Monday, July 25, 2016

The Top PGDM College in Greater Noida Speaks on Abenomics


The top PGDM college in Greater Noida, Ishan Institute of Management & Technology has been at the forefront of incorporating contemporary issues of business and economics into its curriculum. While the last few weeks have focused on BREXIT, in today’s piece we turn towards Asia. Japan forms the centre piece of our analysis. It makes enormous good sense to assert that the Japanese economy is in the midst of string recessionary currents and there are no signs of the Japanese PM Shinzo Abe being successful in navigating the ship of the Japanese economy. The point that makes the entire episode so bizarre is that Abenomics that is essentially an extension of the Keynesian policy of pump priming has failed to produce the desired results in the case of the Japanese economy. The stimulus packages offered by the Shinzo Abe led government in Japan has incorporated pump priming but to no avail. At the top PGDM college in Greater Noida, Ishan Institute of Management & Technology we believe that the curious case of Mr. Shinzo Abe and consequently the Japanese economy presents a case for rethinking on the viability of Keynesian pump priming policies. The devil in the data shows that Japan is slowly but unfortunately walking the path of fiscal profligacy that if not addresses with concurrent measures like taxation to reinforce inter-temporal equilibrium may lead to far worse consequences.

The Top PGDM College in Greater Noida on Abenomics: Devil is in The Data
At the top PGDM college in Greater Noida we believe that the failure of stimulus packages to lift the drowning animal spirits of capitalism in Japan require an analysis into the budgeting technique being used in Japan along with an inquiry into possible leakages that may exist. To begin with here is some interesting data on the Japanese economy:
·        Investment levels are still below pre-crisis levels.  Investment for Q1, 2016 stands at 72 trillion Yen vis-a-vis 77 trillion Yen for Q1, 2007.
·        Japan is yet to overcome deflation. The inflation level for 2015 was at 0% against -0.2% in the year 1998.
·        Japan cannot leverage the demographic dividend. It has 26.3% of its population above 65 years of age.
·        Japan has one of the lowest population growth rates. It has a fertility rate of 1.4% against the global median of 4%
·        Japan is not receptive enough to immigration. The immigration percentage stands at 1.6% against a global median of 45%.
·        Japan has an incredibly high debt to GDP ratio of 246.6% against the global median of 82.2%.
Probably this set of data offers a possible explanation for the continued crisis in Japan and the failure of the stimulus packages. For the Japanese economy to be analysed in economic terms, the academicians of the top PGDM college in Greater Noida, Ishan Institute of Management & Technology have translated these statistical measures into cultural and administrative insights. Take a look.
Remedy
Obstacle
Expand the workforce by including women and allowing old people to keep jobs longer
Cultural workforce traditions and seniority systems in corporations
Counteract negative demographics by allowing immigration
Deep aversion to immigration from policy makers and the local population
Hike taxes to lower government debt
Political compulsions from people and corporations against tax hikes
Institute industrial and labour market reforms
Resistance from labour unions, industries and lack of political will

Japan has done more than enough to foster economic ties with the world in the aftermath of the Second World War. To this extent Japan has aggressively promoted foreign direct investment by other companies in Japan and vice versa. Japan has a very strong export sector that has proven competencies in the verticals of automobile, software, heavy engineering, infrastructure and logistics. Yet Japan somewhere represents the face of a society that is yet to come to terms with the latest and the most advanced level of globalization i.e. immigration and cultural exchanges. Hidden behind the sophisticated bullet trains, total quality management revolutions and fast cars of Honda, Suzuki and Nissan are the age old orthodoxies of a culture that is steeped in tradition, seniority, rigid social strata that is by and large immobile and does not allow too much scope for interaction of foreigners with Japanese. Under such circumstances Japan is left to lick its wounds while leading a sequestered lifestyle.
At Ishan Institute of Management & Technology, one of the top PGDM colleges in Greater Noida we wish to engage in greater data collection on the economic plight of Japan with a belief that the issue with Japan has larger ramifications and roots that extend beyond the obvious mathematical economics of pump priming and need to be seen in the broader context of the CAGE framework of Dr.Pankaj Ghemawat, IESE School, Barcelona by incorporating cultural and government factors to the stereotyped mathematical modelling preferred by macroeconomics experts.


Monday, July 18, 2016

Top PGDM Colleges in Delhi NCR Offer Business Lessons from Sir Alex Ferguson

One of the top PGDM colleges in Delhi NCR, Ishan Institute of Management & Technology, has endeavoured to offer students unique business lessons from non-profit enterprises and other unorthodox verticals. Given that sports has witnesses unprecedented commercialization and a new wave of professionalism has created a major impact on sports like cricket and football. While south Asia is largely under a perpetual and eternal grip of cricket, it makes enormous good sense to assert that as an industry vertical football has the market value, offers some of the highest pay packages and rewards to sportsmen and boasts of record transfers and signings that tend to rewrite records every year. There are reasons behind bracketing Ishan Institute of Management & Technology under the top PGDM colleges in Delhi NCR. Our tryst with sports management and efforts to extract business lessons initiated with the lectures on strategic management for the 17th batch of PGDM. It helped that two students had gifted one of the faculty members a copy of the autobiography of Sir Alex Ferguson, the legendary manager of Manchester United, “Managing My Life”. The 18th batch continued with the efforts with some students occasionally asking for the copy of the book for self study and raised genuine questions on sports management on the floor of the classroom. The 19th batch of PGDM took it a step forward by offering a presentation based on extensive research on the World Cup winning team of Germany (2014). Finally the efforts bore fruits in the 20th batch with the coverage of a fully fledged case study on Sir Alex Ferguson published by Harvard Business Review. In this piece we take a look at some of the major takeaways from Sir Alex Ferguson’s career with Manchester United. Take a look.

