Google’s calculated gamble?

The acquisition of Motorola Mobility presents the strongest means at Google’s disposal to challenge Apple’s dominance. Whether Google can pull that off remains to be seen

As the boards of directors of Google and Motorola Mobility approved the $12.5 billion (or $40 per share) buyout of the latter by the former on August 15, 2011, the $3.1 billion purchase of online advertising firm DoubleClick, Google’s largest acquisition so far, was a thing of the past. And so was Google’s status as just a notable search engine giant. It was now a hardware manufacturer too, challenging its arch rival Apple more directly than its Android licensing programme allowed it to, especially in terms of a more tightly integrated multi-screen proposition.

Interestingly, Google also offered Motorola Mobility a significant reverse termination fee – a whopping $2.5 billion – to guarantee that it will remain committed to the deal. That’s around 20% of the total purchase price. Remove Motorola’s $3 billion in cash on hand from the purchase price, and the fee forms an eye-popping 26% of Google’s total consideration, way above the normal reverse termination fees, which usually run 4-10% of any given transaction. Further, Google is paying 63.5% more than Motorola Mobility’s closing price on the New York Stock Exchange on August 12, 2011. Considering that the average premium of more than 360 deals in the wireless-equipment industry on that basis was 32% in the past five years (Bloomberg data), it’s certainly big money that Google is paying for a company that has been struggling to remain profitable in recent months.

For information, Motorola Mobilty posted net losses of $81 million & $56 million in the first and second quarter of 2011. Moreover, while the global handset market has been growing at a smart pace (global mobile phone shipments rose 13% y-o-y in Q2 2011), Motorola has failed to keep up with the competition. In fact, in Q2, Motorola shipped just 10.6 million handsets (out of which 4.4 million were smartphones), as compared to its peak of 65 million handsets in Q4 2006.

The reason is clear. Google did not join hands with Motorola for its global handset reach or even brand equity for that matter as its current market share is less than 2.5%. The main reason for this historic deal is the recent legal context surrounding smartphone IP. In fact, Google’s deal for Motorola comes a month after it lost a bid to a consortium (which included Apple, Microsoft, RIM, Ericsson & Sony) for 6,000 patents from the Canadian Nortel. For Google, which faces an increasing number of patent infringement claims against its Android system, the loss was a major blow. Thus, the deal, which requires regulatory approval and is expected to close by the end of 2011 or early 2012, would give Google a quiver with more than 17,000 patents (with an additional 7,500 pending) that would help it defend Android OS from a barrage of patent lawsuits from its rivals. Besides this, Motorola Mobility is a leading maker of TV set-top boxes and the acquisition could stage a comeback for the troubled Google TV. Further, owning a handset manufacturer allows Google to better integrate software and hardware. No doubt, with the Motorola buyout, Google is trying to take a leaf out of Apple’s book by becoming more vertically integrated. But the question is, can it succeed?

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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.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

why M&As can go bad, and why 75% of them actually Destroy Shareholder value for the acquirers. Co-Ordinated

Prof. Bill Kaufmann, Faculty of M&A Integration, College of William & Mary's Mason School of Business and at Sum COX School of Business, Writes about why M&As can go bad, and why 75% of them actually Destroy Shareholder value for the acquirers. Co-Ordinated 

WHY IS REALIGNMENT NEEDED WHEN INTEGRATING AN M&A?
The new company that is now before you is a new company. So it has to be treated differently. Here are the reasons why: (1) Turnaround candidates: Sometime you realise that the company with which you are shaking hands is – crudely stated – a loser. What do you then? You have to believe that you can turn it around and make it a winner; (2) Future acquisitions: Just because you spend money on one does not mean that you may not enter into another inorganic deal. Prepare for the next one; (3) Accelerated growth: In order to achieve synergies and grow fast, the combined entity actually has to act like a combine. You can’t grow if you are fragmented; You’ll need new strategies for your new business model; and (5) New markets, products, distribution, customers: Optimising the new organisation and it’s value is critical. Post-merger or post-acquisition, you are no longer the same old company. Your entire business is now “new”! Remember, your competition isn’t going to wait for you to get organised. So you should take as little time as possible to get your soldiers in line!

