Online Business Surge in India and its Future Prospects

If you study the recent trend in the online business in India, you can easily find out three major market players. Namely: Flipkart, Snapdeal and Amazon. For traditional India where online purchasing was a taboo and thus was limited to few online tickets booking, these companies together have introduced a new culture of online business culture in India. A business that is forecasted to grow from sales of $ 2.3 billion (As of 2014) to $32 billion (as of 2020).

For Flipkart which is largest internet company by its market value of $7 billion, it went through rough ways to arrive at this position to bust the myth that consumers like to see and feel the product before buying. Reluctance of customers to give details of their credit cards, fear about the delivery of the product, suspicion to get exact product etc. were of paramount amount which pioneers like Flipkart had to go through. 

These companies are at the verge of cut-throat competition as they have been going with massive marketing strategy to boost the sales. Recent humongous sales made by e-tailers like Flipkart of $100 million in 10 hours as "Big Billion Sales day" and Snapdeal retaliating the same with sales of a crore per minutes proves this. As such there is a humongous sale that these companies have been able to make. And thus large amount of profit. While the competition is tough over a small profit margin, these companies are also facing challenges. The recent challenge is not because of the competitors in online commerce, but because of the competition/conflict between these e-tailers and brick and mortar models. It should be understood that it is until recently that brick and mortar business have been dominant in doing business in country like India. But this culture is changing rapidly. 

Challenges to Indian e-tailers:

1) Tough competition from competitors who are coming up with innovative strategy to increase sales.

2) Problems from top brands having brick and mortar outlets like: LG, Sony, Samsung etc. who are accusing the e-tailers of making predatory sales (selling below cost), thus damaging their sales and brand names.

3) The customers in Tier-I cities like Mumbai, Delhi, Bangalore etc. who prefer see-feel-buy approach in contrast to online modes. Luring them for online business might be relatively difficult.

4) New entrants in the industry which might reduce the price of product offerings sharply in contrast to the old market leaders. Similarly, it is also more likely that manufacturers and brands might offer product offerings via their own online sites. 

5) Another possible challenge would be large brick and mortar group like: Reliance Industries, Future Group, TATAS group planning to go online to expand. etc

Brighter side:

It can be seen evidently that Indian e-tailers have been inspired from Chinese mega online internet retailer: Alibaba's success, which raised record high of $21.8 billion IPO. The statement of Flipkart CEO and Founder Sachin Bansal to make Flipkart a $100 billion club member in upcoming 5,10 or 15 years provides a hint that they are planning for a rapid growth of company business in near future. 

Now lets us put light on the basic facts that hints us about the brighter aspects of growth of online business in India.

1) Online retailers selling product-offerings in a cheaper price as they save on rent and other infrastructures are sure to attract large untapped customer segment in future.

2) Online markets are growing rapidly in Tier 2 and Tier 3 cities where physical outlet are absent or are few. They will penetrate the market deep enough before physical outlet set-up there and start to attract the customers.

3) Indian is a country with population of 1.2 billion out of which the population of age group of 18-40 is 40% (as of census 2011). And this is the chunk of population on which online retailer have been finding a dip in sales. This trend is supposed to increase even more. 

4) The service that these companies offer is almost flawless. Delivery before the delivery date, free delivery, 30 days replacement period, etc. will lure more customers to try these sites.

5) The online market has moved towards growth phase of business cycle in which the startup has dried up in recent years as investors are focusing more in larger companies. Thus the prospects of larger companies to grow are even more.

6) Proliferation in the use of smartphones in Indian market which have enabled large base of customers to go online regularly and thus have access to these sites will increase the sales even more in near future. 

Business as a solution to Social Problems

Contemporary world has been confronting with many social problems that people, government and business societies are concerned about. Many serious problems are arising that have come down heavily on the people. Problems like: climate change, deforestation, poor nutrition, access to water, pollution etc. have created major threat to livelihood of people. The problems are supposed to increase even more when endeavor of governments to address these problems have been making only an incremental improvement and primarily the reason for this being scarcity of resources.  In this connection when government (which has been referred to as the solver of societal problems) has been facing with resource crunch, the onus lies on the business which is the real creator of resources in the form of profit. 

Business can create resources when they meet the need, at a profit.  Business at the present time possess humongous power availed to them via resources possession. The accumulation of vast resources generated from profit enables them to mobilize energy and resources to solve the societal problems.

Societal problems and Business:

When we generally talk about business in relation to the societal problems, two differing views appear. The traditional thought identifies business as a creator of societal problems. Meaning that business creates profit at the expense of the society. Profit is excessive when: pollution is massive, labor exploitation is prevailing etc. This is the view that is commonly prevalent which partly is also because of the fact that companies have been neglecting the society in which they operate.

