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Let me introduce myself before we take a deep dive into my own experience and perspective for choosing a particular B-School for management studies. I am a traditional Indian IT professional with varied experience in some of the well-known IT companies in India (I hope I am just in assuming that the readers know companies like Infosys, IBM). After spending more than seven years in the industry I gained technical expertise and varied domain knowledge in Telecom, Retail. Many of you will also be interested in knowing my objective for doing MBA at this stage of career, but, I will keep it as a secret which will only to be revealed in front of admission committee. After all, it is a subjective matter and everyone has their own idea behind getting into management studies.

I started to think about doing one year MBA from India a year ago. That does not mean I did not ponder on the idea of reaching to Europe/ US for the most sought qualification. US B-schools were anyway out of the reach of my financial horizon and risk appetite. I applied to few of the B-Schools in UK and eventually got admission offer from one of those; later realized that this was also not my cup of coffee. Looking at the current economic scenario and my own personal constraint; I was not ready to spend some thousand EUROS to learn management practice which anyway I could not have applied to Indian perspective as I need to stay back in UK to recover the fixed and variable costs (a management concept I already know even before starting to study it formally).

So, let us discuss about the B-schools is India offering one-year MBA. As I scored a decent 720 in GMAT, I targeted only some of the top B-Schools which I have listed down below. I would like to take and each institute and provide my opinion about it (of course the opinions presented here are personal and I have tried to make sure that I am not biased toward the one I finally opted).

IIM – Ahmadabad/Bangalore

These B-schools tend to focus on participants who would like to shift career from middle management to senior management. These are the most sought brand names in India in management studies and corporate flock to campus to pick up the best managers. The average experience for admission into IIM-A/B stands at 10-12 years and I believe this is the one of reason I did not get a response back. As every business caters to a unique market segment, their target customers are mid-level executives, the course fee also tend to be on a higher side (2 million INR). It seems to be 30% less than what I could have shell out if I did plan to do MBA from a decent B-Schools in UK.

Indian School of Business, Hyderabad

This is one of the Schools which made me do a lot of cost-benefit analysis even before sending application. A grand salute to their efforts to bring the course at par with some of the most sought courses/B-schools in a short span of time. But what make me wonder are the current trends in admission in-take and the placement opportunities available in market. With a sheer batch size of 800 + participants and operations in two campuses; I will be impressed with institute efficiency to get everyone in the batch placed with a so claimed high post-course average package. Also the high investment makes me doubt about my own capabilities to earn and quickly get back to a financially equilibrium.

I hesitantly applied and to my dismay I got an interview waitlist (this is better way to say someone that you are neither selected for interview nor rejected).

IIM Lucknow, Noida Campus

This was one of the institute I was looking forward to the most due to family reasons and location advantage (I preferred to stay in NCR region). The interview turn-out ratio (10 out of 19 applicant appeared for the interview in my slot and similar figures from other locations) and feedback from various source make it clear that the IIM-L Noida campus is still struggling to pick its own share of cake in the elite class of other IIMs. Placements figures were a bit confidential affair and I struggled to get the exact picture even after trying all the sources I could. The course fee though less as compared to other IIMs was still a costly affair for me.

I appeared for the interview and waited for 2 weeks with finger crossed.

S P Jain Institute of Management & Research, Mumbai

Constantly ranked among the top 10 for last many years and churning out its 8th batch of one year MBA batch;  the B-school was my last target to be in. The total cost of the course is half as compared to other B-Schools I targeted. Placement, as I got to know is decent and is more dependent on participants own efforts (but this is the case with every other 1 year B-School). The participants leverage on the B-school brand and Alumni network along with their own network to get into the role/job they aspire to be in.

 So, what was my decision and where am I today

I landed in S P Jain Mumbai on 8 Jan, 2012 with hope that the year 2012 will be the most exciting year in life.  The first few days in the campus made me realize that I have landed at the right place.

First of all, the feeling of funding my course from my own pocket made me free from lot of worries. I will not be carrying a baggage and will not worry whole year about the placement as it hinders the learning process. After all, the placement and job is not the ultimate objective of getting into management studies, when I already had a well paying job.

Second, now I believe that for a person like me who has been more occupied in the world of programming languages and algorithms, there is a lot of learning and personal development is required. The top class institutes admit people who are already well suited executives and just need a brand name to accelerate the career. I did not find any examples, where they admit an average individual and turn him into an entirely different person.  It is logical for me to rather join a decent B-School which is still aspiring to be in top-notch class and is putting extra emphasis on learning and development rather than emphasizing more on the marketing techniques. After all, we are the one who will ultimately pay for their marketing expenses.

