that while there employee engagement, mounting work pressure,
are thousands of wellness solutions, many and team friction along with the predominant
companies do not have either a proper strategy underlying issue which is physical inactivity.
or a constructive plan to implement it. They Organisations with effective wellness
are truly trying to figure out the right solution programmes have 34% higher revenue per
to combat rising health issues and healthcare employee and have seen 28% reduction in
costs. It is here that wellness startups such as number of sick leaves. Moreover, it has been
Gympik are trying to make a difference. They noticed that with most effective wellness
are designing constructive and strategic plans to programmes, organisations have experienced
help organisations make employee fitness and 26% reduction in health costs. To build a
health a priority. healthier and happier workforce, Gympik
has initiated programmes that ensure higher
The need productivity, lower absenteeism, higher
According to studies, employees under high engagement, and lower job dissatisfaction.
stress cost 40% more than the average employee, A variety of fitness services are designed and
while almost 33% feel that work stress is incorporated into one, to suit employees
affecting their productivity.1 Job stress affects diverse fitness interests and needs. In addition
creativity and the problem-solving abilities of to that, the change of activity in every session
employees, costing businesses millions of dollars. helps break the monotony of following
Stress may also contribute to unethical behaviour the same exercise everyday and makes it
such as lying to customers or taking shortcuts. more engaging.



motivating. Long-term engagement is key to

prolonged behavioural change and optimal health
benefits. Furthermore, employees tend to stick to
programmes when companies employ motivating
factors, perks, competitions, and other fun ideas
related to fitness. It has been found that working
out in groups helps in peer-to-peer bonding,
building healthy competition, and leveraging peer
accountability and support.
Rewards and badges work as motivating
Corporate wellness programmes should be
designed in a way that encourages people
Path towards mental and spiritual wellness to prioritise health.To make this possible,
This year had a huge impact on the way the companies have to take initiatives and consider
fitness market works and there have been lot of aligning programmes that are reward-based. For
improvements with companies heavily investing example, an employee referral programme where
in initiatives related to improving the employees employees are asked to refer other employees and
physical and mental health and working towards the person referring the maximum employees
nurturing the spiritual, emotional, and social gets awarded, or hosting wellness competitions.
facets of well-being. The year 2017 will be Making people aware of their fitness progress
revolutionary as far as the fitness industry is compared to others works as a motivating factor; it
concerned. However, with the improvement also works as a benchmark and encourages people
in technology, fitness cannot stay away for long to push their limits. People are also inspired by
without technology being seamlessly integrated the special rewards, titles, or badges that signify
with it. To make fitness even more effective and achievements and gain a sense of achievement.
measurable, Gympik has come up with the idea A successful corporate wellness programme
to incorporate wearable devices and apps that is designed by integrating employee relations,
can track the training programme, its duration, leadership, support, qualitative framework,
impact, and much more. This encourages people strategic plan, and employee and employers
to push themselves more towards fitness and active participation.
achieve the best out of the training. With more employers inducting corporate
wellness programmes, it is important to
Social networking plays the key role employ the right set of methods and strategies
Social networks help spread awareness about to effectively employ them. A successful plan
the benefits of healthy behaviour. It has been can ensure long-term employee engagement,
found that when people connect their wellness sustainable behaviour change, higher
programmes to social networking platforms, the participation rates, and significant health
outcome becomes more interesting as it involves results for employees. A thoughtfully planned
ABOUT THE AUTHOR the participation of peers, team members, programme has a higher rate of success in
Amaresh Ojha is friends, and family. This also encourages people building a healthier and creative workforce.
the Founder and to continue their fitness programme since
CEO, Gympik. 1
it is more engaging, fun, empowering, and statistics-the-ultimate-collection


Optimal employee productivity is never happenstance; it results from a focused
strategic approach.

he success and best out of the workforce. The process starts
competitiveness of an with managers recruiting qualified people as
organisation depends employees who will be an asset in the future.
not only on the overall As quoted by Mary Kay Ash, Personnel are
productivity of the workforce definitely a companys greatest asset. It doesnt
but also on the productivity make any difference whether the companys
of each employee. A well- product is cars or cosmetics. A company is only
motivated employee can create a positive as good as the people it keeps.
workplace environment and even motivate Entrepreneurs can ace employee productivity
others. On the other hand, an unmotivated by undertaking the following steps that could
person can create a demoralising atmosphere result in an immense change in the level of
which could result in others too losing faith in employee productivity:
the company.
This makes it crucial for employers to Identify skills set, limitations, and objectives
constantly find new and efficient ways to keep of employees
their employees at their finest. This would also Employees are recruited on the basis of their
ensure that their performance is at peak levels all skills and relevant knowledge of the job they
year around. are applying for. However, these two factors
Ingenious observation and prospective planning alone are not enough to understand them.
by entrepreneurs are essential to bring the Managers must conduct a background check


