My Thoughts

Niketa Mehta – case of Indian abortion law

2008-08-05T02:52:00.001-07:00

In media there was lot of discussion about the case of Niketa Mehta in Bombay High court. Some so called elite people, hooked to internet and sitting in air conditioned offices, of India were aggressively supporting abortion. They were arguing that it is parental right to have abortion and there should not be time limit by the law at what time parent should go for abortion. Another argument was that this law is very old and is not applicable to present day when technologies have advanced a lot. All the arguments seem valid at surface. Lets delve into little bit more details

The argument Mehta families gave in the court was that they do not want a handicap child in their family. This was one of the weirdest arguments one can give for abortion. There are many questions linked to this argument. First of all, if a baby is handicapped then the child (unborn yet) should be killed? Medical expert may guess about the congenital heart issue but they cannot guess about other issues like blindness, dumb, deaf or cancer etc. what the parents should do in this case? Should they be allowed to kill the baby just after birth as soon as they come to know about the problem? If the question is of the competitive life in the developing countries then a child who fails in the board examinations or gets below 80% should also be allowed to kill by parents.

The Mehtas’ says they do not have money for the treatment of the child every four year. If the money is an issue then most of the parents should be allowed to kill the female foetus because they can argue they do not want to arrange for the dowry etc. (though dowry is not legal but it is acceptable practice in India and very few people will say it does not exist in any section of the Indian society).

Above all a seven month foetus is not a parents’ property at all. It is an unborn baby. It has all the organs. It is a human and has human right. There are some people who support mercy-killing and may argue on this as mercy-killing. I believe mercy killing should be reserved for rarest cases. Otherwise in a developing country where there is no social security system all the old men and women should be killed because they live life of dependent and treated like animals. Why not all the people living below poverty line be killed? Anyway they do not contribute anything to the national GDP because most of them unemployed. Eliminating human being because of their physical, mental or economical disability is not a solution to the problems. It is running away from the problem.

I appreciate the mehtas for coming to court and asking for court permission to allow them to abort the child. They could have done this silently in any of the maternity centre. It has opened a debate but the debate should be about how to support the disabled in the country and not about legalising the killing (abortion) of disabled. We need to create a social support system for them. This debate should not end in the air conditioned offices, common men should get involved in it then only it can do any good for the society.

Honda launches hybrid cars in India

2008-06-19T04:16:00.000-07:00

Recently, Honda Motors Launched first hybrid car in India. This was good news for the environmentalist but does it make any practical sense?

Currently it cost over Rs 20 lakhs. In India, someone who is going to buy car with such a price tag is bothered about petrol price. it is status symbol for him. So I do not think it make any sense to launch this car and be happy about environment.

Some people may argue that it is so expensive because of the taxes by the government. even if the tax is brought down to 20% from current 100%, cost will not go below 12 lakhs and this is also not the range of middle class, petrol price sensitive, people. it is just an publicity stunt by the company, I think.

many more IIT in India

2008-06-11T16:27:00.000-07:00

For many years IITs have been opposed to the idea of having many more Indian Institute of Technology (IITs) but this year humane resource department has won and we will have many more IITs. I am personally supporting this idea of having more IITs but if they can manage the standards of original IITs. They should not be for the sake of having more numbers.
Many people oppose this idea by arguing that it will dilute the brand name of IITs. I do not agree on this. I would like to compare this mass education in some of the big schools in the west. For example, Harvard, INSEAD and LBS takes thousands of MBA students each year but their name has not dilute by having more student. I think it has only help them by having more alumni.
For the IITs new strategy should be to build brand for themselves. For example, one IIT can say they are very good in computer science and the other can say they are good in nuclear science and the other one in civil engineering. All of them can not be good in all the subjects. they need to create niche for themselves and should not be bothered by more IITs. They have good faculty and there is a sizable alumni network to support them.
I think a new era has started in the history of IITs and they will emerge more stronger once they realize that they have to live with this reality. Good luck to them.

biofuels are good or bad?

