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If you are a company doing business in the developing world, chances are that you are not far away from poverty in a very basic form. You cannot, and should not, be an island behind electrified fences. And at the same time, its not your job to solve global hunger. What can you do ? What should you do ? You are doing something, by the very fact of your existence. You provide jobs to people. There is no better way of fighting poverty than that. This is the greatest good that companies can do. Locational choices on where to operate are dictated by a whole host of considerations – nearness to market, availability of inputs, government incentives, cost structures, etc etc. I suggest that one more criteria be added – poverty around the location. Other things being equal, go to a place with higher poverty. Perhaps go to places where others haven’t been. Go outside of the big cities. This isn’t an ideological rant. In my business life, I’ve been part of many many locational choices. Our best d

I’m posting a few pieces on Corporate Social Responsibility in the developing world. I had posted my views on what companies should NOT do here and what they could do here , a few months ago. I’m picking up the theme in relation to the developing world, because the circumstances and the maturity of CSR are , I believe, different in the developing world. In my book, the first role of a socially responsible organization is to follow the law. This is not so simple in the developing world as it might seem. The first question is “what law ?”. The laws of the country you are operating in ? The laws of the country you are headquartered ? You say it should be the law of the country in which you are operating in. But what if the law is silent on something which is taken for granted in other parts of the world – say for eg pollution. If the standards are lax in the country , would you follow only those standards, or would you follow those in the developed world ? Is "pollution outsourci

Yes, I know, it’s the blogger’s equivalent of kicking the dog. But you aren’t human if you don’t do it once in a bluemoon. Not so long ago, when my blog had a readership of 1 (myself), I wrote, or I should say more accurately I copied, my first weekender “non businessy” piece. I was reminded of it when reading a very nice post by The Thoughtful Train on Solomon Asch’s experiments on Conformity. I am no psychologist, but this came to mind on reading her post. And I am much flattered by a very kind and large hearted blogger friend A Journey called Life who is egging me on to do “non businessy” stuff. So please forgive me. It’s a lazy Sunday morning. The moon is blue today. Here’s an old piece titled The Violonist at the Metro .

I read an interesting and short piece on leadership styles in Tom Peters’ blog – a nice post by Madeleine McGrath. Click here – it’s a lovely little post. What do you think ? This is classic Theory X and Theory Y. Can one leadership style exist to the exclusion of the other and promote excellence in the long run ? I am firmly in the camp of “yes, only one style really works in the long run”. But this post set me thinking. What do you say ?

When will the world come out of recession ? How will the recovery look like ? Questions that are in our thoughts all the time. Self appointed experts are falling over themselves predicting the answers to these questions. The flavour of the month seems to be to characterize the recovery after an alphabet. Some economists are predicting a ‘V” recovery – a straight rise after the steep down. Other think it will be a “U” – down, flat and then up again. Nouriel Roubini , an economist noted for being one of the few to have thought a recession was coming before it came, thinks it will be a “W” . As economists have to invent a term for everything, this will be a “double dip” recession. Now Sir Martin Sorrell, chief executive of WPP, an advertising giant, thinks it will be a “L”. Unfortunately, humility has not been a particular virtue of economists. The least they can do, after failing en masse to see a recession coming, is to keep quiet in penance. No. They are loudly proclaiming their abili

A few days ago I posted on the Cash for Clunkers scheme that is just closing in the US (Click here ). In the post, I jokingly asked the question – “Why not cash for clunkers for TVs, washing machines, dishwashers, or for that matter, kidney machines”. It turns out that this wasn’t a joke. Or else somebody in the US administration is reading my blog (Ha Ha). There is such a scheme coming – Cash for refrigerators . Usual rubbish being given on improving energy saving. Cost ? Some $300 m. It IS becoming a joke. What next ? For some prosaic speculation, click here . Where will this all end ? The wallet is empty. You are borrowing from your children. And then recklessly spending like this . When the history of our generation is written, it shall be said of us – that was the most irresponsible, reckless generation in all of human history; a generation that committed the unpardonable sin of bankrupting its children before they were born. The United States Constitution is the one of the most d