WHY DO YOU NEED TO BE CAUTIOUS ABOUT THE HYPE OF M&As
My experiences and some studies show that 50% or more of upper-middle management and above will be replaced or eliminated, if acquired. There will be consolidation of locations. Operations close, people move, terminations and disruptions occur. This is inevitable. Workers need to be prepared for at least 10% of job loss at the acquired company after the integration is complete. Worse, 75% of M&As fail to achieve their “stated” communicated objectives prior to the event and many acquisitions fail to increase shareholder value and most actually reduce value short term.

It’s much more fun being the acquirer than being acquired. But my observation is that no matter which side of the merger or acquisition you’re on, few people including senior management are asking the question, “What’s in the best interests of the combined companies?” Instead, the question seems to be, “What’s in it for me, how do I come out on top and what do I have to do to survive?”

Be careful what you wish for in the name of M&A. You may lose it all!

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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.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Tiananmen Mminus The Bloodshed?

Was the Tiananmen Square incident more of a Western Media Propaganda to damage China’s image? Was the uprising in fact dismantled peacefully without a drop of blood being shed? Did US diplomatic officials already know of this new truism? If WikiLeaks is to be believed... yes!

There are two views of Tiananmen Square. One is the western view, which says that on June 4, 1989, in Tiananmen Square, anywhere between 240-2600 protestors were brutally killed to suppress any uprising; and the other view, which says that in 1989, in Tiananmen Square, no bloodshed occurred and the entire uprising was crushed peacefully. The entire propaganda with respect to the bloody massacre is said to be more of a western media gimmick to dent China’s image in global forums, according to the latter view.

The US diplomatic cables obtained by WikiLeaks (released a week back) indicate that on June 4, 1989, the Chinese People Liberation Army (PLA) “did not massacre demonstrators inside Tiananmen Square.” The cables also cite an eyewitness, a Chilean diplomat, who saw the military entering the square but did not see any mass firing of weapons. The crowd was apparently forced to dismantle using anti-protest weapons like truncheons and wooden clubs. After several requests made by leaders including Liu Xiaobo – Nobel Peace Prize winner, 2010 – students peacefully left the square.

The cables also mention the name of James Miles, who was in Beijing then as the BBC correspondent. James confessed in 2009 that he misinterpreted the entire saga and “there was no massacre at Tiananmen Square.” Another cable declares how the protest was supported by “the leader of China’s trade unions” and further mentions, “An anonymous caller who phoned Congen Shenyang on the morning of May 21 said that the party had convened a CCPCC meeting and that the Chairman of the All China Federation of Labour Unions Ni Zhifu condemned the decision to impose martial law.” Against the popular belief false perspectives created by the western media, a cable quotes a few diplomats who describe a “joyous mood among the protestors after the first introduction of martial law in Beijing failed to halt the pro-democracy movement.”

Beyond WikiLeaks, there are several sites, micro-sites and news items that point towards the same fact. In an archive (titled “A National Security Archive Electronic Briefing Book”) in George Washington University (gwu.edu), the US embassy declared that “...the troop’s lack of weapons in their earlier assault indicates that orders not to use force had still been in effect [during the Tiananmen Square protests]” Another document in the same website (dated June 3, 1989) reads, “Police today fired tear gas on crowds gathered at the walled compound of Zhongnanhai, near Tiananmen Square, according to press reports.”

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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.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

“Our Bfsi Clients are now Focussing Less on Costs’’

Kris Gopalakrishnan, CEO & MD, Infosys, talks to Virat Bahri on The Company’s results and The Management Changes

B&E: What is your outlook for the coming year in terms of topline and customer wins? What are the trends in client spending in the coming quarters?
Kris Gopalakrishnan (KG): We expect the next fiscal to be a normal year for the industry. We have given a guidance of 18-20% growth for the next fiscal. The previous quarter was good for Infosys with respect to large and transformational deals. Infosys closed four transformational deals and six large deals in the previous quarter. After the big recession in the US, clients have started to fine-tune their spending based on what is happening in the macroeconomic environment more quickly than in the past. This is what had impacted Infosys in the last quarter. Today, we have much more clarity on what they are going to spend on but whether they will actually spend that money is a concern. If clients face further challenges in the economic environment, they may fine tune their spending more.

B&E: Infosys, as a company, has been known as a founder-run corporation since inception. How will the entry of K V Kamath as Chairman help the company to achieve its strategic objectives?
KG: The recent developments in management ensure a seamless transition from founders to the next generation of leaders. This will prepare the company for the future as well. K. V. Kamath is experienced and is an expert in corporate governance. His role is to chair the board and oversee governance.