Transparency in and do a SWOT analysis of Training and skill development
communication is the candidates to understand In the current dynamic and competitive
them. Also, techniques such environment, training has become a must. It
vital to avoid any type
as job rotation should be used develops a mindset among employees that the
of misunderstanding to identify their strengths management does care about enhancing their
between co-workers, and weaknesses. skills set. Further, the availability of resources
seniors, and managers. and mentorship boosts employee morale.
Allocating goals as per
analysis Transparent communication
The next step is setting achievable goals and Transparency in communication is vital to avoid
targets for employees. It could be frustrating any type of misunderstanding between co-
for a person if the manager sets the bar too high workers, seniors, and managers. While being
and chances are that he or she will do something assigned a certain task, an employee must be
unethical to achieve the target. To avoid briefed thoroughly so that he or she has a clear
employee morale degradation and loss of faith picture of the target to be achieved.
in seniors, it is vital for any manager to set goals
that are clearly defined and realistic. Appreciation and incentives are the
best motivators
Appreciation is one of the most important
aspect when it comes to improving employee
productivity. If a manager is successful in
recognising the efficiency of an employee, he
can find the ideal way to motivate and bring
out the best in him or her. Employees cherish
even the smallest appreciation of targets and
achievements, and those who are rewarded for
going the extra mile to achieve set goals turn
out to be more productive and fulfilling in the
long run.

Workplace which one will not leave

The key to employee productivity is an
environment which is warm, kind, and
welcoming. Professional culture must be
established within the organisation, among both
the management and employees. Every need
of the employee must be heard, addressed, and
appreciated whenever possible. It is one of the
external factors that helps achieve targets easily.
There are cases in which the employees could

face stress and other health issues due

to workplace envrironment. The aim should
be to create a family atmosphere in the



Their personal problem should be addressed

sensitively. If an employee is in a crisis, treating
him or her with kindness would have a positive
impact. Employees in such situations develop
loyalty towards the organisation and will always
try to give their best.

Right equipment and technology

Managers should ensure that they provide
their personnel with advanced technology and
devices. This is one of the requisites for meeting
deadlines. It also reduces wastage of time and
ensures higher returns.

Promotion and demotion

Promotions should be done in an unbiased,

objective manner. Personal grudges and other
negative experiences should be ignored while
deciding promotions. Rather, an employees skill,
performance, and professional behaviour are the
parameters that should be given importance.

Managers should encourage employees
to give feedback in order to have a better
understanding of workplace dynamics. It will
help them gain perspective of how employees
view the company they represent.
As a final note, productivity of the workforce
can be improved by making employees feel
Discrimination must be eliminated responsible and getting them to work happily
Any kind of bias can result in huge negative rather than dispiritedly. Teamwork is the ability
consequences for the organisation. Apart from to work together towards a common vision.
being unethical, it could result in an incompetent Alone we can do so little, together we can do
person holding a prominent position. Nepotism so much. If your actions inspire others to dream
can lead to more skillful employees being left more, learn more, do more, and become more,
out. Almost every professional organisation you are a productive leader.
around the world today avoids discrimination of As rightly said by Paul J. Meyer, Productivity
all kinds and also talks about it being an equal is never an accident. It is always the result of a
opportunity employer. commitment to excellence, intelligent planning
ABOUT THE AUTHOR and focused effort.
Gaurav Dureja Employees are not just employees Remember that an increase in productivity
is CEO, Ambrane As a human, every employee has a set of will yield a corresponding increase in output
emotions and feelings which should not be hurt. and profits.


The advent of online pharmacies is changing the nature of consumption in India.



