There have been innumerable references to ethical lapses among MBA degree holders during the financial crisis of the last few years and understandably so. I believe that what irks many people in retrospect is the fact that the rewards and punishments of the major players did not seem to be commensurate with their roles in the fiasco. Some attribute the disaster to unbridled greed run amok among the financiers, and others put the responsibility on flawed public policy or inadequate regulatory oversight.No matter who is ultimately to blame, lessons for anyone who purports to be educating leaders abound, and because so many of the bankers involved had MBA degrees, business schools must analyze the whole series of causes and effects, and try to draw conclusions about appropriate modifications to their own programs.In light of the financial meltdown, I believe that MBA programs would better prepare their students if they could answer "yes" to the following three questions:1. Are students exposed to the fundamentals of ethics and to cases of ethics violations from the real world? I would guess that most top schools give such exposure, and many schools have made ethics and social responsibility required coverage. This approach would address some of the issues around the appropriateness of reward structures and the morality issues related to the growing disparity in compensation within and across major organizations. 2. Do students fully understand the responsibilities they take on in leadership positions? Here, schools have much work to do, because the full breadth of fiduciary and moral responsibilities is not well understood by students. This direction would require each leader to approach new assignments with a desire to understand what every constituent expects of him or her, to say nothing about the complex legal and fiduciary responsibilities entailed in top positions.3. Do students have a critical analysis mindset that can guide them in questioning the claims made about models and procedures? Certainly accepting faulty models of risk and market adjustments led many CEOs and regulators astray. Most schools could do much more to give their students the knowledge and courage to evaluate and challenge proposed models. Because the amount of knowledge in the world isgrowing at exponential rates and can never be mastered, leaders need to be well-grounded in fundamental ways of thinking and making wise decisions.Of course, business schools cannot control what their graduates do 30 years after graduation, but I believe that we would cut down the probability of collapse in good judgment if all leaders refreshed their knowledge and acceptance of basic ethical precepts; if they fully understood their responsibilities to their constituencies; and if they continually sharpened their critical analysis skills. Therefore, business schools should create continuing education opportunities for executive along these lines, and they should make sure that all freshly minted MBAs have been thoroughly exposed to these principles. (The author is dean of the Tuck School of Business at Dartmouth)
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Pranab Barua, Business Head - Apparel and Retail of Aditya Birla Retail (ABR), is in action. Like his predecessor Thomas Varghese, Barua is tightening the loose ends of retail business by downing shutters on 27 supermarket stores under the brand More in Mumbai. These stores had turned loss-making due to the high rentals and rising competition. Barua finds hyper markets to be the ideal retail model for Mumbai. "Except for the one profitable super market, which is at Kharghar in Navi Mumbai, we have closed down all the small retail shops in Mumbai. Similarly, we will look at the viability of supermarkets in high-rental places like Delhi," says Barua, who earlier was the managing director of Reckitt Benckiser India. Depending on the location and size of the catchments, the company will decide between supermarkets and hyper markets.ABR, a privately held company of Kumar Mangalam Birla, has 500 supermarkets and 12 hyper markets under More. Supermarkets were the one where the company had expanded rapidly in the first phase, and then closed many. During the time of Thomas Varghese, the company closed down more than 100 stores in two years and opened 50-60 at cost efficient locations.Unlike super markets, ABR started slowly in hypermarkets segment, but picked momentum in metros, posing threat to bigger players like Big Bazaar and Reliance Retail. But overall, Birla's food and grocery retail chain continues to make losses despite spending over Rs 600 crore on building the network across the country. ABR had reported a net loss of Rs 423 crore in the year ended March 2011 on net sales of Rs 1,637 crore. According to earlier estimates, the company will hit EBIDTA profitability by 2013 and PAT profitability by 2015, in 7-8 years of its operation.Barua is now focusing on controlling the costs to turn around the retail business. "We need to increase the throughput and margins to sustain the growth," he says. While controlling the costs by shutting down the loss-making shops in Mumbai, Barua aims to expand the business in low-capital cost cities with supermarkets. "In this financial year, we plan to open 70-80 supermarkets, in addition to adding 5-6 hypermarkets," he explains.In opening hyper markets, ABR faced delay because of the developer in most projects. With the financial downturn hit twice the market, most of the projects are completing at snail speed. In this environment of below 7 per cent GDP, the job of Barua is to change the retail business into cost efficient with the reduction or addition of stores, say analysts. According to a research report by The Boston Consulting Group (BCG), the organized retail in the country is growing at over 25 per cent and reaching a size of $44 billion by 2012. However, Indian players are still at nascent stage in forming a successful retail model, estimate analysts.While building retail business, the Aditya Birla group is seriously considering building its apparel portfolio under listed entity Aditya Birla Nuvo. For getting the operational synergies at the back end and plugging gaps in womenswear and kidswear, Nuvo decided to acquire a controlling stake in the rival Pantaloon retail chain, controlled by Big Bazar's Kishore Biyani. Unlike before, Birla is fast consolidating his consumer facing businesses at various levels. It's a tough task ahead.
