Volume - 1, Issue - 2 February, 2010

A Bi-Monthly Magazine

A Student’s Initiative
 DIRECTOR’S
MESSAGE

A remote village in Kerala is famous for a unique feat. The artisans in this
village, Aranmula have perfected the craft of making a mirror without using any
glass. Through one of the toughest and most skilful jobs humans have ever
done, these gifted people have found the right mix of various metals which
when alloyed together give one of the best mirrors in the world, a mirror that
has zero convexity - one that reflects the truth – the real pratibimb.

Going through the second edition of PRATIBIMB, the student magazine of

TAPMI, I was reminded again of the skilful art that made the Aranmulakannadi,
the world famous. Like that work of art, the magazine had taken extra pains to
reflect the contemporary thoughts and action in management without any
skewness or bias. It needs a lot of courage to look at things and form unbiased
opinions. To a large extent the second edition of Pratibimb achieved the same.

The magazine provides a holistic view to management, from the perspectives of

various specializations offered. Not only does it include insights from our very
own students, but also embraces ideas from the best brains across the country.
The magazine also has expert inputs from across the industries, thereby
bringing the academia and industry together.

It gives me immense pleasure to congratulate the team members for their

sincere and consistent efforts in bringing out this edition of Pratibimb and would
also like to extend my heartfelt wishes for all their future endeavours.

Saji Gopinath

2

We proudly present to you the second issue of
Pratibimb.
Pratibimb, as the word implies, is the
“reflection” of management. It is the
reflection of the latent creativity that exists
in every sensitive human mind; a
materialization of the desire to express
oneself. The purpose behind Pratibimb would
remain the same - to give a platform to
individuals to express themselves in the best
possible manner with ideas that would
produce change.
Continuing with the tradition of Pratibimb,
we have added a new section called
„INSIGHTS‟ which encapsulates the lives of
renowned management thinkers of our era.
The first article in this section is contributed
by our faculty, Prof. Vijaya, who has
interests in Individual and Interpersonal
Dynamics.
We thank all the students from various
colleges who have put in their efforts to pen
down amazing articles and have also poured
in entries for our finance game „Beat-The-
Market‟. The entries for „Beat-The-Market‟
were judged by Mitesh Thacker, chief trading
analyst, and Prof. S. N. Rao, Associate
Professor of Finance at SJM School of
Management, currently on sabbatical leave
at T.A. Pai Management Institute .
There are many more articles which we are
sure will grab your attention and are aimed
to tickle the grey cells in you..
We hope Pratibimb would provide a standing
ground for students to not just compete
amongst their peers but also to show their
skills, talent and knowledge to the world
Editor’s Corner
outside which includes the vast Alumni base
of TAPMI and organizations in the
corporate world.
At the end, I would like to congratulate all
the members of Team Pratibimb who were
behind the success of this issue. I would also
like to thank to our Director Dr. Saji
Gopinath for his inspiration and Prof.
Chowdari Prasad and Prof. Jaba Mukherjee
for their continued and valuable guidance.
We thank all those who gave us feedback
which includes many corporate wizards,
alumni, faculty and students who tried to
improve the issue. I‟m sure you will be able to
notice the change. Please continue to send in
your suggestions and contribution to
pratibimb@tapmi.edu.in.
Enjoy Reading!!!
Rahul Garg
Chief-Editor
Rahul Garg
Editors
Rohit Kumar
Preetha D.
Creative Designer
Varun Sunil
Member
Hima Sachdeva
3
 Contents

Marketing
Brands in Rural India 5
Commercial Breaks: The Despised Hygiene? 8
CRICVERTISEMENTS 10
Finance
Will Chinese Yuan become the next reserve cur-
rency? 13 10
2010- The Year of Commodities 16
Interview
An Interview with Professor Jagdish Seth 20
HR
Opportunity recognition and project selection:
Some approaches for small enterprises 24 20
Marvin Bower – The Management Thinker 28
Expectations from the new age employer
Systems
32
24
Social Networking: Is it really social? 36
Operations
Achieving competitive advantage through supply
chain 38

08 28
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Pratibimb | Feb. 2011
Marketing Mania

BRANDS IN RURAL INDIA

Shanu Singh | NITIE, Mumbai
Brand, by definition, is an intangible entity which income in comparison to that of rural (BPL and
is designed and projected with the aim of striking middle class) region.
a chord with the consumer behavior. This
Characteristically both the rural and urban
definition is true for most of the brands in the
demography can be positioned at different levels
urban context, since, all the marketing drives for
in Maslow‘s hierarchy of needs pyramid. Since the
brands are designed specifically as per the demand
urban class look at brands as more of a status
and psyche of the urban customer e.g. DoCoMo
symbol or differentiator, it can be positioned at
branded itself as a service provider for the ―urban
higher level in the pyramid, while rural majority
young‖ generation.
can be positioned at a lower level since it looks at
But as we move to brands as an item
rural India, most of necessity. Since
of the marketing each different
and branding hierarchy level
gimmicks start to projects different
look out of place. kind of needs,
Before application of the
understanding the same branding
cause, we must practices will not
understand that a work for people
brand has got both who live in
behavioral and altogether different
personality traits. worlds with
Therefore, it is different set of
more of a dynamic priorities and
entity whose mindsets.
character varies as
Though the above
the environment
analysis looks
changes.
simplistic, some of the multinational corporations
In India, we have diverse demography where only learnt it hard way, by trial-failure and many,
distinction is made not just on the basis of sex or still, need to learn. If we talk about the FMCG
age, but also on the basis of the background, sector specifically, on average 40-50% revenue
culture and ethnicity. And this distinction comes from the rural market but as per the
complicates as we divide the population further statistics, under this segment, organizations still
into urban and rural India. We still have more don‘t have focused strategies to deal with rural
than 60 percent of population residing in villages, market or they have a strategy, but allocate only a
hence forming the core part of our population, small part of branding expense quota to it.
while remaining 40 percent resides in urban cities.
But now the scenario is changing. In today‘s urban
Demography (middle and rich class) in the urban
market, organizations have to operate in intensely
region is better educated along with higher
competitive low margin environment. This is

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Pratibimb | Feb. 2011
forcing them to venture out into the untapped
rural market. Since the same branding campaign
couldn‘t be applied in rural India, organizations
are coming up with new branding strategies, new
product range and ingenious distribution network
dedicated to rural consumers.
Scope for Innovation
On the brand marketing front, though we have
seen some magnificent early efforts which made
brands synonymous to the product (Colgate for
toothpaste, Lifebuoy for Soap), major innovations
required to drive the rural demand are still
lacking. A few attempts have been made in case of
product segments like tractors and fertilizers, but
very few are from the cross-market segments.
Again, attempts have been made to localize the
marketing campaign by translating them into local
languages, but they couldn‘t strike a chord with
people since the regional touch had been ignored.
Rural marketing needs to be focused on, since
majority of population there, is uneducated and
highly sensible to culture as well as the value
system. Thus, advertisements should be designed
to project the product as an extension of local
culture. For example instead of selling ‗Ghee‘ in
cylindrical pet bottles, specially designed ‗Matka‘
shaped bottles could be used.
Rural Branding Strategy
Strategy to Connect: Brands like ITC and HUL
have come up with the concept of E-choupal and
Project-Shakti. These projects are launched to
create symbiotic relationship between village
Marketing Mania
leadership and organization by acting as facilitator
for carrying out effective agro-trade. Since village
leadership plays a vital role in word of mouth
publicity at the village level, it can provide a
conducive environment for launching a new
product under the umbrella of facilitator
organization. These are the perfect examples of
using benevolent leadership along with
combination of product profiling.
Product Re-designing: Brands can be launched in
specially packed variant of its flagship items to
suit the demand and purchasing power of rural
India. Since these variant will be smaller and
cheaper, people can easily afford to buy it. This is
the perfect example of matching the brand
personality with that of environment. Example:
Specially packed biscuits or bread with fewer
slices (3/4) could cater to huge rural market.
Ingenious Distribution: Lakhs of women in rural
areas earn a living by selling brand products and
thousands of enterprising young men and women
are being enthused to become part of the vast
distribution system as a means of starting on the
ladder of entrepreneurship in their own right.
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Pratibimb | Feb. 2011
Organizations can leverage upon this cheap,
motivated and highly penetrated task force for
grass root brand building and distribution. This
model can be used as a pilot project for launching
the new products at village level.
Conclusion
In nutshell, it can be said that currently in the
rural market, a brand may be more like a myth,
but the scenario is changing and organizations are
working towards capitalizing the opportunity by
creating brand awareness and hence vouching for
brand realization at rural level.
Marketing Mania
References
1. HUL plans major rural push,
thehindubusinessline.in, June 2010, http://
www.thehindubusinessline.in/2010/06/09/
stories/2010060952690500.htm
2. B. S. Raghavan, Rural India as growth engine,
thehindubusinessline.in, June 2010, http://
www.thehindubusinessline.in/2010/06/04/
stories/2010060450240900.htm
3. How India Earns, Spends and Saves – A Max
New York Life-NCAER case study
highlights the need for financial literacy,
financialexpress.com, Feb 2008, http://
www.financialexpress.com/news/how-india-
earns-spends-and-saves-a-max-new-york-
lifencaer-study-highlights-the-need-for-
financial-literacy/270710/0
4. S.Jain, K.Swarup, Effect of advertising on
enhancing brand personality and consumer
buying decisions, Journal of International
Management, v.6, July-Dec,2009
5. Rural marketing in India: A case study By G.
Srinivas Rao
6. India Brand Equity Foundation (IBEF) study
on Indian rural market
7. Unilever in India - Rural Marketing
Initiatives, a case study. ICMR.
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Pratibimb | Feb. 2011
COMMERCIAL BREAKS: THE DESPISED HYGIENE?
Rohit Arora | TAPMI
―Advertising may predispose individuals to
respond positively or negatively towards a product
or brand. Such elements, as the execution of the
advertisement, the mood created by the
advertisement, the degree to which the viewer is
aroused, and even the context within which the
advertisement is received, (e.g., television program
or magazine), may affect their feelings about the
advertisement, and in turn their feelings about the
product or brand (Stern and Zaichkowsky,
1991).‖1 Another important variable which might
affect the viewers‘ feeling, especially for a TV
advertisement, that can be included in the list of
variables given by Stern and Zaichkowsky, could
be the time length of the advertisements or of the
commercial break itself.
In spite of being the costliest media for
advertising, TV has always been regarded as one
of the most efficient and economic media to reach
consumers, due to the shear fact that it provides
more reach, in terms of eyeballs grabbed, to the
advertisers.2 Though there is a lack of statistics in
this field in the Indian context, many reports
suggest that the increasing clutter of
advertisements has started creating a repulsion
effect on the viewers for the advertisements.
While the early 70s saw a norm of having a 60
second advertisement in America, the same for the
present day has come down to around 30 seconds,
Marketing Mania
with more than 10% of the commercials booking
spots for less than 15 seconds. The same trend
seems to be followed in India as well. With the
overall break time being increased over the period,
the number of advertisements being aired has
increased by a large amount, creating a feeling of
irritation among the viewers.
With time, the consumers have been empowered
more than ever, by technology, and it has become
imperative to know if the viewers, so sought after,
actually watch the large number of advertisements
or if the evolving technology has enabled the
viewers to skip the advertisement by quickly
changing the channel (known as channel grazing)
to watch a recorded version (zapping or zipping) 3,
of the show, courtesy, the invention of DVR, just
to ensure that they are not disturbed by the long
chain of advertisements which sometimes
continue for longer durations than the show itself.
The increasing number of downloaded daily soaps
does indicate that the consumers are shifting
towards other technologies to watch things which
were limited to T.V. till a few years back. A
report by Morgan Stanley published in 2009,
based on the experience of an intern, states that,
there is a lesser inclination for television among
teenagers or the younger generation; this is
supported by a number of factors, one of which
is, the large number of advertisements on T.V.
which they want to avoid.4
Though many researchers mention the extent of
clutter in their research, most of the studies still
have been restricted to a general attitude of the
viewers towards the advertisements, various
factors or stimuli which they judge the ads on and
their effectiveness. Kallem and Naved (2002)
mention that ―There is a strong possibility of
irritation on the part of the viewers when their
popular program is interrupted by the
commercials. Because of this, if a negative attitude
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Pratibimb | Feb. 2011
Marketing Mania
develops towards the TV commercials, then the advertisements. The problem can further be
purpose of airing them will become self subdivided and studied to find an optimal
defeating.‖5 solution. What can be the reason of a stated
aversion towards advertisements if the viewers
The first question to ask here should be – Is it
enjoy the programs more with breaks? One
really true that advertisements are driving the
possible reason might be the repetitive nature or
viewers away from television set or is it just a
lack of content in the advertisements. The present
perception? At the end of the day, everyone might
world‘s consumer wants to make the best out of
find advertisements intervening in their joyful
the time and resources available and lack of any
expedition to their favorite
program but as mentioned by
Anthony Ulwick in his book
―What customers want‖, we, as
consumers, never know what
we really like and what we
don‘t. It, hence, is important to
first understand what makes
the viewers change the channel
during a commercial break.
Viewers have more than one
reason for changing the channel
during a commercial break, and
new information demeans this desired outcome.
their tendency to avoid breaks, is just one of those
Hence, may be campaigns with more creativity
many. Viewers also look at commercial breaks, as
and a refreshing look might, will be able to break
an opportunity for refreshment/change or even
through the clutter. Can we use it to explain the
relief from the prolonged program, which they
success of the Vodafone campaign? May be not
exploit by surfing through the channels and/or by
yet, not until the phenomenon is established but
indulging themselves in some other activity – a
still, a slight relation can be observed for sure.
phenomenon which can be explained by the term
- ‗Multitasking‘.
References:
Nelson, L. (2010, October), in his research paper
1. Singh, R., Vij, S. (2008). Public Attitude
―Defend Your Research: Commercials Make Us Towards Advertising: An Empirical Study of
Like TV More‖, exclaims the same by
Northern India. ICFAI Journal of Marketing
mentioning the cognitive importance associated
Management.
with an advertisement during a movie or a TV
show by the viewers. The research which studies 2. Ronald, W., Whitewill, K., & Thomas, J.
the impact of advertisements on the likeability of (2008). Advertising Procedure (16th ed.).
a movie or a TV show among different viewers Pearson Education, Inc.
explains that even though the viewers when asked 3. O‘guinn, T. C., Allen, C. T., & Semenik, R.
directly may prefer a commercial free program, J. (2003). Advertising and Integrated Brand
they eventually enjoy a show more with Promotion (3rd ed.). Vikas Publishing
commercial breaks. House.
Where does the tradeoff come to an end then? 4. Khan, K.M., & Khan N.M. (2002). Facets of
Viewers need a break, even though they might not Indian Advertising and Consumer Behaviour:
realize it and will not accept the intervention of An Empirical Approach. Kanishka Publishers.

