Wall Focus-119

(News collection for Management studies)

Volume: 02           Issue: 119         01-November, 2010 – Monday Pages: 8

Focus :  Customer Relationship Management
Satisfying customer needs – Customer service excellence needs to be an obsession.

What needs should sales and service providers satisfy to make customers happy?

We want to be respected. We want to feel acknowledged as a person and for what we are. Being ignored or being seen as an intrusion is something none of us like.
If the salesman is taking time to understand the customer instead of jumping to sell a product, it makes the customer comfortable and builds confidence in the salesperson.

Make the customer feel important.

The selling is about satisfying customer needs and that customers have two types of needs to be satisfied – physical or tangible need and personal or psychological need. Retaining customers is about going beyond mere satisfaction ion. It is about making them happy and delighted so that they want to come back.

Let us see what needs sales and service providers must satisfy that will make customers feel good and happy.

These are fairly basic human needs and apply to all whether young or old, rich or poor, man or woman. I believe these are very basic after the roti, kapda, makaan needs. We will also see that these needs are interrelated and the solution to all is almost common. While there could be many personal needs, I would categorise them into four broad categories with the understanding that most other needs would fall into these categories.

Customers want to be respected  - We want to be respected. We want to feel acknowledged as a person and for what we are. Being ignored or being seen as an intrusion is something none of us like. We need to ask ourselves how often we do this in our interactions with customers or colleagues. What can service providers do to show respect? A lot, which is quite simple really.

We show respect by attending to a person. When we are talking to a person and we get distracted by someone else or receive phone calls or look somewhere else or do our own work like writing or working on a computer terminal, what we are really showing is a lack of respect for the person in front of us.

In today’s context, we have an even more common and yet a really unacceptable situation. A salesperson sits in front of a customer (I will change it to - a person sits in front of another person, as this can be any personal interaction context) and while one person is talking (the customer), the other person (the sales or CR person) takes a call on his mobile or plays around with SMS. I believe this is downright rude and shows total lack of respect for the other person. Adding insult to injury, it never ceases to amaze me that I find so many sales/service people meeting me after an appointment they have sought, and then in my office, on my time, take calls on their mobiles for doing some of their business.

I have now learnt to tell people who come to see me on sales calls to switch off their phones while they talk to me in my office on my time. I am the customer. What amazes me even more is that companies spend a large amount of money on service training and customer handling and do not drive home these basics. Respect, as I see it, is to focus on the person we are dealing with and give undivided attention to him or her.

I have also not understood why customer-facing people get interrupted by other colleagues and telephone calls. In my book of rules, this is unacceptable. This should be part of Customer Service 101 in any programme.

Customers want to feel important  -Leading from this is a similar need – we want to feel important. When a customer deals with a salesperson, she likes to believe she is the most important factor in the success of the salesperson and the company. What can we do to show that she is important and that we value her business? Quite simply, as we saw above, by respecting the person.

How often do we find ourselves as a customer standing in front of a sales or service person, and the person not even looking up and acknowledging your presence? True, the person behind the counter or desk may be busy or with another customer. Can he still do something meaningful to acknowledge the other person without upsetting the person he is dealing with? A smile, a nod to show that he has registered the customer’s presence, is a good enough place to start. Or a short and pleasant ‘will be with you in a while’ and ‘thanks for waiting’ shows you value the customer and her presence.

As a salesman, I have found many simple ways of sending the message across to the other person that he is important and that I value his time. If I meet a customer in my office, I would consciously clear my table of papers and material so that there is no clutter between me and my customer. I may also tell my secretary or the operator to hold all calls for the next few minutes as I would not like to be disturbed. These actions cost me nothing but I believe they give me a lot in terms of building relationships with my customers. I need to send the message to my customer that he is important and I respect his time. There are many other such actions we can take.

Another simple step is to thank the customer for her business at the cash counter and hope you would see her again. Most people at cash counters do not even look up at the customer. In fact, most often I find myself thanking the cashier after my purchase – essentially for giving me the change due to me and letting me get away from the shop.

Customers want to feel understood  -We want to feel understood. Any customer talks to a salesperson because he or she has a need that is to be satisfied. The customer has so much choice that often she is confused and not sure she is doing the right thing. She also fears that the salesperson’s job is to sell whatever they have and not necessarily what is best for her. A customer thus wants reassurance that she is dealing with a person who understands her needs and will recommend a solution that is best suited for her. The salesman is, in fact, like a doctor in this situation. The patient (customer) has a pain (need) and the doctor has to prescribe the right medicine (the product, solution) that will remove the cause of pain. What does a good doctor do? He sits the patient down, asks questions, listens patiently, looks at symptoms, understands the patient’s issues, does an examination and then writes out a prescription.