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Well, that's done with. Enough open-mouthed staring at the Apple top-brass as they work their magic on stage. An Apple event is always enjoyable, leaving in its wake more than the usual analysis, quibbling and complaints even as fans rush to be the first to get whatever new products are announced. And much the same way as someone will ask you why you hate dogs if you say a cat is awfully cute, Android users will scoff at you for being an Apple slave and Apple fans will wonder if you've ever really used an Apple device if you as much as say anything half-nice about Android.With the hype having simmered down, it's time to take stock of the disappointments and complaints filtering through. Personally, I'm disappointed that I will have to wait until fall to see what iOS6 is like, try out Siri and see what other features that couldn't be taken up at the event may be sprinkled around. One is also anxious to see which features will really work in India, specially maps and the local search that enables Siri and whether the virtual assistant will be tuned to Indian accents or local search results.One of the most reported fallouts of the WWDC event is the possible exit of the 17-inch MacBook Pro from Apple's lineup. The 17-inch was first brought to market by Apple in 2003 and while many will now consider it far too heavy and unwieldy to carry around, designers and other creative types particularly would miss it. But professionals have largely shifted over to the 15-inch MacBook so perhaps it's time to say goodbye to the 17-inch, finally. There hasn't been an official announcement however and since Apple is a company that loves to keep its secrets and surprise its customers – you ever know what will happen in the future. Perhaps it will go into cold storage to emerge later.Emerging later is what is likely to happen to the Mac Pro, Apple's desktop computer. This too is a favourite with professionals who deal with design, video editing and other processor intensive tasks. But it hasn't received an update or any attention at all for the past two or three years. PC Magazine reports that Apple said it'll still be a while yet; in fact, maybe next year. For a company that pushes the post-PC era concept, the Mac Pro is probably not on priority.Another disappointment is that the first generation iPad, iPhone 3G and older the iPod Touch will be left out of the iOS6 loop. Without upgrades, these will now definitely wither away as apps begin to give trouble on them and don't work to their fullest. Those who are buying these devices second hand or still have them will have to think of buying new ones. It's time to move on although it's sad that a device like the original iPad is working fine at the moment but will abruptly go obsolete in a few months. We're yet to see the full list of features in iOS 6 and of course capabilities begin to be evident only when apps that take advantage of the system begin to make their way to the App Store, but so many of the features showcased have already been n use elsewhere – though perhaps in not so polished and finessed a fashion. Facebook integration, for example, is not a new piece of magic but something everyone's already doing in individual products. It's nice --- but hardly worth separate demonstration. Notifications have been on in Android phones and tablets and also are not killer capabilities. But you would think they were from the way they're presented. Everyone was expecting the Retina Display to turn up on MacBooks, but it did so only on the 15-inch MacBook Pro but with a price tag that still keeps it out of the reach of most people. One could argue that for now the Retina MacBook Pro can be thought of as a premium product since it is not absolutely imperative and everyone has been working fine enough without it, but that doesn't stop the wistful complaints. At the same time, the general view is that the Retina Display will eventually make it to all Apple products. Even though WWDC was full of announcements, there are those who wanted more. They wanted news or announcements on Apple TV and there were none. They wanted to know more about the next iPhone even though that's not the way Apple works. In the end, one must remember that this was a conference for developers and for the most part, they looked happy enough. Let's hope they go back and bring out nicer and nicer apps over the next few months.Thursday, 00.10 AMApple Diary 3: Say Hello To SiriScott Forstall, senior vice president of iOS Software at Apple, has no hesitation kicking off an introduction to iOS6 with a good jab at the competition, Android, showing the audience a chart of the fragmented landscape of multiple versions of that OS existing simultaneously on different devices vs the integrated evenly distributed iOS5 and its satisfied customers. He even made an oblique reference to Ice Cream Sandwich, calling it a "certain dairy product". Scott Forstall, senior VP of iOS Software with Apple CEO Tim Cook With iOS 6 coming to iPhones upward of the 3Gs, second and third generation iPads, and third generation iPods, a new set of capabilities come in as well. The first among these is the much-wanted Siri virtual assistant. Often thought to be the one reason the iPhone 4s is selling so well, Siri has led to many spin-off imitations on other phones, including the Samsung Galaxy S3 with its S Voice. None are as capable of understanding natural language as Siri whose skills have now grown on the new OS. She will be able to answer specific questions on baseball, basketball, restaurants nearby (with ratings and reviews), movies, directors, actors, and other topics. She will also be able to oen up apps on the device. She is of course also integrated into reminders, contacts and other essentials. Apple has added language support for several more countries, specially China. But also Korea, the home of the Galaxy phone. And Japan, Canada, Spain etc. Apple says they are taking Siri around the world. No mention of India, so we can't tell whether we're on the list yet. Bringing the Siri assistant into another country means a lot of work as it must have access to information easily to be able to answer questions easily. Asking her to get you to Chinappa Mutthuswamy street will not help unless she can understand and access information. And so, the use of this service may be limited to some features only, but we will only know when iOS6 becomes available this fall.Siri was fully expected, as was a maps function, specially since Apple has stopped using Google's maps. With Siri doing a lot of searching and Apple's own new maps system, Google has been hit rather hard below the belt. Apple's maps, which again may not apply to India, have a 2D, 3D and a "Flyover" mode, allowing you to go from a flat version to plan a route to a destination and then seeing it in photographic mode in the Flyover view. Turn by turn directions combine with these maps to take you places. Google has had some of these functions already. But typically, Apple has taken these concepts many steps further. It remains to be seen how well they work outside of the demo.For the past year, Apple has had a tight integration of Twitter into iOS 5 and you can tweet easily from almost any app, or from native Apple applications. You link your account once and it works throughout the system. The same is now being done for Facebook while Twitter gets even more accessible from the Notifications Center in the same way as has been done with the Mountain Lion OS. Sharing things to Facebook and to post from apps will be as easy as it is for Twitter.An interesting new feature is Passbook. This uses items from apps such as boarding passes from an airline's app or Starbucks cards, movie tickets etc and lets the user access services through them. You could board a plane with a boarding pass on the phone. Loyalty cards wil also be supported. These will be location-friendly so that you walk into a Starbucks and get a notification popping up your card to use if youd like to. Innovative as this is, again we don't know yet whether India will find this