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Aloha (October 2005) - University School of Management Studies Newsletter


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Monthly Newsletter of University School of Management Studies...a great job done by Abhinav (Helllooooo Guys)..

Monthly Newsletter of University School of Management Studies...a great job done by Abhinav (Helllooooo Guys)..

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  • 1. ALOHA Connecting Thoughts Includes GOVERNMENT BIJOYENDRA SANYAL explores the future National Rural Employment Guarantee Act scope in this month’s special focus! has been recently been launched by the Manmohan Singh government. ASHISH BOOKWORM KAUSHIK explains its real effects and In this month’s edition of the bookworm implications. LATIKA MAHER presents her views on Stephen R. Covey’s highly appreciated best- MARKETING selling work – 7 Habits of Highly Effective Changing business scenario HARPREET People. KAUR presents the newly evolving purchasing practices in the country. CAMPUS CATCHUP Get to know all the latest happenings on the HEALTH campus of University School of Management Medical tourism is on an upswing in the Studies with MAYANK GOEL’s first hand country with the growth projected to increase reporting. steadily in the coming times. SACHIN GUPTA identifies the reasons for this sudden FACE-TO-FACE spurt of health travelers. In the interview of the month Mr. D. P. Nanda, GM, Moser Bear spoke to RAHUL TAXATION BHIMRAJKA about the future plans of the SUMIT MAHAJAN presents the highly company. controversial FRINGE BENEFIT TAX in a new perspective. BIG BULLY HIMANSHU NAUTIYAL and VIDHI tame BE POSITIVE the bulls and bears of the sensex in this The key to success in today’s competitive monthly roundup of the stock market. world is to have a Can – Do Attitude. NEHA TIKOO explains 5 easy steps to building a QUIZZLER ‘Can-Do Attitude’. Update your business knowledge with this month’s edition of QUIZZLER compiled by SECTOR ROUNDUP quizmaster BIJOYENDRA SANYAL. This month PRABHAT JHA rounds up the major happenings in the Automobile sector in GURU COOL the past few months. This month ASHISH KAUSHIK talks about the works of the famous business guru SPECIAL FOCUS Michael Porter. Click here to know your guru! The launch of Club One Air gives India its first fractional cost based airline. ALOHA Connecting Thoughts GOVERNMENT
  • 2. EDITOR’S NOTE Welcome to the inaugural issue of ALOHA – Communicating Thoughts, the monthly magazine of the University School of Management Studies. We, the students of the country, have the task of shaping tomorrow. We have the potential to transform and transcend all – be it old conventions, standards or above all, our own limitations. Strangely enough, for a group as important as this, our voice is still not heard. There is no proper channel for us to speak out – for what we think is right or against what we feel is wrong. ALOHA is just a small step towards setting that right. It is the voice of the students of USMS – the mouthpiece through which we would make our opinion known. The views expressed in here are purely those of the authors, and thus bear no necessary relationship with the institution. And that’s what ALOHA is – a way to reach out to the rest of the world. This first issue marks the fruition of months of hard work and planning. Right from the initial concept to the final design, everything has been managed by us students. The issue spans a gamut of articles on varied topics to make this one of the most comprehensive mirrors of the managerial and economic issues gripping the country. I am proud to present to you ALOHA – Communicating Thoughts. Hope you like this small effort on our part. ABHINAV PUROHIT Editor - ALOHA
  • 3. ALOHA Connecting Thoughts GOVERNMENT India's rural job guarantee scheme The World Bank says that more than 30 manual work. Through this Bill the per cent of the Indian population lives on government, aims at removing poverty less than $1 (Rs 43.50) a day, but Indian by assuring at least 100 days' economists believe the figure of poor -- employment. The minimum daily wage especially rural poor -- could be much had been pegged at Rs 60. State higher. We have tried to fight poverty by governments, Panchayati Raj institutions various means, but have met with little as well as non-government organizations success. So what India needs is would be involved in implementing the something more lasting than patchwork law. policies to help its millions of poverty stricken people. The government feels that the National Rural Employment Guarantee Act can solve that problem, given that it has the potential to provide a livelihood to millions. But will the plan succeed? Why is there resistance to it? What will it cost the nation? According to the last Census, 72 crore (720 million) people live in rural areas. The National Rural Employment Currently at around 7.8 per cent, the Guarantee Act will cost about Rs 40,000 unemployment has been steadily rising (Rs 400 billion) crore annually. in India. This has led to a migration of According to another estimate, however, huge numbers of people from rural to it could cost about Rs 50,000 crore (Rs urban areas. With over 65 per cent of 500 billion) annually, or about slightly India's population under the age of 35, less than 2 per cent of GDP. The Rural the country needs to create 6 crore (60 Development Ministry currently is million) jobs over the next five years to allocated Rs 24,000 crore (Rs 240 prevent the unemployment rate from billion) annually for all its schemes. To gaining unmanageable proportions. meet the total cost of this ambitious scheme, states will still have to shell out Jean Dreze, a Belgian economist, who is Rs 4,000 crore (Rs 40 billion). The rest currently with the Delhi School of of the Rs 12,000 crore (Rs 120 billion), Economics, is the chief author of the assuming the total cost works out to Rs National Rural Employment Guarantee 40,000 crore, might be raised from other Bill, 2004 promises wage employment to schemes whose allocations may now be every rural household, in which adult merged into this project. members volunteer to do unskilled 1
