Monday, January 28, 2008

9/11 couldn’t (Im)melt him!

Holding the reins of a 129-year old extraordinarily diversified conglomerate, the only name that has remained on the Fortune 500 elite list (since its inception in 1955) with a gargantuan m-cap of a blinding $418.6 billion on the NYSE & a grand $160.9 billion in annual revenues during 2006 pouring in from eleven business verticals (ranging from aviation & infrastructure to finance, healthcare & energy), is by no means a task free of hitches… Don’t believe us? Well, ask Jeffrey (Jeff ) Immelt, the CEO of General Electric & he’d thumpingly reiterate that!

Sworn in just four days prior to the September 11, 2001 terrorist attacks, Jeff passed his most fragile days in the company under the shadow of huge setbacks to its aviation & insurance businesses. Infact, GE’s insurance business alone suffered a substantial $660 million in losses due to the attacks. Then followed the Enron scandal, which again cast huge allegations on the company. Those were the thorny heydays for the man who had previously led GE’s $7 billion Medical Systems unit as its CEO! But surely, there must have been some reason why a seasoned CEO like Jack Welch handpicked him from amongst the crowd. Surely, it was not because both started their careers in GE’s Plastics unit. Surely not!

For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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posted by Editorial at 5:48 PM

Friday, January 18, 2008

Wild, wilder, wildest!

The bane of the Bajaj Group is very clearly in their love to run their companies while owning them. It seems funny that neither Rahul nor the other owners have considered the fact that hiring non-family external CEOs to run their family companies can in one shot resolve the family disputes about control; and also portray an extremely professional image of the group. In November 2006, Rahul boasted at a Wharton symposium, “There is no reason to believe that a non-owner (CEO) is more competent than an owner (CEO).” Sadly, with this statement, Rahul gave away lack of even skimming knowledge of research on the subject. Research from Harvard, London Business School et al has proved beyond doubt that family CEOs will eventually destroy firm value and ensure breaking up of groups. And now, according to the exemplary BDO Stoy Hayward Survey, only around 10% of family-businesses globally survive past the 3rd generation.

Dear Rahul, it’s already the third generation at Bajaj now, a group that has started breaking apart at breakneck speed. Was it a coincidence then that just this week news filtered out that you are finally searching for an outside CEO for Bajaj Auto? Perhaps... The New York Times writes about the movie Wild Hogs, “It’s a comedy about male midlife anxiety. Some of us may not find the subject so funny, but never mind.” Dear Sir, we know you don’t find this funny; it was never meant to be a comedy anyway; but we’re anxious, so are lakhs of your shareholders. And wild as we may be, we just can’t ‘never mind’!
For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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posted by Editorial at 11:52 AM

Thursday, January 10, 2008

Millions of young hands are learning to press the trigger...

At any point of time about 300,000 kids are involved in some kind of war or conflict in more than 85 countries. Some are yet to cross their tenth year on Earth. As of now, Africa alone has more than 200,000 child soldiers involved in wars & armed conflicts in Burundi, Chad, Cote d’Ivoire, Congo, Rwanda, Sierra Leone, Liberia, Somalia, Sudan, & Uganda. As if all these were not enough that an additional 500,000 children are estimated to be involved in paramilitary groups in almost all continents of the world. The worst suffers are the fairer sex, as many girl soldiers (40% of total) are recruited to provide sexual services & are even raped & gang raped in the war camps repeatedly. Such reports no wonder oft en go unreported or at best ignored. This stark reality of millions of kids in this word is incidentally a stark contrast to the affluence that an equal number grow up in developed world. Forget the digital divide, unless steps are taken to restore some sort of parity, be prepared for the coming apocalypse.
For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

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posted by Editorial at 12:20 PM