B&E: We have hardly seen a trend of cross-industry CEOs & Chairmans in India so far while there are many global examples like Alan Mulally, Dan Akerson, Jeff Kindler et al. According to you, how does it help to rope in an executive in the top management from a different industry?
KG: Every successful corporation needs to transform itself periodically to remain relevant to its stakeholders. The recent change in Infosys’ leadership team is a planned effort by the Nominations Committee to ensure smooth transitions within the company.

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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.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Go beyond ‘Dunce’ caps

Intelligence Failure can be Harmful and even Fatal to Innocent People. Accountability for Agencies is Becoming a must

Ever since American President Abraham Lincoln created the first official secret service of the world in 1865, several countries followed suit and these institutions became critical to their security. Yet, the best of intelligence networks often display a distinct lack of intelligence!

In 2001, CIA shot and killed a family of American missionaries as they were travelling in their private aircraft over the Peruvian sky with the help of the Peruvian air force. They thought that they were drug lords! In 2007, CIA intercepted the telephonic conversation of Mrs. Marilyn McAfee (the American ambassador to Guatemala) to come to a conclusion that she was not ‘straight’. It was found later that she was happily married, and the tapped telephone conversation was with her poodle! FBI failed to provide evidence against Oklahoma City bomber Timothy McVeigh, which led to postponement of his execution in 2004. British Security Service MI5 had reports of Richard Reid’s (a British citizen) link with al-Qaeda and their omnipresent plan for 9/11. Yet, they did nothing! A Moroccan immigrant to Norway, Ahmed Bouchiki was mistakenly murdered by Mossad agents who thought he was responsible for the Munich Olympics massacre! And on May 20 this year, embarrassed Indian authorities withdrew the list of fugitives claimed to be residing in Pakistan, when it was found that at least two of them were in India itself!

Sheer irresponsibility and poor judgment by these agencies has lead to harassment, pain and even death of innocent people. Accountability for these agencies is becoming increasingly critical, and so is punitive action; whatever the cause of the failures.

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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.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

A Change in The Infosys DNA?

Besides The Upheaval at The Top, it has been a Defining year for Infosys, which saw some Welcome Growth in Revenue Terms. However, Rupee EPS Guidance is a Concern

On certain critical counts, it has been a defining year for Infosys, in good ways as well as not-so-good ones. The exit of T. V. Mohandas Pai, member of the board and Director - HR, who had served the company for 17 glorious years, was a setback enough. Matters became worse when Pai began to talk about the preference of Infosys for experience over professionalism when it came to hiring people or moving them up the ladder. For a company where the founders hold hardly around 10% of the shares, it was a serious allegation indeed. That was like suggesting that Infosys wasn’t the ultimate case study when it came to successful separation of ownership vs management, at least not to the extent to which it is perceived to be.

On the financial front, the company posted revenues of Rs.275.01 billion, which was a growth of around 20.9% yoy. Net profits grew by a far more modest 9.7% yoy to reach Rs.68.23 billion. In particular, the company missed its estimate for the fourth quarter, wherein revenue grew by 1.1% sequentially in dollar terms to reach $1.6 billion. The company still faces some instable conditions in the US market and revealed that clients were slow in taking decisions especially in the fourth quarter. There is a disappointment with the rupee EPS guidance as well, which is between Rs.126.05 and Rs.128.21, a growth of 5.5-7.3% yoy. In a statement during the conference call, CEO Kris Gopalakrishnan commented, “Rupee guidance is muted as it is a reflection of the dollar guidance. We look at the appreciation of the rupee and then we translate that.” In addition, the company has hired some 43000 employees this fiscal. Administrative expenses rose by a significant 21.07% yoy to Rs.19.71 billion for the past fiscal. Mostly though, Infosys has had a much better growth compared to last fiscal, when revenue grew by just around 3.5% yoy and net profit grew by 3.6% yoy. In terms of shareholder satisfaction, the company ranks 6th in B&E ‘s list of India’s top wealth creators in terms of absolute increase in mcap of Rs.325.44 billion yoy. But since April 15 when the quarterly results were announced, the company’s share price has been severely hit. Infosys opened April 15 at Rs.3,296.15 and closed 9.67% lower at Rs.2,980.70 on the same day.