Third, as the course starts three months earlier as compared to other institutes which start the session in April-May, I will be completing the course early and will be back in job to support my family.

“There are no secrets to success. It is the result of preparation, hard work, and learning from failure.”

-PGPM 811 Participant.

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Knowledge influences practice.
Practice refines knowledge.
Let industry and academia integrate.
Let ignited minds ideate.

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The Application of Learning program(ALP) provides the PGPM participants an opportunity to apply the management concepts picked up during the course of the PGPM program in different areas like strategy,finance,marketing,IT consulting etc to real life industry scenarios.

Our ALP at OTIS India kicked off on Aug 24,2009 for a period of 6 weeks and should I say it was great to get back to cushy offices and the corporate life after the ever-so-hectic, but of course fun-filled college tryst.The CIO of OTIS India is directly mentoring us on the ALP amidst his busy schedule and it has been an exciting 2 weeks so far on the ALP.

Long hours spent discussing the business processes,interacting with the business users,planning the IT roadmap for the company,applying the lenses of IT strategy to a real business scenario has indeed been an enriching experience.

OTIS Company which is an Engineering-to-Order company and not only the No.1 among the Elevator companies of the world with their products in all the tallest structures of the world like the Eiffel Tower-Paris,The Petronas Towers-Malaysia ,the upcoming Burj-Dubai and many more,but also envisions to be the Numero Uno in “Service Excellence”.

The aptly named Application of Learning program of applying our new found management learning’s taught by some of the best faculty among B-schools at SP Jain,Mumbai to the industry has indeed been a challenging stint thus far,and we look forward to make the best of it!

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I was having a small discussion with my HRM professor on different facets of formulating a sustainable HRM strategy which is not a mere lip-service but beyond that. I thought I would share some of those thoughts which were provoked as part of the questions posed and how we can build on the ideas to reach our goal. Some of the questions which came to my mind were very basic but I guess atomic level details are always basic in nature and it is from there you start to build upon the foundation that leads to more concrete ideology.

We talk a lot about the fact that can we work in consulting, or can we go to FMCG sector after doing MBA? Would it be possible to take a lateral shift totally un-related to our previous work-profile…?. I think so it is possible to an extent but it is not something which can be achieved just by your efforts because a business runs on two facets – External positioning and internal strength .The former means to be substantially and differentially present to meet customer’s expectation and build customers’ engagement. The latter means its attitude of its people to improve processes and remain cost competitive. Many a time’s company’s focus on the external positioning rather than on the internal processes and especially in a business upturn situation and in a downturn they turn their attention to internal processes and on people. A Great company would do both simultaneously at all times to improve its internal and also evaluate it external positioning to improve its performance. If an organization is building its attitudes focusing on improvement of processes all the time, the competencies of people also gets enhanced and there is a multiplier effect across the organization Therefore skill and competencies must be there but ultimately the attitude drives commitment and even at times if there is a skill deficiency , or organization can still have a competitive advantage for a sustainable performance as experience of some great organizations have proved irrespective of the industry type.

When we talk about “sustained success”, then what is the measure for it? , we have seen that there are umpteen dimensions which are qualitative and measurement of those may be a big challenge…One of the ways to deal with this is to profess the concept of “triple bottom-line” within the organization. The concept of TBL demands that a company’s responsibility be to stakeholders rather than shareholders. In this case, ‘stakeholders’ refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder (owner) profit. You can see such examples in corporate like ITC, TATA Sons. Also the idea to develop “strategy maps” for the HRM process which can lead to formation “balanced score cards” would be beneficial in assessing intangible measurements as tangible outcomes.

“Motivation” – we have talked a lot about this in parlances of our organizations and dwelt upon it in classrooms but in a highly competitive market , the equation for motivation always has one variable with a positive relationship and that is “money” but as managers we know that we may not always control the pie to the extent we may wish to…so…what is the least that can done to address this challenge…though money is important dimension in the life of an employee there are examples which are counter supported by research worldwide that people are motivated when

  • They are clear about their objective and what is expected of them.
  • When they have a supportive superior
  • When their workplace interface are friendly

As managers our locus of control is to create this and that’s our job all the time every time – albeit a tough job but that is what makes life and management wonderful.

I will keep sharing my small brain-storm sessions with larger audience because I find this as the strongest medium to gain more knowledge.

