The original Don

Surajdeo Singh became the byword for mafia in the 1970s and 80s

Late Surajdeo Singh, the original coal mafia `don’, belonged to Gonia-Ranigunj village in Uttar Pradesh’s Balia district. His story is no less exciting than Haji Mastan’s.

He started life as 'khalasi' in the Ranigunj Coke Association in West Bengal but soon moved to Dhanbad. He soon became a key muscleman of BP Sinha, who was an influential labour leader during the 1950s, a man credited with the very emergence of mafia in Dhanbad.

Soon after Indian coal was nationalised in 1971, Surajdeo Singh started grabbing the reins of Dhanbad's treasure trove of coals, clearly outsmarting his mentor Sinha in both arm-twisting and political connections.

Gradually Singh established his own labour association called the Janata Mazdoor Sangh (JMS) and began bringing in influential labour leaders and cadres of the Indian National Trade Union Congress (INTUC) ) under his flag. By 1974, he successfully merged BP Sinha's labour unions of Borargurh and Kushtaur coal mines to his JMS.

In 1977, there was an epic clash of authority over Bhuridih mines between Sinha's supporters and JMS musclemen. After Sinha was murdered at his residence on March 28, 1979, Surajdeo Singh became the uncrowned mafia king of Dhanbad.

However, unlike Sinha, whose supremacy was inarguable and who had succeeded in making key mafia figures his associates, Singh came under fierce competition from Sinha's supporters, all of them dons themselves, and thus began a circle of violence that threw law and order out of gear in Dhanbad – for all times to come.

The fact that Surajdeo Singh belonged to the native village of former Prime Minister Chandrashekhar helped his transition to politics. He won the Jharia Assembly seat on a Janta Party ticket in 1977, after which he further cemented his position as the undisputed don of the mining underbelly.

By 1975, he is supposed to have made as much as Rs 50 crore (a huge sum if you consider the fact that the Bofors scam which rocked the nation a decade later involved only Rs 64 crore paid in kickbacks to top defence officials) with his illegitimate businesses.

It also became a family business. Singh's illegal errands, murder and loot were carried out by his brother Bachcha Singh, who also had many criminal cases pending against him. Another brother Ramdhir Singh too was involved.

Surajdeo's other trusted sword arm was Raghunath Singh who is believed to have played a major role in the killing of BP Sinha.

Surajdeo Singh was ruthless with people who posed a challenge. When one of his former associates Sakaldev Singh floated a parallel labour union called Bihar Janta Khan Mazdoor Sangh (BJKMS), he was immediately on Surajdeo’s radars.

In 1983, in a spine chilling, cinema-like climax, his men fired at Sakaldev's house at Sijua crossing in Dhanbad continuously for two hours in broad day light without any police intervention!

Surajdeo's ways became the talk of the nation. On February 1, 1988, his men led another dramatic attack, this time on SK Roy, INTUC leader and rival. At about 11 in the morning, they surrounded the INTUC office and fired indiscriminately on Roy's ambassador car, killing his bodyguard Collector Singh and three others, Vinay Sharma, Surendra Rai and Anandi Rai. Surendra Rai was to appear before a special trial court a week later to testify against Surajdeo Singh who was accused of a failed murder attempt on SK Roy in 1982.

With the mafia don's death in 1991, family power had waned in favour of another mafia honcho Suresh Singh, but not for long. The don’s legendary residence, Singh Mansion in Dhanbad, continues to remain an epicentre of activity with significant political clout.  His widow Kunti Singh is Jharia MLA, brother Ramdhir Singh is Ballia Zila Parishad Chairman and son Sanjiv Singh is being groomed to take over family 'business’.

Times have changed but the Singh Mansion continues to be a beehive of activity, reportedly knee deep in the battle to control both ballot and bullet so as to keep their political clout and mafia rackets going.

Closer to the Godfather saga, Sanjiv Singh, Ramdhir Singh and his son Sashi Singh are main accused in the December 2011 slaying of Congress leader Suresh Singh, an old Surajdeo adversary.

In turn, Suresh Singh was believed to have masterminded the disappearance and alleged murder of Sanjiv Singh’s brother Rajiv Ranjan Singh. The names of these two families have become synonymous with 'blood’ killings.

Sanjiv Singh, however, dismisses allegations against his father. “The fact remains that my father was a trusted leader committed to peoples’ welfare. We were named accused in coal merchant Pramod Singh’s murder case but the court absolved us of all charges. Local leaders cannot digest people's continued affection for us which is why they concoct stories and try framing us in false cases.” Touching indeed.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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

ExecutiveMBA

Curtains or a fresh lease?

The long-term fate of the Congress in Odisha will crucially hinge on whether it can cash in on the anti-incumbency factor in the 2014 Assembly polls, writes Dhrutikam Mohanty

For Odisha Congress, there is hope in the air. But so is trepidation. Leaders of the state party may not admit as much, but they are acutely aware that the 2014 Assembly polls will be their last chance to bounce back after being out of power for a decade and a half. On the face of it, the current political scenario in Odisha seems to be in favour of Congress, which has been out of power since 1999. With the anti-incumbency factor kicking in, this is the party’s best chance to topple the Naveen Patnaik government.

Congress, which held uninterrupted sway over Odisha for 35 years after Independence, is now facing an acid test. If it can’t get its act together this time around, it could well mean the beginning of another long spell in the wilderness.

 The ruling Biju Janata Dal (BJD) could face dissidence over distribution of party tickets. Its former strategist, Pyari Mohan Mohapatra, has floated a new political party, Odisha Jana Morcha (OJM), and has announced his intention to upset Naveen Patnaik’s applecart. Many BJD poll ticket aspirants could gravitate towards OJM if they are not nominated by the ruling party.