  • 4. ALOHA Connecting Thoughts GOVERNMENT Finance Minister P Chidambaram says major problems of employment and that the government will meet the development. requirement for the job guarantee scheme by: The opposition party BJP on the other hand brought out the major demerits of • Normal increase in budgetary the bill, which are as follows: support; • Savings from existing • The decision to provide Rs 60 employment schemes; and per day for a guaranteed 100 • Additional allocation in gross days rural employment translated budgetary support to states. to only Rs 500 a month, which is not sufficient to run a family. Chidambaram said the states' share in • The law could lead to friction the funding is only 10 per cent. In his within a family over selection of Budget for 2005-06, Chidambaram had the member to be provided the stated that the National Food for Work job. • It is feared that in the process Programme would be converted into the women and physically National Rural Employment Guarantee challenged could be left out. Scheme with an allocation of Rs 11,000 • The decision to make the state crore. governments finance 10 per cent of the scheme could lead to To begin with, as many as 200 districts, financial problems because of the including 150 districts under the Food poor financial conditions of some for Work Programme, would be covered states. under the Bill. It would be extended to all the 600 districts in the country within With back up of such arguments BJP five years. The Bill also provides for demanded inclusion of the urban sector unemployment allowances if the job, in the bill or a separate bill for the urban under the scheme, is not provided in the sector as 4 crore urban poor are still rural households. living in slums. There were also concerns about increasing fiscal deficit, With UPA government taking all the rising interest rate and corruption level credit for the bringing the bill out, Rural as past initiatives such as food-for-work Development Minister Raghuvansh programme have all resulted in the Prasad Singh stressed on the point that above-mentioned problems creating an employment would be generated through insecure environment development works, solving the two . ASHISH KAUSHIK 2
  • 5. ALOHA Connecting Thoughts MARKETING Status of purchasing practices & IT in India The business world is changing rapidly This integration calls for accurate & and newer innovations in every field are timely flow of information throughout ruling the roost. The purchasing trends the supply chain. of Indian industries have similarly undergone a radical transformation in Various effective purchasing practices the last couple of decades. In 1980s, could be: - companies could reduce cost of their products and services to compete in the 1. Single Sourcing - It implies that market through number of suppliers should be the application reduced to minimum; ideally to of strategies like one only. time and lean 2. Supplier Involvement – Initially manufacturing this practice characterized only a (this means buyer - seller relationship, with manufacturing price-based decisions being the products sole determinant. But now, both according to the parties, buyers as well as sellers, time period or are interested in long-term according to the profits. Thus long-term cost seasonal trends), total quality cutting, quality, capability and management amongst others. But these services form the basis of strategies do not help now in further cost purchasing decisions. reduction, so many of the companies 3. Strategic Purchasing - It can be discovered effective Supply Chain viewed as the pattern of Management as the next step to increase decisions related to acquiring profit and market share. required materials and services that support operations and Better purchasing practices and activities of the organization. integration of the processes of the supply These have to be consistent with chain members are two key elements of the overall corporate competent supply chain management. Purchasing strategy. It means that the various practices can be hailed as the foundation business practices adopted by the on which the whole Supply Chain organization so as to survive in Management structure is based. For this competitive business world effective management of the supply like diversification of products, chain, these practices need to be price and quality management supplemented with the integration of etc. are well aligned with the processes of the supply chain members. purchasing plan for the future. 3
  • 6. ALOHA Connecting Thoughts MARKETING Adoption of the above purchasing deliveries between manufacturers, practices has benefited numerous suppliers, distributors and customers. organizations around the world. Second one involves the backward coordination of information, which USE OF INFORMATION flows from customers to suppliers and TECHNOLOGY for this real time exchange modern IT tools need to be used rather than Exchange of traditional paper based information information at systems. each and every level at USE OF INFORMATION appropriate time TECHNOLOGY IN PURCHASE by appropriate PRACTICES IN INDIA personnel is the need in today’s business scenario. A survey conducted among 273 Organizations have to work in companies results that Indian Companies coordinated manner with their suppliers, have adopted new purchasing practices distributors, and the retailers. to a large extent but the use of IT is very Information about consumers purchases, less. Among the top 5 IT technologies, sales forecasts, promotion activities, on- fax is the most commonly used as a hand inventory and production schedules communication technique. E-mail is the is required to be exchanged among the next most used whereas use of bar chain members in real time to effectively coding and e-commerce is almost nil. manage the supply chain. For this there Thus, Indian companies are at the should be integration along the supply preliminary stage of employing supply chain. It can be of two forms. The first chain management. Because real type of integration involves coordinating integration can only be achieved through and integrating the physical flow of the application of IT tools. HARPREET KAUR 4
  • 7. ALOHA Connecting Thoughts HEALTH Medical Tourism When multi-specialty luxurious private Current Scenario: hospitals came on the horizon in the Referrals and word of mouth used to be early 80’s , many people scoffed at their the mantra for the hospitals. But now classy comforts, 5 star facilities & air these private hospitals are realizing that conditioned atmosphere. But today we this mantra is loosing its sheen. So they are living in an era where all these coming up with some of the innovative facilities are prerequisite to a good, marketing strategies like - sponsoring hospital. Now it looks like as if hospitals events, associating with neighborhood are not attracting patients, rather they are doctors through which doctors are attracting customers who are willing to referred. Some cases to these hospitals & pay more for availing these facilities. in return they will get some of the perks like – invitation to medical seminars, The mushrooming of new private discount for themselves & their family at hospitals, coupled with the rise of an these hospitals. Some of the other urban & middle class willing to pay strategies adopted include tie-up with more for quality healthcare and the hype medical insurance companies, opening surrounding medical tourism in India, is call centers to enquire about the health forcing large private hospitals to act like of the patients & reminding them about a corporate house with marketing & PR their regular health check-ups after they department and spend huge amount of have been discharged. Some of the big money on just marketing . private hospitals like Apollo, Escorts and Max Healthcare are adopting all these Reasons, why private hospitals are strategies. going for aggressive marketing look very apparent: 1] There is a shortage of good medical facilities in some parts of India and these private hospitals want to fill this gap. 2] Rising Income of people of India is enabling them to demand not only the basic medical facilities but some of the extended benefits like – air conditioned rooms, state of art infrastructure etc. also. 3] A huge chunk of foreign patients are coming to India for availing cheap medical facilities. 