Build a Grassroots Level Talent Development System

It was 1986 when Sir Alex Ferguson first joined Manchester United. One of the first things he did was to initiate two centres of excellence dedicated to the youth. His definition of youth was as young as nine years of age. To streamline his efforts to build the grassroots level program he recruited many scouts whose job was to spot and identify top football talent in schools, localities and clubs and report their findings to Ferguson, brief him and initiated proceedings for trials at the centres of excellence. This led to some major talent developments. David Beckham, Ryan Giggs, Paul Scholes and Garry Neville were among some of his early finds who later became top performers for Manchester United and England. At that time many had questioned the rationale behind such steps but the results paid put the questions with time. There are two lessons. Create the ambience of being back in school. Enable top young talent to learn from a very young age and pool them together so that they learn about each other’s game and grow up being part of a cohesive unit before joining the senior team.

Rebuild the Team to Maintain the Competitive Advantage

Even at the peak of the team’s success Sir Alex Ferguson continued to streamline his search for top talent. All the players available with the club were categorized into three demographic levels: above 30, 23 years to 30 years and the young ones who fell into the age bracket below 23 years of age. Players falling under the age group of above 30 years of age were assigned the task of leading the team, setting examples in the training session, working with the manager on strategy and tactics for matches and share their experience with the young players below 23 years of age and groom them on and off the pitch. The players in the age group of 23 years to 30 years were assigned tasks of performance on the pitch, maintaining discipline in the club in practice sessions, gym session and relief and rehabilitation sessions. The young players were put to test in the practice and occasionally used as substitutes for the senior players in matches. Ferguson’ assessment was that a team’s cycle lasted for 4 years and hence it was imperative to maintain a portfolio of talent on these lines and match roles and responsibilities to the stage of the team life cycle the concerned player was going through. It was in a sense very similar to the inventory based approach to human resource retention.

Total Quality Management On and Off the Pitch

Ferguson was the ultimate total quality management freak in football. He never allowed a single bad training session during his entire tenure at the club. More than sharpening the technical skills of the players at Manchester United, he was more concerned about the players not giving in. Attitude formation was given due importance and discipline was chosen over motivation. Work ethic and sustainable high energy levels were stresses upon in training with the single minded logic that what is produced in training gets manifested on the field. Ferguson recruited what he called “bad losers”. These were players who were great on dedication, work ethic and talent and yet may have lost some golden opportunities at the junior level. Each of his training sessions was based on development of intensity, speed, focus and a high level of performance. There was not a single day when Ferguson allowed any player, not even the great players like Beckham, Ronaldo, Rooney, Scholes or Nistelrooy to get away with a half hearted or less than 100% commitment at training. This showed in the games that Manchester United played. Such was the impact that these great players would practice for hours at a stretch so much so that Ferguson would have to actually chase them in from practice to prevent exhaustion.

Being in Charge and in Control

Ferguson kept things simple and in control. Right from the first day when he took charge at Manchester United he was high on self belief that if he had to transform Manchester United into one of the best in the business he had to do things his way not the players’ way. For that to happen he had to be in control of the tactics, strategy, discipline, training sessions, off days and recruitment. His personality was higher and bigger than that of the players. That allowed him to earn the respect of the players and everybody else at the club. Not for a single day was indiscipline tolerated. For example when Nistelrooy disgruntled in public he was promptly transferred to Real Madrid. When Roy Keane publicly criticized his team mates his contract was terminated. These actions sent out a message that it was the manager of Manchester United who was in command and not anybody else.

Timing the Communication

Nobody likes to be criticized and especially not the superstars of football. There has to be a courage, honesty, politeness and firmness in the way a manager says no to players. The manager needs to have these elements in him to be able to match the message to the moment. This is especially needed in situations when players had to be rested, substituted or axed from the team. Ferguson combined the roles of a doctor, teacher, parent and critic as a manager and his boys knew that he meant business. There was no messing around with him once a message had been delivered. A no nonsense approach improved the longevity of the team along with that of Ferguson and the players. No big player created at Manchester United ever wanted to leave the club because they knew that the opportunities for self development at the club were immense. This was in part a result of the communication that Ferguson committed himself to.

Play to Win

Managers talk of being flexible and situational. There are three coordinates for any situation in business and sport: time, space and scale. To play to win teams have to learn to prepare to win. A great part of that preparation need to be streamlined across these three coordinates of time, space and scale. That meant that Ferguson had to build and develop tactics, strategy, intensity and above all the technical and analytical skills in players separately for these three coordinates of time, space and scale. Manchester United practiced separately for a situation when they were going down 0-1 with 45 minutes, 30 minutes, 15 minutes, 10 minutes and 5 minutes of play left. The efforts reflected in the results on the field with Manchester United winning many close matches during Ferguson’s tenure. Also the team practiced very differently for away matches and home matches. The third check point in training sessions was that of scale. Ferguson prepared his players to repeat performances time and again and that was done keeping in mind the long schedules of the EPL and the UEFA.