2008-05-29T03:11:00.001-07:00

these days everyone seems to talk about the biofuels (in support of these or opposition). I will say i will support the production of the biofuels with a condition that all the subsidies given to the agriculture for food are not given to the production of the biofuels. In my view if biofuels are cheaper after the subsidy than it is better to buy oil and why waste the public money on generating biofuels. If biofuels are cheaper in absolute terms without any subsidy than we need to talk about the carbon emission as well. are the biofuels generate less carbon emission in total. I am emphasizing on total carbon emission because lots of fertilizers are used in production of crops and there is carbon as well.
just because it is fancy, we should not support it. if it has merit and logical superiority over the oil then of course we should support it. even if we produce lots of biofules and food prices go up even then the inflation will go up and lots of people will die of hunger in poor and developing countries. main purpose of the biofules is not to keep the oil prices low, but to keep the inflation in control. if that can not be done then there is no point of having oil price at $40 per barrel by using all the crops for biofuels.

Airtel (Bharti) MTN merger talk failed

2008-05-24T13:53:00.000-07:00

For last few weeks, there was quite enthusiasm (a sort of pride) in some of the colleagues that Airtel (an Indian company) is going to announce largest bid in the telecom. Now Airtel has officially announced that the talk have failed to result anything.
From beginning, I was doubtful that Airtel, if it were successful, can management such a large company with too much diversified market. One of the biggest problem when we talk about Africa (or a company in Africa), we think it as one country. In reality, there are so many countries and every country has very diverse culture and needs. comparing Indian market with market in Africa might not be correct way to evaluate possible success for the merger. There is also issue of ownership. I am not sure if the people of africa will be too happy to have and Indian company owning telecom so openly. there are many indian companies operating in many part of Africa but generally they are low profile except TATA that is almost everywhere on the streets and many people dont even know it is an Indian company.
Now talks are terminated, I believe this is good news otherwise Indian shareholders might have suffer a big loss.

i am back

2008-05-23T16:51:00.000-07:00

I have been off from writing my blog for quite some time because of many reasons. one of the biggest reason for not writing blog was I was just too lazy. I am back for good and I will start writing again.

Have a nice weekend.

Quantitative MBA managers think in terms of finance only, learn human factor as well

2008-03-01T14:45:00.001-08:00

Recently, I was reading a book “In search of excellence” by Tom Peters and this article is a reflection of his writing.

Most of the managers in the west (particularly USA) come from management schools with MBA degrees. These managers have little experience of any industry and they directly start working at a very senior and taking decision on behalf of the organization and shareholders. Ironically, many of the MBAs have background in engineering or economics, two subject very closely linked with mathematics or numbers.

Even the admission processes to these MBA schools is design in such a way that only math students can come easily. These managers study mainly finance in the schools and start looking for numbers everywhere.

When they go for finance jobs, they seems to do really well but when they go into other industries they start looking for the cost cutting and economy of scales etc because it makes sense to them (or to their mind filled with numbers).

On the other hand there are countries like Japan that does not have any MBA school but still do quite well in the many industries. Even the Tokyo Stock exchange is one of the biggest in the world.

He further talks about the human factor in the success of the Japan and argues that managers are too much focused on the numbers and they lose sense of the human factor that affect the performance of the organization as a whole.

Even when the question of quality improvement comes, managers with quantitative mind start thinking of putting more employees in the quality department. The fact is that Japan automobile factories have one third of the quality engineers in comparison to USA.

It seems that in big organization people factor is more important than anything else.

Quantitative MBA managers think in terms of finance only, learn human factor as well

2008-03-01T14:45:00.000-08:00

Recently, I was reading a book “In search of excellence” by Tom Peters and this article is a reflection of his writing.

On the other hand there are countries like Japan that does not have any MBA school but still do quite well in the many industries. Even the Tokyo Stock exchange is one of the biggest in the world.

It seems that in big organization people factor is more important than anything else.

Closely guarded (reserved) executives

2008-02-28T14:39:00.000-08:00

Everyone is fighting with the next person for something. Even the people working in the same team are fighting for the promotion or getting some sort of rewards. In some of the industries it is very important to have close team work but all the members are competing with each other. How can they be good team members?
Most of the senior executives are very reserve when it comes to communicating with the new people. They speak some very diplomatic things and one cannot make any sense of what they are trying to convey. This is because of their experience of working with different teams and people. Whenever someone opens his/her mouth other people start interpreting something for their benefits.
In today’s fast communication it is very tricky thing to use email system. Anyone can do CC or BCC while replying or writing an email and it puts the recipient in little dilemma. If you don’t want to reply some email, people will put your boss in CC and then you have to reply. Even if you find out problem in others work, they might find other ways to defend themselves by using polished language and you may find yourselves in messy situation.
Because of these reasons, senior executives prefer not to speak much with new people. But this is caused problem even for them. For example, when they hire consultants to solve some issues, they are so reserves that consultants find it difficult to get information. In this situation, how someone can help when the client is not willing to share information.
Consultants first need to build trust and credibility to win the trust as soon as possible so that they get real information to proceed further.