4] Competition in the urban markets is forcing these hospitals to differentiate themselves through their facilities. 5
  • 8. ALOHA HEALTH Connecting Thoughts Future trends: a year, are expected to double within the It is next 2 to 7 years. expected More and more private hospitals will go that more rural to tap up this huge market and and more more and more schemes like “kisan private card” by Escorts hospital which requires hospitals the farmers to “save a rupee a day “ to will come finance their up with all medical bills their kind will come up. of innovative marketing strategies. Corporation of Competition will increase in this sector, the Indian as some of the foreign hospital chains Medical like Fortis, Wookhardt, and Duncan etc. Sector will will enter the Indian market soon. pick up fast Hospital rooms with facilities like TV, and the refrigrator, telephone, sofa set, easy process from chair & dining chairs will become the illness to norms of day. International patients to recovery is going to be very smooth and India, which currently stood at 1.5 lakhs patients in the hospitals will have an amazing experience in the hospitals. SACHIN GUPTA 6
  • 9. ALOHA Connecting Thoughts TAXATION Fringe benefit tax: a new look benefit & hence tax has to be paid. A point to be noted here is that there might not be any benefit to the employee because the expense is incurred on behalf of the client but still the amount is taxable under FBT. There is further reiteration of this point as another clarification says that if the employer has incurred any expense for any one of the purposes enumerated in the relevant section, then the whole of the expense shall be deemed to have been provided. No segregation of expenses for employees & for others is to be allowed. The only saving grace is that the same amount would not be taxed as FBT in the hands of the client. There are occasions when some expense If you thought that the fringe benefit tax has to be incurred with respect to the was to be paid by the employer only for customer or the client. An entity would the expenses incurred or benefits incur such expenses & there might not provided to the employee then the latest be employee in this situation also. Some circular from the government will make of the common expenses in this area you change your mind. Various include hotel stay & air ticket charges. explanations & clarifications shows that These expenses would be classified as expenses on a client or a customer & being taxable & hence FBT will have to even dealers would see the fringe benefit be paid on this. tax (FBT) springing into effect. Next time HLL, NESTLE or COLGATE If a company incurs an expenditure for offer freebies such as cups with a pack the client & this out-of-pocket expense is of tea leaves, cold coffee shakers with reimbursed by the client, then the instant coffee powder or a free company that has incurred the toothbrush with pack of toothpaste, they expenditure has to pay FBT on this. The will have to cough up FBT on such client will not pay FBT on this. The expenditure. All these expenses are to be logic here is that head of expense is treated as sales promotion expenditure covered under FBT as a deemed fringe and therefore, are liable to attract FBT. 7
  • 10. ALOHA Connecting Thoughts TAXATION Similarly, free samples of medicines distributed by pharmaceutical companies to doctors also qualify as sales promotion expenditure & would attract FBT. Consumer durable companies that give away freebies, such as a DVD player with a colour tv or film/music software with a player, could be asked to pay FBT on the expenditure incurred on free offers. The summer holidays of employees may now prove expensive for the employers. It now appears that the employer will have to pay FBT in the years that in which employee claims the income tax exemption on leave travel assistance Right now, employees are liable to pay (LTA). When the LTA is not included in tax if the company reimburses expenses the salary, the expense would be taxable of over Rs 15,000 a year for medical in the hands of the employer. treatment in unapproved hospitals. This is because expenses above this threshold The tax liability of companies providing are treated as a perquisite. However, the medical reimbursements to their CBDT has now clarified those expenses employees is to rise. The central board on medical reimbursement for treatment of direct taxes (CBDT) has made it clear in unapproved hospitals will be taxed. that companies will have to pay FBT on The employer will have to pay FBT if reimbursements up to Rs 15,000 for the amount is below Rs 15,000 & the medical expenses incurred by their employee will have to pay tax if the employees in unapproved hospitals. amount exceeds Rs 15,000. SUMIT MAHAJAN 8
  • 11. ALOHA Connecting Thoughts BE POSITIVE Boost your attitude !!! Accomplish your goals!!! "A positive attitude is the one characteristic that all successful people have in common." Anon “Attitude”- What is attitude? It is why. We should believe in our selves a manner in which one feels, thinks, or and believe that nothing is impossible acts that shows one’s disposition, because the word impossible itself says opinion, or frame of mind etc. In today’s that ‘I-M-POSSIBLE’. world, having a positive attitude is often considered a secret to success, but for maintaining that attitude; ‘will’ is the 3. With the main prerequisite. The power of positive problem in attitude can help us in accomplishing mind, focus whatever goals we set for our selves in on what life. Conversely, negative thoughts and you can do feelings can prevent us from living the about it life we really want. It is a positive state of mind, which manifests in the way one Finding ways to use what we’re good at thinks and acts. One can develop it is to solve the problem. Generally, through the following steps: whenever we face a problem we tend to think negatively and feel low about it, we should curb this habit by looking at 5 Steps to building a ‘Can-Do the problem from different perspective Attitude’: and thinking about the alternative ways of solving our problem. 1. When you hear yourself say you can't do something, stop! 4. Be open to trying a different approach Resist going down this path – it's a one- way STREET, WHICH lowers our By perceiving from different outlooks confidence and demotivates us. we can solve any problem that we face. Refraining our selves from saying “I Whatever we do, we should take interest can’t” can work wonders. Remember, in it and make it enjoyable and fun for it's a habit – and it can be broken. ourselves. 2. Develop a problem solving mind-set Look beyond the "can't" to the reason 9