At the top PGDM colleges in Delhi NCR like Ishan Institute of Management & Technology we pick up business lessons just like that from every nook and cranny possible to bring you of the box insights on business. The piece above is based on the efforts of the students of the college to bring high quality discussions and academic issues in management to the floor of the classroom. The top PGDM college in Delhi NCR acknowledges the efforts of Binay Kumar Singh and Subhash Yadav from 17th batch of PGDM, Uttam Singh Rajput and Zeeshan Khan from 18th batch, Abhishek Kumar Singh and Bipin Srivastava from 19th batch, Pawan Sinha, Utsav Kundu, Samir Akhtar and Alka Mishra from the 20th batch. 

Thursday, July 14, 2016

Designing the Exit Strategy for BREXIT: The Top PGDM College in Delhi NCR Speaks on Theresa May

At the top PGDM college in Delhi NCR, Ishan Institute of management & Technology, we have been following the chain of events that have followed BREXIT. The event is one of historic importance and epic proportions at that. Not since the end of the Second World War has Great Britain seen itself in such a quagmire. While it looked like a financial issue, the turn of events that led to the promise on a referendum by the former British PM David Cameroon and the results that have astounded many across the world have left room for the impression that it is a political issue with many dimensions. Now that Great Britain has its second woman Prime Minister in Theresa May there are some positive things to look forward to. At the top PGDM college in Delhi NCR, we are attempting an ambitious and intellectually stimulating academic surgery to diagnose the BREXIT issue and its different dimensions along with the probable solutions that Mrs. Theresa May may design to streamline the exit strategy. The BREXIT design issue promises to be a exciting case study in designing an EXIT strategy from the perspective of strategy, business environment and human resources management. Take a look.

Trade Policy of Theresa May and BREXIT

It may sound paradoxical if not subversive to hop and jump over to trade policy discussion on day two of the tenure of Mrs. Theresa May. Yet, it makes enormous good sense to assert that at the heart of the BREXIT is an unhealed wound of a meagre economic growth rate of 0.2%, one of the lowest in the last eight decades. Great Britain had virtually surrendered its competitive advantage in international trade by signing for EU membership. Negotiating a free trade agreement with European Union requires holding talks with each of these 28 member nations that call for diplomatic talks at government level. The entire process of signing one free trade agreement with EU takes 6 years. Trade data available with the Conservative Party shows that more than 50% of Great Britain’s trade volume is shared with non-EU nations like United States of America, Canada, India and China. Among all these nations, India takes the highest time to streamline and finalize a free trade agreement in 3 years while Canada, United States of America and China do the same in 1 year. Theresa May shall do well to accept the recommendations of the David Davis Conservative plan to design and sign free trade agreements with each of these non-EU nations while simultaneously exiting EU.

FDI and Reclaiming the Industrial Class of Great Britain

It is given and granted that London has taken a beating over the issue of BREXIT as a financial hub of Europe and the world. Many banks, financial corporations, insurance companies and microfinance institutions may think of exiting Great Britain and London in particular in the coming 2 years. Their next choice may be Dublin. What can Theresa May do loss offset this situation? She can design corporate income reductions to streamline the tax regime and use it as a tool to attract FDI from the blue chip corporations in the world. Great Britain houses a skilled workforce that is productive, healthy and industrious. They can look forward to recreating the manufacturing sector in which Great Britain had once done exceedingly well. First enable inexpensive import substitution through a flexible trade regime that allows manufacturing companies to import raw materials, spares, parts, accessories and value addition components from labour intensive economies like China and India. Second, offer corporate enterprises a corporate income tax rationalization program to reduce the corporate income tax rate from the existing 20% to 15% on EBITDA. Third, laser focus on sunrise sector verticals like automobile, pharmacy, biotechnology, genetic engineering, IT and software development and textiles through an unbalanced growth approach that leverages the high quality social overhead capital left over by the David Cameroon legacy.

Single Market Access and Using Free Trade on a Reciprocal Basis

The EU leadership consisting of the German Chancellor Angela Merkel, the French PM Francois Hollande and the Italian PM Matteo Renzi will be gunning for Great Britain to exit early. Theresa May is a known leader in the international community for her strong bargaining and arrogant, brash and abrasive style. This must be put to good use by Great Britain to push through bilateral free trade agreements on a country specific basis. Do not allow the EU members to form a cartel of sorts to pressurize Great Britain into giving into their demands for a single market access as it was during the good old days of Great Britain’s EU membership. The use of free trade on a reciprocal basis focusing in industry verticals will build the lost competitive advantage in sectors like automobile Most importantly Great Britain’s great strength is the large population of knowledge workers and the knowledge economy must be leveraged to build competitive advantage in select verticals on a reciprocal basis. On the contrary if Great Britain is forced to a raw deal, Theresa May does not have to be taught to reciprocate in the same coin.

Poland, Lithuania, Latvia and Ukraine: Engaging the East

In terms of foreign policy there are challenges galore. United States of America mus know and it hopefully does know that they have lost an essential ally and friend in David Cameroon. In Theresa May, Great Britain has found the British version of an American Donald Trump. Her priorities would not be to oblige United States of America but to keep Russia at bay. Four nations are strategically important namely: Poland, Lithuania, Latvia and Ukraine. It is for Theresa May to restore confidence to these nations as a military and economic power to offer them a shield against the expansionist regime of Vladimir Putin. That is easier said than done though. In the absence of EU, it will not be easy to negotiate with Vladimir Putin’s Russia.