However the modern thought opines exactly the opposite and finds a cordial linkage between business and societal problems. For example a business causing less pollution means that the system is efficient, resources wastages is minimum etc. which automatically leads to more profit and vice-versa. As companies focus on long run of business, the notion of business as solver of societal problems is getting more practiced. This philosophy has been more popularized by socially responsible investors.

Role of CSR in addressing Social problems:

CSR in not a new buzz world in business world. The term originated in a club Rome in 1970s among a group of scholars, thinkers, executives that took talk of laying the future of sustainable development.  Though there isn’t any widely accepted definition of CSR, it can be defined as a self-regulatory mechanism, voluntary rather than mandatory, whereby business ensures compliance with the law of land, ethical standards, and international values. As such, besides embracing the responsibilities for the business actions, CSR attempt to address social issues by going beyond the interest of the firm and the law of the land. Though CSR has often been referred to as a voluntary initiative, recent change has been in the direction to make it mandatory also. For e.g.: Company Act  2013 of India makes CSR a mandatory obligation on the part of the company with  at least INC 5 crore net profit or INC 1,000 crore turnover or INC 500 crore net worth, to pay 2 % of their average net profit of three year on CSR activities on each financial year. The importance of CSR reporting is increasing which are driven by regulatory bodies and stock exchanges around the world.

In case of Nepal, there is absence of dedicated policy that guides CSR activities. Proper enforcement of existing laws will promotes basis for voluntary CSR activities. For instance Environment Protection Act 1997 forbids individuals and enterprises from polluting the environment that might have an adverse effect on the environment or public life. Similarly other acts like, Consumer Protection Act 1998, Black Marketing and Punishment Act, Drugs Act, Corruption Prevention Act, etc. promotes fair practices in business and society.

For companies wanting to be socially responsible, CSR standardization measure like ISO 26000 can give a good reference. ISO 26000 though is a voluntary measure, specifies key principles as roots of socially responsible behavior which are: accountability, transparency, ethical behavior, respect for rule of law etc. Similarly another accepted framework is Triple bottom line which identifies three Ps: people, planet and profit as three pillars of sustainability. As such concern of society, economy and environment must be addressed. Also OECD guideline to multinational companies, UN Global compact etc. are also very popular.

Futuristic Approach to CSR

Though CSR initiatives have been effective in addressing social problems (at least in incremental way) the more sustainable approach to CSR approach would be “Creation of Shared Value” which means addressing of a social issue with a business model. The notion of creating social value is to create product offerings that meet social needs. Harvard Professor and strategist Michael Porter in one of the Ted talks, identifies this model as “high form of capitalism that aims on addressing social problems in effective way”. For e.g.: Invention of drip irrigation technology saves water and fertilizer by allowing water to go drip slowly to the roots of plants, Nestle initiative to become a nutrient company rather than being a food company (that may make people victim of obesity), etc. marks the movement of a company towards this approach of creation of share value.

In another way, this approach enables companies to change the conventional approach of the society of business as creator of social problems. The advantages of this would flow in manifold volume which might be, reduces business risk, greater acceptability of brand, garner customer appreciation, brand enforcement, reduce conflicts etc. which in totality helps it to be a leader in the industry.

As such business resources when deployed effectively can play an instrumental role in solving social problems that are too large for government and I/NGOs. 

Analysing Humongous Bonus Distribution by Surat Diamond

Publishes in New Business Age Magazine, November Issue 2014,  http://www.newbusinessage.com/issuedetail/991)

Last week came incredible business news that amazed many people in India and abroad. This news was about an Indian diamond based business company, named Hari Krishna Exports, giving generous bonuses to its employees. The company gifted nearly 500 Fiat Punto cars, 200 two-bedroom houses and jewels to 1200 staffs, all told, a worth of 50 crores.  The company gave these “as part of reward for loyalty program for employees who performed best for last five years”, according to the company chairman and MD Savji Dholakia.

Picture of the reward distribution program: taken from ibtimes.co

In the contemporary business world where organizations are driven by profit via cut-throat competition, this model of giving enormous amount of profit to employees is taken by surprise by many people.  Let look at different aspect of the news and its impact.