Dilemma of historical relationship with economic benefits

2008-02-26T15:29:00.001-08:00

Many a time companies develops relationship with some charity organizations (hospitals trust etc). These relationship are developed unconsciously and no one think about how much it will cost in future or how difficult it will be to break this relationship.

When the profits are running low and the cost of input goes up, these organizations start looking for cost cutting and see these liabilities as a financial burden on the shareholders. These relationships are developed for the social benefits in the beginning and it may not be possible to break relationship publically.

In India, some of the business groups supported social cause to such an extent that they have become synonyms with the trust. There is a very big business groups based in Kolkata, India, that has worth around Rs. 5000 Crore (more than a US $ 1 billion) but all this money is tied with the trust.

This kind of business problem can arise anywhere. I was reading about one of the corporations that has supported a football club for almost 90 years and now want to breaks its ties with the clubs and it is finding it’s difficult to do so.

I don’t think there is any answer to this kind of business problems. Decisions are solely based on the judgement of the management team.

Effective feedback to and assessment of team members

2008-02-23T03:57:00.001-08:00

Formal assessment of the team members is very much subjective in most of the companies. It is dependent on the company culture, personality and expectations. Assessment is done by the human beings on some point based system (1-5 or 1-10) that can easily have error of 10% to 20% (depending on what point system was used).
Some of the companies try to assessment project quite objective and quantitative using different methods. 360 is one of the most famous ways to have objective feedback about an employee but in most of the cases your line manager has largest share on your feedback.
Whatever method is used, employees of the organization should have clear idea about the methods used and implication of the output on the individuals. Rules of the assessment should be defined unambiguously so that the assessor and the assessed don’t have scope for argument. But the project managers should be ready for the difficult performance related discussions.
HR can take role of psychological support before and after the assessment. Performance is good or bad, candidate needs support for the next action and how to progress next and achieve targets for the next assessment.
To make it amicable experience, assessment should be of specific targets and how they will be measured should be explained when the targets are set. Targets should be realistic and achievable. Just by imposing some targets those are not realistic will not serve any good to anyone.
Individuals' performance can be improved if assessments are conducted with integrity, skill and communication and can help in building professional excellence.

Managing expectation of the team, clients and boss

2008-02-20T13:32:00.000-08:00

How many times you have faced problems because you could not manage the expectations of the team members, boss or the client. It is one of the biggest source of conflicts between the (inter or intra) teams.
I give you an example how the expectations of the client can go up and if we don’t manage them well they can create problems. One of friend was working on the change management project on a client site. In the change management project, privacy of the employees on the client site is very important because if this is not ensured then no one will reveal any information about the organization. During the project, they were interviewing the different teams on the client site. After the interview of team A, the boss of the company asked how was the team, they replied it went very well, team was very cooperative and helpful etc etc. Next the consultants interviewed team B and again the boss came in the evening and asked about the team B. Now the consultant said that they had a contract that they will not reveal any private information about any employee. But the consultant had already done the damage to team B. Telling good things about team A and not telling anything about team B was an indication that there was some problem with team B.
It is better to manage expectation at the beginning rather than waiting till late. Expectation of the clients or the boss or the team always keep increasing so don’t let them become dragon and get trapped in the problem.

Difficult to work in a team, take the responsibility and work individually

2008-02-19T12:43:00.000-08:00

Most of the activities we need to work in groups and groups have lots of conflict because individuals have different expectations in the team. Other reasons of the conflicts are no proper work division. If the work is divided at randomly, without giving proper thought to the final result then when the individuals come back with their work that work is not compatible with the other’s work. Because everyone has put his/her effort in working, they don’t want to change their part and that become adamant. They keep finding problems with others work and suggesting them to modify their work. And it becomes the point of breaking the team. As the team becomes bigger, chances of conflict also become higher. I think optimum size of team is 4-5 to avoid bigger problems.
One of the easiest ways to solve these problems is to take the responsibility of whole work. Believe me, most of the time, other team members will not mind if you work alone for everyone. It is important that other team members trust your capabilities and don’t interfere at later stage. You might have to work little harder, but this way of finishing work is much faster than the traditional way doing everything in the team.
This does not mean that I am suggesting to do everything individually and to avoid working in team. I am suggesting that we try to avoid conflict by proper project planning at the very beginning of the project. If this cannot be achieved for any reason, try to work on whole project individually.