  • 12. ALOHA Connecting Thoughts BE POSITIVE at the world, but also our whole 5. Do it your way environment and the people around us. We should make things work for Negative attitude says: “You cannot ourselves, on our own terms. We should achieve success” leave a mark on what ever we do and be our selves and not imitate anyone. Positive attitude says: “You can achieve success, and that is what A positive attitude leads to everyone wants and strives for” happiness and success. It possesses the power to change our whole life. When Even one single step towards we see the bright side of life, our life manifesting a positive attitude will bring becomes filled with light. This light more light into our life!!!!!! affects not only us, and the way we look NEHA TIKOO Your erroneous zones Have you ever looked into the mirror and asked worth. Remember, at no time, under no yourself what’s wrong with you? Or have you ever circumstance is self-hate healthier than self-love. said ‘Yes’ when you wanted to say ’No’? Or do Even if you have behaved in a way that you dislike, you feel that it’s not you but others in your life that loathing yourself will only lead to immobilization controls your feelings? and damage. So instead of hating yourself, develop positive feelings. Learn from the error and resolve If your answer to any one of these is yes then they not to repeat it but don’t associate it with your self- reflect your erroneous zones. An erroneous zone worth. is a kind of self-destructive behavior that may seem perfectly acceptable, but in reality, is harmful to• You don’t need their approval your own happiness. Needing approval is tantamount to saying “your view of me is more important than my opinion of So how does one go about overcoming his/her myself”. You can never escape disapproval no erroneous zones? matter how much you want it to go away. For every opinion you have, there is a counterpart out • Taking charge of yourself there with exactly the opposite view. Don’t judge your intelligence on the basis of your ability to solve complex problems. A truer• The useless emotions – guilt and worry barometer of intelligence is effective, happy life If you believe that feeling bad or worrying long lived each day and each present moment of life. enough will change a past or future event, then you You are intelligent if you know how to choose are residing on another planet with a different happiness over depression. Feelings are not just reality system. Learning from your mistakes is emotions to you. They are reactions you choose to healthy but guilt is unhealthy because you are have and so once you learn that you can feel what ineffectively using up your energy in the present you choose to feel, you will be on the road to feeling hurt, upset and depressed about a historical intelligence – a road where there are no bypaths happening. that lead to nervous breakdowns. So break yourself from the past and free yourself • Self love and self worth from all the pressures that drive you towards your If you love someone then don’t judge your self past. Past is over and don’t let your past occupy worth on the basis of whether the other person feels your future.” Your future is an empty canvass the same for you or not. You might want the other and you can paint it the way you want” person’s love but it is not essential to your self SUCHITRA AHUJA 10
  • 13. ALOHA Connecting Thoughts SECTOR ROUNDUP Automobiles Sector The growth in Indian Automobiles of finance at relatively low rates of Sector has been high for the past few interest and price discounts offered by years, since 2001-02 to be precise. Post the dealers and manufacturers have liberalization, the arrival of new and stimulated the demand for vehicles and a contemporary models, easy availability strong growth of the industry. Passenger Car Market 2002-03 (A) 2007-08 (P) Total Units - 547,083 Total Units - 975,703 Premium & Premium & Executive Luxury Executive Luxury Mid-size 2% 3% Mini Mid-size 2% 19% 0% Mini 20% 17% 26% Compact Compact 56% 55% Projected CAGR 12.3% 11
  • 14. ALOHA Connecting Thoughts SECTOR ROUNDUP Two Wheeler Market Present estimated size 5.4 mn units per year CAGR (last 5 years) 10% Average two-wheelers per 1000 people India 27 China 08 Advantage India • Largest Two-Wheeler Industry Milestones 2003-04 Manufacturer in the World • Car production crosses 1 million • 2nd Largest Tractor Manufacturer mark. in the World • Car exports cross US$ 1 million • 5th Largest Commercial Vehicle mark. Manufacturer in the World • Auto component exports cross • Number 1 in Global Motorcycle US$ 1 billion mark Manufacturer is in India • 4th Largest Car Market in Asia - crossed the 1 million mark PRABHAT JHA 12
  • 15. ALOHA Connecting Thoughts SPECIAL FOCUS Fractional cost based airline model-the Indian perspective The airline sector in India has grown by The Indian economy is growing at a leaps and bounds in the past few months berserk speed and business travel is also and that has opened a lot of interesting grown rapidly. The inconvenience and possibilities. While most of the new frequent delays of airline travel entrants are in the low cost segment one increasingly may cause companies to turn airline that stands out is Club One Air; to business aircraft to help solve at least India’s first airline based on fractional part of their air transportation needs. Many ownership model. Promoted by Manav companies recognize that business aircraft Singh, it caters to the top executives and are tools to enhance productivity. Through businessmen allowing them to pick up a point-to-point, on-demand, private stake in the venture and fly wherever and transportation, the use of business aircraft whenever they want. Besides the flying can result in considerable timesavings. charges, the fractional ownership costs The need for connecting flights between Rs 50 lakh and Rs 2 crore, disappears, while the time spent at airports ranging between one-eighth and one- is minimized as companies