feature useful yet. Apart from anything else, it does require that apps and services opt in and create access to usage. No point going up to Jet Airways with your iPhone unless they have the process to give you a boarding pass via Passbook in place.There are also advancements to Safari, FaceTime (which will be usable on cellular networks not just Wifi) and there's a great Do Not Disturb system to group contacts who can call you when you're "off" , reject calls with specific messages, get reminders to call later, and more. .There are more features marking this new upgrade to the OS used by the increasingly popular iPad and other iOS devices. Some of these have been seen in separate bits on other devices – such as the Notifications Centre itself which is on every Android device – but the execution will probably be polished and smooth as Apple usually makes sure it is. More will be known as reviewers get their hands on Apple's new devices and software which is when we will know whether the products live up to the confidence with which they were presented at the WWDC in San Francisco. Wednesday, 19.30 PMApple Diary 2: Mountain LionAll those shiny new MacBooks need a good operating system to make them come alive, and OSX Mountain Lion, coming in July, will be downloadable both to new MacBooks and older ones. It's always interesting to see what new usability has been put into an operating system – after all, you live with it day and day out and an obstacle or missing feature really eats into your productivity. Mountain Lion will be downloadable from the Mac Store and will update on all your Mac computers with a single purchase. That's interesting, considering we've always had to make separate purchases of Windows for different computers – unless licensed in some way Apple's head of Mac software Craig Federighi (Reuters) With great Apple pride, Craig Federighi, Apple's head of Mac software, strode up to deftly show off the new Mountain Lion OS. All those complaining that Apple events weren't quite the same should have checked in with themselves to see if there was a single moment of inattention as he went through the main collections of features. At the same time, as eight of the features were revealed, one by one, it was impossible not to think that some of these weren't entirely new to other systems. Only difference is that Apple seems to build upon an idea and take it to a much higher degree of usability. For a long time, Apple has been pushing its iCloud. And that's the first thing Craig Federighi took up. He demonstrated how when you log in first time with your Apple ID, your apps are all configured to work with the cloud. iMessages, for example, a long time gripe of users on the iPad, will show your messages across all your Apple devices. If you get a message on your phone, but are at your laptop, you can see it there and respond. When you work with your email, you get it on all devices. Reminders and Notes work in the same way. You set a reminder on your phone, but it will also pop up on your laptop. Documents are also in the cloud, with updates to them showing across your devices. We're reminded of apps like Any.DO that update instantaneously as well, but here we're talking about an integrated whole system. In time, you no longer have to think about syncing even for photographs. Users have also not been particularly thrilled with the dull Safari browser. Now, you can see what you were browsing from any of the Apple devices. This idea was implemented in Google's Chrome browser very recently. You're reading something on the Web at your laptop, but you suddenly need to get up and get into your car. Switch to your iPad or iPhone and you can continue where you left off. Safari is refreshed to come up with Instant Google like suggestions, browse much faster, scroll easier, and gesture based commands to navigate tabs and pages. Notifications, existing for a long time on Android phones and then on the iPhone and iPad, comes to the MacBook with Mountain Lion in a smartened up avatar. It works across devices, of course, and gives you alerts for important things, lets you Tweet from within it, and even lets you disable all interruptions temporarily. When you're making a presentation it will automatically go off. Dictation now becomes part of the overall OS, working with all applications. You can talk to update your Facebook status or input text into a document. It remains to be seen whether there will be an Indian English module to make it possible for users in India to work with this without getting hordes of errors. Dictation is already present on the new iPad. Siri, however, was not demonstrated as being part of this OS. Twitter was already tightly integrated with the iPad. In Mountain Lion, sharing with Twitter and Facebook and other networks like Flickr is more prevalent. Enter your account once and you can share from anywhere without making too much of an effort. Everyone sat up to take a look at a new feature called Power Nap. This gets your MacBook work at various essentials while it's closed up and in sleep mode. It silently backs up your data, collects notifications and updates to system software and apps. This, claims Apple, doesn't even take up much battery. With Mountain Lion, the OS on MacBooks comes a step closer to iOS on the tablet. Gestures and other aspects of interfacing with the device are more common across them. But iOS is also about to get an upgrade. It will move up to OS6 and will also have a whole lot of new capabilities…Coming up in the Apple Diary. Wednesday, 03.40 AMApple Diary 1: The New MacBooksAs the good people of India turned off their lights and settled into their beds for a hard earned nights' sleep on the night of the 11th of June, the "techies" pulled closer to their laptops and tablets and prepared for at least two hours of hyper-alertness, live-blogging the live blogs and annoying each other on Twitter. The world's most watched tech company was about to take the stage in Mascone West, San Francisco for its developers' conference or WWDC as it is breathlessly known. The World Wide Developers' Conference was indeed fairly worldwide, with 62 countries represented in the gathering. Up until then, down to the very last moment, there were reels and reels of rumours and guesses at what would be showcased or revealed at the event. As is always the case with an Apple event, the anticipation reached fever-pitch, though perhaps not quite as much as it would have if a new iPad or iPhone had been expected to launch. Apple CEO Tim Cook (Reuters) When the conference kicked off, it was not introduced by Apple CEO Tim Cook, (he came later) but by the now world famous Siri, a hint at how important the iPhone virtual assistant would be to whatever was upcoming on Apple's products. Siri said hello to all with a few jokes and many drum rolls. And then it was time for Tim Cook to take the stage.How long it will take for the ghost of Steve Jobs to fade away from Apple's conferences, but there is still an unreasonable and illogical amount of "Steve-watching" leading to minute and rather unfair comparisons; what Tim Cook was wearing, how he talked, how he gestured, and even which spot on the stage he preferred. Worse, if he were to be too Steve-like, he would surely be criticised for not being his own man. If he was not at all Steve-like, people would keep nostalgising about how great such shows were when Jobs was around.But all was set aside as Tim Cook showcased staggeringly large numbers on the apps and how many people bought them at the App Store. More than all the numbers and how there was a whole industry built around apps though, Tim Cook said, it was important to stop and think of how much apps had really changed peoples' lives. A video followed to show how various apps had helped people in critical ways: a teacher in India used them to bring life to classes, a blind man used them to take off for walks on his own, autistic children used them to create, and more stories. He thanked the developers for making this happen, and Phil Schiller, senior vice president of worldwide marketing Apple, came