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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.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

JV ‘ex’Ercises of Futility?

After burning his hands with The Failure of Logan, Carlos Ghosn is again Grappling with Issues related to his ultra low-cost Car Project with Bajaj Auto. While The Automotive veteran has been able to turn around The Fading Fortune of Renault-Nissan globally, his India Journey has been full of hurdles so far.

When Renault opened its India office in 2005 in the financial Capital Mumbai, its intentions were clear – forge a JV with Mahindra to become a part of the growth story in Asia’s second-fastest growing automobile market. Analysts then opined that it would herald the beginning of an era in which French carmakers would soon come to dominate the Indian market, pushing aside the American and Japanese who had been running the show till then.

Mahindra Renault’s Logan attracted decent numbers in the early months but the high price of the product failed to hold customers in the showrooms for long. Within just six months into the launch, the product was lagging way behind its counterparts in the entry-level sedan segment. The product sold just 351 units in March 2010, a month before Renault opted to move out of the JV. Clearly, the Rs.7-billion JV investment was not working as planned and the ‘Indo-French’ car failed to meet the expectations of the JV partners. However, the failed attempt did not dampen Carlos Ghosn’s (CEO, Renault-Nissan) ambitions to strike gold in the Indian automobile market again. At the time when Logan was struggling (“Logan failed to deliver mainly because of its high price point” said Alex Mathew, Head – Research, Geojit BNP Paribas), Renault had already inked a deal with Bajaj Auto for the Ultra low-cost car (ULC) project and was confident of making a breakthrough in the domestic circuit taking this route. However, to Ghosn’s woes, that project too has been mired in trouble in the recent past.

It may be recalled that the project was already running behind schedule even as Ghosn was in India last year to discuss the branding and production plans for the product with Bajaj Auto’s Managing Director Rajiv Bajaj. The Renault-Nissan chief might have wished that his visit would bring to an end the controversies surrounding this ambitious project, but that has surely not been the case. In fact speculation surrounding the car has only deepened further with Bajaj saying recently that Renault has still not made up its mind on the matter of branding and the company (Bajaj Auto) will be selling via its own distribution network, if required (“We will never partner with someone who has the right to walk away. We will sell it through our network if they are not happy with the design,” Bajaj said). On its part, the Renault management is of a view that it will finalise its decision only after examining the car developed by Bajaj Auto. “We will take a call on the Bajaj ULC only after we see it and are confident that it will fit the needs of the Renault brand,” said the spokesperson of Renault India.

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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.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

The new age Commercial Plane was not Airbus

The Worst start to building The new age Commercial Plane was not Airbus’. It was Boeing’s. Its biggest project – The Dreamliner 787 – has turned a Nightmare. There are other problems too. What went Wrong with Boeing? & can CEO Jim McNerney play Captain America?

What caused Boeing’s health to deteriorate? McNerney has forever been known as a game-changer – a CEO whose radical change ways revived a corporation like 3M (it was under him that the company slimmed down, returned to profit-making and even dropped its old name – Minnesota Mining and Manufacturing). He tried the same at Boeing. To ensure that bottomlines improve, he adopted the outsourcing model. The idea was that instead of working with the traditionally accepted manufacturing practices, Boeing would work with engineers and labourers outside the company. It first started with the 787 program in 2005 and was then replicated on the 747s & 777s families. That meant trouble. A typical 787 (& 777) has 70% of its parts manufactured in Japan, Korea, Sweden, Canada, Italy, Australia, France, Germany and 15 other locations in US, that Boeing workers in Seattle put together. The entire exercise was destined to end up as a fragmented engineering act and a complex set of 50 confused suppliers, with minimum check on quality and overstretched supply-chain. McNerney took the big risk, Boeing took the beating. While its reputation & revenues did fall, the associated R&D costs have not only hurt bottomlines in the past year by up to $4.1 billion, but also threaten to erode the same in the years to come, as Robert Spingarn, analyst at Credit Suisse tells B&E, “Many bullish analysts and investors have been relying on declining 787 and 747-8 R&D to allow for meaningful earnings growth. But, even as these development programs inch closer to completion, the prospect of new R&D for a refreshed or new 777 and a clean-sheet 737 may offset any benefit. Either way, upside could be an issue if R&D cannot be tamed and if Boeing’s Defense business weakens beyond expectations.”