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King-Cong(ress)

The curtains were drawn on the 15th Lok Sabha elections yesterday after the results were announced. Expectedly, UPA will retain power at the centre. What surprised however was the way Manmohan Singh & Co. mustered numbers for Congress with consummate ease. 205 seats is something which even die hard Congress fans were not expecting. With only 19 seats short of majority, the alliance of Grand Old party of India is all set to retain power with support of some smaller parties and a few independents.

If you ask me, I personally wanted BJP to win. But a choice between Manmohan and LK Advani rolled the dice in favor of the former. The results are significant in current scenario when India along with the rest of the world is going through tough times. A Third Front (or an nth Front government) at the centre, a la Deve Gowda regime in 1998 or a Charan Singh government post emergency in 1979, would have resulted in unstable government and power games in the Parliament, with actual issues relegated to the backseat. A stable government at the Centre ensures pro-reformist measures, tackling of real issues, possibly a revival of D street in Mumbai and importantly for us, no political upheaval at the end of 2009 when PGPM goes for placements.

Significant results

  • Congress gets past 200, after 19 years
  • Expect the fifth generation of Late Mr. Motilal Nehru to take over centre stage anytime soon in the form of Rahul Gandhi
  • End of Advani era in BJP. But who next…Narendra Modi? My guess is as good as yours
  • Lalu, Paswan routed in their stronghold Bihar
  • Nano moves out of Bengal but drives Mamata in
  • Prakash Karat and his dogmatic leftist policies leaves CPM high and dry
  • Naveen Patnaik(Orissa), Karunanidhi(TN) and YS Rajashekhara Reddy(AP) do well riding on a  pro-incumbency wave


Key states

Uttar Pradesh: Rahul proves his mettle
UP is considered the most sought after state in India with maximum number of seats. There is an old saying: ‘The one who rules UP, rules Delhi’. Rahul Gandhi decided to go alone in UP without any alliance. His perennial visits to poor households and hunger strike paid. Drama or not…I don’t know. But after 25 years, Congress got back its Dalit and Muslim vote bank which resulted in 21 seats. Significant numbers huh!! Mayawati caved in under anti incumbency factor. And Mulayam was fighting with no real issues at hand.

Maharashtra: Raj Thackeray – Baazigar
‘Haar ke jeetne waale ko baazigar kehte hain’: Shahrukh tells Kajol during their first meeting in the famous 1993 Bollywood blockbuster. I never quite understood the meaning of the insipid dialog then. Now, I guess, I do. Raj Thackeray’s MNS did not win even a single seat, but ensured BJP-Shiv Sena combine pay for not his ouster from Shiv Sena. Raj quotes a dialog from Amar Akbar Anthony after election results with an obvious reference to his cousin Uddhav – ‘tum apun ko itna maara. Apun tumko sirf do maara…par kya solid maara maloom’. BJP-Shiv Sena vote bank got divided with Raj’s MNS. Congress-NCP combine won 25 of 48 seats and significantly, won all six constituencies in Mumbai.

Delhi: We love you Shiela
Delhi BJP state unit needs to do some serious introspection. HT says: “Delhiites seem to have fallen in love with Sheila Dixit”. Not without a reason though. BJP draws a blank. And a clean sweep for Conngress – 7-0.

Bihar: Perform or Perish
While we were watching election results on NDTV before running for our International Business quiz, Varun Jha told me – ‘Ladke ne kaam kiya hai Bihar mein’  with an obvious reference to the CM. Good governance pays. What Manmohan did at the centre, Nitish did in Bihar. Ensuring a landslide victory for BJP-JD(U) combine, he clearly showed that if you perform, you will be rewarded. Lalu -Paswan got what the rest of the country was hoping for. Three seats for RJD (down from 24 last time) and a big ZERO for Paswan’s Lok Janshakti party. The humiliating part is both lost from the constituencies they were contesting from. Lalu managed to win one at Saran beating loud-mouthed Rajiv Pratap Rudy of BJP.

Andhra Pradesh: Glamour downloaded
AP along with Rajasthan tilted the balance in Congress’s favor. YSR defied the anti incumbency wave getting 33 seats for Congress. Glamour downloaded with Chiranjeevi’s Prana Rajyam Party not managing even a single seat. Sad to see Chandrababu Naidu failing again.

West Bengal: Bengalis gift to the rest of the country
Prakash Karat tried his level best that India does not take a step forward in the last five years. The hopeless handling of Rizwanur murder case and unnecessary violence in Nandigram and Singur ensured CPI(M) not finishing at the top of the table in WB after 30 years, winning only 15 of 42 seats. A change of guard was inevitable. Mamta Banerjee’s politics on Nano paid off. Mr. Ratan Tata surely won’t be a happy man.

