March 2006
A MANAGEMENT KALEIDOSCOPE
“To see a World
in a grain of sand,
And heaven
In a wild Flower,
Hold Infinity
in the Palm of your Hand”
MET Institute of Management
Our Faith
Knowledge can neither be stolen by a thief,
nor snatched by king.
It is indivisible unlike ancestral property,
It never burdens the bearer,
It multiplies manifold when offered to others.
Knowledge is the Supreme form of wealth.
e
About MET
A
t the MET League of Colleges, we encourage students to push the limits of their minds. Because, we
believe, that's what gives them the edge. Today, we can say with pride that our students aren't just
intelligent. They are sharp. Razor sharp. Sharp enough to slice through the syllabus and add value
to real projects. Sharp enough to start their own business, if they want to. Sharp enough to deal with the
sharks in the world. Sharp enough to understand, that in the final tally, profits come from building on
values.
The MET League of Colleges is a conglomerate of ten premier educational institutions, driven by a singleminded focus on imparting quality education to make students sharp. Established in 1989, with a mission
to redefine the system of education, MET is a professionally managed, multi-disciplinary and multi-faceted
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help young professionals face the challenges of life. And make their mark in the corporate world.
Institute of Management
Institute of Mass Media
Asian Management Development Centre
Institute of Medical Sciences
Institute of Information Technology
Institute of Pharmacy
Institute of Distance Learning
Institute of Computer Science
Institute of International Studies
Rishikul Vidyalaya
4
From the Director’s Desk
“To see a world in a grain of sand and heaven in a wild flower
Hold infinity in the palms of your hand and eternity in an hour”
- William Blake
As the fifth issue of Metaphor is reaching out to the stakeholders, our country is poised for a quantum leap of a
unique kind. Our economy which has been struggling in the past to achieve 4-5% growth in GDP, is now
growing at 6-8% despite set backs in the field of agriculture and rising fuel prices. The liberalization process
both in the domestic and international spheres has resulted in releasing dynamic forces of growth, which had
held back our country for long years. Despite a surging trade deficit, the net inflow of foreign investors and
NRIs has leveraged high level of foreign exchange reserves. The BPO/ KPO explosion has not only brought
more dollars home, but added to the crowding in the malls and institutes offering professional education. Hail
to the new customer of future!
As students of management committed to the study of the economy, we are concerned with the under currents
and the drivers of this sustained growth phenomenon. It is necessary to demystify and probe key issues like
factors responsible for the upward movement and a sustained buoyancy in capital markets, investments, real
estate, retail, pharmaceuticals, bio-tech and services sector of the economy. In the budgetary exercise we
have seen that lowering of excise duties, tax burden as well as tariffs have led to substantially increased level of
revenue generation. The liberalized economic reforms have provided a big boost to the professional and
technical manpower in the country often leading to pockets of scarcity in some high-tech areas. The prophets
of doom and conformists have been proven wrong. For once the Scientist President is being ably supported by
an Economist Prime Minister delicately riding an uncertain political juggernaut.
The part of the answer to his quiz lies in the contributions of information technology to the global
communication network. Through a host of satellites and millions of kilometers of cabling under sea and
ground, we have networks, which can hear the faint heart beats of an unborn child across continents. Now we
hope to decode the sonar waves triggered by the rumblings of the tectonic plates at faults buried kilometers
deep under the ocean. All this has been achieved not only due to great scientific advances but facilitated
immensely by mass commercialization at low costs. Therefore even the poorest rural landless women workers
have been empowered by the web movement through the micro credit of the Gramin Bank as they punch the
mobile keys to sustainability and profit. It is the power of the networked world, which now allows the western
economies to enjoy the low cost advantage of the underdeveloped countries while the benefits keep flowing
from west to east.
Little did William Blake imagine the power of his words and the prophecy woven in his poem, when he chose
the grain of sand as a Metaphor as it is the silicon chip which delivers infinity in the hands which once plucked
the wild flower.
Prof. Vijay Page
Director
MET Institute of Management
5
The METAPHOR Team
Editors-in-Chief
Prof. Vijay Page (Director)
Prof. (Mrs.) Leena George
Editorial Team
Rohan Amladi
Siddharth Deb
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Twinkle Fatnani
Stuti Jain
Design Team
For all Contributions, Comments &
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Prof. (Mrs.) Leena George
MET Institute of Management,
MET Complex,
Bandra Reclamation,
Bandra West
Mumbai 400050
Tel No: 26519232 / 26440446
Website: www.met.edu
Email: [email protected]
6
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Contents
1
Customer of the Future
Ashwini B. Divekar
8
2
Paradigms of Strategizing Brands
Prof. Sangeeta Tondon
11
3
Cost Volume Profit Models
Prof. D. M. Marathe
13
4
E-Business application in manufacturing
Prof. Khalid Sheikh
19
5
Current practices of HR and its Future
Prof. Leena George
22
6
The Future of BPO Industry in India
Rahul Khandelwal
26
7
It’s all about Attitude
Namrata Narsaria
28
8
Advertising : It’s all in the the mind
Rohan Barhate
30
9
Enterpreneurship Need of the Day
Shikha Sandhal
32
10
Sell More to Earn More
Dr. S. C. Panendekar
34
11
MET Tsunami Relief Activity : Economic
Rehabilitation of Muttom, Kanyakumari
Alpesh Mehta
39
12
Patents & its History: An Overview
Niteen Jain & Archana Kolge
40
13
Making a difference at the Global Level
Pawan Thadani
42
14
Rural Brahman
Supriya Lulla
45
15
Book Review
Prof. Khalid Sheikh
48
16
MET UTSAV
50
7
Customer of the Future
-Ashwini B. Divekar
The year before this saw what some would call
contradictory trends in marketing while mass brands
were forced to cut prices significantly to stay afloat, many
luxury brands witnessed spectacular performances. This
is the fifth year since we entered the new millennium. It is
a totally new world. Everyday we are bombarded with
new products, boasting better features, better services,
more user friendliness, higher utility values and
improved value for money.
India is a playing economy. The customer is able to play
one seller with another and extract the best deal for
himself. India has dramatically changed. Customer
power is here to stay.
The opening up of the economy during the 90s has
propelled the growth of this customer power. Suddenly,
the market has seen an explosion of brands, giving
customers multiple choices. And with growing media
exposure, international travel, and easy availability of
foreign brands, customers' demands for better things in
life has put greater pressure about delivery of quality and
value on the marketers. Gone are the days when
manufacturers set the standards, today customers are
demanding it.
The customer is fast changing. He is becoming smart,
well informed and focused. He has more than one
instrument to make a purchase. The role of a customer is
changing from the receiver of message to an active,
informed analyst of the message.
Today the marketers have realized that success or failure
of a product depends not only on what and how you
deliver to customers, but also on how the customers
relate to the brand.
The domestic market can be clearly segregated into
three broad clusters: the super-rich, the middle-class
and the have-nots. Each consumer class has a different
psyche and relationship with brands.
Today's customer has a high media exposure and there is
also an increase in the level of awareness. Needless to
say, a brand that inspires the customer will attract a
better price than its competition.
8
PROBLEM DEFINITION:
The project mainly deals with finding out whether there is
a significant difference between the brands that the
customers are using and the brands they are aspiring for,
whether the customers are satisfied with the existing
brands or they want something more, and whether the
customers' perceptions are taken into account by the
marketers or not.
OBJECTIVE:
The objective of the project is to identify the needs,
aspirations and demands of the future customer.
METHODOLOGY:
We surveyed the people who are between the age group
of 21-25 years, because they are the future customers.
We have taken the perception of the respondents for the
brand that they are aspiring for and the brand they are
using, on 5 point Likert type of scale. What we wish to
find out is if there is any difference in what they use and
what they aspire for. If the difference is significant then
companies should gear up and work out their strategies
accordingly.
FMCG:
We compared the scores for FMCG products aspired
and products used, the correlation was 70%, it appears
that in this category, consumers demand sufficient
choice, high service, convenience, fresh, high quality,
safe products, and value for money.
Thanks to the changing customers' mindsets and the
business environments, FMCG marketing is no more
going to be the same again. Tough market situations
and more discerning customers have rendered
conventional brand management tools obsolete. The
secret of successful brands is that they are able to
connect with the heart and soul of the customer.are able
to connect with the heart and soul of the customer.
The FMCG sector is witnessing fundamental shifts.
Markets are stagnating, competition is growing and
becoming more complex; technology is rapidly
developing; international and environmental issues are
coming to the forefront; more and more companies are
concentrating on their core business and business is
becoming more and more global. At the same time
customers are becoming increasingly sophisticated and
demanding.
FMCD:
Here, we found that there is a significant difference
between the brands aspired for and the brands used.
Correlation worked out at 55%, meaning that to the
extent of 55%, people are aspiring for a positive change,
but the other 45% are not actually determined.
Take the case of mobile phone handsets, here as we all
know companies are coming out with new models
almost on a daily basis, the companies use latest
technology and also lot of money is spent on advertising
and distribution, and still customers are aspiring for
more and more features to be made available.
Customers buy FMCD products for quality and service
and they always aspire for better quality and service. Also
reliability is something that most customers take as given
these days.
SERVICES:
Perception values for services were found to be
significant, to the extent of 9% level, although the
correlation worked out to the tune of 67%. People are, in
general, aspiring for better and better services.
With increasing competition and changing customer
preferences, companies, both in the manufacturing and
service sectors are increasingly focusing on services to
differentiate their offerings from each other. The need is
being felt more than ever before, as the tangible features
of 'products' offered by manufacturers and service
providers tend to get imitated easily. This implies that
such companies will need to find certain intangibles that
can differentiate their respective 'products' to get imitated
easily. This implies that such companies will need to find
certain intangibles that can differentiate their respective
'products'.
In a service industry, one of the factors that motivates a
customer to opt for a service is whether the service
provider is able to reduce his or her anxieties, articulated
or not, in relation to the same. In case of insurable
products, many customers are not fully aware of the
benefits being offered as well as the terms and conditions
underlying the same. There is always an apprehension in
the minds of the customers that insurance companies are
only interested in collecting the premium without
explaining the conditions for seeking future claims.
Because of this fear, the general tendency is to avoid
taking insurance covers. This problem is particularly
acute in the personal line of insurance where the
decision is taken in an individual capacity.
How many times has it happened to you that you have
gone to a nearby retail shop looking for a product and
there were no stocks available? This is the biggest
challenge for any manufacturing company - to make
stocks available at the right place so that demand is not
unfulfilled, keeping in view the complex Indian retail
structure. As far as retail services are concerned, people
are aspiring for better services then they are provided
today.
Even in the case of Telecom Service Providers, people
are aspiring for better services in terms of network and
also they are looking for value for money.
ANALYSIS:
The future customer aspires for better products &
services as compared to what he or she is using at
present. We worked out the bivariate correlation which is
found out to be 63%, meaning that majority of the future
customers have a positive direction of thinking, but 27%
are not sure about their future choices.
Today it isn't enough to say your product is the best, the
customer should also feel that the product is exclusively
customized for his needs, and that you value him the
most. Products' USPs are no longer sufficient to craft
marketing strategies or simply the brand tag of your
company. Successful market strategies in the present
cutthroat competition emerge from the understanding
of how customers think, feel, reason, and select
between different alternatives strategies or simply
the brand tag of your company. Successful market
strategies in the present cutthroat competition
emerge from the understanding of how customers
think, feel, reason, and select between different
alternatives.
CONCLUSION:
Today, we're not just tackling consumers but also
shoppers. And the battle is not only in the
consumer's mind but also in his hands. The focus of
marketing needs to go beyond just abstractions
(one way communication of brand values) to action
(live demonstration of brand values) so that the
customer is made to feel the brand more holistically,
and can influence customer behaviour at the
moment of truth - the point of purchase.Also today
the customer is moving up the 'Diminishing Return'
Curve i.e. after getting a certain level of quality in
many categories; customers are unwilling to pay
more for incremental quality and so are ready to
make do with acceptable quality. So the need to
deliver better value at the same price is much
greater today.
9
To sum up, marketing is combating both customers and shoppers; the battle is in the mind and for the
hand; there's a need to use media and real world experience to build brand differentiation and to force
behaviour; and communication needs to go beyond two speaker sound to surround sound for maximum
impact.
Something to think about…
(The author is a student of MET and this study is done under the guidance of
Dr S. Panandikar and Prof Gupte Faculty, MET Institute of Management)
10
Paradigms of Strategizing Brands
-Prof. Sangeeta Tandon
The age of enlightenment was a period of
unprecedented growth in terms of freedom, knowledge,
toleration and commerce. Its champions, such as
Bentham, Locke and Smith, believed in the idea of
human potential and progress, and changed the way we
think about the world. Today in an era championing free
markets with frequent restructuring, rapid technological
leapfrog and continuous change, companies depend
critically upon developing, building and strengthening
'Brands'. Everyone knows that building your product or
service into a bonafide brand
is the only way to stand out in
today's insanely crowded
marketplace. The only
question is, how is it to be
done.
A brand is an idea that is
something difficult to grasp.
Just as capital is a concept, so
is a brand. Although a brand is
related to a physical product
or service it is itself immaterial.
It is a transforming idea that
converts the tangible into
something of value. As Alan
Mitchell says 'Brand is a
specific tool by which we make
real markets work: a tool
which real people use to
navigate their way to real
value exchange'. Consumers'
choice of what they buy
depends rather less on an
evaluation of the functional
benefits to them of a product
or service, rather than more on
their assessment of the people in the company behind it,
their skills, attitudes, style, altruism, modes of
communication, speed of response and so on.
The passion for the totality of the brand trickles down
starting from the CEO himself (he is the real brand
manger) and has a cascading effect through all the
employees of the company. If the brand is to be
established as a coherent and consistent entity, there
must be a common approach to the strategies and
tactics of communication. What the best company
brand represents is a common culture. The onus
therefore must be on the organization to define clearly its
approaches, accessing multiple media, or both, a
company must have a clear brand identity with depth
and texture so that those designing and implementing
the communication program do not inadvertently send
conflicting or confusing messages to customers. A
company's brand may have many points of contact. They
range from the closest to home (employees) to the
furthest distant - the community in general.
Because of the diversity of contact, there is a diversity of
communication media used
and various departments
may be responsible for
important communications
on behalf of the brand. The
word of mouth becomes the
most powerful medium of
communication. If a
product or service is made
not just relevant but also
important to consumer's
lives they become
ambassadors of the brand
and these true loyalists carry
the message on their own
like disciples of a great
cause.