So what can Boeing do to expedite the process and ensure that cost control (outsourcing) and timeliness go hand in hand in future? Airbus, which contracts 52% of its aircraft body-making, is the answer. It assembles parts (in France & Germany) manufactured in 12 locations in the four nation cluster – Britain, France, Germany and Spain. And if cost reduction be the prime condition, Airbus’ assembly line for the smaller A320s in China is quite an example. The solution to convert Boeing’s global outsourcing mess into a strategic geographic advantage lies in creating regional assembly hubs. Like Airbus, it could begin with an assembly station in China for the new planes, to cater to the demand in the Asian region (like the $10 billion order from Air China & HNA Group for 5 747-8s, 6 777s & 32 787s received in March 2011). And considering that Boeing has to fast increase delivery pace in order to cater to a fresh demand, the newer assembly stations will only reduce its order-delivery lag. The question now is not whether it can cultivate a conservative approach to outsourcing or not. Rather, it is how Boeing can learn fast and act. Airbus, despite a more calculated approach saw its jumbo A380 suffer a couple of initial delays, resulting in $24.8 billion in added costs & lost orders between 2006 & 2009. Boeing has already lost many times more. Question is – will the hole in its pocket get bigger?

Fire on board, to software integration issues, to discovery of weak points in the composite metal used, to an in-flight engine shutdown, the Dreamliner has been more of a ‘nightmare’liner for Boeing. Though experts are of the opinion that this is not the end of the road for Boeing, and that revenues will continue flowing despite the fires and engine malfunctions of the 787s & 747s. The hefty order-log already recorded and expectations of huge demand from Asia and replacement orders in US & Europe will help its cause, as New York-based Alexandria Carroll of Goldman Sachs tells B&E, “For the near term, 787 & 747 challenges have the potential to create further volatility. However, we expect very strong new aircraft order demand, strong global air traffic, and the company’s supply restraint through the last cycle to all be larger positive drivers of the stock than challenges, which are a negative. The associated R&D tailwind catalyst are likely to be realised over the next few quarters.” Adds S&P’s Tortoriello, “Emerging economies in Asia and the Middle East will continue to improve, which should sustain demand for narrow-body aircraft, supporting Boeing’s total backlog of about 3,400 aircraft as of December 2010. In addition, US airlines continue to take deliveries to improve fuel efficiency of aging fleets. Further, the third-quarter 2011 delivery of the 787 should act as a catalyst for the stock, with about 850 aircraft recently on order.” While Goldman Sachs estimates revenues for Boeing in FY2011 to to touch $67.97 billion (a y-o-y rise of 5.69%), the figure as per Credit Suisse stands at $69.76 billion (rise of 8.48%).

Having said thus, McNerney has to realise that the storm will only gather over the coming quarters, faster and stronger than it did in the three years gone by. It’s more than half of his company’s revenues at stake (assuming that the Pentagon will continue to patronise Boeing’s Defense business as EU does to EADS-Airbus), and the clock for him is running backwards. He’s done nothing to make investors smile (Boeing’s Mcap has fallen by $2.13 billion since he took over in June 2005) and McNerney might be out before Boeing even gets out of this rut. In short, he has little time to prove that an intergalactic outsourcing strategy can work. If it hasn’t in seven years, it perhaps never will. Many airlines have bet their future on Boeing, and this equation can turn turbid sooner than expected, irrespective of how many dollars and elbow grease the new projects have called for. And it is already showing signs of that.

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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. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

As Shatter-Proof as Ever!

Women have broken a lot of Gender Barriers in Society, But The Glass ceiling is not Exactly in that List Yet

When a movement gathers pace, it can change an existing status quo that is years, even centuries old, and unleash a new paradigm. By that yardstick, the women’s liberation movement was started in the US in 1964 in the US and spread across the world. Obviously, a lot has changed since then when it comes to acceptability of women in corporations and in various positions, but when you look at upward mobility for women in the corporate world, you will be surprised at how little has changed.

At the outset, women CEOs head only 15 companies out of the Fortune 500, which is a representation of just 3%. A look at the results of a survey by US non-profit organisation Catalyst for 2010 provides deeper insights. Only 15.7% of board seats in Fortune 500 companies were occupied by women as compared to 15.2% in 2009. Only in their share of nominating/governance committee chairs do women beat that figure with 16.9% share, as compared to 16.8% in 2008. The board chair, on the other hand was occupied by a woman in 2.6% of Fortune 500 companies in 2010 as compared to 2% in 2009.

