RONNIE SCREWVALA, CEO & FOUNDER, UTV GROUP

B&E: Yours is one of the first listed film companies of India. How did that change UTV’s growth radar?
RS: More importantly, we were one of the first ones that attracted private equity in media in India. It was a given that if we brought the private equity at some stage, we would need to list the company. It was just a consequential event; it was not any turning point.

B&E: The conglomerate decided against distributing dividends in the last financial year. Why was that? What is the expectation this time around?
RS: I do not think that media companies have an ordained plan of distributing dividends and dividend is never a high priority. We are not a government company and we are not a company with 70 years in the business. We are a high growth media company that constantly reinvests it’s profitability in other high growth ventures. So our shareholder returns are based on share value and not dividend. Microsoft did not give any dividends for 23 years of its existence...I don’t think they have a bad track record because of that. You need to be in a really placid water or calm water to be a dividend paying company... LIC and GIC give dividends. Companies are not judged on dividends today. Pfizer and other pharma companies with $40 billion or $70 billion revenues, and a stable income with a 3% growth, need to feel that they have to pay dividends because they do not have shareholder growth in value which goes up by 20% or 30% each year. It goes up by 2 or 3%.

B&E: Where do you think your competitors have beaten you?
RS: I believe everyone must look at the Media and Entertainment business as anything but competitive. We really do not spend too much time on a competitive landscape; not because we do not believe that there are people doing different things, it is actually because we are busy analysing how we can grow in the market. Right now, a lot of people are doing a lot of different things, which is going to help the industry. So if there is a youth channel and there are three competitive youth channels, the youth genre has to go up; that is more important than figuring out who is comparing with whom. We are doing 12 movies out of 200 movies that are being made, I can’t go around making 200 movies anyway; somebody is going to make the rest of the movies. So that is not competition.

B&E: What are those strategic mistakes you’ve made in the past that were critical?
RS: Tonnes of them. On a learning curve basis, there would be three in a day. If there were less than that means we are not experimenting, we are not being aggressive...we are not pushing the envelope hard....we are not being adventurous. The pace at which you grow and your ability to take risks is measured by the number of mistakes you make.

B&E: There would be some that you would like to tell us...
RS: I think we missed the first cycle of broadcasting of 1992-95 because we were too busy with the content space. I think we got into the home shopping business way before its time. The infrastructure was very low, credit card penetration was slow and people were not in touch with the field products. The third is probably diversifying into South-east Asian markets in Singapore and Malaysia. The markets were so small and so insular that it was not worth our time and effort.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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The public sector behemoth SBI

Last year’s slowdown was a blessing in disguise for the public sector behemoth SBI, forcing it to become truly competitive. And the bank has only moved ahead since then. Avneesh Singh finds out how

No doubt, the cost to income ratio of SBI has increased to 52.59% as on March 31, 2010 from 46.62% as on March 31, 2009, but then, the majority of it has been due to higher operating expenses incurred on branch and ATM expansion, recruitment of new employees, et al. “It’s true that our employee cost has gone up during the last fiscal, but it was because of the fact that we were hiring when others were firing,” Bhattacharya tells B&E.

Nevertheless, thanks to some well thought out strategies and the sustained bull run, SBI has become one of the highest value creators among PSUs in recent times. The market capitalisation of SBI zoomed from `155.32 billion in Jan. 2005 to `1.76 trillion in Sep. 2010, an astounding increase of 1,035%. This, along with the proposed merger with its subsidiaries (merger with State Bank of Indore has already been approved by the government), has put SBI in a perfect position to challenge the mights of global banking giants.

Further, while evaluating the performance of SBI, one has to factor in the fact that the bank had always worked with his one hand tied behind its back due to political compulsions. Still, it has managed to change its culture and financial performance. And, as the government has said so often, SBI is certainly working for the common man.

Read more.....