9
Pratibimb | Feb. 2011
Marketing Mania
CRICVERTISEMENTS
Siva Harsha Karra & Ankur Gajjaria | TAPMI

Cricket is an excellent sport where different teams over starts and the number of balls refer to the
play the battle of the bat and the ball on-field, but number of seconds available to telecast. With the
there also runs a parallel battle off-field where changing game, the avenues to advertise on air,
many companies play the game ADICKET to have grown dramatically. They can be broadly
create an impression classified into ON-Field
in the viewers‘ minds and OFF-Field.
in the short time-slots
Many players across
available to air their
different industries have
commercials. The
played the Advertising
game fought here,
Premier League (APL)
depends on the
in IPL3. Some
batting order or the
interesting findings
quick runs they make
about the different
in those few balls.
players‘ performances,
The batting order in
strike rates and averages
ADICKET refers to
have come out in the
the order of the
research study
conducted by us
represented in the above
graph.

The most number of

advertisements (Graph:
Frequency) aired was by
VODAFONE with the
ZOO-ZOOs providing the
entertainment which had
already created their fan
base. Others on the top
were TATA PHOTON
PLUS, LG INFINIA &
advertisements aired in the respective break; it KARBONN. TATA PHOTON PLUS was a
may be just after the wicket or just before the next ―boom boom‖ player scoring quick runs in few
balls. The

10
Pratibimb | Feb. 2011
Advertisement just showed the price reduction to
Rs 2499 in 7 seconds and was aired just before
the bowler got ready at his mark to bowl the next
delivery.
The new IPL season has brought 93% new
advertisements while some companies persisted
with the old ones. The zoo-zoo advertisements,
for instance, brought out the new ―Power to
You‖ series of advertisements. Other companies,
Maaza for instance, continued the same theme of
―Aam ki pyas bujhao‖ advertisements, but with a
new ad launched at the time of IPL. Consumer
electronics items like mobile phones, T.V. etc are
the most frequently aired sector. The new low
cost Mobile companies like Karbonn, Micromaxx
and Lava etc. stole the show.
The commercials varied across different types,
Figure 2. Types of AD's
from humor to Energy.
Most of the
advertisements (26 %)
were informative (figure.
2) while 21 % were
inspirational as they
inspire the viewer and
address the aspirations of
the viewer, especially the
youth. 18 % of the
advertisements used humor to
put the point across and the uniqueness of the
content was the hallmark of 12% of the
Marketing Mania
advertisements. Since IPL matches are considered
family viewing, only 1% of the advertisements
had sensual content with JK cement being a one
OFF. The batting order i.e. the slot in the break
had the opening batsman VODAFONE scoring
most of the times and the pinch hitter being
TATA photon plus.
The batting order i.e. the slot in the break had the
opening batsman VODAFONE scoring most of
the times and the pinch hitter was TATA photon
plus. The remaining players came at different
slots. The slots in the break have different
monetary costs associated with them and here
comes the role of the advertising firm to select the
right slot with its financial limitations. The other
sectors included DTH, Insurance, Beverages,
Automobiles and FMCG etc. Godrej‘s ―Go Jiyo‖
social campaign created a little curiosity initially,
but faded away, as the tournament progressed.
The key player in an advertisement is the Brand
Ambassador be it the ZOO-ZOO, or a celebrity.
Advertisements with Akshay Kumar were aired
more frequently than any other celebrity based
commercials. Abhishek Bachchan‘s advertisements
were also recurrently aired. Among sports stars,
Sehwag and Gambhir together had the maximum
number of advertisements aired during IPL 3.
The statistics showing each player are interesting,
but the actual performance (Figure.3) was
observed using a detailed market research survey
which was conducted using a questionnaire with
Figure 3: Brand recall
some interesting findings coming out. Telecom
ads like VODAFONE, AIRTEL and IDEA were
one of the most highly advertised and had a high
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Pratibimb | Feb. 2011
recall value. Viewers were looking for creativity
factor in the advertisements followed by the
emotional factor. The Realistic factor was the
least important, according to respondents. There
were only a few ads that reflected the emotional
factor. Most of the viewers took a break or
switched channels during the strategic time out
and during the innings break. So, the
advertisements shown during these times were less
recalled. The Ticker advertisement had a very low
recall.
Marketing Mania
Now the time has come for the marketing
companies to explore the OFF-Field
opportunities. The most important player here is
the spectator. The only way he‘s involved, as of
now, is by holding the ‗4‘ and ‗6‘ placards, but
he‘s going to play a major role in the time to
come. Here‘s the challenge: To come up with
ideas where the marketing company makes him
promote the brand directly or indirectly.

FACTORS to be considered by a
Sports Marketing Firm
1) The viewer is mostly interested in an
entertaining or an emotional commercial which
catches his attention and thus high recall value is
associated with high exposure.
2) The slots in the break have different monetary
costs associated with it and here comes the role of
the advertising firm to select the right slot within
its financial limitations.
3) Another key factor in an advertisement is the
Brand Ambassador may it be the ZOO-ZOO or a
celebrity.
So, the challenge is to come up with creative
refreshing short commercials with the right brand
ambassador. But, the question to be answered is whether
―WE‖ have any role in defining the rules of the
The other prominent forms of commercials are game ADICKET.
the bottom of the screen Tickers and the In-
stadium screen commercials. The In stadium
screen Ads which are aired during the over is an
indication that the aired time of the game cricket
is decreasing and the advertising time is
increasing.

The tickers used at the bottom of the screen was

used by the sanitary ware company Jaguar and
automobile company Hyundai which promoted
all their brands from Santro to Verna with
different taglines associated with different
incidents like the fall of a wicket or a boundary
etc. CBZ also promoted its Xtreme bike using a
ticker, with every six hit.