How would a patient feel if he tells a doctor he has a stomach ache and the doctor immediately writes out a prescription? He would feel uncomfortable and wonder how the doctor could give the right prescription when he has not even taken the trouble to understand the problem.

On the contrary, when a doctor asks questions and takes time to understand, the process itself makes the patient feel comfortable and very often half the pain seems to disappear! This is exactly how a customer feels when he needs to buy something or has a problem with a service rep.

The fact that the salesman is taking time to understand the customer instead of jumping to sell a product makes the customer comfortable and builds confidence in the salesperson. I find this is very relevant for service and complaint-handling departments where anxiety, anger and emotion levels are likely to be high. Customers want to be reassured that you are making the effort to understand the problem so that you are likely to give the right solution. This makes the customer comfortable.

Customers want to feel comfortable  -This brings me to another need – we want to feel comfortable. We want to feel easy and not pressurised when dealing with others. As I see it, being comfortable is the end result of having other needs met. We can see from the above that if a customer feels respected, important and understood, she will be comfortable with the salesperson. When we are comfortable and at ease with the salesperson, we are happy and want to come back to the same person.

Make customers WANT to come back  -Interestingly, a few simple steps would satisfy the above needs very easily. In fact, one simple step alone will largely satisfy the above needs well – being a good listener. Remember, we all have personal needs and simple actions can satisfy these needs and make us happy. It costs nothing really but there is a lot to gain. We all want to deal with people who make us happy. When a customer is happy, she wants to come back to the same store, bank, dealer or shop.

As Stew Leonard Sr., of the American Stew Leonard’s chain of supermarkets, said, “When a customer walks into my store he does not ask what I can do for Stew Leonard. He asks what Stew Leonard will do for me.” What Stew Leonard knew was that he had to make the customer happy. Happy enough to make the customer WANT to come back. That is the secret of building customer loyalty. Not very difficult is it?

(Ramesh Venkateswaran-The writer is Director, SDM Institute for Management Development, Mysore.)

SPECIAL FOCUS – Books - Manage Mentor
Lead but don't forget to manage ( Collected by K.Mounika- 09D61E0030)

Leadership Secrets
Michael Heath

Bosses who are chronically impatient may not like to know that ‘being impatient may look dynamic but it rarely has a positive outcome,' writes Michael Heath in Leadership Secrets (www.harpercollins.co.in). In fact, impatience often leads to misunderstanding, rework and repair, adds Heath.

Winning people: Stating that patience is required for dealing with people, politics, and perspective, the author reminds that people are not immovable in their thinking. “But they have to feel that they have control over the decision to change. When pressure is applied they might comply. But they will not be persuaded.” The leader needs to realise that winning people over to his or her cause may take time. As for politics, the author's counsel to leaders is to read the politics and wait patiently for the right time to move. And a sense of perspective helps leaders in choosing the conflicts and opportunities wisely.

Leaders and managers: ‘Lead but don't forget to manage,' is another insight in the book. “You manage things; you lead people,” reads a quote of Grace Murray Hopper, aptly cited by the author. He also refers to Abraham Zaleznik — that the role of a leader is like an artist, scientist, and creative thinker as opposed to a manager.

“Managers live in — and maintain — the system, the detail of working life. The small stuff. They're responsible for the ship's boilers. They make sure the turbines are working. See to it that the crew's happy and that courses are followed. But the leader decides the course. They look at the map and place their finger on where the ship is going.”

Quick wins: A section devoted to change has a chapter titled, ‘maintain momentum,' where the author emphasises the need for keeping motivation high during any change process. A simple tip that he offers is to look for ‘quick wins' which let people know the process is working.

Get feedback: To know what stage your change process has reached, ‘Watch the ball,' the author advises. “What is it that makes a great tennis or squash player? Is it how they hit the ball?” he asks. “No, it is how they pick up the flight of the ball early and move to the best position to hit it.” So too is accurate feedback, analogises Heath. It is about getting the important information as far ahead as possible.

DAY FOCUS:  (Focused by K.Mounika- 09D61E0030)

Logistics -Railways to introduce dual cab passenger loco

In some good news to loco drivers, the railways have decided to introduce cabins at both ends of a diesel locomotive to enable them with better range of view, speed and operation.

“The trial of the dual cabin system is going on and will be put into operation for passenger trains once it gets the certification from the Commissioner Railway Safety,” said a senior Railway Ministry official.

At present, the diesel locos with 4500 HP for passenger trains are equipped with a single driver cabin at the front side of the engine.

“Drivers face difficulties in viewing the signals while running the train in opposite direction,” said the official adding “the rear-end drive constraints the driver to speed up beyond 110 km per hour.”

The new design, named WDP4D, overcomes speed limitation by providing two cabins for driver and crew-friendly features such as LCD screen displays among others.

“The new locomotive is capable of running at more than 130 km speed in both directions and thus fulfilling the needs for increasing speed of the passenger trains,” he said.

Rlys, NTPC sign MOU for setting up power plant

A MOU was on Sunday signed between the Railways and the central power utility NTPC for setting up a 1320 MW power plant at Adra in West Bengal’s Purulia district.

Speaking at the MOU signing programme, Railway Minister Ms Mamata Banerjee said, “The project is not only a matter of pride for the people of West Bengal, but also the entire country.

“This shows that if there is a will there is a way,” she said in an apparent jab at the Buddhadeb Bhattacherjee government for alleged neglect of development in Maoist-affected Purulia district.

She asked officials to ensure that the project was implemented within three years against a target of five. “If the target is for five years, why cannot it be implemented in three?” she asked.

Railway sources said the power plant would be set up on land belonging to the railways which has agreed to co-operate with the union ministry of forest and environment for compensatory afforestation in 300 hectare.

They said the total project cost was Rs 8,000 crore which would be financed through debt-equity ratio of 70:30.

The equity contribution of the railways and NTPC would be in the ratio of 26:74, the sources said.

The power from the plant would be transmitted to the Railway Load Centre in the eastern, northern and western region through national and state transmission networks.

Ms Banerjee said that this was the second power project, railways was to build in collaboration with NTPC. A 1,000 MW project jointly by the railways and NTPC was already coming up at Nabinagar.

At present the railways’ peak power requirement was 3,500 MW which was estimated to reach 6,000 MW in the next ten years.

Executive director, electrical engineering management, railway board Mr Sudhir Kumar and executive director NTPC Mr S N Goel signed the MOU on behalf of the railways and the NTPC. NTPC chairman Mr Arup Roy Chowdhury was present on the occasion.

The railway minister also laid the foundation stone for a Coach Mid-life Rehabilitation (MLR) Workshop at Anara in the district.

MANAGEMENT TIPS: A B C of Motivation

Avoid Negative Thoughts, People, Things and Habits.
Believe in yourself.
Consider things from every angle and others points of view.
Dare to Dream and Dream Big
Energy, Excitement and Enthusiasm is in your blood.
Family and Friends are hidden treasures; enjoy these riches.
Give more than you planned to.
Have a good sense of humour.
Ignore Criticism, Ridicule and Discouragementfrom others.
Jump on Problems because they are Opportunities in disguise.
Keep up the good work however hard it may seem.
Love yourself, just as you are.
Make Impossibility a Possibility.
Never lie, cheat or steal, always strike a fair deal.
Open your eyes and see things as they really are.
Prefect Practice makes you perfect.
Quitters never win and Winners never quit.
Reward yourself for every small success and achievement.
Stop Wasting your Time and Procrastinating important Goals.
Take control of your Life and your Goals.
Understand so that you could Understood.
Visualize your Goals and Dreams everyday.
Win over your own weaknesses and make them as your Strengths.  Accelerate your efforts
Yes Yes Yes, Yes you Can and You Will
Zap your Stress and Enjoy your Life.

Case Study : PERSPECTIVES OF MANAGEMENT

           

The division manager had recently heard a lecture on management by objectives. His enthusiasm, kindled at that time, tended to grow the more he thought about it. He finally decided to introduce the concept and see what headway he could make at his next staff meeting. He recounted the theoretical developments in this technique, cited the advantages to the division of its application, and asked his subordinates to think about adopting it.

It was not as easy as everyone had thought. At the next meeting, several questions were raised. ..Do you have division goals assigned by the president to you for next year?.. the finance manager wanted to know. ..No, I do not, ..the division manager replied. ..I have been waiting for the president.s office to tell me what is expected, but they act as if they will do nothing about the matter... ..What is the division to do, then?.. the manager of production asked, rather hoping that no action would be indicated. ..I intend to list my expectations for the division,.. the division manager said. ..There is not much mystery about them. I expect $ 30 million in sales; a profit on sales before taxes of 8 percent; a return on investment of 15 percent; an ongoing program in effect by June 30, with specific characteristics I will list later, to develop our own future managers; the completion of development work on our XZ model by the end of the year and stabilization of employee turnover at 5 percent...

The staff was stunned that their superior had thought through to these verifiable objectives and stated them with such clarity and assurance. They were also surprised about his sincerity in wanting to achieve them. ..During the next month I want each of you to translate these objectives into verifiable goals for your own functions. Naturally they will be different for finance, marketing, production, engineering and administration. However you state them, I will expect them to add up to the realization of the division goals...