Types of conflicts in the teams

2008-02-17T15:51:00.000-08:00

All the teams have some kind of conflict because the individuals have varying experience, thought processes and expectations. This is does not mean that a team having conflict is a failure, this conflict can be used as an asset. Team conflict through successful and productive resolution can be done through understanding conflict dynamics and cultural approached to conflict management.
People have different approach to conflict based on the individual psychology. It can be emotional, cognitive, constructive and destructive. A successful team has cognitive and constructive conflicts.
Anger, personality clashes, ego and tension creates emotional conflict. Resolution to a problem is not easy when someone has emotional conflict.
When different team members have different ideas and arguments that generate cognitive conflict and this is mainly depersonalized. This is based on arguments about the merits of ides, ,plans and projects. It forces team members to rethink problems and arrive at a collective decision because cognitive conflict is not based on personal feelings.
Constructive conflicts help team resolve problems and uncover new solutions to old issues in a productive manner (Thompson, Aranda, and Robbins, 2000). It allows change and growth to occur within a team environment. Destructive conflict, like emotional conflict, causes dysfunction when a "lack of common agreement leads to negativism" (Thompson, Aranda, and Robbins, 2000). This disrupts the progress of all group members. Destructive conflict in teams diminishes the possibility of any problem resolution.

Changing world, can we afford to stay neutral and plan long term?

2008-02-16T10:54:00.000-08:00

There is a dilemma for the project managers. One hand they are expected to have long term plan for the projects and on other hand, there is nothing like constant so it has to be dealt with flexible system. Though there are always check points to get the feedback of the project and then fill them back into the system so that the system can generate some responsive strategy.
Sometime we get so much confused with this dilemma that we start asking ourselves that when we have so much uncertainty, why plan at first hand. This is true that we need to modify our plan according to the changing demands of the environment and shareholders but the general project outline gives a framework to work in. This framework gives a direction to proceed. Other important thing to remember is if there are lots of changes in the project that also mean that the project was not planned properly or the project is not relevant any more. We should sit back and analyse if the project is still relevant. Many a time, we keep working on projects that are not relevant because we find it difficult to forget the sunk cost.
We should also be clear in our mind that it is not always possible to plan everything in advance because either we don’t have expertise to do so or it is too expensive or time consuming. We need project plan with some realistic goals.

Indian IT major may avoid layoff during recession by focusing on Asian market

2008-02-14T11:25:00.000-08:00

During last couple of months, there has been a lot of fear among the IT workers in India. Some of the major companies have either layoff some of the staff or have decelerated the hiring rate. Though it is not clear whether the US is heading towards recession but the companies and the analysts are expecting this for some time now. If any recession comes, Indian IT companies may suffer for short term because companies in the west will cut IT spending on new projects to cut cost. I am of the view that they cannot stop IT spending for long time because IT is backbone for the companies to compete in the fast changing global economy.
During this time IT companies should look at the Asian market that they always ignore. Indian and Chinese market is booming and IT spending is considerably higher these days. If the companies get some work in the home market to compensate for the losses in the western market that will be great. Wipro recently got multimillion dollar project from one of the major retailer. This internal focus will give good backing to fight any fluctuations in the international market.

Regulators raid Intel, DSG in Europe – managers are helpless against antitrust lawsuits?

2008-02-13T10:51:00.000-08:00

EU regulators raid Intel offices on Tuesday. They also raided some of the big electronics retailers, DSG and Media market, in EU. This has become a regular practice of the regulators in the EU to raid offices of some of the big retailers or OEMs. EU is becoming difficult market for the big companies to operate in. Microsoft got so much tired of the lawsuits in EU that it conceded defeat after fighting for many years and paying millions of dollars in penalty. On one side companies need to fight with the regulators on the other hand market is not growing anyway. Manager doesn’t seem to have any option to fight with this. Shareholders of the companies demand for the more profit and bigger operations and growth in every sense. When the managers try to do this, they are accused of the monopoly and all. It is very difficult for a company to avoid become monopoly when the customers like the product/service of the company and how can managers say no, we don’t want to grow anymore. One of the solutions to this problem is to keep diversifying the business of the company. But even this is not a viable solution because once the regulators start investigations; they keep broadening their scope of the investigations. For example, in case of Intel, they started with investigations for the possible contract with the OEMs of the computers but now they are also investigating relationships of the Intel with retailers.
I just wonder if managers can have any solution to avoid with these antitrust lawsuits.

