IIPM Management College: March 2013

Thursday, March 28, 2013

Be a Pilot @ Rs.25 Lakh!

Basic Medical Facilities may not be Available to all in India, but a Job as a Pilot, well, as The Recent Developments Expose, is not very Difficult to get if you have a Thick Wallet.

In its latest breakthrough, the Crime Branch of the Delhi Police, investigating the case of Airline Transport Pilot Licences (ATPLs) and Commercial Pilot Licences (CPLs) in wake of the furore over issuance of fake pilot licences, on April 6, arrested two more officials of the Directorate General of Civil Aviation (DGCA), exposing the rot in a system that has long been known to be an exclusive premise of the high and mighty. It is quite evident now that it was impossible to work the system without the help of DGCA insiders. The point gathers weight as out of a total of thirteen individuals arrested in this regard so far, three are DGCA officials.

The DGCA has been known to dole out favours and change regulations to suit airlines and the siblings of senior ministry officials, and it had all been smooth sailing for the fraudsters until IndiGo pilot Parminder Kaur Gulati landed on the nose wheel of her plane at the Goa airport, though not for the first time. Investigations into Gulati’s faulty landing in January revealed that she had obtained her licence based on a fake marksheet. Further probe revealed that Passi’s daughter Garima, a pilot with SpiceJet, had also obtained her licence through a fake marksheet, allegedly with her father’s assistance. DGCA Assistant Director Pradeep Kumar in the licensing department and R. K. Passi, Director, Safety, DGCA, are among those in the Crime Branch net for allegedly assisting touts, mostly comprising of flying school instructors in Madhya Pradesh and Ahmedabad, to obtain pilot licences using forged documents.

Furthermore, former DGCA chief and now Secretary, Ministry of Civil Aviation, S. N. A Zaidi’s son was employed with Jet Airways. The son of R. P. Sahi, Joint Director General, DGCA, was also a Jet Airways employee. Deputy Director-General A. K. Sharan’s daughter worked for IndiGo Airlines. Director, Air Transport, Lalit Gupta’s daughter handled revenue management for IndiGo. Chief Flight Operations Inspector Capt. H. Y. Samant’s daughter also worked for a private carrier.

“Unlike previous instances where we were unsure whether the DGCA Assistant Director knew that he was pushing for licences based on doctored marksheets, in this case, both the DGCA officials were fully aware that they were using fake marksheets. Thus, while only Rs.25,000 was charged by Kumar to expedite the process of issuing these fake licences, the duo arrested by us charged Rs.4.50 lakh from the tout operating from Ahmedabad,” DCP (Crime) Ashok Chand told B&E. The three pilots currently in the dock include Capt. Swaran Singh Talwar of MDLR Airlines, Capt Meenakshi Singhal of Indigo Airlines and Capt. J. K. Verma of Air India.

In the meantime, the Government was also quick in its display of action against those linked to the fake pilot licence scam and set up an independent committee for the scrutiny of all 4,500 ATPLs, 10,000 CPL licences along with an audit of the 40-odd flying schools in the country. While Union Minister for Civil Aviation Vayalar Ravi says the Government will not spare anyone found guilty, experts say that there is an urgent need to overhaul processes within the DGCA. Before we delve into the intricacies over how the system can be manipulated to suit a privileged few, here is a quick look into the pilot licence racket and how it operates.

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

2012 : DNA National B-School Survey 2012
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Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
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Anna Hazare wins IIPM-Rabindranath Tagore Memorial International Peace Prize

IIPM also Announces Anna Hazare Fellowship in Rural Entrepreneurship & Management

NEW DELHI: After Irom Sharmila in 2010, it’s Anna Hazare who has won the 2011 IIPM RABINDRANATH TAGORE INTERNATIONAL PEACE PRIZE. In a bid to show strong solidarity to Anna Hazare’s determined and nonviolent protest against corruption and for the institution of a Jan Lokpal Bill; IIPM, the foremost institute of higher learning in management, entrepreneurship and National Economic Planning, today declared that the award for the veteran activist would include the award honorarium of Rs.1 crore. This was declared by Prof. Arindam Chaudhuri, Director of IIPM Think Tank, after he met Anna in the presence of IIPM’s Founder Director, Dr Malay Chaudhuri at the protest venue near Jantar Mantar. The prestigious award, comprising the highest prize money in this category in India, would be handed over to Anna Hazare on 9th May 2011 at a special ceremony being organized by the institute to commemorate the 150th birth anniversary of India’s first Nobel laureate Rabindranath Tagore.