Having been BJD’s election manager in the last two elections, Pyari Mohan knows the party’s chinks. He will definitely play a role in diverting the BJD vote towards non-BJD candidates. This is bound to work to the advantage of the Congress.

The launch of Pyari Mohan’s new political party last week has stirred the pre-poll pot. He announced he would go in for an alliance with any non-BJD party to oust the “blind and autocratic government of Naveen Patnaik”. He claimed that national-level leaders of many political parties are in touch with him for pre-poll tie-ups. He said his alliance will win 80 to 85 seats (in the 147-member Assembly).

Asked about the possibility of OJM joining hands with Congress in Odisha, state Congress president Niranjan Patnaik says, “We are a national party, so any-poll alliance has to be decided at the central level. But Mohapatra has declared that OJM will contest 110 seats. This leaves only 37 seats for the Congress at best. How can we accept this?”

The results of the recent civic body elections in the state have been a shot in the arm for Congress. Candidates of OJM and Congress won most of the seats in the  polls in Hindol, Atabira and Nuapada.While in the newly-formed Hindol Notified Area Council (NAC), Congress won seven and OJM-supported independents won six seats, the ruling BJD managed to get only two seats out of a total of 16.


Similarly, Congress won seven seats in Nuapada NAC against BJD’s four. In the newly formed Atabira NAC, Congress and BJD won six seats each. Political analysts say this is the first poll setback for BJD after Pyari Mohan’s suspension.

But is Congress ready to make the most of the opportunity? “I don’t think so,” says senior political analyst Prashant Patnaik. “Organisationally, Congress is weak. The party faces acute infighting and the senior leadership is bitterly divided.”


Dissidence has indeed been the bane of Odisha Congress for the past decade and a half – a fact that has harmed the party’s stocks in the eyes of the public.

The last spell of Congress rule in Odisha was under Janaki Ballava Patnaik in 1995. It was chaotic and scandal-ridden. Corruption charges, scandals and weak leadership made the party unpopular. The party’s decline in Odisha began when it failed in relief and rehabilitation work in the aftermath of the 1990 super cyclone.

In the 2000 Assembly elections, Congress was down to only 26 seats from 80. In 2004, the party did marginally better, winning 38 seats. In the current Assembly, however, the party has 27 seats. Similarly, while Congress won nearly 35 per cent of the vote in 2004, its vote share declined to 29 percent in 2009.

Congress vice-president Rahul Gandhi visited the state in February. During his two-day stay, he interacted with party functionaries at the district, block and panchayat levels and held marathon sessions. He wanted to figure out why Congress had become so weak in Odisha.

After Rahul’s visit, the state Congress leadership declared that grassroots workers would have a say in the selection of the party’s poll candidates, preference would be given to youth, and no family would be allowed to field more than one aspirant.

Sivananda Ray, state Congress vice-president claims, “People are no longer obsessed with the so-called clean image of Naveen. They are fed up with rampant corruption and irresponsible administration. I strongly believe Congress will return to power.”

If it does not, the party would be in danger of going into terminal decline in Odisha the way it has done in Tamil Nadu, Gujarat and Chhattisgarh.

The Congress last ruled Tamil Nadu in 1967. Since then, it has only been riding piggyback on either of the two main Dravidian parties, DMK and AIADMK. The recent UNHRC resolution on Sri Lanka was a good opportunity for the party to attempt a political comeback. But that opportunity was lost. Right now, the national party is seen as a liability in TN and no outfit would want to align with it to fight the 2014 Lok Sabha polls.

Similarly, Congress has been out of power for over 20 years in Gujarat, with Narendra Modi performing an electoral hattrick. Problems abound for the party in the state, once its stronghold.

The situation is no different in Chhattisgarh, where a factionalism-ridden Congress is struggling to make a comeback. The Raman Singh-led BJP is eying a hattrick in the state. Last year, soon after the Congress defeat in the Bastar Lok Sabha byelection, a young Congressman had accused the party of being “BJP's B team”.

Read more.....

Source : IIPM Editorial,, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

BBA Institute

Small towns, Big Games

Sporting arenas take off in India’s catchment areas

On January 19, the hometown of India’s cricket captain became the country’s 42nd international venue when it hosted England in the 3rd one-day international in the newly built Jharkhand State Cricket Association (JSCA) Stadium. The stadium, built within the premises of the Heavy Engineering Corporation (HEC), had been formally inaugurated only a day earlier.

Come May 12, Ranchi will be on the Indian Premier League (IPL) map as well. Title holders Kolkata Knight Riders (KKR), who have already been knocked out of IPL Season 6, will be playing Royal Challengers Bangalore (RCB) at the JSCA Stadium. Two days later, Pune Warriors India (PWI) will travel to the same venue to take on the down and out KKR.

A match involving KKR might no longer be of any significance in the larger context of the upcoming IPL play-offs, but for Ranchi, a city known as much for its star hockey players and archer Deepika Kumari as for Dhoni, the two games are of immense importance. These games will give the city another opportunity to showcase itself to cricket lovers around the country and the world, pretty much like Raipur, the capital of Chhattisgarh, did on April 28 and May 1 by hosting two Delhi Daredevils matches in another spanking new sporting facility, the Shaheed Veer Narayan Singh Stadium.

But it isn’t only cricket that is taking centre-stage. Ranchi gave a great account of itself when, between January 14 and February 10 this year, several matches of the inaugural Hero Hockey India League were played there. Not only did Ranchi Rhinos win the tournament, the team’s home ground, the Astroturf Hockey Stadium located in Morabadi, imprinted itself on the minds of lovers of the game nationwide.

Had geopolitical considerations not got in the way, Ranchi’s hockey stadium, like its cricket areana did a few months ago, would have made history by playing host to India’s arch-rivals Pakistan in April. But that was not to be – the Indo-Pak hockey Test series was called off against the backdrop of mounting tensions between the two constantly sparring neighbours.