Indian IT worker layoff during 2008 US (world) recession is reality?

2008-02-11T12:27:00.000-08:00

Though there is no recession officially (If the two consecutive quarters don’t see any growth than there is recession, by definition) but it seems it has already started hitting the IT workers in India. There are rumours that IBM has fired around 700 engineers in India. Other companies are reducing the performance bonuses etc. I am not sure if the layoff has started in India for the IT workers or the companies are just cleaning the redundant, non-performing staff to save the cost on salaries. As we already know that the Indian Rupee appreciation against dollar in the last one year has hit the profit margins for the IT/BPO companies, companies will take every step to make themselves efficient to fight with any recession in the US. Since US is still the largest market for most of the IT companies, any bad news for the US economy will hit the Indian IT industry as well. Companies are trying to diversify into the Europe and Australian and Asian market but the share from these regions is still significantly low.

I doubt that the slow growth or recession in the US market will hit Indian IT companies for very long because companies will cut the IT spending in the first year of recession and they will have more outsourcing to cut the cost and that will help the IT industry in India. In this scenario, engineers working for these companies should try not to take too much risk with the performance and try to improve the skill set that can be used for diverse projects. It should not happen like the Y2K boom time when every engineer had almost same skills and when the boom burst they had nothing else do. If the current employees continue to provide value to the companies and companies see high value in the future, chances are you will not be fired or made redundant.

It may be hard time for the current student looking for the jobs in IT sector. Students should do their homework properly to search for the jobs and be ready to go for higher education for one-to-two years in case economy goes south and they don’t find job. Don’t take this bad luck, but convert it good luck by learning new skills.

Can Yahoo chief stop the merger deal from Microsoft CEO Steve Ballmer?

2008-02-11T10:13:00.000-08:00

Today one of the biggest challenges for the managers is to perform well otherwise they need to face with some of the harsh reality of the corporate world. Get sacked or company is acquired by other companies and they eventually lose the freedom. Yahoo Corporation was facing problem for quite a long time in integrating some of the big applications it developed (or acquired) over the last 10-15 years. As I am always sceptic about the valuation of the online business (with most of the asset as intangible), I did find it difficult to understand how it was valued so high on the stock market. I think even the shareholders of the yahoo were also thinking similarly and wanted to see some hard cash earnings from the businesses that yahoo was building for so long. As soon as the shareholders started asking for the return company got into problem. One of the best sources of the earning for the yahoo was advertising. It had lots of online customers and it could attract advertisers to pay for the advertising space but this was not enough.

Yahoo is performing (financially) so poor that now the shareholders will not wait to see some charisma from the yahoo. Shareholders are now very much aware that the company management is not able to turn around to make it a success so one of the options is to replace the whole management team but that is not possible at this moment because it is too late. Other option to merge with some company and Microsoft seems the only interested company to pay such a huge price for the products, yahoo has got. No doubt, yahoo has some of the very well known products (yahoo mail) in its portfolio but getting value out of them is not so easy.

Since Microsoft needs someone to boost its online presence so it would be willing to pay higher price for this deal. At this moment, Google is becoming so powerful everyday in online market that if Microsoft could not catch it now, it will never be able to catch that. Microsoft has money and all resources so it will not stop this deal even when the Yahoo board has rejected the deal. Yahoo can only try to persuade Microsoft to pay little higher price. I doubt that Microsoft would pay too high price now because it knows if it drop this deal then the share price for Yahoo will down (probably to single digit) and eventually, it will not get what it can get now. One of the best ways for Yahoo is to find some other organization that will be interested in bidding against Microsoft. In 2008, US economy seems to slow down so chances are rare that any company (other than Microsoft that has cash earning machine) will be willing to risk such a high amount and it mainly in cash.