Well, if General Motors can file for bankruptcy, who is safe ? This recession has been brutal to famous names from the past. Lehman Brothers has vanished. GM and Chrysler went into bankruptcy and are emerging with large parts of them brutally chopped. When the dust has cleared, there will indeed be a new world where many of the familiar faces are gone. That’s the way it should indeed be. The fittest should survive, shouldn’t they ? Buts it's still a sad day, when an icon like Reader’s Digest totters. They filed for Chapter 11 bankruptcy protection yesterday. They aren’t going out of business; at least not yet. The Chapter 11 filing is only for the US business; not for their operations in the rest of the world. And they’ll continue to hit the stands – Chapter 11 does not mean you stop operations ; it just means that you get some breathing time and space from the creditors hovering outside and have time to restructure. But for sure, the old Reader’s Digest is gone. What emerges out o

You drive on the left side of the road in some countries and right in others. Except , of course, if you drive in India where you drive on the left, right, up, down, under, over, fifth dimension, whatever. Now this is no big deal. Except for some some confusion if you travel between countries which practice the opposite system. Typically in the UK and its former colonies you drive on the left. And in Japan. Everywhere else you drive on the right. Why this is so, is history – if you are really interested in how this came to be, click here . As is the reason with everything that is non standard in the world – voltages, plug pins, mobile frequencies, etc. There are however a few countries in the world which decide to change ! Now , why they do this, is beyond comprehension. But they do. Nigeria was one famous case decades ago (left to right) – easy to speculate why ; some car companies must have made some people very rich. Since 1970, things have been pretty much stable. But on Sep 7th, t

The desire to monetize online news is leading some to enthusiastically promote micropayment systems. A number of the leading newspaper sites are leaning toward a cooperative payment system that will allow readers to use a single account to access material at the leading papers. Such a system will not be technically difficult to implement, but getting the price right will be a significant challenge because of transaction costs and significant differences in the economic value of articles. To create the best industry wide effects, a micropayment payment system would need to include as many papers as possible (see "The Challenges of Online News Micropayments and Subscriptions" http://themediabusiness.blogspot.com/2009/05/challenges-of-online-news-micropayments.html ). The fact that a consortium is currently being sought only among the major players illustrates, however, that such a system would be cost inefficient because content from smaller papers would attract fewer transacti

This is a business blog – where “weighty matters” are thoughtfully commented upon in a classic and serious style, that demands wearing a suit when typing out the post. And then comes a tag. Now readers of this blog know that I convert tags into a businessy one and still post wearing a suit. But then Rads is a cheeky girl. She says she loves tagging people like me as we go to great lengths to keep our blogs “one dimensional” and don’t reveal any personal stuff. ??? Now that is a challenge. How can one ignore a “challenge” from the one and only Rads. So taking a break from wearing a suit, I’m wearing Bermudas instead and opening my heart out !! All personal stuff. No business. Deep breath. Here goes … 1. What is your current obsession? Easy one – Blogging 2. What are you wearing today? What else will a man wear ? A trouser and a shirt. Oops sorry; I’m supposed to be wearing Bermudas. 3. What’s for dinner? Roti, Dal, Sabji – all made by myself ! 4. What’s the last thing you bought? Afrai

Germany started this and other countries picked it. The US had its “cash for clunkers” programme this month and is closing it on Aug 24 after “a wild success ”. Cash for clunkers, is a dole the US government gives Americans for trading in their old car and buying a new one. The subsidy that Uncle Sam is willing to give could be as much as $4500 per car. The US government has just spent $1.9 bn on it. In Germany, it was “successful” in that auto sales went up by some 20% or so. It is estimated that it cost Germany some $ 3.5 bn and it is claimed that it saved “thousands of auto jobs”. The moral justification under which politicians have sold this idea is that carbon spewing clunkers will be replaced by fuel efficient cars and that this is helping the environment. Balderdash. They are doing this because its wildly popular as everybody loves a subsidy, if its given to them. And in car crazy countries like Germany and the US, that's pretty much everybody. I can’t fathom the economic r