• By giving enormous bonus to its employees, this company has earned humongous popularity that wouldn't have been possible even if it had allocated the monetary worth of bonus to advertising.   
• As I googled to learn more about Surat Diamond business l, I got many Google pages that would be with heading such as: “Diwali Bonus-500 CARS, 200 Flats and Jewels”. This is a unique social business model that the business world has seen of now and can be a benchmark model for others wanting to adapt this model.
• This can also be related to as an exemplary form of Corporate Social Responsibility (CSR). As Richard Branson has defined business as” trying to make a real difference to other people’s life”. In this connection, the real “business” of a business should be caring of its employees, and in fact, this is the starting point of a sound CSR.
• As I read this news, I thought about how amazing it would be to work in company like this. And this might be what most of the employees who read the news be thinking as of now. What I am sure is that, this particular company has been Dream Company for many employees of the industry and prospect employees. The direct impact is, the retention will be high and the company at the same time can attract the talented personnel of the industry also.
• Another important thing here is that the bonus was given to 1200 employees based on their preference. Those who didn't have home were gifted with flats, those who had home were rewarded with cars, and those having both cars and home were gifted with jewels.  As such, it encourages the existing companies to have reward preferences options when they design any reward program from their employees.

Looking at the big picture, HariKrishna Exports can realize in next few years are: increased sales, increased client base, high employees retention and performance, increased brand awareness of the company, and increased job applicants. Well, the advantages that it is going to reap are in manifold times greater than the cost incurred for achieving it.

Porter's Five Force analysis of Boeing Co.

Introduction to Porter’s Five Forces:

In 1979 came an article which was published in Harvard Business Review, titled “How Competitive Forces Shape Strategy” by Michael Porter, which ignited a revolutionary era in the field of strategy. Today’s Porters five force model has been the de facto framework for the industry analysis. Analysis of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack. A proper analysis helps one to gain a big picture of what is influencing profitability in the industry. You identify game-changing trends in advance, so you can exploit them swiftly.

The five forces are:

1) Threat of New Entrants

2) Threat of Substitutes

3) Bargaining Power of Buyers

4) Bargaining Power of Suppliers

5) Competitive Rivalry.

Industry information:

Global aircraft manufacture is dominated by strongest duopolies: Boeing and Airbus.  Also known as “Big boys club”, these two gigantic companies have dominated the market tremendously and thus have created significant barrier to entry.  The industry also has cases of new entrants coming into operation but eventually failed. Some of them were: Mitsubishi, Indonesia IPTN, etc. Beside these two dominating companies, there are small players who have been operating in niche market like: Bombardier (Canada), Embraer (Brazil) etc. and recently Chinese manufacturer COMAC which generally caters to the local market.

Company Profile:

 Founded in 1916, Boeing is the largest global aircraft manufacturer by revenue, orders and deliveries. It has a strong customer base and support in 150 countries across the globe. With more than 12000 commercial jetliner engaged in aviation service, Boeing boasts itself as the largest aircraft manufacturer. Boeing is also a market leader in the industry of military aircraft manufacturing. Boeing features in Fortune 500 list of companies and is ranked 26^th on the “World’s Most Admired Companies” list, 2013.

Porter’s Five Forces analysis of Boeing Company:

1.       Threat of New Entrants: Low

Threat of new entrants is relatively low because of humongous amount of fixed cost of competing. Factors like: huge capital investment required, extensive level of R&D budget and activities, massive level of technological expertise needed, etc. creates a high entry barriers and thus low threat of new entrants.  Some companies that have operated in regional level and aircraft manufacturer of china are enjoying niche market are because of the preferential benefit arranged by the particular Nation state.

2.       Threat of Substitute: Mild

Threat of substitute for aircraft manufacture is minor as people prefer aircrafts largely because of time factor. Rapid advancement in bullet trains, car etc. might affect the aircraft manufacturing business in the future.

Fig: Five forces that shape Industry’s competition

3.       Bargaining power of Buyers: Mild

In totality bargaining power of buyers is mild.

·         Buyers purchasing in bulk: High bargaining power of buyer

·         High capital investment by buyer in purchasing of aircraft: Buyer involves long-term contract with seller and thus low bargaining power.

·         High switching cost: Switching cost is high because of technological factors and long-term contracts involved and this low bargaining power.

4.       Bargaining power of Suppliers: Low

In case of aircraft manufacturers it has been found that both of that Boeings makes outsourcing to large number of suppliers throughout the globe. For e.g.: Boeing itself has more than 100 firms supplying it with the parts of the aircrafts. As there are large numbers of suppliers and the firms that purchase are concentrated, the bargaining power of supplier is low. The company has the power to negotiate with the price of supplies due to economies of scale.

1.       Competitive Rivalry: High

Sluggish industry growth, no clear market leader and undifferentiated strategies, high barrier to exit, etc. drives for the competitive rivalry among the existing players of the industry. The market is largely a duopoly market, resulting in low profit margin in the airline industry and thus Boeing fighting furiously with Airbus for more share of the industry.

