New Drishti # 49 --- 15th April 2004

7/29/2019 New Drishti # 49 --- 15th April 2004

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(Daily I nformation Capsules for all those who want to fathom learning in all its depths)

Date: 15th April 2004

(To be used by faculty membersAND

a copy to be kept for students reference in the Library too)

CONTENTS

The following pages contain:

1. NewsTracker:NewsTracker: The edit will give you links to important and happening news,which you just cant afford to miss. Follow the link and read the articlessuggested.

2. Pool of KnowledgePool of Knowledge: A collection of definitions and meanings of terms from aselected field of study.

3. Specializer:Specializer: An article by the gurus on Management Fundamentals.4. QuizQuiz: A GK quiz on Current Affairs, Brand Quiz and Companies Punch lines

etc., to check your reading habits and to hone your memorizing skills!


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NewsTrackerNewsTracker

Instructions: We suggest you copy-paste the link on the address bar of your Internet explorer. Avoid keying itthrough your keyboard because it might be prone to errors.

CHEERS FOR MULTILATERALISM

The World Trade Organisations Appellate Body deserves congratulations for pulling up the European

Commission (EC) for its discriminatory trade practice in granting tariff preferences to 12 developing countriesincluding Pakistan. In a strong vindication of Indias position, the Appellate Body has ruled against tariffpreferences granted to these countries for their assistance in the ECs war against drugs. The ruling comes asa shot in the arm for Indian exporters and is another reason for India to redouble efforts to strengthen themutilateral mechanism. Unlike bilateral trade agreements, where trade preferences can be extended on aselective basis, the beauty of the multilateral system is that it does not permit discrimination between trading

partners. Therein lies the strength of the WTO. Trade policy instruments cannot be used to serve political

objectives. For a country like India that is just a lightweight in global trade that is the best bet for the future.

http://economictimes.indiatimes.com/articleshow/612523.cms

ARE YOU A VALUABLE ASSET OR LIABILITY FOR YOUR BANK?

Watch out, you are on your banks radar. Banks these days constantly monitor their customers financialbehaviour both inside and outside the bank branch. The questions that come to the mind are several. First,how do they do that and why would the banks do that, what do they stand to gain from it? But, the most

important question is how it affects you as a customer? Government, private and foreign banks analyse eachcustomers financial behaviour, in terms of average balances maintained, number of cheques used each

month, number of cheques dishonoured and many other things such as regular payment of loan instalments,credit card payments and so on.

The next logical question is how do banks benefit from this data. They use this for two objectives; the first is todetermine the profitability of each customer to the bank. While the second main objective is that, this datahelps them select customers for profitable cross-selling opportunities. Most banks these days have a proxy

profit and loss statement for each customer, which records the revenue the bank earns from each customerand the money the bank spends in servicing the customer. Read the article to know how both banks andcustomers benefit from such inspections.



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ARRIVING AT GOODWILL

While purchasing property, especially commercial property, the buyer has to invariably pay up for goodwill.

Usually the amount is quite heavy. But what is this goodwill? How is it calculated? Are there any hard and fastrules governing determination of goodwill? Is it synonymous with premium? These questions often puzzle a

buyer. It is a quality that will bring to the purchaser profits in future, almost without his efforts. The efforts havealready been made in the past. Goodwill is the ability to earn profits higher than other firms. It enables earningof excess profits over and above what normally firms earn. Goodwill arises only if the firm is able to earn super

profits. Goodwill is nothing more than the probability that the old customers will resort to the old place or to aparticular place or supplier. It enhances the capacity of the business to earn profits in the future. Read thearticle to get these answers.



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Pool of knowledge

All the terms and definitions that have baffled you all these days. Get acquainted with them and solve all yourqueries.

Marketing:

Narrowcasting - a term used in reference to cable television in the U.S., where cable TV stations, withspecialised interests such as sports, news, weather, movies, etc, allow advertisers great selectivity; that is,advertisers can in arrow cast their messages rather than broadcast them.

National Account Marketing - the creation of marketing teams or groups (NAM Teams) within a companyspecifically to meet the needs of major client organizations; the teams or groups usually consist of marketing

and sales personnel as well as engineers, production specialists, and so on.

National Accounts- major accounts which are sometimes served by a separate sales force because of theirimportance. Account specialists try to meet their special needs and to develop close relationships with keypersonnel. Also referred to as Direct Accounts and House Accounts.

National Introduction - the immediate launch of a new product on a nation-wide scale. Because of the riskand the substantial investment in production and marketing that a national introduction requires, many

organisations choose rollout approach instead.

National Marketing Manager - a marketing manager with the responsibility for the nation-wide operations of amarketing division.

National Sales Manager - a sales manager with responsibility for the nation-wide operations of a sale division.

Near-Pack Premium - a sales promotion in which a gift is to be collected from elsewhere in the store byconsumers who have purchased a particular product.

Need-Directed Consumers - one of three broad groups of consumers (with outer-directed consumers andinner-directed consumers) identified in the Stanford Research Institutes survey of American lifestyles. Need-

directed consumers, representing about ten per cent of consumers in the U.S., are motivated by need ratherthan by choice.