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Pratibimb | Feb. 2011
WILL CHINESE YUAN
RESERVE CURRENCY?
Abhik Saha | BIM Trichy
Introduction
To begin with the first point let‘s see what the
basic requirements are for a currency to become a
global currency. The first and the foremost point
is probably the confidence that most of the
nations have on their own economy. All other
reasons mostly revolve around this main factor.
To illustrate this point let‘s take a virtual example.
Say there is a basket of nation that exists like
‗A‘,‘B‘,‘C‘,‘D‘,‘E‘ and each of them have a distinct
currency of their own. Now the country that is
economically better-off has an edge over the
others to position its currency as global currency,
simply because of the reason that the other
countries perceive that particular country to be
the most stable, independent and as one, which is
unlikely to make any drastic changes in its
economy and more specifically, its exchange rates.
Now what problems can arise due to sudden
changes in exchange rate? Let‘s denote currency of
each country like currency of ‘A‘ as ‗Ax‘ and so on.
Also assume ‗A‘ is better positioned among the
other 5 countries in terms of its economy. Now
say ‗B‘ makes some export to country ‗C‘. In this
trade, ‗B‘ would prefer to take ‗Ax‘ from ‗C‘ rather
than the home currency ‗Cx‘. Simply because ‗Ax‘ is
perceived to be more stable than ‗Cx‘ in terms of
exchange rate fluctuations due to its strong
economy.
Now what signifies a strong economy and it‘s
resiliency to disturbances in global phenomenon?
The size of the economy is no doubt an
important indicator of a strong economy. Also the
country is presumed to have a current account
surplus arising out of trade balances. The size,
depth and openness of financial markets of the
country are also very important parameters for
becoming global currency. Another factor is the
Finance Frenzy
BECOME THE NEXT
free convertibility of the currency to other
currencies.
The rise of Dollar as the global
currency
In 1944, after the collapse of Gold standard, the
Dollar was made the global currency and other
countries could exchange Dollar for a particular
amount of gold. The United States was
undoubtedly the largest economy with 175 billion
dollars. A few countries had pegged their own
currencies to the US dollar. Even a few countries
like Panama adopted the Dollar as their own
currency and rejected the proposals to have their
own currency. Also the dollar has served as the
most used medium of exchange in financial
transactions from that time onwards until today
across the globe. Trends in the volume of
currencies across years stand as a testimony to the
fact that the dollar had ruled supreme over the
years. In fact it has been observed over the years
that dollar consists of almost half of the global
currency transaction through the years.
(Share of various important
currencies in foreign exchange market)
Also the Dollar has been the most considerable
part of foreign exchange reserves of various
countries.
Challenges to the dollar & the rise
of Renminbi
The dollar has faced considerable competition
since early 1980 when the Japanese yen was
increasingly used, but the usage decreased with
recession in 1990. Since 1999, Euro has provided
stiff competition because of the large size of the
economy and more number of countries adopting
Euro as the national currency. But the recent Euro
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Pratibimb | Feb. 2011
crisis has caused the Euro a huge setback on
becoming the reserve currency. But recent
developments in the currency warfare come from
the second largest economy of the world, China,
which has poised serious threats to the greenback.
Last year, Russia had called for a supernational
reserve currency which got considerable support
from the Chinese counterparts.
The Chinese currency on the other hand has
posed a threat to the dollar. Let‘s see the
condition of China, the second largest economy as
of now very carefully.
For the last 20 years, when the USA and the other
European nations were busy showing off their
powers, China had been able to extract the
production capacity of the west and positioned
itself as the manufacturing house of the world.
Hence when the United States and Europe have
groped in financial crisis, China had been able to
show a strong GDP growth figure, thus sustaining
their wealthy condition. It has a huge trade
surplus arising out of its marvelous export
orientation and favorably devalued currency. It
has a massive US$2.5 trillion in Forex reserves,
thereby making the United States, the powerful
nation, its debtor. China has also been able to set
up its Sovereign Wealth Fund, China Investment
Corporation, with a $200 Billion, to manage its
Forex reserves of $ 2.5trillion. All these factors
press hard for Yuan becoming the global
currency.
Finance Frenzy
But that is just the beginning of the story. The
Chinese leadership is now opining to reduce its
excessive dependence on dollar assets (estimated
to be $ 2trillion) because of the mounting fiscal
deficits of the USA which may weaken the
greenback considerably. Also the Chinese are
planning to take bold steps to bring the Renminbi
into competition with the dollar as a medium of
international trade by making the Renminbi a
freely convertible currency whose value would be
determined by the market, investors and
companies around the world freely buying and
selling it. As per analysts, the tentative date of free
convertibility is 2020, though the Western world
is pretty skeptical about the fact.
But these perceptions have started to change since
Beijing undertook a few measures like completing
currency swaps i.e. providing Yuan to central
banks of other countries, to be used in trade with
China, like Argentina, Hong Kong, Indonesia,
South Korea and many more. These arrangements
ensure that these countries no longer need the US
currency to transact with China. It had also
denominated bilateral trade ties with Brazil in
both the countries‘ currencies. All these are
evidences of increasing faith of other countries
towards the Renminbi.
Emerging markets now account for 55% of
China‘s trade, which is expected to increase
further. A switch from the dollar to the Renminbi
for trade settlement would be a lucrative option
for the EU nations to deal with China as it will
then require only one time Forex trade. China can
actually do even more; it remains as one of the
most preferred investment destination in the
world. Large foreign institutions can already buy
shares in mainland firms through a $30 billion
qualified foreign institutional investor (QFII)
program — but they must first invest in U.S.
dollars, which are then converted into Yuan. A
new plan known as the ―mini-QFII‖ extends that
to Hong Kong brokerages, and lets them invest
Yuan directly.
14
Pratibimb | Feb. 2011
If Chinese corporations start selling Yuan
denominated bonds, the Yuan may find increased
acceptance due to its high return rates.
The way ahead
But the path is not that easy for Yuan. Making
the currency convertible would make the Yuan
appreciate with respect to all other currencies,
which might provide the exporters a real shock
and cause social unrest, which could also reduce
the GDP growth rate. China had been able to
create a huge forex reserve by virtue of its current
account surplus which in turn is due to its largely
undervalued currency. Now, once the Yuan is
made freely convertible, China may not be able to
sustain its huge current account surplus. Also the
bond markets in China are not too well developed
and hence, it is unlikely that FIIs will be pouring
huge money, in the near future. China‘s huge forex
reserves are mainly believed to be in USD in the
form of government treasury holdings.
Yuan may also rise parallel to the Greenback and
may become the reserve currency, instead of
displacing the latter. The idea may seem a little
counterintuitive, but a logical thought would
perhaps make it clearer. Historically, the monetary
system in the world did not have the idea of two
global currencies, but that doesn‘t mean we would
not see anything like that in the future. In fact the
idea of two global currencies is very much feasible
and there shouldn‘t be any theoretical or
economic repercussions. We have to realize that
America is an economic superpower and it‘s not
so easy to dethrone its currency. In fact America
would continue to purchase in terms of dollars
and would not take up any other currency so
easily. So in order to trade with America, other
countries would have to keep the door to USD
open. At the same time, countries may reduce
their excessive dependence on dollar and
accumulate Renminbi, due to increased
opportunities of trade with China. In that case,
both the Greenback and the Redback may serve as
Finance Frenzy
global reserve currencies, at least in the near
future.
In this case, a new concept of ―Currency
depending on trade‖ or ―Trade Circles‖ may
come up. Every country would have some
projections of their future trade requirements and
accordingly they would maintain their forex
reserves. This may result in some countries having
huge Dollar reserves whereas on the other hand
some countries having huge Renminbi reserves.
This will bring the Dollar with direct
confrontation with the Renminbi. This condition
is likely to sustain for some time until and unless
one of the two nations, China or America, evolve
as undisputed leaders in each and every sense.
Conclusion: The dollar‘s supremacy is no doubt
challenged, and the strongest competitor is the
Chinese Yuan. Now it‘s remaining to be seen
what lies ahead. Philosophically, what has never
happened before is waiting to happen now. So,
Dual Reserve currency may be on the cards on a
10-15 years time horizon.
References:
1. The Bretton Woods Agreement (20 July,
1944), ena.lu, July 1944, http://www.ena.lu/
bretton_woods_agreement_20_july_1944-
020703828.html
2. World Currency, en.wikipedia.org, http://
en.wikipedia.org/wiki/World_currency
3. Foreign Exchange Reserves, en.wikipedia.org,
http://en.wikipedia.org/wiki/
Foreign_exchange_reserves
4. John Foley and Wei Gu, China‘s Yuan: A
guide for the perplexed, blogs.reuters.com, Sep
2010, http://blogs.reuters.com/
columns/2010/09/10/chinas-yuan-a-guide-for-
the-perplexed/
15
15
Pratibimb | Feb. 2011
2010 – THE YEAR OF COMMODITIES
Prashant Rishi, Preetham N | IIM Lucknow
Introduction
After two years of the financial crisis, 2010 has
been relatively a good year for the investors
worldwide. There was an across-the-board rise in
all the major asset classes – stocks, bonds,
commodities and dollar. This is the first time
since 2005 that all the four asset classes have
closed in the green at year-end. However, among
these, commodities were the star performers. The
following indices give us the picture:
1. The Thomson Reuters/Jefferies CRB index,
which tracks 19 materials, gained 17% in
2010.
2. MSCI All Country World Index (for stocks)
went up 13%, dividends reinvested.
3. The Bank of America Merrill Lynch‘s Global
Broad Market Index showed 4.88% global
bond returns.
4. The U.S. Dollar Index gained 1.5%.
Figure 1: CRB Index December 29, 2010,
Source: Green Faucet
This is the first time since 2007 that commodities
have outperformed the other asset classes. In
2007-2009, growths in all the asset classes were
highly correlated with each other. This correlation
Finance Frenzy
was observed due to the effect of global economic
growth on the fate of assets, in the wake of
recession & subsequent recovery. However, in
2010, this growth correlation of asset classes
faded, with commodities accelerating ahead of
stocks, bonds and dollar.
In this article, we discuss not only some of the
major drivers that drove the demand for
commodities, but also some major classes of
commodities which remained red hot in 2010.
Finally, we conclude with an outlook of
commodities for the year 2011.
Demand Drivers of Commodities in
2010
Some of the major reasons that drove the demand
for commodities in the year 2010 are:
1. Emerging Market (EM) Economies:
China is estimated to have grown by nearly
10% in the year 2010. As a major consumer
of global commodities, it has
largely driven the commodities
rally in 2010.
2. ‘Financialization’ of
Commodities: There was an
increased interest from hedge
funds, pension funds and other
institutional investors which
invested close to USD 60
billion in commodities in
2010. This rally sparked off an
interest in retail investors who
bought into commodities through the
numerous Exchange Traded Funds (ETF)
and Exchange Traded Notes (ETN).
3. Environmental Hazards and Calamities:
Floods in Pakistan destroyed the harvest of
cotton contributing to a rise in its price.
16
Pratibimb | Feb. 2011
Similarly, the drought in Russia &
Kazakhstan sent the price of wheat soaring.
4. Inflation: Negative real interest rate in the
developed world, along with increased
liquidity (in the wake of QE), has brought in
heavy money supplies to commodities, as
more and more people lose faith in fiat
money.
Growth Analysis
Metals
1. Palladium: A metal used in automobile
engines; it rose by 97.3% fueled by the
growth in auto production in Asia and North
America.
2. Gold & Silver: A 5% rate hike in China to
curb inflation led to worries of overheating in
the emerging markets. This turned the
investors towards perceived safe havens
Figure 2: Gold Price: Recent Trends Source: Business Insider
leading to a rise of 29.8% in gold and 84%
in silver. Most commodity analysts are bullish
on silver to rise further in 2011, since gold to
Figure 3: Gold/Silver Ratio, Source: Silver Prices.Net
Finance Frenzy
silver price ratio is at 59:1, as against the 200-
year historical average of 17:1.
3. Copper: Copper staged an impressive rally in
2010 from the commodity-wide sell-off that
occurred when the global financial crisis hit
three years ago. While copper demand in
western economies were weak, it remained
strong in emerging economies such as China,
the world‘s largest consumer of the metal,
driving up its prices by about 30.2%. Another
factor that contributed to its rise is its
diminishing worldwide supply, caused by a
fall in its mining activity.
Agricultural Produce
Continued imports by China, flooding of fields in
Canada and dryness in Kazakhstan and South
America curtailed the supply of agricultural
produce in the international markets. This, along
with the other factors discussed above, drove the
prices of agricultural produce to record levels. For
example, cotton & wheat rose by 92% & 47%
17
Pratibimb | Feb. 2011
respectively, while increased demand for coffee
increased its price by 77% to 13-year high.
Oil and Natural Gas
Figure 4: Oil Prices – Recent Trends, Source:
Calculated Risk
Oil closed at USD 91.38 per barrel, recording a
gain of 15.2%. The year started with a low
demand for oil due to reduced manufacturing
activity in the developed world (owing to
recession). This led to stockpiling of oil, which
was offset to some extent by robust demand from
the developing countries. Towards the latter half
of the year, manufacturing picked up its pace in
the developed world. This, along with debasement
of major currencies around the world, led to a rise
in demand for oil, thereby increasing its prices.
Oil moved in a band from USD 68 to 92
throughout the year.
Natural gas, on the other hand, was a major loser
closing 21% lower than its previous year‘s close.
Low demand and increased production of shale
gas from North America brought down its prices.
Commodities 2011 Outlook
While the developed economies are on the path to
recovery, demand from the developing countries is
expected to remain strong. Growing populations
with increasing middle class is expected to
stimulate demand for infrastructure, housing,
energy and improved nutrition (especially meat).
Subsiding of the fear of double dip in the US and
growth in manufacturing activities in the west,
along with sustained growth in developing
Finance Frenzy
countries is expected to reduce the inventory of
oil from current mark of 60 days leading to an
increase in its prices. Most analysts expect it to
cross USD 100/barrel in mid-2011.
Same is the case with precious metals. Most
economists predict that increased printing of
dollars by Fed (QE 2) will make investors lose
faith in USD and will increase demand for metals
like gold and silver. However, it should be noted
that in case the expectation of dollar depreciation
does not come true, precious metal prices might
fall. This can be caused by many possible
scenarios in 2011 (like a US stock market crash,
trouble with other currencies like Euro & Yen and
implosion of a country in Euro zone to name a
few) & can make the precious metals cheaper.
The overheating of the Chinese economy poses
another risk to the estimated growth of
commodities. The anticipated policy tightening
by the Chinese government to curb inflationary
pressures may slow down the growth in the
economy thereby dampening the Chinese demand.
At the end, we can say that commodities are
expected to continue their rally in 2011, but this
depends on a multitude of economic factors, like
high inflation in US, weak dollar & continued
growth in China.
References
1. Danske Bank, Commodities 2010: Five
Themes to Drive Commodity Markets This Year,
oilngold.com, January 2008, http://
www.oilngold.com/analysis/research/
commodities-2010-five-themes-to-drive-
commodity-markets-this-year-2010010810624/
2. Andrew Binet, Why Jeff Rubin Still Sees
Triple-digit Oil Prices by 2011,
theglobeandmail.com, June 2010, http://
www.theglobeandmail.com/report-on-business/
industry-news/energy-and-resources/why-jeff-
rubin-still-sees-triple-digit-oil-prices-by-2011/
article1598427/
18
Pratibimb | Feb. 2011 Finance Frenzy
3. Michael Checkan, Commodities 2011: 5. Silver Investing Opportunity, October
The Road Ahead, December 2010, http:// 2010, http://www.esilverinvesting.com/silver-
www.gold-eagle.com/editorials_08/ investing/silver-investing-opportunity
checkan120710.html
6. Update: 2011 Outlook for Commodities
4. Commodity Forecast for 2010, 2011, Remains Positive, greenfaucet.com, December
http://seekingalpha.com, December 2009, 2010, http://www.greenfaucet.com/technical-
http://seekingalpha.com/article/178037- analysis/update-2011-outlook-for-commodities-
commodity-forecast-for-2010-2011 remains-positive/50011