can control fourth of an aircraft cost thus enabling a their employees' travel schedules. person to own an aircraft at a fraction of Employees also can use travel time more the cost. effectively, as business jets provide quieter working environments than the Fractional cost based airline model have commercial flights. been in vogue in the west for some time. One of the factors driving the business jet However many Indian corporate and even market is MNC’s may not want to bear the cost of growing buying an aircraft. These companies could frustration own them jointly with others through a with travel fractional ownership program, thus on providing a lucrative market to Club One commercial Air and others of its ilk. The number of airlines. customers for fractional programs may Polls and expand, as they may prove more attractive surveys, as to first-time business aircraft users than well as outright purchases. In the west, fractional considerable ownership is an important element in the anecdotal business jet market; and its growth has evidence, indicate that many corporate been phenomenal. executives resent time spent waiting for commercial flights at airports, seeing it as lost productivity. 13
  • 16. ALOHA Connecting Thoughts SPECIAL FOCUS In the Indian context its success is It may also end up with planes that largely dependent on how the market produce no revenue but still have capital shapes up in the coming years. One of and operating costs attached. the factors that they need to be careful about is price. Even the top segments of Club One Air must also be extremely Indian corporate sector are frigidity sensitive to demand surges, and the fleet about the expenses they acquire. It is must be sized to meet the greatest of expected to face competition from these. If it is not done, customers will airlines offering club card or jet card have to be paid for any violation of programs, which are popular in the west. timing and availability guarantees. To Already there has been a buzz in the avoid this, it will need to supplement industry that Kingfisher is eyeing this their fleets by chartering other people’s market. In general, the card programs planes, which is an expensive provide the benefits of fractional proposition. ownership, but without the need for capital investment in a full share. Essentially, the programs are simply a means to market block charters. Another aspect airlines like Club One Air need to keep in mind is the fact that making money with fractional operations is difficult. Unless the airline has a tremendous market presence (in terms of bases and airplanes), it will need to fly a Despite all possible roadblocks it may large number of non-revenue-producing face, the future of fractional cost based flights. Planes will often need to fly airlines in India, seem to be bright. Its empty somewhere to pick up a customer; success will go a long way making our they might also need to fly empty after civil aviation sector truly international. dropping one off. BIJOYENDRA SANYAL 14
  • 17. ALOHA Connecting Thoughts BOOKWORM 7 habits of highly effective people In The 7 Habits of Highly Effective principles, the more accurate and People Stephen R. Covey presents a functional they will be. holistic, integrated, principle centered approach for solving personal and The book is based on 7 habits, three of professional problems. Covey, one of the which pull us from the level of famous management gurus, reveals a dependence, where the actions we take step-by-step pathway for living with are a result of the situations we are in or fairness, integrity, honesty and living behavior of people around us, to the with dignity. He makes us realize how level of independence, where we act important an aspect of our lives ‘change’ rather than being acted upon. is, and how we can take the advantage of Independence is the paradigm of I — I the opportunities can do it; I am responsible; I am self- that change creates. reliant; I can choose. These are included in the second part, PRIVATE The book is divided VICTORY. These three habits are: into four parts. The first part talks about 1. Be proactive…. Where the paradigms and proactivity signifies that we do principles. A not blame the circumstances for paradigm is how we our actions. Rather we hold see the world, how ourselves responsible for we perceive, everything we do. Proactivity is understand and the freedom to choose our interpret what we response to any stimulus in life. see. Covey states that if we want to 2. Begin with the end in mind…… make a significant, Where Covey lays stress on quantum change, we need to work on imagining what kind of thoughts our basic paradigms. Then he talks about would we like to hear from the principles. He makes us aware of the fact people associated with us after that principles are like lighthouses. They our death, and act accordingly. are natural laws that cannot be broken. He very effectively exemplifies They have an enduring and permanent the fact that whatever we do, we value. He blends our basic paradigms should keep in mind the long- with these principles. The more closely term results emerging from it. our paradigms are aligned with these 15
  • 18. ALOHA Connecting Thoughts BOOKWORM a team achieves much more than 3. Put first things first….. Where all the members would he explains the concept of individually. personal management through the “Urgent Vs Important” Part four of this book, RENEWAL, quadrants. One realizes how to talks about the seventh habit: prioritize in order to succeed. 7. Sharpen the saw…. It’s the habit The third part, PUBLIC VICTORY, is that surrounds all the other habits where we reach the level of and makes all these habits interdependence. Interdependence is the possible. It’s renewing the four paradigm of we — we can do it; we can dimensions of nature - physical, cooperate; we can combine our talents spiritual, mental and and abilities and create something better social/emotional. together. Covey includes the next three habits in this part. These are: All in all with penetrating insights and powerful anecdotes, this book 4. Think Win/Win…. Where the teaches us principles - principles of author emphasizes on going for a personal vision, personal leadership, deal in which both the parties personal management, interpersonal win which will lead to active leadership, empathic communication, efforts from both sides and best creative cooperation and balanced results. self-renewal. 5. Seek first to understand and It’s a book that gives you not just then to be understood… A very essential tips, which can be used to important aspect of an become good managers, but also can interdependent living, where help a layman to become an effective Covey introduces the term and efficient human being. Its for ‘empathy’. this reason that it is hailed as one of the best ever written management 6. Synergize…. Which means that book and I recommend you to get a in an organization, two plus two copy for yourself without further is not four, its much more than adieu! that. Synergy is the power where LATIKA MAHER 16
