Stop that Social Mutation

I still vividly remember the day when my middle brother who had recently joined an engineering college felt nostalgic about home, escaped from his hostel on the first weekend to meet his family. Much to my surprise, my father who had been very loving issued a stern warning to my brother that this kind of visit should be his first and last. That he should now try adapting to the hostel life, make new friends and work harder towards a better career. I could not comprehend my father's behaviour at that point of time because the college was just around 200km from our hometown and to me it made sense him coming over the weekend. Nevertheless his frequency of visits reduced but his attachement for the family continues till day. This has been the kind of society we have grown up in. Though we got the decision making power a bit late (compared to the West) but it ensured that the ability and the credibility of the decisions taken afterwards would never be in doubt. We were fortunate to have the covering of love and belongingness which protected us from the vices and kept the unwanted things at bay.

Moving into the 21st century with gloalization putting a significant impact on our society, the contours have begun to change. The time the parents are willing to spend with their kids is reducing. With competition running neck deep the parents are under pressure in their professional lives to perform to their best. Some may say that the priorities have changed and our urge for higher standard of living has risen exponentially. Well I would agree with the second point but not with the first. It is a natural human tendency that when we see or experience something better we strive to achieve that. And hence it is no surprise that with the advent of internet and mass media the influence of the West has begun to be seen. We are a developing nation with a huge potential to compete with the developed ones. Therefore we are trying our best to match them in whatever possible areas. But all said and done, the parents of today have the same expectations from their kids as those from the yesteryear. Though the parents of today are more liberal but they still expect their kids to be obliging,understanding and respectful. So it would be wrong to say that the priorities have changed. Probably the way we are going about it is changing. We want our kids to be competitive from the minimum age possible. Hence whatever little time the parents spend with their kids is unconsciously about discussing the ways to improve further mostly in studies, may be sometimes in extra curricular activities. What we, as parents, are forgetting is that career is only a part of life and not the entire life in itself. Hence an understanding of indigenous social and cultural practices is no less important than the demystification of the theory of relativity or solving the Pythagoras theorem.

I firmly believe the generation of today's parents bears the highest resposibility in shaping the society of tomorrow. It is they who have the maturity to criticize the orthodoxies of the past and yet continue to be reverent. Let us not shy away from the undeniable postion of the adolescents of today: they are teeming with information, continue to be demanding and aggressive in their pursuits. They are like the waters of a river whose boundary is being redrawn. Hence the parents must guide the next generation in taking a somewhat central path without blindly copying the Western culture. This mandates taking a pause from our dailiy chores and creating an interactive environment where the seeds of the yesterday's society do not dry up.

Growth Vs Development

There is not an iota of doubt about the creditable growth India has mustered over the past decade or so. From being a closed economy to an economy the world keeps a close track of, is in itself a no small achievement. Though some nerds would still be unaware but most of us would agree to the fact that India has transformed herself from a land of snake charmers into a reservoir of software engineers. Name a field, talk about its corresponding successful people and one will inadvertently find an Indian leading the pack. Be it the league of academicians or litterateurs or scientists or businessmen Indians have proved their mettle in every field and at every level. A proud sense of achievement envelops us and we bask gleefully in this glory.

The merry mood gets a setback when the sights of a hapless Diwali of flood affected people or a grievously injured child after a bomb blast is broadcasted. The sad plight of farmers of Nandigram is inconsequentially discussed at length by the self anointed champions of the poor (read CPI/CPM). Our elected representatives continue to showcase their moral bankruptcy shamelessly in public. After the British Raj, the new young generation Raj trying to play ‘divide and rule’ game has been prophesizing the virtues of regionalism with utmost audacity. It’s when we sit back and delve deeper that we get to witness the sad state of affairs around us. We realize that perhaps we have been parochial in looking at the growth story of India.

Completely acceptable is the point that it takes a mammoth effort to channelize a nation of one billion people towards development. Even much more acceptable is the notion that the painstaking task requires a lot of struggle to weed out the hindrances. But obliviousness of basic tenets for a sustainable development has only undermined the positive effects of a continuously expanding economy. Signing of Nuclear deal does, on paper, sound like a step in the direction of achieving self sufficiency in energy. But think deeper and one will realize how flawed our assumption is. After having allowed corruption, like cricket to run in our veins would not we be silly to expect the same electoral representatives who flashed bundles of green papers to work towards electrification of villages. We continue to spend a sizeable portion of the budget on bolstering the external security but internally we have never been so much insecure as we are now. And unsurprisingly no government is able to fight this out because this requires addressing the basic issues of extremism, prolonged region and religion biasness and continued ignorance of the plight of the lowest strata of the society. We boast of the Indian scientists working at the NASA but we forget that though the US faces at least half a dozen of oceanic storms every year the destruction is far lesser than what an alternate year flood or storm causes in India.
The most ironical aspect of India’s growth story has been that though we are the world’s 2nd fastest growing economy we continue to languish among the bottom five in the Human development Index. But this aspect continues to make us ponder about the scope still left for development.