Beat the Market

As Jim Cramer, a former hedge fund manager, and a best-selling author put it, “As long as you enjoy
investing, you'll be willing to do the homework and stay in the game… I mean I'm not smarter than the
market, but I can recognize a good tape and a bad tape. I recognize when it's right and when it's wrong and
that's what my strength is.”

Stock markets have never been predictable, you may apply the best of logic and reasoning but there could
be a possibility that you may falter if the emotions of the investors take control.

The entries for this contest have been judged by Mr. Mitesh Thacker, Head Research & Trading Analyst,
www.miteshthacker.com and by Prof. S N Rao, Associate Professor of Finance at SJM School of
Management currently on sabbatical leave at T.A. Pai Management Institute.

The winning entry of „Beat the Market‟, first edition is of Mr. Piyush Agarwal and Mr. Ankur Gupta, IIFT,
Delhi!!!

We thank all the participants for their effort.

Beat the Market is a game designed to prove your mettle in stock market analysis. You have to pick any 2
listed companies from BSE and analyze their stock movements till 1 st April, 2011. On the basis of
fundamental and technical analysis you need to give us your share price estimate of these two stocks as on
24th April, 2011. Fundamental & Technical analysis will carry 70% weight while 30 % weight will be given to
Accuracy of the estimated prices in the final score.

Prize: Rs. 1000 /-

Rules:
 You can pick any stocks but the stocks should be from different industry
 You need to send us file by 09:59 AM, 4th April, 2011
 You may analyze in a team of not more than 2 members
 The file should not be more than 7 pages long including cover page, the cover page should contain the
team name, team members name, Institute name, contact number
 File name should be BTM_<TEAM_NAME>_<INSTITUTE_NAME>
 Mail the file at pratibimb.tapmi@gmail.com