In India, the situation actually happens to be significantly better. A survey by EMA Partners International in 2010 covered 240 large corporations in India, and found that 11% of them had women CEOs. There were other differences. For instance, in India, 54% of women CEOs were in the BFSI sector, followed by media and life sciences at 11% each and FMCG and consulting at 8% each. In the US, FMCG and consumer durables accounted for 48% share of women CEOs and financial services accounted for 7%. But in terms of directors, India is worse off, since only 5% of seats for women directors in the BSE 100 are occupied by women, as per a report by Standard Chartered.

By all yardsticks, these aren’t indicators of a shattering glass ceiling for women. Simultaneously, there is definitely a wealth of academic research being done on issues of relative competitiveness, opportunities available, leadership styles, et al. Justin Wolfen of Wharton made one such study of S&P 1500 firms from 1992 to 2004, and concluded that there was no significant difference in returns to holding stock between female led and male led firms. A report by Lee and James in 2004 concluded that hiring a female CEO leads to negative abnormal stock return of 3.7% as compared to a negative 0.5% for a male CEO during the announcement window. A B&E 2007 study concluded that some 50% of the women CEOs under study eroded shareholder’s wealth. In addition, a huge 75% of companies led by woman CEOs underperformed the Sensex. On the other hand, a report by Catalyst cites that companies with higher representation of women on management teams provide 34% better average shareholder return than those with low representation.

A 2004 research by Michelle Ryan and S. Alexander Haslam of the University of Exeter pointed to the possibility of an even more dangerous trend after women CEOs shattered the glass ceiling – that of a glass cliff. Their research concluded that women appointed to leadership were more often put in situations where the chances of failure were high. Evidences cited in subsequent reports are are CEOs like Carly Fiorina of Hewlett Packard, Patricia Russo of Lucent and Alcatel-Lucent, Kate Swann of WHSMITH, Lynn Elsenhans of Sunoco and Carol Bartz at Yahoo!. But then, there are also surveys that concluded later on that this could not be generalised. There are a number of celebrated women leaders in US as well as India like Irene Rosefield of Kraft Foods, Indra Nooyi of PepsiCo, Chanda Kochhar of ICICI and Shikha Sharma of Axis; who defy the assumption that women CEOs necessarily underperform.

Or does the verdict even lie in statistics? Poonam Barua, noted economist and Founder Chairman of the Forum for Women in Leadership (WILL), comments to B&E, “There is no clear data that women CEOs get better business performance – simply because there are not enough women CEOs over time to make this static trend available. However, it is clear that having a woman CEO does not lead the company to financial disaster like Lehman Brothers, AGI, Chysler, or RBS.” Diversity in the work place at all levels is certainly a valuable end for the corporate world, and all possible efforts need to be done to provide equal opportunity to reach the top.

Through interactions undertaken with some select Indian and American CEOs and entrepreneurs, we give you exceptional insights on how they are leading their companies into the next growth orbit and the challenges they face in this special issue of B&E. Are they indeed getting the better of all the ‘glass’ on the way? Well, that judgement cannot be made in a haste.

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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. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

Philately as a Hobby has not been able to Grab The Imagination of Indians.

 B&E meets up with Kavery Banerjee, Chairperson, WPE Secretariat to get The Softer side of this Field

B&E: Even scented stamps were very popular during the 1990s. Are you planning to reissue them during the exhibition?
KB: We had come up with three sets of scented stamps in the 1990s. As we wanted it to be quintessentially Indian, we launched the first set on sandalwood followed by one on rose and one on jasmine. But a lot of research goes into making these stamps. Normally, we don’t reissue stamps, but we will be coming up with similar stamps in the case of zodiac signs just to appeal to the children, as we will offer customised stamps where children can have their photograph with their sun-sign printed.

B&E: The public hasn’t seen too much promotion for the event so far. What are the reasons for the same?
KB: We were trying to do innovative promotion with economical costs, as we don’t have huge pockets to promote this exhibition. We have a event manager on board who conducts road shows for us. The idea was to position it at prominent locations so that it can create awareness among the public. We are also doing various school contact programs, wherein we are educating the children and inviting their schools to come, but it is just one part of the target segment as their parents will be the ones who will encourage them to take up philately. The other segment is elderly citizens and as philately is a very rewarding and interesting hobby that does not require much hard work, we believe we will be able to attract that segment as well. We have limited our activities to Delhi and NCR region, as these will be the areas from where the footfalls will come.