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Zee Business Best B-School Survey 2012
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Budget backlash

The fuel price hike announced by the Finance Minister has galvanised the Opposition to close ranks in a rare show of unity. But will the sound and fury translate into long-term political gains? Pramod Kumar reports

In the final Cabinet meeting prior to the presentation of the Union Budget this year, three important financial decisions were taken. As the meeting drew to a close, the Petroleum Minister made a request for a hike in fuel prices. Finance minister Pranab Mukherjee assured him that some steps had already been taken through the excise duty channel. But agriculture minister Sharad Pawar and railway minister Mamata Banerjee warned that a fuel price hike would fan anger against the government and adversely affect the prospects of the UPA in Assembly Elections scheduled for the coming months.

Mukherjee replied that not hiking fuel prices would adversely affect the pace of pro-people projects. So the allies advocated a ‘wait and watch’ policy: increase the prices of petrol and diesel and then gauge the popular reaction; if things threaten to snowball, get the UPA chairperson Sonia Gandhi to intervene and order a partial rollback. It was also suggested that the time-lag between the hike and the eventual rollback could be utilised to lessen the oil pool deficit. In that scenario, the Congress would have its cake and eat it too, it was pointed out.

But the fuel price hike triggered something that the Congress had not bargained for: new-found unity in the Opposition ranks which had for months been in disarray. In fact, a few parties that support UPA from outside have also thrown their weight behind the hue and cry raised by the Opposition. By protesting both inside and outside the ring, the two Yadav satraps — Lalu and Mulayam — have made it amply clear that they might even withdraw their unilateral support to the UPA on the issue of price rise. Political pundits, however, feel that this will not affect the UPA as it enjoys a comfortable majority.

The problem is that this approach by the allies has found resonance in the Congress itself. Some elements in the ruling party are not convinced with the logic trotted out for raising the petroleum prices through the Budget. Party leader Digvijay Singh has already expressed his reservations on the issue. Similarly, there is unease among the youth brigade too. In fact, the son of petroleum minister Murli Deora, Milind Deora, has openly come out against the decision. And he minced no words. He went as far as to write letters to both Sonia Gandhi and Manmohan Singh seeking their intervention.

Congress strategists believe that such a step was necessary to correct certain financial misadventures of UPA-1. They claim the priority for the current regime is to strengthen the economy. Prior to the Budget, Mukherjee had clearly explained all the tough measures and had assured the Cabinet committee that although these measures would hurt momentarily, they would lead to long-term benefits. They would help put the economy back on track following the recession. He put forth the same explanation in the aforementioned Cabinet meeting too.

While Trinamool Congress and DMK had bought the logic then, they came out openly against the decision once the recommendations were implemented. They were in favour of reduction of service tax and excise duty. The fuel price hike will affect their two core groups, farmers and the middle class. While the former will be affected by the rise in the price of diesel, the increase in transportation costs will hit the latter. Transportation cost escalation might fuel a further rise in the prices of essential commodities.

Talking to B&E, Trinamool leader Dinesh Trivedi said that while the Railway Minister kept diesel transportation out of the ambit of service tax, the Finance Minister failed to do his bit. This, according to Trivedi, was not in accordance with the sentiments of the allies.

The same goes for DMK, whose leader and Tamil Nadu CM M. Karunanidhi shot a letter to the PM merely three hours after the Budget was presented. A. Raja, Union Communications Minister, wasted no time in personally delivering it to the PMO. DMK is peeved as it could find itself on sticky ground in the Assembly elections due next year. However, sources claim that there is another reason behind this response. The PMO is apparently not happy with M.K. Alagiri and the way he runs his ministry. He has been told so in as many words by the PMO, but he has refused to mend his ways. DMK is now using this issue to settle scores and ensure that Alagiri remains a part of the ministry.

This was also the first time in India‘s parliamentary history that the entire Opposition staged a walkout in the middle of the Budget presentation. There were two flanks that were particularly active. The command of the UPA allies was with Mulayam Singh while the united Opposition was spearheaded by leader of the Opposition in the Lok Sabha, Sushma Swaraj. Swaraj had called a joint meeting of the Opposition in the office of the BJP Parliamentary Party prior to the Budget session. All matters related to floor coordination were discussed there. It was decided how, and when, the Opposition would corner the government over the price rise issue. It was also decided that some Opposition parties such as JD(U) would raise the matter of corruption and then the entire Opposition would walk out of the House.