In interaction between
people and organization
there has to be a
congruency between what is
offered and what is
delivered. This is the basis of
trust. This idea of trust has to
be driven by a relatively high
degree of transparency. This
enables the customer and other audience to have faith in
the delivery of brands. This of course is not an
unquestioning relationship. Consumer will still demand
certain standards of behavior from companies and they
will ask questions of brands that are seen to fall short of
expected standards. The crucial ingredient in the success
of any brand is its claim to authenticity.
Many organizations talk of mission statements and
vision statements. Unfortunately, most of those
statements turn out to be a muddled stew of values,
strategies, practices and are usually a boring, confusing,
structurally unsound stream of words that seldom have a
11
direct link to the fundamental dynamic of visionary
companies. Building a visionary company requires 1%
vision and 99% alignment. When you have superb
alignment, a visitor could drop in from outer space and
infer your vision from the operations and activities of the
company without ever reading it on paper or meeting a
single senior executive. Core competence is a strategic
concept that defines your organization's capabilities what you are particularly good at - whereas core
ideology captures what you stand for and why you exist.
Core competencies should be well aligned with a
company's core ideology. The most lasting and
significant contribution of those who build visionary
companies is this core ideology. It helps us to know and
understand the difference between what should change
and what should not. Passion, emotion and conviction
built around the core competencies and core ideologies
are its essential ingredients. Developing core
competencies with single-mindedness strengthens
brands and what they stand for.
A successful branding programme creates in the mind of
the prospect the perception that there is no product on
the market quite like your product designed to
differentiate your cow from all the other cattle on the
range. Sometimes trademarks and visual symbols are
given importance. A symbol can represent a name and
perhaps be seen and identified even from a distance.
Another way to make a brand distinctive is with color. For
example, red is the color of energy and excitement.
Color consistency over a long term can always help a
brand burn its way into the mind of the prospect. Today
brands are built with publicity and maintained with
advertising. The cart is now driving the horse. What
others say about your brand is so much more powerful
than what you can say a bout it yourself.
A brand becomes stronger when you narrow its focus. It
does not mean the same thing as carrying a limiting line
rather it means acquiring intensive depth in the core
competencies and dominating the category to achieve
the envisioned future. Diversifications into unlinked
projects and processes dilute the identity of the brand. A
brand that has lost its line rather it means acquiring
intensive depth in the core competencies and
dominating the category to achieve the envisioned
future. Diversifications into unlinked projects and
processes dilute the identity of the brand. A brand that
has lost its Singularity can also lose its life. Of course, it's
not only the audacity of the goal but also the level of
commitment to the goal that counts and one has to go
on a crusade to fulfill this dream. Envisioned future
should be so exciting in its own right that it would
continue to keep the organization motivated even if the
12
leaders who set the goal disappeared.
Brands can enrich people's lives or manipulate them.
Employees can find fulfillment at work or entrapment.
The task is to create a culture and system where the focus
is more consistently focused on the positive. Research
consistently shows that people do not feel that they fulfill
their potential at work and that internal politics prevents
effective communication and progress. The employee
may have the desire and the potential to become an
active participant in the organization, but there are clear
barriers to engagement. 'Guidelines, rules and policies
do not in themselves make us honest. They only mark the
pathway we should follow' (Kraemer, 2002). As Marx
pointed out, our responsibility extends to the system and
for the institutions within it.
It is only the will and determination to set ambitious
goals for the organization and the passion to excel can
clear all barriers to growth and success. Nothing great
was ever achieved without passion. If as a business
leader, entrepreneur or manager, you want to build a
sustainable and competitive great organization begin
and pursue your endeavor with a 'passion to win'.
(The author is a senior full-time faculty with Mumbai
Educational Trust's Institute of Management since 1997.
She teaches Economic Environment of Business and
Managerial Economics presently and has a long
teaching experience. She has authored a textbook on
'Managerial Economics' for postgraduate students and
has also written several articles in various journals of
Management.)
Cost Volume Profit Models
-Prof. D.M.Marathe
These models are extensions of simple break even
analysis. In these models it is assumed that the total
cost of operation is divided distinctly in fixed and
variable costs. Volume of production or sales remain
within operating manufacturing capacity. Denoting
following variables.
Q:
Level of production or sales unit.
P:
Selling price Rs./unit.
F:
Fixed costs
Rs.
V:
variable cost of production Rs./unit
Then profit Z = Total Revenue Total cost
= PQ f VQ
Z = ( P V)Q F
In short profit Z = f( P , Q, V, F )
CVP analysis is the study of how profit is influenced
and determined by price, volume and costs.
CVP analysis help us to answer the following questions
:
i)
Level of sales at break even situation or noprofit-no-loss situation
ii)
Budget profit level at budgeted production
iii)
Changes in profit due to changes in price,
volume and costs.
The above analysis assumes that there is only one
product to be manufactured and sold. All the
costs which are fixed, remain constant within the
operating capacity of production. Variable cost of
production per unit is constant or total variable
costs are linearly dependent or directly
proportionate to the level of production. All the
variables such as price and costs are known and
remain constant. All these assumptions put a
stringent limitation on above analysis. (n spite of
this the above model is useful in the following
aspects.
i.
Planning the Sales Budget
Ii.
Decision regarding acceptance or rejection of
special order.
iii.
Make-buy subcontract decisions pertaining to
components, products and sub-assemblies.
Iv.
Determine the operating capacity and
selection of equipment.
Model 1 :Determine and single product model with
linear costs
Profit Z = (P-V) F
Hence level of production/sales at breakeven = F/( PV
V= 70 Rs./unit
)
then breakeven quantity = 12000 units
If target or budgeted profit is Rs.5 lakhs.
Then budget quantity = ( F+Z )/ (P-V) = 1700 units.
Model 2: Deterministic multi product linear
costs
This can be used if product-mix i.e. relative volume of
product remain constant. The volume of product
remain constant. The volume of product I, Qi is
constant multiplication of base product say Q1 or Qi
= kiQ1
Then Z = n
å ( P-V
i
i ) Q1-F
i=1
n
Q1
å Ki ( Pi-Vi) -F
i=1
OR Breakeven Quantity Q1 = F/ Ki ( Pi-Vi) &
Qi = KiQi
E.g. Product A, i =1 Selling price Rs.20/unit,
Variable cost Rs.8/unit
Product B, I=2 Selling price Rs.35/ unit,
Variable cost Rs 15/unit
Fixed Costs = Rs 78000/Also assume volume of production of B is twice that of
A
\Q2 = 2Q1 or K2 = 2
& K1 = 1
\OR Breakeven Quantity Q1 = F/ KI ( PI-Vi) =
78000/1(20-8)+2 (35-15)
=1500 units
& Q 2 = 2Q 1 = 3000 units
Model 3 :Deterministic-single - productnon- linear costs
Let us assume that
2
total revenue TR = (3Q/2)- Q /50
& Total cost TC = 5 + Q/10 + Q2 / 50
Profit Equation Z = TR TC
2
2
= (3Q/2 Q / 50) ( 5 + Q/10 + Q /50 )
e.g. f=12,00,000 Rs. P= 170 Rs./unit
13
Breakeven Quantity will be when z = 0
The roots of above quadratic are Q = 4.037 or
30.96
The profit maximization will take place
when dZ /dQ = 0
Solving the equation Q = 17.5 units.
Practice problems
1.Total revenue = 1200 Q 10 Q2
& total Cost = 15000+5Q3Q2/2+Q3/5
Determine the breakeven quantity & sales quantity
which will maximize Profits.
2
2. Total revenue = 1374.4Q- 0.859Q
3
2
Total cost = Q /1000 9Q /5 + 1180Q +
134000
Find breakeven quantity and quantity which will
maximize profits.
3. Total cost = 31500 + 6Q + (7 Q2/100)
Selling Price = 441 4Q/5
The current selling Price is 300/unit
Find breakeven quantity and quantity that will
maximize profits.
4 Based on the study of the historical data a
management accountant has
established that the demand function for a product A
can be represented
by the equation Q = 6000 36 p, where Q is the
quantity demanded , p
the selling price (Rs/unit). He has also computed the
variable cost as
Rs. 18/unit and the fixed costs as Rs 150,000 Derive
an expression for the
Profit volume. Prove that there are two breakdown
points and find their
Values.
What should be the activity level for this product that
will maximize the profit volume and what will be the
maximum profit?
will maximize the profit volume and what will be the
maximum profit?
5
In respect of another product B, the
management accountant has established that both the
revenue function and the total cost functions are nonlinear and can be represented as:
TR(Q) = 120 Q 0.1Q2
2
3
& TC (Q) = 20000 + 1 Q 0.02 Q + 0.0002 Q
Depict the patterns of the revenue and cost functions in
graphical form.
Derive an expression for the profit volume and verify that
both Q = 217 and Q = 437 are breakeven points.
14
Marketing Department has set the sales level at 400
units. The management accountant argues that at this
level profit volume will be lower than the maximum
achievable. Show that the accountant's contention is
right and determine the incremental profit volume will
be lower than the maximum achievable. Show that the
accountant's contention is right and determine the
incremental profit volume as against the profit volume
on sales level set by marketing. Calculate the results to
the nearest integer values.
Probabilistic Models or CVP under uncertainty
In deterministic models it was assumed that sales
quantity, selling price and cost components are known
exactly and fixed. In most of the real situations these
values are not known accurately but subject to random
fluctuations. These fluctuations are characterized by
specifying some probability distribution. Hence the
amount of profit will also have some probability
distribution. The objective of CVP analysis under
uncertainty is to determine probability distribution of
profit. Then various inferences such as probability of
breaking even and probability of achieving desired
profit level can be drawn.
The sales volume, fixed cost, variable cost & selling
price will have some Probability distribution. If the
distribution fits some theoretical distribution then the
profit will also follow theoretical distribution.
Otherwise empirical distribution will have to be used. If
the distribution is theoretical then statistical theory can
be used to derive probability function for profit. In case
statistical methods cannot be used then simulation
techniques can be used.
Model 1 : Single product, sales quantity
probabilistic
Assume that selling price and cost parameters are
known with certainty. Sales Quantity is subjected to
random fluctuations and it follows normal distribution
.the example is as follows Let Selling price P = 32 Rs/unit
Variable cost V = 18 Rs/unit
Sales quantity Q follows N (60000,12000 )
i.e.Sales Quantity Q follows normal
distribution with average
60000 units and standard deviation of 12000 units
or Q = 60000 ,sQ = 12000
Profit Z = (P-V)Q F
= 14 Q - 520000
\ Z _ N ( 14Q 520000, 14sQ )
Probability that the product will not break even =
probe (Z<0)
OR Prob [Z z/sz < (0-320000/168000)]
OR Prob {normal Z < - 1.9}
From normal distribution tables this probability is
0.0287
Probability the expected profits are more than Rs.2
lakhs
= prob
[Z>200.000]
= prob [ (Z-Z )/s Z>(200000-320000)/168000]
= prob [ normal Z > - 0.71]
= 0.7611
.
Find probability distribution of profit.
Find probability that product will not
breakeven
iii.
Find probability that profit will be at least
Rs. 5 lakhs.
iv.
Find probability that profit will not be more
than Rs 15 lakhs.
ii.
Mean
Std. Dev.
Sales Quantity
50000
4000
Selling Price (Rs/unit)
70
12
Variable Cost (Rs/unit)
36
8
Fixed Cost (Rs Lakhs)
6.5
2.6
Model 2 : Single Product all parameters
probabilistic :
In this case sales quantity Q, selling price P, variable
cost/unit V & fixed cost F are subject to random
fluctuations & all follow normal distribution
Solution:
i.e. Q _ N (Q, sQ )
i.Profit Z =(P - V )Q - F
V _ N (V, sQ )
Average Profit Z =(P-V) Q- F
= (70-36)50000 650000
=10,50,000/2
8
Variance of Profit z = 6094.24 X 10
=1259X106= s z
Or Standard deviations z = 780656/-
P _ N ( P, s p )
F _ N (F,sF )
Now Z = ( P-V) Q-F
Or Z = ( P - V ) Q - F
& sZ2=Q2( sP2 + sV2 )+( P - V)2sQ2+sQ2(sP2+ sQ2 )
2
+sF
This based on following statistical principles :
If Z = X + Y ; If Z = X - Y
ß
ß
Then Z = X +Y Z = X - Y
ß
ß
sZ2 = sX2 + sY2
sZ2 = sX2 + sY2
If Z = X Y
Z=X Y
2
2
2
2
2
SZ = X2 sY + Y2 sX + s X sY
Example :
A company wishes launch a new product. There are
no certain estimates of sales quantity, selling price and
variable cost / unit and fixed investment. The
following probabilistic estimates are available. Each
parameter is assumed to be normally distributed and
independent of each other.
\Profit Z _ N ( 10,50,000 ; 780656 )
ii.
Probability that product will not break even =
Prob [Z<0]
=prob[(Z - Z)/sZ<(0-1050000)/780656]
= prob [ normal Z < - 1.34 ]
= 0.0901 or 9.01%
iii Probability Z > 500000
=Prob[(Z - Z)/sZ>(5000001050000)/780656]
= prob [ normal Z > - 0.7 ]
= 0.758n or 75.8%
iii.
Prob [ Z< 1500000 ]
= Prob [ (Z - Z )/ Z<(15000001050000)/780656]
= Prob 0.719 or 71.9%
1. A company has developed two new products A and B,
which they wish to launch in the market. The first year
sales off take, selling price and variable costs are subject
to uncertainties as per probability distributions shown
below. However, due to resource constraints, the
company is unable to launch both the products in the
same year. Recommend which of the products should
be launched. Support your recommendation with
cogent analysis and reasons.
15
Product A
Product B
Mean
Std. Dev.
Mean
Std. Dev.
Sales (Q) Units
60000
3000
75000
4000
Selling Price (P) (Rs/unit)
80
10
70
15
Variable Cost (V) (Rs/unit)
35
6
30
8
Fixed Cost (F) (Rs Lakhs)
12
-
13
-
[ Parameters are normally distributed and mutually independent ]
[ normal distribution Z 2.10 1.96 1.65 1.28 1.34 0.7
Area(0toZ) 0.482 0.475 0.450 0.400 ]
Health care plan to launch a new brand of shampoo. Certain estimates are not available. Probabilistic estimates
are given by the consultant. All follow normal distribution and are independent of each other.
Mean
Std. Dev.