Jharkhand has always been a force on the Indian hockey scene. It has given the nation some of its most skilled players. From Jaipal Singh Munda, who was in the Indian team that won the hockey gold at the 1928 Olympic Games in Amsterdam, to Sylvanus Dungdung, the state has a rich hockey legacy.

Birendra Lakra of Ranchi represented India in men's hockey during the 2012 London Olympics. Manohar Topno is known as ‘The Wall’ of Indian hockey. Asunta Lakra, sister of Birendra and Bimal Lakra, became the Captain of the Indian women’s hockey team in 2011.

Hunger to succeed against all odds obviously drives boys and girl of the smaller cities and as the quality of the sporting infrastructure in these parts of the country begin to improve in leaps and bounds, their prospects will only be strengthened. Ranchi, Raipur, Dharamsala, Shillong, Wayanad – many small towns across the length and breadth of India are making a bid to join the sporting big league. What’s more, they are succeeding. Raipur, as the second home to Delhi Daredevils, pulled off a near-miracle with its clockwork conduct of DD's IPL matches against une Warriors India and Kolkata Knight Riders.

A suitably impressed Board of Control for Cricket in India (BCCI) lauded the Chhattisgarh Cricket Association, which isn’t yet a full member of the BCCI, but the state chief minister Raman Singh made it clear that while the stadium had been built in double quick time, sustaining the facility would take some doing and without the support of the BCCI, all the good work would come to naught. Quite so.

When the Himachal Pradesh Cricket Association (HPCA) Stadium in Dharamshala was built some years ago, similar fears had been expressed in certain quarters, but the facility has managed to withstand the challenges. The stadium, which stands at the altitude of nearly 1500 meters on the higher slops of Kangra valley and has the imposing snow-clad Himalayas as its backdrop, has been hosting IPL games involving Kings XI Punjab since 2010. The ground is also home to the Himachal Pradesh Ranji Trophy team.

The HPCA Stadium, Dharamshala, the brainchild of Anurag Thakur, BJP MP from Hamirpur and BCCI joint secretary, has floodlights and its pitch is regarded as one of the fastest in the country. England made the most of the conditions when they defeated India by 7 wickets in the 5th ODI played on Januray 27.

A similar high altitude stadium has been built in Sulthan Bathery in Kerala’s hilly Wayanad district. It is located 900 metres above sea level and is being seen, along with the Dharamshala cricket facility, as an ideal conditioning camp venue for any Indian team undertaking a tour of England, where the ball seams and swings much more than anywhere in India.

But doubts will continue to persist as India, which has 27 teams playing in its domestic cricket tournament, is today home to as many as 42 international stadiums. Several cities in the country, including Nagpur, have two stadiums. The new Vidarbha Cricket Association Stadium in Jamtha on the outskirts of Nagpur may have established itself as an international venue but the question is: how accessible is the facility to aspiring young cricketers?

Former India opener Akash Chopra, in a column authored after Ranchi’s debut as an international cricket venue, had written: “While there is no denying that, if put to good use, these stadiums can be breeding grounds for the Dhonis and Pujaras of the future, it is important to find out if the investments involved, usually in excess of Rs 100 crore, are yielding the right results. These stadiums must make both financial sense, with regard to the revenues they generate by hosting international and IPL games, and practical sense, in terms of access players enjoy to the facilities at these grounds through the year.”

The most striking thing about these newly built stadiums is that they are all state of the art. Take the one in Ranchi as a case in point. It isn’t what a small-town stadium would have been only a decade ago. It has the best possible practice facilities, spacious change rooms, and bathrooms that provide for steam and ice baths. It also has residential suites and an indoor cricket academy. The stadiums in Nagpur and Raipur are just as good and are being talked about in the same breath as Eden Gardens and the Punjab Cricket Association Stadium in Mohali.                        

If the new facilities are tapped right, there is every chance that towns that were once on the fringes of India’s sporting culture will increasingly find the spotlight turning on them. If one little initiative by a Sports Authority of India (SAI) coach and former heavyweight boxer Jawa Singh could turn nondescript Bhiwani into a nursery for champion pugilists, there is every reason to believe that a concerted effort on the part of sports administrators could alter the country’s sporting landscape for good.

Read more......

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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

ExecutiveMBA

Kurt Vonnegut to Charles McCarthy

In October of 1973, Bruce Severy — a 26-year-old English teacher at Drake High School, North Dakota — decided to use Kurt Vonnegut's novel, 'Slaughterhouse-Five', as a teaching aid in his classroom. The next month, on November 7th, the head of the school board, Charles McCarthy, demanded that all 32 copies be burned in the school's furnace as a result of its "obscene language." Other books soon met with the same fate. On the 16th of November, Kurt Vonnegut sent McCarthy the following letter. He didn't receive a reply.

November 16, 1973

Dear Mr. McCarthy:  
 
I am writing to you in your capacity as chairman of the Drake School Board. I am among those American writers whose books have been destroyed in the now famous furnace of your school.

I want you to know, too, that my publisher and I have done absolutely nothing to exploit the disgusting news from Drake. We are not clapping each other on the back, crowing about all the books we will sell because of the news. We have declined to go on television, have written no fiery letters to editorial pages, have granted no lengthy interviews. We are angered and sickened and saddened. And no copies of this letter have been sent to anybody else. You now hold the only copy in your hands. It is a strictly private letter from me to the people of Drake, who have done so much to damage my reputation in the eyes of their children and then in the eyes of the world. Do you have the courage and ordinary decency to show this letter to the people, or will it, too, be consigned to the fires of your furnace?