Customer satisfaction results in high profit margin in high end market

2008-02-09T15:39:00.000-08:00

Most of the consumers’ good retailing companies in the west are fighting to keep large market share even when they are earning low profit margin. Most of the goods are manufactured in China and there is little room for any innovation to have cheaper logistics (and it is more difficult when the oil prices are heading north). Retailers have pushed the manufacturers and suppliers in the People republic of China to such an extent that there is no room left for reducing any cost. But there is still high end market that has not been shifted to any developing country and there is any chance that it will have happen in near future. There are many reasons behind this. First, it is very difficult to translate the exact requirement for some of products and manufacture them in other countries. It’s more about the culture rather than the technical specifications of the product that cannot be translated. Every country has some culture and that is difficult to replicate. As I was talking to one of my friends from Kenya, she told me that they used to have a traditional dress in their country and that used to be quite expensive because that required a specific kind of fibre for clothes and they were hand woven. Now in the last few years situation have changed and now they can get that traditional dress very cheap because it is manufactured in China. Problem is not with manufacturing something in China. Problem is once something is manufactured in China, customers expectations are to get product at cheap price. So these new traditional clothes are made of synthetic fibres and every Kenyan who had seen traditional clothes a few years back can tell the difference. Other problem is manufactured in other countries so far have no idea about the local cultural values and they can sometime make some products those are not easily acceptable in different cultures (e.g. white and black colours have different meanings in different countries).

By understanding this problem, some of the local manufacturers in the developed countries can fight with the flow of the cheap good coming from other countries. Though it is almost impossible to fight with the flow of the goods but the local manufactures in west can still produced some of the high end products that have high quality and adhere to the local cultural taste. For example, Scandinavian citizens are used to of very standards of quality of life. And this has been very well exploited by a company Vipp in Denmark that sells vey high end, high quality bins at a very high price (some of the bins are even for Euro 500). These are handmade with high steel by local craftsmen. For keeping earning high profit margin in this market by selling high end products, one needs to be very clear about following practices

Never compromise on quality for cutting cost: Always remember that by cutting cost by reducing the quality will not work. You are targeting some of the customers, who prefer to pay for the quality, so don’t disappoint them. Short term profit can hurt in big way in long term.

Mixing low quality with high quality: Don’t try to serve all the customers together. Even the company like Walmart is not able to serve the high end customers even after spending lots of money on advertising. It is the culture of the organization that serves the customers. So if you want to serve the high end customers, don’t try to mix product range because competing with the low cost product from Asian countries is near impossible so keep the market that can be protected and gives heavy profit margin rather than single digit that retailers make.

Merger of two of the biggest technology companies - Part 1

2008-02-08T01:59:00.000-08:00

Recently Microsoft announced takeover bid for yahoo at a premium of 60% over the 31st January stock price. As the talk is going around in the market, it seems that if the shareholders of yahoo agree, this deal will go through without much opposition from the regulatory bodies in USA and Europe (In any case, Microsoft has got the best lawyers to fight with antitrust lawsuits all over word to maintain its Windows monopoly). I feel that this deal will end the empire of one of the biggest success story in the software industry, Microsoft. There are many reasons for me to say this. I want discuss some of them here.
Organizations are not made of economic units: Both the organizations, Microsoft and Yahoo, have some of the best mind in the world working for them. They don’t have not only software geeks but also marketers, psychologist, graphic designers etc. All of these employees are working hard to make their respective organizations a success. The problem is when the merger talks proceeds senior management think of these employees as economic units and feel as if they can replace any employee by another or reduce any number of employee and will continue to get the same results. In this assumption, there are two problems. First, in any organization there are very few natural leaders who can do work without any supervision and can produce something wonderful that can give big advantages to the technology companies. These people are the first one to leave when there is uncertainty and it is not always easy to identify who these are. Second, when we are working with human, we cannot consider that the work of two employees will be total of the work they can do individually. This is because they are human and they have some friction. Higher the number we have to put together, higher the friction will be. Here we are talking of tens of thousands employees in two organizations.
Number of online visitors: Steve Balmer seems to assume that when the Microsoft and yahoo will merge they will have online visitors equal to the sum of individual visitors on two websites. I have doubt. There will be number of users who will be visiting both sites every day. They might stop visiting two different websites when they will become same.
Money for replicates applications: There are lots of applications both the companies have in common, e.g. mail services, news service, and ad program and so on. When they will merge they will have to decide which program to keep and which to scrap. It will not be easy to decide and it will be more difficult to integrate them. Yahoo has been anti Microsoft for a long time so deep inside the code of the applications, architecture will be such that that cannot be easily integrate with Microsoft applications. If they cannot be integrated successfully or take more time than expected, cost of integration will go high and saving from synergy will be difficult to gain.

How to decide future strategy of the organization?