Sales Quantity (Units)
90000
2500
Selling Price (Rs/unit)
90
12
Variable Cost Production (Rs/unit)
40
9
Variable Cost Selling (Rs/unit)
10
0
Fixed Cost (Rs Lakhs)
14
0
Find probability that the company will not breakeven and the company will earn at least Rs 10 lakhs as profit.
Model 3
Single Product. All parameters probabilistic ( empirical distribution )
In this case all parameters are uncertain but do not follow any specific theoretical distribution. Hence
simulation technique will be used for application of model.
7/95 3b/96 5b/97 2/98 50/99 7/99 2b/00 4a/01 4b/01
prsb sim sim
sim prsb sim
sim sim
sim
Model 3 (48)
Single Product. All parameters probabilistic (empirical distribution)
In this case all parameters are uncertain but do not follow any specific theoretical distribution. Hence simulation
technique will be used for application of model.
Example:
A company plans to launch a new product for which the following empirical
Distributions have been developed as regards sales volume price, costs Note that the sales volume in this case is
dependent on the price. Only a few discrete levels of the parameters are considered to keep the example simple
(Table A).
16
Selling Price
Sales-Volume 1st Year
Variable Cost
Rs/Unit
Prob
Units
Prob
Rs/Unit
Prob
30
0.40
24000
0.28
12
0.25
26000
0.32
14
0.35
28000
0.24
16
0.25
30000
0.16
18
0.15
Fixed Cost
32
0.35
34
0.25
Rs/Lakhs
Prob
22000
0.32
2.0
0.30
24000
0.26
3.0
0.40
26000
0.24
4.0
0.30
28000
0.18
20000
0.34
22000
0.26
24000
0.22
26000
0.18
Stimulate the launch operation for 15 interactions using the random digits given below and find the probability
distribution of the profit volume, probability that this product will not break even in first year, probability that the profit
volume will be at least Rs.2 lakhs, random digits : ( the digits have to be continuously used without any omissions and
the digits chosen must be in the sequence of the event simulated for interaction )
27767
43584
85301
88977
29490
69714
94015
64874
32444
43278
13025
04338
54066
15245
47624
67732
74103
37221
88570
73017
80217
10875
56326
19087
24572
17943
56001
98898
15438
45093
74319
80053
Solution : To simulate the probabilistic events we must first allocate random numbers for each of the events. This is
shown below :
Selling Price
Sales in Units
Rs/unit
P
P
RNI
Units
P
P
RN2
30
0.40
0.40
00-39
24000
0.28
0.28
00-27
26000
0.32
0.60
28-59
28000
0.24
0.84
60-83
30000
0.16
1.00
84-99
22000
0.32
0.32
00-31
24000
0.26
0.58
32-57
26000
28000
200000
22000
0.24
0.18
0.34
0.26
0.82
1.00
0.34
0.60
58-81
82-99
00-34
35-59
24000
0.22
0.82
60-81
26000
0.18
1.00
82-99
32
34
0.35
0.25
0.75
1.00
40-74
75-99
17
Variable Cost
Fixed Cost
Rs/Unit
P
12
14
16
18
0.25
0.35
0.25
0.15
P
RN3
Rs (Lakhs)
P
0.25
0.60
0.85
1.00
00-24
25-59
60-84
85-99
2.0
3.0
4.0
0.30
0.40
0.30
P
RN4
0.30
0.70
1.00
00-29
30-69
70-99
Simulate in order P,Q,V &F
Formula used : Z = (P-V) Q- F
Simulation Results :
n
RN1
P
Rs
RN2
X
000
RN3
V
Rs
p-v
Rs
X(p-v)
Rs000
Rn4
F
Rs000
Z=PV
Rs000
1
27
30
76
28
74
16
14
392
35
300
92
2
84
34
85
26
30
14
20
520
18
200
320
3
89
34
77
24
29
14
20
480
49
300
180
4
06
30
07
30
14
12
18
540
94
400
140
5
01
30
56
26
48
14
16
416
74
400
16
6
32
30
44
26
44
14
16
416
32
300
116
7
78
34
13
20
02
12
22
440
56
300
140
8
43
32
38
24
54
14
18
432
47
300
132
9
01
32
52
24
45
14
18
432
47
300
132
10
62
32
46
24
77
16
16
384
32
300
84
11
74
32
10
22
88
18
14
308
72
400
92
12
21
30
58
30
57
14
16
480
07
200
280
13
30
30
17
24
80
16
14
336
21
200
136
14
71
32
08
22
75
16
16
352
56
300
52
15
32
30
61
28
90
18
12
336
87
400
(64)
(Total)
1852
Expected average profit volume = 1852/15 = 123.466
Number of occasions with negative profit 2 out of probability 15 Probability not break even = 2/15 =
0.1333 = 13%Probability the PV will be more than 2 lakhs = 3/15 = 0.20 = 20PV range =320
(-92) = 412.
Note: Only 15 interactions were done in the above manual simulation. To get better result the number of
interations should be increased to say 200 or 500 for which computer may have to betaken. The
probability distribution can be shown as histogram.
(The author is a Senior faculty at MET Institute of Management)
18
E-Business application
in manufacturing
-Prof. Khalid Sheikh
WHAT IS E-BUSINESS?
technologies have done away with the necessity of EDI
except for communicating with the existing legacy
E-commerce deals with using the Internet, digital
communications, and IT applications to make the
buying/selling process faster, easier, and more effective
and efficient. E-business, a much more comprehensive
concept, involves the continuous optimization of an
organization's value proposition and value-chain
position through the adoption of digital technology and
the use of the Internet as the primary communication
medium. This transformed business is an e-business,
able to outperform traditional business by adapting
more rapidly to market changes, responding faster to
customer needs, operating
at the lowest possible cost,
and managing the
creation and termination
of dynamic marketing
relationships as needed.
Such an enterprise must
implement and integrate
e-commerce systems, as
well as customer
relationship management
(CRM), knowledge asset
management, supply
chain management (SCM)
and logistic applications.
The focus in e-business is
on the extended enterprise
that includes intraorganizational, business-to-consumer (B2C), and
business-to-business (B2B) transactions and processes.
Electronic business, according to Norris et al. (2000),
encompasses three stages: e-commerce, e-business,
and e-partnering.
systems. However, every company today needs the
capacity to do business over the Internet (Norris et
al., 2000).
— E-Commerce. E-commerce, as a component of ebusiness, focuses on efficiency in marketing, selling,
and purchasing products and services over the
Internet. It includes:
— The e-storefront and e-catalog (selling over the Web)
— E-billing and e-payment (customer self-service)
— Rudimentary forms of e-procurement (Web-based
indirect procurement)
—
Electronic data interchange (EDI), which is a unique,
dedicated, and custom technology shared by two
companies, is one technology that has enabled B2B ecommerce for many years. However, today's web-based
— E-Business : E-Business strengthens linkages in
the value chain between businesses, and
between a business and its customers by
electronically connecting suppliers and
customers at all steps along the value chain. Ebusiness applications manage supplier data,
customer data, and
all associated
transactions. EBusiness focuses on
effectiveness
through improved
customer service,
reduced costs, and
streamlined
business processes.
Streamlining
business processes
in the e-business
world involves two
imperatives:
a ) Tr u s t a m o n g
partners, and
b) agreement on standard ways of working, and
agreement on a common data language that
facilitates dialogue on mutual business events
over the Internet (Norris et al., 2000).
— E-Partnering : It is an intense relationship
between businesses that utilize e-business
capabilities to create an environment for shared
business improvements, mutual benefits, and
joint rewards. More than simply linking business
systems, e-partnering is a strategic, customerfocused relationship in which companies work
together to optimize an overall value chain.
E-BUSINESS APPLICATIONS IN
MANUFACTURING
A manufacturer could use the Internet and benefit
from the new economy broadly in two different ways
19
by applying e-business:
—
— To Reduce Overheads. E-business can help
reduce overheads or indirect costs through:
- Cost reduction in transactions with suppliers,
distributors, and customers.
- Cost reduction in marketing/sales
- Improved (that is, fast, error-free, and
roundthe-clock) access to and by customers
- Faster feedback from customers
The above model needs considerable
developmental work and unusual cooperation of
suppliers and shippers. Copying Dell's
accomplishments by other manufacturers is
difficult; thus, this is genuinely a core competence
for Dell. Interestingly, Internet-based ordering
system is the easiest thing to copy in this direct
business model. The aspects of the direct business
model that are most difficult to copy are listed
below:
computers never become obsolete. It also
ensures that when the prices drop they don't eat
into Dell's profits.
— To Drive Manufacturing (Direct Business Model).
E business can be used to drive manufacturing by — Orders flow through Dell's factory in about 24
hours, which includes assembly and testing of
following what is called Direct Business Model.
each assembly for about 16 hours.
This model eliminates the middlemen in the
order-to-delivery process. Dell computers is one — Shipping is through well-known shipping
organizations such as UPS, Federal Express, and
of the pioneers in application of e-business to
others. Tested and packaged sales units
hort lead time. drive manufacturing. Under this
(computers and servers) are loaded immediately
model, the customers place orders directly with
on to trucks from shipping companies that are
the manufacturer; the manufacturer produces the
backed against the other wall of the factory. Once
product to customer specifications; and the
loaded on the trucks of shippers, they are no
customized product is delivered to the customer
longer a part of Dell's inventory
in a short lead time
USE OF INTERNET TO DRIVE MANUFACTURING:
DELL'S DIRECT BUSINESS MODEL
— Dell computers ensures that its product quality is
as good as the best in the industry and also strives
to keep the delivery promises nearly 100% of the
time.
— Customer has direct access to Dell Computers
through telephone, fax, and/or Internet.
— Dell Computers does not ship product from
inventory. Yet its turnaround time is comparable
or less than those of the manufacturer that ship
from inventory.
— Suppliers cooperate fully with Dell (the
manufacturer) to ensure prompt just-in-time
delivery to the factory. Trucks bringing parts and
components are backed against one of the
factory walls. Parts are unloaded as needed in
production. The part is considered to be in the
inventory of the supplier as long as it resides in the
supplier's truck.
— There is practically no inventory of parts or
components in the factory. Dell can assemble the
latest in components such as processors, CDROM drives, hard-disk drives, etc. as and when
they become available. This ensures that Dell's
20
— The coordinated supply of parts and delivery of
assembled products
— The near absence of parts inventory
— The ability to go to assembly of an order in about
24 hours after receiving the order
— The completion of production of almost all orders
within two days after receiving the order
— The absence of finished goods inventory
— Ensuring delivery to the customer five days from
the order.
The direct business model (e-business) requires
businesses to be agile and flexible, and creates very
high expectations among new economy customers.
But the success of this E-business model depends on
a company's partners more than ever. E-business
includes e-procurement, e-logistics, e-supply, and
e-manufacturing (Swamidass, 2000).
USE OF INTERNET TO REDUCE OVERHEAD
COSTS
Following activities can be performed on the
Internet, which can lead to enormous cost savings:
1) Disseminating company information, ISO
certification, awards, etc.
2) Providing product information: specifications,
functions, prices, etc.
3) Processing online requests for additional
product information, brochures, and samples
4) Conducting virtual tour of factory on the web to
disseminate information about manufacturing
and other processes to customers and suppliers
5) Collecting information on customer interests
6) Providing exact prices, availability, and order
status online
7) Online order entry
8) Conducting online biddings
Advanced Uses of Internet to Reduce Overhead
Costs
1) Order tracking and after-sales status reporting
2) Employee and customer training on the web
REFERENCES :
Iyenger, Partha (2000) “E-business: Dealing with
Organizational Structure Issues,” in MM: The Industry
Magazine, vol. 3, issue 1, December 2000, pp. 70-1.
Norris, Grant; James R. Hurley; Kenneth M. Hartley;
John R. Dunleavy; and John D. Balls (2000) E-Business
and ERP: Transforming the Enterprise. New York: John
Wiley & Sons, Inc.
Swamidass, Paul A. (2000) “Emerging Business Models
and Manufacturing Strategies for India in the Internet
Era,” in MM: The Industry Magazine, Dec. 2000, vol. 3,
issue 1, pp. 40-8.
(The author is professor of e-business at
NMIMS)
The following is a story narrated by the famous Sh
G. Narayan, which serves as a lesson for survival
in today's context.
A hare and a tortoise live in Ahmedabad. They are good friends
and like all good friends, sometimes have a dig at each other.
One day, in a light mood, the hare ridiculed the tortoise for his
slow pace. The tortoise reacted by challenging the hare for a race
between Paldi to Navarangpura.
On the appointed day and time, the two assemble at the starting
line and start the race. The hare dashes off the start line like a
flash. After crossing the midway mark, he feels that a short nap
would do no harm. The short nap turned out to be a bit too long.
Meanwhile, the tortoise crosses the hare and reaches the
destination. The hare wakes from the slumber, oblivious of the
time, and dashes off towards the finish. To his dismay he finds the
tortoise having a nap at the finish line.
The moral of the story is "Slow and steady wins the race."
The story does not end here...
The hare goes home and soon understands that complacency
and overconfidence were the reasons of his defeat. He vows not
to repeat the mistake again. He then invites the tortoise for
another race. The tortoise agrees to his friend's request.
They meet at the appointed day and time at the starting point.
The race starts. This time the hare dashes off to the finishing line
without taking a break and wins the race comfortably.
The moral of the story is "Fast and steady wins the race".
The story does not end here...
The tortoise goes home and thinks hard. He was aware that the
hare cannot be defeated in speed. He then ponders over his core
competence. At last he finds a solution and invites the hare to
another race. This time the course is changed. It is from Paldi to
Airport. The hare agrees.
At the appointed day and time, the two meet at the start line and
the race begins. The hare dashes off like a flash. Soon he arrives
at the banks of river Sabarmati and is overwhelmed by a sense of
dejection, as he did not know how to swim. The tortoise comes to
the bank, looks at the hare with sympathy and coolly gets into the
water. He swims to the other side goes to the airport and comes
back.
The moral of the story is "Core competence wins the race."
But the story does not end here...
Both the friends decide it was enough of racing against each
other. Why not think hard and find a way by which they together
could travel from Paldi to airport at the minimum possible time.
At the end of a brain storming session they come out with a
solution and decide to try out the next morning.
At the appointed time they meet at the starting line. The tortoise
sits on the back of the hare. The hare dashes off form Paldi to the
banks of Sabarmati. There the hare gets on the back of the
tortoise and the tortoise swiftly crosses the river. On reaching the
other side the tortoise again sits on the back of the hare. The hare
runs as fast as he can to the airport.
Thus they both reach airport in the fastest possible time.