I gather from what I read in the papers and hear on television that you imagine me, and some other writers, too, as being sort of ratlike people who enjoy making money from poisoning the minds of young people. I am in fact a large, strong person, fifty-one years old, who did a lot of farm work as a boy, who is good with tools. I have raised six children, three my own and three adopted. They have all turned out well. Two of them are farmers. I am a combat infantry veteran from World War II, and hold a Purple Heart. I have earned whatever I own by hard work. I have never been arrested or sued for anything. I am so much trusted with young people and by young people that I have served on the faculties of the University of Iowa, Harvard, and the City College of New York. Every year I receive at least a dozen invitations to be commencement speaker at colleges and high schools. My books are probably more widely used in schools than those of any other living American fiction writer.

If you were to bother to read my books, to behave as educated persons would, you would learn that they are not sexy, and do not argue in favor of wildness of any kind. They beg that people be kinder and more responsible than they often are. It is true that some of the characters speak coarsely. That is because people speak coarsely in real life. Especially soldiers and hardworking men speak coarsely, and even our most sheltered children know that. And we all know, too, that those words really don’t damage children much. They didn’t damage us when we were young. It was evil deeds and lying that hurt us.

If you and your board are now determined to show that you in fact have wisdom and maturity when you exercise your powers over the eduction of your young, then you should acknowledge that it was a rotten lesson you taught young people in a free society when you denounced and then burned books–books you hadn’t even read. You should also resolve to expose your children to all sorts of opinions and information, in order that they will be better equipped to make decisions and to survive.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

BBA Institute

So what ails the Yamuna?

And why is NRCD not being pulled up immediately?

For those who may not know, NRCD stands for the National River Conservation Directorate. Perhaps the hidden nature of the directorate is more deliberate than by chance, as in all the brouhaha surrounding the recent furore on the increasing pollution in Yamuna, there was not even a ghost of a mention of NRCD, a body which technically should be the one being pulled up for destroying – through the lack of sustained action plans – whatever was left of the Yamuna. More amusing is the fact that NRCD, which is supposedly heading the Yamuna Action Plan, comes under Ministry of Environment and Forests rather than the Ministry of Water Sources.

It was the Supreme Court which first ordered a scrutiny on the pollution levels of the river 19 years ago and directed the Yamuna Action Plan in1993. However, reports by prominent agencies (Center for Science and Environment, MIT and others) including the recent SC reviews, reveal that the river remains as dead and polluted as usual in spite of the last two decades' effort and massive investments of Rs.6,500 crore to clean the river.

Inadequate capacity of sewage treatment, inefficiency of fund utilisation and delayed project implementation worsened the condition severally. A report submitted to the SC by an inspection team highlighted that “Delhi's 17 Sewage Treatment Plants (STPs) have a capacity of 2,460 MGD against a utilization of 1,558 MGD” where the city generates sewage around 3,800 MGD. In the same line, the Delhi Jal Board’s inceptor sewers project (to treat sewage before it flows into major drains) became a major failure as it was just able to spend only Rs.51 crore of the Rs.1,963 crore allocated. Sadly, apart from the inceptor scheme, the whole budget to restore Yamuna has simply gone down the drain since 1993. Over time, Uttar Pradesh, Haryana and Delhi have spent around Rs.2,052 crore, Rs.2,084 and Rs.2,394 crore respectively. The YAP First Phase had to be accomplished by 2000 but was delayed by three years. And the proposed inceptor project would be completed by 2014 instead of 2012.

So who should be pulled up? The IIPM Think Tank has regularly argued that randomly hitting whichever departmental spokesperson walks into the court is no solution. The NRCD should be necessarily broken down into sister organisations, with one organisation heading the management of each river of national importance.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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

ExecutiveMBA

Henry Miller to Anais Nin

In 1932, months after first meeting in Paris and despite both being married, Cuban diarist Anaïs Nin and hugely influential novelist Henry Miller began an incredibly intense love affair that would last for many years and, along the way, generate countless passionate love letters. Below is one of the most powerful examples, written by Miller in August of 1932 shortly after a visit to Nin's home in Louveciennes.

August 14, 1932

Anais:

Don't expect me to be sane anymore. Don't let's be sensible. It was a marriage at Louveciennes – you can't dispute it. I came away with pieces of you sticking to me; I am walking about, swimming, in an ocean of blood, your Andalusian blood, distilled and poisonous. Everything I do and say and think relates back to the marriage. I saw you as the mistress of your home, a Moor with a heavy face, a negress with a white body, eyes all over your skin, woman, woman, woman. I can't see how I can go on living away from you – these intermissions are death. How did it seem to you when Hugo came back? I can't picture you moving about with him as you did with me. Legs closed. Frailty. Sweet, treacherous acquiescence. Bird docility. You became a woman with me. I was almost terrified by it. You are not just thirty years old – you are a thousand years old.

Here I am back and still smouldering with passion, like wine smoking. Not a passion any longer for flesh, but a complete hunger for you, a devouring hunger. I read the paper about suicides and murders and I understand it all thoroughly. I feel murderous, suicidal. I feel somehow that it is a disgrace to do nothing, to just bide one's time, to take it philosophically, to be sensible. Where has gone the time when men fought, killed, died for a glove, a glance, etc? (A victrola is playing that terrible aria from Madama Butterfly – "Some day he'll come!")

Anais, I only thought I loved you before; it was nothing like this certainty that's in me now. Was all this so wonderful only because it was brief and stolen? Were we acting for each other, to each other? Was I less I, or more I, and you less or more you? Is it madness to believe that this could go on? When and where would the drab moments begin? I study you so much to discover the possible flaws, the weak points, the danger zones. I don't find them – not any. That means I am in love, blind, blind. To be blind forever! (Now they're singing "Heaven and Ocean" from La Gioconda.)

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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

ExecutiveMBA

B & E This Month

Dell: stake sell
Will going private revive the PC maker’s fortunes?