At the top PGDM college in Delhi NCR, Ishan Institute of Management & Technology, we envisage a historic turn of history itself for Great Britain, as Theresa May takes charge at 10, Downing Street. We will keep updating as events come across. 

Wednesday, July 13, 2016

Innovation Insights from the Top B.Com College in Greater Noida

The top B.Com College in Greater Noida, Ishan Institute of Management & Technology has just explored something about innovation that is not too exciting. Innovation is more than a mindset to experiment. Given that global economic conditions have become interdependent and intricately woven by the sparks of economic growth unleashed by economies of different nations and corporations, innovation as a sustainable business practice has become a different ball game altogether. To this extent, it makes enormous good sense to assert that there is ample empirical evidence on the fact that big corporations are great at optimizing and leveraging existing strategic business units and resources and the small companies find innovation to penetrate the market. Once a small company enters the growth phase somewhere innovation is lost. The challenge then is to understand that growth brings inertia of a different kind. Organic growth in particular can be a big barrier to companies to adopt an innovation agenda because their structures, systems and staff get accustomed to functioning like parts of a well oiled machine. As the machine gathers momentum it assumes control of the driver rather than the driver assuming control of it. As one of the top commerce colleges in Greater Noida, Ishan Institute of Management & Technology is curious to understand the reason behind getting into this kind of state where process dynamics assume a sense of automation and the cycle becomes a virtual impasse for corporations to decode.

Breaking the Chain and Then Putting It Together

But this is half the challenge. While there are many managers and business executives capable of breaking into this cycle and catching the bull by its horn, there are other relevant questions they must answer. It is possible to stop or reduce the momentum of a machine. It is another challenge to institutionalize the change in business processes and functions and create a customer centric business model based on an innovation. To get the resources, staff, vendors and most importantly customers to rally behind something that is new and untested in terms of user experience is one of the greatest barriers. How should corporations adopt an innovation agenda? Is there a simple algorithm or protocol to be followed for innovation to be practiced as a sustainable business tool? At the top B.Com college in Greater Noida, Ishan Institute of Management &Technology we refer to the following 8 fold path for innovation. These 8 steps are as follows:
·        Aspire
·        Choose
·        Discover
·        Evolve
·        Accelerate
·        Scale
·        Extend
·        Mobilize

We found this simple algorithm for innovation in a McKinsey research publication and the academicians at the top B.Com college in Greater Noida feel this is the correct way to go about things.

Understanding the Dynamics of the Algorithm for Innovation

The innovation algorithm that we have referred to is premised on 8 different steps. These steps have been broken down for many reasons. First innovation calls for change management. The rate of innovation and its institutionalization has to be kept flexible so that it can be increased to suit a response to a crisis situation or reduce it in case if the situation demands a less risky approach. Second, evolution rather than revolution is required. It is important to collect firsthand accounts of user experiences of staff, clients and distributors. Watching for the receptivity of the market during the entire process leaves the scope to go back the algorithm for corrective action and control. Third, it is critical to get the innovation matrix right by matching technologies for market segments and then attaining the right scalability.

The above algorithm starts with aspiring to embrace innovation as a factor that is critical to growth. The second step is to choose the right portfolio of talent, products, markets and technology. Third, there has to be a discovery of the right business, market and technology insights that combine to form winning value propositions. Fourth, there is a need to evolve from an old business and revenue model to a new one that offers scalable and defensible profits to the enterprise. Fifth, action has to be taken to ensure a small time to market. This constitutes the step to accelerate. Being able to launch an innovation as a commercially feasible product or service in the market before competitors do so, provides the competitive edge. Sixth, the challenge of scalability needs to be addressed. Companies those are successful at innovation focus on scalability or the lack of it before pursuing an innovation project rigorously. The ability to repeat the functions, procedures and processes to produce an innovation for the masses holds the key to commercial fruition of innovation projects. Seventh, companies need navigators to get into external partnerships with vendors, suppliers, talent, franchises and distributors to enable them to reach out to a wide audience in the market. Eighth, companies that continue to innovate at scale get the basics of incentive management right within the organization and beyond. They put in place an ecosystem that stimulates talent towards innovation within the confines of their routine functions and reward them. Motivation in this context does serve the purpose for sustaining the innovation stream as it is short lived. For innovation to sustain as a routine business function it must outlive the initial spark of enthusiasm caused by motivation.


While the above algorithm serves as a blue print for innovation in companies, at Ishan Institute of Management & Technology, one of the top B.Com colleges in Greater Noida we aim to follow up on this story with empirical evidences and case studies of companies. 

Tuesday, July 12, 2016

Leadership in India: Insights from Top B.Com Colleges in Greater Noida

The top B.Com colleges in Greater Noida make all out efforts to groom students towards the achievement of career goals. This act of grooming requires more than a laser focus on academics. At Ishan Institute of Management & Technology, one of the top commerce colleges in Greater Noida the academic community has deliberated upon leadership and the way it is practiced and projected in India. Leadership has always been and will continue to be one of the most important elements of corporate success. For that matter leadership in India has slowly but steadily undergone a sea change in the last two decades. S such India is a young free market economy and has not had the luxury of time to learn leadership amidst the backdrop of economic growth having already been achieved. Leadership in India was one of the enablers of economic growth in the last two decades and for the economic growth momentum to sustain itself, it shall have to be an “essay in persuasion”.