19
Pratibimb | Feb. 2011
AN INTERVIEW
WITH PROFESSOR
JAGDISH SHETH
Charles H. Kellstadt Professor of Marketing,
Goizueta Business School, Emory University
Dr. Jagdish Sheth is the Charles H. Kellstadt
Professor of Marketing in the Goizueta Business
School and the founder of the Center for
Relationship Marketing (CRM) at Emory
University. Prior to his present position, he was on
the faculty of the University of Southern California,
where he founded the Center for
Telecommunications Management, the University
of Illinois, Columbia University and the
Massachusetts Institute of Technology. Dr. Sheth is
an expert on geopolitical realignment of nations,
global competitiveness and strategic vision for global
enterprises.
Dr. Sheth has been conferred with the P.D.
Converse Award, Charles Coolidge Parlin Award
and the Irwin McGraw Hill Distinguished
Marketing Educator Awards by the American
Marketing Association.
Dr. Sheth has worked for numerous industries and
companies in the U.S, Europe and Asia, both as an
advisor and as a seminar leader. He is an
internationally recognized business consultant and
Interview
his clients include AT&T, BellSouth, Cox
Communications, Delta, Ernst & Young, Ford, GE,
Lucent Technologies, Motorola, Nortel, Pillsbury,
Sprint, Square D, 3M, and Whirlpool. He has given
more than 5,000 presentations in at least twenty
countries. He is also on the Board of Directors of
several public companies, including Norstan and
Wipro Limited.
A prolific author, Dr. Sheth coauthored a textbook
with Banwari Mittal, Customer Behavior. In 2000,
Dr. Sheth and Andrew Sobel published a best seller,
Clients for Life and in 2001, the book Value Space,
coauthored with Banwari Mittal, was published.
Another book, The Rule of Three, was coauthored
with Dr. Rajendra Sisodia and published in 2002.
In 2007, Dr. Sheth published The Self-Destructive
Habits of Good Companies... And How to Break
Them. Dr. Sheth's most recent book is Chindia
Rising.
In this interview, we have posed various questions
from his books and his previous research. To know
the answers, read on !!!
20
Pratibimb | Feb. 2011
Sir, as you have done an extensive research on
CRM practices, how do these practices differ in
India as per your observations from the rest of the
world?
The differences are not as strong as the
similarities. The processes, the infrastructure, i.e.,
the databases and the data-mining capabilities are
very similar for CRM. The differences are
probably on three fronts:
i) The decision making processes‘ by customers is
centralized in India. In foreign countries the
decision making is decentralized to whoever is in-
charge. So we have to do both bottom-up and top
-down selling there.
ii) The gap between the customer and supplier in
terms of technical knowledge is much greater
here. So there is lot more need of education and
awareness and not just selling. Over there the
customer in B2B and even a consumer is lot more
knowledgeable. We think that is going to be
equalized with more online information. It is just
a matter of time.
iii) The third one is much more complex. It is
because of very strong diversity here which means
there is no such thing as a national thing, it‘s
always local view. We are having lot more
diversity at the state level which is basically the
influence of sub-cultures.
How easy or difficult is it to maintain the
relationship with customers in India?
The relationship is maintained at multiple levels.
The owner of the business has to make sure that
their succession planning takes place. You have to
establish continuity with your customers People
still tend to start with a company and stay for a
long time with the company, where as in the US,
the churn of managers is much higher except on
the technical side. There is lot more stability and
predictability here.
You have given seven self-destructive habits of
good companies in your book ―Why Do Good
Companies Fail?‖ What about unethical conduct
Interview
of the top management? Which category would
this factor belong to?
The company is akin to a living being. Therefore
the leader of the company must be more like a
medical doctor where his key skill lies in
diagnosis and not cure. Whether a bad ethical
aspect is really one of the seven bad habits is
something to ponder over. It is out of arrogance
that unethical habits tend to monopolize. There is
an eighth bad habit for most companies having an
uncanny naïve way of plateauing the potential of
their own people. After paying mega bucks they
don‘t allow them to do what they need to do.
There is an old theory which is known as Peter‘s
principle which states your rise to the level of
incompetency. But this is just the opposite. The
thinking is that the company somehow through
processes, human resource reward system, always
stuck you and gets less out of you and therefore is
not good for the company.
Talking about arrogance, what about the cases of
Enron and Satyam?
Enron became very arrogant, GM became very
arrogant and so do Satyam, they believed that
nobody can touch them whether they commit
ethical or unethical practices. Satyam thought that
they knew everybody in Andhra Pradesh and
therefore they can do whatever they want to do.
Unethical behavior doesn‘t happen because people
are unethical by nature but it‘s the opportunities
and circumstances that create the temptation and
an opportunity pretty much. When you are a
listed company, you get into the trap of
performing year after year.
In your book, ―Why Do Good Companies Fail?‖
you wrote about the dangerous habits (internal to
the organization) that good organizations develop
which eventually lead to their failure. What are
the external factors that can make a good
organization fail and how should organizations
tackle these factors?
The big habit that we have mentioned is called
‗denial‘. When you deny the new realities it is
21
Pratibimb | Feb. 2011
external and when you are not able to change as
the environment change that‘s when you collapse.
We have talked about six external factors in a
paper titled ‗Why Good Companies Fail‘, when
they change you must be more adaptable and if
you are not able to adapt you don‘t do well or
you collapse. One is regulation when you have
new laws being passed. The second one is ‗capital
markets‘, third is ‗technology‘, fourth is
‗competition‘, fifth is ‗globalization‘ and the sixth
one is ‗customs‘.
This is the same phenomenon that we saw happen
when electronic engineers believed that analog
technology was superior to its digital counterpart
which might have been true at one point in time
but not necessarily true always. The same thing
happened in the movie industry when 70mm
movies were considered superior due to their
precision but they lacked any animation. I have
seen denial of competition from emerging
markets, we laughed at the Japanese when they
were trying to compete, we laughed at the
Koreans and now we are laughing at the Indians
and the Chinese. When you deny external factors
or a new reality, we often run into this problem.
But as with the case of Microsoft, they didn‘t
expect that a new company like Google could
beat them in the market. Google came up with
technologies which MS could not fathom and
eventually we see these technologies dominating
the tech space. These are more of external factors
which company can‘t think of and can‘t tackle
from internal capabilities.
Due to ‗internal competency‘, so I call it
‘competency dependence‘, often what you are
good at actually becomes a liability, which is
opposite to core competency. That‘s the problem
with Microsoft. They are not able to do anything
outside of the ‗Windows‘ framework. So they
couldn‘t set standards for wireless technology or
for cable. They spend trillion dollars to create a
set-top box standard. They couldn‘t negotiate
well with Nokia which is a dominant player,
because MS would always want to control. They
Interview
missed out on wireless technology. X-box, they
tried on their own, because other players didn‘t
want to play with them anymore. So they have
not been successful at any access device except the
PC. To me it‘s a core competency issue.
Considering that the birth rate in China is
reducing while in India‘s it is still increasing, how
would the demographics of India and China
impact world politics in the next 20 yrs?
The actual issue is that China of course is ahead
in markets but not sourcing. India has several
advantages; it‘s not just the language we were into
legal and financial system which is more western
whereas Chinese destroyed that to put
communism in place. So they really have to get
back to a global way of looking at the legal
contracts and financial aspect, which they are
doing, so that gives us an advantage for a long
time. Chinese diasporas is very ethnic, Taiwan
Chinese is different, they were very wide, and they
are loyal to mainland China surprisingly but I
don‘t see the level with which Indians have
penetrated into mainstream society.
What do you think would be the major factor for
the growth of the country; would it be increasing
population or decreasing population?
It depends on the optimal points which in turn
depend on demand and supply issues. If you have
a population that is growing but you create
employment and wealth growing even more, then
it‘s a very positive force.
The other factor is that in the longer run, with
the aging of society, it begins to create more
obligations, either on the government, as in Japan,
or with the private sector as it is true in America
where GM has as many as 7-8 retirees, for whom
they have obligations for pension plan and health,
while there is only one new employee who
contributes for them. So it‘s the productive wages
and the demographics that are contributing
factors towards the economy. Right now we are
very worried about the baby boomers, as they will
all become 65 and above which means at that age
22
Pratibimb | Feb. 2011
they can trigger the pension plan from the
government over to the social security. The
number is 10000 per day for 19 years. But we
don‘t have enough money for that, because the
new person who is contributing to our social
security is not that large. We did fantastically well
in the time of baby boomers as they became our
net producer and contributed towards the wealth
creation.
What is the view about Indian Population? Is it at
a critical level or surpassed it?
The Indian demographics used to be radically
different between rural and urban. During my
research on population control which I did on 68
year funded by the Ford Foundation, I found that
if you go back to 1914, the number of children
born was about the same - 4.1 per woman and the
difference was very negligible between rural and
urban. By 1950‘s -60‘s in urban areas the birth
rate declined enormously to 2.7 only, but in rural
areas it continued. In agricultural society, the
children are assets for you but in industrializing
society they become more of a liability. What we
are watching right now is whether the rural
demographics will be just like urban one with
more job opportunities, new factories being built
there, for construction work etc.
Indian Economic policies are comparatively open
when compared to China. Indian organizations
are going for mergers and acquisitions beyond the
country`s border while China still has lots of
restriction, most of the companies still
concentrate on domestic demand. How will this
work out for India and China in Future?
Chinese started with exports by and large but now
they are encouraged to focus on internal/
domestic demand. They are going to become
global eventually because competition comes from
foreign countries. My view is that Indian
corporations would be using mergers &
acquisitions as their strategy and because the rest
of the world is receptive to selling to Indian
companies than to most Chinese companies as
Interview
other governments still have an uneasy
relationship, with the Chinese government. Some
governments still level them as communist
country. In the long run there won‘t be a long
term difference. In many industries, the Chinese
and Indians are becoming dominant players,
especially raw materials. In other places, Indian
companies will sell out to somebody. In the short
run there are significant differences, the majority
of the Chinese corporations which are global are
state-enterprises, privatized.
What strategy should Indian Companies adopt to
gain a global brand image?
There are three aspects to gain a global brand
image:
i) Brand as an asset: A brand should have good
reputation in the rest of the world. In the
garment, fashion and FMCG industry, we have
seen that Indian companies are buying companies
for the brand assets.
ii) Many western companies have a lot more
technology on the shelf. When you don‘t want to
imitate and you want to innovate, acquisition
becomes a good strategy. Technology invented
there has more commercial potential in emerging
markets like India.
iii) These companies have organized processes
and human capitals, so you can learn from them
on how to manage businesses on a global level.
Indians are trying to create brands on a global
basis, especially in the B2B market for example
names like Infosys, Tata etc. Wherever the
profession is the brand name, it is relatively easy
to go global. When you have a product brand
name, you have to decide whether you shall take
the product brand name or the company. Usually
when you are a lower income economy, you begin
at the lower end of the price quality ratio. It‘s a
very reverse brand cycle compared to the
Europeans and Americans where you invent
something, brand it, charge premium prices.
These are two different approaches.
23
Pratibimb | Feb. 2011
OPPORTUNITY RECOGNITION AND PROJECT SELECTION:
SOME APPROACHES FOR SMALL ENTERPRISES
Prof. A. S. Vasudev Rao, Senior Professor and Dean (Admin) at TAPMI
“Profits are not made by differential clever-
ness, but by differential stupidity”
(Attributed to David Ricardo, Economist, by
Peter Drucker)
Introduction
Opportunity is a situation in which a person can
exploit a new business idea that has the potential
to generate profit.
There are several opportunities behind various
problems and issues faced in the business, manu-
facturing, services and generally in the society and
living conditions of people. The entrepreneur has
to generate ideas using his creativity and innova-
tive approach to recognize the opportunities that
lie ahead of him. ―The bigger the problem, the
bigger the opportunity‖. Ideas that have been
through a sieve of analysis, by asking the right
questions on market, technical and financial vi-
abilities, hold up as opportunities.
It is to be noted that the information resource an
entrepreneur possesses, helps recognize opportu-
nities when compared to a person having no or
low level of information. Opportunities arise be-
cause of technological changes taking place, po-
litical and regulatory as well as social and demo-
graphic changes. They can result in not only new
products / services, but also new methods of pro-
duction, new markets, new ways of organizing
business and new materials. It is important for the
entrepreneurs to recognize the right opportunity
that fits their background – experience, knowl-
edge, skills and the uniqueness of the product /
service. Level of competition and market and cus-
tomer need assessment are also important. ―New
venture strategies‖ is a frame work of old markets,
new markets Vs old products and new products.
Timmons model of the entrepreneurial process
HR Buzz
identifies these key factors i.e., opportunity, re-
sources and the entrepreneurial team, which result
in preparation of a business plan for the project
finally selected.
It may be noted that there are countless strategies
for creating new ventures, but most of them have
not yet been well conceived. Selection of a profit-
able and sustainable project idea is a very critical
aspect in the venture launching stage for an entre-
preneur. Some guidelines and approaches are
available for new entrepreneurs to help them in
identifying and selecting suitable projects, de-
pending on their background, investment capacity
and experience / qualifications. Many entrepre-
neurs have their dream projects too.
For selection of a suitable project, the market,
technical and financial viabilities are most impor-
tant factors. The project outlay in terms of capi-
tal cost, sources of finances, long term prospects
of the project, associated business and financial
risks are to be carefully considered. It is also very
important to consider own preferences, attitudes
and the family support available to the entrepre-
neur. Ultimately, project selection is a search and
select process. The methods and procedure are
partly structured and partly unstructured; partly
subjective and partly objective.
Some Approaches for Project Se-
lection
A survey of small enterprises located in industrial
areas and estate in coastal Karnataka revealed a
few specific approaches adopted by some of the
entrepreneurs. Using these approaches, the entre-
preneurs had launched their projects and later
tasted success. But a few of them also had to face
failures. The learning from these incidences is
useful. The approaches studied are as follows:
24
Pratibimb | Feb. 2011
I) A few entrepreneurs selected and launched pro-
jects in which they had extensive marketing ex-
perience. This was observed in case of an alumin-
ium vessel manufacturing unit, as well as in an
Ayurvedic drug manufacturing unit. In both the
cases, the owners did not have relevant technical
background in the production area. One unit is
highly successful, whereas the Ayurvedic unit is
making a turnaround. Branding of the medicine
also was helpful in this case.
The learning from this is that backward integra-
tion i.e., from marketing to production works well
for small enterprises. Extensive knowledge of
market and its finer details helped the owners to
manage through the start up period which is nor-
mally a critical period for survival. The product
may not be spectacular and innovative, but the
market potential and / or niche were identified in
these cases.
II) In one or two cases, the entrepreneurs having
succeeded in their first ventures set up outside
their home States, tried their best to establish the
second unit nearer to their home town / home
district of D.K. and Udupi.
This could be to foster a linkage to their home
towns or villages and contribute to the socio-
economic development of the area. Their ethnic
value and love for doing something worthwhile in
their own soil was a strong driving force. One of
the units, established in a rural area, is a nationally
known lighting luminaire design and manufactur-
ing company. It manufactures word-class products
and probably is the number one company in India
in lighting and luminaire design and manufactur-
ing. The unit had employed local rural persons,
trained them and made out of them a productive
group of employees turning out quality products.
In similar other cases, there were failures also, be-
cause the home town location were totally out of
fit for the projects, considering the market or raw
material availability.
Yet another hi-tech product, the flame proof
switch gears, was also set up at Udupi district, by
HR Buzz
a promoter, who belonged to a village near Udupi.
He had set up his first unit for manufacturing of
the same product at Mumbai a few years back.
Looking at the market potential based on likely
demand from the mega projects of MRPL, BASF,
proposed Power Company and Steel complex, the
project was selected for establishing in Udupi dis-
trict in an Industrial Area. During the operational
phase, the unit did not get adequate market as
anticipated for its products from local industries.
But the unit still exists operating at low capacity
for the reason best known to the promoter at
Mumbai. It may be his desire to continue to have
a unit near his hometown. The strategy has not
been very successful in this instance. Possibly,
such a unit needs a wider market and industrial
customer base.
III) Another significant factor, which helped en-
trepreneurs decide about the product, particularly
in case of Gulf-returned NRIs, is the skills they
possessed or the commercial experience they had
gained in their Gulf jobs. In a specific case, where
the promoter was highly experienced in tool and
die designing and manufacturing, this strength
was used to develop medical disposables, particu-
larly for Urology applications. The manufactur-
ing of these items required basic die designing and
manufacturing capabilities using special stainless
steel materials and extruding special polymer ma-
terials.
In this case, the promoter networked extensively
with professional doctors, overseas material sup-
pliers for procuring critical materials such as
stainless steel wires, tubes, teflon and PVC re-
quired to develop the products, using his die mak-
ing capability as base strength.
IV) Similarly another entrepreneur, Gulf returned,
took over a sick unit for manufacturing of pilfer
proof caps (P P caps). The reason was again the
resource he had for getting the key item of pro-
duction, the precision die. Good quality P P cap
manufacturing requires precision die, to punch
and form out of printed aluminium sheets. In this
case the entrepreneur‘s family member at Mumbai
25
Pratibimb | Feb. 2011
was a reputed die maker, who knew complexities of
manufacturing. This valuable resource was the key
factor in decision making to take over the sick unit
and achieve a complete turnaround. The unit is
very successfully operating at present, achieving
much higher capacity utilization.
V) Some of the entrepreneurs have taken innova-
tive products / services that they have seen or ob-
served abroad for their projects in the coastal dis-
tricts. Examples is the first unit set up in Udupi
district for manufacturing of concrete interlock
paving blocks, hitherto manufactured abroad.
Though initially the product acceptability in the
market was slow, later on it was overwhelmingly
recognized as a good material suitable for paving
application works, requiring faster completion and
curing. Concept marketing was effectively em-
ployed by the entrepreneur.
VI) In small enterprises, it may be difficult to de-
velop a brand and niche in the early years of its op-
eration. One of the entrepreneurs narrated that be-
fore launching his present unit which is now very
successful, he had toyed with the idea of manufac-
turing an electronic component. This product how-
ever had new /
replacement demand,
requiring concept
selling. The
market
growth was
rather slow.
His main
criterion
therefore was
to identify and
select a product
which sells in a
larger market
area and is
supported by
adequate marketing
effort. Having identified the
product, he systematically examined the
HR Buzz
viability of the project, and meticulously planned
and implemented the same. Over the last 7-8 years
the venture manufacturing electrodes for welding
works has grown to be one of the leading units in
the State in its category of products.
VII) Highly innovative nature backed by the long
years of work experience acquired as well as varying
skills in operation, maintenance and machinery de-
sign and development has been the prime mover for
a successful entrepreneur to launch a project for
manufacturing of plastic twin head extruder. This
new product was his invention and the outcome of
his innovative design work. This new twin die head
plastic extrusion machine, as reported by him, de-
livers nearly 2.5 times the output of a conventional
single die head machine. It also conserves electric
energy, reducing unit power consumption by nearly
60 percent.
In this case intense development work, continuous
effort to modify and improve the design of compo-
nents and parts, as well as process parameters
helped the entrepreneur to realize his dream of be-
coming a successful small enterprise owner-
manager. He started his humble career as a shop
floor worker in a plastic factory in his school going
age. In this case, the product
selection was a true reflection
of his latent dreams of
invention in plastic processing.
VIII) The last case observed is
yet another one of innovation
and new product development.
This time, it was the decision of
a technocrat-entrepreneur
(engineer), who had previous train-
ing and work experience of 2-3
years in an engineering
workshop. He decided to
leave the job and develop a micro-
processor based color sorting
machine for grains and coffee beans
which were being imported till then. This
26
Pratibimb | Feb. 2011
was therefore a challenge for him to indigenize,
develop necessary design and drawings and manu-
facture the machine in the country for the first
time. This was a stupendous task involving elec-
tronic system design, optics design, component
sourcing, assembly, prototype development and
testing. The sheer challenge in new product de-
velopment, being an import substitution item, was
perhaps the greatest factor for the entrepreneur to
decide about launching the project.
The above are some of the examples of product
selection strategies used by the entrepreneurs.
While the above examples reflect successful cases,
there were failures also in cases where similar ap-
proaches were adopted. The reasons could be
many and nature of problems resulting in failure
of enterprise could be complex.
On overview of the approaches adopted by suc-
cessful entrepreneurs, it is also important to know
the specific motives behind their start up venture.
The motives could be to be independent to gain
higher economic status in life, to be innovative or
to excel in his profession.
Motives for start ups are also important consider-
ing the linkage to growth objectives of entrepre-
neur, later in the project life cycle. While identify-
ing and selecting project, a proper vision for the
product range, product line and basic business
idea should also be visualized. This vision is bene-
ficial if entrepreneur considers these while select-
ing his product / service for the start up venture.
Consultancy Assistance
Small Enterprise Consultants, Professionals, Man-
agers of State Financial Corporations and Banks,
CEDs, TCOs, DICs and other development or-
ganizations can act as the resource centers that can
be tapped for project opportunity recognition,
guidance, identification and selection. The process
of selection is partly structured, partly unstruc-
tured and partly dependent on focused thinking,
partly on divergent or lateral thinking. Project
identification is often an outcome of a triggering
process rather than an analytical and objective
HR Buzz
methodology. It is difficult to develop specific
step-by-step methods or procedure for the proc-
ess. There may not be a proven theory also to
guide this critical task of would be owner-
manager.
The entrepreneur can seek information and con-
sultancy assistance to cross check and support his
decision making criteria.
However, consultants and other agencies could
show the broad direction and support the entre-
preneur in viability analysis. But the hard task of
decision making largely should rest with the entre-
preneur, the risk taker and the anchor of the new
venture.
Summary
Opportunity is a situation in which a person can
exploit a new business idea that has the potential
to generate profit. Opportunity recognition and
project selection is a process and for an entrepre-
neur, opportunities can be seen as hidden behind
several problems faced in the society or environ-
ment
The project identification is a search-and-select
process. For this task environment scanning is
necessary, besides understanding strengths, weak-
nesses, opportunities and threats of the entrepre-
neur himself. Close examination of viability as-
pects on marketing, technical and financial areas is
critical for screening the project ideas. But the
decision regarding which project to finally venture
in is crucial for the entrepreneur. A few ap-
proaches adopted by successful entrepreneurs have
been briefly presented. These approaches cannot
be generalized. They can be used by the entrepre-
neurs desirous of selecting new ventures. Ultimate
entrepreneurial success depends on the right selec-
tion of the project at the start up phase and on all
-round capability to successfully manage the ven-
ture by an entrepreneur-manager during the op-
eration phase.
27
Pratibimb | Feb. 2011
Insights
MARVIN BOWER, THE MANAGEMENT THINKER
Prof. Vijaya | TAPMI
McKinsey consulting is a name that spells pride
with anyone who is associated with it, including
the clients. We would like to present this piece on
a man who helped build McKinsey, the man
behind the mystical magic of this company –
Marvin Bower – his visionary thoughts and
perspectives on management.