on to introduce what's new in the line-up of MacBooks.This is where most of the rumours (or inside information) turned out to be on the spot. The 17-inch MacBook Pro may just have been phased out, although we can't be certain, the rest of the lineup is dramatically upgraded. The MacBook Air, which Phil Schiller points out everyone (read ultrabook makers) is trying to copy, now comes with Intel's Ivy Bridge processors. These are actually going into ultrabooks as well. The Air, available in 11 and 13 inch models, has a few configurations possible. There's the Core i5 and Core i7 dual-core processors, 4 to 8 GB of memory, and top notch integrated graphics which Apple claims is 60% faster than before. Turbo Boost can speed performance to 2.1GHz. The SSD (these silver-thin notebooks are kept light and fast by not using hard drives but flash storage instead) is also faster at 500GB read speed.. There's also a new HD 720p camera, same as the MacBook Pro. Reviews are yet to come in, but the performance should bring the Air into the realm of gaming capabilities. USB 3, available on the Air and the other notebooks in the line-up, also is much faster. In essence, the MacBook Air has come a lot closer to the MacBook Pro.Pricing for the MacBook Air, direct from Apple:The 11-inch MacBook Air comes with a 1.7 GHz processor, 4GB of memory and is available with 64GB of flash storage starting at INR 67,900 inc VAT( INR 64,666 ex VAT), and 128GB of flash storage starting at INR 74,900 inc VAT(INR 71,333 ex VAT). The 13-inch MacBook Air comes with a 1.8 GHz processor, 4GB of memory and is available with 128GB of flash storage starting at INR 81,900 inc VAT (INR 78,000 ex VAT), and 256GB of flash storage starting at INR 99,900 inc VAT(INR 95,142 ex VAT). Configure-to-order options include a 2.0 GHz Intel Core i7 processor, up to 8GB of 1600 MHz DDR3 onboard memory and up to 512GB flash storage. The MacBook Pro, used by so many for video editing and design, which is something that requires raw power, gets a refresh with higher specs. Also moving to Intel Ivy Bridge. The 13-inch MacBook Pro features the latest Intel Core i5 or Core i7 dual-core processors up to 2.9 GHz with Turbo Boost speeds up to 3.6 GHz. The 15-inch MacBook Pro features the latest Intel Core i7 quad-core processors up to 2.7 GHz with Turbo Boost speeds up to 3.7 GHz and NVIDIA GeForce GT 650M discrete graphics. Both the 13-inch and 15-inch MacBook Pro can be configured with a 1TB hard drive or SSDs up to 512GB that are up to twice as fast as the previous generation. More detailed specs are available on the website, as is the keynote, which is interesting to watch if you're planning to buy a new laptop soon. The MacBook Air and MacBook Pro ship with OS X Lion but will upgrade to Mountain Lion, a refresh which will bring many more gesture-based tablet-like functionalities to these notebooks.Pricing for the MacBook Pro, from Apple:The 13-inch MacBook Pro is available with a 2.5 GHz dual-core Intel Core i5 processor, 4GB of memory and 500GB hard drive starting at INR 81,900 inc VAT(INR 78,000 ex VAT), and with a 2.9 GHz dual-core Intel Core i7 processor, 8GB of memory and 750GB hard drive starting at INR 99,000 inc VAT(INR 95,142 ex VAT). The 15-inch MacBook Pro is available with a 2.3 GHz quad-core Intel Core i7 processor, 4GB of memory, Intel HD Graphics 4000 and NVIDIA GeForce GT 650M, and 500GB hard drive starting at INR 122,900 inc VAT(INR 117,047 ex VAT); and with a 2.6 GHz quad-core Intel Core i7 processor, 8GB of memory, Intel HD Graphics 4000 and NVIDIA GeForce GT 650M, and 750GB hard drive starting at INR 152,900 inc VAT(INR 145,619 ex VAT). Configure-to-order options include faster quad-core processors up to 2.7 GHz, additional hard drive capacity up to 1TB, up to 8GB of memory and solid state storage up to 512GB. But what made everyone shout out in delight, is the 15 inch MacBook Pro with Retina Display. Schiller calls it the "best computer we've ever made". It is about as thin as the MacBook Air (as are the other MacBooks now) and Phil Schiller demonsrated how it was just about as thin as his finger – 0.7 inches thin and 4.4 pounds light. An amazing fete. This is a display on which you can't discern the individual pixels and is the clearest on any existing noebook. Glare and reflection have also been reduced by up to 75% to make working with it more comfortable. This notebook can apparently play four simultaneous streams of uncompressed 1080p HD video from its internal storage.The Retina version has higher specs: Intel Core i7 quad-core processors up to 2.7 GHz with Turbo Boost speeds up to 3.7 GHz, NVIDIA GeForce GT 650M discrete graphics, up to 16GB of faster 1600 MHz RAM and flash storage up to 768GB. Two Thunderbolt and two USB 3.0 ports. There's 7 hours of battery life and 30 days of standby.Pricing for the Retina MacBook Pro:The 15-inch MacBook Pro with Retina display is available through Apple Authorized Resellers. The 15-inch MacBook Pro is available with a 2.3 GHz quad-core Intel Core i7 processor with Turbo Boost speeds up to 3.3 GHz, 8GB of memory and 256GB of flash storage starting at INR 152,900 inc VAT( INR145,619 ex VAT); and with a 2.6 GHz quad-core Intel Core i7 processor with Turbo Boost speeds up to 3.6 GHz, 8GB of memory and 512GB of flash storage starting at INR 192,900 inc VAT(INR 183,714 ex VAT). Configure-to-order options include faster quad-core processors up to 2.7 GHz, up to 16GB of memory and flash storage up to 768GB.Each of these devices comes with an army of specs that would take a while to get through. The Apple website has these but explains them via videos.In a few months, all of these notebooks will run on a new operating system. Up next in the Apple Diary.Mala Bhargava is a personal technology writer and media professionalContact her at mala at pobox dot com and @malabhargava on Twitter
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Kishore Biyani, the Chairman of Future Group, is the largest retailer in the country with 17 million square of feet of space. From 2006, his bets have ranged from retail to financial services to restaurants to supply chain management. Although a debt of Rs 7,800 crore has hounded the Group, he was able to convince investors about India's consumption potential and kept them more than interested. Of late he is looking at making the business leaner and stronger and has put an end, at least for now, to a period of experimentation. By selling a stake in Pantaloon stores and Future Capital Holdings, he has managed to wipe out close to Rs 6,050 crore of debt in the last one month. This is how it happened. It received Rs 1,600 crore from the AB Nuvo deal and another Rs 200 cr for the BCCL placement. The FCH deal with Warburg Pincus helped slash the group's debt by Rs 4,250 crore (Rs 450 cr plus Rs 3,800 crore automatically wiped out). But Biyani is a confident man and is now turning the corner. He spoke to Businessworld's Vishal Krishna about his plan for the coming year.You have collected so much data on Indian customers, what is it telling you about your business?Few years ago I would have told you that retailing was an art, it required someone with an understanding of operations. It needed someone who could risk it all and build an efficient chain. But now it is a science, we have close to two million loyal customers across different brands in the group. Central alone has five hundred thousand loyal customers. We are at that stage where we have to use this knowledge not just to generate sales, but how to engage them and stock merchandise according to their tastes and preferences. But data mining is becoming important and it goes beyond what loyalty cards tell you. It is this that will build our business going forward.You have created a strong merchandising team to help you expand the lifestyle formats?The lifestyle formats, Central and Brand Factory can now generate Rs 4,000 crore in the coming year. The merchandising team in Central now knows what brands work since it is a market place. It is a place where brands compete for space. Thanks to my cousin Rakesh Biyani — who created processes a decade ago — it has become such a success.Consumption is also slowing in the country, but Brand Factory as a format grew 15 per cent, what worked?It works because the people in the aspirational segment are more than the ones in the upper middle class. It is where people buy previous seasons collection at discounts all year round. It is a business the group banks on during a slow down because it is designed to provide shoppers a great experience at all year discounts.Are you expanding home formats like electronics and furniture?Electronics we have seen that the format is growing slowly, we might at another look at the strategy this year on this. Similarly with the home format we might go slow.You have sold stake in a couple of businesses, is there a more realistic view to expanding the business now?The group will continue to focus on the food and lifestyle formats. It is the core business. The whole business is about mapping what formats work in tier 2 and 3 cities. We'll plan expansion and the capex according to that. The Central and Brand Factory are amazing success stories for us.