Rajasthan: Maharani’s after effects
Another state which turned the tide in favor of UPA. BJP continues to pay for sins committed by Vasundharaje Scindia during her tenure as Chief Minister. After their debacle in assembly elections last years, they lost badly in Lok Sabha elections as well winning only 4 of 25 seats.

 

Finally…

The election results will ensure a stable government at the Centre. But I sincerely hope that Congress adopts a complete pro-reforms policy. And liberalization moves in a fast forward mode now. Hope not to see any further reservations in educational institutes or any talk of reservations in private sector. Late Pramod Mahajan had aptly said once, “We take pride in being the world’s largest democracy. We need to be the world’s most efficient democracy”

I would like to end this post with my dream cabinet:

Prime Minister: Manmohan Singh
Home Minister: P Chidambaram
Defence Minister: Pranab Mukherjee
Finance Minister: Montek Singh Ahluwalia
HRD Minister: Rahul Gandhi

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Introduction
Hedge Funds are a popular investment vehicle for High Networth Indviduals(HNI) or other Institutional Investors who have bigger risk apetite than retail or smaller investors. The Hedge funds invest in all possible investment vehicles like shares, debt, commodities, real estate, private equity companies etc. Well as the name suggests the basic methodology of hedge funds is to invest in risky financial securities and hedge these investments using different hedging (alleviating risk) techniques like arbitrage, short selling etc. A typical investment in a Hedge Fund for example requires around Rs 1,25,00,000 to Rs 3,00,00,000. Remeber this figure can go to about Rs 50,00,00,000 for bigger funds. 
 
Risk Associated 
 
So why all this hoopla around Hedge Fund investment. Well the debacle of Long Term Capital Management(LCTM) Fund which leveraged itself more than 30 times on the investor’s money was one of the biggest hedge fund bubble leading to lot of scare among not only developing countries but developed nations of world too. It was the big daddy of Lehman Brothers. Some of the geniuses of our times(mathematicians, nobel laureates) were involved in developing mathematical and statisitical models for churning out an average return of more than 40% in LCTM. But the fund was ultimately bailed out with the help of Federal Reserve and Investment Banks in 2000.
 
Some of the risks which make investment in Hedge Fund scary are :
1. Hedge Funds usually invest in very risky securities to generate an above average return than stock market and other instruments. This leads to an inherent risk
2. Because of the competitive nature, hedge funds do not publicly disclose their investments which concerns investors.
3. Historically there haven’t been regulatory framework to keep a tab on Hedge funds and protect investors.
4. Lock In period is high in Hedge Funds, even exiting out of an hedge fund can take a minimum of one month.
5. Volatility of strategy. To make a decent return, the hedge funds have to manoeuvre funds around different markets which leads to volatility and skepticism among investors
 
Types of Hedge Funds
 
There are various classification of Hedge Funds, some of the most popular ones are :
 
1. Fixed Income arbitrage – These funds work on exploitation of inefficiencies in the pricing of bonds(fixed income). For example you might hold a long position in interest rate swap and opposite position i.e. short position on bond. This is called as swap spread arbitrage. There are other methods such as yeild curve arbitrage, volatility arbitrage, capital structure arbitrage etc. The instruments used are interest rate swaps, asset backed securities etc.
 
2. Convertible arbitrage – These funds work on pricing inefficiency of a convertible security and the common stock. For example you might go long on Tata Motor’s convertible bond(say FCCB’s) and short on Tata Motor’s stock. The premise is that convertible security might be priced inefficiently relative to the underlying stock. In above case this arbitrage will be succesfull if the Tata Motors FCCB is selling at a perceived discount to Tata Motors stock.
 
3. Merger Arbitrage – These funds exploit price inefficiency in stock price of merging companies. In a cash merger, an acquirer proposes to purchase the shares of the target for a certain price in cash. Until the acquisition is completed, the stock of the target typically trades below the purchase price. An arbitrageur buys the stock of the target and makes a gain if the acquirer ultimately buys the stock. Whereas in a stock for stock merger, the acquirer proposes to buy the target by exchanging its own stock for the stock of the target. An arbitrageur may then short sell the acquirer and buy the stock of the target. After the merger is completed, the target’s stock will be converted into stock of the acquirer based on the exchange ratio determined by the merger agreement. The arbitrageur delivers the converted stock into his short position to complete the arbitrage.
 
3. Sector Funds – These funds invest in specific sectors like pharama, technology etc. based on their expertise
 
4. Diversified Funds – These funds invest in different sectors to mitigate risk.
 
Many investment banks provide the index of performance of different hedge Funds grouped by category like this.
 