Speaking on the occasion, Prof Arindam Chaudhuri commented, “This award is to pay our sincere gratitude to a person who has selflessly worked throughout his lifetime for the betterment of the society, working for the poor, the needy and the general public. His non-violent approach and awe-inspiring support base has truly made him a modern day Gandhi. We at IIPM stand in strong solidarity to support his protest against corruption.”

During his meeting with the veteran activist in the morning, Dr. Malay Chaudhuri, the Founder Director of IIPM, expressed his strong desire to start an Anna Hazare Fellowship Programme in Rural Entrepreneurship and Leadership at IIPM. This programme aims to train 50 rural youths annually, selected from all across the country, with the required managerial and entrepreneurial skills. Once trained, these young rural entrepreneurs would be provided a monthly fellowship of Rs.4000, which they would further utilize to bring about sustainable economic development in their specified rural belts.

Last year, IIPM honoured the “Iron Lady” of Manipur, Irom Chanu Sharmila with the Rabindranath Tagore Memorial Peace Prize, for her determined and committed fight for over a decade against the controversial Armed Forces Special Powers Act (AFSPA). The prize was handed over to her in Imphal by a 3-member team, which had travelled from Delhi. On previous occasions, IIPM has honoured various noted individuals from different walks of life for their contribution in social welfare, literature, fine arts, culture, et al.

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Sunday, March 24, 2013

In Better Times, Two is a Crowd!

The Recent exits of The CO-CEOs at Wipro has once again Caused Experts to Critically review Wipro’s ownership-Management Equation. Are these Experts indeed off The Mark?

Wipro’s equation with its CEOs has bordered on the uncanny more than once. It did not make any sense then, it does not make particularly significant sense now. When Wipro’s poster boy CEO Vivek Paul quit the company, it was hard to find people who would want to believe in Wipro’s credentials as a professionally managed company. It was openly speculated what Paul’s decision had to do with his uneasy equation with Azim Premji, Chairman and 76% shareholder in Wipro. People were also compelled to make comparisons with what had transpired between former Ford Chairman Henri Ford II and Lee Iacocca years back at Ford Motor Company in the US. Also, conjectures that claimed that the road was being cleared for Azim’s son Rishad Premji were being made even then.

If these voices were somewhat in the closet then, they have had a field day in the past few weeks; as Wipro said (read marching orders) to its joint-CEOs Girish Paranjpe & Suresh Vaswani on January 21. This time, Premji himself acknowledged that the joint-CEO structure was put in place for the downturn & they need to have a simpler organisational structure post recovery, which has brought T. K. Kurien to the helm.

In later interactions with national dailies, Premji has minced no words in saying that the company had been particularly lacking lustre when it came to leveraging the growth phase of the IT industry post-recession. Indeed, the company has been underperforming its peers in the IT industry to the extent that it has come under the risk of being overtaken by Cognizant, which has been on an aggressive growth trajectory. The company reported a consolidated net profit of Rs.13.19 billion, up by just 3.36%, and a revenue increase by 1.26% sequentially to Rs.78.29 billion (IT services contributed 76% to this figure) for the quarter ending December 2010. Operating margins remained flat at 22.2%. Infosys, in comparison, posted 2.3% growth in revenues to Rs.71.06 billion and net profit increase by 2.5% to Rs.17.8 billion (qoq basis).

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Sunday, March 17, 2013

The Air Fares Conspiracy Theory?

The Last Time Domestic Airlines were allowed to decide fare levels, They went into a Hand-Wringing war to death. This time, The Government has intervened. But the Players Aren’t Amused. Steven Philip Warner Answers Why.