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Life is uncertain. There are so many things that one likes to achieve at various stages of our lives, such as buying a new car, purchasing a new house, saving for a good education of children, annual vacations and of course ensuring a comfortable retirement. It would be an understatement to say that for the fulfillment of these aspirations, one needs to build a suitable corpus or accumulate appropriate wealth. So what is stopping us from achieving these goals or creating a corpus to fulfill these dreams? The answers are many. With each passing day, understanding the financial markets and their increasingly complex products have become necessary for individuals. Add to it the ever rising inflation, the inability of traditional saving sources to beat the inflation, increased cost of living, spiralling health costs, inability to create a sufficient corpus prior to retirement, the fear of being dependent on our children and living as per their whims and fancies in the sunset years of our lives! In such a scenario, financial planning has become necessary for attaining long-term financial security. But what is financial planning?Financial planning is the process of wisely managing your finances to achieve your dreams and goals, while at the same time helping you to negotiate the financial barriers that inevitably arise in every stage of life.In short, it is a roadmap to help you achieve your life's goals. For proper financial planning, tt helps you to answer certain basic questions regarding: Your current financial situation Where you want to get to? What are the implications? What is the best strategy that will take you there? Financial planning can help you: Set realistic financial and personal goals. Assess your current financial health by Examining your assets, liabilities, income, insurance, taxes, investments and estate plan. Develop a realistic, comprehensive plan to meet your financial goals by addressing financial weaknesses and building on financial strengths. Put your plan into action and monitor its progress. Stay on track to meet changing goals, changing personal circumstances, changing stages of your life, changing products, markets, and tax laws. Financial planning helps via Individual / Family Cash Flow analysis Personal Budgeting Investment Planning Retirement Planning Insurance Advisory Net worth Estimation Estate Planning advisory. The second question which now arises is who can do this for you? The answer is a Certified Financial Planner (CFP). A CFP uses the financial planning process to help you figure out how to meet your life's goals. The Planner takes a BIG PICTURE view of your financial situation and makes recommendations that are right for you. He is a practicing professional who has the ability to help people deal with their various personal financial issues. To sum it up, the concept of Personal Financial Planning is now slowly but surely being understood and adapted by individuals and families who have chosen the path of treading towards their Financial Freedom. (Kalpesh Ashar is proprietor – Full Circle Financial Planners and Advisors)
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Experiences of taxpayers reveal that once an assessment is made raising a demand, the tax officials insist for payment. In matters concerning collection of tax, the Assessing Officer rarely exercises the discretion in taxpayer's favour despite the fact that the law authorizes him to keep the demand in abeyance "as long as the appeal remains undisposed of". Orders are sometimes non-speaking, ignoring the CBDT circular and various judicial precedents. If demands are arbitrarily enforced by the tax officials rather than the requirements of law, it may add to the current adverse environment in which the industry is functioning.Recently, a communication from the CBDT inter alia stated that in area of parameters of performance of tax officials, achievement of the target revenue collection shall be given the highest weightage and will also be a major factor while considering future placements. The instructions contained in the communication carry the risk of miscarriage of justice and undue hardship to the taxpayers. The Gujarat High Court has issued a notice to the CBDT in a PIL challenging the CBDT's decision to link promotions and postings of officers with tax collection made by them.Several writ petitions are filed as tax officials adopt coercive measures to collect tax. In matters relating to stay of demand, various circulars / instructions are issued by the CBDT. In the process of tax recovery, various circulars / instructions and judicial precedents which have a binding effect are disregarded by the tax officials.The CBDT's communication dated 1 December 2009 clarified that in stay matters, Instruction No. 1914 dated 2 January 1993 holds the field which prescribes certain guidelines in relation thereto.In Maheshwari Agro Industries v. UOI1 the Rajasthan High Court urged the CBDT to issue appropriate guidelines for grant of stay in spirit of the 1969 Instruction and to clarify its uniform application all over the country.In KEC International Ltd. v. B.R. Balakrishnan2 the Bombay High Court observed that in a large number of matters, orders were being passed by the department only with the idea of effecting recovery before 31 March though such orders could have been passed earlier in detail and after recording proper reasons. The Court laid down parameters required to be followed by the tax officials when a stay application is made by the tax payer. Unfortunately, the guidelines are often breached by the tax officials.Recently, in UTI Mutual Fund v. ITO & Ors3 the Bombay High Court again laid down guidelines to be borne in mind for effecting recovery, relying on the decision of KEC International.In Lopamudra Misra v. ACIT4 the Orissa High Court held that the revenue authorities must act in a fair and legal manner in order to gain faith of the assessee and to create confidence in the tax payers' mind and for smooth administration of the law. In this case, the Assessing Officer informed the petitioner that in case the tax liability was not discharged, she would be charged with interest, penalty and prosecution. The Court observed that such an action on the Assessing Officer's part was not a healthy practice.The CBDT should consider that decisions of the Assessing Officers may be reversed by appellate forums and hence a Master Circular may be issued in matters concerning stay of demand, keeping in view the interests of the taxpayer. This would avoid cases of unjustified recovery and will also help in creating an environment of trust, co-operation and genuinely contributing to the exchequer.1. taxman.com 68 (Raj), 2. ITR 158 (Bom), 3. WPL No. 606 of 2012 (Bom) 4. WP(C) No. 2113 of 2011 (Orissa)(The author Jayesh Desai is Manager in Deloitte Haskins & Sells)
