Final Vol. 4 Issue 4 - IIM Indore

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Volume 4 Issue 4 January-March 2013

EditorialWe are pleased to release the last issue of Volume 4 of Indore Management Journal(IMJ). The present issue contains views on institution building specifically in thecontext of higher education. The issue also carries scholarly articles including acase study, perspectives and book reviews.

On the occasion of the foundation day celebration of IIM Indore, N. Ravichandranpresents an introductory summary on institutions building in the conference titled”Creating and Sustaining Institutions: The Indian Experience”. Based on hisexperience Deepak Satwalekar reflects on the concept of institution building. Hebelieves that what is true for institution building is equally true for career building.VL Mote argues that what is true of the nation's educational programs is also trueof the nation's development. According to him, the triads for any educationalprogram is who to teach, what to teach and how to teach. For academic excellence,he emphasizes on understanding the economic as well as the social environment.SG Desmukh takes the case of ABV-IIITM. He discusses the differences betweenthe views of technology school and the management school and explains how ABV-IIITM is balancing the views of both the schools to evolve as an institution ofexcellence.

The first article addresses the relation between interest and investment and arguesthat while making monetary policy the authorities need to factor in the distributionof liquidity in addition to the volume of aggregate liquidity. The second article isa case study that focuses on the content, process and challenges that are faced bya large, reputed bank in India during its transformation phase.

The perspective section carries five important articles. The first one discusses thedivide between Science and Religion and argues that there is no Cartesian dividebetween the two. A balance between the two can bring a high level of synergy inone's life. The second article draws a philosophical perspective to comment on thearticle. Draws from the experience of Venkat Changavalli, the third perspectivethrows light on how to build successfull personal brand. The fourth perspectivetalks about the use of intelligent measures for employment testing. The fifthperspective is a reaction to Sandberg's exhortation to women to 'lean in' to theircareers and set right the gender skewness in organizations.

As in the past, the present issue carries a rich selection of book reviews. Diversethemes, such as leading business through the great economic power shift, conqueringthe Chaos, lessons for breakthrough growth, the story of Param, and how Gujaratisdo business are included.

We are sure that you will find this issue enjoyable to read.

Editorial TeamIndore Management Journal (IMJ)

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EDITORIAL

VIEWPOINT

1 Institutions Building

5 Reflections on Building InstitutionsDeepak Satwalekar

9 Thoughts on Academic ExcellenceV. L. Mote

13 ABV- IIITM: Experience of a T and B SchoolS. G. Deshmukh

ARTICLE

22 Balance Sheet Effect of Real InvestmentSubhasankar Chattopadhyay

MANAGEMENT CASE

31 Organizational Transformation: The Case of Republic Bank of India (REBI)Ranjeet Nambudiri and Radha Ravichandran

PERSPECTIVE

40 Swami Vivekananda: Bridging the Cartesian Divide of Science and ReligionSwami Samarpanananda

47 CommentaryBiswanath Swain

50 How to build Successful Personal BrandNithiya Anil Changavalli

52 Intelligence Measurement:Recommendations for a Research based Strategy in Employment TestingSangeetha Rajan

60 Perspectives on 'Lean In'Madhusri Shrivastava

BOOK REVIEW

63 Global Tilt : Leading your Business through the Great Economic Power ShiftSatheesh Kumar T. N.

65 Conquering the Chaos: Win in India, Win EverywhereKajari Mukherjee

68 The Elephant Catchers: Key Lessons for Breakthrough GrowthWallace Jacob

70 ParamMadhukar Dayal

73 Dhandha: How Gujaratis Do BusinessJitender Kumar

CONTENTS

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Volume 4 Issue 4 January-March 2013VIEWPOINT

A brief summary of the introductory remarks made bythe Director is reproduced below.

What are Institutions?

Institutions are different from enterprises /organizations. More importantly, institutions can beseen as evolution of an organization. Enterprise is thefirst level of formal structure of a business / commercial/ social entity.

Characteristics of Institutions

Institutions are characterized by the performance forwhich they stand for. They are independent of time.It is often not clear as who has created them. Thereis no standard operating procedure to create institutions.They are sustained and nurtured by the stakeholders.

Some outstanding examples of institutions includeChristian Medical College and Hospital, Vellore, 3M:Profile of an Innovating Company and Chaparral Steel:Rapid Product and Process Development as amanufacturing unit. These organizations eventuallyhave a purpose. They performed well, constantlyevolved a mechanism by which they can be reinventedthemselves.

DNA of Institutions

Institutions have a definite eco-system. They aredynamic and agile to the environment conditions. Theyare customer centric. They are adoptable to thetechnology, market and customer needs. They developa unique policy to be resilient. They are people enabledand performance driven. Often they change the frameof reference in which they operate. Institutions are builton innovative ideas, creative solutions and an abilityto balance risk. They are driven by leaders and ownedby stakeholders.

Annexure 1Conference on Creating and Sustaining Institutions:

The Indian Experience

Programme Schedule

Day 1: Wednesday - October 2, 2013

1400 - 1430 Topic: Tutorial on InstitutionBuildingN. Ravichandran, Director,IIM Indore

1430 - 1600 Topic: Evolution of ManagementInstitutions1. Ajay Pandey, Professor,

IIM Ahmedabad2. Sudas Roy, Former Professor,

IIM Calcutta3. Devanath Tirupati, Officiating

Director, IIM Bangalore

1630 - 1800 Topic: Experience Sharing1. S.G. Deshmukh, Director,

IIITM, Gwalior2. Rajendra Nargundkar,

Senior Dean - Academics,IMT, Ghaziabad

3. Aditya Shastri,Vice Chancellor,Banasthali Vidyapith

1800 - 1845 Aspiration of Students /participants on IIM Indore

1930 - 2045 Cultural Programme

Institutions Building1

.

1 This article is part of the speech delivered by Dr. N. Ravichandran atIIM Indore on the occasion of its Foundation Day on October 2, 2013.

Indian Institute of Management Indore has been celebrating its Foundation Day by public events, seminars andconferences etc. In the year 2013, this was celebrated with a conference titled "Creating and SustainingInstitutions: The Indian Experience". The schedule of the conference is enclosed as Annexure 1. This was alsoused as an opportunity to document the aspirations of students as well as faculty members about the evolutionand positioning of IIM Indore. The student aspirations presented in the conference is placed in Annexure 2.The Faculty aspirations presented in the conference is placed in Annexure 3. Three important presentations inthis conference are included as a part of this article.

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Day 2: Thursday - October 3, 2013

0945 - 1000 Introductory Remarks byDr. M.N. Buch, Member, BoG,IIM Indore

1000 - 1115 Topic : Reflections on InstitutionBuilding1. Deepak Pental, Former Vice

Chancellor, Delhi University2. S. Sundarrajan, Director, NIT,

Trichy

1130 - 1300 Topic : Academic Leadership1. V.L. Mote, Former Professor,

IIM Ahmedabad2. Gautam Barua, Mentor

Director, IIIT, Guwahati

1400 - 1530 Topic : Reflections on InstitutionBuilding1. Deepak Satwalekar,

Former MD, HDFC StandardInsurance

2. P. Balaram, Director, IndianInstitute of Science, Bangalore

1545 - 1715 Topic : Learning from thepracticing world1. T.G. Sagar, Director and Dean

of Cancer Institute (WIA),Chennai

2. N.S. Kannan, ExecutiveDirector, ICICI Bank Ltd.

1715 - 1745 Valedictory AddressT.V. Rao, Adjunct Professor, IIMAhmedabad

1800 - 1845 Evolution of IIM Indore in thenext 10 yearsDirector, Dean (Administration)and Activity Heads of IIM Indore

1900 - 2015 Cultural Programme

2030 Foundation Day Dinner**

Annexure 2Aspirations of Our Students at IIM Indore

Presented by Students

The value of a business school is not just about thequality of the professors or the education or the campusfacilities.

These factors are obviously important. But lots of schoolshave them. And they're hard to tell apart. At the highestlevels, moreover, there's only one thing that reallydifferentiates one business school from another: Theamount the school will help your future career. Someof the key aspects are provided below.

Admission Process

Focus on Diversity

Gender : Minimum of 33% females in a batch

Stream : A minimum percentage (Say 5%)from under-represented but important streams(Commerce, Arts, Medicine, Law etc)

Work-experience: Focus on varied industriesand profiles

Entrepreneurs: Some percentage admissionreserved for entrepreneurs - No Placementassistance

International admissions - Will enhance globalthinking and bring in a broader perspective

Scholarships

Merit based fee-waiver during admissions

Will attract better talent

Pre-Term: Preparatory Course before Term Starts

Review courses in financial accounting,microeconomics, statistics, and financial analysisfor students without the relevant background

To include classes in English for those who needit languages, Short seminars in communicationskills, computing technology, trading simulations,and career management

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Student Life

Academics

• Learning teams consisting of six students fromdifferent sections

• Culture designed to reduce competition andfoster collaboration

Clubs and Committees

• Being a member is mandatory

• Year-round events

Cooperation

• Between students of different programs

• Among students of same program

Games and Fitness

• World-Class grounds/courts

Dual/ Joint Degree

A University like System

• Students should be able to draw on resourcesfrom all of the different programs runningincluding law, engineering, medicine,humanities and sciences

• This will lead to a collaborative, cross-disciplinary learning culture where studentsare encouraged to pursue a joint or dual degree

Faculty

Collaboration

• In a university like system, faculty from onediscipline (e.g. Law) may take basic law coursefor another disciplines (e.g. MBA)

• Would also help research in overlapping areasof study

Guest Lecture into Curriculum

• Industry experts to give a few lectures in eachcourse taught

• Instead of having guest lectures by industryexperts, call industry experts to give lecturesas part of the relevant running course

• Can provide contemporary best practices andinsights

MBA Program

Class Participation

• CP component to be increased to at least 40%

• Essential for sharing of ideas and groomingof individuals

Personalized Mentoring

• One teacher assigned to each individual

• Helps in guiding career path and choosingelectives

Vision for the Future

The education received at IIM Indore should empowerstudents with the knowledge, skills, and long-term visionthat lead to innovation and growth. Students will builda powerful network of accomplished, inspiringcolleagues that will continue to sustain them, long aftertheir final class.

Exponentially more than a resume enhancement or ameans to an end, time spent at IIM Indore will shapea student's entire career - and transform their life. It willprepare them to navigate the unprecedented economic,social, and other complex changes the future willcertainly bring.

Annexure 3Faculty Aspirations

The Journey so Far: Established in 1996 - 6th among theprestigious IIMs. First batch of PGP graduated in 2000with 36 participants

Today, IIM Indore is the largest in terms of PGP intakeacross IIMs. It has a

• Robust Doctoral program - contributing faculty toIIMs

• Well-established EPGP - alliances with leadingglobal institutions

• Presence in multiple locations - PGP and PGPMX

• Only IIM to offer an Integrated program

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• MDPs - train around 1200 managers annually

• Focused Executive / Long term programs (E-Governance, Defense services etc.)

Vision

• To emerge as one among the Top 5 managementinstitutions (2009-2013)

• To evolve as a contextually relevant school withworld class academic standards

• To propagate, assimilate and develop contemporarymanagement practices and systems to contributeto social capitalism in India

• To illustrate and experience the uniqueness ofembedding a business school in a social sciencesetting

• To have a dominant presence in all segments ofmanagement education in Indian and abroad

The Road Ahead - Academic and Executive programs

• Scaling up the FPM program - impacting theacademic fraternity

• Specialized PGP / EPGP programs aligned aroundindustry verticals- healthcare, analytics, logisticsand supply chain etc. - impacting the industry

• Capacity enhancement of industry - relevant andcutting-edge executive education programs atmultiple locations - NCR, Chennai etc.

• Collaborate with local and state governments tomake top-class education accessible easily -impacting the society

Enabling mechanisms

• Recognition as best-in-class institution -accreditation, enhance alliances with globallyrecognized institutions etc.

• Become an institution of choice for top notchacademicians - attract the best talent from Indiaand abroad

• Create a world-class executive education centeroffering solution-based training programs

• Leverage and adopt latest technology - be at thefrontier of innovation in pedagogy

• Embed academic areas in social sciences andenhance participant exposure and learning throughreflection

• Research centers that contribute to creation ofapplied knowledge such as Leadership,entrepreneurship, analytics, supply chain

• Build synergies between teaching and research

• Knowledge dissemination through a world-classjournal that appeals to researchers from across theglobe

• Create high quality infrastructure

What We Want to be Known for

• Collegial culture - ecosystem characterized bycooperation and collaboration

• Institution driven by values - thus rendering theneed for the formal system redundant

• Center of Excellence for research and case writing- action research contributing to application

• Creating thought leaders not only in the industrybut also academia, the non-business context,government etc.

• Institution aware and sensitive to the needs to thesociety around - An institute that contributes toevery segment - academia, industry, society.

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While this may describe our sentiments today, it isactually a quotation from the book "A Tale of TwoCities" written by Charles Dickens in 1859 describingevents and times in England and France in 1775. So,we are not uniquely damned by the actions and inactionof the current rulers. All I want to say is not to let currentexternalities rule us and our actions, but to prepareourselves to take charge of our lives and to lead ourlives in the best possible manner. Best, not just forourselves, but for the society at large, because our goodcan only come from the good of the society and itsmembers. The aristocrats in France found that out thehard way - on the guillotine.

I am an extremely lucky person to have had theopportunity, three times, to create something fromnothing. I failed badly the first time when I was twenty-two years old. That company does not exist today. Thenext one was a bit more successful, but it is only 36 yearsold. I am referring to HDFC, India's first private sectorand currently the largest housing finance provider. Thethird is still work in progress, 13 years old, but isshowing good signs of replicating its parent. I am talkingabout HDFC Standard Life Insurance Co. Ltd. HDFCcreated a new sector, while HDFC Life Insurance wasthe first private sector life insurance company to beregistered 44 years after the creation of LIC through thenationalization of the then existing private life insurers.

I am an example of what an average person who iscommitted to his principles, and can get others to believein them, can achieve in his life. This is not to brag aboutmyself, but to emphasize that you can do it. Many

youngsters think that if you go down the path of valuesand principles, it is a lonely path and a dead end street.You are wrong. There are enough good people in thisworld in search of a leader who will show them the rightway of doing things, not the expedient way of achievingshort term results. There are institutions and companiesin India which stand testimony to this belief.

So how do you go about building an institution? Youdon't. You cannot. That cannot be the objective. It canbe the result of your actions. An institution is after allonly a legal manifestation of the people in it.

Let me give you a little background in order to putthings in perspective. What was being established thirtysix years ago was a financial institution that was i )intending to raise long-term resources, which wasgenerally very difficult to do at that time, ii) financehouseholds directly for housing, which no bank orinstitution in India had dared to do iii) service loansefficiently even though there existed no legal mechanismof foreclosing on mortgages and iv) still remaincommercially viable and enhance shareholder valueconsistently.

To make commercial sense of this venture, we had tobe different and the difference we decided on was"customer service". At that time, quality customerservice, especially in the sphere of retail finance, wassomewhat of an oxymoron.

Right from its inception, HDFC has maintained a strongservice philosophy - service became the business andservice became the product. For HDFC, service definedthe organisation's products, delivery processes, internalsystems and how people interact with each other. Soright from the very first day we opened our door forbusiness, we at HDFC installed our home-built model

Reflections on Building Institutions1

Deepak Satwalekar

1 Lecture delivered at IIM Indore on October 3, 2013 on occasion of theFoundation Day celebration of IIM Indore.

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of

foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light,

it was the season of Darkness, it was the spring of hope, it was the winter of despair…"

– Charles Dickens (1859)

Deepak Satwalekar

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for customer service. And the reason why we had todevelop our own service delivery model was simple -- there was just no other domestic model to emulate.

Quality service became an inherent feature of ouroperations. Quality became the distinguishing attributein our operations. Striving for excellence became apersonal mission for each one of us.

The way HDFC looks at customer relationshipmanagement has not changed, what has changed arethe ever rising customer expectations. Customers haveincreasingly become more demanding, less loyal, seekconvenience, demand the best service in the shortestpossible time and at the lowest cost. And if the customerdoesn't find a satisfactory solution with yourorganisation, he simply takes his business elsewhere.The comfort that some financial organisations used tohave -- the feeling of 'owning the customer' for life istoday just not there. So getting a customer is only onepart of the job, retaining the customer requires a differentstrategy altogether.

Customers will automatically gravitate towardsorganisations where they feel they will get superiorservice, where they feel they will be treated fairly, beadequately informed about the costs of the transactionsand where they generally feel a sense of comfort. Mostsuch impressions or perceptions are created by wordof mouth through experiences of other customers.

As a practitioner, I believe that for a financial product,the only differentiator is service. The uniqueness of afinancial product will last at the most a week or amonth- anyone can copy it and the only patent protectionone can have is quality of service.

Employee and customer satisfaction are inextricablylinked. An organisational structure more often than notdetermines the efficacy of relationship managementwithin an organisation. How the staff is treated willinvariably reflect how a customer is treated. It is unlikelythat a disgruntled employee will be able to providecustomer satisfaction, but a committed and empoweredemployee is more likely to help acquire and retain acustomer.

I'd like to quote the closing line of the stage musical,

My Fair Lady : "the difference between a flower girl anda lady is not what she is, but the way she is treated".What it means is managers who believe in theiremployees and have high expectations of them can getphenomenal results. Remember, you can never, ever,do enough for your people.

At HDFC, we had always believed that empoweringfrontline staff is a necessary condition for deliveringexceptional service. It is the frontline staff that reallyunderstands the customer's psyche because any inter-face is with the frontline staff. It is therefore necessaryto keep frontline staff motivated and enthusiastic.Empowerment is the process of creating an enablingenvironment in which individuals take responsibilityfor making significant shifts in the value creation processfor customers and contribute to the organisational goals.It requires the creation of a culture where people acrosslevels feel they can make a difference and this in turnassists them in acquiring the confidence and skills todo so.

Empowerment is often mistaken as increasing the powerof the employees. On the contrary, it is more aboutreleasing the knowledge and motivation whichemployees already have. People must directly experiencebeing in charge of themselves and their destiny todevelop an empowered state of mind and thereby exhibitempowered behaviour.

More important than the introduction of neworganization structures is the need to have in place avalue system, the organizational culture, which weavesthrough the entire fabric of the organization and becomesthe cohesive force that holds and drives it forward. Itwill therefore be necessary for the senior managementto crusade for and get the message of the organizationalvalues down to the last employee, on a regular basis.A healthy culture is simply a function of several factors,namely, honesty, trust, dignity and respect. They all gotogether; they reinforce one another.

You may have noticed that in my talk I have made noreference to any financial ratios or parameters- notbecause they are not important to building institutions,but because people are more important. And this is trueeven for you, individually, at the personal level. Howard

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Stevenson, Professor at Harvard Business School, basedon extensive research, has articulated the findings verywell "the four things that make us feel successful in life:achievement, significance, legacy and happiness". Youwill note that money, status in society don't figure inthat list.

What is true for institution building is equally true forbuilding your career. So let me just leave some thoughtsbehind for your consideration. These have been thedriving force in my life, and I have benefited a lot fromthem.

• Take jobs and internships that pay less money or nomoney, but give you the opportunity to learn,experiment and grow. After completing my gradu-ation in IIT, I took a job at an unknown small companyat Rs 600 pm instead of a job at L&T paying 25 percentmore. I have no regrets at all.

• Do what you love, and not what is "expected of you"or what is seen to be the right thing. If you enjoywhat you are doing, you will bring passion, energyand an ability to work without stress. As ThomasEdison, who held 1093 patents, said, " I never dida day's work in my life: it was all fun".

• Be passionate about whatever you do. Give it your100 percent. As Ralph Waldo Emerson said, " Nothinggreat was ever achieved without enthusiasm"

• it is important for us to have an aspirational statementfor ourselves. To see ourselves in a grander mannerthan just as a cog in some wheel. We must have agoal, an end cause, a higher aspiration for ourendeavours, and we must work with passion and beloyal to the end cause. We crave so much more inour work, and not just money. We want fulfillment,creative challenge, growth, joy and a sense that weare living for something more than ourselves. Therewas an anecdote that I used to repeat very often,because I thought it was very apt. So let me repeatit one more time.

• When St. Paul's Cathedral was being built in the late17th century in London, Sir Christopher Wren, aneminent architect, asked a mason what he was doingand he said I am carrying a brick from here to there.He asked another mason what he was doing and he

said I work from 10 o'clock to 5 o'clock, I get tenshillings a day and this is my means of livelihood.He then asked a third mason what he was doingand he said: I am participating in the building of thismagnificent cathedral.

• One of the biggest mistakes you can make in life isto accept the known and resist the unknown. Youshould, in fact, do exactly the opposite put a challengethe known and embrace the unknown. Six weeks afterjoining Citibank, fresh from my MBA, I quit, onlyto join a company that had started operations a monthearlier - that was HDFC. No one had heard of it.I realized that for me working in a big company, withits rules and regulations and processes would havebeen stifling. I wanted to write the rules. Let me behonest. Did I know all this when I did what I did?Absolutely not. I just went with what my heart toldme, and it has not let me down.

• Learning is a process not an event. I thought learningwould be over when I got my degree. It's not true.I haven't stopped learning, and my teachers have beeneveryone from the junior most in the company tosenior colleagues in industry. Indeed, it gets easierto learn once you're out of the educational systembecause it's easier to see the relevance of why youneed to learn.

• Be true to yourself.

• Set the highest standards for yourself.

• Live up to your own expectations. Its tougher thanmeeting your bosses expectations.

• It is important to stick to commitments made by you,so don't promise anything that you cannot deliver.

• Keep things simple. Don't introduce complications ifthey are not necessary, even if they make you lookintelligent.

• Don't seek greatness in other people's eyes.

• Cherish your convictions and stand by them. You canfake principles for an audience. You can't fake it inyour own eyes. Your conscience is the strictest judge.

• Do what has to be done. Fame, admiration andrewards will follow. Don't work for the rewards. Don'tmake money your sole aim in life.

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• Money is only a means to some end.

• Build intrinsic strength so that you truly become greatand are not just thought of as being great.

• Customers are all you have. Care for them.