  • 19. ALOHA Connecting Thoughts CAMPUS CATCHUP CAMPUS ROUNDUP August 1st marked the induction of the 6th batch of University School of Management Studies MBA programme- +. The whole batch of new comers of all the courses of the university were addressed by the Vice Chancellor Prof. K.K Aggarwal at the University Auditorium. Prof Aggarwal introduced all the Schools and the Head of different departments. The students were informed about the infrastructure of the university. Also included was a visit to the University Information Resource The students body of USMS- Synergy, Center. The students were then offered was introduced to the freshers by the refreshments at the end of the President of the body Mr. Ravi programme. Dhanwariya. Synergy’s structure, goals and operations were explained in detail to the rapt audience. Some of the newcomers then took the podium to share their impressions of the first day at USMS. The rest of the day saw the healthy interaction between the newcomers and their seniors. This is what some of the new comers had to say: Then the Dean of University School of Management Studies, Dr R.K. Mittal at “This (university) is a whole new the seminar hall of USMS, separately experience for me and I am glad that I oriented the new batch of MBA students. am here” Himanshu Nautiyal The event began with the dean giving a brief introduction about the school’s “I never thought the student body infrastructure and the facilities. All the Synergy would be so active….” Sumit faculty members gave an introductory Mahajan speech about their background and vision for the university. “The faculty is illustrious” Akanksha Gupta 17
  • 20. ALOHA Connecting Thoughts CAMPUS CATCHUP The fresher party of USMS was held at participants for the title with over 15 the BLUES Discothèque on the 28th of guys and 10 girls putting in their best August. The place was rocked by the effort. The first round was the ramp walk students of USMS with all of them in which the contestants showed some arriving in style, putting on the hippest style and attitude on the ramp. Then outfits in town. The party began at 11 in came the introduction round with the the morning with a bang and the dance brief introduction by the participants. floor was set on fire. The music was The final was the talent round in which loud and rocking with DJ Sunny exciting the contestants flaunted the various the souls. The party saw some talents they possessed. Eventually the commendable dance performances and results came out with Miss & Mr. happening moves. Everybody had a ball Fresher award going to Latika Mahar & and unlimited snacks and soft drinks Gaurav Sharma in that order. helped the matter. The dance session Another jam session followed for an lasted for four hours followed by the hour and a half. This was a memorable Miss & Mr. Fresher competition. There occasion with everybody enjoying the was fierce competition amongst the moment to the fullest. MAYANK GOYAL 18
  • 21. ALOHA Connecting Thoughts FACE-TO-FACE General Manager of Moser Bear, Mr. D. P. Nanda In a candid talk with Rahul inflationary conditions prevailing in the Bhimrajka, the General Manager of economy has also contributed to our Moser Bear, Mr. D. P. Nanda explains price tags! the secrets behind the run-away success of Moser Bear. He also talks about the Rahul Bhimrajka: - Moser Bear, future expansion plans of Moser Bear in despite being a benchmark in quality, India and abroad. The excerpts of the has reported heavy profit cuts of the past interview are: one year. Comment. Rahul Bhimrajka: - With two- D. P. Nanda: - This can be attributed to production unit in NCR, one in Noida, two distinct reasons. Firstly as I and the other in New Delhi, it has been mentioned earlier, the increasing prices seen that the company is experiencing of raw materials has hit us badly. high communication and traveling costs. Secondly the international CD sale has What has been done to minimize these taken an unprecedented and unexpected costs? dip. To counter this, we are launching some new formats in the CDs, which D. P. Nanda: - We have a hotline would help us in creating a steady between our Delhi and Noida offices, demand. But, as of now, the market and we have our own logistic facilities demand does not argue well for us. apart from the hired truck capacity. We have also shifted our loading operations Rahul Bhimrajka: - the one problem from Tuglakabad and moved to a much that has plagued every corporate in the closer location in Dadri. These small country is that of Power. How do you changes have contributed several deal with it? millions to our savings. D. P. Nanda: - As power is the Rahul Bhimrajka: - What is the reason backbone of our industry, only a small that despite stable prices of fluctuation too can greatly affect the Polycarbonate in the market, the quality of our products. To tackle this, company has seen an increase of around we have our own powerhouse that 25% in average costs? generates nearly 40 MW of electricity everyday. We use filter water for the D. P. Nanda: - The raw materials used smooth working of the power plant. apart from Polycarbonate, have been steadily rising in the international Rahul Bhimrajka: - What are your market. Moreover, the overall plans to explore the domestic market? 19
  • 22. ALOHA Connecting Thoughts FACE-TO-FACE D. P. Nanda: - It is growing. In fact, we believe that the real India lies in its D. P. Nanda: - We are known in the villages, and as the computer penetration market for our quality price and in these areas is increasing, now logistics, which we handle brilliantly. electricity and other infrastructure Our reach with the suppliers is excellent facilities too reaching here, the rural which help us having a very good market is opening up and we are gong to credibility with our clients. Our major market our products more aggressively threat is from China, as they produce in these areas. Also, we would now look products low in quality and price. But to grab a better hold over the urban because of price difference they are market by launching some new format eating our share. But we will come out CDs and other products in the urban of it soon. markets. Rahul Bhimrajka: - How does the Rahul Bhimrajka: - What was the attrition rate affect you as compared to motive behind joining the Blu-ray Disc other industries? Association? D. P. Nanda: - The attrition rates is not D. P. Nanda: - Currently our brand is an issue with us as the salaries, perks, not very well known in the international quality, that we are offering to our market, so tie-ups with these types of clients is as per the existing industry associations will get us some exposure structure. as well as popularity in the global market space. Rahul Bhimrajka: - tell me about the latest MOU signed between IIT, Delhi Rahul Bhimrajka: - Why was HP and Moser Bear. chosen to manufacture optical media using the unique “light scribe” D. P. Nanda: - We engage in extensive technology? R&D for the format of our CDs and other products. The MOU is towards that D. P. Nanda: - It is the need of the hour; end too. As the rural market is still to we are paying royalty to HP to get its capture, we are banking heavily upon services. our solar energy products to succeed in these markets. Rahul Bhimrajka: - What is your competency in? Rahul Bhimrajka: - Thank you. RAHUL BHIMRAJKA 20