For that matter some of the greatest chroniclers of leadership issues in the world have agreed on the fact that the Indian way of leadership is different from the West. A book published by researchers Harbir Singh, Peter Cappelli and Michael Useem called the “The India Way” has listed some of the unique characteristic features of Indian leadership. More than just leadership styles of the leaders themselves, it is the impact of the leadership on people that is much more of a brand differentiator in this context. Let us take a look at some of these unique aspects of Indian leadership.

Inverting the Organizational Pyramid

Stories of Indian leadership are full of legends that state the inversion of the organizational pyramid and destruction of the office of the CEO. To this extent, Vineent Nayar of HCL Technologies and N.R.Narayana Murthy of Infosys are both role models. N.RNarayana Murthy, one of the founders and principal share holders of Infosys lives a very modest life. He lives in a three bedroom flat in Bangalore with his family, travels in a family car, and spends time on higher education initiatives of the world’s top business schools and universities. In fact he also has been seen to do the chores of his household. Vineet Nayar transformed the Indian leadership with his approach towards 360 degree performance appraisals at HCL Technologies. Subordinates were asked to rate the performance of their bosses and even their bosses’ bosses. In doing so he set the record straight by making the top management accountable to the middle level and the middle level to the operations level.

Empowering Through Communication

India is a cricket crazy country and it is not very surprising to note that one of India’s most successful cricket captains, Sourav Ganguly was invited to IIM Calcutta to deliver a guest lecture on leadership. In his address Ganguly emphasised the practice of empowering his team mates through communication. In his playing days Ganguly was a hand that could crack the whip and pat the back of the boys both at the same time. First he did what he said at team meetings. This created trust and meant that the boys took his words seriously and that plans made were implemented. Second, he believed in communicating not passing instructions. Again this resonates with the practice of Vineet Nayar of HCL Technologies as well. Nayar incorporated the practice of decision making at the point where it must take place, i.e. at the point where the corporation met the customer. His job was to empower his teammates with resources to do the job without interfering in their work. It was the same with Ganguly. If an Irfan Pathan  was getting whacked by an Adam Gilchrist or Hayden, Ganguly would walk up to Pathan, talk to him, pat his back, take him into confidence, ask for Pathan’s tactics of line and length to allow the batsman to commit a mistake and set the field to the liking of  Pathan. Bowling was Pathan’s job. Ganguly was a resource provider.

In India Leaders are Born not Made

There are two types of leaders depending upon whether they were born or made. Born leaders are instinctive. Made leaders are meticulous. The West produces leaders who rely on strategic planning, big data, team meetings and presentations and essentially codified form of knowledge resources. On the contrary in India, leaders are instinctive. Their decision making evolves from the coordinates of a situation like time, space and scale. Knowledge exists in silos of institutional memory, applications, files and personal computers. The instinct is born out of experience and hence the Indian leader gets better with more experience because of the learning that is involved.

People as the Source of Competitive Advantage

In India people are looked upon as and developed as a source of competitive advantage by the leaders. The focus on staff development, training and development, people engagement and the practice of going beyond professional talk to share their personal issues affecting performance sets Indian leaders apart. This makes people in Indian enterprises feel at home and put their best efforts for organizational success. On the contrary in the West, leaders restrict themselves to highly professional meetings. People do not open up to their leaders and hence many pieces of business intelligence are lost or buried under the stacks of files and applications.


At Ishan Institute of Management & Technology, one of the top B.Com colleges in Greater Noida we groom leaders of tomorrow. Our academic pedagogy is delivered through a system designed to bring out leadership qualities in students. 

Monday, July 11, 2016

Searching for Synergies in M&A: Insights from Top B.Com Colleges in Delhi NCR

Ishan Institute of Management & Technology, one of the top B.Com colleges in Delhi NCR has been active in exploring the elements of successful mergers and acquisitions that create shareholder value. As such the biggest merger and acquisition story of the year so far is the acquisition of LinkedIn by Microsoft. Priced at USD 26 billion and USD 192 per share it is truly a big ticket acquisition. However Microsoft does not have a very bright corporate history of acquiring companies. Some of the biggest acquisitions by Microsoft in its recent history have not fetched shareholder value as promised. At all top commerce colleges in Delhi NCR the academic community in their lectures regularly focus on the existence of synergies as a precondition to the success of mergers and acquisitions. In reality though it is hard to explore and examine the prospects of synergistic effects in mergers and acquisitions. In the context of the Microsoft acquisition of LinkedIn we take a look at some of the indicators of synergies in mergers and acquisitions.