A healthy
ifty-five year-old Lata was Whether it is scheduling lab tests online or
diagnosed with rheumatoid installing a biometric system for tracking
arthritis, one of the common patient information, the Digital India vision
auto immune dieases. Owing for healthcare is empowering citizens to make
to chronic swelling and stiffness smart and meaningful use of technology.
in her joints, her physician
instructed her to stay at home Growth of e-pharmacy startups in India
and take complete rest. The quandary was According to industry experts, the e-pharmacy
apparent: how could she buy medication sector has great business potential and is
regularly if she was supposed to be in bed? expected to grow from an $18 billion market
Her daughter, Tara, who stayed in another to $55 billion by the year 20201. Several
city decided to order medicines for her ailing startups specialising in the pharmaceutical
mother from an online pharmacy. All Lata had sector have witnessed keen interest from early-
to do was provide a valid prescription and the stage investors to capitalise on Indias growing
medicines were delivered at her doorstep. healthcare e-market. The annual production of
Technology has grown in leaps and bounds and pharmaceutical products in India is valued at
the healthcare sector has benefitted the most. over R2 lakh crore, which makes the country one
Today, with digital technology permeating of the largest manufacturers of pharmaceutical
every aspect of our lives, consumers can avail products in the world. Online pharmacies
themselves of better facilities in the comfort have contributed significantly to transforming
of their homes. For India to be a veritable the global pharmaceutical distribution chain.
digitally advanced nation, e-health will provide With the introduction of technology in the
the much-required foundation for excellent sector, a more systematic platform is in place
quality of and better access to medical wherein it is possible to trace all medicines to
services. This will also eventually lead to a the manufacturers, access logs, track any illegal
transparent and efficient healthcare system. drug consignment, and crackdown on counterfeit


Patients unable to make medicines. Moreover, online daily or weekly trips to the pharmacy, especially
daily or weekly trips to pharmacies help consumers the elderly, benefit largely from such platforms.
save a lot of time and In order to serve consumers better, several
the pharmacy, especially discourage self-medication. No e-pharmacies track the date of purchase of
the elderly, benefit largely medicines can be sold online medicines and send a reminder to the customer
from such platforms. without valid prescriptions. of the next date to order, helping them maintain
Unlike offline pharmacies, a the regimen.
patient cannot buy his/her choice of medicine
online, as suggested by a friend or a relative Challenges faced by e-pharmacies
to treat his/her illness. The sale of restricted Though e-pharmacies look like a promising
medicines such as Schedule X medicines cannot trend today, the business is challenged by several
be done online unless a valid prescription is regulatory issues. The pharmaceutical business
provided and examined by a pharmacist. comes under the purview of the Drug and
Cosmetics Act, 1940; Drugs and Cosmetic Rules,
Shift from offline to online pharmacies? 1945; Pharmacy Act, 1948; and Indian Medical
The introduction of e-pharmacies has effected Act, 1956. What the sector continues to lack is a
a shift in the buying pattern of consumers. well-defined dedicated law to govern it. All the
Convenient and safe options, attractive discounts, laws related to e-commerce are defined under
doorstep delivery, and hassle-free services have the Information Technology Act, 2000. India
attracted consumers. Patients unable to make lacks concrete laws defined for different verticals
in e-commerce, which means that e-pharmacies
are also under the purview of this common Act.
The authorities who look into the operations of
e-pharmacies are incapable of comprehending
the provisions stated under the IT Act and there
are high possibilities that different inspectors and
controllers interpret the law differently.
The regulation is a Central as well as a
State licence subject under a rigid system
of inspectors and controllers. So, it is not
uncommon to see different interpretations
and views take shape due to the lack of
understanding. Further, archaic laws and
impractical regulations, make it difficult for
e-pharmacies to operate.
The Food and Drug Administration (FDA) of
India often adopts a biased approach towards
e-pharmacies despite them adhering to all
necessary rules and regulations. The All India
Organisation of Chemists and Druggists

(AIOCD) and other organisations have raised

concerns about the safety aspect of online
pharmacies. While online pharmacies have
helped generate data for the government