2008-02-05T15:24:00.000-08:00

This is not a simple task because most of us are not clear in our mind about what is strategy. Most of the time what are talking about is the operational issue rather than strategy for the organization. Strategy is long term vision for the organization that provides direction for future actions, in short. It is in evolving processes and we need to keep reviewing the organizational strategy to check if we are align to the present demands of the market and shareholders and are ready to serve the future markets as well. To decide the strategy one need to follow a systematic approach and be honest to yourself and build arguments on logical assumptions. Let’s discuss the process in detail
Identify strategic customers: One of the first tasks is to identify strategic customers. I have discussed this in my previous article .
Identify strategic competitors: It is very important to understand that everyone in the market is competitor but not strategic one. For a bakery retail chain in UK, Tesco Metro is a competitor but not the strategic customer because both of them are targeting customers from different segments. They can be substitute for each other in the mind of customer but not still customer think of them as different options.
Identify core competencies of the organization: This is one of the most difficult tasks because most of the time no one in the organization knows that they are core competencies. Core competencies are practices and processes of the organization that are difficult to imitate by competitors. Managers might say that flexibility is the core competency but it is very abstract. There is something very basic that generate the flexibility and that is the core competency. It needs lots of brainstorming to identify core competencies and most of the time it is the employee very low in the hierarchy who can answer about this than the senior managers. It is shocking but it true.
Identify key issues: These are the issues that are stopping organization from growing further. These are different from operational issues. Many a time, managers start thinking that the poor cash flow is strategic issue but it is not. Key issue can be how to manage cost while the raw material prices going up?
Find Strategic options: Come up with options to address the key issues. Remember we are looking for options and answer to the key issues. Options can be very something out of the blue and completely different from the existing business. It does not matter because anything can be an option.
Evaluate strategic options: One needs to evaluate strategic options in the light of core competencies and if the organization can exploit them it is a viable option. For example a retail chain having logistics as core competency can start logistics business. It is a feasible option. It depends on the shareholder value analysis if this option should be pursued or not.
All these steps are linked to each other if we do any of the steps wrong, we will have completely disastrous strategy. Something Microsoft and Yahoo are trying to pursue. I will talk about this later.

Changing perception about some of the big Technology firms

2008-02-02T01:26:00.000-08:00

Technology business has been the target of criticism of monopoly by one or the other company for many years. Microsoft has been the biggest victim (in terms of cost it has to pay to lawyers and fine to anti competition commission in Europe) of this accusation. To a certain extent that is correct and the in recent years Microsoft has gone out of any big innovation (they say that they need to recover cost on innovation and need money to fund future innovation for the benefit of the customers). Well, I don’t want to discuss about Microsoft here, it can be find my other newspapers and magazines. I want to talk about the two most admired technologies companies, Google and Apple.
Google is one of the most admired companies of recent time. Every computer science engineer and MBAs want to work for Google. It worth the praise for what it had done by revolutionising the internet. Google search has remained ad free on the front page and that is one of the biggest advantages for this. But in recent years, it has been accused of its monopoly in the internet search and internet advertising. I see there is a problem. Some of the biggest purchasers of online ad space with Google are blaming it for charging too much because of virtual monopoly in the online advertising. And these same customers are supporting a deal of Microsoft and Yahoo. (Microsoft Makes Grab for Yahoo).
Google needs to understand who the strategic customers are for this business. I understand that the internet users are the end users for the Google ads but the strategic customers are the advertisers who pay to Google for purchasing online ad space (based on keyword search). Though the ultimate responsibility of Google is to serve the end customers but if the strategic customers are not happy and move to another rival for any reason (high price, poor personal attention etc) then Google will not be able to run its business model.
Similarly Apple is also being blamed by the entertainment suppliers (Disney, Sony etc) of its monopoly in online music world. They don’t like the similar price scheme for all the songs and movies. They want to sell the new album songs for higher price than the 99c but Apple is not listening to them. These same music companies who are supplying music to Apple are not pushing and supporting Amazon for the online same of music on Amazon. They know that Amazon has very large customer base and it is willing to listen and negotiate the terms for the differential cost/price structure for the songs.
The point I want to make is that in technology business if the customers are listened properly they start finding another business to serve them. It is true for any business but it matter a lot in the technology business because the amount be talk about is multi billion dollars. Hundreds of billions of dollars will be lost in revenue for these companies if they fail to respond the changing demands of the customers.

Which customer is more important?