(a) Can a division manager develop verifiable goals, or objectives, when the president has not assigned them to him or her? How? What kind of information or help do you believe is important for the division manager to have from headquarters?

(b) Was the division manager setting goals in the best way? What would you have done?

Focus – Day Tip It is not earning a livelihood that is important. What matters is the ideals for which you live.

Wall Focus -118 ( 29th October,2010)

 

(News collection for Management studies)

Volume: 02           Issue: 118         29-October, 2010 – Friday        Pages: 12

Focus :  Brand Line - Advertising
Getting inside the Indian entrepreneur's brain - Cognitive neurology has some answers to why the owners of Nirma and Jyothy Labs ignored convention in their advertising..

The repetition of stimuli is key to strengthening any memory. This has been understood very well by organised religion and political parties, the real masters of mass persuasion.

The Indian entrepreneur brings a large dose of intuitive wisdom to his business decisions. His decisions look very different from those discussed in business schools, but deliver tremendous results in the market place.

Business school educated professionals rarely grasp the greatness of those decisions at the outset. Nor are they able to unravel the science behind those intuitive decisions. So they are incapable of effectively countering those decisions.

When Karsanbhai Patel launched Nirma washing powder in the Seventies, the launch television commercial was seen as bizarre. Even today, an unwritten norm of the advertising industry is that the brand name should appear just once, that too during the last few frames of the TVC.

In the Nirma launch commercial pack shots, brand usage shots and brand benefit shots and the brand name “Nirma” were repeated many times. The whiz kids of the advertising industry thought the commercial would be the first fall of a small-time Indian entrepreneur who was just learning the tricks of the trade.

When M. P. Ramachandran of Jyothy Laboratories launched Ujala liquid whitener to take on a large established MNC brand, he did not splurge on glitzy television commercials. The launch ad of Ujala in local magazines asked people to send in a short poem using the words ‘Ujala', ‘clothes' and ‘whiteness'. Instead of using the best copywriters from the best advertising agencies to write eulogies about the brand, ideally in English, here was an Indian entrepreneur who was asking the consumers to write something about the brand and its benefits, that too in their mother tongue.

While the innovative business ideas of Nirma and Ujala have been replicated, the communication ideas during the launch of these two brands have never been fully understood.

With the emergence of Cognitive Neurology as a fundamental science to explain all aspects of human behaviour, we are in a better position to decipher the science behind even the most intuitive decisions of the Indian entrepreneur.

A memory is formed in our brain thanks to connections between millions of neurons and the electrochemical stimuli that pass between them. Any memory in turn is connected to several other associated memories. The strength of a memory depends on the strength of its neural connections. All marketing activities aim to strengthen the neural connections between a particular brand and the benefit it caters to.

How do we strengthen the brain's neural connections? If electrochemical stimuli pass between a set of neural connections repeatedly, the neural connections become stronger and stronger. So the repetition of stimuli is key to strengthening any memory. This has been understood very well by organised religion and political parties, the real masters of mass persuasion. Repetition of prayers, chants and slogans are an integral part of their daily rituals. So when Karsanbhai Patel repeated the brand name and brand images multiple times in Nirma's launch commercial, he was intuitively following a memory strengthening exercise that has been happening in the churches, temples and the streets of this country for centuries.

After the Korean War, many of the American soldiers who were captured as prisoners of war came back from Chinese prisons as strong believers in communist philosophy. American psychologists who wanted to find out how this brainwashing happened were surprised to find that no violent methods were inflicted on these prisoners to alter their belief systems. Chinese authorities just got these American prisoners to write down what they wanted them to believe in.

Yes, getting your consumers to write down their liking for your brand dramatically increases their loyalty towards your brand. Jyothy Laboratories received thousands of poems written by the consumers. There would have been ten thousand others who wrote a few lines on a sheet of paper or at least thought of a few lines of a poem in their brains. In the brains of all these amateur poets, millions of neurons related to ‘clothes' and ‘whiteness' would have formed a very strong connection with brand Ujala.

There are many great marketing ideas that are lying unused because no one has discovered their true worth. To know their true worth we need to polish them using the science of cognitive neurology. So the next time you need to insert the line ‘I love XYZ brand because …' at the end of the brand contest form, would you consider it a legal requirement or as one of the most powerful ways to build strong loyalty for your brand?

(The writer is CEO, FinalMile Consulting, Mumbai.)

The New Manager -Management
Think similarities, not differences - Focussing on what is common helps one work through the differences..

I'm writing this column sitting in transit at Frankfurt airport's tower lounge. All around me I see business class travellers. I etch the scene in my mind so as to share it with my readers in my next column. There are a few differences among the people around me.