Every time one scuttles across data-laden scrolls that predict “hope” for airlines in India, the claims are dismissed as wishful thinking. This situation has not changed in a long time now & under such a circumstance, even a good P&L account does little to ease the broad populist anger. Hardly mattered therefore, that the two largest domestic airlines – Jet Airways & Kingfisher – reported improved financials in recent times. [While Jet announced profits of Rs.124 million during Q2, FY2010-11 (compared to a loss of $4.07 billion last year), Kingfisher reduced its losses by 44.88% to Rs.2.31 billion.] One quarter of good treatment cannot play ice on the bump.

Painful memories of Rs.260 billion in losses in the past five years (source: IATA) is hard to wipe out. The ever-increasing debt load of the high-fliers is another sore. Rs.582.73 billion and counting it is, of which Jet accounts for Rs.138.97 billion and Kingfisher for Rs.79.22 billion (as on March 2010). There is worry in the air, and the airlines have suddenly realised that they are sinking faster than stone. And their hurried attempt to ensure profits by increasing fares by at least 200% over the past month (since November 15, 2010, “after a confluence of issues led to capacity falling short on certain routes, particularly to/from Mumbai”, as Sydney-based B. Somaia, Regional Director, CAPA tells B&E), proves this.

The airlines had put forward a distance-based pricing cap “logic” to the Directorate General of Civil Aviation (DGCA), for its approval. The following were the fare slabs proposed: distance less than 750 km, 750-1,000 km, 1,000-1,400 km and more than 1,400 km. Had the DGCA given its nod (which it did not, and the players are now demanding independence when it comes to price-setting), an IndiGo ticket priced at Rs.6,581, purchased on the day of travel, between Delhi and Mumbai, would have sky-rocketed by 244.3% to Rs.22,000 (distance of 1,407 km). For JetLite passengers, the spot fares would have risen by 289.1% from the current Rs.7,967 to Rs.31,000. Thus the fares of even the low-cost carriers (LCCs) would have become about 100-200% higher than the ongoing economy fares charged by the Full-Service Carriers (FSCs). Bad news for an environment which saw air traffic grow rapidly only after the advent of the LCCs in 2003. Says John Siddharth, Aerospace Expert, Frost & Sullivan to B&E, “LCCs have been successful in India due to their low cost strategy. Assuming the LCCs do not have a good competitive pricing in place, it would first reflect in their load factors, which would take a nose dive from the current average of about 85%. The Indian airline sector is on the verge of transforming into a luxury which would result in a negative growth of air passenger traffic.”

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Monday, March 11, 2013

How did The Konishi Move Work?

Two years ago, We Criticised Canon for Belligerently Focusing on R&D Investments and Innovation when the Market didn’t seem to have a taste for it. Two years thence, We realise that Canon India’s CEO Kensaku Konishi somehow has managed to pull it off, Despite all Criticism. How? This one’s just to Answer That Question!

“Stay hungry. Stay foolish.” It was a virtue that The Whole Earth Catalogue, a famous American magazine quoted in its last issue before closing down; and one, which Steve Jobs quotes quite often as being his mantra for continuous innovation and R&D. In the early part of this decade, Canon India had a measured, tentative and tenacious approach that started with a restrictive foray into the B2B arena. Over the last few years, however, the company has been true to the above ‘Stay hungry...’ philosophy, in letter and spirit. The company has been on a relentless drive to raise its stature from the sidelines to being firmly in the driving seat in the digital camera, copier and printer markets in India; and purely focused on product innovation and on-the-ground retail strategies.

Two years back, we ourselves had questioned the relevance of Canon’s belligerent focus on investing in R&D, at a time when the economy itself had slowed down. Today, it just seems that Kensaku Konishim President and CEO, Canon India, took the right gamble. As of now, Kensaku does have some numbers to defend his course of action. Revenues in 2006 stood at Rs.3.8 billion. By October this year, the company has touched Rs.10 billion and it plans to reach a turnover of Rs.12.5 billion by end 2010. That would mean a CAGR of around 34.67% for the last four years. The company is still far from satisfied with this level, which is obvious. After all, Canon India still contributes less than 1% of the parent company’s global turnover (Europe leads at around 33.3%). Konishi projects that the company should be able to contribute 1% to global turnover by 2012, 2% by 2015 (turnover of around $2 billion) and 5% by 2020 (turnover of $3 billion). So how did Kensaku manage such a show?