• Planning and strategy formulation is important, butexecution is critical.

• To become truly great, you must add more value tothe world. And the best way to begin doing that isto become a more valuable person. Acquire skills noone else has. Read books, no one else is reading.

As someone said, and I don't recall who:

What will matter is not what you bought, but what youbuilt.

Not what you got, but what you gave.

What will matter is not your success, but your significance

What will matter is not what you learned, but what youtaught.

What will matter is every act of integrity, compassion,courage or sacrifice that enriched, empowered orencouraged others to emulate your example.

What will matter is not your competence, but yourcharacter.

What will matter is not how many people you knew, buthow many will feel a lasting loss when you're gone.

What will matter is how long you will be remembered,by whom and for what.

Living a life that matters doesn't happen by accident, butby choice.

Concluding Remarks

In a fast changing and increasingly more competitiveworld where the biggest trend in business is the riseof infotech, corporate leaders are searching for achievingsustainable competitive advantages. Howeverincreasingly they will find that this search will leadthem not towards increasingly hi-tech solutions, butinstead towards the soft side of business - values andculture.

In this world, corporations and institutions have anenormous responsibility to support the reinstatementof a business ethic that shuns short cuts and unethicalpractices; that builds a management style to reflect this

ethic; that is quick to promote an active public servicestrategy and is in tune with the environment in whichit operates. In the long run, this approach makes businesssense as customers are likely to be much morediscriminating in a world of information andtransparency and are likely to gravitate to thoseinstitutions that have impeccable standing, enlightenedleadership and a strong element of social responsiveness.

Deepak M Satwalekar retired as the Managing Directorand Chief Executive Officer (MD & CEO) of HDFCStandard Life Insurance Company Ltd. in November 2008.Before taking on the responsibility of setting up andrunning the new Insurance company in the year 2000,he was the Managing Director of HDFC, the country’slargest mortgage lender. He received a B.Tech. inMechanical Engineering from IIT, Bombay, and a M.B.A.from The American University, Washington D.C. He hasconsulted for the World Bank, the Asian DevelopmentBank, and other bilateral and multilateral agencies inseveral countries. Besides being a recipient of the“Distinguished Alumnus Award” from IIT, Bombay, heison the Advisory Council of the IIT, Bombay. He has beena member of/chaired several industry, Reserve Bank ofIndia and government expert groups. Inter alia, he hasbeen/is a member of the Technical Advisory Committeeof the RBI, the Committee for Policyholder Protection/Intermediaries, etc of the Insurance Regulatory andDevelopment Authority, Committee for Restructuring theNPS set up by the PFRDA. He also serves as anindependent director on the boards of some largecompanies in India. He serves on the India Advisory Boardof a large European Bank and is currently active on theBoard of Trustees of IshaEducation (ishavidhya.org), GyanPrakash Foundation and Teach to Lead(teachforindia.org),which are engaged in the field of primary education forthe low income and socially disadvantaged members ofsociety in rural and urban India respectively. In the fieldof higher education, he is on the board of the IndianInstitute for Human Settlements (iihs.co.in). He is anadviser to Private Equity and Venture Capital firms as alsoon the Board of Society for Innovation andEntrepreneurship, an early funding vehicle set up at IIT,Bombay. He is also advising a company which isestablishing a network of BPO centersin rural areas acrossthe country. Board memberships include: Infosys, Asianpaints Ltd., Piramal Enterprises Ltd., The National StockExchange of India Ltd., The Tata Power Co. Ltd., IL&FSTransportation Networks Ltd., India Mortgage GuaranteeCorporation P Ltd., Franklin Templeton Asset ManagementIndia P Ltd.

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The topic on Academic Leadership for discussion istimely and opportune. It is timely, because none ofInstitutions for higher learning, including the IITs andIIMs find a place among the top ten institutions ofhigher learning around the globe. Why do not we inIndia have a M. I. T., the Sloan School of Management,Harvard Business School of Business Administrationand the California Institute of Technology? This questionis of concern not only to academicians like us but alsoto the Ministry of Education, Government of India. Ifwe do not address this question in right earnest, wewould be perpetuating mediocrity. It is opportunebecause India is now grudgingly getting globalappreciation as a country that matters. However, weare lagging far behind China in economic development,in giving to Indian citizens, good education, nutritionand an excellent health system that is comparable tothe best in the world. In addition, India is nowhere nearChina when we compare the Indian military might withthe military might of China. The Indian army hasundoubtedly come a long way since the day when itsuffered a humiliating defeat at the hands of the PLA.However, we cannot correct all the problems that I havelisted above, unless we provide an excellent academicleadership to our Institutes of higher learning. In a"Knowledge-Economy", can India survive withoutexcellent education and particularly, higher education?Providing academic leadership in achieving excellencein teaching must be the top priority of the Institutes andtheir distinguished alumni.

I make no apologies for beginning my presentation withthe questions that I have posed in the second paragraphof this article. Asking the right questions is as importantas finding the answers to the questions. It is so for thesimple reason that we cannot answer a question thathas not been posed. According to the legend, wrotehis three great works, and impelled by the first questionof his wife, The three words happen to be the firstthree words of the three works respectively. Why does

the sky look blue? This question led to the answer "Bluecolour of the sky is due to Raleigh scattering."

Now that we are discussing "Academic Leadership" inIIM Indore, it is obvious we must address "academicleadership" in management education. I strongly believethat the Institutes of Management and the alumni ofthe Institutes' top management programmes have acrucial role to play in addressing the major managerialproblems that the Indian Industry and the IndianGovernment face. I hope that I do not appear to bechauvinistic when I make the above assertion. The lateDr Vikram Sarabhai told me when he recruited me ayoung assistant professor "Mote the purpose of theInstitute of Management Ahmedabad is to help theIndian Government and the Indian Industry in resolvingmany problems which we can classify as managerial.You must do so through your empirical and theoreticalresearch and teaching" These words of Dr Sarabhai areetched on my mind and these words ring in my earseven now after fifty-one years.

With this background let me now address the question,what should be the action plans of the Institutes ofManagement and the alumni of its top managementprogrammes for providing academic leadership? Thetriads of any educational programme are who to teach?what to teach? And the third element of the triad is howto teach? In the present context the question, who toteach is redundant. Clearly, our target audience is theparticipants of the Institute's top managementprogramme. I will therefore concentrate on the twoelements what to teach and how to teach.

Clearly, an organisation exists in an environment,comprising the economic and the social environment.The recent debate between two well-known economists,Professor Sen and Professor Bhagawati, whether socialdevelopment comes first or economic developmentcomes first shows the importance of understanding theenvironment that we live in. When President Obamawon a second term, he said, "The US is standing on afiscal cliff." In India, we are in a much worse situation.

Thoughts on Academic Excellence1

V. L. Mote

1 Lecture delivered at IIM Indore on October 3, 2013 on the occasion ofFoundation Day celebration of IIM Indore.

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Our fiscal deficit among other factors, is leading toinflation, which in turn is leading to high current accountdeficit. As an economist observed "Inflation is thecruellest tax on the poor." Can you imagine the hardshipsthat poorer sections of the society must be facing whenonion, which is a poor man's food costs about eightyper kilogram? The rising prices of milk and vegetablesare driving the inflation. Why cannot the persons whoare in charge of managing the Indian economy tameinflation? Obviously, helping the understanding of theeconomic environment must be an important part of theInstitutes' programme for providing academicleadership. I am sure that during this excellent"Conference on Creating and Sustaining Institutions"you must have discussed these important aspects of theIndian economic environment. My experience showsthat the courses that teach Macro Economics rarelydiscuss these questions, which should be the central fociof such courses. Who but the Institutes and its alumnilike you can provide this academic leadership?

Undoubtedly, we have followed a development patternthat has benefited only a few urban citizens who speakEnglish2. Publishing data about the proportion of Muslimstudents in the Two-Year Post-Graduate Programmesthat the Institutes offer would show how lopsided thedistribution of educational opportunities for highereducation are. Similarly, making public the data aboutthe proportion of students whose parents are industrialworkers, in the IIM's Two-Year Post-GraduateProgrammes, would again highlight how lopsided thedistribution of educational opportunities for highereducation are.

What is true of the nation's educational programmesis also true of the nation's industrial development. Thenation has developed large industries that are capitalintensive resulting in large scale unemployment. Whatthe nation needs is an array of labour intensive industriessuch as tourism and the garment industry, which arewell paying. However, the impediment to thedevelopment of these industries is the attitude of theworkforce. Remaining absent at the smallest pretext is

a common norm. In a garment industry, the productionis organised in a line where each operative performsa limited operation and passes on the garment to thenext operative. In such a production set up, absenteeismcan be detrimental. Further, the poor quality of educationaffects the industry. In an interview for the selectionof sewing machine operative, I asked the candidatewhether an inch is longer or a centimetre is longer? Iwas surprised when the candidate who had passed thestandard 10 in high school did not know the correctanswer.

Similarly, for tourism we need guides who can speakmany languages fluently. I speak subject to correction,but I am afraid that we do not have facilities to traintourist guides. Clearly, the only solution to all theseproblems is to ensure that all young Indians get goodquality basic education. By basic education I mean thatthe education that will give them proficiency in reading,writing, and basic arithmetic. It is unfortunate that thepoorest sections of the society do not get good qualityeducation.

The Government of Gujarat has given this importanttask to Ahmedabad's municipal schools. Unfortunately,the less we speak about the quality of education in theseschools the better off we would be. Now the Governmenthas made it mandatory for corporations to set aside 2%of their profit for achieving the corporations' objectiveof Social Responsibility. I do hope that IIM Indore andits distinguished alumni will help the corporations touse these funds effectively and efficiently for impartingeducation to the poorest of the poor children in the city.

It is not possible to discuss thoroughly in the ambit ofone short presentation all these issues. It would sufficeit to say that the IIMs and the IITs should equip manyNGOs3 who can carry out these tasks.

I have not discussed two important issues regarding theIITs and IIMs' role in providing academic leadership.The first issue is, how to teach? And the second issueis the need to prepare teachers for meeting theburgeoning need for educating people at different levels.

2 Once a research assistant told me, "Professor, do you realize the advantagethat you have because your parents spoke English?" He stopped me deadin my tracks.

3 SHARDA Trust, Arvind Mills' arm for helping the urban poor is carryingout many of these tasks effectively.

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For want of space I will only answer the question, howto teach rather perfunctorily. I suggest that for answeringthe question how to teach, all teachers should followGandhiji's advice to teachers. He said, "teach for life,through life, and throughout life." (Emphasis added).

Undoubtedly, the need to prepare good teachers is apressing need. However, I am afraid that the IITs andIIMs can do very little about it except for training theteachers they need for their own requirements. For anyperson who wants to teach in primary school or highschool must have a B. Ed. degree. Unfortunately, theIITs and the IIMs can play no role in improving thequality of education in the B. Ed. Programme. I recallthat the IIM Ahmedabad had started a programme foruniversity teachers but they had to wind up thatprogramme soon.

Let me now turn to the question of social environment,which also has close connection with the economicenvironment. Parliament has passed the Food SecurityBill. Undoubtedly, no Indian citizen would like to seea child going to sleep on an empty stomach. An oldEnglish adage says we must not only give fish to ahungry person but also teach him to fish. Do we havean effective educational programme to teach a vastmajority of the unlettered persons among the poorestsection of the society? I have already highlighted thisissue and I need not repeat it here.

We get a glimpse of the Indian social environment whenwe read about the brutal rape and murder of Nirbhayain Delhi. Similarly, the rape of a photographer journalistin Mumbai leads us to question how this could happenin India where we proudly say, "Angels dwell wherewomen are respected?"

Do you remember the disaster in Uttarakhand wheremany pilgrims lost their lives? Let me recall the sequenceof events leading to the disaster in Uttarakhand. On 12June, the Metrological Department issued a warning ofheavy rainfall near the Kedarnath temple and suggestedthat the char dham yatra should be postponed. Thedepartment sent copies to the CMO and to the DistrictCollector's office. Unfortunately, none of the worthiestook any notice of these warnings and the disasterfollowed. It was the Indian Air Force and the Indian

Army rescued the pilgrims. The Air Marshal said "ourrotors will keep spinning until we have rescued the lastpilgrim. In the massive rescue-operation that followedthe Air Force lost one helicopter, the pilot, and the armypersonnel lost their lives. But the Air Force did not stopits rescue operations. After giving full military honoursto the pilots and soldiers who lost their lives in theoperation, the Air Force continued its rescue operations.

The Indian Armed forces could do such a rescueoperation because it has a strong code of conduct. Thecode is:

1. The safety and the honour of your country come first.

2. The safety and the honour of the men you commandcomes second, and

3. Your own safety and honour come last.

That the Armed Forces live according to this code ofconduct is apparent when we see the ratio of officersto me killed in all battles.

Contrast the behaviour of the Air Force Pilots and thesoldiers of the Indian Army with the behaviour of theshopkeepers and the dhaba owners who fleeced thehungry and the thirsty pilgrims who could manage tocome down safely.

Can the Institutes of Management and its distinguishedalumni act as the conscience keepers of the society? Iam sure that if the IITs and the IIMs followed thisstrategy, then over a couple of decades they would havetransformed Indian society.

I could go on. We academicians do not keep timeaccording to the watch. We keep time with the calendar.I would not tax your patience. Let me conclude my talkby sharing with you the important message that the lastverse of the Bhagvadgita gives to important people likeyou shape the destiny of organisations. Perhaps a wordon what the Bhagvadgita is may not be out of place. TheBhagvadgita is more a religious classic than aphilosophical treatise. It is not an esoteric work designedfor and understood by the specially initiated but apopular poem which helps even those "who wander inthe region of many and variable." The last verse of theBhagvadgita says "unite vision (yoga) and energy(dhanuh) and not allow the former to degenerate into

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V. L. Mote was a Professor at Indian Institute ofManagement Ahmedabad from 1962 to 1993.

Indian Institute of Management IndoreManagement Development Programmes

JANUARY - MARCH 2014

S.N. Programme Title Coordinator Dates

1. Negotiation Skills Kamal Kishore Jain Jan 06 - 08

2. Retail Management Hasmukh Gajjar Jan 07 - 10

3. Workshop on Business Modeling U. K. Bhattacharya Jan 13 - 15

4. Senior Management Programme Prashant Salwan Jan 16 - 25

5. How to Build Innovative Organizations D. L. Sunder Jan 22 - 24

6. Leadership Communication Madhusri Shrivastava Jan 27 - 29

7. Customer Behaviour and Marketing Strategy Sabita Mahapatra Feb 03 - 05

8. Competency Mapping & Management Sumit Kumar Ghosh Feb 03 - 05

9. Strategic Reward Management Kajari Mukherjee Feb 10 - 12

10 Workshop on Logic of Logistics U. K. Bhattacharya Feb 10 - 12

11. Accelerating Leadership Impact Swatantra Feb 17 - 19through Communication Skills

12. Corporate Performance Management Keyur Thaker Feb 18 - 20

13. Cloud Computing and Other Madhukar Dayal Mar 03 - 05Modern Computing Architectures

For details please contact:Management Development Programmes (MDP) Office

Indian Institute of Management IndoreRau-Pithampur Road, INDORE 453556 (India)

Tel: +91-731-2439750, 2439752-54 • Fax: +91-731-2439800, 2439751 (D)E-mail: [email protected]

madness or the latter into savagery. High thought andjust action must be, for ever, the aim of man."

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This paper elaborates the case of an institute of higherlearning specializing on both Technology (T) andManagement (B). It is an interesting synergization ofboth a T-school and a B-school. Various challengesfaced and interesting initiatives undertaken arediscussed. The insights gained are also spelt out witha view of sharing the experience of sustaining theseinitiatives.

1. Introduction

ABV-Indian Institute of Information Technology andManagement (ABV-IIITM), Gwalior is a premier Instituteset up by Ministry of HRD, Government of India in1997-98 with the objective of imparting quality educationand conducting high quality research in the cusp areasof Information Technology and Management. Theinstitute is the first in the series of MHRD institutionsin the IIIT family. It is a novel experiment of synergizingIT and Management. It is both a T-school and a B-schoolcomplimenting each other. The institute is fullyresidential, spread across 150 acres of lush-green area,and has state-of-the-art infrastructure. Currently, theinstitute is exclusively a Postgraduate (PG) institute. Itoffers postgraduate and doctoral level programmes.The institute got the status of a deemed university in2001. The institute has academic collaboration withinternational institutes and universities from abroad(Deshmukh, 2012).

The institute is set up with the following objectives:

• To provide research, consultancy and advancementand dissemination of knowledge.

• To undertake extra mural studies, extensionprogrammes and field outreach activities to contrib-ute to the development of society.

• To promote the cause of information technology andmanagement education and research in an integratedmanner.

It may be noted that, for a country like India, thereis a huge demand for high quality UG education, andfrom the supply side, there is no dearth of goodquality candidates and institutes offering UGprogrammes. However, getting good quality candi-dates at PG level, particularly at the PhD level, isa big challenge. ABV-IIITM takes pride in havingtaken this challenge with a conscious focus on PGeducation with a deliberate tilt towards developinga qualified manpower in terms of PhDs. The institutehas contributed to the technical manpower scenarioby offering its doctoral output in IT and Management.The high quality products out of its Ph D programmeare working in IITs (IIT Delhi, IIT Chennai, IITKharagpur), IIMs (IIM Lucknow, IIM Shillong etc.),NITs (Jaipur, Bhopal etc.), IIITs (Jabalpur) to namea few.

It may be worthwhile to dwell on the typical char-acteristics of a good institute (Deshmukh, 2012).

• A good institute must have good academicprogrammes which enable students to develop a goodperspective and instill a sense and commitmenttowards lifelong learning.

• A good institute must have the faculty who arecreating, not just conveying knowledge in their fields,and who are engaged in their disciplines beyond theinstitute itself.

• It should have ties to the fields with which it works- for example, the Business school should haveconnections to the business community; Technologyschool should have connections with industry andtechnologists.

• It should foster a passion for learning, not just trainpeople for specific jobs, so there should generally bean eco-system enabling intellectual curiosity on cam-pus.

• It must have a focus on continuous improvementwhereby the pursuit of excellence is never ending.

• The institute cannot ignore the culture and contextwithin which it operates and attempts to influence.

1 This paper is based on a presentation made by the author at IIM Indore'sFoundation Day Conference: "Creating and Sustaining Institutes of HigherLearning" on October 2, 2013.

ABV- IIITM: Experience of a T and B School1

S. G. Deshmukh

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This paper is an account to take stock of abovecharacteristics with reference to ABV-IIITM Gwalior.The following premises are to be noted. These premisesare the building blocks and help understand the fabricand texture of an institute such as IIITM.

• P1 : An institute is a socio-cultural- technical system

• P2 : An institute is an organic entity and has itslife cycle

• P3 : An institute has its own dynamics and sensi-tivities

- Corollary : Residential campus has its social dynam-ics

• P4 : Both culture and context are inevitable parts ofthe institute

• Culture

• Culture gives identity to an institute

• Culture is a composite entity - difficult todefine but easy to feel

• Culture is built over a period of time - it cannot be copied, nor can it be transplanted!

• Context

• Context in which it was established, evolvedand reached its maturity

2. Academic Programmes Offered

The Institute offers a five - year Integrated Post Graduate(IPG) programme leading to degree of Bachelor ofTechnology in Information Technology and Master ofTechnology/ Master of Business Administration. Thisis a flagship programme of the institute as reflected interms of its acceptability by industry, parents and highranked candidates from AIEEE examination. Thecurriculum consists of:

• Blend of information technology and management(typically in an IPG (M Tech programme, 30 to 35percent course credits come from Management streamand in IPG (MBA) programme, about 40-45 percentcourse credits come from Technology stream.)

• Set of courses designed to introduce state-of-the artin the domain of the study. For example: there arecourses such as Mobile Computing, InformationSecurity, Set of courses designed to introduce societalorientation by linking the implications of subjectunder study to social and economic problems of thesociety. For example, there are courses such as, e-governance, Environmental Ecology etc.

Table 1: Academic Offerings

Sn Programme Characteristics Credits ExpectedDuration

1 Integrated Post Graduate Leading to:B Tech (IT)+ M Tech, 220-230 5 YearsProgramme (IPG) or,B Tech (IT) + MBA Credits(Admissions through includingAIEEE/JEE) thesis

2 M.Tech Computer Sc and Engg. 58-60 2 years(Admission through GATE) (Adv Networks, Infor. Security, Credits

VLSI, Digital Comm) includingthesis

3 MBA Focus on integration of IT and 60-70 2 years(Admission Through Management with specializations CreditsCAT/MAT/CMATJMET) in General, PSM (e-governance) including

and IT Enabled Services thesis

4 PhD With focus areas in IT, CS, EC, 12 Credits Min.(Admissions through written Management /Humanities and course work+ 3 yearstest, presentation and Applied Sciences Thesis

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The institute also offers regular M. Tech and MBAprogramme and a very vibrant Ph D programme. Thetotal student population on the campus is about 950.

Table 1 presents the academic programmes offered bythe institute.

3. Challenges Faced

The institute faces both routined and some interestingchallenges.

3.1 Routined Challenges

The institute faced many challenges, being infantile indevelopment phase, and being in a location such asGwalior. These challenges were on account ofdocumentation, procedures, and work culture. Table 2shows how these challenges were addressed.

Gwalior does not have good connectivity, though it isjust over 300 kms away from Delhi. The air connectivityand road connectivity are not adequate. However, theissue of connectivity is addressed through virtual ordigital connectivity. For example, through videoconferencing/Skype, the issue of connectivity is partiallyaddressed.

The institute is also visible in various social media such

as Facebook, LinkedIn and also hosts and supportsevents outside Gwalior to show its presence andvisibility.

3.2 Interesting Challenge

As mentioned, the institute works in the cusp areas ofIT and Management. Applied sciences and humanitiesform an integral part of the institute both in terms offaculty resources, and research ares being pursued. Ata gross level, it appears that the institute has a dualview: the view of a typical T-school and a view of aB-school!. (Table 3)

It is an interesting challenge to have a balanced viewamalgamating both the views. This is facilitated by

a) Faculty jointly guiding students for IPG/M Tech/MBA thesis work.

b) Faculty collaborating on research projects of mutualinterest coming from T or B school

c) Students and faculty jointly participating in variousevents.

It must be noted that at times, the institute may givea look that it is predominantly a T-school, at times, itmay give a look that it is predominantly a B-school. Thechallenge lies in giving it a perfect blend of both T and

Table 2: Various Challenges Faced by the Institute

Sn Challenge How was it Addressed?

C1 Documentation Through ISO9001:2008 Certification:Hired a consultant to help in documentationDigitization of records: Academic and Admn Related through anagency

C2 Streamlining of Procedures ISO9001: 2008 acted as a platformInvolvement of internal people with experts from outside foradopting procedures

C3 Automation Computerization of various activitiesUse of software such as Tally, SORS (an in-house ERP foracademic system)

C4 Work Culture Involvement of various stakeholdersMaking processes transparent, Getting feedback from various usersPeriodic visits by employees (Faculty, staff ) to other institutesPeriodic visits by outside expertsRegular hosting of events involving people from outside

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B school. This challenge cannot be met unless faculty,staff, student and other stakeholders are aligned withthe vision and mission of the institute with a sharedperception.

4. DNA of the Institute

The institute has earned a place of recognition. Table4 presents a quick score card of the institute.

Generally, the DNA of any institute is characterized byseveral elements (Anubhai, 2011). Several DNA elementshave contributed to the above scorecard.

4.1 Competent Faculty

ABV-IIITM follows IIT norms in recruitment of faculty.Every regular faculty is a Ph.D. They are selectedfollowing a rigorous process, including seminarpresentation and personal interview before the selectioncommittee. The seminar is attended by all faculty

members of the institute. Our faculty is on the editorialboards of several journals. The faculty has won severalprofessional awards and recognition such as Best PaperAward, Young Scientist Award, Career Award by AICTEetc. The institute is also able to attract adjunct facultyfrom industry.

4.2 Competitive Students

The institute is able to attract high quality studentsreflected in their AIEEE /JEE Ranks or GATE/CAT/JMET/MAT scores. Students have won severalcompetitions and awards. They have also won OpenSource Software Competition held at several institutesincluding IIT Bombay, NIT Trichy etc. From ACM-ICPCto IBM The Great Mind Challenge, Lord of the Code(IIT-B and Red Hat) to Google Code Jam, the studentsof the Institute have been at the top position of variousInternational and National competition.

Table 3: Two Interesting Views

T-School View B-School View(IT/Computer Sc/Applied Sciences) (Management and Humanities)

Strong focus on quantitative and optimum solutions Strong focus on qualitative and heuristics

Always searching for exact answers Searching for thumb rule based solutions

Comfortable in dealing with certainty Comfortable in dealing with uncertainty

Work with complete information Work with vague information

Structured in approach Unstructured in approach

Table 4: Quick Score Card of the Institute

S1 Publications by faculty in last five years in Refereed Journals/Conference/Workshops (as per SCOPUS indexed database ) 500+

S2 Ongoing Research Projects from external funding agencies 16

S3 Ongoing Research Projects under Faculty Initiation Grants 6

S4 Ph.D.s Awarded till date 44

S5 Books published by the Institute Faculty 22

S6 Patents filed 02

S7 Workshop/ Seminar/Conferences conducted in last 3 years 50+

S8 Number of Entrepreneurs Developed 25+

S9 Alumni base (till 2012-13) 1791

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4. 3 Strong Focus on Research

The institute has developed strong research themes inIT, Management, and Applied Sciences. The followingis an indicative list of these areas.

T-Areas Image Processing; Biomedical ImageAnalysis, Wireless Ad-hoc Networks, Gridcomputing, Quantum computing, MobileComputing. Biometrics, InformationSecurity; Soft computing, AI, Modeling andSimulation of Biological and EnvironmentalSystems, Datamining, EvolutionaryAlgorithms, VLSI Design, Nanoelectronics,Robotics , Reliability, Modeling for Nanomaterials.

B-Areas IT Enabled Marketing, CustomerRelationship Management, , Supply ChainManagement, Project Management, FinanceManagement, Accounting, TechnologyManagement, Human ResourceManagement, Econometrics, Social Impactof IT, Public Policy and Processes,e-governance.

Research crossing the discipline boundary is encouraged.

The research is conducted by both students and faculty.

The students have an opportunity of thesis work (be

MBA or MTech students). This provides a good outlet

for research. The outcome is through publications in

national /international conferences or journals.

The faculty members have an opportunity to do

sponsored research. The institute has conducted several

sponsored research programmes funded by agencies

such as DIT, DST, MHRD etc. Its strong focus on research

has led to numerous publications during its short period

of existence. Its faculty and students have contributed

to over 500 publications in International Journals and

Research Conferences.

4.4 Spirit of Innovation

Creating entrepreneurs thriving on innovation andcreativity has been the forte of the institute. Right fromits inception, the institute has been promotingentrepreneurial spirit of the students and has been

nurturing young talent through E-cell and Innovationand Incubation Centre, incubating new enterprises.The institute has a collaboration with CIIE (Centre forInnovation, Incubation and Entrepreneurship) at IIMAhmedabad. The institute takes pride in havingdeveloped 25+ entrepreneurs till date. In a very shortspan of time since its inception, the Institute haswitnessed over many ventures by its students. CEONSolutions, BCube IT Services, ADAVANTALTechnologies, are to name a few such vibrant units.The faculty and students are encouraged to set up newenterprises.

4.5 Peer-to-peer Learning

There is a student forum called, AbhigyanAbhikaushalam Student Forum (AASF). This is acompletely student driven forum emphasizing on peer-to-peer learning. All activities are managed by students.

• It organizes 50+ events per year

• Brings out magazine showcasing student talent

• Sensitizes about various issues

• Organizes various programming contests, b-plancompetitions, quizzes etc. thereby help students indigesting both T and B view in synchronization witheach other

• Helps to develop organizational skills along withtechnical skills

4.6 Enabling Ecosystem

The institute provides an enabling ecosystem forresearch. This includes a well-stocked library, state-of-the-laboratories (23 labs) and good computationalfacilities. The students are encouraged to present papersat national and international conferences/workshops.In last 2 years more than 80 students were funded forsuch participation. Besides academics, a lively cultureof peer-to-peer knowledge sharing, collaborativepersonality development and skill enhancement ensuresmulti-dimensional development of the students as apart of the ecosystem.

The institute has developed strong linkages forcollaboration with the Industry. There is an IBM Centreof Excellence in Software. The institute has collaboration

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with C-DAC. Periodic sessions by Industry professionalsare conducted to sensitize about the emerging technologyand business scenario. The institute has developed strongbond with the Madhya Pradesh government forconducting various e-governance and IT relatedprogrammes for employees.

5. Impact

As one of the premier IT and Management institutes,ABV-IIITM produces a large volume of human resourcewhich in turn serve the nation. An alumnus of ABV-IIITM is not only a human resource for Gwalior orMadhya Pradesh, s/he earns the ability to create andsustain national and international impact. Our alumniare in top leadership roles in corporations (such as TCS,Wipro, Yahoo etc.), educational institutions (such asIITs and IIMs, ), research labs (such as DRDO, NTROetc.), NGOs, governmental agencies, and as heads oftheir own entrepreneurial companies.

Educational institutions are open systems. Thus,institute's technological know-how and managerialwisdom have meaning only when they addresses humanand societal problems. The mandate of any academicinstitution should be the development and skill up-gradation of all the stakeholders by imparting neededknowledge. Therefore, one of the mandates of ABV-IIITM Gwalior is to create technological and managerialsolutions to solve social and economic problems at thegrass root level. In particular institute endeavors to:

• Understand the challenges faced by the populace atlarge.

• Understand the prevalent governance system (involv-ing citizens, non governmental entities, business andgovernment) and developing ways to make it moreeffective.

• Gear institute's research and development activitiesto meet these challenges.

• Develop low cost technology enabled managerialsolutions which are modular in nature and haveability to interoperate with broader solutions devel-oped at state/national level.

A number of initiatives are taken by the institute whereintechnology transfer is effected.

The impact is also felt through following initiatives:

5.1 Training Programmes

a) Apart from curriculum, ABV-IIITM is committed tothe society through its social obligations. The instituteis always eager to take community led initiatives,extension and outreach programme. One of ourflagship programmes is training for professionals.Training for professionals, a novel concept initiatedby the institute based on the idea of Finishing Schoolin association with Department of Information Tech-nology, Government of India. It is dedicated toguiding the professionals all round the country forexcellence in Technology and Management and tobridge the gap between their education at the un-dergraduate level and the requirement of InformationTechnology Enabled Services.

So far 15 batches of students have been trained withmore than 700 unemployed graduates taking advan-tage of this programme. The programme started asa response to the NASSCOM survey that revealedless than 25 percent of the total professionals in ITare employable. The program is a special initiativeof the Institute to strengthen the quality of ITeducation and to enhance interface with industry, forthose sections of the society who otherwise do havethe access to state-of-the-art facilities and good learn-ing environment. The programme aims to createquality manpower by imparting high quality profes-sional training in three domains namely technology,management and soft skills for personality develop-ment. Active involvement from industry have led tothe creation of good content for the program.

The finishing school has also benefitted the institutein the following ways:

• Helped in developing unemployable graduates ofother institutes/colleges

• Improved in developing infrastructure

• Industry based assignments helped in gainingindustry acceptance

• Industry faculty participation helped in reorient-ing our faculty

• Improved our visibility

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plantation. Students are encouraged to undertakeenvironmental projects such as waste management,environmental hazards of computer and mobile phones,water conservation as a part of course curriculum. Treeplantation is a regular activity on the campus.

The institute is first of its kind to initiate a butterflyconservatory on the campus. Butterfly is an indicationof environmental health of the campus. With this viewand to sensitize student community, a butterflyconservatory was launched on 11 April 2010 on thecampus with active support from MP Biodiversity Boardand Department of Horticulture , NDMC, New Delhi.The institute has also produced a documentary called'Disha" to showcase the biodiversity of the campus.

5.3 Professional Impact and Recognition

The institute has also created certain professional impact.The following is a direct acknowledgement as recognizedby the professional world. Table 5 provides an indicativelist of recent laurels earned by the institute.

b) In line with the mission of the institute of providinge-governance solutions, the institute has conductedtraining programme for NREGA (National RuralEmployment Guarantee Act ) workers of MP forenhancing their IT skills. This is a first-of-its kindprogarmme wherein large number of employees atthe grass root level are being trained.

c) The institute has conducted several FDPs (more than7) in recent past. It has trained more than 225 facultymembers from various T and B schools.

5.2 Environmental Consciousness

ABV-IIITM is committed to a sustainable society forfuture generation. It promotes environmental awarenessin both formal and informal ways. In formal mode, theinstitute has designed courses like environmentalecology, ecosystem and sustainable development forthe students. In informal mode, students are sensitizedtowards the present environmental problem by studytours and other participatory activities regarding waterconservation, recycling, nature conservation and tree

Table 5: Professional Recognition Earned by the Institute

Sn Award/Recognition Year Remark

1 CMAI MP Educational Excellence Award for Best IT Institute in 2013 T-ViewMadhya Pradesh, by CMAI

2 25th Rank in India Today-Nielsen Survey of Best Engineering Colleges 2012 T-View

3 20th Rank in Top 100 Engineering Colleges for CS and 22nd rank for 2012 T-ViewEC Silicon India)

4 8th Rank in Zone (West) wise ranking of All India Engg Colleges 2012 T-View(Silicon India)

5 22nd Rank in DataQuest-CMR Survey of Best T-schools in India 2011 T-View

6 29th Rank in Best Professional Colleges of India, Outlook-MDRA Survey 2011 T-View

7 B-School with industry related curriculum Award by BloombergUTV 2013 B-View

8 12th Rank in Silicon India - "What if not IIMs" Survey of 100 2013 B-ViewTop B-Schools in India

9 B-school leadership Award by DNA & Stars of Industry Group 2013 B-View

10 Best B-School with Industry Related curriculum , ABP News Award 2012 B-View

11 Best B-School with IT curriculum Award by Devang Mehta Memorial Trust 2010 B-View

12 Best B-School Leadership Award by STAR News 2010 B-View

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As mentioned earlier, the institute being both a T-schooland B-school participates in both surveys conductedtypically for a T-school or B-school.

The intangible impact is also felt in terms of enthusiasticabsorption of our Ph D output by institutes which areapparently higher in academic ranking!

6. Interesting Connects

In today's networked economy, one cannot remainisolated. The institute is also no exception to this. Theinstitute impact and get impacted by surroundingenvironment, eco-system and society. The institute beingvanguard in IT and Management has developed strongconnections with the surrounding ecosystem. This canbe elaborated as:

6.1 Internal Connects

a) Connect with students: Students are connectedthrough several academic programmes and alsothrough various student led initiatives. Instituteconstantly engages students in various activities, bothtechnical as well as managerial. Student festivals arean indicator for this.

b) Connect with faculty: Faculty are engaged in variousactivities. Besides teaching, faculty is expected towork on research, extension, and outreach activities.These activities are designed to actively engage thecreative and intellectual potential of faculty in unisonwith students.

6.2 External Connects

a) Connect with growing knowledge economy: Today'seconomy is highly connected and is based on knowl-edge currency. The institute has acted as a nurseryfor grooming talent for the knowledge economy. Thistalent is reflected in terms of a strong alumni baseof over 1700 trained manpower spread across variousIT and IT enabled services both in India and abroad.

b) Connect with the spirit of Entrepreneurship: Theinstitute has also acted as a spring board for entre-preneurs. It has produced entrepreneurs in IT andIT enabled services, thus merging the T-view andthe B-view. The institute is also incubating technical/

business ideas which may later become businessitself. There is strong foundation laid at the instituteto promote the spirit of entrepreneurship through e-cell and technology innovation and incubation centre.

c) Connect with industry: The institute has developedstrong liaison with industry not only local (such as

JK Tyres, Godrej, SRF etc) but at the national level(such as IBM). This helps in developing a real lifeperspective. The industry speakers help in makingstudents realize the practical/pragmatic aspects of theworld. The internship programmes done by studentswith industry help in establishing this connect.

d) Connect with the community and society: The insti-

tute has started several initiatives to stay connectedwith the society. A regular IT literacy programme isconduced for neighboring community. Similarly,students also teach school children from sociallydisadvantaged sections of the society. Conductingseveral impact studies (such as assessment of

Janmitra, assessment of impact of quality of serviceact etc.) is also a pointer to the social relevance ofthe institute.

It is to be noted that both internal and external connectshelp in establishing an identity for the institute.

7. Insights Gained and Summary

Institution building is not a simple exercise. It takesyears to establish oneself. Ram Mohan (2011)demonstrates a good case of IIM Ahmedabad and theefforts taken by its visionary leadership. For a smallinstitute such as IIITM Gwalior, it will take some timebefore its objective evaluation is done to assess impact.However, the following insights are important:

a) The best practices and good procedures cannot bejust transplanted. Though they are easy to under-stand, but difficult to implement! These are to beevolved, developed, adopted/ adapted and imple-mented based on the context and culture.

b) Any change that is to be implemented must be donekeeping in view the stakeholders.

c) It is a challenging task to maintain a balance of T-view and B-view.

S. G. Deshmukh

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d) Recruiting faculty remains the key challenge - andis harder for IIITM due to the existence of operationbeing CS/IT and Management led in which PhDs areless and job opportunities in the industry plenty. Thischallenge can be addressed suitably by working onseveral fronts. Providing a good eco-system to attractgood faculty is just one of the initiatives.

e) Typically an Institute has its baggage and own legacyissues which need to be addressed sensitively. Ini-tiatives are to be brought slowly and surely afterunderstanding the culture, context and the texture ofits people!

f) The institute is developing itself as a research-ledenterprising Institute- this is quite different than atypical teaching-led Institute. It is here that the T-view and B-view help in realising this.

ABV-IIITM Gwalior is vibrant with its strong alumnibase, competent faculty, competitive students andmotivated staff. The institute has created a niche foritself in the cusp areas of IT and IT enabled management.The high impact research done by the faculty andstudents is reflected in both quality and quantity of thepapers published, number of training programmesconducted and most importantly social initiatives suchas Gyandhara , Buttrfly conservatory, Finishing schoolprogramme. The institute has become a model whereinIT besides its various technology facets, is also perceivedas an instrument for social change through a strongdiscipline of Management. Thus the institute can beperceived as a blend of both a T-school and a B-school.It is to be noted that for an upcoming institute -establishing its position is a herculean task - one needsto work on multiple fronts! Amalgamation of both Tand B views offers immense opportunities as well asan interesting challenges.

Acknowledgement

Preliminary version of this paper was developed formaking a case for new IIITs in PPP mode by highlightingthe model of centrally funded IIITs. This version wasbased on several comments/observations received frominstitute heads of IIITs. The author is grateful to all ofthem. This version was also published in a special issueon "Technical Universities" of Journal EngineeringEducation (in 2012). Author is thankful to Mr N VRatnalikar for motivating to write on experience sharingabout IIITM.

For the present version, the author is thankful to inputsreceived from various quarters in consolidating thiswrite up. Especially the interactions with various facultymembers and institution builders during the nationalconference (October 2, 2013) at IIM Indore has helpedin crystallising various perspectives.

References

Anubhai, P. (2011). The IIMA story: the DNA of an institution,Random House India, Noida.

Deshmukh, SG. (2012). ABV-IIITM Model: Experience sharing,J of Engg Education, Special Issue on TUs, Jan 2012.

Ram Mohan, TT. (2011). Brick by red brick: Ravi Mathai andthe making of IIM Ahmedabad, Rupa & Co, New Delhi.

S G Deshmukh earned his B Tech, M Tech and PhD fromIIT Bombay and is associated with ABV-IIITM Gwalior.His professional interests include quality management,supply chain management and information systems. Heis on the editorial boards of several journals. He is aNational Council Member of IIIE.

S. G. Deshmukh

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1. Introduction

The old debate on the relation between interest rate andinvestment seem to be back in Indian policy space.Private sector and the central government want softeningof interest rate, on the presumption that borrowing costnegatively affects the demand for capital and durableconsumer goods. On the other hand, monetaryauthorities does not want so, as that may harden inflationand fuel further inflationary expectation. It was widelyspeculated that the wish of the central government willbe reflected in monetary policy, once the new governorassumes office, but it did not materialise fully.

The debate is excessively preoccupied with thedownward sloping demand for capital goods (andconsumer durables) with respect to borrowing cost(interest rate). The debate often overlooks the fact thatinterest rate is not the sole determinant of the level ofinvestment1. If it were, the level of investment wouldremain unchanged most of the time as interest rates areoften policy driven and are changed infrequently.Therefore the policy debate must be carried out lookingbeyond the usual investment demand schedule. Thispaper tries to do so by offering a different perspective.

In the relevant literature (see section 2 below) - inunderstanding the relation between stock of liquidityand the level of investment - the causation begins froma change in stock of liquidity. In Keynes's GeneralTheory (1936), changes in nominal money stock affectsthe interest rate via liquidity preference. This in turnalters the cost of capital and, subsequently, spendingon durable goods, such as fixed investment, housing,inventories and consumer durables. In turn, changes inaggregate demand affect the level of production. Thisprocess has come to known as monetary transmissionmechanism. Therefore the fundamental reason forchanges in expenditure is relative abundance or scarcityof liquidity that is willingly effected by monetaryauthority. However, the stock of liquidity available inthe economy may affect investment in several ways

Balance Sheet Effect of Real InvestmentSubhasankar Chattopadhyay

without requiring interest rate to change first - a goodexample is liquidity trap. 2

This paper explores one such possibility by posing asimple question - can composition of balance sheetaffect the level of investment? The literature does notaddress this issue explicitly as transmission mechanismis about the effects of changing stock of liquidity on theeconomy. If the stock of liquidity is held constant tosuppress the effects of transmission mechanism and thelevel of investment goes up (due to say 'animal spirit'),what are likely 'ex-post' balance sheet effects on financialmarkets that may call upon suitable intervention frommonetary authority? The framework developed in thispaper is based on general analytical argument and isnot India-specific as such.

To understand why such an enquiry may offer usefulpolicy insight, let us first quickly look into the relevantliterature.

2. Literature

Let us look, in turn, into the issue of investment financeas set out in the theories of Keynes and Kalecki and inthe literature on credit channel of monetary policy.

2.1. Investment Finance in Keynes and Kalecki

The distinguishing feature of investment goodsproduction is that while expenditure (on labour, materialetc.) is to be incurred now, the returns would be spreadover multiple future periods. Financing of investmentis the mobilization of liquid funds for this currentexpenditure which is a point input. The amount offunds to be obtained goes up with the level of investment.The issue is at what cost this funds can be obtained andhow this cost would change with the level of investment.Cost essentially means the rate of interest. Intuitivelyit appears that requirement of more funds due to higherlevel of investment ought to exert pressure in the

1 See chapter 8 of Romer (2006) for a detailed discussion on investment.

2 Another example is a shift in the investment schedule caused by changesin business sentiments or by the so called Keynesian 'animal spirit'.

Subhasankar Chattopadhyay

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financial market in terms of pushing the interest rateup.

The linkage between investment finance and its cost hasrecurred and is captured in different ways in literature.The issue of investment financing is captured in thestandard Keynesian IS-LM (Keynes, 1936) model in thefollowing way. Starting from an equilibrium position,when (autonomous) investment goes up, say due tohigher future profit expectation, IS curve shifts to theright and income goes up by virtue of the multiplier.Higher income calls for a higher transaction demandfor money. Given a fixed nominal stock of money, highertransaction demand has to be met by releasing liquidityfrom the pool held for speculative and precautionarypurpose. To induce people to do that willingly, interestrate must go up. So in the ex-post equilibrium bothinterest rate and income are higher. Note that sucheffect on interest rate is due to transaction demand andis not related to issue of investment finance as such.

When the equilibrium is reestablished after increase ininvestment, there will be additional saving arising outof higher income, and it is exactly enough (ensured bymultiplier) to finance initial change in investment.Financement of investment is linked to additional savingavailable arising out of higher money income. Thisargument is captured by the statement that 'investmentis self-financing', or 'investment finances itself'. Thisimplies that there will be no problem of financinginvestment in the aggregate. Investment will eventuallybe matched by corresponding saving. Until savingequalizes investment, investment-saving gap will leadto changes in income but not in interest rate (recall thatsaving is function of income only in the standard IS-LM model) when excess capacity exists in the economy.This means that investment financing is not a problemas any level of investment can be financed at anunchanging rate of interest. The supply of funds isperfectly interest elastic in the sense that investment inthe aggregate is not subject to a fund constraint.

Kalecki (1942) showed that, when wage earner do notsave, real gross profit earned by capitalist as a classdepends on their consumption and investment decisionsformed in the past, with corrections made for unexpected

changes in the inventory and prices. Saving out of thisprofit can continue to finance the same rate of investmentin the subsequent period.

What happens if capitalists wish to invest and/orconsume more? Kalecki argued that such increasedexpenditures are self-financing in the following way.Imagine that a particular capitalist borrows from theCentral Bank (or for that matter from commercial bank),to invest over and above the level of preceding period.When such finance is spent, essentially that amount willbe received by other capitalists under the form of profits(due to assumption that workers do not save), and putagain into a bank as a savings deposit or used to payoff a debt to the Central Bank. Thus, Kalecki argues that,the circle will close itself. He also pointed out that creditinflation (money supplied by the banking system) isrequired to take care of an increase in investment. Itis needed partly to finance investment and partly tosupport higher transaction demand due to higher levelof economic activity and prices.

The statement 'investment finances itself' resemblesthat of Say's law, remembering that multiplier causesincome to increase only in demand constraint economy.However, it must be emphasized that this statementdoes not anyway indicate that finance is irrelevant, butmeans only that finance is not a constraint in theaggregate.

After the publication of General Theory, Ohlin (1937)challenged Keynes's view on investment finance andpointed out that there is a problem of reconciling savingsand investment until the multiplier works itselfcompletely. The problem is the following; suppose thereis an exogenous increase in effective demand due tochange in investment. Consequently, via the multiplier,output will rise to meet the increased demand. However,during the process of adjustment towards the newequilibrium, planned savings and planned investmentare not equal. Keynes then introduced the concept of'revolving fund' to take care of interim difficulties infinancing process when investment is not equal to saving.This is what is called the 'finance motive' which is atemporary demand for liquidity and is different fromthe demand for active balances which will arise as a


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result of the investment activity whilst it is going on(Keynes, 1937 A, pp. 246). Such demand for fund istemporary as the very need arises because of the transientnature of disequilibrium in the financial market.

.. "finance" is essentially a revolving fund… When the flowof investment is at a steady rate, so that the flow of ex-anteinvestment is equal to the flow of ex-post investment, thewhole of it can be provided in this way without any changein the liquidity position. But when the rate of investmentis changing in the sense that the current rate of ex-anteinvestment is not equal to the current rate of ex-postinvestment, the question needs further consideration (Keynes,1937B, pp 666).

It seems that, if a pool of liquidity is set aside, abovedifficulty can be side stepped and there will be no unduepressure on the interest rate during financing ofinvestment. However if that is not sufficient, monetaryauthority will have to accordingly adjust the volumeof liquidity even when the level of investment demandremains the same. Further, Keynesian theory does notdistinguish between 'external' and 'internal' finance. Itdoes not matter whether firms draw down their ownreserves (retained earnings) or chooses to borrow fromfinancial sector. In Keynes, external and internal financeare perfect substitutes, therefore there is no wedgebetween external and internal finance costs.

This paper will pose this issue against possible balancesheet effects of real investment by employing aframework due to Hicks (1977). To sharply bring outbalance sheet effects, i.e. to focus on the direct effectof financing real investment, we shall assume that thestock of liquidity is held constant during the financingprocess. This would suppress the conventionaltransmission channel. Further, as in Keynesian theoryof money market, we will adopt stock equilibrium fordetermination of interest rate. For this reason it isappropriate to look at the effects of real investment onbalance sheet.

2.2. Credit Channel of Monetary Policy

Given uncertainty about the future, market outcomeswill be efficient and Pareto-optimal as long as agentshold symmetric beliefs about the nature of uncertainty.

But often there is asymmetry of information amongagents. Therefore efficient contracts may not be possiblefor one simple reason: one party's insufficient knowledgeabout the other party involved in a transaction mayprevent taking accurate decisions. In the context offinancial markets, entrepreneurs often have moreinformation about the project 'quality' than the investors.Under such condition, Keynesian assumption thatinternal and external funds of a firm are perfect substituteand therefore both have the same cost will no longerbe valid. The difference between external and internalcosts is known as 'external finance premium'. Accordingto the literature on credit channel of monetary policy,3

monetary policy affects the size of the external financepremium. Such premium reinforces the conventionaltransmission process. Two mechanisms have beensuggested to explain the link between monetary policyactions and the external finance premium: the balancesheet channel and the bank lending channel.

The balance sheet channel postulates that the externalfinance premium should depend on borrower's financialposition with net worth (measured by liquid assets plusmarketable collateral). Higher net worth enables aborrower to self-finance a greater portion of investmentproject or enables to offer more collateral to guaranteethe liabilities. Such insight explains why borrowers areoften need to meet certain financial ratios, or are requiredto make down payments. An extensive theoreticalliterature has evolved around this idea to argue thatendogenous pre cyclical movements in borrower balancesheets can amplify and propagate business cycles, aphenomenon that have been referred to as the 'financialaccelerator' (Bernanke et. al., 1999).

Banks play an important role in overcominginformational problems in credit markets; as a resultmany borrowers are substantially bank dependent.Banks remain the dominant source of intermediatedcredit in most countries and specialize in overcominginformational problems and other frictions in creditmarkets. In the presence of asymmetric information

3 There is a vast literature on monetary transmission mechanism underimperfect information set up. See for instance, Bernanke and Gertler (1995)and Bernanke et al (1999) for general reference and Bhaumik and Majumdar(2007) and Bagchi, Das and Moitra (2002) for studies in the Indian context.


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monitoring by banks can improve efficiency. Banks arebetter suited to economise on monitoring costs. Firmsand banks develop long-term relationships, thusmitigating the effects of moral hazard. Monetary policymay also affect the external finance premium by shiftingthe supply of intermediated credit, particularly loansby commercial banks. Therefore, a reduction in thesupply of bank credit, relative to other forms of credit,is likely to increase the external finance premium andto reduce real activity. This is the bank lending channel.

The framework that would be developed in this papertakes a different approach altogether. The credit channelliterature shows how quality of today's balance sheetaffects planned investment expenditure. Our analyticalframework seeks to find out how 'ex-post' balance sheetaffects planned investment expenditure. Theconventional transmission mechanism begins with achange in the money supply and is therefore not suitableto address the question posed here. So to assess suchfinancial consequences of real investment, we keependowment of money constant - to block transmissionchannels of all variety.

We build up our arguments in sections 3 and 4.

3. The Financing Process

Macroeconomic equilibrium given by equality of savingand investment may be viewed from the perspectivesof financial and commodity (real) markets. On thecommodity market side, saving is unconsumed outputand it is matched by investment which is demand fornew capital goods by firms. On the financial side, savingis used for acquisition of financial assets that is matchedby acquisition of financial liabilities by firms purchasingnew capital goods. If saving is not equal to investmentin the aggregate then it creates disequilibrium in assetas well as commodity market. Former leads to changesin interest rate whereas the latter causes output/pricesto change. In Keynesian theory, disequilibrium or saving-investment gap is closed by changes in output (throughmultiplier). In contemporary finance, however, tradingin asset is crucial to track changes in relative prices(which is relative rates of return) driven by changes inasset composition. Real investment affects asset marketsin two ways. First, investment expenditure leads to

asset accumulation, physical (production of capital

goods) and financial (saving out of money income).

Second, there is a change in the asset composition and

hence in the relative prices of assets. The first effect is

termed as scale effect and the second as composition

effect here. The scale and composition effects may be

compared with income and substitution effects of

standard consumer theory.

To track financing process, assume that there are two

financial assets, money (M) and share capital (K)

available to hold wealth with a given stock of money

(M = M ). There is one unit of share capital held by the

households for each unit of physical capital held by

firms. Let P be the money price of share capital and

assume that it is market clearing supporting the

equilibrium volume of asset exchange. We also assume

that the financial wealth ( PM + K) is concentrated in

households. Investment in any period is financed by

issuing new share capital. This increases the stock of

share capital in each period. At the beginning of the

period liquidity preference has been satisfied through

holding of desired ratio of money to share capital and

is equal to the ratio in which they are supplied.

To carry out an investment plan firms demand money

(finance) from household against fresh issue of share

capital. Funds are then spent on new capital goods and

associated expenditure on labour etc. This leads

generation of income, additional saving out of additional

income and subsequently households take decisions on

disposition of the new saving.

Once investment activities are completed, the asset

markets would be affected in the following way. First,

investment expenditure leads to asset accumulation,

both physical and financial. Second, changes in asset

composition calls for a change in the relative prices of

the assets (P) brought about through trade in existing

assets. Assuming that the process of financing does not

involve additional money creation (to rule out standard

monetary transmission mechanism) what is the ex-post

effect on the relative price of assets in equilibrium?

The price can be thought of as the return to share capital

or equivalently the interest rate. To induce household


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to part with the liquidity (equivalently to induce themto decrease the ratio of money to share capital) the priceof share capital must rise to the extent at which it isjust not worthwhile for investors to offer furtherinducements to holders of money to reduce their liquidityany more. At that rate of interest the demand for sharecapital will equal their supply. Once this transactionis complete, investors buy investment goods. So moneyholdings by firms come down. Income is generated inthe investment goods sector accrue to the householdand hence money circulates back to them. This restoresthe desired holding of money stock by the household.But due to supply of new share capital, the ex-post ratioof supply of money to share capital is lower. This ratioto be held willingly by the household, return to sharecapital must go up. So the ex-post interest rate mustbe higher than that in the beginning of the financingprocess.

Recognise that this ex-post effect is the outcome ofchanges in asset composition in the household balancesheet. We call this effect as the composition effect ofinvestment finance. What is the likely effect of assetaccumulation on the financial markets? The financingprocess brings about an increase in the stock of wealththrough real investment. Since the process does notcreate money, this change is entirely due to higher ex-post endowment of share capital. In the beginning ofthe process, the households willingly held a part of theirwealth in a non-interest bearing assets, i.e. in money.Ex-post, there is no reason to expect them to deviatefrom such a behaviour, so that a part of the additionalwealth ought to be diverted to additional holding ofmoney. This means that the wealth elasticity of moneydemand is not zero. As a result the equilibrium priceof share capital must fall and that of money must rise(as the stock of money is given); in other words weshould expect a rise in the interest rate. We call this ex-post wealth effect as the scale effect of investment finance.

The Keynesian 'finance motive' may now be given a re-interpretation. A 'motive' should lead people to holdadditional stock of money willingly i.e. voluntarily.From this perspective it would seem appropriate to linkfinance motive to the financial consequence of realinvestment on the asset markets and specifically to the

ex-post scale effect of investment financing. The scaleeffect gives rise to additional and voluntary demandfor money by economic agents. It is also evident thatthis demand may not be temporary in nature like inKeynes' finance demand. Moreover, this demand mayvary depending on the strength of wealth elasticity ofmoney demand for each individual.

To summarise, there are two ex-post effects of investmentfinance on the interest rate. First due to the compositioneffect, and the second is due to the scale effect. Bothresult in an increase in rate of interest in the illustrationtaken above. If we were to write a money demandfunction for the households, it would look like thefollowing.

PMd

= f (Y, i); f1 > 0 and f2 < 0

i = g KM/P

,PM

+ Kc m; g1 < 0 and g2 > 0

Keynes and Kalecki emphasise that the endowment ofmoney with the household is ex-post unaffected becauseof the 'Widow's Cruse' property. So the need for ex-anteinvestment finance does not create any pressure on themoney market.4 However in our exercise of financingprocess we do not get the Keynes-Kalecki result, thoughthe assumption of constant money supply and adoptionof stock equilibrium for determination of interest rateare intact. Our result is different from that of Keynesand Kalecki because of the ex-post scale and compositioneffects of higher endowment of share capital (and wealth)resulting from real investment. This shows that thebiblical Widow's Cruse property is not valid in theaggregate and consequently it cannot be ascertainedthat funds are not a constraint for investment.

4. Disaggregated Balance Sheet

We now expand balance sheet to explicitly includefinancial sector consisting of central and commercialbanks. This classification is similar to that of Hicks(1977, pp 76-77). An investment process begins withexpenditure of liquid assets, either already held by afirm (e.g. retained earnings) or acquired through issueof new securities. A decision to invest is a decision to

4 Changes in interest rate due to transaction demand are not relevant here.


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become illiquid as the ex-post balance sheet of the firmwould contain more illiquid assets (capital stock) andlesser liquid assets. What are the likely effects of achange in the composition of the balance sheet on theaggregate economy?

The balance sheet of a macro-economy is segregatedinto three sectors. There is Central Bank whose job isto conduct monetary policy as usual. Then there arebanking sector and real sector. We club balance sheetsof firm and household and denote it by real sector thatproduces commodity. The Central Bank does not lenddirectly to industry, so that it holds securities of onlyfinancial sector. This keeps the exogeneity of moneysupply intact as in Keynes (Hicks,1977, pp 76). Realsector's assets are money, M, term loans to financialsector, f (consisting of retained earnings of firms +household saving), and real assets, K. A notional liabilityis to be added for accounting balance, but is not shownhere. Banking sector's liabilities are borrowings fromreal sector, f, and from Central Bank, F. its assets areloan to real sector, I, and money, m.

The respective assets and liabilities are shown below.

Liabilities Assets

Central Bank Money Financial Securities(M + m) (F)

Banking Financial IndustrialSector Securities Securities

(F + f) (I) + Money(m)

Real Sector Industrial Real AssetsSecurities (I) (K) + Financial

Securities (f)+ Money (M)

Here total money supply or liquidity (M + m) is fixedby the Central Bank as in the IS-LM framework. For thepresent purpose let us interpret this aggregate supplyof liquidity as the revolving fund meant for investmentfinance. This is done to focus on the issue of the adequacyof fixed pool of liquidity (and also to block usualmonetary transmission effects) to take care of therequirement of finance for an unchanging level ofinvestment.

Keynes-Kalecki position that in the aggregate financingof investment is not a constraint can now be shown atonce. If we add the asset and liability side of all thesectors, we are left with only the real asset (capital stock)of industry, with a notional liability in the accountingsense. When investment projects are taken up, althoughsector wise balance sheet positions are different afterthe investment-saving equilibrium is reached, assetsand liabilities would cancel out once again with higherreal capital stock in the aggregate. Investment doesaffect the composition of assets and liabilities of differentsectors. But such changes in sector wise compositionof assets and liabilities are suppressed in the aggregate.Whatever be the source of finance, it cannot become aconstraint in the aggregate. However, changes in thesector wise balance sheet cannot be ignored. The processand method of financing are important.

Let us assume that securities, i.e. financial and industrial,are less liquid than money. So in the liquidity spectrum,real assets are most illiquid and money is most liquid.The terms at which finances are obtained would dependon the existing relative liquidity position of the financier.The relative liquidity position is given by the ratioliquid-to-illiquid assets. If this ratio is already low thento induce the financier to become even more illiquid,a higher cost, in terms of interest rate payable, has tobe incurred.

Now let us look at various ways in which funds canbe mobilized. Assume that the process of financinginvolve a Keynesian short period so that the absolutelevel of price is fixed. Starting with above balance sheetposition, real sector now wishes to invest by which realasset (K) will go up. Process of investment begins withmoney expenditure; formation of fixed assets is aconsequence. Now current investment will increasefuture output. So a higher level of money stock, 'M'(higher transaction demand) would be required by thebusiness. Clearly, current investment expenditure cannotbe financed out of existing 'M' to a great extent.

There are two alternatives left. Funds can be borrowedfrom banking sector by increasing 'I' (external finance),or can be spent out of retained earnings by reducing'f' (internal finance). When 'I' is increased, there is no


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direct effect on real sector's liquidity position. Howeverin the balance sheet of banks 'I' goes up and 'm' goesdown (because liability side is unaffected). The requiredfinance is obtained from the pool of liquidity held bythe banking sector. The ex-post composition of assets

(Im ), the relative liquidity, of banks goes down. As the

effect is confined to banks' asset side only, liquidity issharply diminished.

In the latter case, both 'f' and 'm' are diminished. Notethat in this case, real sector's liquidity is diminished tothe full extent of additional expenditure 'K'. For banks,a fall in 'm' reduces liquidity whereas fall in 'f' increases

liquidity. So relative liquidity position of banks ( Im ) is

less affected in this case. Hence, when the real sectordraws on own fund the total effect on liquidity of bankingsector is less severe than when the real sector borrowsfrom banking sector.

So an increase in real investment, with a constant supplyof liquidity (M + m), must reduce liquidity somewhere.If investment is financed by borrowing (issuing more'I'), the main loss of liquidity falls on the bankingsystem. When financing draws on own reserves(reducing 'f' and exchanging it with 'm'), the loss ofliquidity mostly falls on real sector itself. For banks, theex-post liquidity position in both the cases will be ofimportant consideration for charging interest rate. Onthe other hand, when real sector spends out of retainedearnings, it has to take into account interest foregoneon financial securities 'f' and its ability to further choosethis method. Hence the methods as well as the choicebetween the methods are significat while takingdecisions on financing of investment.

This is for the change in the composition of assets. Whatis the consequence of a likely scale effect?

4.1. Disaggregated Balance Sheet: Scale Effect

The industrial sector would require more 'M' for therequirement of higher transaction demand for money,resulting from higher circulation of output due to higherreal assets 'K'. There is another additional source ofdemand for money. Because of real investment, wealth

of the economy, PM+m + K` j goes up. There would be

additional demand for money if some the additionalwealth is sought to be held in liquid form. This scaleeffect would call for an increase in interest rate at a givenlevel of liquidity. This additional demand can only bezero if wealth elasticity of money demand is zero, whichclearly is an extreme assumption.

While Keynes's financial system comprised Central Bank(monetary authority) and capital market, a furtherdisaggregation of sectors shows that the method offinancing has effects on the liquidity. It cannot beascertained that interest rate will remain unchanged inthe face of such a greater demand for liquidity unlessit is supplied from outside (here central bank). Thisanalysis also sharply brings out another crucial featureof investment finance. As per Keynes, a given revolvingfund for finance is insufficient only when level ofinvestment changes. But it is now evident a revolvingfund is not sufficient to keep liquidity pressure at bay,at an unchanged level of investment. Our analysis showsthat any non-zero investment would exert balance sheeteffects that are potential enough to change the interestrate. Further, when the level of investment remainsconstant over periods, depending on the method offinancing, liquidity would be redistributed betweensectors. Clearly, in investment finance, which sectorholds the liquidity is an important consideration.

The financing process offers us another insight. TheKeynesian transmission mechanism says that money orliquidity affects the level of investment through thechanges in interest rate. Our analysis so far shows thatinvestment may be directly affected by the availabilityof liquidity (or money supply) without requiring achange in the interest rate. This suggests that one canconceive of an investment function which containsliquidity as an explicit factor.

5. Discussion

The issue of investment finance deals with the likelyconstraints on the availability of funds in the aggregateand a consequent curtailment of the level of investment.To compare the literature on credit channel with ourapproach, note three important differences. First, ourfinancing process does not involve any money creation;the stock of nominal money is given. By doing so, the


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question of transmission mechanism of all varietythrough changes in money supply is ruled out. Second,our analyses do not rest on the issue of the 'quality' ofthe balance sheet of the borrower. In other words, ex-post effect of the requirement of financing does notinvolve market imperfections like informationasymmetry. Third, our unit of analysis is at the levelof sectors unlike at the firm level in this literature. Inassessing the Keynes-Kalecki position on the financialconsequences of real investment, it is crucial to keeptwo of their assumptions intact. One is the constantendowment of money; another is the stock equilibriumto determine the interest rate. The conventionaltransmission mechanism begins with a change in themoney supply and thus one of the required assumptionsis violated at the very outset.5

In our approach of looking into segregated balancesheet of the financial sector, it is the ex-post liquidityratio that is relevant for decisions making on the partof industrial and banking sectors; not the 'quality' ofthe balance sheet. The internal funds of industry in ourcase can be designated as financial securities (f) plusmoney 'M'. A part of this internal funds, 'M', whichis the most liquid part, cannot be used because of a needof higher transaction balances required in the future.We have not distinguished between liquidity held bybanks, 'm', from that by industry, 'M' in terms degreeof substitutability. The important issues here are theamount of liquidity and who holds it. Though it is alsorelevant for credit channel literature, the emphasis ison the perception of the quality (for e.g. whethersecurities are readily marketable) by the financier. Sothe 'effective' liquidity held by the firm may be lowerthan the 'actual' level. This paper argues that there maybe enough liquidity (of high quality) available in theaggregate but financing by more borrowing may posea problem because the existing liquidity condition ofthe banking sector may be tight, though it may be quitetrue that industry holds sufficient liquidity.

The credit channel literature shows how quality oftoday's balance sheet affects planned investment

expenditure. Our analytical framework seeks to findout how ex-post balance sheet affects planned investmentexpenditure. In our case, both the financial and industrialsector would endogenise ex-post liquidity ratios andtake financing decisions accordingly. Focusing at thelevel of industry and banking sectors even out individualfirm or bank heterogeneities. A poor quality balancesheet of a specific firm would have much benign effecton the aggregate level of realised investment. Uponaggregation, information asymmetry, if present, wouldbe operative at the sectoral level. One can surmise thatfirm level information asymmetries would have muchreduced stature on the sectoral level. The bank lendingchannel would also be less functional as informationflows happen between two sectors rather than betweena firm and a bank. As a result it is possible to focusmore on the availability of liquidity rather than on thenature of imperfections of the market.