Online Business Surge in India and it's Future Prospect

If you study the recent trend in the online business in India, you can easily find out three major market players. Namely: Flipkart, Snapdeal and Amazon. For traditional India where online purchasing was a taboo and thus was limited to few online ticket booking, these companies together have introduced a new culture of online business culture in India. A business that is forecasted to grow from sales of $ 2.3 billion (As of 2014) to $32 billion ( as of 2020).

source: Technopak

For Flipkart which is largest internet company by its market value of $7 billion, it went through rough ways to arrive at this position to bust the myth that consumers like to see and feel the product before buying. Reluctance of customers to give details of their credit cards, fear about the delivery of the product, suspicion to get exact product etc were of paramount amount which pioneers like flipkart had to go through. 

These companies are at the verge of cut-throat competition as they have been going with massive marketing strategy to boost the sales. Recent humongous sales made by e-tailers like Flipkart of $100 million in 10 hours as "Big Big Billion Sales day" and Snapdeal retaliating the same with sales of a crore per minutes proves this. As such there is a humongous sales that these companies have been able to make. And thus large amount of profit. While the competition is tough over a small profit margin, these companies are also facing challenges.The recent challenge is not because of the competitors in online commerce , but because of the competition/conflict between these e-tailers and brick and mortar models. It should be understood that it is until recently that brick and mortar business have been dominant in doing business in country like India. But this culture is changing rapidly. 

Challenges to Indian e-tailers:

1) Tough competition from competitors who are coming up with innovative strategy to increase sales.

2) Problems from top brands having brick and mortar outlets like: LG, Sony, Samsung etc who are accusing the e-tailers of making predatory sales (selling below cost), thus damaging their sales and brand names.

3) The customers in Tier-I cities like Mumbai, Delhi, Bangalore etc who prefer see-feel-buy approach in contrast to online modes. Luring them for online business might be relatively difficult.

4) New entrants in the industry which might reduce the price of product offerings sharply in contrast to the old market leaders. Similarly, it is also more likely that manufacturers and brands might offer product offerings via their own online sites. 

5) Another possible challenge would be large brick and mortar group like: Reliance Industries, Future Group, TATA group planning to go online to expand. etc

Brighter side:

It can been seen evidently that indian e-tailers have been inspired from chinese mega online internet retailer: Alibaba's success, which raised record high of $21.8 billion IPO. The statement of Flipkart CEO and Founder Sachin Bansal to make Flipkart a $100 billion club member in upcoming 5,10 or 15 years provides a hint that they are planning for a rapid growth of company business in near future. 

Now lets us put light on the basic facts that hints us about the brighter aspects of growth of online business in India.

1)The online market has moved towards growth phase of business cycle in which the startup has dried up in recent years as investors are focussing more in larger companies. Thus the prospects of larger companies to grow is even more.
2)  Indian is a country with population of 1.2 billion out of which the population of age group of 18-40 is 40% (as of census 2011). And this is the chunk of population on which online retailer have been finding a dip in sales. This trend is supposed to increase even more.

3) Online retailers selling product-offerings in a cheaper price as they save on rent and other infrastructures is sure to attract large untapped customer segment in future.

4) Online markets are growing rapidly in Tier 2 and Tier 3 cities where physical outlet are absent or  are few. They will penetrate the market deep enough before physical outlet set-up there and start to attract the customers.

5) The service that these companies offer is almost flawless. Delivery before the delivery date, free delivery, 30 days replacement period, etc will lure more customers to try these sites.

6) Proliferation in the use of smartphones in Indian market which have enabled large base of customers to go online regularly and thus have access to these sites will increase the sales even more in near future. 

Why Small Countries are Economically Viable in Globalized world ?

From amongst the large number of small countries, some are developed while many others are still struggling to prosper. The small countries that have developed have followed a specific path that has allowed them to attain a competitive advantage with respect to the other countries. We maynot exactly attribute a particular reason for the underdevelopment of a particular country but we can clearly pinpoint why a particular country has developed over a particular period of time.

For small countries, the case may be different than that of the bigger countries. The concept of “small of beautiful” applies when we take reference of small countries that have prospered a lot in short period of time. 

Let us study the reason that pushed small countries hard enough to prosper in a short span of time.

1.             Openness to trade:

Small countries are generally found to be open to the trade. They are less hesitant to enter to the international business. The reason behind this is that, small countries develop themselves competitively in some niche products or services that have been ignored by the larger nations. Eg: Singapore, Hong Kong, Switzerland etc.