Read more.....

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri 
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles. 

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Prof. Jim Heskett, Baker Foundation Professor, Emeritus, at Harvard Business School

The Word Profit has Provoked a Wide Range of Issues and Emotions among Respondents & Businesses around The World. It also Launched Debates, and many readers Argued for Measures of Success other than Profit, writes Prof. Jim Heskett, Baker Foundation Professor, Emeritus, at Harvard Business School.

Charles Green (founder and CEO of Trusted Advisor Associates) continues the discussion by suggesting, “The really interesting question raised is: if profitability is higher when pursued as a by-product than when it is pursued directly, why then do managers (irrationally) choose to pursue profit directly rather than indirectly? I think the answer is to be found more in psychology than in economics.” Does that account for the increasing interest in the field of behavioural economics? What do you think? H. L. Hencken once said, “For every problem there is a solution that is simple, direct... and wrong.” This brings to mind experiences with leaders of the most profitable organisations that I have observed. Almost to a person, they treat profit as a by-product of other things to which they devote most of their attention, things such as a focused strategy that delivers results to carefully-selected customers while pursuing policies and practices that leverage results over costs, hiring people with the right attitude (one that fits with the organisation’s culture), and proper training and organisation (often in teams). Financial targets are given no more or less emphasis than targets associated with employee and customer engagement, often by means of some kind of balanced scorecard. Rewards and recognition – whether based on the performance of the entire company, teams, or individuals – reflect this philosophy. The idea is to create what my colleague, Michael Beer, calls a “high commitment, high performance” (HCHP) organisation.

This idea has been addressed at length in a new book, Obliquity, by British economist John Kay. You might guess that Kay thinks profit as a “direct goal” is overrated, otherwise he wouldn’t have much substance for a book on the subject. Kay argues that business problems cannot be solved by drawing a straight line between cause and long-term effect because they are so complex, a manager’s information so incomplete, the competitive environment so complicated, analytic techniques so inadequate, and the number of things over which a manager has control so limited, that it is impossible to make the connection with any assurance. As Kay puts it, “The mistake is to make inferences about the relationships between outcomes and processes when we cannot observe and do not understand the processes themselves.” The argument is that those things that contribute to long-term shareholder value will be revealed and achieved by realising intermediate goals or through some kind of overarching mission and vision that helps an organisation achieve long-term shareholder value as well. Of course, it assumes that we know what those things (missions, visions, intermediate goals) are and that we have some understanding of how they contribute ultimately to shareholder value.

There is some empirical evidence to support Kay’s thesis. For example, Fortune’s 100 Best Places to Work regularly produce more profit than a matched set of competitors. Kay’s response to this would probably be, “What does that prove?”
If it can be demonstrated that this approach yields more profit, why doesn’t the leadership of more organisations pursue profit through “indirect” means? Or is it, as Kay might ask, as simple as this? Can this philosophy be carried too far? Is it compatible with the need in a public company to “make the numbers” every quarter? Is it dangerous or misleading to give too much emphasis to the idea that profits are a by-product of many other policies and practices? Is it wise to communicate this concept to all levels of an organisation? If so, how is this best done without confusing people?

Is profit as a “direct goal” overrated? And if it is, why then is it so frequently found among goals?
Coordinated by: Steven Philip Warner

Read more....

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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Earth receives more energy from the sun in just an hour than the world uses the whole year

In 1860, Auguste Mouchout, built a steam engine powered by the sun. His efforts were deemed a technical success, but economically impractical by the French Ministry of Public Works. The photoelectric effect was theoretically grounded by Albert Einstein in his 1905 paper, "On a Heuristic Viewpoint Concerning the Production and Transformation of Light," for which he was awarded the 1921 Nobel Prize for Physics. The photoelectric effect simply says that above a certain threshold frequency of sunlight, the amount of electricity produced by certain metals is directly proportional to the intensity of the incident light. Until recently, the capital cost of building production facilities has been greater than the cost of building like facilities using fossil fuels. Now that scenario is changing.