B&E: With the promotions you have done, what kind of footfalls are you expecting in this seven-day long event?
KB: We are planning to bring in about 3,000 kids everyday. However, as it is being done after such a long time, we are not very sure on what kind of footfalls we will get. Apart form the kids, there will be many renowned philatelists coming to the event. But 3,000 is the minimum that we are expecting to start with and we hope that it exceeds our expectations.

B&E: The hard reality is that with technologies like e-mails and mobile phones, people have stopped writing letters. How do you view the trends for India Post?
KB: It is a fact that with e-mails and mobile phones coming into the picture, a certain set of people have stopped writing letters, but even then, the overall volume has been on a rise for the last two years at least. It is mainly because of the fact that a lot of official and business mails are sent through India Post. We hardly have any competition with courier companies, as they take only the creamy layer. Our network of 1,55,000 post offices is unmatched, as even China Post has only 50,000 post offices.

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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. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

“Intel and Qualcomm are Two Different Rivals”

Eight years back, Advanced Micro Devices (AMD) promised to become ‘the’ Intel-killer. It still does. With a modest market share of 12.1% in the microprocessor space, AMD believes that its Fusion and Vision technologies will work magic in the notebooks & mobility devices platforms and enhance consumer experience radically. B&E’s steven philip warner discusses AMD’s status and strategies with Marty Seyer, Global Chief Strategy Officer, AMD.

B&E: AMD has had a rather modest time during the past few years. But it’s still willing to bet on the “next era” of computing. Could you share something about AMD’s future launches?
Seyer: As the only company in the world that develops and designs both x86 CPUs and discrete Graphics Processing Units (GPUs), AMD will play a critical role in pioneering the next era of computing with the first Accelerated Processing Unit (APU) that combines graphics & computing technologies onto one chip. This new processing approach, which AMD calls Fusion, uniquely capitalises on the company’s strengths, while forging into new technology that is designed for a better, faster, more seamless computing experience. Directly tied into our Fusion approach, looking ahead, AMD has a strong focus on enabling a complete computing experience with stunning graphics, accelerated application performance and video capabilities to fulfil consumer demand

B&E: Late last year, AMD settled a $1.25 billion anti-trust complaint with Intel. What are the benefits from this settlement to AMD and what’s your growth strategy for 2010?
Seyer: The November 2009 legal settlement with Intel paved the way for both companies to look ahead and finally compete on a level-playing field. We enter 2010 with one of the strongest platform & technology road maps in our history. AMD’s strategy is to continue delivering exceptional platforms, serving as a one-stop-shop with the essentials for customers across server technology, client platforms & graphics.

B&E: AMD is investing heavily on server & graphic technology. What’s all the talk about your new ‘Vision’ approach that follows the ‘Fusion’?
Seyer: We are seeing strong demand in a variety of markets, including a rebounding server industry that is being driven by cloud computing and virtualisation, among other technologies. On the graphics side, there’s unprecedented demand for immersive graphic experiences, be it gaming, video or otherwise. In fact, in just the three months after the launch of the ATI Radeon HD 5800 series, the first DirectX 11-capable graphics products from AMD, we have shipped more than 2 million DX11 cards. In 2009, we introduced Vision Technology from AMD, a new way of communicating with consumers, retailers and PC manufacturers that breaks the traditional model of how PC benefits are communicated by emphasising real-world usage models that communicate the value of the whole system, not technical specifications. The positive response to the Vision approach prompted the launch of Vision Pro at The Consumer Electronics Show 2010, which expanded the program to AMD’s enterprise customers. At CES, Lenovo debuted its first AMD-powered ThinkPad notebooks, using Vision Pro.

B&E: Intel & Qualcomm are two of AMD’s biggest competitors. What challenges do they pose to AMD?
Seyer: Intel and Qualcomm are two different competitors. The former is well established in the computing market, and the latter in the communications market and is just beginning to enter the computing market through smartbooks. The key to success won’t be based on past achievements, but on forward-looking innovations and through our Fusion approach, we have plenty of capability and assets to lead in our target markets. The semiconductor market has always been, and always will be fiercely competitive, but AMD is keenly focused on what we need to do to succeed.

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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. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting