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Showing posts from May, 2007

India's Edsel Mistake

Reading through Simon Robinson's 'India Without the Slogans' in TIME, I could sense a danger for India : Edsel.

Well, Edsel as in Ford Edsel, one of the most famous examples of over-hyping, effectively advertising a product and raising expectations before the actual product completely failed to match expectations.

There is lot of talk on India now. Incredible India! As Robinson mentions, this years World Economic Forum meeting was replete with 'India Everywhere' advertising. India is moving up the chain : it is no longer hyphenated with Pakistan, implying its self-destructing conflict, but with China, underscoring its emerging economic might. Indian businessmen are on a global buying spree, Indian companies are hugely successful in IT, real estate prices are going through the roof, salaries are rising, there is a clear optimism in the air.

But, for all this, one wonders whether India is selling ahead of itself. Robinson talks about the age-old Indian problems of infra…

Alfred Chandler

Alfred Chandler passed away last month.

It's funny that I chose Alfred Chandler as my nickname on Second Life. Playfully, I wanted to be the business historian of the Second Life businesses :-)

However, having lived in the age of Internet, I am an worshipper of enterprise. For me, managers are outdated and out of touch, and completely incapable of leading because the environment is fluid and expectations are uncertain. For me, the entrepreneur is the hero.

Chandler had just the opposite view. For him, managers were real heros. They were the value creators. He saw it at the pinnacle of the industrial age. More importantly, he worked it out with Alfred Sloan and GM, which needed all of Sloan's efforts after living on the brink under William Durant's management by the seat of pants.

Chandler is also remembered for his contribution on strategy thinking. He is remembered for his studies of strategy and structure, which is ever more relevant today, when the companies need to reasses…

The Eleventh Force

Thomas Friedman can be rightly called the Cheerleader-in-Chief of Globalisation. His unending enthusiasm, coupled with his great capacity to observe only the sunny side of things, makes his books a kind of sugary-syrup, something that feels good and cheerful while it lasts.

Whatever my attitudes towards his books, here is something I wanted to add to one of his lists.

He lists - in his 'The World is Flat' - 10 great flattening forces of globalisation: namely, 1. Walls coming down [Berlin Wall]; 2. Connectivity [WWW]; 3. Work Flow Software; 4. Uploading [Open Source Software]; 5. Outsourcing; 6. Offshoring; 7. Supply Chaining; 8. Insourcing; 9. In-forming [Web Search]; 10. The Steroids [Digital, Mobile, Personal & Virtual].

I wanted to add another, the eleventh, English Language.

If it was commerce that led the first and the second wave of globalisation [Globalisation 2.0 as Friedman calls it], it is global communication and cultural infusion and uniformity will lead the next. …

The Morality of Profit

In most societies today, making profits are accepted as moral, if not especially praiseworthy. This was not as obvious as it appears today – people used to be embarrassed about making a profit not so long ago.

Crazy as it seems today, it is worth thinking why it was so.

Profits, as economists will put it, is the reward for risk-taking, for putting a business enterprise together in the pursuit of an objective. In this definition, remember, profits are not what it is commonly understood to be – the gross middle-line towards the bottom – but a figure net of entrepreneur’s earning [wages for his labour], dividends and interests on borrowed capital, and provisions for building and other physical assets [a sort of rent, offsetting what these assets could have earned if leased out]. This pure profit – surplus – accrues to a business as a reward to its organisation, for the act of entrepreneurship itself.

Economists were divided on how this surplus comes about. The conventional wisdom was, as I …

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