Lehman and A layman

These are certainly not usual days for employees at any of the investment banks. In every nook and corner of the office small groups of people are busy discussing: who is next after Lehman? Normally the very same people strive for breathing from the plethora of work that never seems to end. But suddenly after the demise of Lehman the entire tempo seems to have been lost. Because they are faced with a question much more critical than meeting the immediate targets: will the subprime market crisis engulf the entire investment banking industry?

The other day one of my colleagues (from one of the top European banks) was remembering how in the year 2000 when Lehman Brothers offered a package of 1crore per annum to one of the IIM graduates created a stir so much so that The Economic Times came out with a full fledged article on the entire day’s schedule of that student after he joined the company. Now the news of the very same company going bankrupt seems to be sending jitters down the spine. For those not associated with this industry, Lehman was not just the fourth largest Investment banking company but a dream of every single student opting for a Finance major. As all the industry experts would tend to agree Lehman was easily the best paymaster in its league and to a good extent can also be credited for the exponential rise of salaries the middle class India has seen in the past decade. According to an Assistant Vice President of one of the European investment banks “We have received resumes from the ex-Lehman employees but the problem is their current salaries are at least a quarter higher than the industry standards. Hence to get absorbed back into the industry they will have to take a salary cut not because the companies would try taking advantage of their situation but because the average salary across that company for that position would itself be lower.” And this is not the end of the saga of Lehman’s might. The BSE index which was more or less range bound in last few months was forced a rapid downward movement. Lehman had made huge investments in the real sector and not surprisingly these stocks tumbled on the news of Lehman’s bankruptcy. The stocks of IT companies, handling massive business accounts of Lehman, wore a gloomy look and some of the companies quickly reacted by even downsizing their current strength.

On a whole Lehman had far reaching prominence in the sectors other than banking alone. So if you are wondering what Lehman has got to do with a layman, think again? The Lehman bankruptcy, easily the biggest in the US history, has put the entire panel of Federal Reserve on the block. It has triggered the panic button and is expected to have significant impact on the US Presidential elections as well.

Well the big question that remains to be answered: have we reached the nadir or is there another fellow (read Morgan Stanley) waiting to be exposed? The Fed and the other Central banks have already got into the act of rescuing. We would get an answer in the next few days but one thing we can be sure of is that investment banking as a profession would not sound that lucrative for some time to come. And I guess even Farhan Akhtar would not have been shown as an investment banker had ‘Rock On’ been made after the Lehman episode.

Oil Shocks and The way ahead

The oil, in recent past, has been at the center stage; apart from fueling economy it’s fueling the critical national & international politics. More importantly the recent developments continue to demonstrate the relevance of oil in the world economy. The current surge in crude oil prices is not new to the Indian economy; however there are two aspects which could be worth pondering over: the repercussions of the oil shocks and subsequent resilience of the economy. There is most certainly a third aspect as well (to which most of the readers will agree) and that is the lack of vision the successive governments have shown in reducing the dependency on oil. But we would leave it for the government in command to ponder over in detail.

The last four decades have seen a series of oil shocks, yet since the Indian economy has been in different stages of development the impact of the shocks have been varied. India came face to face with the first oil shock in 1973. This was the year in which Arab countries realized the power they wielded through OPEC. The outbreak of Yom Kippur war and nationalization of oil companies by Iraq led the oil prices to increase manifold. The domestic economy being a net importer of crude oil came under severe pressure. According to the statistic from Centre for Monitoring Indian Economy (CMIE), 1973 became the first year after independence when not only industrial production declined but the spiraling inflation also threatened to mar the consistent growth rate of yesteryears. Fortunately for India a severe decline in demand forced the OPEC nations to take measures for lowering the oil prices.