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Vijay V. Vaitheeswaran's new book Need, Speed And Greed: How The New Rules Of Innovation Can Transform Businesses, Propel Nations To Greatness, And Tame The World's Most Wicked Problems, offers a unique view on innovation and how it is redefining the world as we know it. BW asked retail strategy and marketing consultant Sanjay Badhe to skype Vaitheeswaran to know more about the book.Sanjay Badhe: Very early in the book, you mention innovations as processes and services as opposed to just technical inventions. How do you see our understanding of innovation changing as services and processes come to the fore?Vijay V. Vaitheeswaran: The first is the conventional misunderstanding of what innovation is. It's conflicted/confused with technology. And in my book, you will see that I strongly disagree with the way the world looks at and measures innovation by measuring things like patents for new technologies. These are important, but I feel that it is an input into the process, not the output. So the point I am making is that innovation is about fresh thinking which may or not involve technology, and it has to create value in the market place and this value creation is the more important part of the innovation process, and the more difficult part, not the coming up with the new gadget or gizmo.The other part is services, and how they are evolving. The world is moving towards an economy in which it is not only about brute force and manufacturing widgets, it's about thinking ultimately about services and the end user experiences. You know GE was a pioneer in this kind of thinking where they were primarily a manufacturer company, and they make refrigerators, locomotives and aircraft engines. But 30 odd years ago, they realised that rather than having customers pay for a jet engine, which might sit on the ground, and it requires a lot of maintenance etc., customers would rather pay when the plane was up in the air. So GE came up with the model of leasing, so that customers only paid when the plane was used. It's a service model, this is a well known now, but at that time it was path breaking, so the advantage is that you turn what was a widget or a commodity product in a sense , into something you manufacture into a service business, as GE did. And their customers were happy. What they cared about was reliable air travel, nobody wants to own a jet engine, so you can imagine many more things that we think of today as low-end and commodity businesses actually becoming high-touch customer-oriented services and that's where the global economy is moving very forcefully and also where most of the value addition will be. And that's also where innovation comes into its own. If we are going to meet the needs of 7 billion people —soon 9 billion — on earth, there is no question we need to increase agricultural productivity and it's wrong to say that this has to reduce opportunities in rural areas. SB: But do you see this as coming from an orientation towards looking at something as a service? Where do you see this coming from?VVV: The reason this is happening is that as we move towards post-industrial models of the economy, you see the shift across economies and if you look at the OECD average of the proportion of GDP that comes from services, it's nearly two-thirds. If you look at the US, it is almost 80 per cent. In developing economies, this share is much less. You see agriculture of course, and you also see traditional manufacturing being much higher, for example in China and India and another developing economies, but the trend line is clear: as countries get wealthier, as their populations get more educated, they move up the value chain and they tend to move away from low value-added things. For example in China, when assembling iPads, they get less than $10 for their contribution to the iPad, as compared to what the designers and marketers in Cupertino, California get which is more than $400.SB: It's interesting, you made this point about agriculture, which has been such a large driver for less developed economies, while in your book you mention that agriculture is very inefficient in the methods used as well as in terms of resource allocation. But countries such as India and China are still dependent on agriculture.VVV: If we are going to meet the needs of 7 billion people -- soon 9 billion -- on earth, there is no question we need to increase agricultural productivity and it's wrong to say that this has to reduce opportunities in rural areas. The wrong thing to do is to look at this as a zero sum game. We should empower farmers and agricultural communities whether that's in India or in Africa -- where agricultural productivity rates are even lower than in India. And this can be done among other ways, innovatively, using novel forms of credit as well as applications of technology and information in markets as well as new ways of agricultural technologies such as controversial ones like genetic modification or less controversial ways such as drip irrigation to dramatically increase efficiency in water use. You can also imagine, for example, better application of satellite data that is now available, where weather prediction can be done for example modeling droughts, which would help farmers in poor areas get information so that they don't get gouged by the middle man when they sell produce. This is part of what mobile telephony had done in rural India, where farmers use cellphones and can go to the market with the best terms. But there are still large parts of the world including in India where the poor farmer doesn't have that information and so there are many things we can do to improve agricultural productivity, empower the individual farmer that would raise total agricultural output.The second thing is if you look at economic history, it shows that as countries advance, they tend to urbanise. And so that is not to denigrate the agricultural economy or pastoral life, but simply to point out a fact. In the past three months, China became, officially, more than 50 per cent urban for the first time in its history. And we know that's also the history of humanity, so the challenge is how do we manage an urbanising world population in a way that cities are decent places to live with an environmental footprint that's acceptable and they provide opportunities that can actually help revive and keep agricultural communities back home because it's not an either or. We need both. Click to read the review of Need, Speed and Greedbreak-page-breakSB: And do you see a role for new ideas and technology? Would this be primarily technology driven or it would be products and services driven?VVV: No, I reject the kind of ‘techno fetish', which is associated with the word innovation; it's a dangerous diversion. The future is not fundamentally about technology. Technology will play a huge role but only when we apply it in ways that create genuine value for communities, for markets, companies and citizens. So the emphasis has to be on why technology matters, not so much in new technology but a better way in applying an old technology, or may be in a new context, or a new industry or a new country or market and that will often involve learning from what others have done.SB: One of the areas your book does cover is how do companies avoid the path to ‘gold plating ‘ inventions and related to this is the term ‘ can we make dinosaurs dance' ? But can dinosaurs really dance? VVV: Economic history would suggest that successful corporations with high-end products are very likely to face difficult challenges, especially if we are going into an age as I see it, where disruptive innovation will become much more common. Look at the Fortune 500: in comparison with 1950 and 1975 to today, you find most of the organisations in the earlier Fortune 500 have gone. They just do not exist. Companies that were legends in the IT industry, for example, like Wang, Digital Equipment from the 1980s, who invented parts of the IT industry are now gone. Precisely because they were ‘dinosaurs that couldn't dance' and they were unable to come up with a response to the personal computer when it came. Today, we see Google and Facebook