6. Conclusion

Keynesian proposition that financing investment is nota problem in the aggregate relies on effective demandproblem and multiplier. Any level of investment demandcan be financed without any repercussions on moneymarket because additional investment demand wouldalways find matching saving through multiplier. Thefocus is on aggregate liquidity and thereforeconventional monetary transmission mechanism relieson the effect of changing liquidity on interest rate. Ouranalyses show that, when one looks into sectoral balancesheet with fixed stock of liquidity, constancy of interestrate can no more be ascertained. Real investment createspressure on interest rate via scale and compositioneffects of liquid-to-illiquid assets of a sector. Thereforebalance sheet effects may require additional liquidityadjustment by the Central Bank in the intervening periodbetween two monetary policy reviews depending onthe course of real investment.

The usual monetary policy transmission mechanismcan therefore be further extended to capture 'ex-post'balance sheet position of different sectors. When thelevel of investment goes up (through a shift in theinvestment schedule), interest rate would go up becauseof higher demand for money for transaction purpose.5 Nevertheless, it must be emphasised that market imperfections are as

important as balance sheet effects in determining borrowing cost.


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But this may not be the only effect. It may so happenthat, there is enough liquidity at the aggregate level,but the distribution of liquidity (ex-ante and ex-post)is such that method of financing becomes important.This effect is going to further complement the effect onborrowing cost due to credit channel of monetary policy.Distribution of liquidity is as important as volume ofaggregate liquidity and complications arising out ofasymmetric information captured in the quality ofliquidity. This perspective may offer monetaryauthorities important insights to conduct monetarypolicy.

Acknowledgement

The author gratefully acknowledges detailed commentsby Prof. Amitava Bose on an earlier version of the paperand useful comments from an anonymous referee of thisjournal.

References

Bagchi A. K., Das P. K. and Moitra B. (2002). Are ListedIndian Firms Finance Constrained? Evidence for 1991-92 to 1997-98. Economic and Political Weekly, February23.

Bernanke B. and Gertler M. (1995). Inside the Black Box:The Credit Channel of Monetary Policy Transmission,The Journal of Economic Perspectives, 9(4), 27-48.

Bernanke B., Gertler M. and Gilchrist S. (1999). The financialaccelerator in a quantitative business cycle framework.In: Taylor J. and Woodford M. (Eds.), Handbook of

Macroeconomics, vol. 1C. Amsterdam: North-Holland.

Bhaumik S. and Majumdar S. (2007). The Impact of MonetaryPolicy on Corporate Borrowing in India: An EmpiricalInvestigation. Money and Finance, September.

Hicks J. (1977). Economic Perspective: Further Essays onMoney and Growth. London: OUP.

Kalecki M. (1942). A Theory of Profits, The Economic Journal,52(206/207), 258-267.

Keynes J. M. (1936). The General Theory of Employment,Interest and Money. In Moggridge (Ed.), The CollectedWritings of John Maynard Keynes (vol 7). London:Macmillan.

Keynes J. M. (1937A). Alternative Theories of the Rate ofInterest. The Economic Journal, 47(186), 241-252.

Keynes J. M. (1937B). The Ex-ante theory of the rate of interest.The Economic Journal, 47(188), 663-667.

Ohlin B. (1937). Some Notes on the Stockholm Theory ofSavings and Investments II. The Economic Journal, 47(186), 221-240.

Romer D. (2006). Advanced Macroeconomics (3rd ed.). NewYork: McGraw-Hill/Irwin.

Subhasankar Chattopadhyay is a faculty in the Economicsarea of Indian Institute of Management (IIM) Indore. Heis a Fellow of IIM Calcutta specializing in Economics andFinance. He holds a Bachelor’s degree in Physics andBachelor of Technology in Electrical Engineering fromUniversity of Calcutta. Prior to current engagement, heworked as an Assistant Professor with IMT Nagpur. Hisresearch interests include Keynesian, Intertemporal andStructuralist Macroeconomics. His teaching interestsinclude Macroeconomic Theory, Macroeconomics forDeveloping Economies, Financial Economics and AssetPricing. He can be reached at [email protected].


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Abstract

This case study narrates the situation of a large bank,christened Republic Bank of India (REBI) that hasundergone a radical transformation. The objective ofthis case study is to identify triggers leading to largescale transformation efforts and examine the responseof a stable and slow moving organization to such triggers.The case study is descriptive in nature and focusses onthe content, process and challenges in a large scalechange intervention program.

REBI, a ninety year old public sector bank, was facingcompetitive pressures from New Private Banks (NPBs)and also lagged on the technology adoption front. Thebank was known for efficiency in branch operations,however, had inherited an inward looking culture withlittle focus on marketing and sales. As the externalenvironment changed, private banks started expandingaggressively into the semi-urban and rural markets thatwere considered the stronghold of public sector bankslike REBI. As a response, REBI undertook a culturaltransformation exercise called Project Restructuring(PR), aimed at making the bank market-focused, sales-oriented and customer-centric.

The case study provides a brief overview of the Indianbanking industry and conditions that prompted ProjectRestructuring at REBI. This is followed by a detaildescription of Project Restructuring beginning with theideation, visioning exercise and communication channelsused to overcome resistance among employees. Thecase study then describes the four pillars of change viz.,growth in retail assets, growth in SME, enhancing branchservice and centralization of key processes. The changeprocess is explicated in terms of specific activitiesundertaken at the branch level as well as the rebranding

Organizational Transformation: The Caseof Republic Bank of India (REBI)Ranjeet Nambudiri and Radha Ravichandran

exercise at the corporate level. Finally, challenges facedby REBI are discussed.

Key words: Change management, restructuring,intervention, cultural transformation

Introduction

The transformation initiative of Republic Bank of India(REBI), christened Project Restructuring (PR) had shownexcellent initial results with an increase of nearly 25percent in Current Account Savings Accounts (CASA)business. The top management team desired to beproactive and well prepared before Union Governmentannounced another around of licenses to new entrantsin the Indian banking space. REBI had achieved goodresults in previous financial years showing Year-on-Year growth of more than 20 percent in total business,advances, deposits, net profit and other income. AsianBanker had just rated REBI as the 3rd strongest bank inIndia. It was widely held that the transformationinitiative introduced three years back was instrumentalfor this turnaround in performance.

However, the question facing the top management teamof REBI was how to keep up the tempo of the changeinitiatives. PR had not yet touched many parts of theREBI system. Moreover, new private banks (NPBs) werefast expanding into the semi-urban and rural markets.REBI had leveraged technology and arrived at the sameplatform as leading banks and were now comparablein terms of product innovation, alternate channelpresence and technology adoption. However, the visionstatement of the current year was still some way awayas REBI aimed to break into the Top 3 banks of thenation.

MANAGEMENT CASE

This case study, though based on real events, is a fictionalized version and any resemblance to actual entities or persons is coincidental. There are referencesto actual organizations and people in the case study. Names of organizations and persons have been changed to protect their identity.

Ranjeet Nambudiri and Radha Ravichandran

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The Indian Banking Industry

Reforms were initiated in the Indian banking industryin early 1991. As a result new private sector banks wereestablished, interest rate was deregulated, relaxationwas made in the Cash Reserve Ratio (CRR) and StatutoryLiquidity Ratio (SLR), and foreign banks were allowedeither in the form of branches or wholly ownedsubsidiaries among other initiatives. This led to thesector becoming extremely competitive. NPBs andforeign banks were early adopters of latest technologyand used advanced technology to offer innovativeproducts and better service quality. At the same time,newer opportunities arose as the demographic profileof the customers was changing. Markets opened up forcorporate accounts and high net worth individuals(HNIs). NPBs offered better service quality and customerexperience resulting in a trend of shifting customerloyalty. At the same time customer expectations fromthe banks increased significantly. New entrants into thebanking sector were free from the legacy of problemsof Non-Performing Assets (NPAs). Backed by a fullycomputerized establishment they could adopt advancedIT based hardware and software solutions rapidly. NPBswere able to offer the earliest version of what is todayknown as a core banking solution because their brancheswere networked through a common technology platform.Transaction time was brought down dramatically, thusenhancing the customer service quality. Around thesame time, Public Sector Banks (PSBs) offered thevoluntary retirement schemes (VRS) resulting in exodusof senior level officers from the PSBs to the NPBs.Though PSBs had the advantage of greater reach, thePSBs outmaneuvered this using alternate deliverychannels and direct selling agents. PSBs were losingtheir market share to more aggressive new private sectorbanks.

Republic Bank of India: Need for Change

REBI was one of the leading PSBs of India. The bankbegan operations in the early part of the 20th centuryand was nationalized by the Government of India (GoI)in 1969. The bank had grown through a strategy oforganic growth as well as a few acquisitions. Steadygrowth and profits characterized REBI and in the early

2000s it issued an Initial Public Offering (IPO) followedby a follow-up offer, both of which were hugely over-subscribed. It was generally perceived to be a stable andtraditional bank.

REBI had a 4-tier structure consisting of the Head Office,Zonal offices, Regional offices and branches. In 1998-99 the zonal offices were dropped to create a leanerstructure. The bank also attempted to modernize itshuman resource systems by adopting best practicesfrom across the globe. Information technology initiativeswere unavoidable, and REBI had computerized 70percent of its branches by 2000. It was in the processof augmenting the alternate delivery channels like ATMSas well as adopting core banking solutions. ATM networkincreased 100 times in 10 years while hardly 50 brancheswere added in the same period.

REBI was known for the strength and efficiency inbranch operations however, was considered weak inreaching out to potential customers. Like any other PSB,the bank had never felt the need to indulge in aggressivesales. However, this changed when with changes in theexternal environment. Competition in the form of NPBs,increasing awareness of the customers, and technologyadvancements created pressure on the bank to maintainits market position. The trigger for change came whenNPBs also started expanding into the semi-urban andrural markets that were traditionally the stronghold ofPSBs and threatening the market position of PSBs inthese markets. Branches of NPBs focused completely insales and marketing as the branch operations werecentralized. Feet-on-street was the strategy as branchpersonnel aggressively pursued sales targets. Internalreports indicated an impact of the external environmentalchanges. The bank was growing but the growth wasslower than the market, especially in fee income, retailloan accounts and current and savings accounts (CASA).

To adapt to these changes and meet the expectationsof stakeholders REBI went in for planned change effortsand transformation of the organization. As such, thebank was not faced with a significant decline inperformance. However, the trigger for change was adesire to figure among the Top 5 banks and at the sametime reverse the slow growth in few segments. Republic


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Bank of India approached a leading managementconsulting firm to advise them on the transformationinitiative. At the same time, the bank was clear that thetransformation would be driven internally. Hence, 10core team members were appointed to chaperone theproject. The consultants visited branches along withcore team members to understand the existing systems,processes, organizational culture, and skill gap.

The consultants suggested a transformation processwhich was then christened Project Restructuring (PR).The process aimed at transforming people, reengineeringand improving processes with the support of technology,exploiting technological advancements to improveservice quality and delivery and imbibe sales andmarketing orientation amongst the rank and file of thebank. The aim was to inculcate a culture of sales andmarketing from the corporate to the branch level andtransform into a sales-oriented, market-focused,customer-centric work culture.

Project Restructuring: The Content

Buy - in of Top Management and Rank and File

Management of change is usually driven from the top.However, the top management of REBI was quick torealize that a consultative process would be moreeffective in inculcating a sense of ownership among theemployees. The bank held a conclave for the topmanagement which was facilitated by their managementconsulting agency. Top managers introspected aboutthe performance of the bank, its strength and weaknesses,preparedness to take on future competitive pressuresand other related issues. Many of the participantsquestioned the need for change when the bank wasperforming reasonably well on most parameters.However, the change management group arguedforcefully in favor of the change initiative andhighlighted the dip in critical parameters like CASAratio, retail loan accounts while also indicating the dataon customer satisfaction indices. The matter was drivenhome by surfacing the several challenges facing PSBsin general including aggressive marketing and thetechnological edge of the NPBs and the changingpreferences of customers. The top management groupcalled the attention of the participants to identify areas

of immediate improvement and change. A survey heldamongst the participants identified 9 critical areas withmarketing and sales, human resources, and informationtechnology emerging as the most critical areas. Manysenior officers were of the view that marketing and salesneeded immediate revamp. REBI set out a road mapfor the future in the form of a vision statement. Afterseveral rounds of discussions involving the officerassociation and staff Republic representatives the bankdrafted the Vision Statement.

Communicating the Change Agenda

Town hall meetings were arranged across the countryto reach out to the staff with the new vision statement.The top management briefed the staff about the changingmarket scenario, aggressive competitors, changingdemographics of the consumers and their preferences,and the dominant role of technology in banking. Theneed for change was highlighted. REBI used a metaphorof "redesigning a moving vehicle" to mobilize supportfrom the staff members. The metaphor infused theemployees with vigor and motivated them toward thetransformation targets.

The top management identified two critical aspects ofgrowth viz., “instilling the drive of sales and marketingacross bank staff and reconfiguration of the businessmodel to enable us to grow for the future". The objectiveof PR was set out as "Transformation of Republic Bankof India into Sales oriented, customer and market focusedfinancial services organization"

Main Themes of Project Restructuring (PR)

Sensing the exploding growth potential in retail andSME sectors, REBI identified these segments as thrustareas. To achieve the aggressive growth targets set out,the bank needed to focus on changing the marketingorientation, sales and service attitude across thehierarchy. The initiative also called for back officecentralization to free the branch staff from operationalroles and thus enable them the bandwidth to go out tothe market for direct sales.

Thus, the four pillars of PR were identified as

1) Growth in Retail asset (Marketing &Processing)


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2) Growth in SME (Marketing & Processing)

3) Branch sales and service (Improving customer expe-rience in branches)

4) Centralization of key processes.

The top management had clearly identified that for thistransformation to be successful it would need to bedriven through internal change agents. The bank henceembarked upon the task of identifying "coaches" todrive the change program. The coaches were mandatedto spend between 3-5 weeks at each branch anddemonstrate the selling process as REBI launched thetraining through a "participative" approach. This wasnecessary because a large proportion of the branchpersonnel had never been involved in the selling process.Many of them believed that they would never be ableto conduct cold calling and field based sales activities.The coaches were expected to bring about atransformation in these beliefs because they themselveshad been officers without prior selling experience andhence the tacit message was that selling was a skill thatcould be gained.

Project Restructuring: The Process

Pilot Phase and Phase 1

Republic Bank of India selected Mumbai, Pune andHyderabad centres in the pilot phase. These centreswere chosen because they offered a typical combinationof HNI customers, salaried middle class and SME ofvarious types. 70 coaches were assigned to the branchesin these centres. These coaches demonstrated the bestpractices by actually doing banking business on thefloor of the branch, and involving branch personnel inoutbound sales activities. The employees not only learntthe nuances of marketing techniques and technologybased service delivery but also started believing thatselling was a skill they could learn. Restructuringinitiatives were tailored for each type of branch viz.,retail asset branch, retail banking branches and creditthrust/SME branches.

Pillar 1: Retail Assets

In the retail segment, specialized branches for retailassets (RAB) were converted into centralized processing

centres for retail loan termed as Republic Loan Points.Branches would now generate leads and intimate theRLP. At the RLP marketing officers were expected tofollow up on these leads. A comprehensive Leadmanagement system software supported online responseto leads generated by the field staff and relayed it tomarketing officers for conversion. Credit anddocumentation officers looked into the credit worthinessand document execution part. The RLP also had staffto manage loan repayment, follow up and customerservice. Assured turn around time of 2 days for vehicleloans and education loans and 5 days for other loansrequiring legal formalities was the norm. Thus, REBItargeted a significant improvement in customerexperience and service quality. The bank outsourcedContact Point Verification, Centralized Processing ofApplications and Post-dated cheque Managementactivities to outside agencies. Branch staff wasencouraged to plan outbound sales and, marketing atpoint of sales (car dealer showroom, builders'construction site etc). Builders and car dealers wereaggressively pursued for possible alliances for homeloan and 4-wheeler loan respectively. Campus loancamps were held at premier institutes for promotingeducational loans and providing on the spot in-principleloan. Thus, the thrust of Project Restructuring was ontransforming into an aggressive sales organization.

Pillar 2: Small and Medium Enterprises (SME)

SME coaches were posted in branches with the aim ofimproving the credit flow. These SME coaches helpedbranches explore the potential around nearby catchmentareas and also supported marketing efforts for a rangeof products which included deposits, current account,short term/long term loans, and fee based products.The branch staff generated leads through customerreferrals and outbound marketing in industrial estatesand commercial markets. The coaches also trained creditofficers in marketing skills and best business practices.Seven SME central processing centers (SMECP Centers)were established in the major metro centers and wereheaded by senior executives. SMECP centers acted asprocessing hubs for Business Banking Branches. Theadvances officer at each branch along with branch


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manager would lead the SME business effort. Marketingofficers posted at the SMECPC would generate leadsand also take care of conversion of leads from branches.The processing officers and technical evaluation officersscrutinized the proposal and submitted to the grid forclearance. SMECPC marketing officers identified clustersand adopted intensive marketing techniques to attractthese clusters. The bank adopted a focused and intensivesales strategy to target the SME segment and this wasevident from the positive results in this segment.

Pillar 3: Enhancing Branch Sales and Service

Sales Initiatives

Branch offices were converted into marketing offices toinclude advances department, savings/current accountdepartment, cashiers, fixed deposit department andcustomer relationship managers. Each department wasexpected to promote products, depending on thebusiness potential of the customer they handled. Forinstance, the cashier could promote alternate deliverychannels like ATM/debit card. Branch sales initiativesalso included reaching out to existing customers forother businesses like cross selling of third party productsto HNI customers, salary account for corporate clientsand SME customers through tele-marketing. Staffmembers were made to undergo intensive trainingprograms. Lead generation was the primaryresponsibility of customer-facing employees, who thenforwarded these to product owners. Product ownershad conversion targets, while lead generation targetswere set for the branch. The coaches showcase how toput up stalls in potential centers, fixing appointmentwith influential contact people for meeting to promotethe banks services and door-to-door campaigns.

Service Improvement in Branches

While aggressive outbound selling was the order of theday at Republic Bank of India, the transformationinitiative also focused on enhancing the customerexperience. Project Restructuring, not only aimed atsales growth but also at improving the customerexperience in the branch and migrating them to alternatechannels thus reducing branch operations. Branchambience was enhanced by changing the layout, offering

best-in-class wait areas, leisure reading material andtop class infrastructure including fully air-conditionedcabins and lobby. Lobby banking was introduced inselect cities with facilities of drop box, ATM, touchscreen kiosks in an exclusive aesthetic section withinthe branch.

The bank assigned dedicated relationship managers tohandle privilege account clients. Privilege lounges wereset up for HNI customers. Customer service officerswere mandated with a target of 100 calls per month toreview service delivery quality, update of personal dataand explore potential for cross selling. The bank quicklyrealized the importance of training their branch staffof technology advancements. Coaches conductedintensive training programs for the customer facingstaff to enable them resolve customer queries rapidly.

Pillar 4: Centralization of Processes

Centralization of back office processes was the backboneof the transformation process. The success of the other3 initiatives depended on the speed with which backoffice operations were centralized. This wouldsignificantly reduce the burden of routine repetitivework of the branch personnel and enable them to focuson managing customers in the branch. 5 key processeswere centralized namely inward clearing, outwardclearing, account opening, cheque book issuance andgeneration of account statement. The core team drewup a road map for centralization. As PR reached thecompletion of Wave 1 the bank had already centralized100% clearing of both inward and outbound in 19 centres.Personalized cheque book issuance for all branches inIndia was centralized in Mumbai, taking centralizationto national level. Concurrently, coaches trained thebranch staff in the technology based centralizedprocessing. This allowed integration of branchoperations with the centralized back office and gave thebranch ample time to focus their energies on acquiring,retaining, and converting potential customers.

Phase II

Coaches stayed in a region for up to 3 months and atevery branch for nearly 2 to 3 weeks. Efforts of PhaseI lead to a set of trained officers who turned into coaches


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taking the number of coaches to around 140. 46 regionaloffices out of 55 were covered in Phase I. PR as a nationalrollout was carried out through this chain reaction. Asthe next step and to support the transformation effortRepublic Bank of India created business verticals onspecific business segments both on asset and liabilityside. This led to realignment of branches along specificbusiness segments to enable focused development. Theseven verticals focused in large corporates, SME, retailbanking, personal banking and operations, rural andagriculture business, transaction banking, and treasuryand international business. Of these, the transactionbanking vertical was unique to the industry as for thefirst time any bank was providing a specialized androbust payment and settlement system and cashmanagement services.

The transformation process was rolled out across thebranches in 2 phases and was accomplished over aperiod of 18 months. The whole exercise focused oncombining the power of people and technology, buildingrelationships through people and fast and efficientdelivery of services with technology support. RepublicBank of India covered 1000 branches under technologyin 6 months' time on war footing to support PR initiativesand became the first PSB to be 100% on core banking.

Project Restructuring: Enabling Mechanisms

Project Restructuring had completely revamped thebranch structure and operations. Marketing supportsystems for retail and SME businesses at the regionaloffices were established. This called for creation ofseveral enabling structures and processes. Some of theseare discussed in the subsequent sub-sections.

Role of the Branch Manager

The branch manager is perhaps the single most visibleface of the bank for retail customers. Republic Bank ofIndia wanted the Branch Managers (BMs) to play alarger role within the branch and in the command area.BMs are expected to interact, communicate, motivateand enhance performance of the members of theirrespective branches. As a team leader the BM was ina position to impact the success of PR either positively

or negatively. Job responsibilities of branch staff hadchanged drastically and many of the staff memberswere neither skilled nor trained in sales activities. Manyeven lacked the self-belief that they could conduct direct

selling transactions. Even though, the coach wasproviding support and training inputs, the BM wasentrusted with the critical responsibility of motivatingthe branch staff, instilling belief and confidence in themand overcoming their resistance to the change process.At the same time the BM was also charged with the

responsibility of improving the ambience of the branch.As part of the direct sales responsibilities the BM wouldmandated to participate in public/social events withinand around the command area to increase visibility ofthe bank. The branch manager was also expected togauge the command area potential through regular

business intelligence and market surveillance activities.By augmenting the role of BMs, Republic Bank of Indiaaimed at transforming sales culture at the front endof the bank and turning them into market outlets. Thispaved the way for building the organization into oneof "sales oriented universal financial services". REBI'scase highlights the significance of getting 'buy-in' from

key role holders as organizations undertake radicaltransformation initiatives.

Re-skilling

It was evident that a large majority of the staff, including

branch managers, were not equipped to handle their

new responsibilities and roles. Many had never taken

part in direct sales activities in their career and several

were also inadequately trained in technology. Clearly,

PR faced its biggest challenge in terms of the skill sets

of the existing employees and the success of the project

depended in a large measure on the bank's ability to

re-skill its people. Strong leadership communication

initiatives helped reduce the uncertainty and resistance

to change. However, the bank still faced the issue of

re-skilling a large pool of employees. Leadership

development programs for top management were

conducted by reputed business schools while the middle

management underwent training in customer service,

direct sales and managerial competency enhancement.


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Rebranding

REBI was careful not to initiate any re-branding exercisetill there was complete confidence over the results ofPR. The top management reasoned that when a newclient walked into a branch after seeing the newpromotional campaigns s/he should experience the "newand changed Republic Bank of India". This experiencewould generate a lot of positive word-of-mouth and goa long way in sustain the change effort. A pan Indiacustomer survey covering Republic Bank of Indiacustomers, potential customers and private bankcustomers was conducted. The survey revealed thatPSBs were perceived to be laggards in technology basedservice delivery and suitable only for old generationcustomers. Republic Bank of India wanted to projecttheir new transformed avatar of being a customer centricbank with state of the art technology. The bank engageda leading advertisement and communication agency tofacilitate the rebranding exercise. The exercise beganwith a change in the logo, with the new logo signifyingthe proposed customer-centric approach. Similarly, thebank's ad line was replaced with a new theme thatdepicted as a new-age bank that understood customerneeds, thus targeting the younger generation of clients.

Several internal meetings, circulars and employeeengagement activities were carried out to take theemployees into confidence about the need for rebranding.The campaign was launched with two TVCs and fourprint advertisements. All advertisements focused onthe newly imbibed customer-centric approach. Valuefor money, multi-channel delivery, assured servicedelivery within time and transparency in businessdealings were the brand promises made through therebranding exercise. The initial response to thiscampaign was quite positive.

Challenges Faced during Implementation

Project Restructuring was an elaborate exercise thespanned nearly 2 years. The transformation initiativeswere phased out and carefully planned at every stage.Even so, such a massive exercise cannot be executedwithout challenges and Republic Bank of India wasfaced with several such issues during the project designand implementation. The question at the top of the mind

of most of the employees was "what is the need for suchan exercise when the bank is performing well in allaspects, on all parameters including the share pricemovement in the stock market". The biggest challengefacing the transformation team was to convince thecontended and complacent employees about theinitiative. Extant literature states that convincingemployees of the need for change in the absence of avisible external or internal trigger is among the biggestchallenges for a change agent (Beckhard & Harris, 1987).REBI tackled this problem with the hands on involvementof the senior management beginning with several townhalls meetings conducted by the CMD.

However, inspite of a strong communication initiative,the bank faced some resistance to change. Branchmanagers no longer had the responsibility of handlingbranch operations and this led to some discontent. Branchmanagers were now prodded into moving out of theircomfort zones. Those with several years of experienceand adept at handling branch operations had to moveinto field sales roles. It was expected that some employeeswould not react favorable to this. Learning while doingwas not easy for many of the long-standing employees,some of whom resented the extra pressure created bysales targets and customer issues. Lead generationtargets were met with less resistance, however, frontlineemployees were wary of customer complaints becauseonce the lead was generated the customer was no longerin their control. Moreover, with changes in the jobdescription of the branch employees it was expectedthat the KPAs (Key Performance Areas) would undergoalteration. The bank aims to address this issue in thenext phase of the change initiative.

Impact of PR and the Road Ahead

Republic Bank of India introduced several new productsboth asset and liability items. PR initiatives startedshowing results as early as during the course of phaseII implementation. Branch sales and service initiativesenabled the bank to increase CASA by 23.2% over theprevious period. Performance at personal bankingbranches in garnering SB account, deposits and CASAwas much higher compared to other branches and overallbank average. Likewise SMECPC and RLPs contributedmuch more than the other branches towards MSME andretail loan respectively.


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The Asian Banker ranked Republic Bank of India as the7th strongest bank in Asia Pacific region and 3rd amongstIndian banks. The bank was in 275th place amongstmost valuable global banking brands in the current year(up from 351 in the previous year) By Brand FinancePlc. Financial Express, Earnest &Young survey of bestbanks in India for the current year ranked RepublicBank of India as 3rd in growth and 4th in efficiency andprofitability amongst nationalized banks. Thus it seemsthe transformation initiative though long drawn andeffort intensive had produced the desired results.

Realizing that customer service excellence is the keysuccess factor in the current competitive situation andhuman capital as the key enabler to achieve serviceexcellence, Republic Bank of India wanted to focus onthese two aspects in Restructuring II to be launched inabout two years' time. The bank is all set to unleashPR II with customer service excellence and HRdevelopment as the prime focus. Aggressive branchexpansion to the tune of 500 branches per annum fornext 5 years is planned in order to meet the socialobjective of financial inclusion which the bank aims topursue relentlessly encompassing more and more of theunbanked population.

Conclusion

The case of REBI highlights several key issues relatedto management of change. As is the case with any largeorganization, REBI seemed to be in a comfortablesituation with reasonably sound performance metrics.However, the "corporate cholesterol test" suggested byVermuelen, Puranam and Gulati (2010:2) would indicatethat REBI was in immediate need for change. The externalenvironment was changing rapidly and competitivepressures on REBI were increasing manifold. Internally,the top management had a desire to be recognized asone of the top performing banks in the country. Boththese served as the triggers for change in the case ofREBI.

As a manifestation of its ninety year old legacy, the bankhad a very strong culture and values; beliefs and normswere shared across the hierarchy. Very often, a strongculture can create barriers to the change process as staffmembers fall into a routine and face inertial pressures.This case study provides a description of how a large

and stable public organization followed a phased outstrategy to transform itself. Through the detaileddescription of the content and process of ProjectRestructuring it is evident REBI had chosen theappropriate change management strategy. The bankunderstood that change of this scale and nature couldonly be effected with the support of its managerial andclerical cadre. Many PSBs had faced the brunt ofresistance from their employee unions in the muchwritten about Voluntary Retirement Schemes of the late1990s. REBI clearly did not want to commit the samemistake and thrust a complex change managementprogram on an unwilling and non-cooperative set ofemployees.

While, the case highlights several positive aspects ofthe initiative, it is worth considering the also identifiespotential pitfalls. While, the initial results at REBI arepositive, it is also worth considering whether one canreally attribute the results solely to Project Restructuring.Critics of the planned change claim that it is often notpossible to isolate the impact of change managementprograms (Cummings & Worley, 2009:42). The samecan be said about Project Restructuring as well. Anotherissue that dogs proponents of change is the sustainabilityof such initiatives. It is often noticed that once the initialeuphoria dies down, the change agents find itincreasingly difficult to implement the program. Kotter(2007) emphasized the significance of "institutionalizing"the change effort. This includes creating a road map andclearly articulating successive steps in the changeprogram. The organization also needs to identify changemilestones and review these periodically. It is evidentthat the first installment of Project Restructuring hasmet with success, the question is can the top managementof REBI come out with an equally successful sequel.

References

Beckhard, R., & Harris, R. (1987). Organizational transitions:Managing complex change, Mass: Addison-WesleyPublishing Co.

Cummings, T.G, & Worley, C.G. (2009) OrganizationDevelopment and Change, Cengage Learning.

Kotter, J.P. (2007) Leading change: Why transformation effortsfail, Harvard Business Review, January 2007.

Vermuelen, F., Puranam, P., & Gulati, R. (2010) Change forchange's sake, Harvard Business Review, June 2010.


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Ranjeet Nambudiri is an Associate Professor in theOrganizational Behavior and Human ResourceManagement area at the Indian Institute of ManagementIndore, India. His research interests include trust anddistrust related issues in business and non-businesscontexts, justice issues during organizational change,managing organizational transformation, high performancework systems, self-managed teams, and organizationalcommitment. His papers have been published in

International and Indian journals and two of his casesare registered and published on Ivey Publishing. He haspresented papers at international conferences like EGOS,Academy of Management, ANZAM, EIASM, AAOM, andAICSDR.

Radha Ravichandran, PhD has almost 15 year of teachingexperience at an undergraduate and graduate level.

Leave this chanting and singing and telling of beads!

Whom dost thou worship

in this lonely dark corner of temple with doors all shut?

Open thine eyes and see thy God is not before thee!

He is there where the tiller is tilling the hard ground and

where the pathmaker is breaking stones.

He is with them in sun and in shower, and

his garment is covered with dust.

Put off thy mantle and even like him come down on the dusty soil!

Deliverance? Where is this deliverance to be found?

Our master himself has joyfully taken upon him the bonds of creation;

he is bound with us all for ever.

Come out of thy meditations and leave aside thy flowers and incense!

What harm is there if thy clothes becomes tattered and stained?

Meet him and stand by him in toil and in sweat of thy brow.

Gitanjali, Rabindranath Tagore


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Volume 4 Issue 4 January-March 2013PERSPECTIVE

The Cartesian Divide

It has become a truism for people, down to the prattlingbabes, to denounce religion in comparison to science.To many, of them religion seems to have no scientificbase, and to many others, these two appear mutuallyexclusive. It matters little that most of them have noidea of what religion is, or for that matter, how sciencetruly works.

Of course they cannot be blamed entirely for themisconception. If Newton, Einstein, Abdus Salam,George Salmon, Pascal, Bhaskara, Aryabhatta and manyother great mathematicians and scientists had respectfor their traditional religions, then we have Laplace,Richard Feynman, Stephen Hawking, Richard Dawkinsand a horde of other scientists who either aggressivelyridiculed the idea of religion, or politely shrugged offany mention of the "R" word.

The beginning of the divide between science and religionmay be attributed to Rene Descartes (1596-1650), whobrought in the concept of the Cartesian divide throughhis X-axis and Y-axis. It was through this divide thatpeople started looking at matter and mind, God and theworld, science and religion, as eternally separated.

The atrocities on the scientific greats like GiordanoBruno and Galileo by the church did not help matters,and thinkers like Voltaire added to the growing discordbetween the two. By the time Newton came on the scene,God had become a "hypothesis" for Laplace, the Frenchmathematician.

That is how the tradition of the Cartesian divide betweenreligion and science continues.

Swami Vivekananda: Bridging theCartesian Divide of Science and ReligionSwami Samarpanananda

Swami Vivekananda, the prophet of the present age,tried to bridge this divide. It is through his works thatone can feel the underlying unity between the two.During his stay in the West, he met and impressed withhis views many leading scientists and inventorsincluding Nicholas Tesla, Hiram Maxim (inventor ofmachine guns), Lord kelvin Kelvin and many severalother great thinkers with his views.

Religion and Science: A Closer Look

Mundaka Upanisad categorises knowledge into two:Intuitive knowledge about God (para vidya), andPractical knowledge of the world (apara vidya).According to this, anything other than the intuitiveknowledge about God (spirituality) belongs to aparavidya, i.e. sciences. Even the knowledge of the scripturesbelongs to sciences only, since they talk about goingto heavenly places, which are nothing but extensionsof this world only. It implies that the true meaning andpurpose of religion is to make a person divine, andeverything else in religion is secondary.

But can science make one divine? Going by the presentdefinition of science, this seems difficult, since scienceis all about the world, and religion is all abouttranscending the world in its entirety. Science teachesus how to turn the wheel of the world, while religionteaches us how to stop our inner wheel. So, noadvancement in science can ever encroach upon therealm of religion.

With this idea clear, we can have a closer look at thepaths taken by science and religion.

Their Approaches: The crucial difference between theapproaches of science and religion lies in science beingreductionist ("Whole is equal to the sum of its parts"),and religion being holistic ("Whole is more than the sum

Note: This article is published in Prabuddha Bharata, a monthly journal ofthe Ramakrishna Mission. IMJ is thankful to the author for his consent to publishhis work.

Swami Samarpanananda

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of its parts"). Who is right, is a big debate that has beenraging on since the times of Aristotle, or even earlier.

Science depends on models, which it keeps fine tuningtunes from time to time to adjust the new data andfindings. However, the goal of religion is not to explainthe universe, but to take an individual to God. Naturallyit does not require a model to explain God. Rather, ituses a fixed model to explain the universe to maintainits peace of mind.

It is a fact that religion mixes spiritual truths withreligious myths to produce a potable concoction for themasses. So what? Science also mixes facts with scientificmyths! Without propagating these myths they will fadeaway from public memory, and their funding will stop.For example, the timing of Big Bang, birth of the universeetc. are the most entertaining scientific myths of moderntimes. It is interesting to read "decisive" statementsfrom the high priests of science on these topics. Similarare the cases that we read about regularly in newspapersregarding researches that conclude with "This may leadto...".

Methods of Knowledge

Scientific theories are developed in two ways:

(A) Reaching a conclusion through a string ofsuccessively derived statements from starting theorems,known as axioms. These axioms can be arbitrary, oreven absurd, though mutually consistent. When we saythat science is born of logic and reasoning, we forgetthat there are limitations of reasoning processes, whichare the mechanisms of proofs and theorems of science.Kurt Godel proved mathematically the limitations ofmathematical reasoning, and WittgensteinandWittgenstein argued that both language and thoughthave definitive limits.

Religion, on the other hand, is never axiomatic, andnever derived, nor thought out. Masters speak onlywhat they experience themselves. So, if we declare theexperiences of a pure mind to be wrong, then what rightwe have we to consider the perception of an emotionallycoloured mind correct?

(B) The second method used by the scientists is to relate

observed phenomena through a theory. In most cases,however, these theories are not laws but mere models,which undergo a change once different kind of datacomes in. For example, the universe of Newton andEinstein was definitive, while the universe of quantumphysics is probabilistic.

And, how does religion gain its knowledge?

There is a near total misconception about this evenamong the scientists. In general, they think that religionand religious perception is are about extra sensoryperception. This idea is completely wrong. ESP, and allother such hocus-pocus may be anything, but it is notreligion. These are mere attention grabbing antics bythe clever.

Every religion has its roots in the transcendentalexperience of a mystic, prophet or the founder of areligion. When these great teachers of humanity giveup all their worldly connections and desires, and whenthey outgrow the need of feeding the senses, their mindbecomes pure and crystal clear. It is then that theyexperience the light of God. Hinduism describes thisstate as transcending the mind, since in this state themind does not function the way we understand it tofunction. This state is popularly known as samadhi (or,transcendence), and the knowledge gained in this statecannot be questioned by those who live in gross worldlystate. Being of the nature of fullness, this knowledgedoes not evolve with time. Only when a person hasgained the knowledge of pure consciousness (or God)in this state, he becomes truly competent to talk aboutGod.

So, while science evolves from good models to better,religion does not have to evolve because it does not offertheories based on observed facts. Every religion is firmlyentrenched in the intuitive knowledge of God, asdescribed by its masters, and hence it develops itsexplanations of the world and its affairs backwardsfrom what the masters experienced in the depths of theirmeditation.

Here it may be mentioned that it is not the job of religionto explain anything of the world. To bring peace to themind of its followers, religion does get into explaining


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things. However, it does so simply because the rightteacher of the related subject (science, geography,sociology etc.) has not yet taken charge.

Scientists raise questions at the superconsciousrealisations of the sages, in which they got the knowledgenot through their senses, but through something beyond.Yet these very people seem to forget that many famousinventions and discoveries of science belong to therealm of sheer instinct, which is a much lower versionof intuition. For example, knowledge came throughchance (Dynamite by Alfred Noble; antibiotic byFlemming)), in dreams (Kekule' Benzine structure,Watson's double Helix of DNA structure), and intuitiveflashes, after the whole scientific onion was peeled off.

Religions in general, and Vedanta in particular, rely onthe validity of pratyaksha pramana (Sense Perception),and anumana pramana (reasoning) - the two tools thatare essential for scientific growth. Acharya Shankara,the great exponent of Vedanta, repeatedly asserted inhis commentaries that the validity of direct perceptioncannot be negated by even a thousand scripturalutterings.

The third method of knowledge is known as shabdapramana, which is about the knowledge gained throughthe words of scriptures. The ideas about God, soul,rebirth, creation etc. cannot come through directperception, or through reasoning, hence one mustdepend on what the sages have said about these. Afterall, the sages had no ulterior motive to mislead people,and they had the purest of pure character, along witha supremely incisive and brilliant mind.

The real strife between science and religion lies exactlyon this point. Science won't accept scriptures as thevalid source of knowledge, nor would religion give upthe scriptures.

Interestingly, scientists keep swearing by "the sages ofscience" belonging to their own generation! And evenwhen these "wise" are proved wrong, the scientists ofthe generation refuse to accept their own new prophets!And, they call religious people bigoted!!

Creation, Life after Death etc.: Creation is a difficultissue both for science and religion. People want to know

wherefrom we have come, and where we are going. Themost popular answer by the religious is that "we camefrom God, and we are going back to God.' And, thepopular reply of the present day science to this questionis "we come from big bang, and are going towards bigcrunch."

The Vedas also took up the issue, and came up withtwo hymns, Purusha Suktam (RV X.90) and NasadiyaSuktam (RV X.129). The first one takes up creation ashaving come out from, and by, Purusha (God). Thesecond one takes up the concept of the subtle becominggross, and then acting on itself. It is thus that Prana (thecosmic energy) hammers at Akasha (The the finest firstparticles) to produce gross matter, and the universe.

Every model of creation in Hinduism, excepting theajatavada (the philosophy that there is no creation), canbe boiled down to these two hymns.

Swami Vivekananda was fascinated by the concept of

creation given in Nasadiya Sukta, where it says DeeveeroJeelebmJeOe³ee leoskebÀ, "the only one that there was, hammered

itself to bring out the creation". From this, Swamijideveloped the concept of Prana (energy) and akasha(matter) coming out of the same substance, and thesetwo being one in the dyu loka (electric sphere). The greatscientist Nicholas Tesla was fascinated by these ideasof Swamiji in 1896, and it would wait for another 10years for Einstein to work out independently theequivalence of matter and energy in his now famousequation, "e equals m times c squared".

Interestingly, who was ridiculing Einstein for findingout the grand unifying principle of nature? You guessedit. Scientists of his generation!

The same Nasadiya Suktam throws up its hands in despairat the impossibility of finding out the truth behindcreation and concludes with:

keÀes De×e Jeso keÀ Fn Òe Jees®eled kegÀle Deepeelee kegÀle F³ebefJeme=efäëBut, after all, who knows, and who can sayWhence it all came, and how creation happened?The gods themselves are later than creation,So who knows truly whence it has arisen?

This standpoint of inexplicability of creation is acceptedby every religion and religious philosophers. Their most


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common answer is that "it is God's will", which

essentially means "I don't know the answer".

Acharya Shankara comments that if the goal of the

scriptures had been to describe creation, then all of them

would have described exactly the same thing, which is

not the case. According to him, the one and only one

aim of every scripture is to teach a man his divine

nature.

If such is the case, then why ridicule religion for its ideas

on creation, heaven, hell etc.? People want to know the

answer of many riddles of life. But, if he goes on

speculating on all this, he will be lost forever in the maze

of the inexplicable. So to save the lost, tormented, or

curious souls, religion comes up with a simplistic,

soothing and satisfying explanation. If the illiterate but

believing millions take these answers for the scientific

truth, then it is not the fault of the religion.

One Time Creation? A lot of confusion between science

and religion is caused by the concept of one time creation,

popular in Semitic religions. When scientists say that

they do not believe in God, they essentially mean to say

that they do not believe in a Creator God, who set the

world in motion at some point of time. According to

Biblical calculations, creation took place sometime in

4000 BCE. Even Newton added his bit by calculating

the dates in the Bible and came up with the conclusion

that creation took place in 4032 BCE!

But is it conceivable that the Infinite God will create

something that is hopelessly limited in time and space?

Well, only naive can believe that. Many Western thinkers,

including Immanuel Kant, refused to accept this kind

of schoolboy theology.

Hinduism goes a step further, and comes with a fully

developed idea of cyclic creation in nature. According

to it, infinite number of universe is being created,

destroyed, and exist at any given point of time.

The idea of multiverse and cyclic creation has just started

seeping into science, which suffers from a Semitic

mindset, and hence has no idea about how the Indian

minds tackled the issues which were born of the ideaof infinity in religion.

Rationality: Is religion rational and consistent? The factis that science assumes axiomatic truths (which mayprove false), while religion begins with the words ofMasters (which have never been proved wrong). It isindeed unfortunate that many go to the extent of tellingthat spiritual masters are liars, since there is no proofof what they say. Yet, they cannot disprove the spiritualexperiences.

Religion, particularly Vedanta, is fully consistent, doesnot suffer from inner contradictions, brings meaning inlife, and is universally applicable. If this is not beingscientific, then what is?

To give an example, we can look at the problem ofinfinity as seen by the Vedic sages. They came up withthe idea "purnasaya purnamadaya purnam eva avasishyate'- which means that when infinity is taken away frominfinity, it leaves infinity as residue. And, this wasspoken at least 10,000 years ago!!!

Interestingly, religion has contributed Syadvad (whichleads to probabilistic outcome) of Jainism, and Neti -Neti (The the process of negation) of Vedanta, whichare two very powerful tools of reasoning.

Commenting on the role played by religion in thedevelopment of science, Freeman Dyson wrote, "Westernscience grew out of Christian theology. It is probablynot an accident that modern science grew explosivelyin Christian Europe and left the rest of the world behind.A thousand years of theological disputes nurtured thehabit of analytical thinking that could be applied to theanalysis of natural phenomena. On the other hand, theclose historical relations between theology and sciencehave caused conflicts between science and Christianitythat do not exist between science and other religions...."

However, religion is not bothered about the problemsof infinity, or in problems involving evolution or creation.It is interested only in finding out the true meaning ofexistence.

The Issue of Consciousness: The various religiousphilosophies have tried to harmonise the world of"Physics" and what lies beyond it in the form of"Metaphysics". One of the popular explanations is bySamkhya philosophy, according to which the world of


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experience evolves from Prakriti through Mahat (cosmicintelligence), and Ahamkara (cosmic ego). But Prakritiis inert, while Purusha (soul) is pure consciousness.

But what is pure consciousness? How can one know it?