The ten most valuable companies (in terms of market capitalization) are (see my separate post on this here ) 1. PetroChina (China) 2. Exxon Mobil (US) 3. Ind & Comm Bank of China (China) 4. China Mobile (China) 5. Microsoft (US) 6. Wal-Mart (US) 7. China Constr Bank (China) 8. Johnson & Johnson (US) 9. Proctor & Gamble (US) 10. Royal Dutch Shell (UK/NL) Now look at the list of the ten wealthiest persons in the world (Source Wikipedia ) 1. Bill Gates (US) 2. Warren Buffett (US) 3. Carlos Slim (Mexico) 4. Larry Ellison (US) 5. Ingvar Kamprad (Sweden) 6. Karl Albrecht (Germany) 7. Mukesh Ambani (India) 8. Lakshmi Mittal (India) 9. Theo Albrecht (Germany) 10. Amancio Ortega (Spain) These two lists say something about China, and India. China dominates the first list; a sign of the times. However it is completely absent from the second list , upto the Top 100 ! India does not figure in the first list anywhere, even in the top 100. But a number of Indians are on the second 100 li

I received another letter from the Google Book Search Settlement Administrator this week informing me that my rights will be affected by the proposed settlement of the class action suit against Google for copyright infringement by scanning books and other publications. I have been a de facto part of the class action lawsuit because I am the author of numerous books, chapters, and other publications affected by Google’s decisions to scan and sell copies of materials still protected by copyright. The settlement has been supported by the Association of American Publishers—which represents major publishers—because it protects their interests, but it is opposed by the National Writers Union and the American Society of Journalists and Authors because it seriously degrades the rights and interests of those who actually write the content. The split between publishers and authors is not surprising because anyone who has observed the uneasy relationships between musicians, authors, scriptwriters

Concluding a sequence of posts on HR with a defence of the people who run that function ! I’ve been unduly harsh in some of my earlier posts – to be fair, there’s much to be said about what they do well too. HR is the most difficult function in a company, in many ways. In, say finance, 1+1=2 – you can’t argue about that. When it comes to dealing with people, as we all know, 1+1 is never 2. How do you deal with something that’s essentially unpredictable ? Its very sexy to say we should have freedom , no rules, and openness. But the dividing line between freedom and anarchy is a thin one. Take travel expenses. Put a hand on your heart and say that you have never ever mixed personal stuff with official work and claimed it. Never ? We do this even when the Nanny is watching. Imagine if there’s no Nanny. The world isn’t full of Mahatma Gandhis whose iron self discipline can obviate the requirements of rules. For lesser mortals like us, the rule book is inevitable. Why the complexity ? Its o

Its really tough to figure out what “culture” is. In a company. Just like any group of people - a community, a village, a country, or a race, - has a “culture”, so does a company. But its often very different from what the leaders of a company want us to believe. Culture is a way of behaviour that characterises many of the people in a company. It develops as a consequence of a series of events in the company’s history, from the behaviour of its leaders, from the nature of people it recruits, and from what sorts of behaviours are actually rewarded and encouraged. Companies tend to list a series of “values” that define their "culture". These are often motherhoods – mom and apple pie that that are quickly ignored. Companies usually list too many values – some seven or eight of them , which are all utopian in nature. These are impossible to achieve. One or two of them will predominate, which may not at all be one of the seven “official” ones. Companies’ official statements of cul