  • 23. ALOHA Connecting Thoughts BIG BULLY "Psychology of trading" Successful futures traders always acknowledge the importance of 4. MAINTAIN MENTAL CLARITY psychology in their trading. Traders One of the keys to successful trading is must be disciplined and remain mental independence and clarity - the emotionally detached from the market. ability to free you from concerns that might distract you from trading. Whether Trading requires management of the they be family, friends, or financial emotional states. Emotional imbalance concerns, always aim for a complete impairs the ability to make congruent clarity of mind in your decisions. The most optimal state is one trading. Being clear in your goals and of complete emotional detachment, to maintaining your mental focus will help remain calm and to act in accordance to you stick to your plan and not make rash the markets. That includes negative as decisions based on emotion. much as positive emotions - the key word is to stay "cool". Following are 5. DON'T PLACE ALL YOUR the some important points that a trader EQUITY IN ANY SINGLE should observe in his or her trading POSITION strategy…. One of the keys to success in trading is lasting in 1. DISCIPLINE the game. Like most things in life, without it you Don't over DID YOU KNOW? Bombay Stock Exchange won't succeed. Discipline is sticking to commit Limited is the oldest your plan, including your "stops" and your stock exchange in Asia entry points. It is the hardest, but most account to important rule of all. any single position. 2. KNOW YOUR PURPOSE Know why you are trading, if it is for the 6. ACCEPT THAT THE MARKET thrill, to make a living, whatever it is…. IS ALWAYS RIGHT you will enjoy it more and trade better if The market cannot be controlled by one you know why you are doing it. person so it has to be accepted that it will move regardless of what you want it 3. TRADE ONLY WHAT YOU CAN to do. Fear, greed and hope can cloud AFFORD TO LOSE your vision of the market and can Futures trading are risky; so don't fund cause emotional responses detrimental to your trading with money, which, if lost, your trading. The market will go where could put you into financial difficulty. it wants to go. “THE BIGGEST RISK IN LIFE IS NOT TO TAKE RISK.” 21
  • 24. ALOHA Connecting Thoughts BIG BULLY 7. TRADE WITH DEFINITE GOALS 9.ADMIT DID YOU KNOW? IN MIND THAT Bombay Stock Exchange Profits belong to those who make YOU was established as "The decisions and act, not those who react. ARE Native Share & Stock Your trading plan should not only focus WRONG Brokers Association" in on the best time to get in but also when Don't fall 1875 to get out. This involves setting a view in love for profit taking or loss minimization. It with a is better to set a stop for a losing position. If you get it wrong, loss amount and stick to it. If in profit it admit it, get out, conserve your equity is a good plan to set a stop to take a and wait for another opportunity. minimum profit while still giving the trade the potential for further profit. 10. LET PROFITS RUN UNTIL YOU HAVE A REASON TO CASH IN 8. DON'T TRADE TOO MANY Let profits run until you are given a MARKETS reason to cash in, whether that Concentrate and focus on a few select be a trading system signal, a markets and completely master them; fundamental factor or your initial this is what professional traders tend to objective. do. HIMANSHU NAUTIYAL and VIDHI 22
  • 25. ALOHA Connecting Thoughts BIG BULLY Benefits of online trading Trading futures online is not magic. especially important if you are Even though the information is moving placing a market order. Online at the speed of light, success in the orders get to the trading floor market still requires discipline, faster than telephoned orders. knowledge, and patience. There are • Lower Commissions. several benefits to online trading: Brokerage firms usually charge less for handling an online • Convenience. The financial transaction because fewer of their information you need for your resource are tied up in executing trading decision - your a trade. outstanding futures positions, the • Control. When you trade online, amount of cash you have in your you decide (no one else) what to account, and the amount of do and when to do it. margin required for your intended trade - can be found on Accuracy. Occasionally, messages your computer screen. between you, your broker, and the • Speed. Futures prices can move trading floor can be mis-communicated. quickly. Once you have made Online trading reduces the number of your trading decision, you want steps in the order process, therefore to place your order ASAP. reducing the chances of a Speed of the execution is misunderstanding. HIMANSHU NAUTIYAL and VIDHI STOCK JAGRONS Dear Money A situation in which money or loans are very difficult to obtain in a given country. If you do have the opportunity to secure a loan, then interest rates are usually extremely high. Also known as "tight money". Trend Trading A trading strategy that attempts to capture gains through the analysis of an asset's momentum in a particular direction. The trend trader enters into a long position when a stock is trending upward (successively higher highs). Conversely, a short position is taken when the stock is in a down trend (successively lower highs). Effective Date The date, declared by the Securities & Exchange Commission (SEC), on which shares can start trading. This usually refers to the date when shares become available for sale in an initial public offering. 23
