Business News

'Maruti Will Not End Contract-Worker System'
Violence at Manesar was a criminal act: Osamu Suzuki

Simmering unrest among contract workers at the Manesar (Haryana) plant of Maruti Suzuki exploded in violence and arson on July 18; one HR executive died, and 96 employees were injured. Suzuki Motor Corp Chairman Osamu Suzuki made a point of visiting Manesar and meeting every injured worker during a week-long trip just after the locked-out plant reopened on August 21.

Labour unrest is just one of the problems India's No. 1 carmaker faces. In April-July this year, Maruti's share of the domestic passenger vehicle market fell to 38.6 per cent, the lowest in a decade. In 2000, the figure stood at 55.5 per cent. Maruti's finances are not looking good: operating profit margin has fallen from 12.74 per cent in 2009/10 to 8.05 per cent. Return on capital employed has halved from nearly 28 per cent to 13.5 per cent. Return on net worth has similarly declined from more than 21 per cent to under 11 per cent.

The 82-year-old Suzuki, looking calm and relaxed in shirt-sleeves, showed a surprising grasp of numbers and detail when he sat down with Editor in Chief Aroon Purie and Editor Chaitanya Kalbag for an exclusive interview in a New Delhi hotel room.

On the Manesar unrest

Osamu Suzuki, Chairman of Suzuki Motor Corp

This trouble has led to the tarnishing of Suzuki Motor Corp worldwide, and pulled down the image of Maruti Suzuki in India. This incident happened on July 18; today is August 29. More than one month has passed. Many people have been arrested, but I cannot believe that the reason for the incident is not yet clear. The rumours are that these people (the attackers) would be put in jail for a week or 10 days and then be released and then they would be heroes or stars. That was what they were thinking. Already, all those who indulged in this violence - there were 546 people - have been identified and they have been terminated. They must have wanted to extract money from Maruti Suzuki, but we have decided that we will not give them a single penny.

I think the way the (Maruti) union has taken up its dispute with the management is not at all correct. I don't consider this a union-management labour issue; I term it as a criminal act, and, of course, it shocked me.

From 1945, when Japan lost in World War II, until 1960, we also had labour troubles. So I have also experienced labour problems (in Japan). The timing may be different but each country goes through labour trouble in its own time.

Marketing Glossary

Decline stage

The last stage of a product's life cycle, during which sales fall rapidly

Demographic segmentation

Demographic segmentation consists of dividing the market into groups based on variables such as age, gender family size, income, occupation, education, religion, race and nationality

Depth interview

A lengthy, one-to-one structured interview, examining in detail a consumer's views about a product

Differentiation

A marketing strategy aimed at ensuring that products and services have a unique element to allow them to stand out from the rest

Direct mail

The delivery of an advertising or promotional message to customers or potential customers by mail.

Direct marketing

The planned recording, analysis and tracking of customer behaviour to develop a relational marketing strategies

Company Profile

Forbes Marshall Pvt. Limited

Trusted Partners in Steam Engineering and Control Instrumentation

For over six decades, Forbes Marshall has been building steam engineering and control instrumentation solutions that work for process industry. Today we have evolved into a leader in process efficiency and energy conservation through technology tie-ups and focused investments in manufacturing and research. Our joint ventures with the world’s leading names enable us to deliver quality solutions in 14 countries. Our business practices and processes have combined into a singular philosophy of being trusted partners who provide innovative solutions. It’s a philosophy we are proud to live up to.

For over half a century, Forbes Marshall has been building steam engineering and control instrumentation solutions that work for process industry. Forbes Marshall's goal is to provide solutions in Energy, Efficiency and Process Automation, using the best technology the world has to offer. 50 years ago we started out with steam generation solutions. Today we are comprised of twelve business divisions; most of them partnering with the world technology leaders in respective fields, manufacturing products that cover the entire spectrum of energy generation, energy efficiency, control and instrumentation for the process and power industry.

HR Article

Creating Team Norms

Now that we have established the essentials of team norms, the next step is to create these norms so that each team member learn to interact with fellow members, as well as those outside of the team, effectively and successfully. If you lead a team that has difficulty of interacting with each other, perhaps you need to follow these steps in creating and developing team norms.

Form a charter – Draft a list of proposed team norms that you want to project in your team. You could also follow team norms from other work groups. You could also advise your co-members to make up their own ideas for team norms.

Gather your members – Schedule and hold a meeting to introduce the proposed team norms to your members. Make sure that all team members must be present at the meeting so that the norms can be “owned” by all of them. If one member is absent or does not attend, postpone the meeting for another day.

Let an outside person facilitate – It is best that a person outside of your team facilitate the meeting so that members would not feel that they are being “dictated” by a new set of rules. In the absence of a facilitator, let another team member lead the meeting.