A customer no longer to monitor public health deals unlike at offline stores that sell medicines
needs to worry about the and revolutionised the way on maximum retail price.With the convenience
consumers access healthcare, to shop anytime, anywhere, get free delivery, and
high cost of medicines the lack of proper regulatory other assisted services, an increasing number of
as e-pharmacies provide and implementation-boosting consumers is inclined to shop for medicines online.
attractive deals and mechanisms is proving to be Online pharmacies not only have the potential
discounts on medicines. a bane. to save people from several health implications
In the US, online pharmacies but also bring into effect a more transparent
are governed by the same system. Neither can medicines be hoarded
laws that are in place for offline ones. Both are illegally nor can poor-quality medicines be
required to have licenced pharmacists and a maintained in stores. With tracking facilities
valid prescription. made feasible by e-players, a consumer can
file a complaint or report health issues after
Are more customers switching to online consumption of the medicine.
purchases? Online pharmacists are not just a more
While the future seems bright for new entrants in convenient and cost-effective alternative to their
the e-pharmacy space in India, there is an urgent offline counterparts, but are a more trustworthy
requirement for well-defined laws for the smooth and safer platform to rely on for all medicinal
functioning of their business. Unlike offline stores, needs. Indias healthcare landscape has great
where at times people are forced to wait in long potential to improve substantially with the
queues to buy medicines and haggle for change, birth of more online players that will empower
online stores eliminate all such inconveniences. consumers to access high-quality and affordable
ABOUT THE AUTHOR A customer no longer needs to worry about the healthcare services.
Pradeep Dadha is high cost of medicines as e-pharmacies provide
CEO and Founder, attractive deals and discounts. So, customers have 1. EGTOILRRNF0T3J4OfUg9SN/Will-online-pharmacies-work-
the option to avail themselves of the best possible in-India-and-are-they-even-lega.html


Firing employees can be more expensive than fixing a problem.



rganisations lose more
when office ghosts
are busted. While this
statement seems counter-
intuitive, I believe that
organisations would do
more good by making sure
ghosts are not created rather than busting them
each time.
Well, we are not talking about real spooky
ghosts or haunted buildings; we are talking of
office problems and employee issuesghosts
that exist in every office. Every office has them
some ghosts are evident to managers, while most
are hidden. As in the case of any illness, only
the symptoms keep surfacing. Managers need to
identify the cause and find a solution rather than
just bust ghosts, which may lead to creating more
of them in the future.

What is the real cost of busting office ghosts?

Busting ghosts or firing employees, or making
their exit easy is perhaps a quick and easy solution.


By replacing the This action does get rid of such cases is that there is a high chance the ghost
employee, the manager ghosts, but what is the cost? will return to haunt the workplace. By replacing
Are they permanently gone? an employee, the manager has only driven the
has only driven the Will they never return? spirit away, only to have another ghost haunt in
spirit away, only to have Multiple studies have shown due course of time.
another one haunt in due that attracting a new customer It is therefore more critical to understand why
course of time. costs five times more than there are office ghosts in the first place, and try
retaining an existing one. to solve the problem.
The same logic holds good
for employees as well. Often, managers do not The solution?
foresee the real cost of replacing the employee, In organisations that encounter the problem
but these could include: of office ghosts, there is a pot of evil energy
Advertising cost: even on social media, creating them. Hence companies should work
considerable time is invested for identifying on removing these pots and create sustainable
the right candidates workplaces for employees. Some of the most
Screening and processing costs: from initial common areas that organisations could evaluate
selection to cost of multiple interviews for correction could be:
Onboarding costs Making line managers more
Cost of learning curve for the new employee: appreciative of people: One of the
In majority of cases, this period varies most critical roles of HR is to make every
from three months to even a year in large manager in the organisation appreciate his or
organisations her team, and to cultivate the habit of managing
Cost of ripple effect: the cost of low morale of people well. Many a time, a well-planned HR
the team when a person leaves the company initiative is crushed to the ground on account
Cost of cultural fit: Cultural fit is now of poor handling by the managers. The weak
recognised as one of the biggest determinants link in any HR programme is the way line
of good employee performance; a misfit could managers take it forward to front-line executives.
create trouble across the entire team. Unless this link is strengthened, firing a ghost will
The estimate of the true cost of replacing only result in another being created with time.
an employee could be five to nine times the Creating an open and inclusive
monthly pay cheque. And this does not include culture: In recent times, many leaders have
the risk a company has to undergo owing to the spoken about the need for building a more
dip in customer service levels on account of inclusive organisational culture. But if asked to
new hires. define an open and inclusive culture, majority
of the front-line managers would fail to give
Does this cost result in positive ROIs? a convincing answer. The risk is that high
All organisations talk about positive return on performers are the worst offenders in this area.
investment when businesses are evaluated. By Many of the high- performers fail to understand
the same logic, should not the People Office that an organisation is diverse and to be
and all people managers in the organisation sustainable, it needs to accommodate different
Vishwanath P is understand the ROI of replacing employees?
the Chief - Strategy
kinds of people in teams. A stated policy on
and Project The answer is a definite yes. Given that the inclusive culture implemented by a manager
Management Office, cost of replacement is so high, would busting who wants only his or her clones in the team is
Future Group.
ghosts have a positive ROI? The bigger risk in sure to keep creating office ghosts.