2.             Social Cohesion:

A good example of social cohesion is demonstrated by small countries. Small countries are characterized by less/no problems amongst the ethnic communities, more social harmony, equal and easier to run the country. Hence a better government because of the political stability resulting from the social cohesion.

3.             More adaptive and responsive to changes:

Smaller countries are generally found to be more adaptive than the larger countries. Because of the vulnerability factor, they keep themselves updated of the major changes that are going to take place in the global business or politics. They tend to have better developed sensing mechanism in terms of what is happening in the rest of the world. As such they develop a proactive mechanism to adjust to the changes of the volatile business and political world.

4.             Stable political system and clear economic goals:

If we study the characteristics of the small countries we find that they possess well developed political system that promotes stability and favors economic growth. For a country like Singapore, it has a political system that favors political stability and has clearly identified economic policies that favors rapid development. E.g.: Singapore political system that favors single party rule.

5.             Export oriented:

Because of the relative smaller size of the national consumption (relative to total income), small economies tend naturally to be more export oriented that the larger economies.

6.             Prioritized focus:

The focus of small countries is limited to certain priorities like: education (thus more skilled labor force), innovation(thus more investment and employment), export promotion, competitiveness etc. Most of the time they are not engaged in the issues of international politics, politics over oil, support for democracy etc., that bigger nation find themselves.

7.             Preferential economic advantage:

Many international policies and regulations related to international trade favor small nations. The arrangements are such that small countries are less exposed to trade quotas and other restrictions as they don’t produce in large quantities.

8.             Optimum utilization of resources:

Similarly economic efficacies are found more in small countries. Because of the scare resources, small countries specialize in the maximum utilization of the resources. For example we can see how Japan is proactive to the natural calamities and disasters in spite of having scarce resources.

One important discussion that must be introduced while describing about the development phenomena of some countries is: On what cost factor those countries are developing ? For example for those countries which haven't prospered , we must recognize that their concerns of political freedom ahead of economic liberalization has put a cap on the pace of development.We can relate this to bigger countries like India also. Democracy, poverty, humanitarian values, etc have caused those nation states to focus their resources and energy in diverse sectors , which is, at the expense of the industrialization. Countries based on democracy have to balance their activities between long-term growth needs and short-term social benefits. For example Qatar escapes itself from this phenomena and thus its emphasis on economic freedom before political freedom has served well in the areas of attaining systematic growth. Hence small countries have been prospering mostly because of the value they put on economic development in contrast to political freedom.

But again the question is, Is it really justifiable to attain development at the cost of the social justice and freedom of its people ?


(P.S: This write-up is based on my learnings from MOOC courses and personal research)

Ease of Doing business in Nepal: 2015

Singapore has ranked as a leader in the Doing Business Report- 2015. This year Singapore is followed by New Zealand, Hongkong SAR China, Denmark, Republic of Korea, Norway and so on. The United States ranks 7th, while Japan ranks 29th.

Ease of Doing Business report 2015 is 12th annual report of World Bank group that provides investigated report of the business regulations that enhance business activity and those that constrain it. It is based on measurement of 10 different quantitative factors namely: starting a business, dealing with construction permits, getting electricity, registering property, getting credits, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

In 2013-14 Tajikistan was the nation that improved most significantly followed by Benin, Togo, Cote d'Ivoire, Senegal, etc. To be noted also is the Sub Saharan African region with the largest number of economies accounted for regulatory reforms in 2013/14. While South Asia as a whole has a lower reforms and is slightly placed over OECD countries and Middle Ease and North Africa countries based on the reforms measures taken.

Nepal performance in the Ease of Doing Business has improved by a mere position of a unit with ranking of 108. Still to this date Nepal remains an unattractive place to do business. Though this year figure shows improvements in some indicators of the study, still Nepal needs to improve in many sectors. However if we compare Nepal's rank with that of other South Asian countries, it seems to be in a comparatively better position. Sri Lanka improved the most by jumping six place up in the ranking to 99. Sri Lanka is followed by Nepal with ranking of 108. Other countries rank as follows: Maldives (116), Bhutan (125), Pakistan (128), India (142), Bangladesh (173). The regional rank is 134.

The trading across border of Nepal is lowest among its South Asian neighbours. However it has the best ranking in terms of registering property(globally 27th) which requires 3 procedures, 5 days and 4.8% of property value to register. The regional average is 6.4 procedure, 99.5 days, and 7.2% of total property value.