Synergies of Revenue Post Acquisition

LinkedIn has a membership base in more than 20 countries and the headcount of members stands at approximately 433 million. The leading professional networking site gets 60% of organic traffic from mobile, gets 45 billion quarterly page reviews and has 7 million active job listings. These figures translate into revenues of USD 3 billion. LinkedIn has a total addressable market of USD 115 billion and Microsoft has a total addressable market of USD 200 billion, thereby leading to a combined TAM of USD 315 billion which represents an increase in TAM size by 58%. This synergy is based on pure arithmetic calculation without taking into consideration the fact that Microsoft is a cloud services provider but is not the only one and faces stiff competition from Google. Microsoft offers cloud services and applications largely to the professional segment but falls short in terms of product development in apps on account of two reasons. First Microsoft lacks a solid search engine like that of Google. The fact that Google search comes built into the Google user account as an application is a huge stimulant for Google users to stick to Google. Second Microsoft’s Internet Explorer as a web browser is restricted to being second best worldwide and still has no answers to Google chrome. Microsoft has recently tried to take the battle to Microsoft with a corporate statement that the usage of Google chrome makes the personal computer slow. The use of Google chrome gives a default option of setting Google search as the home page. This shall continue to bother Microsoft because of the way in which search engine marketing and search engine optimization affect the revenue streams from sponsored search results, advertisements and pay per click dynamics. We are not very sure if Microsoft has figured that into account while looking for synergies in revenue and TAM size. To be precise Microsoft as a cloud services enterprise lacks a unique value proposition and thus does not offer the exclusivity to its users and hence does not really cater to the obligations of the VRIO(value, rareness, non-imitability and organizational fit) framework. Where is the non-imitable value proposition? There are other cloud services users who can still access LinkedIn although not as an application built into their professional cloud account. Can Microsoft shut the door on non-Microsoft cloud users for having access to LinkedIn? There is a serious question to be answered.

Synergies from Organizational Structures and Staff

The synergies from the blending of organizational structures and staff deserve a scrutiny. The corporate statement issued by Microsoft in the aftermath of the acquisition asserts that LinkedIn will retain its distinct brand, culture and independence. Jeff Weiner shall remain the CEO of the newly formed company and report to Satya Nadella while on-boarding the senior leadership team of Microsoft. It is worthwhile to note that Microsoft had adopted a similar approach in the last acquisition that it had done. Microsoft had acquired the mobile division of Nokia and kept the Nokia brand alive for a few months and then later started production of mobile phones under the brand of Microsoft. Is LinkedIn a more valuable brand than Microsoft? Should LinkedIn be allowed to retain its unique brand and culture? How exactly can the staff teams of various departments be reorganized under the new company that shall be formed? What should be the proposed organizational structure post acquisition? How shall the teams of managers and senior executives align goals at the tactical and operational levels? The management of Microsoft has maintained silence on these issues. Probably the silence is deliberate and understandable from the point of view of Microsoft CEO Satya Nadella but demands an answer. How can the staff of the two companies shed the baggage of history and work together in a reformed business environment that is being dominated by cloud services? At Ishan Institute of Management & Technology, one of the top B.Com colleges in Delhi NCR, we are not apprehensive on this question but are waiting for things to unfold on the organizational front.


Ishan Institute of Management & Technology, one of the top B.Com colleges in Greater Noida is in the process of collecting data and observing the biggest acquisition deal with interest for academic purposes and aims to introduce a case study on the same for commerce curriculum.

Saturday, July 9, 2016

Agile Methodology is cutting into Management from Software: Insights from Top PGDM Colleges in Delhi NCR