Same differences

Skin tones — white, brown, black, yellow; hair colours — brunette, blond, platinum, jet black, auburn, red and, of course, grey; dress — a man in a baseball cap and tennis shoes with a Polo neck T-shirt is pouring himself an orange juice. A woman in jeans and shirt carrying a backpack is choosing brown bread and cream cheese.

And a set of similarities

A babe in arms is crying and the mother is rocking her quiet, glancing apologetically at people around her. A family of African kids with braided hair and the sweetest faces has had too much Movenpick ice-cream, are whirling around in glee and then, barf — out comes the ice-cream!

Now this could be any place in the world. The scene is not so different from one that we might encounter in India where we come from... ‘So what's special?' you ask.

Just that the scene, so different, yet so familiar, lead to the realisation that though there will always be differences, it's the similarities that we should focus on for a harmonious work life in the global business village.

The realisation itself prompted a memory — during the course of a certain class, one of our senior participants wanted to know how she could stay stress-free while juggling her personal and professional responsibilities and taking on roles that involved bridging differences in language, culture, time, work ethics, you name it.

The answer lies in another question — Do you focus on the similarities or the differences?

If you focus on the similarities, or, shall we say commonalities, it becomes easy to be objective about differences and see them in the right perspective.

Multiple demands

For the New Manager, particularly women who dovetail careers with home, coping with multiple demands is a given, but stress needn't always follow. When your superior dumps yet another project onto your already overloaded plate, you automatically think, “What does he know about the problems I'm facing? He's different, he doesn't understand.”

You instinctively shut your mind to cooperation. The trick here is to not think differences, think similarities. Focus on a common goal, material and emotional, and take it from there. The good of the organisation is a good place to start.

Ask yourself what the new project will achieve — a feather in the department's cap? Won't that make both you and your boss feel good?

Next, ask yourself how much pressure you can safely take — for this, you need to know yourself pretty well, your strengths, your weaknesses.

Then get down to practical aspects. Work out where you are with your original workload and the time you have left. Present hard facts to your boss, and find a creative way to include his needs while not sacrificing yours. Be assertive, show why an idea won't work, or you think it won't. That doesn't mean raising your voice or being rude. It means being factual and polite.

Say, for instance, your boss has asked you to help Steven on the Canada team, who's struggling with some testing work. You can respond with a non-committal ‘I'll try' or ‘yes' and conveniently forget about it. Or, you could say a simple ‘no' and leave it at that. Both responses would leave everyone with a bad feeling.

You know Steven's project is high-profile, and success would mean both more revenue and prestige for the company. Completing it well is in everyone's interest. That's the commonality to be kept in sight.

So here's a better way of handling the situation: “I don't think I can spare the time this week to share Steven's workload. But if we could have till next Wednesday, I can help him for some time on Monday. He can count on me for help on Tuesday as well. I can't spend too long though, as my own projects X and Y for clients A and B (be specific) are at a crucial stage, and I also need to make sure I'm home by 7 pm.”

This way, you're passing a message that the company is important to you, and that you're ready to pull your weight as a team player, while at the same time being realistic about your workload and personal commitments.

As a general rule: See the common good of a company goal,  Give solution-oriented ways to achieve it

Don't take things personally, instead, focus on how similar we all are and find common ground.

At the end of the day, know yourself, wear the same lens as the person you are interacting with. You will find that even the few differences can be tolerated as the similarities take precedence.

(Ranjini Manian - The author is CEO of www.globaladjustments.com. She can be reached at info@globaladjustments.com)

SPECIAL FOCUS – Who told India is poor

( Contributed by K.Mounika- 09D61E0030)

This is so shocking…. ….If black money deposits was an Olympics event…. India would have won a gold medal hands down. The second best Russia has 4 times lesser deposit. U.S. is not even there in the counting in top five! India has more money in Swiss banks than all the other countries combined!

Recently, due to international pressure, the Swiss government agreed to disclose the names of the accountholders only if the respective governments formally asked for it.. Indian government is not asking for the details…No marks for guessing why?

We need to start a movement to pressurize the government to do so! This is perhaps the only way, and agolden  opportunity, to expose the high and mighty and weed out corruption!

Please read on……and forward to all the honest Indians to…..like somebody is forwarding to you…….and build a ground-swell of support for action ! Is India poor, who says? Ask the Swiss banks. With personal account deposit bank of $1,500 billion in foreign reserve which have been misappropriated, an amount 13 times larger than the country’s foreign debt, one needs to rethink if India is a poor country?

DISHONEST INDUSTRIALISTS, scandalous politicians and corrupt IAS, IRS, IPS officers have deposited in foreign banks in their illegal personal accounts a sum of about $1500 billion, which have been misappropriated by them. This amount is about 13 times larger than the country’s foreign debt. With this amount 45 crore poor people can get Rs 1,00,000 each.