Every employee has a Ensuring employee Creating social connect: Every employee
social world and the alignment: Alignment is not has a social world and the greater the positive
just about setting KRAs and impact organisations have on this world, the
greater the positive measuring them on time. It lesser ghosts they would create. HR managers
impact organisations goes beyond this and extends should not become event managers who end
have on this world, from how employees are up managing birthdays to corporate picnics to
the lesser ghosts they selected in the first place off sites, for the sake of maintaining the social
to how their careers are connect. True social connect is established when
would create.
managed in the organisation. employees are understood as humans first. Set-
Alignment will remain an ups that do not understand how humans think
elusive territory unless every and act will create ghosts in quick succession.
employee is convinced about his or her role in HR managers should involve front-line
the organisations growth, and this is followed managers in getting rid of office ghosts.
up with appropriate role measures, authorities, Together, they need to clean up the negative
and rewards. energies that create these ghosts.


Will demonetisation be a push or pause for the real estate growth journey?



Firm ground
he governments recent Pre-demonetisation: reforms
demonetisation move is one As per recent reports, the parallel black money
of the boldest decisions the economy holds R30 lakh crore of the countrys
country has witnessed since economy, which amounts to nearly 20% of
Independence. The ban on the total GDP.1 The real estate sector accounts
R500 and R1000 currency for almost 11% of the GDP, but unfortunately
notes led to chaos at the anywhere between 30% -40% of the transactions
ground level, but most citizens were optimistic involve black money.2 If these unaccounted cash
and supported the crackdown on black money. transactions are included, the sectors overall
This step, along with reforms in various sectors is GDP contribution would be much higher. The
sure to project India as a promising economy on potential of the sector has remained more or
the world map. Although the primary motive was less untapped for a considerable period of time,
to curb black money, it will have a far-reaching as only half of the deals are registered through
impact on the economy as a whole. formal channels.
The impact of demonetisation on various Before announcing the demonetisation drive,
sectors will be felt in varying degrees, depending the government had initiated a few reforms
on the amount of illegal transactions involved in in the real estate sectorin the last couple of
each. The most affected will be the real estate yearsto protect the interests and rights of the
sector as it has always had significant appetite common man. It had also launched a self-income
for black money consumptiontypically, one- declaration scheme, offering the black money
third of the transactions involve money from hoarders a chance to come clean. However, the
unaccounted sources. governments scheme went mostly unheeded


Sale of luxury apartments by real estate developers. cash is required. Cash components changes
and villas are the most The reasons behind the cold several hands before reaching the final buyer.
response were: first, the real Demonetisation will make it extremely difficult
affected in the retail estate sector was already facing for any buyer to pay in cash. The seller will
housing sector. a liquidity crisis owing to poor also not accept such money. As most of the cash
demand and non-conclusive transactions will be curbed further, builders
deals. This situation compelled them to tightly will be compelled to reduce cash transactions
hold the cash in their wallets. Second, the fear and join the mainstream economy. In the given
of losing further liquidity by paying tax on circumstances, the only option left with property
undisclosed income (in addition to the regular dealers is to buy property through legal financing
tax). Third, they adopted a wait and watch with due respect to taxation norms. With this
approach in the volatile atmosphere. move the middle class dream house could be
able to see the day light. This will automatically
Inherent legacy of unaccounted money bring down property prices.
Basically, there are two types of home segment
buyers. First is the primary buyer who buys Post demonetisation: economic outcomes
property and finances it through financial The demonetisation impact on economy can be
institutions or banks, where minimal cash measured in the phases of short-term (days to
transfers take place. Second is the second sale three months), mid-term (three to 12 months)
buyer of housing propertythis is where most and long term.
deals are in cash. Hence, second sale market Short-term effect-buyers market: Lack