One of the most exciting developments in journalism is the widespread appearance of online news startups. These are taking a variety of not-for-profit and commercial forms and are typically designed to provide reporting of under-covered communities and neighborhoods or to cover topics or employ journalistic techniques that have been reduced in traditional media because of their expense. These initiatives should be lauded and supported. However, we have to be careful that the optimism and idealism surrounding these efforts not be imbued with naïveté and unbridled expectation. All these initiatives face significant challenges that require pragmatism in their organization and sober reflection about their potential to solve the fundamental problems in the news industry today. We need to recognize that these online initiatives are not without precedent. We can learn a great deal about their potential from other community- and public affairs-oriented media endeavors. Community radio, local p

Every year, the second leg of the soap opera (see previous post for the first leg), is the drama over the increase in remuneration for the employees. If there is one person, everybody in the company loves to hate, it’s the guy or gal titled “Remuneration Manager”. Many years ago we had a worthy in the company I worked in. It was widely known that he had AIDS (now that was the time when AIDS first surfaced – OK OK I know it was a long time ago). The “news” caught on like wildfire. It became so widely known that the originator of the rumour had to issue a clarification that he meant Annual Increment Deficiency Syndrome ! Some very involved research study is done and the recommendation is made that the average increase should be 3.97%. This goes through at least 27 layers of approval. If it’s a foreign company, it goes right upto the HQ , wherever it is in cuckoo land. Imagine some firang/waiguoren, who can’t point out your country on a map, deciding the rem of Miss Rajalakshmi / Wang Xia

Once a year (at least), in every company, a special event takes place. Its something everybody dreads, but know it has to be gone through. Its called the annual appraisal (OK you can choose more politically correct terms; maybe “performance management exercise”). Ingredients to this event are many. Firstly an incomprehensible and long form to be filled. The form has been “simplified” this year – shudder to think how it was last year. The boss puts it off for as long as he can. He has 25 subordinates and he recoils with horror at the thought of filling 25 forms. Each employee thinks he was the star performer of the year and deserves the highest rating and the largest raise. OMG. But the focus of this post in on HR. So lets assume it gets done somehow. This is the moment the HR function is waiting for all year. For a few weeks, they are the most important lot in the company. They are burning the midnight oil and feeling happily overworked. Now to the fun and games. HR loves to “normalis

Every organisation has a “Bible” – the HR Policy book. Its called by a variety of names – HR manual, Policy manual, Employee handbook, Red book, Blue book, Green book, whatever …It’s a bit like the Constitution of a country. You have to abide by it, or else a trial will be held and you will be punished. It is also the document that creates a lot of angst amongst employees. For, unlike a constitution, it usually only says what you cannot do. And its pretty inflexible and is aimed at the lowest common denominator. The book grows with time to become a monster because new rules get added all the time and nothing is ever deleted. New rules come because loopholes may be discovered (somebody might have exploited them) and they need to be plugged. A bureaucrat’s mindset is nurtured whereby “job satisfaction” , even bliss, is gained by discovering or anticipating loopholes and plugging them. The section that creates the most heartache is usually the travel policy. Elaborate rules are framed th

First impressions matter, right ? Your first impression of the company is usually when you come for the recruitment interview. What sort of an experience of the place do you get ? It goes something on the following lines. You arrive a little early, not wanting to be late. You get stopped by security who has no idea of your coming. You produce your interview letter. He checks on the phone. He then lets you in to a reception area. You sit down with twenty others who have all come for the same reason. Awkwardly you squeeze between two others for the only millimeter of seating space available. You wait. And wait. And wait. And wait. Finally one hour after the scheduled start time, a guy walks up and hands you a form to fill. You deposit that and wait. And wait. You may then be called for a silly test. You finish that. And wait and wait. Its now 3 hours since you came. You would like a nice cup of tea. Fat chance. You keep waiting. Then suddenly you are called for the interview. You rush in