This huge amount has been appropriated from the people of India by exploiting and betraying them. Once this huge amount of black money and property comes back to India , the entire foreign debt can be repaid in 24 hours. After paying the entire foreign debt, we will have surplus amount, almost 12 times larger than the foreign debt. If this surplus amount is invested in earning interest, the amount of interest will be more than the annual budget of the Central government. So even if all the taxes are abolished, then also the Central government will be able to maintain the country very comfortably.

Some 80,000 people travel to Switzerland every year, of whom 25,000 travel very frequently. ‘Obviously, these people won’t be tourists.. They must be traveling there for some other reason,’ believes an official involved in tracking illegal money.. And, clearly, he isn’t referring to the commerce ministry bureaucrats who’ve been flitting in and out of Geneva ever since the World Trade Organization (WTO) negotiations went into a tailspin!

Just read the following details and note how these dishonest industrialists, scandalous politicians, corrupt officers, cricketers, film actors, and protected wildlife operators, to name just a few, sucked this country’s wealth and prosperity. This may be the picture of deposits in Swiss banks only. What about other international banks ?

Black money in Swiss banks — Swiss Banking Association report, 2006 details bank deposits in the territory of Switzerland by nationals of following countries :
TOP FIVE

INDIA $1,456 BILLION
RUSSIA $470 BILLION
U.K. $390 BILLION
UKRAINE $100 BILLION
CHINA $96 BILLION

Now do the math’s – India with $1,456 billion or $1.4 trillion has more money in Swiss banks than rest of the world combined. Public loot since 1947:

Can we bring back our money ? It is one of the biggest loots witnessed by mankind — the loot of the Aam Aadmi (common man) since 1947, by his brethren occupying public office. It has been orchestrated by politicians, bureaucrats and some businessmen.

The list is almost all-encompassing. No wonder, everyone in India loots with impunity and without any fear. What is even more depressing in that this ill-gotten wealth of ours has been stashed away abroad into secret bank accounts located in some of the world’s best known tax havens. And to that extent the Indian economy has been stripped of its wealth. Ordinary Indians may not be exactly aware of how such secret accounts operate and what are the rules and regulations that go on to govern such tax havens. However, one may well be aware of ‘Swiss bank accounts,’ the shorthand for murky dealings, secrecy and of course pilferage from developing countries into rich developed ones.

In fact, some finance experts and economists believe tax havens to be a conspiracy of the western world against the poor countries. By allowing the proliferation of tax havens in the twentieth century, the western world explicitly encourages the movement of scarce capital from the developing countries to the rich. In March 2005, the Tax Justice Network (TJN) published a research finding demonstrating that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe.

The findings estimated that a large proportion of this wealth was managed from some 70 tax havens. Further, augmenting these studies of TJN, Raymond Baker — in his widely celebrated book titled ‘Capitalism’ s Achilles Heel: Dirty Money and How to Renew the Free Market System’ — estimates that at least $5 trillion have been shifted out of poorer countries to the West since the mid-1970.

It is further estimated by experts that one per cent of the world’s population holds more than 57 per cent of total global wealth, routing it invariably through these tax havens.

How much of this is from India is anybody’s guess.

                                                                       

         

Indian Hotels to raise Rs 850 cr thru pref allotment to Tata Sons

Indian Hotels Company (IHCL), that operates Taj group of hotels and resorts, will be raising around Rs 850 crore in two tranches through a preferential allotment of shares to its main promoters – Tata Sons Ltd.
The entire capital raised will be used for the retirement of debt. The company's standalone debt as on September 30, 2010 stood at Rs 2,362 crore and consolidated debt till date is Rs 4,210 crore.
“We have repaid Rs 300 crore already in the current year,” a Taj spokesperson told Business Line in a written response.
A part of the Rs 850 crore will be raised in the current financial year and the balance will be raised not before April 1, 2011, but within the next 18 months, the official said. “IHCL is raising equity to strengthen its balance sheet. The Tata Group shareholding in IHCL will increase from 30.27 per cent as current to 37.55 per cent over the next 18 months”. The company will be issuing up to 3.6 crore shares and up to 4.8 crore warrants on a preferential basis to its promoters for raising this amount.
Rs 6-cr loss -IHCL posted a net loss of Rs 6 crore for the second quarter ended September 30, 2010 against a net profit of Rs 12 crore in the corresponding period last year.
The total income of the company, (including other income) grew by 4 per cent to Rs 344 crore, as compared to Rs 330 crore in the same period last year. The company's total expenditure for the period rose by 12.8 per cent to Rs 317 crore in the period under review, as against Rs 281 crore, last year.
IHCL had reported other operating income of Rs 21.27 crore in the year-ago-period – an amount received from insurance company as compensation for business interruption following the terrorist attack at its flagship property Taj Mahal Palace, in November 2008. So far, IHCL has received Rs 180 crore in insurance.
“The second quarter, which is typically the weakest of the four quarters in India, registered rather subdued occupancies in some key markets where the sentiments were adversely impacted by the continued adverse publicity surrounding the recent concluded CWG (Commonwealth Games),” said Indian Hotels' Managing Director, Mr Raymond Bickson. Due to this, he added, “the anticipated business improvement did not crystallise”.