The moral of the story is "Innovation and team work wins the race"
Contributed By:
Sneha Gandhi
21
Current Practices of HR and its Future
-Prof. Leena George
The role of the Human Resource Manager is
evolving with the change in competitive market
environment. Human Resource function has
emerged as a strategic function affecting the
survival and growth of an enterprise.
With
increasing pressures of competition, the quality and
productivity of human resources benchmark
excellence in organization. Thus making HR a key
factor for corporate survival and growth. In order to
succeed, HR must be a business driven function with
a thorough understanding of the organization's big
picture and be able to influence key decisions and
policies. With changing environment the challenges
faced by HR department also have increased.
In order to understand the current HR practices and
what would be focus of HR in future this study was
conducted. The universe of study was organizations
in and around city of Mumbai. The study focused on
four major sector viz. Banking, BPO, IT and
Pharmaceutical.
Current HR Practices in Banking Sector
Financial sector reforms were initiated as part of
overall economic reforms in the country and wide
ranging reforms covering industry, trade, taxation,
external sector, banking and financial markets have
been carried out since mid 1991. A decade of
economic and financial sector reforms has
strengthened the fundamentals of the Indian
economy and transformed the operating
environment for banks and financial institutions in
the country. The banking industry has become more
competitive. In Banking sector HR issues are more
at the forefront than ever. It's difficult to verify that the
corporate HR goals don't strangle local markets, but
do comply with workers' councils and legislation
and lead the people side of the business.
Outcome of this study reveled that Banking Sector
in order to reduce recruitment cost use Internal
Reference, hire consultants, websites and campus
recruitments.
Taking care of other issues of people orientation,
40% of the sample entertains personal counseling &
coaching. Individual accomplishment is also
appreciated by 40% of the banks. Whereas,
employees family problem are also appreciated &
solved by the banks. In banks transferable jobs
22
poses as a big problem for the employees.
Employee's convenience is taken into consideration
but still to a certain extent the compensation or the
benefits given by the organization are not at par as
compared to the sacrifices or personal
inconveniences caused to the employees.
Personal Counselling
and Coaching
20%
Individual Accomplishment
Appreciated
40%
Employees Family
Problem Appreciated
40%
People Orientation
To handle motivation 40% of the banks reward and
recognize the efforts of their employees in personal as
well as professional matters. Whereas, the HR
departments, of the other 50% were of the view that
monetary compensation is not the only way they show
their appreciation for professional achievements.
Reward & Recognition
Training Programs
10%
Fair Job Posting System
40%
Social Security
20%
30%
Techniques for Motivation & Retention
Nearly 50% of the banks provide stress management
techniques to their employees like yoga and gymnasium
facilities etc. Whereas, 25% said that they give them
training to do their work better and manage things in a
better way. Rest of 25% indicated that they review the
reasons that lead to stress and accordingly take steps to
reduce it. Exit interviews are conducted by most of the
banks for an in-depth analysis as to know the reasons of
leaving the job.
Talent Management & competencies assessment and
management will be the major concern of HR
department in the future. It is concluded from the study
that the focus of HR should be on evaluating the
skills,abilities and knowledge of its employees, giving
them authority and making them responsible for the
same, and ensuring that the employees are
competent andflexible enough to meet the changing
work environment.
Talent Mgt.
13%
Compensation Reward &
Recognition Policies
16%
Job Enlargement
47%
Retaining
Power & Authority
Culture Mgt.
13%
26%
Strategic Advisor
12%
Stress Mgt. Programme
11%
Reward for Motivation
& Retention
62%
Focus of HR in
Immediate Future
in Banking sector
BPO
BPO [Business Process Outsourcing] has been the latest
mantra in India today. The Indian BPO Industry is already
worth $2.3 billion. It is growing at a rate of almost 60% a
year in Indian. Most of conventional companies are
moving their non-core business processes to outsource
providers. BPO saves precious management time and
resources and allows focus while building upon core
competencies. The list of functions being outsourced is
getting longer by the day. Apart from call centers,
functions outsourced are span purchasing and
disbursement, order entry, billing and collection, human
resources administration, cash and investment
management, tax compliance, internal audit, pay
roll...the list gets longer everyday. The working style of
BPO is completely different from all other sectors and
same applies to the composition of its work force. The
Challenges and opportunities of HR department is also
different from that of conventional organization.
High turnover rate in this sector has resulted in high
recruitment cost and in order to keep this at its minimum,
redeployment and retraining is done.
Motivating its employees is a challenge which most of
the BPO face as it has different work pattern and culture.
Most of the BPOs reward their employee's
accomplishment during award and social functions.
Practice of sending e-mails acknowledging lesser
significant achievements are a common practice. 47%
of the BPOs follow compensation reward and
recognition policies. Nearly 53% of the BPOs
provide non-monetary reward in the form of job
enlargement, job enrichment , job rotation, healthy
work environment, training and educational facility
etc.
Since high work pressure and stress is a part and parcel
of the daily work of the employees, most of the BPOs
indicated that they provide facilities like health club
membership, flexible leaves, organize cultural activities,
parties , picnics etc. many of the respondents organize
training programmers on stress managements by the
experts. Around 50% of the BPO responses indicated
that professional and personal counseling is also
available to employee. Almost all BPO's conduct
clearance and exit interviews to gain knowledge so as to
improve their facilities.
Personal Counselling
and Coaching
17%
Individual Accomplishment
Appreciated
50%
Employees Family
Problems Appreciated
33%
People Orientation
The study analysis reveled that the focus for HR in future
will be concentrated on managing employee
expectation for retaining of competent employees and
reducing the Attrition Rate , providing employees
challenging tasks and rewarding them for the same and
continuous performance evaluation & training to
generate fast growth within the organization.
14%
OD Initiatives
27%
Aligning with business objectives
9%
Run as a profit center
5%
Attrition Rate
45%
PMS
BPO
Information Technology
The IT software and services industry has grown rapidly
over the last decade. It now encompasses
23
about 650,000 employees. Over the next five years, this
number is expected to triple, to over 2 million persons, so
as to meet the target of $75 billion in revenues, including
exports of over $50 billion.
Attrition, Training and retaining being the major
challenge of this sector, a good pay package is offered
by most of the IT companies to motivate and retain the
employees. Nearly 34% of the IT companies use
compensation, reward policies & promotion as a major
motivation & retention tool. Also 22% of the IT
companies use better working conditions and family
security as a major non-monetary motivational tool.
11%
11%
34%
Family Security
Decision - making
Promotion
22%
Better Working Condition
22%
Compensation & Rewards Policy
Reward for Motivation & Retention
Most of the IT organizations have a defined role for
their employees. Majority of the IT companies
recruit employees through references or through
advertisements in print media. E-recruitments are
also conducted on a large scale. For higher
designations most IT companies practice HR buddy
system i.e. they pick up people from their
organization first. Various standard and advanced
tests are conducted while recruitment. To reduce
recruitment costs lateral shifts are practiced.
Nowadays many of the IT companies also grant
paternity leaves to the employees.
Building up a good, peaceful working culture by
consistency, transparency and changing the
attitudes of the employees are a continuous guiding
and motivating force used by majority of the IT
companies.Most of the IT companies have a
defined career planning system in their
organizations. Continuous mentoring is also
provided by most of the IT companies for a proper
career growth. 25% of the IT companies appreciate
and solve achievements and problems of
employee's families respectively. Due to high
technology and workload, not many IT companies
emphasize on appreciation of work done by
employees in field other than their normal daily
work.
24
Personal Counselling
and Coaching
25%
37%
Individual Accomplishment
Appreciated
Employees Family
Problems Appreciated
38%
People Orientation
Various stress management programs, and
gymnasium facilities are also provided by 75% of
the IT companies. Leaves breaks and picnics are
also facilitated. Employees are encouraged and
motivated to learn during the leisure time . 50% of
the IT companies redeploys their employees in case
of excess manpower. Rest of them has an opinion of
creating dummy projects to keep them busy. Main
motive here is to prove that employees are not
useless. Nearly 75% of the companies conduct exit
interviews to investigate the root cause of a person's
decision to leave the organization. In case of certain
IT companies re-entry is also permitted
50% of the HR Managers in IT industry believes that
the following are the important issues of future HR:
— Educating its employees on all the IT & related
aspects.
— Enhancing the knowledge of employees on
technological upgradation.
— Designing the policies & procedures keeping
employees growth in mind.
Career Planning for fast growth of employees in the
organization.
Pharmaceutical Sector
Nowadays Pharmaceutical companies have
become an integral part of the economy. As a result
of which, its human resources are given tremendous
importance. Retaining & recruiting best possible
potential being the major challenges, many
pharmaceutical companies use internal selection,
consultants, reference, and campus recruitments as
their major methods
of recruitment. They also select on the basis of
national level exams. Various techniques like
strategic manpower planning and talent
management are prominently used for cost
reduction. 38% of the pharmaceutical companies
appreciate their employees' on the job and outside
their job achievements through e-mails, or by
publishing it in newsletters.
Personal Counselling
and Coaching
25%
37%
Individual Accomplishment
Appreciated
Employees Family
Problems Appreciated
system. Excessive manpower is taken care of
through VRS and career transition.
Business Partner
33%
67%
Parent Company
38%
People Orientation
Compensation and reward policies play a major
role in employee retention, but this study revealed
that the compensation and reward policies are not
as per international standards but they definitely
match the national standards. 90% of the
pharmaceutical companies practice continuous
training and learning of the employees, timely
reward systems, employee excellence recognition
schemes and feedback system .of their
performances. Incentives and annual get together
are also in practice.
Personal Counselling
and Coaching
25%
37%
Individual Accomplishment
Appreciated
Employees Family
Problems Appreciated
38%
Studies reveal that since most of the pharmaceutical
companies have gone into mergers and
acquisitions, the decision regarding the future is
highly based on the policies and procedures of the
rd
parent company. 2/3 of the companies are relied
on top management decision-making. Whereas the
remaining 1/3rd are of the view of HR being a
business partner in decision-making and strategic
development.
It is concluded from this study that the focus of HR
has shifted from labor relation and the major
focus today is cutting cost and motivating
employees to retain them. It is evident from the
study that HR will move one step ahead in future
and focus will be more on growth and
development which will also include knowledge
management with an exception of
pharmaceutical sector.
People Orientation
Compensation and reward policies play a major
role in employee retention, but this study revealed
that the compensation and reward policies are not
as per international standards but they definitely
match the national standards. 90% of the
pharmaceutical companies practice continuous
training and learning of the employees, timely
reward systems, employee excellence recognition
schemes and feedback system of their
performances. Incentives and annual get together
are also in practice. HR department plays an
important role in building corporate culture, which
is mainly done by culture building workshops and
trust based policies and practices. Premature
retirement schemes are a part and parcel of the exit
(The author is a faculty of
MET Institute of Management)
25
The future of BPO industry in India
-Rahul Khandewal
The Business Process Outsourcing industry continues its
spectacular growth in India. Recent reports suggest that
the bigwigs of the BPO are now looking at smaller towns
and cities in the country for future growth. Clearly, the
metros are not in a position to cater to the growing needs
of personnel for the industry. Lucknow, Kanpur and
Mysore are said to be high on the list of BPO firms. The
success of smaller cities would largely depend upon
providing adequate numbers of English speaking
candidates with appropriate skills. It is not just about
speaking the language; it is more about adapting to a
culture which requires refinement and sophistication in
communication and quickly learning trade-specific skills
of the BPO segment. In technical terms this is put as
becoming proficient in domain knowledge the BPO
operation calls for. Several technically correct English
speaking persons fall short on these counts. Even in the
metros, only about 30 per cent of the graduates turned
out by the university system fit the bill. In smaller cities,
this number could be even lesser considering their
various limitations. It is wrong to equate the entire BPO
industry with call center jobs alone. True, today the
industry is overwhelmingly related to such jobs. But the
developments in future provide tremendous
opportunities in global works relating to accounting,
billing, back office operations, legal operations,
medical transcriptions, finance and insurance et al.
By 2012, according to an estimate the manpower
requirements of this industry would grow to 3.2 million.
The growth in BPO industry is not a temporary
aberration; by all counts it is not only here to stay but
grow even beyond the foreseeable future. Services are
growing and already contribute more than half of the
nations GDP.
What Limits BPO Growth?
Today BPO growth is restricted by inadequate supply of
appropriate manpower and deficient infrastructure in
most cities barring perhaps the metros. The beneficiaries
of the opening up of BPO sector belong to the educated
middle class. How can other sections of the society
benefit when one of the essential requisite is
linguistic skills? Government intervention could
help expand the benefits to larger sections of the
society. The challenge before the states is to make
radical changes in the system and quality of
schooling and collegiate education. It should start
with the quality of teaching English. The 19th
century emphasis on the written word should make
26
way for greater stress on spoken language.
Teachers need training on the nuances/demands of
the service industry and how to equip the students
with required skills. New course materials will have
to be developed.
What Could Be Done For Grabbing The
Opportunity?
Audio-visual aids are a must in schools and
colleges if the idea is to make learning effective and
learner friendly. The current emphasis of evaluation
based entirely on written examinations will not do ,
skills of presentation and communication will have
to be tested and appropriate marks/grades
assigned to these skills. Presently the BPO has
telecasted as call center jobs. These jobs are
routine and hence boring; being mostly during
night shifts, they attract only the youngsters and very
often just for a few years. This is a HR (human
resource) challenge and some research should
result in certain alternative solutions. For instance,
instead of trying to attract personnel with hikes and
more hikes in the salaries, can not some thing be
done about the working hours and working
conditions? Even a fresh entrant in to an MNC call
centre job gets a pay of around Rs 20,000 per
month. Instead, why not equate an eight hour day
job to say five or six years of night job? Similarly,
more rest pauses could be introduced. Progression
to jobs which do not entail continuous night shifts
could be devised. Possibilities of a staggered night
shift job could be explored; most BPO firms do have
infrastructure in terms of rest rooms, canteens etc
and the employees can get much needed rest in
between.
THREAT TO INDIA:
India, the uncrowned king of the BPO world, may
be in for some rough ride with national and
international studies pointing at competition from a
range of countries including China, the Philippines,
South Africa, Mauritius, Malaysia, Australia,
Ireland and New Zealand.
ASSOCHAM's second BPO industry confidence
survey, identifies China as India's greatest challenge
with 54.45 per cent of the respondents opining the
sleeping giant would eat into India's share with its
superior technological skills.
According to recent estimates by Assocham-IDC,
the BPO market is expected to reach a huge $1
trillion by the year 2006 with US alone accounting
for 60% of the market. An estimate that sure seems
to be coming true looking at the way companies are
competiting among themselves
to outsource
business processes.