This year following reforms aided for improvement of the ranking:
1) Adaptation of new building regulations ( Earthquake resilience)
2) Improved building inspections process
3) Improved/Introduced electronic platforms or online services (for obtaining building permits)

The ranking is updated till June 1, 2014 and thus doesn't include the latest strings of development that the Nepalese government has unveiled in Nepalese business environment like, trade agreement, regulatory changes in the hydropower sector etc. However Ease of Doing Business indicator is remarkable in the sense it gives country like Nepal an assessment of which regulatory reforms have been working, where and why, either in a country's scenario or of that of any other country and thus learn from them.

Massive power cuts, uncertainty about constitutional drafting, volatile political and business environment, etc might have had negative effect to this ranking. As such the government should put a vigil eyes on reforms measure and thus should incorporate methods to improve the business condition of the country. The indicators like:- getting electricity, getting credit, paying taxes etc should be improved more to ensure that ranking gets improved.

However the recent bilateral agreements, Power Trade Agreement with India, surging foreign in Tourism sector, possible promulgation of constitution etc makes one hopeful of the overall business environment improving and thus the ease of doing business also to improve.



Reference:
http://www.doingbusiness.org/

Early Phase of Globalization: Phase III

First phase of globalization (1492-1850) was basically about state-funded voyages that would later on pave way for colonization. In Second phase of globalization (1850-1914), scientific development in means of communication and transportation speeded-up the pace of globalization. Finally the favorable ambiance created by first and second phase of Globalization turned out more encompassing and humongous in Third phase of globalization(1945-present).

On the dawn of 1945, the global economic reforms initiated by United States along with its allies of World War-II provided a framework for commencement of international trade and commerce. Economic cooperation were headed in a direction to prevent the recurrence of global economic crisis like that of 1930s.

The period from late 1940s to early 1970s is often referred to as Golden Age of Capitalism as this phase involved transfer of capital from the Colonial center to its large colonized states started. More global regulatory bodies were installed : World Bank, International Monetary Fund etc that facilitated global trade and played an intermediary role to settle the trade related disputes. Adding more, vital concepts of modern economy: deregulation of the corporate sector, the privatization of public enterprises and institutions, tax reduction, deregulation of capital flows etc flourished in this period. This would change the future of business within the county border and across the national frontiers.

The structure of economy then was quiet different in contrast to what it is at present. Banking sector then was characterized by control of politicians. But at present, banking sector has evolved as strong force for globalization and in most of the advancing economies it is independent and more powerful. Also on the dawn of third phase of globalization, state began focusing on expansion of welfare states, catering to the needs of the poor population, safeguarding the interests of business communities, etc.

Post 1945 saw a major structural change in global politics in which the proponent of capitalism, USA began a global superpower. Similarly global organization like UN acted as a beacon for effective global governance and peace keeping. Beside UN, the emergence of other ING-Os like Human Rights Watch, Amnesty International, Greenpeace etc focused to work on the issues which was difficult for the governmental bodies to work upon. Their operation and cooperation across the world strengthened the global cooperation, understanding and goodwill.

Being Unethical: Is it a gradual process ?

Picture Credits: Wikipedia

Ethics is often referred to as a grey area, especially when we talk about it in correlation with business. However those who are adamant that ethics should be integral part of business opine that ethics though is an abstract concept, should be put forth as Blank and White area. Most of the time people are aware about what is ethical and what is not. However what is that very thing which drive people away from being ethical? Let’s analyses.

Reference Cases:

1) After I enter into my MBA class, it is implied that cell phones should be kept silent or switched off. This was strictly followed during some of the earlier classes. However, after some days, we started using cellphones within class for messaging, using email and internet etc. Since this act wasn't being interrupted by faculty members, there was more lax. And finally some of us started even receiving calls in classes.

2) Our hostel mess serves single banana per meal. But as I am fond of it, I am keen to get some extra bananas. But this is not possible in ethical way. So I started to take one right in the beginning(and have it) and another right after lunch saying that I didn't take it previously. And what next, I even tried getting more when the mess servers are busy.

What generalization we can develop from these two simple real life cases is that "being unethical is a gradual process and if unethical behavior is not checked/interrupted, we tend to become more unethical".

Why is it so? 

A person who commits small unethical act will be motivated when he/she performs that task. This will bring on him/her a sense of achievement or accomplishment because of being able to disobey the law. It will also enhance on you a feeling that you won't get caught and it's easier for you to master such unethical practices.  It will make the doer comfortable about that, and before you know, it snowballs into something vehemently large. This tendency of committing one unethical task after another will lead to a vicious cycle of being unethical and we become a total corrupt.