DAY FOCUS:  (Focused by K.Mounika- 09D61E0030)

Foreign Institutional Investors -Money & Banking - RBI & Other Central Banks- Financial Markets
RBI chief warns of speculative capital flows - Biggest issue is currency appreciation: Subbarao.

Besides the problem of appreciating currency, speculative capital flows could lead to asset price build-up in emerging market economies like India, the RBI Governor, Dr D. Subbarao, said on Wednesday.

Highlighting the impact of the ‘ultra loose' monetary policy of advanced countries on the emerging economies, he said: “Speculative flows on the lookout for quick returns can potentially lead to asset price build-up.”

According to analysts, given the increased inflow of portfolio capital and the rise in asset prices in India in the past few months, the RBI may use prudential regulations to check rising asset prices in the November review of the monetary policy.

Since August, FIIs have invested $15 billion into the Indian equity markets.

In an interview to Business Line a few months ago, the RBI Deputy Governor, Dr Subir Gokarn, had indicated that the bank may look at prudential regulations in the monetary policy review in November if asset price pressures build up.

In his inaugural address at an international conference here, Dr Subbarao said that the biggest problem thrown up by capital flows is currency appreciation, which erodes export competitiveness.

He said the challenge for the emerging economies will be to minimise the costs of the forex intervention. “Managing currency rates in the face of volatile flows entails costs no matter what you do. The challenge is to minimise this cost.”

Explaining the dilemma of the central bank while deciding whether to intervene or not in the forex market, the Governor said: “Intervention in the forex market to prevent appreciation entails costs. If the resultant liquidity is left unsterilised, it fuels inflationary pressures. If the resultant liquidity is sterilised, it puts upward pressure on interest rates which, apart from hurting competitiveness, also encourages further flows.”

He said that though emerging and developing economies need capital flows to augment their investible resources; such flows should be stable and be roughly equal to the economy's absorptive capacity. He said the cyclical component of the inflows causes all the adjustment problems for emerging market economies (EMEs).

Dr Subbarao pointed out that as capital flows are a spill over from the policy choices of advanced economies and is not an exclusive problem of EMEs, the burden of adjustment has to be shared.

The assurance of advanced economies to keep interest rates ‘exceptionally low' for ‘an extended period' has also possibly triggered financialization of commodities leading to a paradoxical situation of hardening of commodity prices even as advanced economies continue to face demand recession. Hardening of commodity prices has affected those EMEs which are net importers of commodities, he said.

Dr Subbarao said that surplus economies will need to let their currency appreciate and only intervene in the currency market to manage disruptions rather than to maintain their competitiveness.

“Managing currency tensions will require a shared understanding on keeping exchange rates aligned to economic fundamentals, and an agreement that currency interventions should be resorted to not as an instrument of trade policy but only to manage disruptions to macroeconomic stability,” he said.

Macro Economy -Food inflation dips to 13.75% on improved supplies

Food inflation declined sharply to 13.75 per cent for the week ended October 16, on improved kharif supplies and fall in prices of certain vegetables, especially potatoes and onions.

According to Government data, the food inflation fell by 1.78 percentage points to 13.75 per cent during the week from 15.53 per cent during the week ended October 9. This is the second consecutive week when the food inflation has declined.

On an annual basis, potato prices eased by 49.69 per cent and onions became cheaper by 6.93 per cent. Overall, prices of vegetables went down marginally by 0.77 per cent during the week on a year-on-year basis. However, other essential items like cereals , milk and fruits continued to remain costly.

Experts said the impact of a good monsoon was slowly becoming visible on the prices of essential items, as the supply side pressure was easing after a good kharif harvest.

On a yearly basis, cereals prices have risen by 4.97 per cent. While pulses became costlier by 4.16 per cent on a yearly basis, wheat and rice increased by 6.56 per cent and 3.49 per cent, respectively.

Among other food items, milk prices soared by 21.65 per cent during the week compared to the same period last year, while fruit rates rose 16.06 per cent. Egg, meat and fish became dearer by 28.12 per cent.