A few years later the outbreak of Iran war caused another steep rise in oil prices. But 1980’s witnessed a much higher rate of investment and consequently the decade saw the Indian economy growing at an annual rate of 5.5%. Unfortunately during the late 1980s India relied increasingly on foreign borrowings. Hence when the Gulf war caused another oil shock India had already got into the balance of payments crisis. To come out of the crisis the government had no option other than take measures of economic liberalization. According to Anushree Sinha, Senior Fellow at NCAER “ The subsequent policy changes did lead to a temporary decline in the GDP growth rate and increased inflation rate but in a long run the opening up of the economy has resulted in India emerge as a global player and play a prominent role in the development of the world economy.”

Here again in 2008 we are witnessing another oil price upsurge due to myriad reasons: geopolitical affairs concerning Iran and other oil producing countries, financial speculation, continuous weakening of dollar, just to name a few. The cascading effect of such a rise has already started to impact the macroeconomic statistics. The inflation figures have already crossed the double figure mark. “The slowing of IIP growth from 6% last year to 3.8% in the current fiscal is surprising and of course, worrisome “said a visibly flummoxed senior economic advisor to the government. Fortunately for us the kharif crops harvest is expected to be good but then a steady rise in oil price will push the transportation cost higher and any hopes of cooling down of primary articles’ prices may just disappear.

Hence even though the adverse effects of a steep oil price rise have reduced, we continue to have a high level of dependence on oil and thus it still continues to play havoc in overall growth story. This however does not undermine the strength of Indian economy. According to an analysis published by Energy Information Administration (EIA), the world oil consumption in the last three decades has undergone a definitive shift which substantiates the above argument. While in the 70’s and 80’s US and Europe had an ever-increasing rate of oil consumption, the last two decades have witnessed the two Asian giants India and China take prominence. Further with recession looming large over US economy the OPEC countries, as in the past, would not like to see oil demand going down due to higher prices. Therefore the analysts argue that a long period of spiraling oil prices may not be here to stay.

But countering a high level of oil dependency with sheer economic prominence can prove to be disastrous in the long run. India, which is projected to become the seventh largest consumer of energy within a decade, has to tread path cautiously in the coming years. There are lessons to be learnt from other countries’ experiences. The 1970’s showed how demand and supply, inelastic in the short run, eventually give rise to conservation and new production. The figures indicate that the OECD countries now consume less than one third of total oil consumption down from two third in early 1970’s. This is partly due to the strict conservation policies followed by the governments of the industrialized countries as well as the conscious research and development of alternative sources of energy, including natural gas and nuclear power, as well as unconventional sources of energy such as wind, solar and more recently, development of hydrogen as a source of energy.

With the current level of consumption we are almost certain to get in a situation where we would be required to import 90% of our total oil consumption. Therefore we need to give due cognizance to the fact that dynamics regarding oil consumption and production will keep changing. Hence it is in our best interest to preemptively embark on a revolutionary change that will make us much more self reliant in energy consumption otherwise the ramifications of a growing dependence on a diminishing resource seem imminent.

Life: A tale of Twists

Life's never been a smooth sail, probably had it been so there would not have been so much fun and charm in living it. I could not realize that just when a feeling of achievement had started sinking, somewhere in the vast ocean of life an unexpected tide of challenges had also started forming. The good part is it gave me some time to bask in the glory of my achievement and just when the sense of accomplishment started transforming into complacency a new challenge was there knocking on the doors.
The unfortunate part ( so would I say) of it was only on hindsight I could realize whether it was strength of some character that helped me come out with flying colours or an indicator of a tinge of weakness that I needed to work upon. Though this has been the case throughout my life but I just get a feel now that the subtle nuances in terms of circumstances have changed. While in the initial years I was oblivious of other options and hence kept on facing the challenges with such fervor as if the ultimate thing in life is to cross this Wall (read "challenge"). In contrast to this the current scenario always seems to present me with multiple options or so to say that I, a bit more mature, seem to have developed a broader perspective and hence always keep trying to evaluate one with another.
A bit confused: which scenario is better because though the later gives me a breather by providing me choices but at the same time the pursuit of it does not have the passion, adequately present in the earlier scenarios. The consequence is a half hearted attempt and hence even a positive result is half enjoyable compared to the earlier ones.
I am still struggling to find an answer which at least I would not debate with my own self. But I have realized that things which are easily accomplished do not give you as much pleasure as hard fought ones. Taking cue from the above as well from the line I recently read in a client signature “I will pass thru this world but once, let me know do all good and shower all virtues that I can to the people.” I am trying to come to the conclusion…this if my life does not face any further twist.