Though I assume that whether you commit a small degree of unethical activity or a huge degree of unethical activity, the jurisdiction is the same: you end up doing something unethical. However, it is the society that defines whether an activity is ethical is or not, based on the perception of the larger size of the population. So sometimes society may forgive small degree of unethical practices as being a normal act. But we should be conscious of whether or not that lax has been promoting our society to be more unethical.

Many of the business scandal that were followed in recent history follow the same trend. They being from something small and finally end up with something really uncontrollable unethical practices. While they manage to cheat something small in one round, they might be willing to cheat a bit more in another round and most likely a really a big in the upcoming rounds. And this is because of the organization's behavior of  not paying attention to the small issues signaling that it is willing to tolerate a level of questionable behavior. For reference:

•  Modoff Ponzi scheme started when he covered relatively small financial losses. Later on, over the period of 15 years, the scam grew in manifold time and finally reaching a galloping figure of $65 billion. 
• The same is in case for World Phone hacking scandal. 
• Collapse of Enron etc

The beginning of most corrupt practices is a lower one. Most of the time we begin with small practices like taking away of office equipment, hiking of transportation expenses, labeling of personal meeting as official visit and son on. And this trend can be identified as a serious problem for the future of the business world. The case is more serious (and interesting) as a recent survey conducted by ethics.org reveals the following findings: 

• About 73 % of surveyed Americans employed full time reported ethical lapses on the    job, 36% said they were distracted by such an incident.
• Young workers, from 18-34, reported substantially higher levels of witnessing ethical lapses and being distracted than middle-aged and older workers.

As such we can observe it vividly that if we do not take proper corrective actions/measures instantly, the future of business world and the society in which we will be jeopardized and our ethical and moral standards will degenerate. 

References:

Ethics.org

Hbr.org

World Forum For Ethics in Business

(for reference about systematic procedure to address unethical practices in an organization, refer to another BlogSpot on ethics) 

Early Phase of Globalization : Phase II

The second phase of globalization covers the period between 1850 AD to 1914 AD. It is marked by the period of extensive internalization of science, commerce, transportation and communication in the middle of the nineteenth century. As such, this phase is also known as "The Age of Transnational Integration".

We can make a study of second phase of globalization based on following four topics:

1. Marvellous Inventions: 
During the second half of the 19th century, world saw the advent of advancement major technological findings that would largely shape the future of the world. Invention of Train system, Postal system and Steam Engines. All these inventions facilitated the integration of the world in an speedy way. These inventions shaped people expectation regarding the future of the integrated world.

2. Flow of Capital and Goods:
We can also identify this phase as one in which there was a cross-national flow of investment capital. This phase of history was marked by an enhanced colonized system that also aided the globalization of business and economic development of colonies. Great Britain investment in its colonies: America, Canada, Australia and New Zealand would later-on facilitate economic development. Also there was extensive flow of goods in this period: the international voyage of goods from India (Asia) to Great Britain (Europe), Canada to Britain, Australia to Britain, etc.  Similarly other colonies based in Europe exploited the vast resources of Africa, to their benefit. However this vast integration of world economies was changed after first world war, which to some extent disrupted the chains of globalization.

3. Establishment of Global facilitating Institutions: 
The proliferation of social organization in this phase: The Scout(1901), Rotary, The Red Cross(1863), The Salvation Army (1865), Olympic games, Nobel prize etc would later prove as a facilitating mechanism for the integration of the whole world.  Also it was visualised that the world would need a global language for regulating and enhancing future global trade. Developed in Poland by Zamenhof', the language was called Esperanto(1887) , which though did not develop enormously, was overtaken by English as language of globalization.  

4. Promotion of notion of Free Competition and Global Integration:
Organizations like Olympic games(1896), FIFA (1904)  developed a common platform to bring together global population together,  and compete for the better international relations among nations. This helped to promote the feeling of competition while also favoring co-operation and harmony among the global population. As such, the basic lifeline of Globalization, i.e free competition, was popularised in second phase. Also they promoted humanitarian ideals and belief in the value of knowledge.

Hence we can conclude that second phase laid down those rudimentary framework which paved way for rapid and massive form of globalization in the third phase.

Sources:
Wikipedia
University of Texas @ Austin
The World is Flat 

Early Phase of Globalization : Phase I

Globalization has tied people of the world living together, no matter what part of the world and what walks of life. No country, regardless of its size, structure and business can ignore the globalization of business. In the present world, advancement in science and technology has completely transformed the concept of globalization. Forces like: modern and sophisticated means of communication, transportation, establishment of global trade facilitation bodies like World Bank, IMF etc, establishment of regional/bilateral/multilateral economic treaties etc has completed added new spheres to the discussion of globalization. 