Agile Methodology is cutting into Management from Software: Insights from Top PGDM Colleges in Delhi NCR
Ishan Institute of Management & Technology, one of the top PGDM colleges in Delhi NCR has been exploring possible inroads into process engineering, enterprise management and productivity management for some time now. Given that India is a proven software and information technology power house in the world, we pondered and deliberated upon some of the industry best practices in software and information technology and objectively assessed the possibility of integrating agile development methodology into mainstream business management. The reason that we the academicians of the top PGDM colleges in Delhi NCR thought of introducing agile development methodology in the first place was because of the impact that it created in terms of performance goals not just result goals. Agile development methodology combines the best of looking at the big picture and then executing effective action. In essence there are two problems that managers face in terms of prioritizing work. First managers lose the vision of the big picture when engrossed in action. This breaks the alignment between strategy and action and weakens strategy. Second those managers that tend to obsess with strategy go weak in execution. This weakens operational efficiency. There are two essential metrics that we need to be mindful of: operational efficiency and long term effectiveness. The first metric is best assessed in short sprints and modules of action on a daily basis. The second metric is best assessed in terms of quarterly, bi-annual and annual reports.
Why Agile Development is Important?
Agile development methodology is a process. It is an essay in persuasion and not an end in itself. The implementation of agile development methodology in mainstream business and corporate sector is based on the following reasons. First, the mantra to operational efficiency success lies in reducing wastage. Some of the major wastages observed in the Indian context are wastage of time, wastage of effort, wastage of capital and resources and wastage of redundant inputs. Second, the objective of corporate enterprises being shareholder value maximization, there has to be sustained effort to create and maintain a streamlined work culture that acts on strategic planning to align enterprise and team goals, on short sprints of action followed by operational and strategic control and on corrective action. As such then strategic management process assumes the form of river rafting with a cyclical pattern of the PDCA cycle-plan do -check and act. Each cycle should lead to a forward motion towards the achievement of goals. This has the impact of shaping up the strategic management process on the lines of total quality management. Third, agile development works on the plank of speed. It lends flexibility in work and top level decision making, streamlines processes and teams and most importantly reduces the time to market, thus enabling organizations to compete on faster cycles of innovation, customer oriented services and resolution of challenges. The organization that solves problems faster grows faster.
The Three Approaches to Agile in Corporate Sector
There are three approaches to implementing agile in business. These are scrum, lean development and Kanban. At Ishan Institute of Management & Technology, one of the top PGDM colleges in Delhi NCR, we opt for a combinatorial innovation in integrating these three approaches.
Scrum works on the basis of solving big complex problems that require lot of strategic planning, corrective action and process discipline in the execution phase of work. The scrum approach work very well in circumstances that require strong project management. This is the case in verticals of infrastructure, real estate, software, information technology, ecommerce development, automobile, heavy engineering and consumer durables. In fact there are public sector enterprises in India that get approvals and stamps from the authorities at the highest level and then gets grounded or stuck in coordination failure as the project seeps through from the central government or PMO to the ministry level or state government level or municipal and local government levels. Scrum can be of great use in these scenarios.
The second approach is that of lean development that works on the basis of continuous elimination of wastes muri, mura and muda.  To a great extent we Indians can borrow a leaf out of the books of the Japanese who are masters at reducing wastages. This has the impact of increasing operational efficiency by saving on avoidable wastages. Such an approach to agile shall work well in scenarios that require process discipline. To maintain process discipline it is important to match goals with actions and identify wastages. In the most generic sense wastages are those that shall not have an impact on the goal when removed. Situations that require business leaders and managers to squeeze out margins in verticals where growth prospects are sluggish are fertile grounds for the usage of such an approach based on lean.
The third approach to agile is based in Kanban that aims to reduce lead time and efforts required in completing processes. Such an approach is best suited for marketing assignments, new product launches, entry strategy into virgin markets and in general scenarios that require the execution of campaigns where in on-time delivery is the ultimate challenge. Moreover this approach is very effective in the implementation of governance systems and structures, financial reporting, compliance and standard operating procedures (SOPs) for regulation.
A Roadmap for the Implementation of Agile in Corporate Sector
The end question: how do we implement agile development in corporate sector? At Ishan Institute of Management & Technology, one of the top PGDM colleges in Delhi NCR we have formulated a simple roadmap for the implementation of agile in business for beginners. Here are the constituents of the road map.
CONDITIONS
FAVORABLE
UNFAVORABLE
Market Environment
Customer preferences and solution options change frequently.
Market conditions are stable and predictable.
Customer Involvement
Close collaboration and rapid feedback are feasible.
Customers know better what they want as the process progresses.
Requirements are clear at the outset and will remain stable.
Customers are unavailable for constant collaboration.
Innovation Type
Problems are complex, solutions are unknown, and the scope isn’t clearly defined. Product specifications may change. Creative breakthroughs and time to market are important.
Cross-functional collaboration is vital.
Similar work has been done before, and innovators believe the solutions are clear. Detailed specifications and work plans can be forecast with confidence and should be adhered to. Problems can be solved sequentially in functional silos.
Modularity of Work
Incremental developments have value, and customers can use them.
Work can be broken into parts and conducted in rapid, iterative cycles.
Late changes are manageable.
Customers cannot start testing parts of the product until everything is complete.
Late changes are expensive or impossible.
Impact of Interim Mistakes
They provide valuable learning.
They may be catastrophic.
Many business leaders work with a very defensive approach that counts on the stick for not being able to push through reforms. A first time experiment to look at an issue with a new perspective, try new processes, alignments and resource allocations requires a strong risk taking appetite. But the institutionalization of innovation on a sustainable basis is a tougher challenge. The implementation of agile starts with the selection of a process owner who is accountable for the implementation and the results. The process owner must have a specialization or expertise in a functional role. His experience and expertise in a functional role is likely to determine the choice of the three approaches that we have discusses above. A process owner with a technological background is likely to focus on product development, design thinking, reduction of wastages, streamlining of processes. A process owner with a finance background may conceive of agile as a project to increase economic efficiency, reduce capital blockage, implement cost cutting and control on a recurring basis and suggest steps for better achievement of KRAs in departments by treating them as profit centres.
Second there has to be a process trainer who has mastered agile practice and can show the way to teams and employees in the implementation of agile for the first time. The process trainer may not have authoritative powers and control but must have mastery on agile. This person should ideally have a mastery on agile along with a strong people orientation.
Third, it is advisable to create new roles for managers and senior executives than change the structure. Changing the structure alters power equations and can significantly affect reporting and performance.
Fourth, systems need to be implemented for measurement of metrics, comparison of departmental metrics and the effect of achievement of these metrics on overall enterprise goals. This shall involve rank ordering components and functions that create value to the existing and new customers. Prioritize functions in terms of financial value created for the enterprise. Enable managers and senior executives to realize the linkage between their achievement of departmental goals and the achievement of enterprise goals. Streamline metrics, define team goals, throw questions at them based on challenges and ask managers to come up with solutions instead of instructing them. It will foster innovation. Agile is about innovation.
Fifth, identify the barriers to agile and devise ways to dilute speed breakers. This starts with the creation of small cross functional teams that consist of people from diverse functional areas like sales, marketing, information systems, accounts, human resource and customer relationship. Focus on teams not individuals. Teams work in agile not individuals. These agile teams forge the link between departmental and enterprise goals. The process owner should ideally tackle team meetings with a short frequency and divide large complex issues into small sprints. The completion of each sprint should be followed by a meeting for the next sprint. For this to happen the process owner should be in charge of the agile framework and take initiative and responsibility. There should be one process owner not two.  Uniformity of command is a must for addressing agile barriers.


