L2.

Analysis of Industry I

Hanif Kanjer
MBA (London Business School), BE (Production) Founder Director, Rustomjee Business School Founder Director, Rustomjee Cambridge International School Director, Rustomjee International School

The Business of Business is

Business

A business has to be involving, it has to be fun, and it has to exercise your creative instincts. Richard Branson

In business, Ive discovered that my purpose is to do my best to my utmost ability EVERY DAY. Donald Trump

Governments

Control Your Identity or Microsoft and Intel Will

Companies

Mukesh rejects Anil Ambani's objections

P Chidambaram with Japanese Finance Minister in Tokyo at the Ministry of Finance, Tokyo

Individuals

Who do these transactions impact?

Lets look at a CASE

Jet Airways buys Air Sahara

Deal $500m, 19

January 2006

The deal is very good for business, our shareholders, [and] the industry.. it will prove that in India things can be done better than anywhere in the world
Air Sahara, which is not publicly listed, has been losing money and is estimated to have debt of up to 7 billion rupees

Naresh Goyal, Jet Airways chairman

When people can see which direction the leaders are going in, it becomes

easier to motivate them.

Lakshmi Mittal

Sahara claims full protection of employees' interests

Total Takeover
Goyal, who described the deal as a "total takeover," said his airline was not planning to retain all of Air Sahara's workers.

As you get bigger, you have to learn to delegate. Its also an excellent way to

get staff involved in the companys operations.

Azim Premji

Jet to interview Air Sahara employees February 10, 2006

Air Sahara's staff strength is about 1,700, including 91 Pilots and 105 flight crew

Flash strike by Sahara pilots upsets flight schedules

February 12, 2006

I arrived at the Mumbai airport early in the morning to catch a flight to Delhi. I waited for long and at the last moment it was announced that the service has been cancelled, said Vikas Chaddha, passenger. Sunday, February 12, 2006

Kingfisher Chairman Vijay Mallya: it

would not affect Kingfisher 19 January 2006

Airlines as it was doing well.

Kingfisher, GoAir, and IndiGo Airlines considering forming an alliance

23 January 2006

Facts do not cease to exist just because they are ignored. Aldous Huxley

The Stakeholders
Shareholders of Jet Airways

Air Passengers

Employees of Jet & Air Sahara

A Selfish Society is a contradiction of terms

Tony Blair

The only society that works today is also one founded on mutual respect, on a recognition that we have a responsibility

collectively and individually,

to help each other on the basis of each other's equal worth.

The business of Business is RESPONSIBLE TRANSACTION

Lets look at another CASE

Indian State seizes Cadbury chocolate stocks after worms

Friday, 03-Oct-2003 9:10AM PDT

According to ORG-MARG figures, in the chocolate category, there was a 3% drop in October while in November the fall was around 10%. Cadbury's lost sales in the festival gifting space. The company expects a drop of 3-5% in sales this year.

Sometimes it is better to lose and do the right thing than to win and do the wrong thing. Tony Blair Cad-bury's concerns...Big B seals chocolate's purity
January 07, 2004

It has spruced up its packaging after decades, capital expenditure Rs. 12 to 15 crores. 12-15% more expensive than the previous easy to tear foil. The company's priority is to first bring back some of the lost trust in the chocolate category and then work towards better margins.

Mr Sanjay Purohit, General Manager - Marketing, Cadbury India Ltd, explains the new packaging at a press conference Kochi , March 31, 2004

And then there are many more..

Mother of All Scams : The Bermuda Triangle! Telgi stamp Paper Scam

Why do these things happen?

Failure of responsibility to
Employees Clients Society at large Stockholders

The temptations for cutting corners and defrauding others are great.

Power, money, and knowledge can foster arrogance and a sense of entitlement that lead to truly shocking behavior

Responding to Failures of Responsibility

Possible responses Discourage people from wanting to do bad (character development). Ethics in business, Spiritual Quotient Eliminate structures that encourage or reward wrongdoing Making wrongdoing impossible (auditing, close supervision, etc.) Quick and harsh punishment of wrongdoing (trials of Enron executives)ultimately most costly response

Reconceptualizing Solutions

Selfish

Altruistic

Often, solutions are seen as either/or, as either selfish or altruistic.

The HK Matrix
Helps Self

Win/Win Infosys

Enron
Plantation schemes
Hurts Others

Tatas
Helps Others

Government Subsidies

NGOs

Harshad Mehta

Lose/Lose
Hurts Self

Self-sacrifice