Round Rock, Texas-based Dell Inc., the third-largest PC maker globally, is discussing the possibility of a potential buyout with private equity firms. Top private equity firms such as TPG Capital and Silver Lake are reportedly discussing the deal with Michael Dell, the chief executive and founder of the company who owns about 15% stake in Dell. For several years now the computer maker has been losing value and market share and has been struggling to regain its position in the PC market. The personal computer business remains Dell’s bread and butter, bringing in 70% of revenues. But as tablets, smartphones and other mobile devices have eaten away at PC sales, shares of the firm have struggled. Over the last five years, Dell’s shares have fallen by 43%, sinking into the single digits by the end of 2012.

To revive growth and cope with competition Michael Dell, who retook the CEO position in 2007, has been considering taking the company private. Dell’s enterprise value of $19.1 billion is 4.4 times earnings before interest, taxes, depreciation and amortization for the last 12 months, according to Bloomberg. That’s a lower valuation than every computer-hardware maker larger than $1 billion, except Hewlett-Packard Co, which has a multiple of 3.5, the data show. But Dell’s net cash balance of $5.15 billion provides some downside buffer as it produces opportunity for a leveraged buyout under the right conditions.

The buyout, if and when it takes place, could actually be one of the largest deals in the technology space since 2007, when KKR & Co bought First Data Corp for more than $25 billion. A buyout can be good for a company even it means investors aren’t able to trade its stocks. Entering into private ownership could amount to more maneuverability for Dell as it tries to stay afloat in a terrain full of pitfalls for PC makers.

Rio Tinto: CEO EXIT

Bad bets force head honcho to quit

In the latest string of exits forced upon leaders of the world’s biggest mining companies, Tom Albanese, the CEO of the London-based minerals explorer Rio Tinto has been replaced by the company’s iron ore boss Sam Walsh. Albanese resigned over a $14bn writedown involving two of his most significant acquisitions, Mozambican coal mining and the Alcan aluminium group. The bulk of the writedown, between $10 billion and $11 billion, relates to aluminum assets acquired in 2007, while the remaining $3 billion is for Mozambique coal operations acquired only two years ago. Albanese has admitted ‘accountability’ for the loss of assets following the bad deals. Prices for metals and their ingredients have fallen sharply over the past several years with the sharp tempering of demand for mineral resources in China, Prices for coking coal have dropped 43% since 2011, when Rio Tinto made its Mozambique move. Aluminum prices have dropped 22% since 2007. At least 20 mining CEOs have stepped down in the past year under pressure from investors and boards, who blame the executives for costly mining projects that were conceived during the commodities boom.

Read more......

Source : IIPM Editorial, 2013.
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
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
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

BBA Management Education

Now, a super body to fast track projects!

Will the government’s plan to set up a National Investment Board to act as a single clearing window for large projects serve its purpose or will it be another bureaucratic exercise in futility?

An ambitious new plan by the Indian government to cut red tape and speed up decision-making on big ticket infrastructure projects has triggered apprehensions in certain quarters, and not without justification. First mooted by Finance Minister P. Chidambaram, the plan calls for setting up a National Investment Board (NIB) to fix chronic delays in implementing key infrastructure projects.

There are projects worth over Rs.7 trillion, in sectors such as roads, power, ports, airports, railways etc, which are currently stuck due to problems in getting approvals from different ministries. According to to the Centre for Monitoring the India Economy (CMIE), projects worth Rs.1.8 trillion were shelved during the April-August 2012 period alone, mainly because of problems related to land acquisition, environmental clearances and lack of fuel and mineral linkages.

To stimulate the economy and expedite mega projects worth Rs.10 billion and more, the government wants to set up the NIB, which would be headed by the Prime Minister. Once the NIB greenlights a project, no ministry will have the power to overrule its decision. The Finance Ministry expects that a decision on setting up the NIB will be taken soon.

Post-1991, there have been repeated calls from the industry to set up a body that simplifies the procedure for starting a project. For the last 10 years, there have been four models that have come up for deliberations. The first was a Fast-tracking Board under the Cabinet Secretary. The second was an infrastructure ministry; third, a Foreign Investment Promotion Board (FIPB)-like structure. And, the fourth a high-powered institution like the National Development Council (NDC) where even chief ministers could be involved with clearances and permissions. While all these models had their pros and cons, the government’s choice in setting up the NIB reflects a combination of a Fast-tracking Board and the FIPB.

Industry bodies have welcomed the idea. “It is possible to have such a mechanism as envisioned in the NIB without violating any existing Act or rule as the intention is to speed up the decision-making process and not bypass any law,” says FICCI President R.V. Kanoria, adding that many investments in infrastructure projects just remain on paper because investors ultimately get frustrated with the delays and abandon their plans.

But the NIB proposal is being strongly opposed by the Environment Minister Jayanti Natarajan. In a letter to the PM, Natarajan said she found the proposal ‘disturbing’ and in conflict with the goals of her ministry. “Often, hard decisions have to be taken to balance the imperatives of development with the crucial need to preserve the environment. In this context it would be utterly against the spirit of the Environment Protection Act to allow an investment board, or the finance ministry, to overrule or decide upon environmental concerns,” Natarajan observed. The Tribal Affairs ministry and various NGOs are also opposing the move to set up the NIB.

But the significance of a body like the NIB can be appreciated in the context of the tangled web of permissions required for a project. Sample this: There are over 65 clearances that are required for a thermal power project at the federal, state and local levels. There are 17 ministries at the central level that directly or indirectly look after infrastructure projects. With three more central institutions involved with clearances – Planning Commission, the finance ministry and the Prime Minister’s Office (PMO) – we have 20 clearance gateways in New Delhi. Then, there are 29 states. Each of them mirror many of these ministries as state-level departments. Some clearances are at the state capital level and some at the local levels. This is the maze that the NIB will have to negotiate.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

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

ExecutiveMBA

Policy uncertainty and the slow recovery

Policy uncertainty in the aftermath of economic crisis’ tends to slow recovery and suppress consumer spending

Financial turmoil, the Great Recession of 2007 to 2009, and the weak recovery that followed ushered in a period of heightened uncertainty in the United States. Even a year after the recession ended, Federal Reserve chairman Ben Bernanke described the economic outlook as “unusually uncertain.”