Let ideas flow – Begin the brainstorming by brining out each of the member’s drafts for a team norm. Let them provide additional ideas as they come along. The more ideas generated, the better. Remember not to comment or critique on the ideas, and instead list everything on the board so the whole group can see them.

Discuss about these ideas – Once the proposed norms are generated on the board, you might want to cross out redundant ideas off the list. You can decide to keep all the group norms listed, or you can discuss to determine the group norms your group wishes to keep. Although there is no recommended number of group norms you can keep, it is best to let common sense prevail when you find there are one too many guidelines. You could also add new group norms over time if the team sees it fit.

Only pay attention to how you interact – Group norms does not concern all group behavior and therefore should not be legislated. What needs attention are the important interaction areas including effective conflict communication, and keeping commitments.

Commit to the norms – Once the set of guidelines has been agreed upon by all members, they are also bound to commit into applying the team norms, as well as telling each other if they believe a group member is violating these norms.

Distribute the list of team norms– After the meeting, distribute to all member the group norms that they have agreed upon.

Evaluate the team norms – After a certain period of time, such as every three months, evaluate how the team norms are affecting the group into achieving its business goals as well as its members’ relationship goals.

Thought for the day

"Dream lofty dreams, and as you dream, so shall you become. Your vision is the promise of what you shall at last unveil."

Our vision pulls us toward its fulfillment. It gives us the energy to do whatever's necessary... so anything is possible if we believe in our dream and refuse to let it go.

Company Profile

MakeMyTrip Limited

An Indian Online Travel Agency

Nurtured from the seed of a single great idea - to empower the traveller - MakeMyTrip went on to pioneer the entire online travel industry in India. MakeMyTrip has revolutionised the travel industry over the years. This is the story of MakeMyTrip, India’s Online Travel Leader.

MakeMyTrip.com, India’s leading online travel company was founded in the year 2000 by Deep Kalra. Created to empower the Indian traveller with instant booking and comprehensive choices, the company began its journey in the US-India travel market. It aimed to offer a range of best-value products and services along with cutting-edge technology and dedicated round-the-clock customer support. After consolidating its position in the market as a brand recognised Nurtured from the seed of a single great idea - to empower the traveller - MakeMyTrip went on to pioneer the entire online travel industry in India. MakeMyTrip has revolutionised the travel industry over the years. This is the story of MakeMyTrip, India’s Online Travel Leader.

MakeMyTrip.com, India’s leading online travel company was founded in the year 2000 by Deep Kalra. Created to empower the Indian traveller with instant booking and comprehensive choices, the company began its journey in the US-India travel market. It aimed to offer a range of best-value products and services along with cutting-edge technology and dedicated round-the-clock customer support.

HR Article

Getting Value From Training

  Get Some ROI (Return On Investment)

All too often, potential benefits from training seminars are lost because the supports required for the application of learning are absent. And let's face it -- nobody can afford to send people for training just for the fun of it. We all expect that training will somehow impact upon a person's present or future ability to contribute to the employing organization. How do we "make it so"? That's our topic this month.

 

General Principles
Getting value from training isn't magical. There are some general principles that you can adapt to ensure that training for yourself and your staff results in changes in the workplace.

 

First, training that adds value tends to be integrated with other management systems. That is, training decisions and actions are carried out with reference to performance management systems, strategic planning processes, and career development initiatives. Training must be managed so that it is planned, and deliberately and clearly linked to workplace outcomes. When training is used as a reward, or its goals aren't clear to all concerned, it is rare that it has any positive impact.

Second, training that adds value actually has three components. First there is the training planning component. Then training occurs. Most important is the third component -- follow-up. Mechanisms must be in place to provide reinforcement to the learner for his or her efforts to implement what has been learned.

Finally, training that adds value occurs when there is an infrastructure in place that supports the learner's application of what has been learned. For example, if people attend a workshop on the use of a computer-based word processor, training will only add value if the software and hardware is available and in place when the person returns from training. While we normally think of infrastructure as relating to things, it can also refer to elements like time. For example, people attending a seminar on the use of effective management techniques will only be able to use what has been learned if they have sufficient time to do so.

So, getting value from training requires integration, planning, follow-up and infrastructure. While getting value should be a shared responsibility on the part of attendee(s) and manager, the manager plays a critical role in helping to create the conditions under which training will add value.

Thought for the day

"Not everything that is faced can be changed. But nothing can be changed until it is faced."

At some time we each have to face up to the fact that our mortal body will eventually die; nothing we can do about that. But we may not choose to face up to the fact that our relationship is in a mess, that we are in the wrong job, or that we have not been doing a good job bringing up our kids. In this state of denial, things just carry on the same, whereas if we faced up to the truth, it's likely a lot could be done to improve the situation.