He was born in August 1903 and grew up in

Cleveland. He graduated from Brown University,
completed the degree of Law from Harvard Law
School and also did his MBA from Harvard
Business School. In 1933, Marvin joined a young
firm of accountants and engineers founded by
former University of Chicago professor, James O.
McKinsey. He was associated with McKinsey for
much more than half a century. He built it and
nurtured it to the status of a well-acclaimed
consulting firm, with engagements with a huge list
of clients. In 1989, Marvin Bower got elected into
the Business Hall of fame by Fortune, the other
recipient being Thomas Alva Edison. Marvin was
modest enough to say, ‗It is a mistake, I am not a
business man, but a professional.‘ His book, The
Will to Manage, in the 1960s, was cited as one of
the world‘s best business reference books in,
Business: The Ultimate Resource. He was
awarded the Harvard medal and also named
fellow of the International Academy of
Management. The Marvin Bower professor of
Leadership development was introduced at the
Harvard Business School in 1995. He passed
away in January 2003, leaving behind him, a
legacy of leaders and perspectives.
Marvin believed leadership can be learnt, but not
taught. If there is one strong thing that he can be
noted for, it is about translating strong basic
values into management consulting; a strong
commitment to anybody on the other side. He
believed that a great institution was built on the
skills and experience of its people and as much
through their behaviors and conduct which was
even more important to his success. And succeed,
he did.
THE PRACTICE:
The nurturing of McKinsey & Company:
‗My vision is to provide advice on managing to
top executives and to do it with professional
standards of a leading law firm. In all successful
professional groups, regard for the individual is
based not on title but on competence, stature and
leadership‘ claimed Marvin Bower, when he took
over McKinsey consulting in 1933 , when
McKinsey passed away at the age of 48 yrs. At a
time, when management consulting was still
equated with management engineering, he
introduced a different methodology to expertise –
young well trained minds ready to be analytical
problem solvers as against only ‗experienced‘
executives lending their high charging consultancy
services. These young consultants were ‗associates‘
in ‗engagements‘ in ‗practice‘ and not just jobs in
business consulting. These had to be people who
could work together within the context of the
firm‘s personality and work well with clients. He
valued imagination and analysis more than
experience. He fostered a culture that encouraged

28
Pratibimb | Feb. 2011
rigorous debate over the right approach or answer,
steering it as a necessary process independent of
personal criticism. To act with integrity, inside
and outside, Marvin called it professionalism.
Being professional and leading to good wok
increases the firm-level confidence. This has a
positive influence and adds ‗tone‘ to the office.
Further, making decisions on whether assignments
can be properly executed and then acting
accordingly helps build the firm level confidence
and also morale. In anything that was within the
scope of Marvin‘s thought or action, he had a
compulsion of professionalism.
Marvin believed that the ‗personality‘ of a
professional firm, is similar to that of an
individual, roughly defined as: the total
impression that the firm makes on those, who
come in contact with it or who hear or read about
it. The total impression depends on the collective
personal impressions made by each individual
employee and the firm‘s objectives, policies and
working approaches that guide how the people in
the firm carry on activities, what they do, what
they write etc. There was a conscious effort each
time, to check whether, what the firm engaged in
and how it engaged in, was consistent to the
firm‘s principles. In one instance, one of the best
performing associates at McKinsey was shown the
door in 30 minutes flat because he violated the
fundamental organizational principles. This was
because Marvin wanted to communicate the
importance of adhering to the fundamental
principles of the organization. Marvin would say
‗I want them to be pulling out the McKinsey
report, something to look at, and think about.
They should understand the care we have given to
the quality of work that we do. That is our
signature‘.
He launched the McKinsey foundation for
management research in 1955. One of the
objectives of doing this was to bring together the
knowledge of business leaders, academics and
expert business consultants, to connect the
theoretical with the practical.
Insights
Client relationships:
Marvin with considerable intuition sensed that
getting clients to adopt recommendations requires
client ownership. This led to a model of
partnership with the clients.
In client studies, James McKinsey, the founder,
used to be always sensitive to the situations and
view-points of the people in the client
organization. He realized that recommendations
are neither accepted nor implemented on the basis
of rational factors alone. He was also independent
with the client; spoke the truth, even though it
risked discontinuance of the relationship. Marvin
learnt these principles and continued the same. He
never told clients what he thought they would like
to hear and consciously ignored fads and fashions.
He insisted on collecting every possible fact and
view while he delved into any problem-solving
context.
He was always known for his tendency to ask
questions; about how the problem fit into the
bigger picture, not to leave out concrete action
plans, for he believed that implementability of
actions was the test to the effectiveness of
problem solving through any study. When
management consulting was still an evolving field,
Marvin learnt the importance of industry trends,
competitive positioning and the need to
understand external economic factors- essentially
defining the ‗top management‘ approach.
THE PERSPECTIVE:
Management decision making:
Marvin held that, management decisions differ
from personal decisions. They should involve a
logical process - a deliberate choice of means to
ends. The test of a decision is in the meaningful
action that can be taken through it. Through his
vast experience in consulting and guiding
company ‗partners‘ through problem resolution,
here are a few steps that his wisdom has to offer
us.
29
Pratibimb | Feb. 2011
Decide whether to decide
1. Is the question pertinent now - does it fit in
with management objectives, plans and
streams of events?
2. Can the decision be made now? Will it
disrupt present plans? Are subordinates
capable of carrying it out? Is enough
information available to decide?
3. Have you the responsibility and the authority
to decide?
4. Should higher authority decide/ should a
subordinate decide? Should some other
executive decide?
5. If decision is not to decide now, let those
concerned know-and the reasons why.
Size up the situation
1. Get all available facts bearing on problem or
question- what, why, when, where, how and
who.
2. Get opinions and judgments of persons
concerned with questions or problems – if at
all feasible.
3. Go to the heart of the matter. Determine
which factor or factors limit or prevent
achievement of the purpose with which
decision is concerned. Subordinate parts to
the whole.
4. Reject from consideration all events, objects,
details and circumstances not pertinent to
action now with means now available.
Think the problem through
1. Develop alternative solutions.
2. Test alternative solutions for advantages and
disadvantages from the standpoint of
Underlying purpose (e.g. more profits in the
long run through better service to customers),
immediate objectives & policies, cost, effect
on personnel and moral codes (Rightness and
reasonableness in light of own and store‘s
codes).
Insights
Determine procedures for carrying out decisions
1. Break required action into simple parts,
putting first things first.
2. Get ideas from those concerned, especially
subordinates. ‗Millions are lost through
discouraging subordinates from expressing
ideas‖. Use consultative management. Admit
things you do not know and mistakes made.
3. Set a completion time or date and work
backwards to get starting dates and proper
timing.
Fix responsibilities
1. See that every individual understands what he
is to do and why and that he is capable of
doing it.
2. Establish reasonable criteria for satisfactory
performance.
Follow up
1. Follow up to eliminate difficulties and see
that the decision is carried out.
2. Review performance with subordinates
concerned, so that they know how well they
did. Be sure to emphasize points that will be
helpful guidelines for future actions.
On People management:
Marvin was against the concept of hierarchy.
Hierarchy, he stated, led to a perception of
authority that each superior has over subordinates.
The subordinates perceive certain constraints like,
the reluctance to disagree with the boss, reluctance
to provide information or offer opinions unless
asked for and also the unwillingness to take
independent initiatives. It is important to create a
non-hierarchical work atmosphere throughout the
firm so that anybody can talk freely to anybody
else and disagree with anybody, without having to
worry about any consequence. It is important for
the leader to respond to anything told or written,
never to be silent on those. These would earn
positive outcomes.
30
Pratibimb | Feb. 2011
It is important for the leader to treat all the
constituents, the owners and others with respect.
Developing the constituent‘s self-confidence and
self-esteem is of utmost importance. When there
is loss of confidence, there is a feeling of defeat,
failure, helplessness and even self contempt. Such
a person is not able to take up purposeful effort,
risks and cannot make use of opportunities within
the organization. In order to develop the
constituents in organizations, genuine praise for
good work helps. Involving them in decision
making and delegating responsibilities and
following up is also important. Converting them
into stakeholders creates a higher sense of
ownership.
On leadership and leading:
Marvin had to offer us a lot on some important
attributes or qualities of leading. They are –
 Trustworthiness - To get into detail, to be
accurate about small things, even correcting
smaller details that may not matter. This is
called ‗high precision truthfulness‘.
 Fairness – This is about treating everyone
maintaining principles of equity.
 Unassuming behaviors – To learn to be
humble and not exhibit arrogance,
haughtiness and egotism. He liked to be
called Marvin, not Mr. Bower.
 Listening and open mindedness - To be ready
to hear what the other side has to say. It is
paying close attention, and asking brief, non-
leading questions that convey interest, not
necessarily agreement.
 Sensitivity to people – This is not only about
people skills, or creating the ‗feel good‘ factor,
but also about being genuinely interested in
people. One should be able to discern what
the other side is thinking or feeling, over time
to guess what is on the other person‘s mind.
 Sensitivity to situations- This means that you
give as much importance to situations as
much as to people. It is about a careful
Insights
analysis of the facts involved, accompanied by
an acute sensitivity to the feelings and
attitudes of people involved in the context.
 Initiative, initiative, initiative- We might
wonder why Marvin had coined this attribute
this way. Yes, it is to highlight the point that
acting is ‗the‘ behavior expected whether in
the initial stages of problem solving or while
implementing the recommendations.
 A sense of urgency - Speed is important to
facilitate improvements and growth.
 Good judgment - This is about combining
hard data as well as intuitive guesses to arrive
at a conclusion that events prove to be
correct. This is anything, but following the
‗fads‘.
 Broad mindedness- It is being tolerant of
varied views and being ready to condone
minor departures from conventional behavior.
 Flexibility and adaptability – This is about
being ready for change when the situation
demands it.
 The capacity to make sound and timely
decisions – This, when practiced will set an
example for others. Setting time priorities will
be useful exercise. Delaying decisions can hurt
many.
 The capacity to motivate - According to
Marvin, in a leadership company, the best way
to motivate people is by leading as an example
and to allow them to perform which are seen
as valuable contributions to the company. He
would often talk about good things and good
names. He never passed up an opportunity to
celebrate success. He would give credit and
praise to people when they did work.
To sum up, Marvin did not develop theories.
However, he conceptualized management, and
was a living example. Management begins with a
personal strategy to live by values, ethics and
rationality to reach our goals and a commitment
to the other side. Each of us can definitely draw
some inspiration from him.
31
Pratibimb | Feb. 2011
EXPECTATIONS FROM THE NEW AGE EMPLOYER
Gowri N Kishore | IMT Nagpur
Conventionally, the core purpose of an organization
is to increase the wealth of its shareholders. But
today, this wisdom is being extended. Today, every
organization – irrespective of size, domain and scale
– must stand for something. There must be a
corporate identity, a personality in the global space
that justifies its presence. Organizations need a big
vision to bind all the stakeholders together, more so
because the new generation – of customers and
employees – is more empowered and demanding
than ever. They want more than value for money –
they want values for money1.
The coming decade will witness a paradigm shift in
what employees seek in their prospective employers.
Already, there is enough evidence of the changing
trends in the results of many recent Best Employer
surveys conducted in India and on a global scale.
The employees of today want more than just money
and job security – there are more emotions in play
here than ever before.
Changing mindset
Employees no longer want to be just ‗human
resources‘ –they want to feel that they ―belong‖ to
the organization, not as mere salaried personnel but
as participants of the firm‘s value creation activities.
They want to feel that they are a part of the bigger
picture. ―I couldn‘t tell people exactly what I was
doing because it was such an insignificant bit of the
project! I didn‘t feel any pride in my work
anymore‖, a software engineer who dropped out
after a few years of work at a top IT firm to pursue
an MBA degree said, on being asked the reason for
her resignation2.
There is increasing disgruntlement about job
content, especially amongst knowledge workers.
People are starting to realize their inner need for
personal satisfaction – their emotional lives –need
to make sense to them. They want to feel that they
HR Buzz
are doing something worthwhile that will make a
difference. This could also explain why there is a
rising trend of candidates preferring to join smaller
organizations rather than huge corporate houses
where they have the opportunity to deal with
identifiable, measurable wholes rather than
undersized parts. Thus, employers must offer
exactly this – a membership to jointly realize a
bigger vision.
Autonomy and empowerment
The next generation workforce demands more
autonomy in their job – the freedom to experiment,
to use their judgment in decision-making and in
taking calculated risks. While they view
accountability and responsibility favorably,
authority and rigid control are perceived negatively.
They want to work for employers who give them
the leeway to act on their own while at the same
time, be available for mentoring and guidance when
the need arises. They seek a mutually beneficial,
more productive working relationship with their
seniors.
There is also a higher need for independence
amongst the employees of today. While three to
five year employment bonds were viewed
nonchalantly in the past, they are seen as deterrents
today. Most young professionals choose to hold on
to the option of moving out whenever they wish.
More and more B-School graduates are taking up
entrepreneurial ventures; to many, the idea of job
creation seems more lucrative than job holding.
This is also a manifestation of the next generation‘s
inner need for autonomy at work and the desire to
make a difference.
Thus, the days of hierarchical organizations are fast
approaching a close. Just as many MNCs insist on
the abolition of titles like ―Sir‖ and ―Ma‘am‖, the
notion of ―control‖ and ―command‖ as integrals
32
Pratibimb | Feb. 2011
HR Buzz
part of a manager‘s function is also disappearing, Work is Life
even from management literature. Organizations
In the last half-decade, there has been a rising call
need to become flatter and more organic,
to organizations to provide work-life balance.
discarding rigid functional or divisional structures
Many organizations like SAS which topped the
for fluid, amoebic ones where teams are created
Fortune 100 list of Best Employers in 2009,
based on current work requirements. Even
scored very high on this count3. But in the
traditional organizations like India‘s nationalized
organizations of the future, there can be no full
banks have been forced to reinvent themselves to
separation between work and life, for better or
attract youngsters. An example is Canara Bank,
worse. Most professionals today spend more than
which spent millions in its rebranding venture to
forty hours a week at work and few things could
change its old-generation image and become more
be more demotivating than if this work was
youth-friendly.
perceived to be uninteresting or mundane.