Need-Gap Analysis - an approach to identifying the unmet needs of consumers, in which respondents areasked to envisage the ideal brand or product and then to rate various existing brands or products on key

attributes; if no existing brand or product measures up to the ideal, a gap exists which could be filled by a newbrand or product.

Need Objection - an objection by a prospective buyer that they have no need for the product offered by asalesperson.

Need-Satisfaction Approach - an approach to selling based on soliciting information to uncover a buyersneed before attempting to present an appropriate product from the range to satisfy it.


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Negative Demand - demand for products which consumers dislike and would prefer not to have to purchase.Negative demand for a particular product exists when consumers, generally, would be prepared to pay morethan the price of the product to avoid having to buy it, as in the case of unpleasant and painful medical

treatment.

Negotiated Contract - a formal arrangement for the supply of goods or services at a price agreed upon boththe buyer and seller.

Negotiated Price - a price agreed upon for the supply of goods or services by both buyer and seller.

Negotiated Rate - a non-standard charge for the carriage of goods agreed to by both manufacturer andtransport company.

Negotiated Selling - a selling approach in which a salesperson attempts to produce a win-win outcome for

both parties. The approach entails the assumption of a partnership between buyer and seller, the salespersonacting as a counsellor to assist the buyer to find the best solution to a problem.

Networking - establishing an informal set of contacts among people with common social and businessinterests as a source of prospects, for the exchange of information, and for support.

New Account - Conversion Ratio - a measure used to evaluate salespeople in which the conversion rate ofprospects to customers is calculated.

New Product Committee - a group within a company responsible for new product policies, including theassignment of priorities to options and ideas for new products and the final decision on whether or not tocommercialise them.

New Product Department - a permanent department within a company responsible for overseeing thedevelopment of all new products.

New Product Development - the creation of new products needed for growth or to replace those in thedecline stage of their life-cycle; the stages in the new product development process are commonly listed as

idea generation; screening; concept development and testing; the formulation of marketing strategies;business analysis; production; market testing; and commercialisation.

New Product Duplication - the introduction by a company of a product that is known to the market but new tothe company. See Innovation; Product Extension.

New Products - products which are new in one or other of two new to a company or new to a market; theyinclude existing products which have been improved or revised, brand extensions, additions to existing line,

repositioned products targeted at to new markets, and new-to-the-world products.


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SpecializerSpecializer

Business management skills

The Art of Management: the triple talents of the manager, theentrepreneur and the innovator-II

By Robert Heller

RELIABLE MAXIMS

I would include the importance of that principle among the 'reliable maxims, which together with instructiveanecdotes and the avoidance of dogmatism, I deemed (and still deem) more useful to cook/managers thandetailed instructions. These aim to substitute book-learning for practical experience and hard results - and as

lThinking Managers has pointed out, you cannot expect to manage by rote. You can derive those reliable

maxims from studying the great exponents, but their actions and theories have the limited force ofanecdotes, and fall well short of the power of universal laws.

That's why what is taught as management at business schools has only a partial bearing on the realities ofbusiness life. Nobody pretends that you can teach somebody to be an entrepreneur like John D.Rockefeller

or an innovator like Edwin Land of Polaroid. You can show people (as Edward de Bono does so brilliantly)that they are capable of far more creativity than they (or others) believe. The test of their creativity is not theirlearning, but their results: not the technology, but the product.

This has great relevance to management, which, as many have written, is not a science, but more an art.

Yet curiously I know no book which discusses The Art of Management: there is a very well-known book,widely read by managers, which deals with The Art of War - but this dates back to ancient China. Despite itsantiquity, though, the book gives many useful analogies, not least that management is a close relative tomilitary command: hence the almost universal adoption of military modes like the separation of line and staff,and the supreme, overweening authority of the Commander-in-Chief (for which read CEO).

TRIPLE TALENTSAs suggested above, this supremacy has resulted in a dangerous cult of adulation. If you are a Rockefelleror a Land, this can hardly be helped. Your creation has provided jobs, wealth and consumer benefits right

round the world. You are inevitably a super-star. But stardom has nothing to do with the processes thatmake one company more effective than another. Those processes require the Triple Talents of the manager

(who makes things happen), the entrepreneur (who makes things start) and the innovator (who makes thingsdifferent - and better).

There's a fascinating illustration of the Triple Talents in the recent history of Procter & Gamble. As theinventor of modern brand marketing techniques (including the soap opera), P&G became a byword forinnovative management (and innovative products like Crest toothpaste and Pampers diapers). But from the

1980s onwards, the great company fell into the hands of veteran managers whose efforts to innovate failedto compensate for slowing sales of the block-buster legacy brands. The inbred corporate culture, which hadbeen seen as a great strength, was now regarded as a liability - a bulwark of conservatism.


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When the weakness of the stock price finally made the need for change imperative, P&G turned to aninsider, Durk Jager, who sought to bully the company and the consumer into submission to his will. Whenthe new products and the earnings flopped, Jager was assisted out of the door. His replacement, A.G.