  • 26. ALOHA Connecting Thoughts QUIZZLER 1 Which major car company owes its A. Uncle chips postwar existence to British army officer B. Lays Major Ivan Hirst, who scrounged steel C. Cheetos and other materials to keep the heavily D. None of these bombed plant going and then secured a 8. 'Think bright, not white' is used by British Army order for 20,000 vehicles? which company? A. Land Rover A. National B. Bentley B. Onida C. Volkswagen C. Samsung D. Jaguar D. LG 2 Which famous cheese is made in the 9. What is the alternative name for town of Hawes in Yorkshire? Consumer Price Index (CPI)? A. Cheddar A. Laspeyres Index B. Wensleydale B. Keynes Index C. Stilton C. Paasche Index D. Ticklemore D. Mundell Index 3. In which year was the Polo mint 10. Who introduced the concept of launched in the U.K., initially being 'Permanent Income Hypothesis'? marketed as `the peppermint ring made A. Adam Smith wholly by Rowntree'? B. Milton Friedman A. 1930 C. Franco Modigliani B. 1941 D. Irving Fisher C. 1948 11. In what year was the WTO (World D. 1955 Trade Organisation) created? 4.What does CNN stand for on the TV A. 1993 or Internet? B. 1992 A. Cable News Network C. 1994 B. Cental News Network D. 1995 C. Complete News Now 12. According to Okun's Law, a 1% D. Crisp Noodle Nest increase of unemployment rate results in 5. 'Quality first, cost second' is used by a loss of GDP of how many percentage which pen company? points? A. ADD Gel A. 3 B. Cello B. 5 C. Reynolds C. 4 D. Oliver D. 2 6. 'Prepared to be watched' is used by 13. If an economy uses a floating exchange which cycle company? rate system then what will happen to GDP if A. TI Cycles the government decided to use expansionary B. Hero Cycles fiscal policy? C. Avon Cycles A. Increases D. BSA B. No change 7. 'No one can eat just one' is used by C. Decreases which chips company? D. Nobody knows 24
  • 27. ALOHA Connecting Thoughts QUIZZLER 14. What was the first Indian luxury A. Tata House hotel established by the Tatas? B. Jasmshedji House A. Taj Mahal Hotel C. Bombay House B. Hotel President D. TISCO House C. Watson Hotel D. Hilton Hotel 21.The Tatas built India’s first steel mill. 15. The Tata group consists of how In which year was it completed? many companies? A. 1902 A. 60 B. 1905 B. 80 C. 1911 C. 125 D. 1945 D. 26 22. Which of the following appliance 16. The merger of which two large names once were part of the GM family pharmaceutical majors created a new of companies? company Aventis? A. Westinghouse A. Ciba and Sandoz B. Frigidaire B. Rhone-Poulenc and Hoechst C. General Electric C. Glaxo and SmithKline Beecham D. Whirlpool D. Ranbaxy and Cipla 23. Which Vice-President of General 17. Which is India's largest Motors left the company, formed his pharmaceutical company? own company and named a car after A. GlaxoSmithKline himself? B. Dr Reddy's A. Hernando DeSoto C. Ranbaxy B. Barney Oldfield D. Cipla C. John Z. Delorean 18. Who is the CEO of Dr Reddy's D. Edsel Ford Laboratories? 24.'We move the world' is used by which A. G V Prasad courier company? B. Satish Reddy A. Professinal Couriers C. Dr Anji Reddy B. None of these D. Dr Ramoji Reddy C. Blue Dart 19.Which pharmaceutical company D. DHL recently acquired a UK-based firm 25.'Spoil yourself' is used by which car called CP Pharmaceuticals? company? A. Pfizer A. General B. Cipla B. Toyota C. Wockhardt C. Tata D. Ranbaxy D. Opel 20. What is the headquarters of the Tata group called? BIJOYENDRA SANYAL 1-a, 2-b, 3-c, 4-a, 5-a, 6-b, 7-b, 8-c, 9-a, 10-b, 11-d, 12-b, 13-b, 14-a, 15-a, 16-b, 17-c, 18- a, 19-c, 20-c, 21-c22-b, 23-c, 24-d, 25-c 25
  • 28. ALOHA Connecting Thoughts GURU COOL MICHAEL PORTER strategic choices. He showed different One of the choices of creating wealth, which had world’s most been quite limited in the world of sought-after traditional trade theories. Several business guru, scholars have lately extended his strategists and diamond model. business There are four factors, Porter suggested, conference that help to make a nation competitive: - speakers, Michael Porter brings phenomenal 1 .Tough Domestic Rivalry knowledge and insight that helps 2. Country Resources corporations achieve greater 3. Country Infrastructure (including the performance. The leading authority on educational quality of its workforce) competitive strategy and international 4. The Cluster Phenomenon competitiveness, he is Harvard Business School’s C Roland Christensen Porter also suggested that there were just Professor of Business Administration. three generic strategies for managers to Porter speaks to government and choose from if they wanted to gain business audience around the world, competitive advantage, something that including AT&T, First Boston and he believed was the underlying purpose Proctor & Gamble, focusing on of every business. These could be briefly necessary strategies. Author of 14 books identified as under: - and more than 50 articles, his competitive strategy: Techniques for • Things could be made as cheaply Analyzing Industries and Competitors is as possible and the firm could the leading work in its field. become the lowest cost producer Traditionally, a nation's international in a market. competitiveness has been explained by international trade theories originating • Alternatively it could offer from Adam Smith. However, today's something special or different global economy is too complicated to be which would allow it to explained by the traditional trade command a premium price. theories. Porter introduced a new competitiveness theory, the so-called • Or, thirdly, it could choose to be diamond model. He differentiated his what Porter calls a focused theory from the traditional trade theories producer, looking to dominate in by arguing that national prosperity is not a niche market, so that others inherited, but created by choices; in would find it too difficult to other words, national wealth is not set by challenge the firm. factor endowments, but created by 26
  • 29. ALOHA Connecting Thoughts GURU COOL To help the firm choose which strategy insight - and strong leadership, the to adopt, Porter has said that it needs to willingness to make hard choices and to decide which of five types of industry it take a stand against the conventional is operating in: - wisdom of the industry. 1. Fragmented 2. Emerging 3. Mature 4. Declining 5. Global Porter has also said that every firm needs to examine the following five forces of competition: - • The threat of substitute products • The threat of new entrants • The bargaining power of suppliers • The bargaining power of buyers • The state of rivalry among existing companies Honored with numerous titles and awards, he earned Harvard’s, David A. Always try to do things in ways that are Wells Prize in Economics for his hard for other companies to copy, says research in industrial organization, two Porter. He further adds that finding that McKinsey awards and many others. unique position isn't always obvious; in the end, it comes down to creativity and ASHISH KAUSHIK The Opinion expressed in this Magazine are solely the author views and should not be interpreted as those of University School Of Management Studies. The Institute and Editorial Board does not take any responsibility of the facts, views publishes here in. 27