is going to be affected more, as maximum of excitement in sector will push down rate
transactions use illegal money sources of of inflation. Consequently, public sector banks
unauthorised accounts. Sale of luxury apartments may reduce interest rates on home loan and
and villas are the most affected in the retail financing. Experts fear that for the next few
housing sector. months there will be little or no transactions
Retail dealers will be badly hit. This segment in the land, commercial spaces, and residential
comprises organised and unorganised; high-rises units in the resale market (secondary). Buyers
and slums. All of them either generate or handle with fair income will adopt cautious approach
black money. Transactions in the slum segment hoping that prices will decrease further.
are dominated by cash and remain outside The fear psychosis of investment recovery
the revenue system. Those in the white-collar among sellers would restrict them dealing in
buildings have a white-to-black ratio of 70:30, properties at this moment. Non-availability
60:40, or even 50:50 depending on the area in of prime properties would further spread
which the property is situated. On the contrary, disappointment in the sector.
those which use minimum cash components Medium-term effect-innovative ideas:

commercial office property, rental property, In the medium term, gradual improvement
leasing, and legal financing will not get in liquidity and reduced interest rates could
much affected. make homes affordable to the middle-income
This sector inherently carries the legacy of class. Due to financial stress, some properties
black moneyright from the purchasing of land might be available on sale with discount in the
from farmers to converting it to commercial secondary market. Some market gimmicks may
property to getting approvals from various be applied to attract customers. Construction
government departments, large amounts of cost may be pushed further down to recover



INDIA GDP FROM CONSTRUCTION entities (developers and funds) will ensure
more liquidity and transparency. According to
2377.8 the data released by Department of Industrial
2285.27 2290.92
Policy and Promotion (DIPP), the construction
development sector of India received Foreign
Direct Investment (FDI) equity inflows of US$
2051.93 24.19 billion between April 2000-March 2016
1975.08 2000 much to the relief of cash-strapped and debt-

IND Billion
1916.56 1914.92 1927
ridden real estate sector.
Broader economic spectrum
Demonetisation process will leave its footprint
1600 strongly on the real estate sector, specifically, and
Jul 2013 Jan 2014 Jul 2014 Jan 2015 Jul 2015 Jan 2016 Jul 2016 also on the various spectrums of the economy.
Source:, Central Statistical Organisation, India For example, under-construction projects will
receive a jolt and will be forced to review the
overall situation. Without sufficient demand for
The real estate sector the investment on expensive housing for a prolonged period, manufacturing
is a high employment deals. To some extent innovative units of construction materials would face the
ideas of cheaper and efficient heat. Transportation, banking, and financing
generator. construction techniques may sector will also suffer due to this slow down.
come up during this period to The real estate sector is a high employment
further adjust reduced prices. Implementation generator. Any slow down would result in lesser
of real estate reforms will inject confidence employment opportunities in the under skilled,
among the buyers to surge revival mode. The semi-skilled, and unskilled categories. According
negative impact will be reflected on the sales of to a 2015 report by ASSOCHAM over 75% of
premium higher-end properties. the 3,540 real-estate projects, with investments
Long-term effect-standardisation: worth over R14 lakh crore, across the country
Over a period of time, fair deals will restore are yet to begin. Once these projects start
transparency. Through formal intervention and functioning, huge employment opportunities will
involvement of the banking sector, banks will be a possibility.
play an active role in price negotiations. They Demonetisation has boosted confidence
may further enforce regulations to declare among citizens. The governments next move
official rates of land and property, which has should be to ensure implementation of reforms
been the norm in the Western real estate such as single-window clearance, digitisation,
Dr Aruna Dhade, is market for quite some time. Prices could be corporatisation, professionalism, prompt
Assistant Professor
of Finance. She controlled by setting upper and lower limits on services, and more transparency in the
has been teaching a price band range. housing sector.
graduate and
In the long term, institutions will come
courses in forward to align and comply with global 1
finance at Indian standards. The sector, with corporate governance capital-black-economy-shrinking-pegged-at-20-per-cent-of-
universities and gdp-2835783/
Qatar University practices, will push ease of doing business and 2
(AACSB) for the last foreign investors will be more open to explore Update_Indiasbattlewithblackmoney_26May2016.pdf
19 years. 3 Emerging Trends in Real Estate Asia Pacific 2016 report by
opportunities in India. The entry of more foreign PricewaterhouseCoopers (PwC) India.


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