Marketing Glossary

Consumer markets

Consumer markets are the markets for products and services bought by individuals for their own or family use

Continuous market research

Continuous research involves interviewing the same sample of people repeatedly

Contribution

Contribution per unit can be defined as selling price less variable costs.Overall contribution is the difference between total sales revenues and variable costs

Core product

The set of problem-solving or need-meeting benefits that customers are buying when they purchase a product. Customers are rarely prepared to pay a premium for these elements of a product.

Cost leadership

A strategy of producing goods at a lower cost than the competition. This usually requires the business to enjoy higher economies of scale or have some kind of productivity advantage

Marketing Glossary

Awareness Advertising or other promotional activity (e.g. public relations) whose primary purpose is to increases general knowledge of the company, and to make people feel more positive towards it

Behavioural Segmentation Behavioural segmentation divides customers into groups based on the way they respond to, use or know of a product.

Benefit Segmentation Benefit segmentation relates to the process of dividing a market based on the specific benefits consumers seek from a product. For example, some car buyers want safety and security from their car, while others look for comfort or speed. A car manufacturer, therefore, has to decide which benefits to offer – and how these benefits should be communicated to the customer

Boston Group Matrix A means of analysing and categorizing the performance of business units in large diversified firms by reference to market share and growth rates. It was developed by the Boston Consultancy Group (BCG)

Brand  A brand is the specific type of the product form. A brand – representedby a brand name, symbol, design, logo, packaging – is the identity of a particular product form that customers recognise as being different from others.

Marketing Glossary

Brand building  Developing a brand's image and standing with a view to creating long term benefits for brand awareness and brand value

Brand equity  Brand equity refers to the value of a brand. Brand equity is based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations. Brand equity also includes other “intangible” assets such as patents, trademarks and channel relationships.

Brand extension Brand extension refers to the use of a successful brand name to launch a new or modified product in a new market. Virgin is perhaps the best example of how brand extension can be applied into quite diverse and distinct markets.

Brand image Brand image refers to the set of beliefs that customers hold about a particular brand. These are important to develop well since a negative brand image can be very difficult to shake off.

Brand loyalty A strongly motivated and long standing decision to purchase a particular product or service

Brand recognition A customer's awareness that a brand exists and is an alternative to purchase

Marketing Glossary

Breakeven  Breakeven is achieved when total contribution is equal to total fixed costs. Addition contribution earned after this point becomes profit Break-even pricing Setting a price to achieve break-even on the costs of making and marketing a product (direct costs). Breakeven is achieved when the total contribution from sales priced in this way at least equal the fixed costs of the business

Build share  A strategy based on the Boston Matrix. Here the company can invest to increase market share (for example turning a "question mark" into a star)

Business portfolio The business portfolio is the collection of businesses and products that
make up the business.

Business to Business Marketing activity directed from one business to another (as opposed to
a consumer). This term is often shortened to “B2B”

Management Guru

IMPORTANT COMPONENTS OF LEADERSHIP ARE TRUST AND SUPPORT

  SANDEEP AND MANISHA  CHAUDHURY

Sandeep and Manisha Chaudhury's team called ResourceGroup, conduct workshops in the national corporate sector besides conducting open classes on how to live life fully and passionately. Sandeep's words emerge lightly but hold the listener's attention because of his innate passion and intelligence. If Sandeep is the face of the group, Manisha is its heart and brains. She is the main creator of their training modules and given her education in psychology, the administrator and evaluator of some of their evaluation tests.

The couple view success in a number of ways, but all of them according to Sandeep, converge to mean the same thing: ''To reach a state of mind where you are continuously and deeply satisfied with what you have and yet aspire to grow towards a vision.'' He adds: ''Success is achieving our potential in all four dimensions of being: 1. Physical—or health 2. Emotional—or love and inspiration 3. Intellectual—or solving life's problems creatively 4. Spiritual—or rising like a bird above yourself and the world and staying there diving deep within and staying there. Finally, you must live your name, because that's where the Godhead in you is hidden.''

Business News

 Pantaloon Retail rallies 6 pc on merger proposal

Shares of Pantaloon Retail India today rose by about 6 per cent after Aditya Birla group firm Peter England Fashions & Retail's board approved merger of Pantaloon's format business and fixed the share swap ratio at 1:5.

After a positive opening, shares of the company further gained 5.53 per cent to Rs 151.50 on the BSE. At the NSE, the scrip climbed 5.84 per cent to Rs 152. As per the share swap ratio, for every five shares of Pantaloon, the shareholders will get one Peter England share.

This mark a step closer towards Aditya Birla Group's proposed acquisition of majority stake in Kishore Biyani-led group's flagship Pantaloon format apparel retail business unit.