Career development Accepting the truth that work will be a central

Job security takes a backseat in the minds of
today‘s employee base where everyone seems to be
on the lookout for a challenging and diverse
career. Job switching, especially in high growth
sectors like IT/ITES, financial services etc. is
quite prevalent. While many of the older
generation do not even possess a resume, most
employees of today who have been working for
four or more years have multiple employers listed
in their CV. Often, job switching is caused not
just for monetary incentives, but also for more
lucrative career development opportunities.
There is also an explosion in one-year and part-
time executive education programmes being
offered by many premier institutions in India and
abroad, be it in management, law, media planning
or design. These cater to the growing inclination
of employees in their mid-careers who are looking
for value-adding courses. In fact, many MNCs
allow their employees sabbatical to pursue such
courses and some even sponsor them. Many
professionals also choose to become freelancers,
consultants or take up part-time jobs. This way,
they are able to juggle multiple jobs
simultaneously, introducing variety in their work.
All these trends stem from an inner need that this
generation feels to learn, develop and contribute
more on a personal and professional basis.
part of their life in future, the next generation
employees are demanding work that does not feel
like work. A topper in most Best Employer lists,
Google‘s USP to its employees is ―Work is Fun!‖
4.
For today‘s employee base, their work must be
interesting, challenging and double as a definition
of their lifestyle. To fulfill all these criteria, job
roles must be rich in diversity and challenge. This
is not an easy task to accomplish and many
companies today are giving the onus of job
enrichment to their employees to solve this issue.
Other HR-led initiatives include job rotation,
employee engagement activities, suitable training
so that the work becomes more doable etc.
Organizational support
Gone are the days when employees
uncomplainingly accepted their superior‘s
rejection of leave applications. To attract and
retain the right talent, today‘s organizations need
to unbend from rigid policies and form a safety
cushion for their employees. They need to
understand and empathize with the demands of
the new generation workforce which includes flexi
-timings, telecommuting, sabbaticals etc.
Apart from helping employees maintain work-life
balance, providing such options is also an
organization‘s way of giving more freedom to its
employees and showing them that they are cared
about on more than just a professional basis. It is

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Pratibimb | Feb. 2011
a show of trust which the employees will gladly
reciprocate.
Breaking glass walls
The quantum of support that employers offer
their female employees is also a decisive factor in
their attractiveness as a preferred employer. It has
been accepted that women are as competent as
their male counterparts in most job roles that the
society offers. In recent years, there have been
more women pursuing graduate and post graduate
degrees and their presence in the workplace is also
increasing. A large number of women who took a
break from their career for family responsibilities
are making a comeback to the workplace.
The employers of tomorrow need to acknowledge
this phenomenon and make suitable provisions to
make the work environment friendlier to the fairer
sex. For instance, TCS offers employee-friendly
policies to female employees embarking on their
second career by providing them with special
training, work-from-home, part-time options etc.
Since the onus of child-care often falls on the
woman in the family, employers can aid in this
respect by offering crèches and child-care facilities
in the workplace. The trend of providing
paternity leave is also catching on as it focuses on
the increased role that fathers have in raising a
family.
Compensation
Young professionals today give more weightage to
the take-home pay rather than the (often
HR Buzz
enormously inflated) CTC that the company
quotes. Unlike the savings-oriented mentality of
the previous generation, they prefer a fatter take-
home pay to benefits and perks. Moreover, what
each employee finds attractive in a compensation
plan is different and as an acceptance of this truth,
many companies have started to offer flexible
compensation plans. Rather than the company
deciding the best way to compensate an employee
for his service, he can be given the freedom to
choose his reward. For example, Oracle offers its
employees a basket of options from which the
employee can pick and choose to tailor his own
compensation plan.
Work culture
Though this differs from one organization to
another, there are some broad expectations that
this generation has, from any organization. A
competitive environment is inevitable in this dog-
eat-dog world but the work culture must not turn
unhealthy. This is especially important because
most of the organizations today have a team based
structure where mutual adjustment and
cooperation are vital in getting work done. If the
environment is unhealthy, the team performance
automatically suffers as does individual employee
satisfaction.
Employees are happier to work for organizations
where they are treated with respect, where the
channels of information and communication are
open and unclogged. ―I don‘t want to work in a
company where everyone is operating with a
hidden agenda. Even if there is a crisis, I would
appreciate it if the management comes out in the
open and admits it. That shows that they consider
us as part of the company‖, said an IT
professional who has worked for a software
company that was undergoing the repercussions of
a takeover.
Conclusion
The upcoming employee base has needs,
aspirations and demands different from the past
34
Pratibimb | Feb. 2011
generations. They seek meaning in their work,
more autonomy and freedom at work, challenging
job roles, rich and diverse job content, complete
organizational support and empathy in
maintaining their work-life balance and flexibility
in everything from work timings to compensation
plans. They are willing to become more than just
salaried employees and become members of the
organizational community who will strive to make
a difference and hence contribute to the vision
they share with their employers.
Thus, the changing mindset of the imminent
professional workforce has created a need for
futuristic employers to reinvent themselves and
change their USP to prospective employees, in
order to attract and retain the best talent in the
industry.
HR Buzz
References
1. Jones R. (2009). The Big Idea -why every
company needs one. Profile Books
2. All direct quotes are from interviews taken by
the author with colleagues, friends and
acquaintances within the past one year.
3. Unusual Perks – Fortune 100 Best
Companies to work for, CNN.com, January
2010,
4. http://money.cnn.com/galleries/2010/
fortune/1001/
gallery.bestcompanies_unusual_perks.fortune
/index.html
5. http://business.rediff.com/slide-
show/2010/jan/29/slide-show-1-indias-10-
best-companies-to-work-
for.htm#contentTop