as dynamic companies and disruptive innovators but I do feel that they themselves will be challenged soon enough. Google itself really has only one business model and they have only done one thing — an algorithm for search that works well. Then they married it with advertising, but they haven't come up with the second thing that makes any money and so they are quite vulnerable for disruption and Google is a dinosaur that also needs to learn how to dance.SB: You do say in your book about new models of organisations emerging and you mention globalisation and googlisation and sharing information across the markets. Do you see this model becoming a force for innovation in the future?VVV: We are seeing new ways of organising intellectual capital. I have given lots of examples of open innovation, networked innovation and user-generated methods of coming up with new products. I also see new ways of doing business models. I gave an example of so-called ‘Micro Multinationals'. In the past, to be a multinational, normally you would start within the local market, build that to profitable enterprise and then slowly venture to the neighboring country, or countries, and then eventually one day become a big multinational once you had hundreds of millions of dollars of sales. Today, though, thanks to the way technology works, the way that information works, you can be a startup company and I know many of them and these are well chronicled where the brain child could be in Bangalore, the sourcing in China, the IT could be done in Chile and the market in California.. This I very easy thing to do and the barriers to entry are lower. We now have reasons to trust electronic commerce for example, which was very important establishing trust online and so you can have, with less than a dozen people, a company that is a true multinational and that is an organisational form that did not exist 10 years ago. I reject the kind of ‘techno fetish', which is associated with the word innovation; it's a dangerous diversion. The future is not fundamentally about technology. SB: You expect this to grow and emerge as the business model of the future?VVV: I don't predict! I spoke about the business model in the future to point out that the old ways of doing things are not the only ways to do things anymore. And that means if you are in a traditional vertically integrated corporation that does things the old way and even has good profits and good products, I don't think you should think your competitors look like you. Your main competitors are those that you cannot even recognise yet! Your competitor may be virtual, or a very small company -- a flea -- that you don't take seriously at the moment and they may carve off bits and pieces of your value chain and reintegrate them in ways that you aren't able to and that's why you need to be quite paranoid these days in scanning the horizon for disruptive threats.SB: You term China and India as innovation powerhouses – you mention health care innovation as an area in India. Are China and India really emerging and while this not a zero-sum game, is the West worried? And also where do you think India would be as far as innovation goes? Is there an industry or is India still finding it's way? VVV: On the first point, I do believe, and as you know, I have chronicled the various elements of how India and China are innovating and not just in a ‘cheap and cheerful' way. The common phrase of "jugaad" has become very popular, but it's not just frugal engineering, which may be appropriate in a poor country with scare resources, as in India. Indians have always been very inventive, so there is nothing new to Indians about this. But what's new and interesting now is both world-class products as well as world-class business models are coming from India. So now what is disruptive is that it is not just cheap and cheerful, but ‘cheaper and often a much better way of doing things' and that is new and something that the world's leading multinationals are now learning from markets like India and China.And the reason this is happening is when you rethink traditional products and practices, not only with an eye towards frugality, but when you now also say how can I make this better. Companies that are burdened with the legacy of doing things in a certain manner rarely innovate and come up with breakthrough methods. On the other hand in India and China, there are many qualified engineers — ‘tinkerers' and this is a strength. So you find a capacity to do a lot of low and mid level engineering, that could be too expensive to do in developed countries. South Korea, too, has this advantage and their companies — Samsung for example — have managed to move up the value chain beyond where India and China are, and they often come through very interesting breakthroughs. In developed markets, these could cost too much, but also it would require the company to go beyond its mindset of how it 'normally' does things. And that's problem. It is not that the resources are not there in the rich world, it is the problem of mindset and legacy assets.As to the reactions to China and India, the US is a free-trading country and it is open to a vision of innovation where others also prosper; however, not during the Presidential election race! The other factor, though, is something important and that is due to the recession after that collapse of Wall Street, Middle America has been hit bad, particularly the manufacturing states and there it is all too easy to blame both India and China for whatever are fundamentally domestic problems.SB: Coming back to India as an innovation hotbed and powerhouse, where do you see that going? What do you think are the industries or business models or ideas which would come up from the market such as India ?VVV: I think India has tremendous potential. One of the great question marks of course is can society agree on what is the appropriate role for the state .There is a very political and fractious debate going on in India, about the role of the state in deciding what is strategic or where the investments should be, or what licenses are required to do what activity. I think I am very clear in my book -the government has a very important role in certain areas, but that role should be carefully circumscribed . The government has a role in encouraging R&D and developing basic infrastructure and investing in education. These are three areas are that are vital and will not be provided by the market. But to go and pick strategic industries to develop and investing policy, and then to decide in an arbitrary way which sectors can be invested in or not is a kind meddling that I think reminds us of the days of the license Raj. It makes sense to remember that the software industry in India took off on and succeeded before the government figured out what it was all about. SB: You see other such growing stars on the horizon or... VVV: You know, the industries of the future are just being invented. I mean at the moment we live in an age of exponentially growing technologies whether it's in genomics and proteomics, whether it is synthetic biology, whether we are looking at mining big data which is going to be a transformative industry for the world. India has natural strengths because of its strengths in science, engineering, technology as well as in some of the recent experiences with IT and software that it can emerge as a powerhouse in these new industries, but only if the government allows them to rise. I think that's really the key. The government has to provide an enabling framework to be sure but it mustn't choke off the entrepreneurs.We need to see the world as a world of abundance, where by applying our ingenuity as well as our collective will, which is expressed through government and through the social sector, we can actually come together to solve these problems and use new technologies as tools for that purpose. And it must be done in a way that's democratic and inclusive and that empowers everyone. A world of 7 billion innovators is what I call for and we are entering an age of much more democratic innovation.