Many analysts claim that uncertainty about economic policies and their consequences has been an important factor slowing recovery. Uncertainty about taxes and the effects of policy on interest rates, prices, health costs, and other economic variables can lead households to defer consumer spending, and companies to cut back on capital investments, new product development, hiring, and worker training. Because new projects are expensive to reverse and because workers are costly to hire and fire, companies have an incentive to wait for greater political stability and policy certainty before proceeding with new business undertakings. If too many companies adopt a cautious stance in response to policy uncertainties, economic recovery may not take hold.

The price of policy uncertainty indeed could be high, according to a recent study titled, Measuring Economic Policy Uncertainty undertaken by me and Stanford University professor Nicholas Bloom. We developed a new index of policy-related economic uncertainty. The index reaches historically high levels after the Lehman Brothers bankruptcy and again over the past year in reaction to the eurozone crisis and the US debt ceiling impasse. We estimate that an increase in policy uncertainty of the size experienced from 2006 to 2011 leads to a fall in real Gross Domestic Product of 3.2%, a sharp drop in business investment spending of 16%, and a loss of about 2.3 million jobs.

The financial crisis and recession presented new and difficult challenges for policy makers. We believe that unusual policy challenges created by extraordinary economic disturbances were the main sources of elevated policy uncertainty in 2008 and 2009. The most threatening aspects of the financial crisis were contained by the middle of 2009, causing our policy uncertainty index to fall substantially in the latter part of 2009.

The index rises again in 2010 and 2011, however, reaching even higher levels than it did at the peak of the financial crisis. High levels of policy uncertainty in the past two years partly reflect deliberate policy choices and political gridlock. A clear example is the debt-ceiling dispute in the summer of 2011 between Democrats and Republicans, which created a real threat of a partial government shutdown. Congress eventually raised the debt ceiling, but agreement came at the last minute and with huge market volatility. Much of the high levels of policy uncertainty in 2011 were caused by policy decisions and policy maker conflicts over how to proceed.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

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

ExecutiveMBA

Reservation hits a dead end... again!

The fracas over quota in promotions underscores a perennial reality – politicians hardly understand reservation in its true sense; and misuse it towards their political ends

Over the years, the issue of quota in government jobs and educational institutions (meant to bring marginalised sections to the mainstream) has only become more contentious and politically polarising with every passing day.

Contrary to its original idea, reservation has catered more to caste-based politics and politicians; helping secure their vote banks. For years together, politicians have used reservation as a bait to invoke emotions pertaining to communal or caste-based divisions & translate them into votes.

The government’s latest proposal seeks to implement reservations in promotion for Scheduled Caste (SC) and Scheduled Tribes (ST) in government jobs with retrospective effect from June 1995. The bitter political battle over the Constitution Bill, 2012 (One Hundred Seventeenth Amendment), which provides for reservation to SCs/STs in job promotions, also saw a deeply divided Parliament. Cornered from all sides over the ‘Coalgate’ issue, the Congress had shown great intent to get the bill passed in Parliament. “We do want to pass the Bill. We also issued a whip to our members. We will try for the passage of the Bill again tomorrow. We are listing it again,” said Parliamentary Affairs minister Pawan Kumar Bansal on September 5. The government’s hurry to push the Bill through in the monsoon session was also demonstrated when the Department of Personnel & Training prepared a note on September 3 for the cabinet meeting scheduled for the next day, and the Bill was introduced the day after. However, some interesting revelations cast a shadow of doubt on the party’s earnestness. Sources close to the development reveal that on September 21, the government referred the quota promotion bill to a parliamentary standing committee. This move, sources say, gives the Congress an opportunity to extend the ambit of the proposed move to include Other Backward Classes (OBCs) among the beneficiaries of the quota in promotions. There are two interesting points to note. First, OBCs comprise of the SP’s core vote bank and second, the decision to refer the bill to a standing committee came just hours after SP chief Mulayam Singh Yadav pledged his support to the UPA government in order to keep ‘communal forces’ out of power!

Ironically, Mulayam’s SP had led the opposition to the Bill when it was introduced in Rajya Sabha. Just after Minister of State for Social Welfare V Narayansamy introduced the Bill, Naresh Aggarwal from the SP and Avtar Singh Karampuri from the BSP almost came to blows as they pushed each other. Mulayam had gone to great lengths to describe the bill as ‘unconstitutional’, and even vowed to continue opposition to it. “Juniors will become seniors. Is it some kind of a joke? Running the government has become a joke,” Mulayam said, adding that the move would create chaos in administration. Going by the current developments, one can only wonder what his next stand would be.

“There was indeed a cynical design behind the hastiness with which the UPA government introduced the Constitution Amendment Bill... The Congress sought to position itself as the champion of the rights of SCs and STs; apart from putting the BJP in the dock in a context where the principal opposition party was bent upon disrupting Parliament over the coal block allocation,” says political observer V. Krishna Ananth.
 

Read more....

Source : IIPM Editorial, 2013.
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
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
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

BBA Management Education

China’s trial of the century

Bo Xilai and Gu Kailai affair may only be a prologue, because the only clear truth to emerge from it is that the Party leadership is fractured

The trial, conviction, and suspended death sentence of Gu Kailai, the wife of purged Chinese leader Bo Xilai, has called into question not only China’s legal system, but the very unity of the Communist Party leadership.

