Mining sector reform on the anvil

The policy envisages “attracting domestic & foreign direct investments to the tune of Rs.1,000 billion in the mining sector & generating direct & indirect employment for about 500,000 skilled & unskilled labour force by 2011.” If approved, it would allow 100% FDI in mining of all minerals, barring Coal, Lignite & atomic minerals. Furthermore, staterun agencies will be treated at par with private entities for the purpose of award of concessions. There will be no mandatory joint venture with local or state-owned companies for mining. The Secretary General of Federation of Indian Mineral Industries, R.K. Sharma, told B&E, “On the whole, it is a good step forward, but the auction of mineral deposits & provision of captive mines needs to be opposed.” He further added, “Tatas are sitting over 3,000 million tonnes of iron ore deposits & produce only about 5 million tonnes of steel; while SAIL, which has control over 5,000 million tonnes of steel, produces over 13.33 million tonnes of steel.”

Development needs to be promoted, but selling the assets of the nation at runaway price would be abominable & a breach of people’s trust in the state.

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Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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Don’t worry pop, i’ll blow it all up!

Perhaps the most dramatic paper that electrifyingly shook age-old perceptions was the one presented in 2004 by stalwart professors Belen Villalonga (Harvard Business School) and Raphael Amit (Wharton), who analysed “all” Fortune 500 firms and proved unequivocally that not only do the stock returns of family firms consistently show higher levels of risk, but also that “when ‘descendants’ (of founders or founding families) serve as CEOs, firm value ‘is’ destroyed!” If one presumed that modern corporate governance norms were enough to mitigate the damage caused by family successors, Villalonga and Raphael prove further that descendant CEOs “destroy value whether or not the family has control-enhancing mechanisms.” While the most noted 2003 research by London Business School proffered that family businesses “risk their growth potential if they fail to recruit from outside,” most amusing was the Economist research at the turn of the century that commented how the death of a significant inside shareholder resulted in a shareholders’ wealth increase (“the larger the deceased’s shareholding, the bigger the subsequent rise!” ) Strangely, this finding gets humungous support from the subsequent benchmark 2005 research paper titled ‘Firm Performance...In Family Managed Firms’ by David Hillier (Leeds) and Patrick McColgan (Aberdeen), which documents positive stock price increases to the “announcement of the sudden death of a company’s founder executive.” But more seriously, they also indisputably brought out how family CEO successions are almost always followed by dramatic declines in not only stock performance, but most dangerously, even operating performance! Not surprisingly, the exits of family CEOs from family owned firms led to increases in operating performance, revenues, employment, stock value, but only if the new CEO being appointed was from outside the family! A fact vindicated a few years before in 2003 by the radical Pérez-González of Columbia Business School; and even by Professor Borokhovich of Cleveland University; and by Bath, Trygve, Schone of Institute of Social Research (Journal of Corporate Finance, 2005); Slovin (Louisiana University) and Sushka (Arizona University)... the list is so endless that it seems stupid to keep on repeating the same fact.

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Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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For Indians, the concept of capital account convertibility was relegated to books... until now!

Truly so, but getting a taste of the varied equities across the globe are just initial steps in the direction of practical capital account convertibility. On this account, even Reliance Mutual Fund is carrying on talks with the London fund house Schroders, Barclays & Royal Bank of Scotland to tie-up on a reciprocal basis. “We are in talks with various potential foreign partners,” said Emerge Reliance MF spokesperson, refraining to divulge further details.

The situation is similar with Tata AMC, which is in advanced talks with global fund houses and investment advisors in a similar attempt to offer global investment products; and not staying behind is UTI AMC, which has already gained the first mover’s advantage by entering into an ‘Investment Advisory Agreement’ with State Street Global Advisors Asia Limited (SSgA Asia) to launch the ‘Global Navigator Fund’. R. Raja, Senior Vice President, UTI AMC, claimed that through their fund, “an Indian investor gets an opportunity to access the global markets, specially equity markets, by investing in these funds. He can diversify across countries, thereby reducing the country risk of his investments.” Frankly, you can buy equity in Russia; gold in Brazil; debt in Africa; and of course, perhaps even islands in ‘The World’ Dubai (the photograph above) – a group of islands in Dubai shaped like the world, where celebrities like David Beckham, Rod Stewart, Michael Schumacher et al, are rumoured to have already purchased islands. But well, there’s just one hindering block... money!

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Source: IIPM Editorial, 2006

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

Head-Infrastructure Head Infrastructure Advisory

A Fortune 500 Company is looking for Head-Infrastructure advisory in their advisory services team. The incumbent will be responsible for providing detailed project assessments & financial advisory services to sectors like Infrastructure, Oil, Power & Gas.

Experience & Qualification: The applicant should be any Graduate with an overall experience of 10-15 yrs
Location: Mumbai
Apply to: fmcg@planmanindia.com

For complete IIPM article click here

Source:- IIPM Editorial, 2006

An IIPM and Management Guru Prof.Arindam Chaudhuri's Initiative

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Brand Talk!

Times are changing and radio jockeys are fast turning into brand ambassadors...

The story goes that Jaggu, a popular RJ of Radio One in Mumbai, complained of carrying more than a few extra pounds and food was on his mind, always. Saffola saw light at the end of the tunnel and together they launched Jaggu ‘Mission 10 kilo’. Jaggu lost 10 kgs in three months flat and the viewers were involved in the whole weight loss programme, so much that some of them even lost weight along with Jaggu. In another example of innovative promotions on FM radio, hair oil brand Parachute did something similar: one of Radio City’s RJ endorsed the brand on air and shared the results with the listeners.

Reviews, interviews, exclusive music rights, tickets distribution, et al, Bollywood was the first to innovate on the small radio set (a low investment and high returns medium) when it came to promoting itself and how! But, now even brands are trying every trick in the book to get themselves heard. Literally!

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Source : IIPM Editorial, 2006

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

Read more:-

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A new outsourcing wave has hit the telecom sector in India and all eyes are now on IBM

Meanwhile, Reliance Communications, the third largest telecom operator in the country, has short listed three frontrunners amongst the contenders, namely: IBM, Tsystems and EDS for this outsourcing deal. It would be similar to the Idea deal, wherein Reliance would sign a pact for 10 years, but the size of the deal in this case is expected to be about $1.5 billion.

However, if the entire cellular service provider industry ends up outsourcing to IBM, would cellular operators be able to get the cutting edge competitive advantage that they are desirous of achieving? After all, a common vendor would impart virtually similar services with negligible differentiation.

Be that as it may, bagging contract after contract, life is beginning to resemble a bed of roses for Big Blue in India. And if they walk away with the Reliance or Vodafone deal (or both), that would be the yummy icing on the cake!

For complete IIPM article click here

Source:- IIPM Editorial, 2006

An IIPM and Management Guru Prof.Arindam Chaudhuri's Initiative

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• IIPM : IIPM Links
• IIPM: More about IIPM
• IIPM Alliances - IIPM - by RAVI
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• THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT
• Pseudo-socialism is creeping back into the policy-making process ...
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