But will China beat India by 2010?
It may. And it's a wake-up call for the Indian
government. If you're interested in setting up a BPO
in China, the Chinese will take care of your business
needs. Whether it's land requirement or
construction of a building. Everything is under
single window processing. No red-tape, here. Even
if China can't beat India, the dragon may snatch a
big piece of the global BPO pie from the tiger's
mouth. India's BPO exports in 2003 were close to
$3.1 billion. China's was only a fraction of it - $210
million. But China's outsourcing market grew at
34.2 per cent, higher than the Asia-Pacific region.
Be it better telecom infrastructure, roads or
government support, China gains over India. But
the deregulation of Indian telecom market has
surely made it globally competitive. In the IT domain
too, India is far ahead of China with close to $10
billion in exports. China's IT exports in 2003 stood
at $700million. But China's fast catching up. It can
produce anything at a lower cost by scaling up
operations. It has perfected manufacturing
processes over the years.
What Needs To Be Done For Growth In
Sector?
BPO
India certainly leads with more than 70 per cent of
the global BPO market. And the future looks
certainly bright. But unless the Indian government
takes some specific steps to improve infrastructure,
the share may diminish.
India needs to give more tax rebates to
entrepreneurs in the BPO sector. Proper framework
for BPO laws needs to be adopted. More bodies
like Nasscom especially for the BPO domain are
needed.
The future looks certainly bright for the Indian BPO
industry. But it may not remain so if the government
doesn't wake up to the danger.
(The author is a student of MET)
Cost Advantage - who wins India or China??
Obviously, China, since labour rates are very low.
(Think of an Indian worker 10 years back.) Typical IT
salaries range from $5500 to $9000 per year for a
programmer with 2-3 years experience. Compared
to other outsourcing destinations, China has the
lowest real estate and power costs.
The average salary of an Indian programmer stands
at $6000 to $12,000. But, it's much lower in China
at $5700 to $9000.
27
It’s all about Attitude!
-Namrata Narsaria
“Everyone has a will to win but very few have the will to prepare to win”Vince Lombardi.
The most important thing to posses in life is the right
mental attitude. Harvard and Stanford University have
validated that 85% of the reason a person gets a job and
gets ahead in the job is because of their attitude. Hence,
much of what we do and who we become is controlled
by our mental attitude. Those with positive attitudes are
likely to be proactive while those with the negative
mental attitudes will simply react. It's more satisfying to
respond than to react. That's why it is important to
develop and maintain the right kind of an attitude.
So, how can you change your attitude? As explained by
Mr. Ziglar there are three things one can do to change
his or her attitude.
Ø
The first being change your mental diet. One
can do this by giving good food for thought everyday,
become a good finder by not looking for other's faults
and change your self from negative to positive.
Ø
Second being, Self talking, as it is the most
powerful, most significant, most life changing
procedure one will ever encounter. It not only motivates
oneself but also develop self-confidence and positive
attitude, which are the need of the day.
Ø
Third thing to develop positive attitude is to be
Courageous. When you have courage, you follow
through on your vision. Without courage, the vision
would never become a reality. Courage is on display
everyday, and only the courageous wring the most out of
life.
Our biggest enemy is “fear”, it wears us down. It keeps
us down from obtaining all the glories that god has in
store for our lives. It's a stubborn enemy, but it can be
overcome. Say this to yourself, “Yes!! I can overcome
this stubborn enemy because I am all the more
stubborn”. We first have to trace our fear by answering
few questions like:-
Ø
Ø
Ø
Ø
28
Where did this fear come from?
Where did it come from?
Who is been feeding and nurturing it?
Who is causing it to grow until it chokes
and kills us?
Soon after answering all these questions you shall
find that it is no one else but you, yourself who is
nurturing this stubborn enemy. This is making you a
big looser in life so to be a winner-overcome fear
and always be positive.
Everyone in this world wants to be a winner but how
many of us actually win? Why can't everybody in this
world be a winner when they want to be one? To be
a winner one must plan to win, prepare to win, and
expect to win. The most important thing to keep in
mind when you start your journey of life to achieve
success is “never to give up”. Remember, failure is
just an event, it is not a person. Failure is a highway
to success. Tom Watson Sr. once quoted, “if you
want to succeed, double your failure rate.” To
support this, the best example would be of a person
who is today well known by all of us. He failed in
business at the age of 21, got defeated in a
legislative race at 22, again failed in business at the
age of 24, overcame the death of his sweetheart at
26, faced a nervous breakdown at the age of 27,
lost a congressional race at 34 then lost a senatorial
race at 45, failed in an effort to become vice
president at 49.but then undeterred by his failures
became the President of United States of America at
52. We are talking about none other than, the
indomitable Abraham Lincoln. For him 'defeat was
a detour and not a dead end.’ was a detour and not
a dead end.'
He dared to dream and achieve it. He proved that
success is not an accident; it is the result of our
attitude.
Success must never be measured by how much
money you have. Success is where you are in
comparison to where you began. Well explained by
Earl Nightingale “success is the progressive
realization of a worthy goal”.
It is not easy to achieve what you want there are a
number of obstacles to success like:--
—Ego
—Fear of failure
—Little or no planning
—Lack of preparation
—Procrastination
—Lack of focus
—Doing too much alone
—Lack of commitment
—Not passionate enough
—Resisting change
—Lack of self-esteem
One needs to overcome all these obstacles to be successful.
People with low esteem and of fatalistic attitude attribute success and failure to luck. They believe and
accept the predestined future written in their horoscope or stars. They wait for things to happen than
making them happen. They are the people with a weak mind, negative feelings and with low esteem. It is
important to understand what makes a person have high or low self-esteem. Here are few such
characteristics that distinguish a person from having a low or high esteem. Check where do you stand and
trace the areas you need t improve in order to develop the right attitude and be a winner an all the aspects
of your life. Try to look at your weakness and convert it into your strength. That's success. Think Positive and
life will be Positive.
(The author is a student of MET)
29
Advertising: it’s all in the mind
-Rohan Barhate
“Maina ko karna ho impress, toh khao mint-o fresh”, says mint-o fresh ad,
“ i'm lovin it .” says the McDonalds ad,
“The sign of success” says the McDowell's Signature brand,
“Thanda Matlab …..” yes, we all know, who says that. But why do they say only these lines and not any other lines. Before
you think, read on…
Advertising as defined by Philip Kotler is “Any paid
form of non personal presentation and promotion
of ideas, goods, or services by an identified
sponsor.” The objective of advertising is to inform,
to persuade and to remind of the product or service
that it aims to target. The purpose of advertising is to
get consumers to think about or react to the product
or brand in a certain way.
But how and why a consumer will think or react in
the way the marketer wants? Let's see…
Inside the psyche of consumer:
Any new advertisement idea begins with the mind of
the consumer. The idea in the consumer's mind is in
the form of a desire, an emotion, a feeling or an
unfelt need .The advertiser must be able to read
consumer's mind and present the desire, the
feelings, and unfelt need in front of consumer in the
form of advertisement. The message delivered
through the advertisement should reflect these
feelings, desires.
When a consumer sees the advertisement whether
in print media or on television, the individual
realizes that the message portrayed in
advertisement is similar to his or her feeling and
desires. So he or she finds the compatibility between
his feelings and the brand or the product. He or she
generates more affinity towards that brand and the
chances that he will purchase that particular brand
increase.
All these processes should be done implicitly. The
consumer must not feel that he or she is being
coerced into getting that feeling or desire. He
should require little effort on his part to realize this
connection between his feelings and the message
of the advertisement. So the consumer gets the
satisfaction that some one else is not dominating
him and he is acting on his own. He should feel that
30
he has made the decision of purchasing this brand
and nobody has effected his decision. He should
feel independent. The feeling that he is independent
is very important for an individual, it's about his selfesteem.
And that's the crux of advertising, the consumer
should act, not only act but he should act in a way,
the advertisers want him to act, and for them this is
reacting and for him this should be action.
So, we are influencing the consumers without their
realizing it!
When Coke ad says, “Thanda….” It is expressing
consumer's mind .In most parts of India or at least in
Hindi speaking and Hindi understanding regions of
India, an individual will not ask for Coke or Pepsi
specifically. The truck driver at any
influenced the consumer without his realizing it! But the
Coke is served and consumed. The goal is achieved.
Conditioning of Mind:
Every individual has the desire to lead a good life, full of
success, happiness and fulfillment. He should be
delighted in purchasing our brand. He should get the
happiness, the feeling of achievement by associating
with our brand. He wants positive approach, the happy
approach in life.
The advertisement should convey to him this message
that you are successful because our brand represents
achievement and associating with our brand means
successful. The McDowell's ad for Signature brand of
drinks says that it is “The Sign of Success”. So in turn an
individual who wants to feel successful and wants to
show off his success , (no matter whether he is actually
successful or not ) is attracted towards this brand .The
goal of advertiser is achieved.
It has been proved scientifically that our feelings, beliefs
and desires are based on our internal thoughts, both
conscious and unconscious. We can be positive or
negative, enthusiastic or dull, active or passive. Our
attitudes are our habits, built on the basis of feedback of
parents, friends, society and self interest. This forms our
self image and world image. These attitudes are
maintained by the inner conversations that we constantly
have with ourselves both consciously and unconsciously.
These conversations involve 'Affirmations', which are
tools for conditioning of mind and advertiser wants to
condition consumer's mind in favour of his brand.
That is how we come to McDonald's ad, which says “ I' m
lovin it”. This statement is sort of affirmation that grooms
the consumers mind to believe that he is actually loving
the McDonald's experience. This statement is the
internal conversation which should go on inside the
consumer's mind, and if he reiterates (he doesn't even
need to reiterate, as ad is shown in print media, on
hoardings, on television) this statement a number of
times, it becomes his habit and belief. If it's his habit then
he will visit Mc Donald's outlet frequently, increasing
sales. And that is exactly, what an advertiser wants.
The HDFC Life insurance ad for pension policy says
eeyo”. The feeling of being neglected and ignored starts
growing in old people who are generally not earning
any income but they have the desire to live with pride
and self-esteem. The statement “Sar utha ke jeeyo”
reflects that desire. So viewer finds compatibility, and
feels more affinity towards HDFC, increasing the
chances of purchase. The aim of advertiser is achieved.
“Sar utha ke jeeyo”. The feeling of being neglected and
ignored starts growing in old people who are generally
not earning any income but they have the desire to live
with pride and self-esteem. The statement “Sar utha ke
jeeyo” reflects that desire. So viewer finds compatibility,
and feels more affinity towards HDFC, increasing the
chances of purchase. The aim of advertiser is achieved.
So, can we say that it's all in the mind?.. Yes, positively
Yes.
References:
1) Philip Kotler and Gary Armstrong Principles of
Marketing, Prentice Hall Publishers. New Delhi , India.
2)Proman Associates Pvt Ltd., Affirmations:Your
Personal magic mantras,Mumbai, India.
(The author is a student of MET)
31
Entrepreneurship Need of the day
-Shikha Sandhal
Entrepreneurship” for us management students this is
not is new topic. If we try to find out the dictionary
meaning of this it is courage or commercial risk. Truly, in
today's era, handling a small-scale industry is an act of
courage. After thinking about it and reading, we
observed that this largely owes to the bad state of smallscale industries in our country today. Why has this
happened?
India signing 'WTO'
Bound by 'WTO', the government of India has been
forced to remove quantitative restrictions on 58 items in
year 2002 and it is planning to implement the same on
178 items. In the last decade, 634 items have been
released which are produced in SSI. Due to this, the
competition in the
Indian market has
increased. The advent
of cheaper foreign
products has adversely
affected the smallscale industries in
India.
An engineer's
story about it
Partly engineers are
responsible for this.
Immediately the
question comes how? If
we think logically, then
we will realize that not
enough engineers are
going for small-scale unit, but if talented people don't
work with such units, then how can be expect it to
improve and compete at the international level? After all'
unless this industry grows, we can't expect big money
and because we are not getting good money, we don't
go for it. So it's like a vicious circle, which we will have to
break somewhere, also, more and more engineers
going abroad and working in foreign companies is
deteriorating the situation at a faster rate.
Financial story
In the past few years, finance was also a problem due to
lack of interest on the government and bank side. This
began right from building up a plant to wages of the
workers and raw material. A guarantor is what a bank
asks for and that is exactly what a new people can't find.
Lack of helping and guiding centers are restricting
talented people from arising on the horizon.
32
Lack of interest about learning new techniques on the
manufacturer side
This is one of the most important reasons for the current
situation out small scale manufacturers is hardly
bothered about the current happenings in the
technology worldwide.
Lack of 'Swadeshi Mantra'
If we happen to dedicate last century to some amazing
phenomenon in country, its surely the foreign products.
“Be Indian and buy Indian” spirit which was alive during
independence movement suddenly seems to have died.
Sony, Ford, Coca-cola, Pepsithe list of foreign
companies seems to
be endless. Agreed
they guarantee their
products, but we have
to realize that charm
of foreign products is
stealing the breath of
home products. After
all, if our products are
not sold even here,
how can we look up
to exports?
Government's
Role
The government is
offering a number of
incentives so that the
n u m b e r o f
entrepreneurs increases. Some of these are:—Maharashtra state government is offering subsidies,
exemption from local taxes and octroi for small
industries in under developed part of state.
—Sales tax exemptions are being offered for those who
export their goods.
—Maharashtra government has founded western
maharashtra development corporation (WMDC)
Considering the sufferings of the entrepreneurs, the
government is now proposing to change its policy about
entrepreneurship. The highlights are:—The central excise limit has been extended from Rs.
30lakhs to Rs.1 crore, i.e more than 300%
—A committee has been appointed to study the
current status of laws regarding entrepreneurshipthe Varma committee
—Another committee has been given the job of
locating sick industries and helping them out of the
crisis.
However, all these plans are still on paper but only if
these are actually implemented then we will be
really making something worth out of all these
plans. However, entrepreneurs are fighting their
way out of the situation like the captain of the ship in
a flooded river.
How entrepreneurs are important for big
industries
Generally, the entrepreneurs supply the small
components required by the big industries. So, they
are the building blocks of the big scale industries.
Small-scale industries can also play the role of
distributor of these industries. In this regard, there
has to be a dialogue between small scale and big
scale industries. Then only, there can be a national
network. Actually, many of the employees of largescale industries get their training from small-scale
industries.