For Complete IIPM Article, Click on IIPM Article

Source: IIPM Editorial, 2006

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

Home Campus Tour Contact Us Sitemap IIPM Think Tank IIPM National Brochure IIPM in Media India Today & Tomorrow Strategic Alliance / Consulting / Intellectual Tic-up Partners Arindam chaudhuri GIDF Planman Consulting Business & Economy 4Ps Business & Marketing The Sunday Indian The Daily Indian Kkoooljobs.com

The nature of change

Never before has there been so much international focus on environment. The challenges of climate change and the effects of global warming has galvanised huge public environmental awareness worldwide. We are witnessing extreme weather conditions, flooding, severe storms, warmth when there should be coolness, droughts, and the glaciers are melting. Finally, it seems humankind is recognising that when we speak about environment, we are not speaking about an external environment, about a Nature separate from ourselves, but about ourselves as well. We are recognizing that we, humankind are not separate from Nature, but are a part of the environment, and with climate change we are all in it together, like it or not. There is no escaping this fact. The words of Chief Seathl (popularly known as Chief Seattle) have never rang louder than today – all things are connected. Whatever befalls the Earth, befalls the sons of the Earth. And sadly it has taken so long for us to come to the conclusion of this connectedness, or rather realised the responsibility that comes with this connectedness.

For Complete IIPM Article, Click on IIPM Article
Source: IIPM Editorial, 2007
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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Genuine efforts are needed to save environment

As the government is now starting to realise the importance of environmentally sustainable economic growth, so are the MNCs operating in the manufacturing capital of the world. “China has long represented the last frontier for MNCs to escape environmental regulations. Many took full advantage of the opportunity to pollute with reckless abandon. Result: Their reputations are now suffering! In the new world of transparency & accountability, there is no place for MNCs to hide,” adds Clark. Consequently, neither these MNCs nor Beijing can afford to brush the environmental malaise that is afflicting the nation under the carpet any more, because it is now beginning to show.

For Complete IIPM Article, Click on IIPM Article

Source: IIPM Editorial, 2007

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

Home Campus Tour Contact Us Sitemap IIPM Think Tank IIPM National Brochure IIPM in Media India Today & Tomorrow
Strategic Alliance / Consulting / Intellectual Tic-up Partners Arindam chaudhuri GIDF Planman Consulting Business & Economy 4Ps Business & Marketing The Sunday Indian The Daily Indian Kkoooljobs.com

SAIL is looking seriously towards emerging green opportunities

In an industry like steel, eliminating pollution becomes difficult even with latest technologies. As R.Sreedhar, steel environment expert, says, “Although the SAIL Bhilai plant has won the CSR Award this year, still communities around that area continue to suffer from pollution and very little corrective action is being taken...” But the SAIL plant is doing quite a bit. The company has given top priority to raw material consumption and water conservation & solid waste management techniques. Having increased their saleable steel production by over 4% to 12.6 million tonnes, SAIL even achieved its lowest energy consumption rate of 7.16 Gcal/TCS in FY 06-07.

For Complete IIPM Article, Click on IIPM Article
Source: IIPM Editorial, 2007
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

Ekta Kapoor’s serials too are aging

While, Zee’s bouquet of channels is bulkier than that of Star, its offerings, be it Star Movies (market share of 54%), Channel V, ESPN Star Sports, National Geographic Channel, History Channel et al, are well-marketed properties in their own right. Star is also trying to go regional once again and has floated a JV with Balaji Telefilms to infuse new life into its Tamil channel Star Vijay and launch a Telugu channel by year end. On cards are channels in Kannada, Malayalam and other key regional languages. Moreover, it is only Star that has a stake in the booming radio industry through Radio City.

For Complete IIPM Article, Click on IIPM Article

Source: IIPM Editorial, 2006

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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• The Nokia disconnect!
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Home Campus Tour Contact Us Sitemap IIPM Think Tank IIPM National Brochure IIPM in Media India Today & Tomorrow
Strategic Alliance / Consulting / Intellectual Tic-up Partners Arindam chaudhuri GIDF Planman Consulting Business & Economy 4Ps Business & Marketing The Sunday Indian The Daily Indian Kkoooljobs.com