Konishi joined India in 2006 and immediately realised that some strategic changes needed to be made drastically fast. His initial plan was based on four base strategies. Firstly, he transformed the reporting structure and made individual people accountable for product groups, rather than the function-based hierarchy prevailing earlier. Secondly, he immediately ramped up on his sales force from around 400 to 800 to cater to customers and end employees. Thirdly, he launched aggressive city by city promotional strategies to make up for the beyond budget constraints in nation-wide promotions. And fourthly, Kensaku forced his people to aggressively tap dealerships; particularly those who were not too much into their competing brands like HP. Kensaku’s added an additional geographic focus for his people in this plan. Since the beginning of this year, Canon is going to Tier 2 and 3 cities as well, through mobile showrooms where they display their products, city by city, week by week.

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Sunday, March 10, 2013

Heartbreak for Hannah Montana

Hannah Montana star, Miley Cyrus is going through a rough phase because of her parents’ split. The star’s parents Billy Ray and Tish filed for divorce last week after 17 years of marriage, and the reason is Bret Michaels’ alleged link up with Tish. The Rock of Love singer allegedly got close with Tish after he collaborated with Miley on the song Nothing To Lose. Miley is keeping mum on the issue, and not taking any sides on her parents’ divorce.

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Wednesday, March 6, 2013

Snips for Bips!

Bips baby is trying to keep herself in high spirits after realising that her role in her latest release Aakrosh has been slashed. While something like this has happened to her once earlier, when her voice was dubbed in Phir Hera Pheri without her permission, she isn’t complaining! She says she did the film because she found the story very gripping, but word is that her friends are quite upset about her negligible role.

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Tuesday, March 5, 2013

Anisha Motwani

Director and Chief Marketing Officer, Max New York Life Insurance, speaks to Steven Philip Warner and Manisk K. Pandey about the company’s segmentation, advertising and differentiation strategies and on why insurance means “need-based” selling.

Within just three months of joining Max New York life Insurance in the Fall of 2007, the former veteran marketer at General Motors, Anisha Motwani, changed max’s tagline from “Your Partner for Life” to “Karo Zyada Ka Irada”, to ensure a greater emotional connect with the consumers. It worked. especially to create a more customer-centric focus and to drive a greater value for the consumer...

B&E: Life Insurance companies have seen a sharp rise in the number of warnings and penalties issued by IRDA in 2010 for violating regulations. The regulator issued warning and penalties to eight life insurance companies in 2010, as against one in 2009. What’s the reason behind this sudden rise in conflicts?
Anisha Motwani (AM): We don’t see this as a conflict. No doubt, some companies have been penalised, but that’s not because of the way they have been functioning. Some reporting mistakes could have led to these kinds of penalties. For instance, there was a company that was penalised because it did not report the change in its shareholding pattern. Such conflicts may not come to the surface due to only customer-related issues. There can be varied reasons too. But yes, as the industry matures, IRDA demands us to be more customer-centric and that’s what we are doing. For instance, we have already launched a CRM initiative called Gold Circle, through which we are trying to create a personalised experience for our customers. In fact, we support all the changes to be more customer-centric because we believe that customer focus starts with “need-based” selling of life insurance, a practice which MNYL was following till date. IRDA will shortly make this need-based selling concept a law, forcing every agent, advisor or distributor to conduct a need analysis before they sell a product. Agents will have to show that why they have sold a product to a customer & whether it meets his particular life-stage need.

B&E: After setting stiff norms for ULIPs, IRDA is planning to cap charges on traditional products in the near future. What impact will it have on the industry?
AM: It’s still not confirmed. I think this is a speculation. But yes, whatever changes come and if they are customer friendly, we will adapt & evolve to embrace those changes.