Sri Ramakrishna uses the analogy of ten pots of waterwhich are reflecting the sun in the sky. With the actualsun in the sky and the ten reflected sun, there are a totalof eleven suns. Now when the pots are broken downone by one, the number of suns goes down. When onlyone pot remains to reflect the sun, we have two sunsleft. But when that last pot is broken, then how manysuns are we are left with?

Those who have not read Vedanta, they will invariablycome up with "one" as answer, and most of those whohave studied Vedanta will come up with "it cannot beexpressed", "; although rare, a few of them wouldunderstand what the answer means or implies!

This is what Taittiriya Upanisad expresses as yato vachonivartante...." the speech fails, along with the mind, tograsp Atman".

In this confused understanding lies the deep dividebetween religion and common sense, and even mostreligious preachers hardly understand the issue. Andyet, every siddha experienced exactly this very thing,but had to express the experience in different termsbecause of the limits of our language and understanding.

Consciousness is that which wills, feels and commands.It is eternal, and unchangeable. It is beyond being thesubject, or the object of any action. It is not the intelligenceof the mind, but mind acts as the great reflector ofconsciousness. Everything other than pureconsciousness belongs to the realm of Prakriti, the nature- both internal and external.

Thus, the entire world of science belongs to the realmof Prakriti, while metaphysics aims at taking a personbeyond it, to the state of pure consciousness, which isalso Existence-Intelligence-Bliss.

But, will science agree to this dismissive attitude ofreligion? Never. According to it, the intelligence thatwe see around us is a mere evolutionary product ofmatter.

Referring to this the great chasm between religion andscience on this issue , Swamiji said, "Every religion hasthe idea that the universe comes out of intelligence. Thetheory of God, taking it in its psychological significance,apart from all ideas of personality, is that intelligenceis first in the order of creation, and that out of intelligencecomes what we call gross matter. Modern philosopherssay that intelligence is the last to come. They say thatunintelligent things slowly evolve into animals, andfrom animals into men. They claim that instead ofeverything coming out of intelligence, intelligence itselfis the last to come.

"Both the religious and the scientific statements, thoughseeming directly opposed to each other are true. Takean infinite series, A-B-A-B-A-B, etc. The question is--which is first, A or B? If you take the series as A-B, youwill say that A is first, but if you take it as B-A, youwill say that B is first. It depends upon the way we lookat it. Intelligence undergoes modification and becomesthe gross matter, this again merges into intelligence,and thus the process goes on. The Sankhyas, and otherreligionists, put intelligence first, and the series becomesintelligence, then matter. The scientific man puts hisfinger on matter, and says matter, then intelligence.They both indicate the same chain. Indian philosophy,however, goes beyond both intelligence and matter, andfinds a Purusha, or Self, which is beyond intelligence,of which intelligence is but the borrowed light."(CW1.252)

In fact, this effort at the grand unification between thediscordant notes of religion and science, is a greatcontribution by Swamiji.

God's Will

The dichotomy of "free will" and "God's will" is nothingnew for the mankind. Since the dawn of spiritual wisdom,the battle between the two has been going oninconclusively. While for most people "God's will"invariably means "I do not know," or "I do not wantto take the blame", the philosophers and scientistsbelonging to the materialist school of thoughts do notbelieve in the "Divine" at all. For them events followa pattern either due to chance or due to "free will". Thebelief of these thinkers is best summed up in the words


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of Archimedes, "Give me a lever long enough and aplace to stand, and I will move the world."

How does Vedanta looks at the issue?

According to Vedanta, Brahman alone exists. In itsimpersonal aspect, it is pure Existence-Consciousness-Bliss, and in its personalised aspect it is perceived asGod who is the controller of all things, external andinternal. The differentiation that we perceive around usin the form of living and inanimate objects, is mere playof name and form, caused by the Lord's inscrutablepower, known as maya or Shakti. It is due to this powerthat God appears to have higher and lower nature. Thelower nature of the Lord consists of gross and subtlematter, while the higher nature is pure Spirit, orConsciousness. The lLiving beings are a combinationof both lower and higher nature, while non living thingsare plain lower nature of God.

When it comes to mind, Vedanta is emphatic that it isthe highest and the most subtle form of matter. Now,anything that has been created belongs to the universe,and hence has to follow the law of cause and effect. Thisimplies that mind has to obey the laws of causation.In fact, if thoughts were not produced by precedingthoughts, and mind did not follow a pattern, it wouldcease to be rational. Even our desire to eat or drink isdictated by the demands of the body, which again isgoverned by strict laws of nature. And, we cannot saythat the mind is bound by laws and at the same timealso free.

The mind being matter, it is not conscious but it catchesthe reflected consciousness from Atman and appearsto be conscious. It is something like the illuminatedglass of a tube light when electricity passes through it.

The mind is not a mere reflector of consciousness butis also tied with the ten sense organs (not the physicaleyes, ears etc., but the subtle organs that reside in thebrain). After getting the light of intelligence from themind, these sense organs start straining to be one withtheir respective objects. This is when desires in the formof attachment and aversion for objects are born in themind. This is when the individual will, popularly knownas "free will", is born. But because mind is not free, thewill also can never be free, and hence there can neverbe a "free will". Talking about this, Swami Vivekananda

said, 'It (free will) means nothing-- sheer nonsense'.What we think to be "free will", is only the mad danceof the senses for their respective objects, powered bythe presence of Atman.

Just as it is impossible for an object to move unless someforce acts on it, similarly mind too being only matter,it requires something else to make it work. Thisimpulsion is caused by the antaryaminthe antaryamin(inner consciousness, which is Atman) that resides withinevery being. When a person does something, he doesit through the medium of his mind aided by his senses,but his acts are made possible only because of thepresence of antaryamin within him. And these acts aregoverned by a clear set of laws known as the laws ofkarma. Just as laws of science are a codification of thelaws that govern matter, the law of karma is the set ofrules that governs the working of the mind.

When a common man looks at the world, he feels thatthe mind has a freedom of its own, while a religiousHindu sees the law of karma acting upon a person. Buta saint sees the working of antaryamin (which in essenceis God Himself) behind every act of a being.

The popular concept of God is someone who seems tobe sitting high above somewhere in the heavens, withprobably a super-super computer, and controlling theacts of every being through his trillions and trillionsof commands every nano second (a rough estimate).Even if this concept be true, the problem of His partialityfor the lucky ones in the world continues. Theologiansmay break their head explaining the relationshipbetween judgement, mercy and "all his will", but evena child can see that these cannot be reconciled. Howcan He punish us for what He has ordained for me?How can there be such foul disparity in the world? Allthe answers that we get are plain naive. No wonderpeople are becoming atheists.

God of Vedanta is different from such popular concepts.He is pure consciousness, and is the impelling force atthe micro and macro level in the form of individualisedsoul (antaryamin) and Prabhu (the Lord of the universe).We act because He is residing within us, but thatconsciousness is mediated by the mind, which is colouredby the defects of affection and aversion of the senseorgans for their objects. This makes our personalityirresponsible. To use an analogy, the mind mostly acts


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like a runaway engine which has its full power supply,but has lost its brakes and steering.

Atman is the antaryamin in every living being, and byits very nature of being pure consciousness, it is Brahmanitself. Again, God is the personalised aspect of Brahmanin this manifest universe, so there is an inherent identitybetween antaryamin and God, although they are not thesame. The conscious principle behind the universe isGod, while the conscious principle behind an individualis antaryamin.

So at the micro level, whatever we do, the source of ouracts is Atman only. And at the macro level, He is themover of energy itself, which makes the world go.Naturally, not a blade moves without His will!

A pure desireless mind is a perfect reflector, from whichthe defects of like and dislike are gone. A person withsuch a mind is one with God. Whatever he does or says,is the true will of God, uncoloured by the defects of hismind. That is why it is said that pure mind, pureintellect and pure consciousness are one and the samething. The goal of life is to free one's mind of impuritieswhich come to it because it wants to have only whatit likes and loves of this world. This cleansing can takeplace only by following what the masters have said.This cleansing is known as "making one's own destiny",for it increases one's inner power by making a goodreflector of his mind. It is then that the infinite potentialof a person bursts forth. It is then that he acquires true"Free will", which is one with "God's will". He nowbecomes free, and also realises that "God" alone doeseverything, for, he is now non-different from God. Thisis freedom, this is jnana, this is bhakti.

Bridging the Divide

In the Mundaka Upanishad, we come across this greatquestion that has troubled the human mind for thousandsof years:

MeewvekeÀes n Jew ceneMeeueesç*defiejmeb efJeefOeJeogHemevveë heÒe®í ~keÀeqmcevveg YeieJees efJe%eeles meJe&efceob efJe%eeleb YeJeleerefle ~~ 3 ~~

-- The sage Shaunaka asked Angirasa, 'Sir, what isthat by knowing which one knows everything?' And,as one can guess, the answer given by the Upanishadis, "by knowing the self, everything else is known".

Many wrongly interpret this to mean that the knower

of atman becomes all knowing (sarvajna) in the worldlysense. But that is not the case. The meaning is that ifa person wants to know about the possible forms thata substance, say gold, can take, then there cannot bean end to that knowledge. There would be infinitenumber of forms, shapes etc. However, if he realisesthat all the ornaments are gold only, then by knowingthe characteristics of gold, he would know all that isworth knowing about the various ornaments.

But, that is what science is also trying tries to do.Talking about this, Swami Vivekananda said, "Scienceis nothing but the finding of unity. As soon as sciencewould reach perfect unity, it would stop from furtherprogress, because it would reach the goal. ThusChemistry could would not progress farther when itwould discover one element out of which all otherscould be made. Physics would stop when it would beable to fulfil its services in discovering one energy ofwhich all the others are but manifestations, and thescience of religion becomes perfect when it woulddiscover Him who is the one life in a universe of death,Him who is the constant basis of an ever-changingworld. One who is the only Soul of which all souls arebut delusive manifestations.

"Thus is it, through multiplicity and duality, that theultimate unity is reached. Religion can go no farther.This is the goal of all science. All science is bound tocome to this conclusion in the long run." (CW: 1. 14)

It matters little what we call that state of unity, butthe fact remains that the goal of all knowledge,philosophy, science, religion, and in fact the goal of allendeavours is to find that unity. Consciously orunconsciously, we are all moving towards that grandunification only.

At the more practical level, one has to know that thereis no Cartesian divide between the two, and that byopting for the right balance between religion and science,one can bring a high level of synergy in life.

Swami Samarpanananda is a monk at the RamakrishnaMission. He is presently attached to its University. Heis the author of the book - Tiya: A parrot’s Journey Home.He is also a Hindi poet.


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I do appreciate the endeavor that the author has takento discuss one of the pressing issues of the modern era,i.e., the nonreciprocal relationship between Science andReligion. To come up with a possible solution to thisissue, the author has paid a conscientious analyticalvisit into the variety of literature starting from Vedasto Indian Philosophical Schools, and from there toWestern Philosophical Schools - which is somethingthat would obviously take the author one step aheadof other philosophical and more particularly othermetaphysical discourses of others. However, tacklingand unknotting some of the grave issues, like the onethe author has taken in this manuscript, by using thediverse analytical methods borrowing from diverseliteratures, sometimes, lands us on insurmountableproblem(s) that I think the author might also be facingin a profuse manner. Let me put them one after theother.

Comment 1: Cartesian Account of Metaphysics holdsthat both mind (soul) and body (matter) are diametricallyopposite to each other because of their inherentproperties: while the essence (property) of mind isthought and consciousness, that of body is extensionand divisibility. Body is devoid of consciousness whereasmind is devoid of extension and divisibility. Hence,these two entities, mind and body, exist in their ownunparalleled way being undisturbed by one another.That is to say, there is, in fact, an unbridgeable gap inbetween Mind and Body.

The author is right in his interpretation that the CartesianFramework is undoubtedly a dualistic one, and thereis an unbridgeable gap in between Mind and Matter.However, the perspective that the author has taken witha view to elucidate that there is a big gap in betweenGod and the World and that between Science andReligion through his (author's) strong claim that thisdivision has got its mooring from the Cartesian DualisticFramework is completely wrong. And by doing so, theauthor might have misinterpreted and misjudgedDescartes' stance completely. In addition, the

CommentaryBiswanath Swain

methodological move that that the author has taken togo from the view that 'there is an unbridgeable gap inbetween Mind and Matter' to the view that 'there is agap in between God and the World that has got inceptedfrom the stance of Descartes', that I found, is somethingfallacious. It is said so because in all his writings, nowhereDescartes has asserted a position that the existence ofGod is extraneous and unrelated to the existence of theworld.

Rather he espouses a model where he states that it istrue that Mind and Matter are diametrically oppositeto each other and there is no interaction amongthemselves; but these two entities are operated by Godin a very structured and planned way - the way Hearranges every other entities in this world. As Descartesputs it:

God alone is the author of all the motions in theworld in so far as they exist and in so far as theyare rectilinear; but it is the various dispositions ofmatter which render them irregular andcurved…God himself has taught us that he hasarranged all things in number, weight and measure.The knowledge of these truths is so natural to oursouls that we cannot but judge them infallible whenwe conceive them distinctly (Descartes, vol. I, 1985,p - 97)

In a continuation to his explanation of the relationshipbetween matter and God, Descartes states that thematter(s) including our body that we come across andthat we possess are neither the product of an "imaginarypower" nor that of "some Goddess", rather a collectionof some qualities taken together, which are preservedby God. In the words of Descartes:

by 'nature' here I do not mean some goddess or anyother sort of imaginary power. Rather, I am usingthis word to signify matter itself, in so far as I amconsidering it taken together with all the qualitiesI have attributed to it, and under the condition thatGod continues to preserve it in the same way thathe created it. (Descartes, vol. I, 1985, p - 92)

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In his discussion of "Treatise on Man", Descartes clearlyelucidates that each man is composed of a soul and abody. It is God who formed both the entities of differentproperties and make them combined together to fetchthe good result required for a man. The insight ofDescartes would be of great help here:

[T]hese men will be composed, as we are, of a souland a body. First I must describe the body on itsown; then the soul, again on its own; and finallyI must show how these two natures would haveto be joined and united in order to constitute menwho resemble us. I suppose the body to be nothingbut a statue or machine made of earth, which Godforms with the explicit intention of making it asmuch as possible like us. Thus God not only givesit externally the colours and shapes of all the partsof our bodies, but also places inside it all the partsrequired to make it walk, eat, breathe, and indeedto imitate all those of our functions which can beimagined to proceed from matter and to dependsolely on the disposition of our organs. (Descartes,vol. I, 1985, p - 99)

Hence, from the above discussion it clearly shows thatDescartes does not vouch a thesis of the non-existenceof God. Nor does he hold that God is completelyunrelated to and eternally separated from the world,the matters, the soul, and all the worldly entities. Nordoes he assert that the beginning or the origin of soulor mind and that of body or matter is something emptyor void (that the author states emphatically that theexistence of mind and body are like X-axis and Y-axis.By holding this view, the author might be making amistake that it is true that the existence of mind andbody are like X-axis and Y-axis, but the origin of X-axisand Y-axis is '0', but the origin of mind and that of bodyis not '0', rather something which is all-perfect andembodiment of all qualities or properties - God. It isHe who operates both the entities in a very sophisticatedway.)

Comment 2: The statement that the author has given"Wittgenstein argued that both language and thoughthave definitive limits" needs supporting arguments fromthe book titled "Tractus Logico-Philosophicus" writtenby Ludwig J. J. Wittgenstein. Wittgenstein does not say

that both language and thought have limits, rather hecategorically states that language contributes to theprocess of thinking. There are limits with the domainof language, and because of these limits, we cannotthink properly, and hence, out thoughts are limited. Butas such, in principle, thought is not supposed to havelimits. Once again, the limits in the thought are therebecause of the limits in the language. And altogether,Wittgenstein has discussed this perspective in a differentcontext, not in the context of what the author has used.

Comment 2.1: But how this discussion is related to thediscussion of the method of knowledge and the maintopic, i.e., the gap in between Science and Religion.

Comment 2.2: By giving importance on the thesis that'our thoughts are limited', is not the author holding theview that religion is limited. It is said so because religionis the product of the process of faith and belief insomething which is not couched within the material andscientific framework. And in this process, the authoris contradicting himself.

Comment 3: The axioms by nature cannot be arbitraryand absurd, rather they are something from which allthe thought processes of a normal human being starts.And because of this they cannot be considered as falseat any point of time. For example: "A is A", "It is self-contradictory to say 'I' am not 'I am'" etc. Famousexamples are the "Laws of Thought" given by Aristotle.All the axioms are not only applied on the domain ofscience, but also applied on all the domains where thethought process is being used.

Comment 4: The author at one point of time saying thatthere is no common platform that religion and scienceshares. Again he is saying that science is based onperception and observation who are the products of theuse of sensory-motor organs and at the same time, theauthor is holding that "Religions in general, and Vedantain particular rely on … thousand scriptural utterings".This shows that there is an intersecting point betweenscience and religion. Hence by bringing this discussionthe author might be self-contradicting.

Comment 5: There is a conceptual and analytical errorthat the author might be committing by holding that

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the knowledge through Shabda Pramana does not comethrough the method of perception, rather throughreasoning. It is said so because when an individual getsthe knowledge in a scripture or the knowledge aboutGod from someone else (who must be trustworthy), thatindividual in question uses his/her eyes or ears to getthose pieces of knowledge. That is to say the individualin question uses the method of perception, of coursemay use reasoning.

Comment 6: In the work titled "Critique of Pure Reason",Immanuel Kant has used two concepts: one is"Phenomenon" and other is "Noumenon" (pluralnoumena). The objects which are there in the form ofphenomenon are something which are located in thespatio-temporal world, and thereby can be perceived.Whereas the obejcts which are there in the form ofnoumenon are something which can never be perceivedby sense organs as they do not exist in the spatio-temporal world. They can only be comprehended by thefaculty of reason. So it is very much conceivable, fromthe Kantian perspective, that some of the creations arelimited in time and space.

Comment 7: Syadvad is a theory espoused by Janisim.They hold that knowledge that we have about anyobject in this corporeal world is not complete andperfectly right because whenever we perceive a givenobject, we perceive from one perspective. So byperceiving that object from one perspective, we cannot/should not claim that the piece of knowledge that 'I amhaving' is real, and a fact. This discussion is nowhererelated to religion.

Comment 8: The author might not be aware that thereis a similarity in between the thesis of Sankhya

Philosophy and that of Rene Descartes. Both (Sankhyatheoreticians and Rene Descartes) are having dualisticframework, and at the same time both also espouse thatit is the "Iswara" or "God" who is playing an importantrole in making Purusa (Mind) and Prakriti (Matter)function in a systematic way.

Comment 9: Philosophers in general are not atheists.Some of them believe in the existence of God whereassome of them do not. If we take all the schools of IndianPhilosophy, we would definitely find that there areschools like Sankhya, Yoga, Nyaya, Vaisesika, Mimansa(purva and uttar), and Vedanta comes under theorthodox school of philosophers who believes in thecertitude of Veda and its creator whereas schools likeBhuddism, Jainism and Carvaka are considered asheterodox school of philosophy who do not believe inthe existence of God, nor in the certitude of vedas.About which the author himself has already pointedout. So it clearly shows that all the philosophers are notheterodox and atheists.

References

Descartes, Rene. (1985). The Philosophical Writings ofDescartes, vol - I. Trans. John Cottingham, RobertStoothoff, and Dugald Murdoch. New York: CambridgeUniversity Press.

Biswanath Swain is a faculty member in the area ofHumanities and Social Sciences at Indian Institute ofManagement Indore. He has earned his PhD (CognitiveScience) from Indian Institute of Technology Kanpur, andMA (Philosophy) and MPhil (Deontic Logic) fromUniversity of Hyderabad. His major areas of interests arePhilosophy of Mind, Philosophy of Action, Ethics,Philosophical Logic, and Business Ethics. He can bereached at [email protected].

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Success is defined as the attainment or accomplishmentof something aspired, planned or endeavoured.Sustaining success involves multiple factors, primarilyhard work, smartness and right attitude. Many successfulpeople who have risen to mighty heights have oftenstumbled and their ability to survive was a result oftheir enduring commitment to perseverance and values.These morals form the basic mantras for a successfullife or career and their importance is emphasized in thisarticle through the success story of Mr. VenkatChangavalli. Mr. Venkat's deep rooted principles havepropelled him to rise from a simple back ground andreach heights in his career, which he has sustained overdecades across many obstacles.

Born in a small village in Andhra Pradesh, Mr. Venkatwas raised in a frugal background as one of the eightchildren born to a school teacher father and mother whowas a home maker. After completing his primaryschooling, Mr. Venkat pursued secondary education ina small town and higher education in the city and wenton to graduate as an engineer from the National Instituteof Technology (REC) Warangal, and as a post-graduatein management from the Indian Institute of Management,Ahmedabad (IIM-A). Mr. Venkat started his career in1977 in Mumbai as a Management Trainee at LupinPharma and went on to achieve a total of 36 years careerexperience that included his role as the CEO of Symriseand EMRI (Emergency Management and ResearchInstitute). After fifteen years of overall multi-functionalexperience in finance, planning and marketing.

His career spans across multiple industries rangingfrom pharmaceutical to textiles to fragrance and flavoursand to emergency management. These career moveshave exposed Mr. Venkat to multi-city cultures rangingfrom that of Mumbai to Bangalore to Chennai andHyderabad and he has worked under multipleownerships ranging from the family-owned Lupin topublicly owned MNC (CIBA-GEIGY) the family-ownedmultinational, Dragoco (later named Symrise), to the

How to build Successful Personal BrandNithiya Anil Changavalli

non-profit organisation, EMRI (108 Ambulance Service),which operates as a public (Government)-privatepartnership. None of these changes ever daunted Mr.Venkat, who though thoroughly bred in a small town,never feared to explore new places and take on newchallenges.

The bold career moves he made early in his careerprompted him to experiment newer roles in the followingyears and have enabled him to understand varyingperspectives that have made him more mature, morebroadminded and more respectful towards othercultures and people.