Inviting Articles
“Best Article”: Gowri N. Kishore | IMT Nagpur
They will receive a cash prize of Rs. 1000 & a letter of appreciation.
We are inviting articles from all the B-schools of India. The articles can be on any field of
business from Marketing, Finance, Operations, HR to Systems.
You can send us articles on:
 Recent developments or trends in any of these fields
 Articles covering latest trends, innovative practices, strategies, etc. in the global
perspective
 We also invite articles on management thinker similar to the current section
 Apart from above, creative works in relation to any of the fields will be equally
appreciated
The best entry will receive a letter of appreciation and a cash prize of Rs 1000/-. The format of
the file should be MS Word doc/docx. Articles should not be more than 2500 words.
The last date of receiving all entries is 10th April, 2011. Please send your entries marked as
<ARTICLE NAME>_<SENDERS‟ NAMES>_<INSTITUTE> to:
pratibimb.tapmi@gmail.com

35
Pratibimb | Feb. 2011
Systems Corner
SOCIAL NETWORKING: IS IT REALLY SOCIAL?
Kumudini Manda | NMIMS
The dictionary defines social networking as ―the Ask me to give an online update at the rate of one
grouping of individuals into specific groups like per 10 minutes and I would give you 20. And
rural communities or neighbourhood then, ask me to strike up a conversation with the
subdivisions‖. Try telling this to someone today person sitting next to me and I would be caught
and you would get bewildered reactions like, dumbfounded.
―Really? I thought it was only possible online.‖
Social networking on Google would give you
Well they are not to be blamed; the concept was
results running into millions in number, with
passed on to them only in the online mode.
services varying from dating to professional help
If anyone is to to educational
be blamed, then advise to just
it is the ease of finding pals. It
access to the is actually
internet and enlightening to
lightning fast find a gamut
speeds at which of sites with
a message can be each one
communicated claiming to be
from one corner more popular
of the globe to than the other.
the other, which And the
is responsible for regional
limiting the affiliates are
scope of not far behind
networking to the race with a
the virtual different set of
world. platforms for every territory. An exhaustive list of
such sites ensures that it keeps one occupied for
Picture this: Rahul, the moment he wakes up hours together in a day without looking for
announces to the whole world, the time at which alternative avenues to socialise.
he got up and how he is running late to work. But
the same person does not find time to catch up People have started living only for letting the
with people at home because of his ―hectic‖ world know what they are up to. It is actually
schedule. Far from being convivial with amusing to see how one does not get tired of
technology on our side, we are increasingly clicking oneself to glory to get that shot to be put
becoming non-communicating beings. One can on display. It is a display of the new skirt or the
go on at length about the latest happenings in new pair of shoes or the funky piece of jewellery
one‘s life when it comes to posting it on the web. that you adorn for your list of friends to admire.
You can consider yourself fortunate if you get It is actually scary to note that every move is
more than two words about one‘s disposition in guided by the motive to put up pictures or quotes
the ―real world‖. for the world to like and comment on. In an
endeavour to picture perfect the moment of

36
Pratibimb | Feb. 2011
savouring the dripping ‗gola‘, I am not sure how
many of them actually remember to enjoy the
gola.
Where is it all heading?
Has social networking only reduced to posting an
update on the number of ‗sneezes‘ by someone
and his/her friends to either ‗like‘ the thought on
one‘s mind or go ahead and comment? Then there
are some who take it to the next level by sharing it
with their so called online friends.
I am afraid all of this is not remotely close to the
idea behind coining the term. We are losing out
the essence of being social in being so
uncommunicative and unresponsive to our
surroundings.
What discriminated us from the other species of
the planet was our intellect and our ability to
socialise and hence the name social being. We are
now becoming a race of asocial species, aloof to
the existence of any other mortal.
We are all ready to wish a speedy recovery to
some bloke in some part of the world who lets the
world know about the 2 degree increase in his
body temperature. At the same time, it becomes a
task for us to find out the well being of people in
the next cubicle or people at home. We are
getting so mired by the virtual world that facing
the factual world is becoming mission impossible.
Systems Corner
It is no wonder that the corporate have begun
taking charge of the alarming numbers of
incompetent communicators. Industries today are
being increasingly driven by soft skills and the
lack of it is being looked at as a trade barrier. Soft
skills training program was unheard of at the time
of our fathers and the forefathers, thanks to our
communication media today- we frantically need
it now.
Where do we draw a line to being candid about
the new stuff bought or the state of one‘s mind
and yet be brusque about the real affairs?
It is high time we took a grip over the situation
and put a restraint over the blatant exhibition of
nothingness. I am not propagating a total
withdrawal from the advances in technology and
living the life of a hermit. I ask for nothing but
moderation to the current practice and
understanding the nuances of actual networking. I
do not totally undermine the contribution of
social networking sites in finding long lost friends
and in getting messages to every nook and corner
of the world in seconds.
Communication being the standalone prerequisite
for networking, it is imperative for us to start
talking, expressing ideas, listening, empathising,
not in the world of the ‗clouds‘ but right here on
this terra firma.
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Pratibimb | Feb. 2011
A C HI E V I NG C OM P E T I T I V E
THROUGH SUPPLY CHAIN
Tejaswi T J and Ravish Kumar | TAPMI
As the companies all over the world are starting to
compete on price, differentiation between the
brands/products is diminishing and more and
more customers are becoming price sensitive.
The leverage the companies have, in charging
higher price to the customer, for their
differentiated product, is reducing. This
necessitates the companies to focus on their
supply chain efficiency to, differentiate the brand.
Supply chain efficiency can be utilized to:-
 Lower the costs, thereby increasing the
margins.
 Increase the responsiveness of the supply
chain, thereby creating a differentiation in the
customer services offered and creating a niche
segment for the product, even though the
product per se is not differentiated.
 Give new service offerings to the customer or
create a new business model to meet the needs
of the customer.
Operations Bonanza
A D VA N TA GE
Food Processing Industry in India
The Indian food industry is estimated to be worth
over US $ 200 billion and is estimated to grow to
US $310 billion by 2015, but it accounts for
only 1.7% of total world‘s trade in this sector.
Food processing industry, estimated at a value of
US $ 70 billion, contributed 6.3% to India‘s
GDP in 2003 and had a share of 6% in industrial
production.
While the industry is large in terms of size, it is
still in a nascent stage in terms of development.
Out of country‘s total agriculture and food
produce only 2% is processed.
Problems with existing supply chain
(shown in the picture below)
Designing the supply chain to
overcome these problems
Once a customer order is given, based on the
forecast, the company estimates a demand of X
Kg of particular product. Now company has two
choices:
38
Pratibimb | Feb. 2011
 It can procure from farmers who have already
grown the particular product, by identifying areas
where the crop is abundant
 It can establish its own linkages with farmers by
forward integration, by getting into contract farming
with farmers and establishing its own delivery and
warehousing system
The areas in which a company can become
responsive, is the information flow from company to
the farmer i.e. the time lag between the company
receiving an order and farmer taking up sowing has
to be minimized.
The supply of products from the farmer to the
company and from company to customer can be
responsive through better coordination and
integration between various partners in the supply
chain.
Value Stream Map
Anything that does not add value to the customer
can be considered as waste and effort should be made
to eliminate or reduce the waste.
Non-value adding processes:-
 Time lag between customer placing an order and
the time farmer takes up sowing e.g. analysis of
the areas in which sowing has to be taken up,
selecting the farmers, time taken for information
flow between the company and the farmer are
Operations Bonanza
increasing the lead time without adding any value
to the customer
 Though the transportation of greens from the
farmer to the company is a necessary process, it
does not add any value to the customer. So, the
effort should be put to reduce the time taken in
this stage
 Wastages happening at various stages like
harvesting, transportation
Make the supply chain lean
Variability in order fulfillment (from the supplier
end to the focal industry) is a function of following
variables:
 Fragmentation of Suppliers (Number of farmers
that constitute the total supplier base)
 Dependence of the farmers on amount of rainfall
and its timings
 Non-scientific farming methods
 Wastage during harvesting, transportation and
storage
 Lack of visibility (Less information flow between
the farmer and the company)
Steps to reduce the variability and
make the supply chain responsive
Fragmentation of supplier base
In India, a large number of farmers have a land
holding of less than 1 acre and when a company
39
Pratibimb | Feb. 2011
divides its demand among large number of farmers,
it further increases the variability as output from
each farmer may vary and company has very less
control over them. But, on the positive side, it acts
as a hedge against variability as the failure of some
farmers to give the required output, will be counter
balanced by output of remaining farmers.
The advantages of contract farming are:-
 Through contract farming, consistency in
quality and quantity of greens can be achieved
 More visibility in the supply chain as the
company can choose areas and farmers from
whom it can procure
 Reduction in variability due to more control
 Increased responsiveness as the company has
direct linkages over the farmers
Reduction in lead time of information flow
between the company and farmer
The time lag that exists between the customers
placing an order and farmer taking up sowing
should be minimized to ensure better responsiveness
and reduction in variability. This can be achieved by
connecting the company to the farmers directly
using information technology.
Company can establish its centers in major areas
where it procures the greens from farmers and
appoint area officers, with whom information from
the company regarding quantity of greens to be
procured will be directly shared through use of ERP
and area officer, from the data base of the farmers
in his area, can choose the farmers for particular
sowing period.
This ensures immediate information flow by
minimizing the lead time for information flow
between company and the farmer.
Operations Bonanza
Information technology can be further
used to:-
 Maintain a database of farmers who are under
the contract of the company and monitor his
performance in terms of yield/acre and
percentage of rejections. This database can be
used to classify the farmers into A,B and C class
which enables the company to concentrate on A
and B class farmers for next sowing period and
ways to improve the performance of farmers in
class C. Farmers in class A should be
incentivized to maintain their performance level.
 Monitor the performance of each and every
farmer and establish a feedback loop from the
company to the farmer, which enables each
farmer to be aware of his performance and the
areas he should focus on to improve the
performance.
Feedback Loop
Conclusion
By implementing all the steps mentioned above, the
company can increase the yield, reduce the wastage
at each stage and reduce the perish-ability rate,
thereby reducing cost and increasing the margin.
Along with increased margin, the company can gain
sustainable competitive advantage by being more
responsive to its customer needs through reduced
cycle time and improved quality.
40
 Inauguration of New TAPMI Campus By The President Of India

The 42 acres new campus of TAPMI has been inaugurated by Smt. Pratibha Devisingh Patil on 9th December,
2010. The campus is equipped with world-class state of the art facilities required for imparting high quality
management education and has a built up area of over 1.2 lakh sq ft covering the Academic Building with 10 air
-conditioned classrooms, Knowledge Centre, and residential facility for over 600 students and faculty. The cam-
pus is Wi-Fi enabled and has a most modern computer centre. The campus library is open 24/7 and has 33,000
books, 285 journals and 17 online databases in addition to Harvard publications (HBS). 5000 bound volumes
of business and general magazines since 1984 have also been preserved in the library along with Project Reports
spanning 25 years, Faculty working papers and other publications.

The President unveiled the Plaque in three languages (Hindi, English and Kannada) and planted a sapling sym-
bolizing the inauguration. The inauguration was also attended by Mr. H.R. Bhardwaj, Governor of Karna-
taka and Dr. V.S. Acharya, Minister for Higher Education, Planning and Statistics, Muzrai Government
of Karnataka. Chairman and Members of TAPMI Trust and Governing Council were also present at the event.

41
 Contact Us:
pratibimb.tapmi@gmail.com
Visit: http://www.tapmi.edu.in/html/pratibimb-overview.html

Team Pratibimb
T.APMI
Post Bag No. 9
Manipal—576104

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