At the present time, when the concepts of globalization is dragging more attention than ever and is ever evolving, we need to understand the historical development of concepts and practice of globalization. 

First Phase of Globalization:

First phases of globalization began in 1492 AD. with the voyage of Christopher Columbus to the new world and the voyages of european exploration that made possible for proliferation of European colonies throughout the world. 

The explorers like: Christopher Columbus, sponsored by Spanish crown, completed four voyages across the Atlantic ocean. Columbus introduced American lands to the world. Similarly Portuguese explorer Vasco Degama made India know to the world in 1498. Similarly, Ferninand McGellan made the first circumnavigation across the world in the service of King Charles -I of Spain, between 1519-1522. Francis Drave made second circumnavigation across the world from 1577-1580, to the service of Elizabeth -I. Drave implemented the concept of tax and executed the confiscation of foreign treasures across the world. 

Basically there were many other overseas expedition prior to these. But these particular event are referred to as beginner of globalization. We can accredit following reasons for this:

1) All of these events were state sponsored acquisition of strategically valuable knowledge and skills that enabled nations like Spain, United Kingdom and Portugal to establish vast colonial empires across the world.

2) These expedition carried out state sponsored expedition to confiscate lust treasures of colonial states that could later on become wealth of the state. This later on paved possibilities of collaboration between state and private companies. eg: Great Britain and East India Company.

3) State sponsorship of global trading monopolies was a foreshadowing of state sponsored national champions global corporations of the model era.

References:
Age of Globalization course, Coursera
Wikipedia
Google

Corporate Quiz 2- Business Books

 Corporate Quiz 2- Business Books

1.      Name the famous personality known for his cartoon character and also wrote the books Bring me the Head of Willy the Mail Boy, Still Pumped up From Using the Mouse and Shaving the Whales? 

2.      Which two companies are associated with Tara Deshpande for India's first e-novel which is authored by Tara and co-authored by the readers? 

3.      Whose autobiography is known as "Work in Progress"? 

4.      In which book marketing legend Peter F. Drucker first coined the term Privatisation? 

5.      Which former Indian chief executive's autobiography is titled as "Bite the Bullet"? 

6.      Who is the author of the book sub-titled as 'Necessary Disorganization for the Nanosecond Nineties'? 

7.      'Who Moved my Cheese' is from the best selling author Spencer Johnson. Name the other book he co-authored with Kenneth Blanchard? 

8.      Whose autobiography is called as "Just For Fun" and co-authored by David Diamond?

9.      Who is widely referred as the Quality Guru and the author of the books Quality is Free, Quality Without Fears and Running Things?

10.  Who co-authored the book 'Weaving The Web' along with Tim Berners-Lee? 

Answers:

1.      Scott Adams
2.      Firstandsecond.com and Adobe Systems
3.      Michael Eisner
4.      The Age of Discontinuity
5.      Ajit Haskar, Ex-Chairman, ITC
6.      Tom Peters and his Liberation Management
7.      One Minute Manager
8.      Linus Torvalds
9.      Philip Crosby
10.      Fischetti Mark

Corporate Quiz 1-Brand Names Origination

Corporate Quiz 1-Brand Names Origination

1.      Name the brand of Beer which got its name from the brewery which was founded on the Banks of the river Amstel? 

2.      What was known as the Blue Ribbon Sports company earlier? 

3.      Which brand got its name from a Sanskrit word which means "Priceless"? 

4.      Which international brand was founded by Adrian Dasley, Larry Hillblom and Robert Lynn? 

5.      Identify the brand which means 'Three Oceans' in English and has it's motto as "Saving the Earth and Serving its People".

6.      "I knew a trade name must be short, vigorous, incapable of being misspelled to an extent that will destroy its identity, and in order to satisfy the trademark laws, it must mean nothing". Who said this and name the brand? 

7.      What is known as the ratio of the percent (%) of a brand's sales in a market to the percent of national population in that same market? 

8.      Sony get its name from the Latin word meaning 'Sound'. But which brand derives its name from a Japanese word for 'Sound'?

9.      This brand derives its name from a old French word meaning "Beam of Light" and a Greek word for "From the Gods". And the company was initially known as American Appliance Company. Identify the brand/company. 

10.  Name the brand of pocket watch used by Mahatma Gandhi? 

1.          Amstel Beer
2.          Nike
3.          Amul from Amoolya
4.          DHL
5.          Sanyo
6.          Geroge Eastman about his Kodak
7.          BDI - Brand Development Index
8.          Onkyo
9.          Raytheon from Rai and Theon
10.          Vintage Ingersoll