How entrepreneurship is backbone of our
economy
The annual budget of our country mainly depends
upon the taxes of various kinds like income tax,
sales tax, octroi, etc. A glance of our budget will
indicate heavy dependence of government on these
small-scale industries as a source of taxes. Thus, in
a way, those from this sector who pay taxes are
contributing to our economy to run on a smooth
track. This sector is a huge source in coping with the
employment problems. So, for a person who can't
get a job in big industries, this is like a life saving
medicine. Therefore, even if the salaries are low on
offer, these jobs are not a bad bargain since these
units operate at root level, right from manger to the
worker, who can get job.
As far as exports are concerned 30% of the exports
are by entrepreneurs. So, this sector is also earning
a name for country and more importantly, foreign
currency. Some entrepreneurs also claim that the
total use of imported products in this small-scale
sector is actually 12% where as it is 88% in largescale industries. Thus, this sector is not 'loading' us
as far as imports are concerned if the source is to be
trusted. In any case, the importance of this sector to
the economy is quite proven and cannot be
ignored.
How entrepreneurs can help themselves
There is a huge scope of entrepreneurs to help
themselves. More and more entrepreneurs should
opt for ISO Standards because, by getting these
standards, they can compete not only at national
but also even at international level. They can then
provide their facilities to even multinationals. There
should be more research and development
programme in this sector. Another way is to consult
with government authorities regarding any legal
matters of complications. A better-organized effort
of informing government about difficulties will help
the cause. They should have a single national
forum in this regard, rather than separate
organizations for every state/zone. Learning new
techniques like value engineering, linear
programming would also help them maximize their
profit.
Conclusion
Government is trying to improve the current
situation regarding entrepreneurship. But still, just
the government's effort will not do the things. We
management students think out of the box and try to
improve the current situation and make the most
out it. Entrepreneurship can be a good option
against job saturation and if one can deliver the
goods then there are endless possibilities.
(The author is a student of MET)
33
Sell More to Earn More
-Dr. S. C. Panandikar
After a spell of slow down, it is believed that Indian economy has turned around in 2003-2004. This is evident from
the results of the corporate sector. The Sale and net profits grew and so does the wages.
Wages mean different thing to different people. For companies it is a deductible expenditure to arrive at G.P. Those
companies whose margins are under pressure keep control on wages, in an exercise to increase efficiency. It is an
expenditure which requires tax deduction at source. For Income tax authorities increased wages means more IT. For
economists, increase in wages means increase in purchasing power of the employees, which ultimately boosts
economy. To an employee, an increase in his salary is good news.
In what follows we are analyzing the data of about 200 companies, which was obtained from Prowess Database and
th
published in Economics Times, 16 May, 2005. The companies belong to some 71 categories out of 110 categories
of companies as described in Capital Market, May, 23 June, 5 , 2005. The data is shown in table 1.
Now the question arises is that same kind of increase in wages in every kind of industry? Is there any industry/ies or
any company/ies which outperformed their counterpart in terms of relative increase in wages? To what extent the
changes in wages are related to the changes in sales and expenditure? These are some of the question we shall
answer in the following sections. The importance of wages in terms of sales and expenditure.
The following tables describe the Bivariate correlations between wages, sales and expenditure. The magnitude of
correlation between wages and sales and expenditure is more or less same to the extent of 0.3.
Correlations
Wages- 04-05
Sales- 04-05
Expenditure 04-05
Wages-04-05
Pearson Correlation Sig.(2tailed)
N
1
.
200
.324**
0.000
200
.301**
0.000
200
Sales- 04-05
Pearson Correlation Sig.(2tailed)
N
.324**
0.000
200
1
.
200
.995**
0.000
200
Expenditure 04-05
Pearson Correlation Sig.(2tailed)
N
.301**
0.000
200
.995**
0.000
200
1
.
200
**. Correlation is significant at the 0.01 level (2-tailed)
Correlations
Sales- 03-04
Wages- 03-04
Wages - 03-04
Pearson Correlation Sig.(2tailed)
N
Sales - 03-04
Pearson Correlation Sig.(2tailed)
N
Pearson Correlation Sig.(2tailed)
N
Expenditure - 03-04
1
.
200
.341**
0.000
200
0.000
200
.327**
0.000
200
1
.
200
.997**
0.000
200
.341**
Expenditure 03-04
.327**
0.000
200
.997**
0.000
200
1
.
200
**. Correlation is significant at the 0.01 level (2-tailed)
The 200 companies together gave rise to change in wages to the extent of 16.52%, whereas the corresponding
changes in Sales and Expenditure are 19.43% and 19.73% respectively. This can be easily worked out from the
following table.
Statistics
34
Wages - 03-04
Sales- 04-05 Sales - 03-04 Expenditure 03-04 Expenditure 04-05
Mean
157.3427
135.0321
1879.3768
1573.6306
1300.402
1557.01
Sum
31468.54
27006.41
375875.36
314726.13
260080.5
311402.1
Now it would be interesting to see averages of wages of various categories of companies. The following
table shows the mean and standard deviations for each of 70 categories of companies.
Report
Wages- 04-05
Category of Co.
Sales- 03-04
Mean
N
Std. Deviation
Mean
N
Std. Deviation
40.6100
2
2.27688
349.4000
2
89.37830
37.1200
2
4.12950
247.7600
2
15.07552
Mean
N
Std. Deviation
Mean
N
Std. Deviation
354.0500
1
.
151.2750
2
63.29313
309.74
1
.
203.4900
2
132.92193
Auto Tractor
Mean
N
Std. Deviation
69.5300
1
.
64.6600
1
.
Auto Scooter, 3 Wheeler
Mean
N
Std. Deviation
301.9725
4
374.22459
254.6625
4
288.19764
Auto Motorcycle & Moped
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
267.9700
1
.
203.9950
2
189.72382
60.8350
2
39.03937
79.5500
1
.
43.6350
1
1.37886
231.5200
1
.
192.0600
2
184.65386
57.5050
2
40.66571
Mean
N
Std. Deviation
Mean
N
Std. Deviation
123.0233
3
79.55696
46.0000
1
.
46.6333
6
16.48817
111.1167
3
79.77997
43.3700
1
.
41.4900
6
20.19168
47.9800
1
.
51.9600
1
.
35.4733
2
9.35086
83.2050
1
35.30507
Abrasive & Ginding Wheel
Aluminium & Al. Products
Auto, LCV, HCVs
Auto Passenger Car
Auto Ancilliary
Bearing
Brewary & Distillary
Casting & Forging
Cement North India
Cement Products
Chemicals
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
81.7400
1
.
38.3550
1
1.11016
Computer-Hardware
Mean
N
Std. Deviation
46.7400
1
.
39.1100
1
.
41.3233
2
11.28830
96.2375
4
31.58790
Computer-Software-Large
Mean
N
Std. Deviation
1741.3120
5
1365.063
1257.6200
5
999.08705
Computer-Software-Small
Mean
N
Std. Deviation
82.9300
20
66.26214
68.0525
20
63.64035
Total
Mean
N
Std. Deviation
239.5827
64
573.43172
188.6388
2
416.17359
Chlorine Alkali and Sodas
Cigarettes
Compressor/Drilling Equip
35
Report
Wages- 04-05
Category of Co.
Mean
N
Std. Deviation
Mean
N
Std. Deviation
37.8300
2
1.54149
37.2100
1
.
35.8850
2
1.15258
28.1800
1
.
Mean
N
Std. Deviation
Mean
N
Std. Deviation
138.2500
5
180.06165
96.3527
11
50.1969
127.46
5
147.28903
82.2436
11
46.49021
Pharmaceutical-Indian-Bulk-Drug
Mean
N
Std. Deviation
43.3800
2
15.55635
37.8950
2
14.8846
Pharma MNC
Mean
N
Std. Deviation
52.545
4
24.80497
61.2400
4
15.54535
Power Generation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
228.2650
2
6.03162
39.0700
1
.
55.1250
2
12.90470
114.7000
1
.
98.2933
3
90.54263
223.3000
2
26.44579
29.9100
1
.
47.1350
2
0.75660
Mean
N
Std. Deviation
Mean
N
Std. Deviation
42.1400
1
.
59.4020
5
31.86818
61.0540
5
30.0641
41.2400
1
.
40.6460
5
9.86808
67.5900
5
50.86636
61.8600
4
19.12793
368.03
1
.
47.5400
1
.
104.9516
57
216.96647
Personal Care MNC
Pest/Agro-MNC
Petrochemicals
Pharm-Ind-BD & FOR
Print & Stationary
Pumps
Refineries
Shipping
Solvent Extraction
Steel Lerge
Sugar
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Textile Cotton Blended
Mean
N
Std. Deviation
62.9475
4
16.09039
314.6200
1
.
38.0500
1
.
55.0880
5
38.34286
Total
Mean
N
Std. Deviation
114.3681
57
242.33741
Tea
Telecom Equipment
Textile Composite
36
Sales- 03-04
101.9000
1
.
77.9600
3
56.41850
49.6400
5
34.35321
Report
Wages- 04-05
Category of Co.
Sales- 03-04
Mean
N
Std. Deviation
Mean
N
Std. Deviation
71.7600
4
33.31451
55.9450
2
29.62070
61.0975
4
26.61278
44.1350
2
16.62408
Mean
N
Std. Deviation
Mean
N
Std. Deviation
86.2700
1
.
82.9200
1
.
86.15
1
.
75.6000
1
.
Electric Equipment
Mean
N
Std. Deviation
634.6933
3
900.07425
609.1633
3
892.58102
Electronics - Consumers
Mean
N
Std. Deviation
57.9100
1
.
52.5200
1
.
Electronic Component
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
184.2525
4
183.63482
112.4650
4
158.2378
52.5650
2
32.57641
72.3567
3
35.88841
42.6650
2
2.77893
169.9450
4
184.05926
111.7225
4
157.38249
43.5000
2
38.18377
Mean
N
Std. Deviation
Mean
N
Std. Deviation
85.1300
6
66.78570
132.4400
2
44.98613
50.9067
3
13.94277
78.7983
6
61.69034
125.2700
2
47.23473
48.9200
3
19.17249
192.4300
1
.
43.6350
2
2.48194
26.8950
2
0.09192
Construction
Courier
Cycles & Accessories
Domestic Appliance
Engineering
Engineering Turnkey Service
Engines
Entertainment/Electronic Media Software
Fertilizer
Food-Proc-MNC
Hotels
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
Mean
N
Std. Deviation
55.0833
3
22.57607
33.4450
2
7.67211
Paint/Varnish
Mean
N
Std. Deviation
187.2100
1
.
44.7700
2
1.31522
34.3300
2
6.54781
49.3000
1
.
Paper
Mean
N
Std. Deviation
83.7175
4
29.63099
77.9350
4
31.24343
Personal Care-Ind.
Mean
N
Std. Deviation
53.9450
2
29.76212
47.9350
2
31.64303
Total
Mean
N
Std. Deviation
117.8072
50
237.63671
109.6786
50
233.73773
Leather/Leather Product
Mining/Mineral/MET
Packaging
52.5100
1
.
37
At this stage one would like to know if the average wages for each sector (category of companies) are same
or not.The ANOVA gave us the following result.
ANOVA
Sum of
Squares
df
Mean Square
F
Sig.
WG 0405
Between Groups
Within Groups Total
17718704
10160771
27879475
70
129
199
253124.348
78765.665
3.214
0.000
WG 0304
Between Groups
Within Groups Total
10452711
6488445
16941156
70
129
199
149324.44
50298.024
2.969
0.000
The pair wise comparison between wages of 03-04 and 04-05 produced following result.
Mea
Pair Wages -04-05
1 Wages -04-05
N
157.3427
135.032
Std. Error
Mean
26.46676
20.63146
Std.
200
200
374.2965
291.7729
Paired Sample
Paired Differences
Pair Wages -04-05
1 Wages -04-05
Mean
Standard
Deviation
Standard
Error
22.3107
95.38982
6.74508
95% Confidence Interval of
Lower
Upper
9.0096
35.6117
t
df
3.308
19
Which means that there is a significant difference between the average wages of 04-05 and 03-04.
So in short we can say that wages changed significantly from 03-04 to 04-05, the rate of change of wages
per each sector do not differ significantly. However, in case of certain sectors the t test produced significant
results. Such as,
1. Pharmaceutical Industry Bulk Drug & Formulation vs Pharmaceutical Multinational
2. Textile composite vs Textile cotton blended
3. Textile cotton blended vs Textile manmade
4. Textile cotton blended vs Textile Products
5. Textile cotton blended vs Textile Spinning/syb/blending.
The turnaround in economy does not necessarily result in increase in sales alone. The labour intensive
companies either give rise to employment or increase wages to effect more production. The question
was does this turn around in economy was uniform throughout each sector of the industry with respect
to wages. The answer is affirmative. While most of the sector paid more amount toward wages, certain
sectors did shrink the wages ( to give better efficiency).
References:
th
Economic Times, Monday, 16 May, 2005.
Capital Market, May 23 June 5, 2005.
( The author is a Faculty at MET Institute of Management
38
MET Tsunami relief activity
Economic Rehabilitation of Muttom, Kanyakumari.
-Alpesh Mehta
December 26, 2004 15:21 IST Rediff.com / News
”Tsunamis hit south India; over 1,800 dead
More than 1,800 people were feared killed and hundreds more went missing when tsunamis triggered by a massive
earthquake -- the biggest in four decades at 8.9 on the Richter scale, according to the US Geological Survey's
National Earthquake Information Centre -- near the Indonesian islands of Sumatra slammed into the southern
peninsular coast of India on Sunday morning.”
Our Mission
Economic rehabilitation in the tsunami hit areas
was the objective of our visit. We wanted to make
sure that our efforts make the tsunami victims
economically self sufficient and stable over a period
of time. MET primarily being an educational
institution, lacked the expertise as that of a disaster
management team. Yet, we wanted to make sure
that our limited financial resources were used for
the best purpose.
An unforgettable learning for the life
A f t e r
completing
the journey
of 48 hours,
we finally
reached
Nagercoil.