My Love Story

I do not exactly remember the genesis of this love affair. There was not any particular incident which made me have a crush on her; a crush that sometimes blossoms into love. We simply met each other one fine day without any intent of falling for each other. That’s were our conversations began. Since we both had an entity of our own it was quite natural that our interactions seemed to reflect our thoughts. Reasonability at times is so very ambivalent simply because the reason beneath could be entirely logical or at times purely emotional, but in both the cases we consider it reasonable. Some sort of this transpired between both of us. Sometimes when one of us behaved on logic, the other happened to act on emotion and vice versa. Resultantly there were conflicts but since neither of us was fundamentally wrong we both reconciled after sometime. The obvious good thing between us has been the mutual respect we have for each other. This has played a pivotal role in keep the relation intact, otherwise how does one explain the repeated reconciliation even after months of being left alone. There were times when she thought I was not doing the most sensible of things but somewhere deep down I had the gut feeling this is what I should be doing, though against the wishes of hers. As they say the world is based on probability I did prove myself right some of the times, coming to her terms at other times. Apart from the admiration I got for my success I also had a ticklish feeling for failing at times. Believe me both the feelings have been equally responsible for making the bond between us stronger. While an admiration is always to be proud of, a slightly ticklish feeling kept me feel like living on the edge. I always had to strive for that extra to maintain the competency level. It was not that I wanted to win a battle against her, rather to keep her respect for me going I could not take her for granted. She was as quick in heaping loads of praise as much in pointing out the shortcomings. Probably she knows that nobody is perfect but then we all must work in a direction which pulls us a notch higher than the rest. I am very proud to be in love with her, do not know if she feels the same. Ladies and Gentlemen, meet my beloved,” The Life”.

Business Ethics: How practical are they for managers?

Delve a bit deeper and one would find that the eponymous question implicitly points to the more genric question : how relevant are ethics for a human being? Because the only change is the domain or the context one is talking about else everything remians the same. Business ethics concern an organisation in the way it works and ethics concern a person in the way he chooses to live his life. Though on first glance it seems less likely that an ethical person will turn out to be a non ethical manager but considering a much smaller domain enveloped by the former it may well be the case.
An insight into the bigger spectrum called life reveals that the society during the course of evolution has put in place various institutions upon which is bestowed the responsibility of monitoring the ethical behavior of human beings. From the time we start taking cognizance of the facts around us the institutions at different stages of our life assume the responsibility of ingraining in us the well accepted virtues and the vices . Normally some of the do's and do not's are willingly accepted and there by followed by us while some we learn the hard way. By hard way I refer to all the punishment that we get on stealing a petty thing or lying for a small cause and the likes of the same. Sometimes we get the punishment at the hands of individuals like parents, teachers and some other time it is the society at large that gets into the act of cleansing.

Reflecting on the smaller domain “corporate world” one easy finding is that though the protagonist remains essentially the same, the environment in which he breathes has a different makeover. No matter how much the doyens of the industry talk about creating wealth for all or promote the much heard cliche corporate social responsibility the basic premise has remained the same : Profit Maximization. Without debating the ulterior motives of an organisation let us focus on the core issue :do managers really need to compromise on business ethics? Time and again the question has been answered in negation with history being replete with examples of downfall of organisations which essentially compromised on business ethics.
It is the myopic view that cripples the management’s decision making abilities and propel them to resort to Machiavellian tactics essentially signaling‘ends justifies the means and not the vice versa’. What they fail to take into account is the long term sustainability of such means and the demise of Enron and Arthur Anderson substantiate the argument.
Even as far as the practicability of the ethically run business is concerned it is very much viable, just that one has to wait for right opportunities and has to be suitably equipped to confront the opponent. Well the opponents to this point of argument may suggest that time lag in waiting for opportunities or getting well equipped might erase one out of the competition. And the answer to this lies in a multi pronged strategy some of the constituents of which may include :broadening the horizon of growth, nurturing the creative minds and ensuring that other involved parties do not falter. This brings us to the last but equally significant issue pertaining to the role played by the government elected statutory bodies who are supposed to monitor the functioning of an organisation. Ironically it is the malfunctioning of these watchdogs that has resulted into a situation where managers have an option to choose between ethical and non ethical means.
Nevertheless we ought to remember that though humans do err but it is the inevitable fall of unethical organisations that is never under doubt.