Lafley, another veteran, has presided over a turnaround that's very visible in the share price (up 58%) - andhas already been lionised in magazine profiles. From one of them, in BW, emerges a clear picture of Lafley's

version of the first talent - management:

1. He gives human resources priority, personally tracking the performance of 200 senior executives.2. He made managers concentrate on the major brands ('instead of trying to develop the next big thing').

3. He made an ally rather than an enemy of the culture.4. He changed the style at the top: quiet manners; moving top executives away from their 11th floor

eyrie; meeting with 12 seniors at a round table every Monday morning - and, above all, listening.

The above quartet admirably demonstrate that prime art of the manager - making it happen. But what Lafley

has made happen is less impressive; indeed, it's fairly standard practice for the large corporation in the2000s. He has cut employment, made two major acquisitions, replaced half the top 90 managers, and turned

to outsourcing in a big way. It's hard to see any evidence here of the two other Triple Talents,entrepreneurship and innovation - and P&G will surely need both to meet intense competition and theimmense power of Wal-Mart: the giant retailer could before many years have passed account for a third ofP&G sales.

ARTISTIC GENIUSLafley could, of course, surprise his critics by dynamic moves in the marketplace and elsewhere. But it'sasking a great deal of any leader to combine the Triple Talents in one person. What the great manager doesis to emulate the artistic genius by seeing the whole picture. Read the wonderful letters of Vincent van Gogh,and you will see exact discussion of technique and detail - but all set within a total concept of the image hewanted to create on paper or canvas. The manager likewise needs imagination to see what the business

can become and to enlist the help of the people best able to start new ventures and develop the differentand better.

Then the CEO can hope to pass the acid test: passing on a company in such good shape that the successor

managements will do even better. (Lafler's predecess-ors at P&G failed this test abysmally). Managers havespent a long and painful time waiting for the upturn. Now that it has probably arrived, the only sensible recipeis to deploy and develop the Triple Talents at all levels - then the good times can go on rolling.


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Quiz!Quiz!

DIRECTIONS: For the following questions, choose the correct option.

Q1. Who is the richest Asian in UK?(1) Lord Swaraj Paul (2) Lakshmi Mittal

(3) Sonal Shah (4) None of these

Q2. Vijay Thadani is the CEO of which IT Company?

(1) NIIT (2) M Phasis(3) MBT (4) Aptech Computers

Q3. Which movie was recently voted as the best family movie?(1) ET (2) Lord of the Rings Trilogy

(3) Star Wars (4) Willy Works and the Chocolate Factory

Q4. Craig Barrel is the CEO of which computer chip maker firm?

(1) Intel (2) Cyrix(3) Motorola (4) None of these

Q5. What is the current inflation rate?(1) 6.2% (2) 4.4%(3) 4.0% (4) 3.2%

Q6. Opel Corsa is a product of which motor company?(1) General Motors (2) Tata Motors

(3) Maruti Suzuki (4) Hyundai Motors

Q7. Singapore Technologies Telemedia (STT) is the telecom subsidiary of which company?

(1) Temasek (2) AT & T(3) DBS (4) None of these

Q8. Crisil picked up 9% stake is which company?(1) American Rating Agency Ltd. (2) Caribbean Information & Credit Rating

(3) Economatters Ltd. (4) None of the above

Q9. Pradip Baijal is the Chairman of which organization?

(1) CRISIL (2) Telecom Regulatory Authority of India(3) VSNL (4) None of these

Q10. If Rahul Gandhi is in Amethi, who is in Lahore?(1) Tushar Gandhi (2) Rahul Bose(3) Varun Gandhi (4) Rahul Dravid


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Q11. Which of the following features distinguish musical sounds from noise?1. Regularity in sound2. A musical sound has a single frequency

3. Absence of sudden4. 3..changes of amplitude in respect of musical sounds

(1) 1 and 2 (2) 2 and 3(3) 1 and 3 (4) 1, 2 and 3

Q12. Fertility of soil can be improved by

(1) Adding dead earthworms(2) Removing dead earthworms(3) Adding living earthworms

(4) Removing living earthworms and adding dead earthworms

Q13. Ozone attacks(1) Glass (2) Mercury and silver

(3) Copper (4) None of these

Q14. 'When used for benign purposes, this is known simply as fertiliser. But when mixed with diesel fuel andset off, if has a detonation velocity of 1,100m per sec'. The powerful tool of destruction referred to

above is(1) C-4 (2) TNT(3) Semtex (4) Ammonium nitrate

Q15. The process by which kidney stones are shattered with shock waves is called(1) Lithotripsy (2) Laparoscopy

(3) Endo-capsular implant (4) Dementia


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AnswersAnswers

1. Ans.(2)2. Ans.(1)

3. Ans.(4)4. Ans.(1)

5. Ans.(2)6. Ans.(1)7. Ans.(1)

8. Ans.(2)9. Ans.(3)

10. Ans.(4)11. Ans.(3)12. Ans.(3)

13. Ans.(4)14. Ans.(4)15. Ans.(1)

New Drishti # 49 --- 15th April 2004

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