We just had
the fairly
rough idea
regarding
the place &
little bit of
information
collected by
us in the
train. After
reaching
Nagercoil
without
wasting a
single minute we immediately rushed to the
devastated areas. On our way, we met some of the
government officials including 3 state ministers and
their MLA,s at St.Mary's relief camp. Some
information had been gathered to frame a plan of
action from them and by personally visiting the
devastated areas. From the next day onwards, we
distributed our entire team into group of four
people so that more data could be gathered in less
time. In the process the DSP of Nagarcoil helped us
a lot with his proper guidance, we finally identified
the place named “Muttam” which needed relief
work. After doing the proper research of the entire
place we finally arrived at a unanimous decision to
provide fishing nets to fishermen in Muttum. This
fishing net has helped 60 odd families to earn their
livelihood which could help another 180 families
with basic living necessities. Decision was taken to
p r o v i d e
fishing nets
b u t t h e
b i g g e s t
problem was
to arrange
the nets in a
short span of
time. We had
to visit
v a r i o u s
factories to
g e t t h e
quotation of
the fishing
nets, where
we finally
came across
F a t i m a
F i s h i n g
Agency owned by Mr.Sayyed Mohammad. He
helped us by getting the nets from Chennai in a
required period.
As everything was arranged, we all finally
distributed the nets, with the help of the SP
Continued to Pg. 47
39
Patents & its History : An Overview
-Niteen Jain & Archana Kogle
Intellectual Property Rights is perceived universally
as an instrument, which affects all economic
activities in one way or the other, although a
majority of people is not sure how this happens. Of
this patents are an important part. A patent is a
monopoly right granted to a person who has
invented a new and useful article, or has made an
improvement on an existing article or is in the
process of making a new article. It consists of an
exclusive right to manufacture the new article
invented or an article according to the invented
process for a limited period. During the term of
patent the owner of the patent, i.e. the patentee can
prevent any other person from using the potential
invention. But the creation of patent is territorial in
extent where it has been created by a statute.
OBJECT OF A PATENT LAW:
In the case of Bishawanath Prasad Radhey Shyam
V/s Hindustan Metal Industries, (1979) 2SCC, 511
it has been held by the Supreme Court, "The object
of patent law is to encourage scientific research,
new technology and industrial progress. Grant of
exclusive privilege to own, use or sell the method or
the product patented for a limited period stimulates
mew inventions of commercial utility. The price of
the grant of monopoly is the disclosure of the
inventions at the Patent Office, which after expiry of
the fixed period of monopoly, passes into the public
domain."
HISTORY OF PATENTS
The term 'patent' has been derived from the word
"Letters Patent" issued by the British Crown. The
history of patents can mainly be traced back to
about a thousand years in Britain. Although we
often think of information commoditization as a
new process, the history of intellectual property
goes back to some of the farthest reaches of our
recorded history. The rise of an intellectual market
in the medieval times coincided with a renewed
acknowledgment within the culture of the existence
of the individual creative self, as well as with the
development of commerce and urban societies.
Previously, it had been not originality, but
craftsmanship within established forms, that had
been valued; oral cultures like that of the earlier
Greek societies had viewed creative works as
collectively produced, and as entities to be imitated
and built upon by others. Later, in the medieval era,
patent system was present in some form or other in
every society. There were communities and persons
who were only authorized to make a particular
product.
1200s:
10-year monopolies granted in Venice, Italy to inventors of silk-making devices
1449:
First recorded patent granted in England for a glass-making process
First patent statute passed in Venice
1624:
1790:
1791:
Statute of Monopolies issued in England
First American patent statute passed
First French patent statute passed
1880-1882:
1883:
Patent statutes introduced in most European countries
Paris Convention for the Protection of Industrial Property - cornerstone of the modern
international patent system
International Patent Institute (IIB) established at the Hague
Patent Cooperation Treaty signed in Washington, D.C.
International Patent Institute integrated into the European Patent Office (EPO)
Bayh-Dole Act passed-granted permission to U.S. universities to license and profit from federally
sponsored research
1947:
1970:
1978:
1979:
1980:
40
International Patent Documentation Center (INPADOC) integrated into the (EPO)
A number of international conventions on intellectual
property have been adopted since last century covering
different areas of industrial property, copyright law and
other specialized matters (such as breeders' rights). The
World Intellectual Property Organization (WIPO) and
UNESCO are responsible for administering the main
conventions in force. The TRIPS negotiations were
conducted within GATT and the provisions of the
resulting agreement are enforceable within the
framework of the WTO -- a forum without any tradition
of work in the field of IPRs.
INTERNATIONAL TREATIES / CONVENTIONS:
The Paris convention created a treaty in 1886, whose
primary function was to guarantee a uniform worldwide
priority date across all member countries. An applicant
may file in any member country of the convention for up
to one year after an initial filing, without losing the
priority date of the initial filing. The last revision of the
convention took place in 1970 known as the Stockholm
revision. By 1982, 93 countries had ratified to the same
including U.K, U.S.A., etc. India is a signatory to it.
China has so far not opted for it. However, it could not
provide the much required International Patent system in
legal and organizational term.
This was how the Patent cooperation treaty (Washington,
1970) was born. It allows an applicant to institute
applications in numerous countries by a single
procedure and to delay his final decision to apply in a
number of countries (official fee, etc.) for a period of 20
months after his priority date. Thus, it streamlines the
filing of multiple national patent applications. However
it does not provide for an international patent. In 1995,
98 states participated in it with U.S.A, U.K, China, etc. as
its other members. As per the European patent
convention (EPC) of 1973, a successful applicant would,
at the end of the process, secure a bundle of national
patents (normally in common form) for such participant
countries as is designated in the application.
India) must:
· Include virtually all-important commercial fields within
the ambit of patentable subject matter, a major change
for countries that have traditionally refused to enforce
pharmaceutical patents on public health/access
grounds.
· Test patent applications for the presence of an initiative
step and for industrial application.
· Include in patentees' bundle of exclusive rights the right
to control the market for imports of the patented
products.
· Eliminate or severely curtail the practice of granting
compulsory licenses for patented technology.
CONCLUSION:
India's perspective in the WTO regime is to harmonize
national interest with international obligation. But no
compromise should be at the cost of public interest.
Areas like pharmaceuticals, agro-chemical products
should be taken into consideration while changing
Indian law as regards to patent. On the international
front, India should raise its stand and endeavor to curb
the exploitative aspects in international patent regime.
(The authors are students of MET)
Two years later the community patent convention was
signed by the EEC states including Great Britain. As per
this convention, if a patent is sought for any ECC state, a
single patent for the whole community will be granted by
a single main proceeding. However, it becomes
inevitably complex, as process would involve national
courts.
A discussion the international conventions and treaties
would be incomplete with the mention of WTO's trade
related aspects of Intellectual Property Rights, which was
proposed in the Uruguay round, and which by 1993 had
become one of the principal components in the overall
package of changes. Under the TRIPS agreement, the
members thereof (which include China, U.K, U.S.A and
41
Making a difference at Global Level
-Pawan Thadani
MET's Institute of Management has provided a golden
opportunity to its management students to be an integral
part of the NGO Section at the United Nations'
Headquarters in New York. I consider myself fortunate to
be part of the contingent that served at the UN Economic
& Social Council in the winter of 2004-05. It goes
without saying that the enthusiasm among METians for
grabbing this break has gone up tremendously. It is
proof enough from the number of applicants that soared
beyond hundred last winter!
For the first time since the inception of the ECOSOC
project two years ago, the selection panel decided to
make the process of choosing candidates more
comprehensi
v e a n d
challenging.
In addition to
the regular
interview
sessions with
the faculty of
the school
and the
mentor at the
UN, we had
to undergo
t
w
o
additional
rounds. One
r o u n d
involved
e s s a y
submissions
and the other
w a s a n
interview with
our Vice Chairman- Shri. Sunil Karve.
It was Dassera when I got the news that I had been
selected to be a part of the Winter Mission of the UN
ECOSOC. My joy knew no bounds! On what better day
could I have been given such great news! From that time
th
on until I left Mumbai on 19 November 2004, the four
of us- Shweta, Purva, Bhavin and myself plunged into
preparations for the trip ahead of us.
To add to our excitement, we had a generous de-brief
from the pioneer group of students that had visited UN in
the Summer of 2002 to set up what is now a familiar term
among METians- “The Paperless Committee” (a record
management and an electronic meeting system for the
Committee on NGOs). It dawned on us that the work we
were chosen for was of a unique nature and that we were
42
to be part of a forum of delegates from all over the
globe!
The euphoria among the group was immense. It was as
though New York was waiting with open arms for us to
arrive. I touched down at John F. Kennedy airport after
dusk and my first day in the USA was full of warmth that
my hosts gave me in what would otherwise be called a
cold, wintry night.
My first day at work was filled with social extravaganza
and I must admit that I have never had the pleasure of
meeting a bunch of people with such diverse origins! I
was on cloud nine when I absorbed the fact that I was
going to
spend the
next three
months with
s u c h
interesting
people and
n o t
t o
mention,
individuals of
such high
calibre! The
NGO Section
is one of the
f
e
w
departments
i n
t h e
Secretariat of
the UN that
has interns
throughout
the year!
Our friend,
philosopher and guide Ms. Meena Sur has given us,
what I can confidently call a treasure for life! A tough
taskmaster and a highly energetic individual, Meena
possesses the true qualities of a perfectionist and an
ideal facilitator. As my memory races back to the first
week that I spent in our cozy little “Paperless Committee”
cabin, I recall the number of times I wrote and re-wrote
memos of communication to various personnel while
sipping my cup of 'freshly brewed medium roast' coffee
(recommended as an adrenaline gusher by Meena).
'Nothing is good enough until you think it is perfect' is
Meena's magic mantra. I cannot agree more.
As we delved into the daily routine of the department, we
realized that the work done by NGOs is not only difficult
And time consuming, but also involves a humungous
amount of communication and follow-up. Unlike the
general impression of a 'laid back attitude' that people
have of NGOs and organizations dealing with NGOs,
we discovered that besides being challenging, the work
demanded tolerance for different cultures and the
elderly (note that a significant number of people running
NGOs are elderly). But we were not left alone to face this
situation. Erdwine Antonio Marie was our messiah when
it came to dealing with executives of NGOs. Erdwine
assists Hanifa Mezoui (Chief of the NGO Section) in
administrative tasks, but as a new comer to the
department, many interns are convinced that she is the
boss. A person with a heart of pure gold, Erdwine is
straightforward and a very helpful soul. The day I
bumped into her, I was intimidated by the way she asked
me what I was doing there. I must confess that she is a
bundle of joy and the life of the department because of
the witty sense of humour that she has! (Peace! Erdwine,
if you are reading this.
Among the several projects that I undertook, I would like
to highlight particularly, the work that I did on the Report
of the Secretary General's High Level Panel on Threats,
Challenges and Change. In his address to the General
Assembly in September 2003, Kofi Annan warned
Member States that the United Nations had reached a
fork in the road. It could rise to the challenge of meeting
new threats or it could risk erosion in the face of
mounting discord between States and unilateral action
by them. He created the High Level Panel on Threats,
Challenges and Change to generate new ideas about
the kinds of policies and institutions required for the UN
to be effective in the 21st century. In its report, the High
Level Panel sets out a bold, new vision of collective
st
security for the 21 century. We live in a world of new and
evolving threats, threats that could not have been
anticipated when the UN was founded in 1945- threats
like nuclear terrorism, and State collapse from the witch's
brew of poverty, disease and civil war.
In today's world, a threat to one is a threat to all.
Globalization means that a major terrorist attack
anywhere in the industrial world would have devastating
consequences for the well being of millions in the
developing world. And the erosion of State capacity
anywhere in the world weakens the protection of every
State against transnational threats such as terrorism and
organized crime. Every State requires international
cooperation to make it secure. The Panel has set out 101
recommendations for various bodies that make up the
United Nations. Primarily it has advocated the setup of a
Peace-Building Commission that will fill the crucial gap
between regional organizations, international financial
institutions and the UN by giving the necessary attention
to countries emerging from conflict.
Hanifa Mezoui entrusted me with the job of preparing a
presentation with the relevance of the report of the High
Level Panel to the UN ECOSOC and the NGO Sectiona presentation that could be used by the NGO Section
to address audiences with the road map of the reformed
United Nations. To supplement my inputs to the
presentation, Hanifa asked me to accompany her along
with other interns to attend a debate on the report held at
the Association of the Bar. I will always be grateful to her
for having given me the exposure to witness the finest
debate I have seen between stalwarts on the subject of
globalization and security.
We did have our share of socializing and retreat during
thanksgiving, Christmas and New Year. The group was
elated when the Head of the Department of Economic
and Social Affairs (DESA)- Mr. Sarbuland Khan
acknowledged the contributions of MET and its students
in an address during a private gathering on Christmas
Eve. And if you thought that the UN employees were
conservative and shy, you should have been a part of the
party that went on that evening. There was wine, entrees
and conversations galore!
The Regular Session of the Committee was fast
approaching and in a span of just over five weeks we
were geared up for a smooth show. Running errands
from the NGO section office to the conference room in
the main Secretariat building had become a frequent
affair and enjoyable all the same as we would get to
relish the sumptuous meals at the One-world Café- a
melting pot of different cuisines from across the world.
My vegetarian co-workers must agree that they never felt
out of place as there was always something for them to
eat (I was the only non-vegetarian in the group).
Daniel Perez is the technical wizard of the team at the
NGO Section and he helped us set-up, maintain and
trouble-shoot the IT infrastructure used to run the
paperless committee during the session. The Committee
commenced with full vigour. To our horror, the Paperless
Committee became inaccessible in the afternoon after a
smooth and error-free session in the morning. But we did
not get disheartened. Part of the team got together to
provide the delegates with paper backup while the rest
of us channeled our efforts into getting the Paperless
Committee up and running. After hours of troubleshooting in the evening and elimination of causes, we
narrowed down the cause of failure to a peculiar virus
attack that choked the bandwidth of the network. It was
not long before we administered thorough virus scans
on the laptops used by the delegates. The network was
up and running before the following afternoon.
However, we had more work at hand as we had to run
virus scans twice every day before the commencement of
43
each session.
Note taking of the proceedings of the committee was a job that was handled by each intern by rotation. This task was
one that required maximum concentration and a high level of alertness. Any point missed could lead to
misinterpretation of an entire discussion among the delegates. The biggest advantage the note-takers had was that
they learnt a great deal about the NGOs whose applications were being discussed or reviewed. And it was this
involvement with the work of the NGOs that gave us a chance to interact with delegations from the member nations.
We had the honour of having lunch with the delegate representing India- Smt. Mukta Tomar who appreciated the
work that the Indian team had put in during the Committee. This was when we realized that our contribution was
special and MET had provided us a platform for making a difference at the global level!
I must acknowledge without being boastful that the team handled the overwhelming realm of tasks during the days of
the Committee very well indeed! And the results showed up- the committee was able to complete all the work on the
agenda two days before schedule! But that did not mean that we had more time to rest. As they say in the corporate
world- “So much to be done, so little is done!”