2008-02-01T12:45:00.000-08:00

How to recognise the strategic customer is a big challenge for the business managers. Most of the time what we concentrate on are not the strategic customers but the end customers of the product we are producing or the service we are delivering. It is always not easy to recognise the strategic customers.
In the retail industry in developed countries most of the sales to the end customers is though the retails chains (Wal-Mart in USA and Tesco in UK). Now all manufacturers, big or small, need to go through these retails chain to reach the end customers. In this kind of environment, the strategic customer is the retail chain rather than the end customers. A manufacturer can do lot of market research and develop a fantastic product but if retail chains refuse to keep on their selves, no end customer will ever see this product. Sometimes these big retailers are so powerful that they even dictate the size, colour and delivery package size on the manufacturers. In happens even with big manufacturers like P&G. To avoid this pressure, manufacturers wants to become bigger and bigger. This was the motive behind the merger of P&G with Gillette.
Other day, one of the senior professors was given the example of the strategic customers for his latest version of the book. He said that for him the strategic customers are the tutors of the course in the universities around the country (and other part of the world too) because if these tutors will not like the book, they will recommend the book to the students and no matter how good the book is it will not be sold. For this reason, he cannot change the content of the book drastically in new version because all the tutors using his book has slides, questions papers etc and they would not like to update them for the sake of new version. And once the book will drastically change they can even look for other books in the market too because for them it will same when they need to prepare teaching material from scratch. It does kill innovations sometime!
Having said this, it does not mean that the end customers (consumers) are not important. They are absolutely important because if they don’t like the product, they will definitely switch to another available product. So for the business managers, it is very crucial task to satisfy strategic customers and the end customers. Not an easy task always.

Organizational Values

2008-01-30T14:27:00.000-08:00

Organizational values are the acceptable standards in any organization that governs the behaviour of the employees in day-to-day activities. It is very important to transmit these values in all the employees so that they will also behave in the same way. If these are not there every employee will behave according to his/her individual behaviour and that will conflict with other employees in the organization.
Every big organization tries to have a formal code of conduct, charter, code of ethics etc that governs the individuals’ behaviour inside the organizations. But apart from this there is much other informal behaviour that gets developed in the organizations. In the smaller organizations where there are smaller groups, employees can challenge each other for unacceptable behaviour and sort out the issues but when the organization become bigger and there is no one to monitor every employees behaviour, employees develop and behave according the organizations values. These values can be anything from a large set of identified values (ambition, competency, individuality, equality, integrity, service, responsibility, accuracy, respect, dedication, diversity, improvement, enjoyment/fun, loyalty, credibility, honesty, innovativeness, teamwork, excellence, accountability, empowerment, quality, efficiency, dignity, collaboration, stewardship, empathy, accomplishment, courage, wisdom, independence, security, challenge, influence, learning, compassion, friendliness, discipline/order, generosity, persistency, optimism, dependability, flexibility). It is important for the organizations to identify their core values and promote them.
To ensure that these values are transmitted properly to the new employees and existing employees are following them, organizations can do following
1. Communicate the Values Constantly. Communication is the key for successfully passing the organizational values to the employees. Values should fit with the organizations' communication, both internally and externally. If we say that we're fun, team-oriented where everyone counts, then having a traditional style with a photo of the CEO may challenge this. Refer frequently to the values in talks and sermons, in articles in internal/parish magazines. Acknowledge and thank those people who have achieved something which particularly emphasises the values. Values should become the part of everyday life in the organization and not something written on the company website only.
2. Enroll New Folk. The values should be explicitly available as new members join an organization. If your organization is a business, this can be a part of the selection process, if a church, then explicitly stating the values of the church creates an expectation in the minds of newcomers. The church then needs to deliver on that! This is very important task because employees who will not be able to fit with the organizational values will leave the organization one day. This is good in long term because they will rarely be able to perform better than those who values the value of the organization.
3. Revisit and Refresh the Values. Organizational values changes with time and evolving nature of the business, revisit your values periodically - allowing members to update them. This has the power of enrolling those who have joined the organization recently, and avoids the stated values no longer reflecting the business culture.
4. Confront Contradictory Behaviour. Ensuring that we give feedback to those who don't live out the values of the organization. If people are allowed to live out contradictory values, then over time there is a clear danger that these will usurp the desired values, particularly if it is the more dynamic, dominant individuals who are espousing the contradictory values.
5. Periodically Check out with Feedback. Ask people what they think are the values of the organization - not only members, who may be influenced by the stated values, but outsiders - observers, customers, former members. Organizational values should be a super set of all the values shares by larger community so that they can be valued by almost everyone in the organization and it will be so if they see that their values are also part of the organizational's value system.