B&E: Max New York Life (MNYL) follows the principle of ‘Young Parent-Old Parent’ in its market segmentation plan. How does it help you take advantage of a vastly under-penetrated market like India, where the life insurance penetration rate is just 4%?
AM: Insurance is a long-term product, and it actually spans through multiple life stages of the consumer. So the earlier you start a relationship with a customer in his/her lifes, the better it is from a long-term customer acquisition stand-point. Therefore our focus is on the Young Parent-Old Parent segment, which spans across people between 25-40 years of age. This makes sense for us as the people who are 25+ certainly present us with the opportunity to cross-sell life-insurance solutions to them as their life evolves, and the people who are 38-40 years old still have approximately 15-20 years of working life and are viable prospects to persist with a 15-20 year life insurance contract. Our core target group preference is the 25-30 year segment, which helps us make sure that we have as many people as there are to come in. India, as you know, is a young market. Therefore, this segmentation strategy is working very well for us.

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Democracy in Jordan

In an exclusive conversation with Akram Hoque and Sayan Ghosh, H.E. Mohamed Ali Daher, the Ambassador of the Hashemite Kingdom of Jordan talks about Middle-East peace process and democracy in Jordan

B&E: Jordan has a good record in human rights, but Amnesty says that honour killing still remains a major problem in the country as on an average almost 20 women die each year on account of the same. Is the government concerned about the issue?
MD: We attach great importance to family honour. Family tradition in other societies may be a little more flexible. Jordan has some incidences (certainly not 20 every year) and government is tackling the subject very seriously. There has been a discussion at the parliament and the Ministry of Justice is about to come up with laws to curb the problem. Earlier, the punishment for such crime was low, now we are looking at it with a different perspective. We will definitely come up with some modern solution.

B&E: Reports show that 70,000 foreign workers suffer from human rights violations in Jordan. Do you agree?
MD: No. Let me tell you one fact about Jordan. For over 70 years, we have been living with our Palestinian brothers who are refugees in our country. But they enjoy all their rights just like the Jordanian enjoy. We even have people from them elected as our Prime Minister, Foreign Minister, Director General of Police and so on. Now, we have refugees from Iraq as well due to the prevailing situation. Our government has made laws to facilitate their stay in the country. They are working freely, they own lands, they own projects and have even established their own businesses. Under such circumstances, I don’t see any reason for such accusations. For information we even have very good records in the UN.

B&E: King Abdullah is the ruler of the state, how do you see him as a leader?
MD: Well, to answer this question, I will not answer as an ambassador, but as a ordinary citizen of Jordan. We, the Jordanians, are proud of our king. King Hussain was a legend. And his son our present King has been following the footsteps of his father. He is very much loved by the people. The world recognises the role he plays. He is one of the wisest leaders.

B&E: Can you comment on King Abdullah’s successor?
MD: Well, in monarchy, we don’t have to worry about who comes after. King Abdullah’s son is now our crowned prince.

B&E: Jordan has successfully escaped the global recession. Was it because the country’s economy is less integrated with the global economy or you have a conservative banking system?
MD: No, certainly our banks have been very vigilant. It’s a blessing that we have a small economy and not a big one, so we are affected very lightly. But definitely, a lot of credit goes to our financial institutions, headed by the Central Bank of Jordan. I happen to be a great friend of the Governor of the Central Bank of Jordan. I worked with him in New York and I know him very personally. He is one of the wisest people in Jordan. He has been taking all kinds of precautio-nary measures to protect the country from recession.

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Friday, March 1, 2013

“I will only think of competition when I am not growing..."

Micromax founder and Executive Director Rahul Sharma in an interaction with Surbhi Chawla of B&E

Ask Rahul the inspiration behind the Micromax venture and the answer is quite interesting. He saw villagers in Rajasthan having to go long distances to charge mobile phones and hit upon the idea of manufacturing one with long battery life. The rest, they say, is history in the making. In this interaction, he discusses the ongoing market situation that Micromax faces:

B&E: You are being looked upon as overnight stars and there are speculations doing the rounds that you are at number two in the India handset industry. So how does that feel?
RS: We are not overnight stars. It has taken some time to get us to this place and we are not number two. We are still trailing Samsung but then, number three is not the bad spot to be in. But give us six more months and may be things might change.

B&E: You had achieved shipments 1 million in January itself. So why is it that your visibility in the market still remains low?
VJ: Yeah, we get that a lot. The thing is that what you see in the market are things that are not sold. Only things with greater shelf life will have visibility. Our stocks don’t last as much for people to put them in displays.

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