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Wednesday, June 17, 2009

THE RISE OF ACTIVISM...


The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School

Investor activism was always there, Satyam witnessed what shareholder activism can do, and now DLF, to its peril, is feeling the heat of ‘buyer activism’ says Gyanendra Kumar Kashyap


When Ramesh, after a 15-year long and successful career in Europe, finally joined a company in India four years ago, he introduced a number of changes in his company’s modus operandi. He faced no hurdle in getting them cleared from the stakeholders then. But today, he is having difficulties in implementing new changes. Looking at the shareholders opposition, the first question that comes to his mind, “Is this the same India where I always took shareholders for granted?”

Welcome to a new era Mr. Ramesh and all those management personnel who never ever expected Indian shareholders to come forward and actively use what their rights are. Yes, ‘passive investors/shareholders’ are a passé now. The new breed of investors/shareholders/buyers are set to change the corporate dynamics with their measured yet pointed agitations. Many may consider this as an impact of the prevailing market dynamics (read: slowdown), but then don’t we know that in recession lies the seed of revival of both the market as well as corporate governance. And perhaps, the slowdown this time has taught the shareholders to be active rather than being passive and showing their discontent by just selling shares. They have understood, the hard way though, that passive discontent neither serves the purpose nor does it creates an impact on the management. Now when their investments are touching new lows on a daily basis, investors are ready to question a number of corporate decisions.

Peter Paul de Vries surely is an unheard name in the investor/shareholder/buyer activism domain in India. But as the head of the Dutch shareholders association, VEB; his success, in dragging ABN AMRO’s management to the court for bypassing shareholders while selling one of the bank’s most attractive assets, must have inspired many at Satyam, Subhiksha, Hiranandani Group et al. Though not new in the West, there have been rare instances in Indian context when investors/shareholders/customers have posed tough questions, let alone the concept of dissent. But times are finally changing and changing for the better. Thanks to investors like IL&FS, IFCI Sicom, ICICI Venture, Azim Premji’s trust, and Laxey Partners et al, for their activism, fraudulent nature of many promoters has been exposed. Had it not been for the institutional investors’ opposition, Satyam’s proposal to acquire Maytas Infra and Maytas Properties would have been cleared creating yet another classic case of ‘unnoticed’ corporate fraud. Similarly, ICICI Ventures, QVT Financials and Laxey Partners played the role of whistle-blowers for Subhiksha and Hiranandani Group, respectively.

But then, retail investors are still apprehensive in taking on the powerful management/promoters, owing to the complexities in regulations and the huge legal costs that come attached with such acts. However, for a change; what has taken the entire nation by surprise is the uprising of buyer activism, an off beat phenomenon till recent past. In the Indian domain, where buyers are unorganised and are meek to take on the promoters, buyer activism heralds the beginning of a paradigm shift. It certainly marks the beginning of the end of passive activism on the part of the buyers. Definitely, corporates who in their good times, rarely paid heed to buyers are all set to face the music of buyer activism.

OMR; oh, please don’t read it as Optical Mark Reader, we are referring here to Old Mahabalipuram Road (Chennai), the new hot seat of the uprising buyer activism. DLF, which is developing the Garden City Project in Chennai has been literally forced to dance to the tune of the falling market as well as the new enligtened buyers. It is a classic case of the paradigm shift that is slowly yet steadily gripping the market. Once during the good times DLF and the likes dictated the terms and as an antithesis, in times of market meltdown now the buyers are getting the things done their way. The builders who had been milking the buyers for too long with overnight double digit price rise have been literally forced to give in to the demands of the buyer.Market reports state that the DLF is willing to reduce the price of its apartment by as much 10-30% in Chennai and Bangalore and is repricing its Hyderabad project by slashing approximately 50%. But buyers argue that the new prices too are very high. However, analysts expect that this move from buyers and price cut from DLF may force many other developers to cut prices between 25-30%. Ashish Bhalla, MD, Millenium Spire, avers to 4Ps B&M, “It is an unprecedented event and has grabbed wide attention. What is noteworthy is the fact that forcing price cuts and threatening to exit cannot be considered as an aberration.”

Buyer activism may be a common phenomenon in the developed countries, but certainly, as buyers realise their power, with time the voice against their exploitation will only grow stronger and louder in India. DLF is just an eye-opener. So, Mr. Ramesh, the next time you prepare a proposal don’t even dare to underestimate any one be it the investors, shareholders or buyers.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
Detail of all IIPM branches
IIPM set to beat economic slowdown
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Rashmi Bansal Publisher of JAMMAG magazine caught red-handed, for details click on the following links.

Tuesday, June 2, 2009

What were you thinking?!


The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School

That brought us to the people conundrum of Ignitee. It all reached a Collinish tipping point during the time when Atul was roped in to becoming a board member around a year ago. That was the time when the agency went through ‘an internal structural change’ – well, read it as ‘many exits from the organisation’. Fighting fire with a washing machine, the agency on a double spin not only went into a critical recruitment drive and roped in well experienced and respected people directly from the ad fraternity – like S Dharmarajan (Vice President for online media), Ashok Karnik (Executive Creative Director) and Sandy Pinto (Senior Vice President for Business Development & Client Services) – but also promoted key personnel, like Harminder Kaur, who was promoted to the post of Chief Strategy Officer.

My issue was with the fact that till last year, the agency did not have even an HR department. That is not to say that an HR department is supremely necessary – as many excellent performing companies have specific staff who double up as HR personnel – especially in companies like Ignitee, where the gross staff base is just around 100 people (they do plan to hire 50 more in the next six months). The agency, to its brilliant credit, has even launched a new venture cell known as SPARK, which is a cell wherein employees can post their innovative business propositions; and if the jury likes their idea, the employees get a platform to jumpstart this venture from within the organisation’s aegis. There is no taking away the fact that such an orientation is only possible in agencies that are fanatically oriented towards taking care of their employees.

Notably, the agency is instrumental in introducing some of the largest brands to the digital medium; glowing examples being HDFC Bank, Satyam, DLF, Religare, Tata Corproate, Birla Sun Life Insurance, Yamaha, CNN, ICICI Prudential, ICICI Home Loans, ESPN, Jet Airways, Reliance Life Insurance, Tata Motors, Tata Indicom, NIIT and Microsoft. Even in the offline domain, the agency is making its own niche waves (as was seen in the Kids Zee commercial), though they still have their major revenues from the online space only – ‘Media’, ‘web development & creative dialogue’, and ‘search’ contribute 40%, 30% and 25% respectively to the overall revenues of the agency. And with the Incredible !ndia account, the recent Congress Rajasthan & Delhi internet campaigns, and Kerala tourism projects, Ignitee has solidified its stamp in the net space. Add to that Ignitee’s brilliant growth plans and new branches (Hyderabad and Dubai being the recent additions) and one starts questioning the extra ‘e’ in their splendiferous name less and less. Well, if Ekta Kapoor can get away with the extra ‘K’s, then what do I and Oscar Wild care about an extra ‘e’, forr ggod’s sakke!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
Detail of all IIPM branches
1500-plus IIPM students placed across the country with 44 bagging international offers

IIPM set to beat economic slowdown
IIPM Admission Detail
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON

IIPM : EXECUTIVE EDUCATION


Labels: , , ,

Rashmi Bansal Publisher of JAMMAG magazine caught red-handed, for details click on the following links.