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It had started to hurt. And the Reserve Bank of India (RBI) felt it was time to do something drastic about it. The medicine -- a large 50 basis points (bps) cut in the repo rate to 8 per cent, much more than the anticipated 25 bps.Growth had slumped to 6.1 per cent in the third quarter of 2011-12 from 8.3 per cent in the corresponding quarter of the last fiscal. On the brighter side, headline wholesale price index (WPI) inflation, which had held firm at above 9 per cent during April-November 2011, had moderated to 6.9 per cent by end-March 2012, in line with the central's bank's projection of 7 per cent. It was a good time as any to cut the repo rate."The rate cut is a substantial and meaningful measure. It should give banks the confidence to bring down wholesale deposit rates, which in turn would reflect in a reduction in lending rates. This would ease the interest costs of the corporate sector, as also give a boost to retail demand. The impetus that this would provide to the economy should see us achieve the projected pick-up in GDP growth towards the 7.3 per cent level indicated by RBI in its policy statement", says Chanda Kochhar, Managing Director & CEO at ICICI Bank.Can We Expect More Rate Cuts?The higher-than-expected rate cut resulted in the 10-year benchmark bond yield quoting 10 bps lower on the day at 8.35 per cent right after the policy announcement. But before you sniff further rate cuts, what is important to note is that inflation softened despite the rise in global crude oil prices."It implies an absence of commensurate pass-through to domestic prices. Fuel prices are expected to remain elevated in the near future", notes out Madan Sabnavis, chief economist at CARE Ratings.The RBI makes a mention of this pressure point. "Going by the recent burden-sharing arrangements with the oil marketing companies (OMCs), the budget estimate of compensation for under-recoveries of OMCs at the present level of international crude prices is likely to fall significantly short of the required amount. Any slippage in the fiscal deficit will have implications for inflation"."A major factor affecting our growth and inflation prospects would be the exchange rate. The rupee has been volatile and the depreciation witnessed in 2011-12 has impacted the bottom lines of companies", points out Sabnavis. According to him, 25-30 per cent of our WPI could be influenced by exchange rate movement. "We expect upside risks on inflation to remain and therefore room available for further rate cuts is limited".Another factor that limits further rate cuts by RBI is the economy's trend rate of growth -- the rate that can be sustained over longer periods without engendering demand-side inflationary pressures. "Even though growth has fallen significantly in the past three quarters, our projections suggest that the economy will revert close to its post-crisis trend growth in 2012-13, which does not leave much room for monetary policy easing without aggravating inflation risks", says RBI. It goes to explain the main reason for the apparent decline in the trend rate of growth relative to the pre-crisis period -- the emergence of significant supply bottlenecks in infrastructure, energy, minerals and labour.Abheek Barua, Chief economist, HDFC Bank, has a different view on this issue. While the central bank has highlighted risk factors such as firm global commodity prices, possible hikes in administered prices of items such as fuel, power and coal and structural pressures from food prices, he feels there is a crucial difference between the central banks's reading of inflation now and its assessment of price pressures a month ago. "The central bank now seems more certain that pricing power of domestic producers has weakened considerably a fact that is of course reflected in the trajectory of core inflation", says Baruah. Core inflation has come off to below 5 per cent in end-March 2012, down from the high of 8.3 per cent in November 2011.Liquidity Will Be Under StrainThe central bank has left the cash reserve ratio (CRR) -- the proportion of deposits required to be held in cash by banks with the RBI -- unchanged at 4.75 per cent. But the Marginal Standing Facility which allows banks to borrow overnight to the tune of two per cent of their net demand and time liabilities (current, savings and fixed accounts) from the earlier 1 per cent.Liquidity has been tight since November 2011 with the borrowing approximately Rs 1,22,785 crore from the RBI's repo window. The RBI also upped its open market operations (OMO) -- it purchased Rs 1,42,500 crore of securities up to end-March 2012 compared with Rs 78,800 crore up to end-March 2011. This is over and above the cut in the CRR by 125 bps to 4.75 per cent.Let us look at the liquidity math now. The 17 per cent increase in bank non-food credit estimated by the RBI implies an increment of Rs 7.99 lakh crore in bank credit during 2012-13; the 16 per cent increase in bank deposits implies Rs 9.78 lakh crore increment in bank deposit during 2012-13. If you were to adjust the bank deposit for 4.75 per cent CRR and subtractg bank credit (food and non-food) from the same, banks would have surplus of Rs 1.16 lakh crore (Rs 9.32 lakh crore minus Rs 8.15 lakh crore)Further, net government borrowings stand at Rs 4.79 lakh crore, of which approximately Rs 1.92 lakh crore (40 per cent) would probably be held by banks based on RBI's data on present holding pattern of central government securities. Therefore, there could be a short fall of around Rs 80,000 crore, which would have to be supported by further OMO purchases by the RBI or another CRR cut, assuming the government meets its borrowing targets.
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