We decided to spend the remaining days of our Winter Mission in concentrating on regular work of the NGO Section
and learnt that the scope of work of this tiny group was very broad. In the following weeks we were fortunate to
witness a movie screening on Dr. Kiran Bedi who was at the end of her tenure in the UN. The documentary on reform
of the prisoners at Tihar jail through meditation- “You be the Sky” moved many a heart. I thank my stars that I was
spectator to a fabulous speech by an assertive and charismatic orator like Dr. Kiran Bedi!
Talking about influential women, an NGO called “Woman on Top” sponsored a conference on Domestic Violence
of which we did become a part. The team helped to manage logistics for the opening ceremony of the conference
organized by the NGO Section.
Our last week was spent wrapping up the various projects that were ongoing like the Publication of the Millennium
Development Goals where I had to hand-over the completed surveys of NGOs who sent in details of the work that
they were doing in line with the eight goals set out by the United Nations.
If I were to sum up what I learnt from this Winter Mission, I could go on endlessly using all the buzzwords of
management for all of them did unfold while we performed the wide range of tasks. Each one of us specialized in
some areas while assisting others in their work. But what matters most to me is that we did make a difference, a
difference that may have changed the life of someone, somewhere.
(The author is a student of MET who did internship at UN ECOSOC)
44
Rural Brahman
-Supriya Lulla
"50 years Before Independence
when there was no food, clothing or shelter-it was India!
50 years After independence
'where there is great market potential, it is RURAL India! “
Rural India - where the rain Gods still play havoc
with one's dreams. The dusty village path winds past a
cluster of slumbering hutments and leads one to a
weekly rural bazaar or haat, brimming over with uproar,
bustle and transaction. This is where the real India
resides. Telephone is considered a luxury here.
Electricity, if at all, comes here only in fits and starts. And
a delivery by road may take any stretch of time.
However, things are
changing fast now. Thanks to
the increasing literacy level
and media explosion, people
are becoming conscious
about their lifestyles and about
their rights to live a better life.
Brand consciousness
is on the rise. This, clubbed
with increasing disposable
income of rural households,
has made the rural consumer
more demanding and
choosier in his purchase
behaviour than ever before.
And the dusky village damsel
has now learned to pine for a
satin rose. Rural India offers a
tremendous market potential. A mere one percent
increase in India's rural income translates to an
overwhelming Rs. 10,000 crore of buying power. Nearly
two-thirds of all middle-income households in the
country are in rural India. And close to half of India's
buying potential lies in its villages.
Hence, with the shifting dynamics of the presentday market situation, now it is the turn of the rural
consumers to dictate the terms. And this reinforces the
need for marketers to formulate a well-designed strategy
to feel the pulse and to tackle the mystic rural market,
and that's where we come in!
Considering the fact that rural markets are
complex and require a first hand look, MET faculty
premeditated a short rural visit for students of the second
semester to better appreciate the rural consumers and
have a realistic embodiment.
Different villages were selected, from Baramati, Nashik
to Jalana and Jalgaon. Our area of study however, was
a village called Gholwad, few kilometers from Bordi.
We were ready with our homework- all students
were equipped with a questionnaire that would assist us
in better understanding the
rural consumers.
So there we were, a group of
young, naive and
enthusiastic 'Post Grads'
attempting to witness the
rural consumer in action. We
accomplished what we had
set off for and more!
Watching them in action was
a treat!
Our perception of
the rural consumer was
imprecise. We had the
opportunity of spending a
warm afternoon interacting
with them. The response we
got was overwhelming. Many students were bowled over
by the simplicity and warmth shown by the villagers.
Most of us were welcomed with a bright smile and a hot
cup of tea. The rural consumers were elated to hear that
people from the city had come to talk to them, while
some were apprehensive about the same, not knowing
what to expect from a bunch of strangers.
This however did not seem to cause any
obstacle in our learning. We managed to gauge the
rural consumer's lifestyle and purchasing habits. Few
trends that have built up among the rural folks have
been highlighted in this write-up.
The villagers are eager to know the trends in
urban areas. They tend to ape their urban counterparts
as they are bowled over by the convenience and the
quality of service offered by the vast range of products
offered in the urban market. Television has played a big
role in creating brand awareness among the villagers.
45
Most villagers have completed their basic
primary education, and almost all children go to the
nearby school. The average family size is 6 members.
The awareness of birth control and family planning
seems to be limited.
Only around 1% of the population is aware of
computers and the use of the Internet. Most households
own a television set, the popular brands being Videocon
and Sharp. If individual households are unable to afford
a TV, many houses get together and pool in for a
common TV set that is placed in a viewing area where
adults and kids get together to spend time in front of the
idiot box.
They are also well aware of Compact Disc
players and other technological advances which were
once only available to their urban counterparts. Their
knowledge of new products is mind-boggling and
completely unexpected. It is a
pleasant surprise to
manufacturers of Hi-tech
products who now have a
tremendous opportunity to sell
their goods to this untapped
market.
Since there aren't any
theatres in such areas, the
villagers watch movies regularly
at home itself. The most popular
channels are Zee Cinema, Star
Plus among the adults and Pogo
amongst the children. The
popular choice was to watch
cricket matches. They also
purchased Video CDs (during
their visit to the closest 'sheher')
Radio penetration is
relatively low among villagers. The prime time is
between 7 p.m. and 9 p.m. during which the natives
indulge in leisurely activities.
The popular mode of transport is a bicycle (Hercules
being the most common), followed by few villagers
owning motorcycles like Luna and TVS. The most
popular means of travel is on foot. The villagers mostly
read local newspapers (Sandesh in Gujarati, Lok Math
in Marathi being the popular choices).
The chief influencers in the buying process are
found to be the children of the house (in case of Fast
Moving Consumer Goods products) followed by their
retailer and other reference groups. The retailers here,
as in the case with most other villages, play a critical role
in the buying process. They are seen as the source of
46
information on various products and especially new
products launched in the markets.
The village participates in weekly haats
(usually held on a Saturday) but most purchases are
made at the Kirana stores. Most consumers make
purchases on a weekly basis and still continue to
operate on the “khaata” system (family account
maintained by the retailer). The wholesalers supply the
retailers with stock on a weekly basis. The retailers
supplement their stock to meet additional demand by
making purchases from a nearby town called Dahanu,
(20 minutes by train from Gholwad).
Consumers are more brand conscious while
purchasing FMCG products like toothpaste, cold
drinks, biscuits, etc. (where, Pepsi, Colgate, Parle G
st
were found to be the 1 choice).
Imitations and
spurious brands are
prominently visible at
the retail outlets. (e.g:
Daily Milk- a look alike
of the Dairy Milk
Chocolates from
Cadbury is present at
almost all outlets and
so is “Fairly and
Lowly”- a look alike of
Fair and Lovely).
The maximum
brand recall is through
advertisements on
radio, television and
print media, as
compared to wall paintings and promotional
campaigns. Out of the three, advertisements on
Television have the greatest influence. The brand
recall through television advertisements is strongest
for ads with celebrities, such as Cadbury with Amitabh
Bachchan, Aishwarya Rai with Coke and Lux.
Despite of focused marketing efforts by
different players in the shampoo category, rural
consumers still prefer using soap for washing their hair
because they are unaware of the harmful effects of
body soap on the hair and scalp. Education on the use
of products is significantly lacking and purchases are
mainly influenced by brand equity that is built through
advertisements.
It was also discovered that the retailers tend to
Continued from Pg. 39
Take advantage of the illiteracy, ignorance and trust of
the rural dwellers as retailers happen to be the only
medium of information about the usefulness of products
especially FMCGs. Another ingrained trend among the
villagers is the identification of a product by the use of
the strongest brand name (that commands greatest
brand equity in the market). For instance, all toothpastes
are referred to as Colgate while making purchases. All
aerated drinks are referred to as Coke. For example
Sprite is called “haraa waala Coke” (Coke in a green
bottle).
Most names are forgotten after watching
television advertisements. The rural folks clearly
remember the contents of the ad or the symbol, logo or
color of the product. Thus there needs to be a significant
input to the recall of product names by the marketers
and they need to simplify the identity of their products to
meet the brand recall capabilities of the villagers.
The objectives of the trip were met successfully
and it was indeed a great learning experience for us city
dwellers who are generally so ignorant about our
counterparts in the villages. A point to be noted is that
the rural market is very dynamic and it constantly adapts
to the availability of new products and technology
although not at the same pace as the urban markets.
Rural folks make up an enormous market for products
that they may have never used before. Rural marketing is
not a right but an opportunity which marketers have to
consider uniqu and challenging!
(The author is a student participant of MET)
handing over the nets to the 60 fishermen. The smile
and happiness that we noticed on the faces of those
fishermen , relieved all the stress that we had in that
week. It is a moment that we cannot forget for our
lifetime.
Our Learning from the Trip :
1.
Time Management: How to gather necessary
information in short span of time.
2.
There are times in life when one has to get the
maximum out of adversity .We forget to take care of
ourselves while helping to revive the lives of people who
need our help.
3.
Learnt to live life independently : at home
everything is done by our parents or servants but, this trip
helped us to know how difficult the life is when everything
comes on our shoulders e.g. washing clothes, washing
utensils, etc.
4.
Learning from group effectiveness especially
when the work is done in crisis situation.
5.
Nothing is impossible when one has the vision,
which would create a path for us to accomplish the most
difficult goals that we come across in life. LIFE ITSELF
SHOWS YOU THE WAY, ONLY EFFORTS ARE
REQUIRED.
6.
Working in a team is more effective than
working independently.e.g On a scale of 10 you can get
maximum 10 points but suppose if you are working in a
group of 5, maximum you can attain is 50 and on an
average you get 25 points.
7.
By looking at the life of the victims of Tsunami
one does not know what life offers to you, whatever one
has, he should get the maximum out of it, and at the
same time also secure your future, do not live in the
present.
8.
One more thing that we learnt was that if you are
sure of doing something , you will do it, as we were sure
of coming back even after knowing that getting the
tickets of the train was difficult, we still managed to come
back changing trains and reaching home. A Proper
learning for Crisis Management as we had to come back
to Mumbai to attend College.
(The author is a student of MET and member of
MET Tsunami Relief Team )
47
BOOK REVIEW
Winners Never Cheat
Everyday Values We Learned as
Children
(But May Have Forgotten)
By Jon M. Huntsman
Published in March, 2005 by:
Wharton School Publishing
The author, Jon M. Huntsman, is a self-made industrialist who
built a $12 billion company Huntsman Chemical from scratch.
And he built it in the old-fashioned way, that is, with integrity. In
Winners Never Cheat Huntsman tells us how he did it, and how
we can, too. There were short-term costs he had to incur. There
were moments when it took great courage. But, ultimately, his
eventful life has proved that his was the right way and it was also
the best business strategy.
The book has a foreword by CNN's Larry King. The foreword
includes interesting biographical anecdotes from Huntsman's
life: his unremarkable beginnings, his scholarship to Wharton,
his founding and stewarding of Huntsman Chemical, his giant
Salt Lake City home, and his philanthropy. Huntsman's struggles
with cancer and the family members he lost to the disease are
also included.
The heart of the book comprises of Huntsman's own
chapters, which include mild rants against lawyers, the story of
his son's "successful 2004 campaign for governor" of Nevada,
tales of his other eight children, their travels, business deals, and
the role of prayer in their lives. Huntsman fills this short book
with anecdotes from his own successful career. We learn about
lessons he learned in the Nixon Whitehouse working on HR
Haldeman's staff. Huntsman describes how he handled various
negotiations for rather large business deals. He also tells us that
lawyers are invaluable as business tools, but not as a substitute
for business thinking or creativity. He also describes his personal
relations with a few business leaders of large
companies.Huntsman's principles of business success
described in the book include:
•-Compete fiercely and fairly.
•-Set the example in the matters related to risk, responsibility,
and reliability
•-Revenge is unproductive; learn to move on.
•-Operate businesses and organizations as if they are familyowned.
•-Surround oneself with associates who listen to their
conscience and act accordingly.
•-Treat customers, colleagues, employees, and competitors
with respect.
•-Return favors and good fortune by helping out those less
48
fortunate.
According to Huntsman, driving hard bargains, negotiating
intensely, or fiercely seeking every legitimate advantage do not
place the integrity of business people in jeopardy. Tough
negotiations, however, must be fair and honest. That way, you
never have to remember what you said the previous day.
Following are some of the most remarkable excerpts from the
book:
-Remember the old chant: "Winners never cheat; cheaters
never win"? And, as kids, we would chide those whom we
perceived to be not telling the truth with: Liar, liar, pants on
fire. Those childish taunts actually hold true today. Moral
shortcuts always have a way of catching up.
-Real winners never sneak to finish lines by clandestine or
compromised routes. They do it the old-fashioned way: with
talent, hard work, and honesty.
-As we grow older, our rationale for not abiding by the rules
would make a master storyteller green with envy. We blame
situations or others. We rationalize that immoral behavior is
accepted practice. And “everyone does it.” Well, even if
"everyone does it" it still is wrong, and we know it's wrong.
-The devil never makes you do anything. Be honest. Improper
actions often appear easier routes, or require no courage, or
are temporarily advantageous.
-Children observe their elders so they know how to act.
Employees watch supervisors. Citizens eye civic and political
leaders. If these leaders and role models set bad examples,
those following frequently follow suit. It's that simple.
In summary, Huntsman's Winners Never Cheat is best
described by the following quotation by Senator Tom Daschle:
"Jon Huntsman's new book ought to be mandatory reading for
leadersand those who aspire to be leadersin every field. His
secrets for success are no secrets at all, but invaluable lessons
that he has reminded us, with his life and now with his words.
These are the pillars upon which we can build our lives, too.”
(Reviewed by Prof. Khalid Sheikh)
Students of MET participating outbound training ,
Aarohan 2005
Mr. Freddy Idansotia, V.P. Finance, Darabshaw,
addressing students on Life of finance professional
during Aarohan 2005
Mr. Indrajit Gupta , Deputy Editor, Business world and
Mr. Sunil Karve, Founder trustee and Vice Chairman
MET inaugurating Swadhyay , HR meet
Students along with Prof. Sangeeta Tandon at
MIDFA Co. during China Mission
Mr. Achyut Godbole ,Mr. Jagdip Kapoor and
Prof. Vijay Page , Marketing Meet
49
MET UTSAV
50
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Bandra (W), Mumbai 400 050, India.
Tel: (022) 26440096 - 26440057
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