Let us begin with the many questions raised at the trial. For starters, Gu claimed that she killed the British businessman Neil Heywood only to protect her son. But, given Gu’s power as Bo’s wife, she could have had someone like Heywood jailed or expelled from China at the snap of her fingers. No need for cyanide. Still, she not only admitted her guilt, but seemed to embrace it as a sort of historical necessity. “In order to uphold the sanctity of the law,” she told the court, “I am willing to accept and calmly face whatever judgment I am given, and I also expect a fair and just judgment.” Not since Stalin’s show trials of the 1930’s has a defendant so effusively praised a judge who seemed bound to condemn her at a trial where no witness or evidence against her was presented. The bitter irony of Gu’s high-speed trial is that she was a true believer in China’s legal system.

Indeed, Gu was an avatar of the Maoist form of legality that China has maintained long after Mao’s death. Having failed the entrance examination to Peking University, Gu was nonetheless granted an exception and admitted to read law soon after the Communist Party restored the law departments. Prior to that, she sold pork in a Beijing market, where she earned the nicknamed, “Yi dao zhun,” meaning that she could hack off a desired slice of meat with one blow.

Gu was one of the first lawyers to receive her license. But, with the Tiananmen Square incident of 1989, the authorities clamped down on the profession’s autonomy. The Party reasserted control over every aspect of justice through a core department: the Communist Party Central Committee’s Political and Legal Affairs Committee (PLAC). This totalitarian organ has no known address, yet it manages China’s police, prosecutors, courts, and justice ministry, and appoints their leadership. All lawyers fall under its remit. Most important, all local PLAC secretaries simultaneously lead the local public-security bureau. Small wonder, then, that the artist Ai Weiwei could be detained in secret, Liu Xiaobo could be sentenced to 11 years in prison for starting a petition, and Li Wangya could “commit suicide” while in custody. But even this monolithic system of control is porous. Had Wang Lijun, the former Chongqing police commissioner and close ally of Bo Xilai, not feared for his life and fled to the United States’ consulate in Chengdu, Gu would still be helping Bo to rule the city.

Wang is no saint. Before he became Bo’s police commissioner, he was the director of the Field Psychology Research Center, where the condemned were executed and their live organs removed. Wang’s paper, “A Study of Organ and Receptor Transplantation after Execution by Injection,” earned him the Guanghua Innovation Contribution Award. In the paper, he credits “our achievements” to the “thousands of transplantations.” Given his familiarity with the brutality of the Chinese system, Wang no doubt understood that, after falling out with Gu and Bo, the US consulate might be the only place he could find safety. After all, when it came to the public-security organs, the courts, and the prison system, Gu always had the final say. She acted as her husband’s adviser for cracking down on crime and corruption, and was responsible for sending two people – including the PLAC secretary in Wushan County – to prison.

In fact, a few days after killing Heywood, Gu donned a major general’s uniform (which could have belonged to her father, General Gu Jingsheng), convened police officers in Chongqing, and falsely claimed that she had received a secret order from the Ministry of Public Security to protect Wang’s personal safety. The uniform, perhaps, was intended to intimidate the Chongqing police.

Read more.....

Source : IIPM Editorial, 2013.
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
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
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

“We had predicted it in 2005, but no one took it seriously”

Arun Maira, Member-Planning Commission, reveals to IIPM Think Tank’s Sray Agarwal and Ganesh Roy about why the need of the hour is to have a faster decision making procedure

B&E: The Indian economy is going through a slowdown. What’s the way forward for the economy now?
Arun Maira (AM): What is happening in the Indian economy is just a phase of an economic cycle and it is not going to be the situation forever. In the present scenario, the investors are shying away from coming to India but there is a dire need to understand that this slowdown is temporary. One of the main reasons for this picture is lack of power in decision making. Hence, the need of the hour is the ability to have a faster decision making module. The trust of our people in the government is shaky right now. It’s not only the case with India but in US too that people currently are low on confidence in the government and there too it is very difficult to bring reforms, whether health care or industrial. Both these nations are on the same page and the transformation seems difficult; but since the US has much larger economy they do not get much affected by investors. We at the Planning Commission perform tasks which do not change with these economic cycles – rather, we do a combined and collective research taking views from common people, environmentalists, people from civil society and many more and try to find out what could be the best possible outcome for any situation; and then we proceed from there. We had predicted long back in 2005 that the Indian economy will grow at around 8% to 9% growth rate; but none of the institutions took our prediction seriously; yet eventually we were right!

What policy reforms should we take to tackle the current issues?
AM: This is a fundamental thing and this has happened over the last 2 years and this has not happened overnight. We have predicted that if policy making and decision making are faster, we can achieve a growth rate of over 9% and we have done that. But again, we also have said that things if not done properly will equally affect the economy, as is the case that you see now. I agree with the fact that the economy is not in a good position; but if things like policy making can be done immediately, we can recover from this economic slowdown very fast.

The growth in the economy has made many persons rich but what about the lower strata of the society? They are deprived of the benefits of liberalization so the ultimate challenge for us is to bring these people into the main strata of the society. The political lock-jam which has happened is also one of the reasons for this condition currently.

The institutional and economic reforms if not implemented will make the scenario even worse than what it is prevailing right now. I am not talking about reforms like FDI in retail or the banking reforms but the way in which jobs are created in the country. It is a major issue of concern for us. For example, the main problem with the Naxal affected areas is that the things which were promised to them were never fulfilled; so to get those promised things, they take the help of arms! This is one example of a main policy failure which we have in our system as of right now.
 

Read more....