Wednesday, July 6, 2016

Policy Questions in the Aftermath of BREXIT: Insights from Top PGDM Colleges in Delhi NCR

Top PGDM colleges in Delhi NCR have been following the turn of events in Europe and Great Britain very closely. In the aftermath of BREXIT, it seems there has begun a fear psychosis that seems to be self perpetuating. To this extent it may be said that the downslides observed in the stock markets of the periphery countries of Europe have been the biggest since the crash of 2008. The pound is now down to $1.30 which again is a matter of concern for British policy makers. There has been no word coming out from the business captains and probably the damage is maximized when top corporate leaders decided to stay mum. It is the lull before the storm. Since the publication of the results of the BREXIT referendum the excitement in media circles may have died down because of the consequences becoming imminent and a leadership crisis swelling in the political circles of Great Britain so much so that even the leaders that had supported BREXIT are wary of taking on the reins from the resigned British PM David Cameroon. There are questions that remain unanswered though. These are the questions that are toughest to answer. At Ishan Institute of Management & Technology, one of the top PGDM colleges in Delhi NCR, we have analyzed piles of data pertaining to BREXIT and have come up with this list of the most important ones. Take a look.

What Will Europe Look Like?

The referendum conducted in Great Britain was a political exercise and the fear it has stirred is a political crisis, not purely a financial one. There are political questions that hover over the future of institutions that had been created and maintained by member nations as a mark of unification of Europe in the aftermath of the Second World War. The European Union was one of them. The other was NATO. European Union was an economic institution that worked with an aim of financial integration and the creation of a free trade area that could facilitate the perfect mobility of people and capital. In the era of the Cold War, staying together and united against the perceived threat of communist erstwhile Soviet Union was a strategic imperative. In the presence of NATO, European Union seemed a very feasible and profitable institution because a free market that was artificially created through the Treaty of Rome and the European Economic Community was defended by a web of stable political and military alliances under NATO. In the presence of a fragile European Union, NATO seems to be the biggest loser. Now that countries like Great Britain have voted in favour of economic sovereignty, could political sovereignty be far behind? Can Great Britain sustain itself under the fire from Scotland and Northern Ireland? Can a divided Great Britain with scattered and fragmented nuclear stealth capabilities continue to have the same importance in NATO? How shall European leaders from countries like Germany, Italy and France deal with an ally that is more of a liability than an asset? The BREXIT issue has the potential to redraw economic and political borders.

Can the Euro Survive?

Great Britain during its tenure of membership of the European Union had its own currency. But as Europe has progressed from the ruins of the Second World War, through the travails of the Cold War and then the disintegration of the USSR, it has become evident that a two speed Europe is not just a much debated possibility but a reality. Rates of economic growth and GDP paths have continued to diverge despite being united by a single currency for most of the member nations of the European Union. The divergence was best gauged from the fact that 2 years ago during a match at the FIFA World Cup between Germany and Greece, social media was overflowing with memes of a debtor Vs creditor match. PIIGS countries have done woefully in the last decade. Despite the fact that Italy has pacified its internal strife by sprinkling austerity measures, the fiscal profligacy of the periphery is putting a drag on the economic growth rates of the centre. How can the Euro survive as a viable currency and as an instrument of investors in the foreign exchange derivatives market? In the aftermath of BREXIT the sudden rise in the price of gold bear testimony to the fact that investors believe gold to be safer than the Euro. Even if this is just a passing phase the consistent sickness of Euro will come under question. Does the fragility of Euro give teeth to the idea of BRICS replacing the EU as free trade area? After all European Union accounts for one third of the global GDP.

What Happens to the Short Spell of Recovery?

European Union had seen a small spell of economic recovery. What happens to that brief spell of recovery that Europe was looking forward in the aftermath of the back to back shocks of 2008 and 2010? The truth remains that economic recovery looks not only difficult but there is a likelihood of Europe slipping back into recession mode. Article 50 of the European Treaty allows a time frame of 2 years for a member nation to negotiate a bargain with European Union for a new agreement on membership. Markets, banks and financial institutions are in no mood to wait for 2 years. If the actions of the British leadership are to be taken at face value, then it is amply clear that Great Britain for one does not have the credibility that it once had after doing the somersault on BREXIT and second, a negotiation for a new agreement with the European Union looks unlikely. The longer that the business of political diplomacy and negotiation drags the murkier it gets for the European Union. Austerity measures that have been implemented by the governments of France, Italy and Germany have not yielded desired results and let us not forget that United States of America has been able to halve its fiscal deficit compared to what it was in 2012 and hence has an option to pump prime but not the European Union.

What Policy Tools Can Leaders and Institutional Heads Use to Counter the Recession?

Institutional heads and bankers have been waiting with baited breath in expectation of an unwanted liquidity crisis that may be imminent in the aftermath of BREXIT. As such most bankers and leaders are ready with liquidity infusion and quantitative easing if required. In emerging economies like India, it is widely believed that companies with exposure to European Union may be adversely affected. Any rate hike by central bankers is likely to be postponed for the next six months. Yet none of these tools may yield results. The likely fall in export revenues, drying up of export orders and outsourcing from Europe to India and other emerging economies shall at one point turn viral but the fact remains that the crisis is largely political and mandates a political solution not necessarily a financial one.

At Ishan Institute of Management & Technology, one of the top PGDM colleges in Delhi NCR we shall continue to bring the best analysis of the BREXIT stories and their impact on stock markets, central banks and trade. Stay tuned.