Success in businesses is not the result of highly mysterious factors. To be successful an enterprise must offer a product or service that people want; it must provide it with better quality and service than other providers—or at a lower price than competitors; it must change with the times and demand; and it must never forget to focus on customer needs rather than its own. And a limited number of competitors helps. Duh. Many journalists have trouble understanding these principles, however, and we were treated to 2 classic stories in which journalists breathlessly announced this discovery over the weekend. The New York Times told us about the “resurgent” Seattle Times. The Times is starting to reap the fruits of monopoly caused by the demise of the print edition of the Post-Intelligencer and the stabilizing economy. It has picked up most of the print readers from the P-I, raised its circulation prices, and been able to keep the higher ad rates that were charged when ads were put in both

If a company told you that you can take a vacation whenever you want, and for however long you want (paid of course), what would you say ? Unbelievable ? There can’t be a company like that ? Think again. There is a company like that. And a pretty successful company, so far. Welcome to Netflix . Their logic is simple. People act responsibly when given the freedom. After all nobody tells you that you have to work for more than 8 hours; or on weekends. And yet you do. Netflix says if its not monitoring exactly how many hours you work in a day or how many days a week, why should it “monitor” how many days vacation you take. Interesting point of view, eh? Netflix’s presentation called “Reference Guide on our Freedom & Responsibility Culture” found its way into the internet. Click here for a fascinating read. It’s a 128 slide long presentation – but don’t be intimidated by the size. These are simple slides and a quick read. Every company would do well to read it. Here are some interesti

Which is the world’s largest company by market capitalisation now ? No don’t look – just guess. Lists of the worlds most valuable companies, largest by sales, etc etc are always dodgy – they rarely represent the truest picture as there are simply too many factors that aren’t common around the world for such comparisons. And they change all the time. But the latest list does produce some telling commentary on the way the world is headed. This is the top 10 in terms of market capitalization as of last week (Source : Bloomberg) 1. PetroChina (China) 2. Exxon Mobil (US) 3. Ind & Comm Bank of China (China) 4. China Mobile (China) 5. Microsoft (US) 6. Wal-Mart (US) 7. China Constr Bank (China) 8. Johnson &Johnson (US) 9. Proctor & Gamble (US) 10. Royal Dutch Shell (UK/NL) The obvious thing that stares in the face is the appearance of China at the top half of the table. Granted, the stock exchanges there have gone wildly up, with every indication of another bubble, that the govern

I had some superb experiences with Air India - the erstwhile Indian Airlines part of it - during my recent trip to India. Readers of this blog would remember that I have been scathing in criticizing Air India here . But praise must be given where its due. So here goes. I flew Air India on two extremely short haul domestic sectors last week. Had a brilliant experience on both flights. Fares were the lowest amongst all airlines flying that sector. Check in took 2 minutes. Both flights were far from full; so had empty seats next to me. The aircraft on this route was one used for international sectors – spotlessly clean, brightly coloured seats with individual TV screens even in economy. Both flights took off 15 minutes before time (now that’s a first. I have never ever experienced flights departing before time). The cabin crew were smartly dressed and very courteous. Even on the very short haul, there were nice snacks. Courteous enquiries as to whether they could get anything else. The sm

Mindless bureaucracy, popularly called the neta babu raj, is alive and kicking in India. It seems to be deeply embedded in the Indian psyche. India’s economic reforms started the dismantling of the neta babu raj, but its so powerfully entrenched that it seems to refuse to go away. Some random experiences on this trip to India. There seem to be very few internet cafes around. To get into an internet café you have to show a photo identity card and then enter all sorts of details in a mind numbing register. That’s the law, presumably to dissuade terrorists , who have used internet cafes before to spread evil. The mind boggles at the thought process of a bureaucrat to frame such a law. And how pointless it is. I have to change addresses in a whole host of places and register that I am a Non Resident Indian. Two years after I moved to China, I am still at it. In each place, you have to produce an insane amount of documentation to prove the address change. It seems perfectly acceptable to th