Source : IIPM Editorial, 2013.
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
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
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
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

National

RBI: interest rate cuts
Apex bank leaves India Inc. disappointed
Seems that the stalled growth engine of India Inc. will have to wait for some time more before it gets some further rev ups. In its latest review of monetary policy, the RBI decided to keep benchmark interest rates and cash reserve ratios unchanged, leaving many market participants and analysts crestfallen as they were hoping for further cut in policy rates. On the contrary, the central bank warned that reducing key policy rates at this juncture could accelerate inflation rather than spur growth. This stand of RBI is in divergence with its earlier stated policy of bringing down the interest rate if core inflation is below 5% (core inflation was hovering around 4.9% at the time of the announcement.) Currently, repo rate (the rate at which RBI lends funds to other banks) and cash reserve ratio are at 8% and 4.75% respectively. However, RBI has increased the limit of export credit refinance from 15% of outstanding export credit of banks to 50%, which will potentially release an additional liquidity of over Rs.300 billion, equivalent to about 50 basis points reduction in the CRR. But RBI’s stance is going to baffle foreign investors no end. After a span of two years, even China has now started to reduce its interest rates in an attempt to boost the economy. Brazil, another member of the BRICS club, has also been cutting its key policy rates for quite some time. Even a recent report of rating agency Moody’s has said that India could turn out to be the weakest amongst all BRICS countries.

Oil: high diesel demand
Private refiners make hay
Due to the huge difference in the prices of diesel and petrol, the demand for diesel in the country has shot up. So much so that demand outstrips supply by a wide margin. Demand for diesel has skyrocketed and exceeds supply because of petrol prices, which is 70% costlier than diesel. As a result, PSU oil refiners have been forced to buy diesel from Reliance Industries Ltd and Essar Oil. State run oil firms like Hindustan Petroleum, Indian Oil and Bharat Petroleum are buying nearly 15 million tonnes of diesel per year from the two private refiners. Essar Oil operates 1,391 operational outlets, including 249 under construction. Reliance has about 700 operating outlets. The private refiners are able to charge diesel at international prices from the PSU refiners leading to huge windfall gains for the former. On the contrary, state firms are suffering a revenue loss of Rs.10.20 per litre of diesel they sell in the retail market. IOC, India’s biggest oil refiner with a capacity to process 66 MT crude oil, annually bought about 42% diesel from other domestic refiners in the first two months of the current financial year. The company produced 4,485.4 thousand metric tonne diesel in first two months of the current financial year against a sale of 6,371.2 TMT in the same period. According to oil ministry’s data keeper, Petroleum Planning and Analysis Cell, while petroleum consumption recorded monthly growth at 0.2% in April (lowest in the last one-and-half years), about 47% of total consumption in that month was of diesel. “This is one strong indicator of dieselisation of the economy due to price distortion among competing fuels,” PPAC said in its latest report. Diesel rates in the country are frozen since June 2011. It is sold at Rs.41.29 a litre in Delhi while petrol costs Rs.70.24 a litre in the metro.

Read more.....

Source : IIPM Editorial, 2013.
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
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
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
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

Intel inside, arm outside!

When Intel Chief Paul Otellini announced that his company had secured the commitment of Lenovo and Motorola Mobility to put ‘Intel Inside’, it was considered as a significant development in the computing world. But the launch of Intel’s first processor in Lava’s XOLO X900 instead was a bit of a dampener. B&E looks into Intel’s strategy and attempts to dig out the chip maker’s odds of succeeding in the smartphone segment

The funny thing about most great corporations is the fact that they are great only for a limited period of time. The greatness stays around for one generation and might even extend to two generations. But the moment they begin taking market forces and technological change for granted – they lose their cutting edge and eventually their greatness. This is the very reason why Microsoft – a company once referred to as the 1000 pound gorilla of the computing industry – doesn’t quite ring that loud a bell today.

The time when powerful – and cash rich – companies could afford to ignore external forces is long over. So when the Santa Clara based semiconductor giant Intel announced that Lenovo and Motorola will have ‘Intel Inside’ their smartphones at the Consumer Electronics Show in January this year, the news made headlines but was hardly surprising. It was about time that Intel made a move into the smartphone market, dominated by chips using designs from ARM of Cambridge.

Consider a few statistics. According to data complied by research firm IDC, 491 million (almost half a billion) smartphones were activated in 2011 – a 61.3% increase over 2010. Samsung, Apple, Nokia, RIM and HTC shipped 94 million, 93.2 million, 77.3 million, 51.1 million and 43.5 million units respectively. The remaining 132.3 million smartphones were sold by players like Sony, LG, et al. How many of these carried an Intel processor? Not even one! Although Intel remains the undisputed supplier to PC manufacturers globally, this market grew by a mere 1.8% last year.

Under these circumstances, the chip major’s interest in smartphones was palpable. And then came the big dampener in the form of Lava’s XOLO X900 powered by an Intel Atom Z2460. At a time when investors and analysts were expecting an Intel equipped Motorola or Lenovo handset, Intel chose to debut in the smartphone category with a lesser known Indian brand. The Intel powered Lava smartphone is impressive no doubt. Even if the processor is not a dual core or a quad core, Intel’s 1.6 GHz CPU with Hyper Threading allows for an exceptional multitasking experience while promising a battery life comparable to competing smartphones. But here’s the catch. It’s priced at Rs.22,000. No matter how well packaged the smartphone is, Indian consumers will hesitate to invest that kind of money when they have an option to go for a Samsung, HTC or Nokia smartphone. The association with Lava therefore appears to be nothing more than a pilot test for the Atom Z2460. That the stock market did not react to the development (Intel’s share price in fact fell by a few percentage points) indicates that investors did not see this launch as a major breakthrough for the chip major.

So, despite extensive expertise in developing processors, why is Intel having such a hard time replicating it’s PC success with smartphones? The answer lies in the architecture. While you have an entire motherboard on a PC which can accommodate everything from Graphic Processing Units (GPUs) to peripherals, all these have to be put on to a single chip (SoC – System-on-a-Chip) in a smartphone. The technology to make this integration possible has been developed by ARM Holdings – a British multinational with revenues of roughly $772 million – which licences it to ecosystem partners like Qualcomm, NVIDIA, Samsung and Texas Instruments.

Read more......

Source : IIPM Editorial, 2013.
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
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
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
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face