What is the hurdle rate ?
 
An investor in a hedge funds has to pay several fees to the hedge fund manager like management fees for the assets held within the fund and performance fees for the positive returns provided by the hedge funds. Management fees is charged on percentage of assets owned by fund and performance fees as a percentage of total profits. But hedge funds cannot charge performance fees as long as they don’t provide returns above a minimum percentage set at inception of hedge fund. This minimum return percentage is called the hurdle rate for a hedge fund and is an incentive for hedge fund manager to push average returns higher.
 
How does a small investor gets to invest in a Hedge Fund ?
 
Answer is Fund of Funds. You can compare them to a Mutual Fund which invests in different securities/scrips of companies. Similar to Mutual Fund an Fund of Funds invests in a selected list of Hedge Funds based on it’s investment strategy. Thus a Fund of Fund(FOF) can be Sectoral FOF, Fixed Income arbitrage FOF, Diversified FOF etc
 
As expected a Fund of Funds reduces the diversification/unsystematic risk. Funds of funds generally charge a fee for their services, always in addition to the hedge fund’s management and performance fees, which can be 1.5% and 15-30%, respectively. Fees can reduce an investor’s profits and potentially reduce the total return below what could be achieved through a less expensive mutual fund or ETF.
 
What is the difference between an Hedge Fund and Private Equity(PE) ?
 
Although both these funds invest for higher growth oppurtunities and are lightly regulated, they have opposing view of investments. Hedge Funds invest in different securities including debt of PE funds and are always looking to find capital appreciation in short term, Private Equity Funds invest primarily in very illiquid assets such as early-stage companies and have a broad long term view of investments. Hedge fund investors generally are able to withdraw their investments more frequently than private equity fund investors who are locked in for longer periods. Hedge funds value their investment on Mark to Market basis whereas PE value using long term valuation methodoligies like NPV,IRR etc. For more details you can look here. (more…)

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A subject that was perceived to be bulky because of the names of Kotler, Drucker,titles with “father of marketing” and “son – in – law of new strategic techniques” holding lots of thoughts filled with inertia in mind was just broken at the beginning of very few sessions by Prof. S.K Palekar. Why go for a customer analysis at Andheri station or at CST flying trains? Taking the liberty of rationalizing the proverb “Customer is GOD” implies me GOD is everywhere, that’s says even inside the manager a customer is there. It started in SPJIMR as a very interesting subject that needs introspection of the Manager to identify himself as a customer first.
Professor Palekar addressing queries.

Professor Palekar addressing queries.

For the first time I learned that equations can be made for any subject to make it more comprehensive when the Prof simulated discussions with “Bone for a dog and chocolate for a girl friend concept”, while taking decisions. The comic example has changed to an emergency formula at the end of the day to arrive at serious decisions. The subject was made lighter and with examples from Philips, Panasonic, Caterpillar, Maggi, Tata steel and of course never to forget Fitted kitchens was just engrossed in the minds of the participants who had an average experience of 60 plus months. There was an absolute abstract feel among the professor and the participants as the class can really think of the concepts in the industry and correlate the theories rather than simply believing E=mc square where m holds some infinite decimal values and God knows who found it. This can be only achieved in a B-School with a fantastic mix of experienced professionals, but I make a point humbly that I am not underestimating freshers here. The assignment based on the verticals allotted, made some ownership of the organisation which I did in my presentations. The so called MS ppts stands before me like some monuments and sculptures involving lots of discussions, debate and infact it has increased the revenue of the night canteen as people finally get settled their arguments with the cup of the tea and you can name it rather “tetley of versailles”. But I am really proud to say if the organisation I am alloted (Tata sky) gets an oppurtunity to see my presentation which we did in group, they may really understand “who am I”? and “what question or comment I am putting before”!

So in a hint I can say that marketing is just about common sense and rest are non sense if you come up with some fourty arrows peeping into twenty boxes which finally perplexes with overdoses and side effects of concepts leading to Ph.D ( permanent head Damage).

To sum up, the session was a superb insight of real marketing practices in four simple steps, crystal clear, pragmatic and I bet neither a Kotler nor a Drucker (hope they don’t mind) can compete in installing these powerful concepts in those minimal duration where a balance between sharing new things and retrospecting past experience is required.

Really a fantastic course organised with the support of the symposium like Buzaar etc etc which made an impact to market me the subject as an experiment and I take this article to be an endterm paper rather than the other one I gave earlier.

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