"The board of directors of Peter England Fashions and Retail Ltd (PEFRL), a wholly-owned subsidiary of Aditya Birla Nuvo Ltd approved the scheme of arrangement for the demerger of 'Pantaloons Format' business into PEFRL," Aditya Birla group had said in a statement yesterday.

Business News

Everstone leads race for stake in Hinduja Finance Future Capital Holdings Ltd.

Everstone Capital has emerged front-runner to pick up a minority stake in Hinduja Leyland Finance, a non-banking finance company (NBFC) owned by the London-based Hinduja brothers, said at least two sources briefed on the matter.

Everstone, an India-focused private equity firm co-founded by Goldman Sachs bankers Sameer Sain and Atul Kapur, could invest Rs 150 crore for a stake of about 10% in Hinduja Leyland Finance. The deal, which has not yet reached agreement, is expected to value the Hinduja arm, mostly a truck financier, at about Rs 1,500 crore.

This might be the first private equity action in any of the Hinduja group companies, with a combined revenue topping $25 billion last year. Hindujas have toyed with the idea of roping in financial investors for some of the group firms but have shied away till date. Recent media reports named Temasek Holdings and AIF Capital as other suitors in the fray.

Hinduja Leyland Finance is 50% owned by the group's flagship Ashok Leyland while the remaining shares are with a clutch of other group entities. The finance company appointed Spark Capital to raise funds to chart an aggressive expansion plan with assets under management estimated to touch $1 billion in the current fiscal.

Everstone Capital declined to comment on speculation, while Hinduja Leyland Finance could not be reached for immediate comments. The NBFC began as a financier to customers of Ashok Leyland vehicles, which now accounts for about 40% of the business. It has expanded operations to cover all vehicle financing, including two wheelers.

Marketing Glossary

Consumer durables Consumer durables have low volume but high unit value. Consumer durables are often further divided into White goods (e.g. fridgefreezers; cookers; dishwashers; microwaves) and Brown goods (e.g. DVD players; games consoles; personal computers)

Consumer markets Consumer markets are the markets for products and services bought by individuals for their own or family use

Continuous market research Continuous research involves interviewing the same sample of people, repeatedly

Contribution  Contribution per unit can be defined as selling price less variable costs. Overall contribution is the difference between total sales revenues and variable costs

Core product  The set of problem-solving or need-meeting benefits that customers are buying when they purchase a product. Customers are rarely prepared to pay a premium for these elements of a product.

Business News

Lodestone deal for Rs 1,932 cr is Infosys' biggest buy

Infosys announced its biggest-ever acquisition, a development that could temporarily muffle chatter that the company is too conservative and risk-averse for its own good.

India's second-largest software exporter said it would buy Lodestone Holding, a Switzerland-based consulting company specialising in business software from Germany's SAP, for about $350 million ( Rs 1,932 crore), giving it better reach in continental Europe.

"I don't think Infosys and conservative should be used in the same sentence anymore," Chief Executive SD Shibulal declared, referring not just to the acquisition but also the realignment of the business model, which he called "a bold step". But investors hoping for meaningful deployment of Infosys' Rs 20,000-crore cash pile were not overjoyed. The company's shares closed only 0.6% higher on the Bombay Stock Exchange after having run up about 10% in the last month.

Marketing Glossary

Buying behaviour  Buying behaviour concerns the process that buyers go through when deciding whether or not to purchase goods or services. Buying behaviour can be influenced by a variety of external factors and motivations, including marketing activity.

Cash Cows  A term used in the Boston Group Matrix. Cash cows are low-growth businesses or products with a relatively high market share. These are mature, successful businesses with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars.

Channel conflict  Disagreement among members of a distribution channel about who should be paid what and what roles each should play. Channel conflict often occurs when a business uses a multi-channel approach to distribution

Cognitive dissonance Cognitive dissonance is an customer effect commonly observed after a major purchase whereby the customer feels uncertainty about whether the purchase should have been made. Post-purchase promotion (particularly advertising) has a role to play to reduce the incidence and effect of cognitive dissonance

Business News

Anand Mahindra plans to merge IT businees under Mahindra Satyam-Tech Mahindra combine

Anand Mahindra plans to merge the information technology businesses of his $15-billion group under the Mahindra Satyam-Tech Mahindra combine, or allow the smaller entities to explore strategic options including sale or merger with an outside entity.

Anand Mahindra plans to merge the information technology businesses of his $15-billion group under the Mahindra Satyam-Tech Mahindra combine, or allow the smaller entities to explore strategic options including sale or merger with an outside entity. This would entail Bristlecone and Mahindra Engineering Services to come under Tech Mahindra or chart an independent course.