After some moderation in July, the food inflation remained high during August and September due to supply disruptions caused by heavy monsoon

ONGC Q2 net rises 6% to Rs 5,388.77 cr

State-owned Oil and Natural Gas Corp reported a 6 per cent rise in its net profit to Rs 5,388.77 crore in the quarter ended September 30.

ONGC had posted a net profit of Rs 5,089.64 crore in July-September quarter of 2009-10 fiscal, the company said in a statement. Sales rose to Rs 18,238.98 crore in Q2 of current fiscal from Rs 15,134.04 crore a year ago.

ONGC said it paid Rs 3,019 crore towards fuel subsidy in the quarter under review, as against Rs 2,630 crore in the Q2 of last fiscal.

The company’s net realisation on crude sales was $62.75 a barrel after giving refiners IOC, BPCL and HPCL a discount to make up for one-third of their loss on sale of fuel below cost. Its net realisation in the Q2 of last year was $56.41 a barrel.

ONGC’s gross realisation (pre-subsidy discount) was $79.21 a barrel as opposed to $70.50 a barrel in the July-September quarter a year ago.

Banking & Finance- RBI may raise key rates to rein in inflation: FICCI

The RBI may go for another round of hiking the short term lending and borrowing rates by 25 basis points each, next week on concerns of high inflation, a Ficci survey said.
The RBI move to raise short term policy rates is likely to reduce demand for consumer durables, it said. The Reserve Bank is scheduled to announce its second quarterly monetary policy review on November 2.
“Majority of the participating economists expect RBI to further hike both the repo and the reverse repo rate on November 2, 2010, by 25 basis points each,” said the Ficci Economic Outlook Survey.
Repo is a short-term lending rate of RBI to banks, while reverse repo is short-term borrowing rate. Most economists however feel that given the tight liquidity situation, the central bank would refrain from raising Cash Reserve Ratio (CRR), which is a po rtion of deposits that banks keep with RBI in cash.
The RBI has raised interest rates five times this year, taking the repo rate to 6 per cent and the reverse repo rate to 5 per cent, to control inflation, which was in double— digits for six months since July.
“Inflation, particularly food inflation, continues to remain a major concern. What is perhaps more important is the steady rise in inflation expectations as revealed by the RBI’s latest survey released in June 2010,” it said.
However, food inflation declined sharply to 13.75 per cent for the week ended October 16, on improved supplies and fall in prices of certain vegetables, especially potatoes and onions.  On the GDP growth, the economists agree with the government’s projection of 8.5 per cent growth this fiscal

MANAGEMENT TIPS: MANAGING FINANCES AND RESOURCES

Whether you're a business owner or a manager, staying on top of tangible items is vital to success. These tips can help you keep track.

Set up a realistic budget. While it's good to be optimistic, don't plan for more spending than you know you can afford. Make sure you plan for emergencies and contingencies as well.

Save costs where they matter the most. Don't just pinch pennies for the present. Make sure your savings will pay off in the long run. Compromising on quality might cost you later on in repairs and replacements.

Spend only when it's necessary. Don't spend if you don't need to. Every bit you save goes toward your profit.

Find alternative sources of finance. Sometimes even successful businesses need a little help. Business loans and investors can help you through leaner times.

Stay true to your contracts. Not only will you gain the respect of your clients, you'll also avoid legal battles that can be a serious financial drain.

Make sure employees are well compensated. Employees deserve to be rewarded for hard work. Make sure yours are well compensated for their time and they'll be more productive and happier to come to work.

Learn to do more with less. Quality is much more important than quantity, so make what you have count.

Assign equipment wisely. While it might be nice for every employee to have a PDA, budgets often don't allow for such conveniences. Make sure the employees that need tools the most have access to them.

Invest in solid technology. This doesn't always mean the latest technology, but what your office needs to do work effectively.

Update when necessary. Using obsolete equipment and programs can really slow you down. Update when it makes sense so you won't get left behind by competitors.
Don't be wasteful. Every sheet of paper, paper clip and pen is a cost on your budget. Use materials wisely and don't waste them out of haste or carelessness.

RESEARCH DESIGN - Practice

The Indian ice-cream market can be broadly divided into teens market and youngs market. There has been a major change in the attitudes of the people towards ice-cream. It is no more a children refreshment product, but a product of all ages and occasions. The giants in this market are Kwality, Lazza, Uncle John, Dairy Day and Arun. Besides these many are entering into Indian market leading to increased competition among themselves. The marketer of a new ice cream brand who wants to enter Indian market wants to understand consumer behaviour interms of awareness, preferences, attitudes and motives.

You are required to sketch a research design that suits this study.

Focus – Day Tip The real sign of an educated person is his attitude of sameness towards all.