One of the principles that Mr. Venkat strongly advocatesto everyone is that no individual should ever be scaredto rise up to any kind of challenge at any stage in theirlife or career. His first major challenge arose when heconsidered applying to IIM-A despite his low proficiencyin English, a drawback he felt would be an obstacle inhis quest for higher education in a reputed institution.So what motivated him during such moments of lowconfidence? His strong academic record especially inmathematics and the confidence and faith that some ofhis seniors and elders had in him. They encouraged himto apply as they felt that this opportunity would helphim nurture his leadership qualities. This instigated asurge of confidence in Mr. Venkat and he completelyovercame his fear and decided to fight his weakness bydedicating time reading newspapers to improve hisvocabulary. And the result? He was offered anopportunity to pursue Post Graduation in Managementat IIM-A and the resulting experience laid a strongfoundation for his future endeavors.

Another important turn in Mr. Venkat's career was inthe year 1992 when he decided to quit the Dragoco Ltd,as he found his boss to be corrupt and incompetent. Hedid not want to work with a senior whose values clashedwith his values. A year later after his boss was removed,he was asked to rejoin the company as the CEO andtransform the failed joint venture company into a

Note: This article is based on Experience of Mr. Venkat Changavalli, Management Consultant and Leadership Mentor.

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profitable one. The reasons quoted for his reinstatementat a higher post were purely his competency andintegrity. Mr. Venkat accepted the offer and successfullyled the company for 11 years to a significant positionin the fragrances and flavours industry. To achieve thismilestone, Mr. Venkat worked very diligently to builda strong infrastructure of processes and people. He alsosuccessfully managed the company during trying timesthat included the transition of Dragoco from an Indiamanaged joint venture to a purely German managedcompany.

In 2005, a new chapter began in Mr. Venkat's careerwhen he took up the role as the CEO of EMRI. It wasa complete surprise to him when the former Chairmanof Satyam, Mr. Ramalinga Raju, approached him withthis offer. This was going to pronounce as an entirelynovel experience for him as he had to break away fromthe corporate business world he was used to and adaptto a totally new system. An opportunity to take up yetanother challenge and prove success in a totally differentfield motivated Mr. Venkat to accept the offer. Heinvented the emergency helpline number 108,conceptualized the set up of the emergency call centreand helped devise new information technology to helplocate the victims, hospitals and ambulances in orderto shorten response times. The emergency service waslaunched on 15th August 2005 at Hyderabad with 15ambulances in the state of Andhra Pradesh. Six yearslater, EMRI operated in 12 different states and accoladeda record of saving approximately 520,000 lives. However,in 2009, things went amiss when the Satyam Computers-Ramalinga Raju crisis threw Mr. Venkat in completedilemma. After parting ownership, Raju requested Mr.Venkat to continue to lead EMRI. Mr. Venkat resolvedto stand up and fight for EMRI and save the uniqueproject. He promptly took appropriate steps thatprevented EMRI from collapsing. His main agenda wasto establish EMRI as an entity completely outside ofRaju and Satyam and to scout aggressively for a newfunder. Despite facing intense criticism from media, Mr.Venkat boldly embraced the situation and remainedfocused on obtaining financial support for EMRI andtake care of his employees. Amidst all the confusion,EMRI continued to operate and provide uninterrupted

services to people. Mr. Venkat mobilized support fromstakeholders (bank, governments, technology partner,society members) and continued to empathise andmotivate his employees. A few months later, EMRIsuccessfully got a new owner and Mr. Venkat emergedmore positive, more humble, more self confident, armedwith more commitment and passion to save lives.

Crisis struck again on 10 January 2011 when the newEMRI management wanted Mr. Venkat to separate fromEMRI. This was yet another unexpected turn for Mr.Venkat but as usual, he did not lose his resolve. SinceApril 2011, he has been practicing as a leadership mentor,management consultant, trainer and inspirationalspeaker. He is providing Management Consultancyincluding Leadership Mentoring to large organizationsin Health Care and Self Care sectors, conductingcorporate training programmes in the areas of strategicthinking, leadership, innovation, execution, humanresources, marketing, public-private partnerships, lifeand self-management skills etcetera. He also mentorsprofessional entrepreneurs for business, partnershipand leadership development through Innovation. Mr.Venkat also serves on the board of State Bank ofHyderabad and is a visiting faculty at IIMA, IndianSchool of Business (ISB), IIMI, ASCI and London BusinessSchool (LBS).

In his role as a mentor, Mr. Venkat emphasises thatadversity is like walking through fire and one shouldstick to good values and ethics and maintain positiveattitude and energy during difficult times. He firmlybelieves that if one lasts this phase, they emerge moreself confident, more positive, more humble, morehumane and overall more successful. Mr. Venkat, tilldate, continues to implement and advocate the sameprinciples and values he has been practising for decadesthat have helped him stand the test of time and continueto spell success in his life and career.

Nithiya Anil Changavalli, has over eight years ofexperience across diverse industries such aspharmaceutical, information technology and consulting.She has specialization in biotechnology and biochemistryfrom the University of Madras.

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The concept of intelligence has long been a point of greatinterest for researchers and practitioners asa predictorof work performance and other achievements. Simonton(2006) found that individual differences in intelligencewere consistently related to leader performance,including assessed performance of the Presidents of theUnited States. Reports such as these indicate theimportance mental ability assumes in our dailylives.

The history of research on mental ability is loaded withcontroversies - technical disagreements on what canand cannot be measured, theoretical differences on thenature of intelligence as well as ethical issues on whatshould constitute the content of the intelligence test.This article discusses some of the major conceptualpositions regarding intelligence and evaluates theireveryday utility in the Indian business context. It isintended for human resource practitioners who makedecisions about mental ability measurement. In thecourse of my work with corporate clients, I have observedthat these decisions are often based on costconsiderations, on the convenience that a tool or aconsulting company selling a tool offers, on reputationof a tool, a researcher or a consulting firm, and severalother criteria, which, though important, may not becentral to serving the main purpose - that of choosingcandidates who are likely to do well on the job.

In the first part, what we know about mental ability andintelligence is reviewed by outlining the generalintelligence argument. Next, some alternate theories ofintelligence and their applicability at the workplace arestudied. The Indian view of intelligence is also describedas it forms a context for those practicing in India.Lastlya strategy for applying what we know about intelligenceto occupational selection in India is recommended.

The General Intelligence Argument

Briefly, around a hundred years of research, debate andexperimentation have been invested in studying the

Intelligence Measurement: Recommendations fora Research based Strategy in Employment TestingSangeetha Rajan

variable called intelligence. Although there has been alot of fine tuning, especially in the matter of culture fairtests and controlling racial and other biases inintelligence testing, the mainstream psychology viewof intelligence has remained by and large unchangedsince the work of Spearman and Binet in the early 1900s.Charles Spearman (1904) first coined the term GeneralIntelligence (g) and held that when branches ofintellectual activity are dissimilar, the correlationsbetween them can be explained entirely by a commonfundamental factor - what he called the law of UniversalUnity of the Intellective Function. The differencesbetween these diverse branches of intellectual function,he claimed, can be explained by specific intelligences(s). Alfred Binet (1905) studied the mental state ofchildren to make decisions about their appropriateacademic

Placement, whether within a regular classroom or specialeducation for retarded individuals. An especially usefulaspect of their revised 1908 Binet-Simon scale was thatthey provided for the possibility of expressing the mentallevel of a child in relation to the age group whoseaverage performance he/ she matched. This later cameto be known as mental age. Once more, a unitary viewof mental capacity is represented by this early theory.

In the western conception of intelligence, theories aboutintelligence and measures of mental ability havedeveloped side-by-side so that the theoretical historyof intelligence is intertwined with advances in statisticsand psychometrics. Factor analysis especially becameimportant to the vision of mental ability asconceptualized by leading psychologists in the westernworld. Spearman's two factor theory was the first majortheory about intelligence in the twentieth century. LewisTerman is famous for his revision of the Binet-Simonscale (known as the Stanford-Binet Tests) and forformulating the concept of Intelligence Quotient (IQ).Dr. Arthur Sinton Otis, who trained under Terman,

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adapted the test to create the Army Alpha and ArmyBeta tests in the 1920s for recruiting soldiers to fightin World War I. This was the first time that a grouptesting format was used. A slight departure from theentirely monolithic view of intelligence occurred withL.L. Thurstone's (1938) Theory of Primary MentalAbilities, according to which intelligence consists ofseven major factors - Verbal Comprehension, VerbalFluency, Inductive Reasoning, Spatial Visualization,Number, Memory and Perceptual Speed. The nexttwenty odd years were essentially spent researchingbetter ways to measure intelligence and the focus wasmore on psychometric concerns rather than conceptualissues. The Wechsler scales, developed originally in the1930's and 1940's, are particularly famous and the revisedversions continue to be in use even today to test themental ability of children and adults. Wechsler definedintelligence as the, "aggregate or global capacity of theindividual to act purposefully, think rationally and dealeffectively with the environment". Despite their beingseveral factors of intelligence brought into the mix bythis time, definitions such as Wechsler's still emphasizethe supremacy of g. Another popular measure of generalintelligence, that made its appearance for the first timein the 1930's, is Raven's Progressive Matrices, a set ofnon-verbal tests presented in the multiple choice format.These tests too continue to be in use today. The late 60'sand early 70's saw the emergence of some more modelsof intelligence - such as Guilford's Structure of IntellectModel, Vernon's Hierarchical Theories, the concepts ofFluid and Crystallized Intelligence as proposed byCattell, and Jensen's Level I and Level II abilities.

Two main controversies surrounding research aroundintelligence have been firstly, whether g is apsychological entity or a mathematical abstraction, andsecondly, whether it is innate or learnt (Lohman, 1989).While some scientists expanded the definition ofintelligence (e.g. Thurstone's 1938 Primary MentalAbilities), statistically there were still overlaps betweeng and other forms of intelligence which suggested thatthis was merely an extension and validation of thetheory surrounding the g factor. In fact, the more theresearch that went into intelligence, the more theimportance that was gained by g. Hernstein and Murray

(1994) examine the role of IQ in social and economicdifferences in the United States. They indicate thatgeneral intelligence correlates negatively with manyother variables such as unemployment, divorce, havingillegitimate children, poverty, incarceration and schooldropout rates, and positively with variables such asincome and socio-economic status. Gottfredson (1998)says that the g factor explains most the differences inperformance between individuals on a diverse range ofmental tests. In essence, she puts g at the apex of whatshe calls a "hierarchy of mental abilities" and argues thatit is mostly inherited. She also defends Hernstein andMurray's work and insists that researchers andpractitioners need to acknowledge the fact of individualdifferences in intelligence rather than soft-pedaling theissue. While the data cannot be ignored and certainlyHernstein and Murray's book The Bell Curve madepeople sit up, it is probably due to such research thatthe concept of g has faced its share of criticism throughthe ages, and alternative models have been proposed(e.g. McClleland 1973, Gould 1981, Sternberg 1985, 2004,Gardner 1983, 2003), some of which we consider in thenext segment.

While there is no doubt that there are individualdifferences in mental ability, the issues have been aroundhow these are manifest, how they should be treated/measured and what conclusions can be drawn. As arecruiter, how should I view the data before me? ShouldI reject a candidate with suitable experience based onhis/ her poor intelligence test score? Gottfredson (1997,1998) says that no other single predictor measured todate has more predictive validity for job performance.She claims that not only does g exist but that it is veryimportant in the practical affairs of life. According toher, the average predictive validity across jobs in theUS economy ranges from 0.3 to 0.5 (on a scale of 0 -1.0). She also quotes research by Hunter (1986) whichsuggests that validities are higher if work sample isused as a criteria rather than supervisor ratings, andgoes on to argue that the more complex the job, the moreimportant g is in predicting performance. Behling (1998)quotes the instance of several employers hiring peoplebased on general intelligence. He also says that g isprobably of more import when jobs require individuals

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to learn quickly rather than depend on the already heldknowledge, when the job requires a great deal of problemsolving, and when autonomy is high. Even so, thecorrelation with performance during the training periodseems to be higher than between intelligence and on-the-job performance. According to Sternberg (2001)however, validity estimates for g accounts only for 20-25% of variance in performance leaving 75-80%unexplained. The dialogue around mental ability testingeventually led to several alternate theories and models,some of which are also useful at the workplace. A fewof these are discussed in the following segment.

Alternate Models of Mental Ability

While most psychologists and researchers until the 1980'swere won over by the unitary model of mental abilityoffered by the concept of g, there were a few whoconceptualized human intelligence differently. LevVygotksy and Jean Piaget in 1970s proposed separatedevelopmental theories of cognition and reasoning.Although there is some evidence to link Piaget's modelto general intelligence (e.g. Humphreys, Rich and Davey[1985]), both theories were developed to explain themental development of children and subsequent researchalso concentrates on children. The interesting thingabout Piaget's theory is that he conceptualizedintelligence as primarily functional in nature having anoperational component responsible for dealing with thetransformational aspects of reality and a figurativecomponent responsible for dealing with the static aspectsof reality. For Vygotsky, learning always comes beforedevelopment. Both theories therefore assume that mentalability is more dynamic in nature than suggested by thegeneral intelligence argument.

In the 1980's there was a surge of interest in lookingat intelligence as multi-faceted. Howard Gardner andRobert J Sternberg both proposed theories of intelligencethat spoke of non-unitary view of mental ability.Gardner's (1983) theory of multiple intelligences gaineda lot of popularity in the educational setting since it waseasy to understand, more inclusive and providedsolutions for all-round development of children. Thereis research that validates the theory by linking scoreson the various intelligences to occupational choice/

stream of work (Shearer [1997, 2006], Preito et al [2005],Harris and Sykes [undated]), but there seems to behardly any research linking scores to performance ina corporate environment. The theory is an attractiveone, but the measurement of multiple intelligences isstill a major problem since they cannot be captured bypaper-pencil tests (Armstrong, 2009). As on date,therefore, its utility in an occupational context is limited.

Sternberg's (1985) theory is more promising. Briefly, hesuggested three main aspects to intelligence - Analyticalintelligence which accords with the traditional idea of"book smarts", Creative intelligence which has to dowith dealing with novel situations or finding newapproaches to solve a problem, and Practical intelligenceusing which individuals create a fit between themselvesand their environment. Sternberg and Grigorenko (2001)define practical intelligence as "the ability to find a moreoptimal fit between the individual and the demands ofthe environment through adapting to the environment,shaping or changing it, or selecting a new environmentin the pursuit of personally valued goals". It can becharacterized as "street smart" or "common sense," andit supplements academic intelligence or "book smart."Practical intelligence encompasses the abilities one needsto succeed in everyday life, including in one's job. Theysuggest that the best way to measure practicalintelligence is through simulations including in-basketexercises, situational interviews, and situationaljudgment tests (SJTs). They report correlations of 0.13-0.37 between SJTs and performance ratings for variousjobs, which is encouraging from a human resourcespoint of view. The authors further explore therelationship between tacit knowledge and practicalintelligence, and say that Tacit Knowledge tests (TKtests) are useful in the work context because they measuresomething more than g. They quote, among others, anearlier study (Wagner and Sternberg, 1985) on bankmanagers where the obtained significant correlationsbetween TK tests and performance criteria, such aspercentage of merit-based salary increase (r=0.48, p <0.05) and generating new business for the bank (r=0.48,p < 0.05). This kind of data suggests that it might bewell worth our while to consider evaluating practicalintelligence in the employment context. Both Gardner's

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and Sternberg's theories have come in for a lot of criticismfrom the g camp for their non-psychometric origins (e.g.Klein [1997], Gottfredson [2003], Visser et al [2006]) ,but with research around the globe strengthening theseperspectives they acquire greater relevance toemployment testing.

The discussion this far has centered on theories ofintelligence that have all originated in the western world.When considering the Indian employment context, it isalso necessary to assimilate the Indian view ofintelligence and its impact on employment screening.

The Indian View of Intelligence

Discussing intelligence in the Indian context is a littleconfusing. There is the traditional view of intelligenceas expressed by the Indian texts. And apart from theSanskrit philosophic traditions, there are other linguistictraditions to consider which may have their own viewsabout the definition and place of intelligence in worldlyaffairs. In addition, the perspective of the lay personof today could be quite different. So when we say theIndian view on intelligence, we could be speaking ofany of these perspectives.

The Sanskrit-Indian view of intelligence/ mental ability/wisdom has always described it as varied, contextualas well as constant, and encompassing much more thanjust the ability to deal with words or numbers.Traditionally, the ability to discriminate or 'viveka' isconsidered the hallmark of intelligence. The Sanskritword 'buddhi'is the closest translation of the wordintelligence. Buddhi derives from Budh (to be consciousof) plus ti a suffix indicating act, state or fact (Baral andDas in Sternberg Eds. 2004, Tripathi and Babu in MisraEds., 2009). The mind is to be analyzed, trained anddeveloped to explain and obtain the goal ofenlightenment and release from rebirth. Intelligence isalmost only discussed in the context of knowledge thatwill enable this enlightenment. The first meaning ofintelligence is therefore awareness/ consciousness.Buddhi includes determination, mental effort, and evenfeelings and opinions in addition to such processes asknowledge, discrimination and decision making. Therealization of Buddhidepends on one's own effort,persistence and motivations. This is not to say that the

hereditary component of intelligence is overlooked. Inthe Indian view, the child can inherit karma (looselydefined as the benefits or costs incurred by earlierthought or deed) from his ancestors and mental abilityis also viewed as a family trait. This rather flexible,practical and inward view of intelligence can be foundin religious and moral texts too.

As per the Vedic view, cosmic intelligence is the basisof all life and pervades everything animate and inanimateas per the limitations of the physical manifestations ofbody and mind. In plants there is a capacity of feeling;in animals, sensations, memory and, even to some extentdecision making, is to be seen. In humans, there is, asper this view, the additional power of discrimination,or intelligence that allows the individual itself to realizeits oneness with the universal consciousness. Rao (2008)says that in contrast to the Western bio-centric view,Indian psychology has consciousness as its core concept,its defining characteristic irreducible to brain states.

In the Bhagvad Gita (Chapter 2), Arjuna asks Krishnato describe the man of settled intelligence who is steadfastin spirit and firmly founded in wisdom. Krishna answersby saying that when one puts away desire and the spiritis content in itself, a person is considered stable inintelligence. When a man dwells on the objects of thesenses, attachment to them is produced. From attachmentsprings desire, from desire comes anger, from angerrises bewilderment and from bewilderment comes lossof memory and that destroys intelligence. When themind runs after the roving senses, says Krishna, itcarries away understanding, even as a ship is carriedoff-course by the wind. Those of disciplined mind, whomove among the objects of sense with the senses undercontrol, have pure spirit and also the power ofconcentration so that they experience peace andhappiness.

The Indian view of intelligence can also be explored byexamining Indian lore. One story from the Panchatantradescribes the lion that sprang to life. Four friends werewalking through a forest - three of them were verylearned and had just completed their education. Thefourth was a simpleton. On the way, they came uponthe remains of a lion that had died. One of the scholars

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displayed his knowledge by reconstructing the bonesof the lion, another scholar added flesh and blood, andthe third was about to breathe life into the form whenthe simpleton intervened. He reasoned that it wasdangerous to bring a lion to life and tried to dissuadehis friends. But they merely laughed at his fears andseeing that he was not able to convince them, thesimpleton climbed a tree to await the inevitable. Thethird scholar brought the lion to life which promptlyattacked and killed all three of them. Another storydescribes the fish ShataBuddhi and Sahasrabuddhi, andtheir friend, the frog Ekabuddhi. Both the fish werehandsome and intelligent, and knew many tricks toescape any trap. When they overheard fishermen sayingthat they would be casting their net in that pond, thefish were unconcerned since they knew so many waysto escape. The frog however, knew only one thing, andthat was to avoid danger. So he escaped the net byleaving the pond well in time while his two fish friendswere caught by the fisherman's net. Countless similartales abound in Indian lore - the cunning hare thatbrought about the end of the foolish lion, the scholarwho could not swim, the stories of Tenali Raman (fromSouth India) or Birbal (North India) or Gopal the jester(Bengal) who solved problems for their respective kingsusing their quick wit, humor and creative thinking.Together these stories underline the belief that thehighest form of intelligence is that which can bepractically applied. They agree that wisdom is not theproduct of book learning alone. Intelligence has verymany manifestations and the gifts of an individual neednot be typical, academic or for that matter, unitary.

Srivastava and Misra (2007) conducted a study tounderstand the amount of congruence between thetraditional views of intelligence and the contemporaryIndian perspective. Their analysis of Sanskrit suktis(sayings, proverbs) revealed four dimensions ofintelligence - Cognitive competence, Social competence,Entrepreneurial competence and Emotional competence.Of the sub-factors, the most important were Control ofemotions (especially anger), Sensitivity to context andHard work. Their analysis of Hindi proverbs also ledto the same four factors, delineating intelligence asplastic, adaptiveand real. Hard work once more emerged

as an important and distinguishing characteristic.Intelligence, as per this analysis, was not confined tothe success of the individual alone. Rather it aims atachieving the common good. Srivastava and Misra, aspart of the same study, also interviewed 1885 men andwomen at rural and urban locations across India andfound the same dimensions of intelligence in theirdefinitions. Social competence was more important inlay people's understanding compared to textual content,but it was still the same four factors that emergedshowing a great deal of alignment between the textualdefinitions of intelligence and the common person'sview of intelligence in India.

Putting What We Know about Intelligence to Work

Theoretical debates aside, many of the points discussedin this article have an immediate bearing on the decisionssurrounding employment testing. Informed by anunderstanding of the key issues, it is possible to createan extremely functional strategy around the use of abilitytests in the Indian business context.

Intelligence is a deeply researched concept and a widechoice of tools is available today which can give us anapproximation of an adult's mental ability. If a tool ischosen after checking its credentials, it is likely to giveus a good range of test performance scores on whichto base our decisions. Workplaces in India are becomingmore like workplaces anywhere else in the world,especially for the English-speaking managerial cadres,so that the objection that the test is designed abroadbecomes less of a problem as the years pass. The testsalso tend to be designed in a more culture-fair mannerso that bridging the gap between east and west on thiscount is easier.

The concept of g has come in for a lot of criticism onthe grounds of perpetuating racial and class differences,which is a point that cannot be ignored. When anintelligence test is used for a relatively homogenousmainstream educated, predominantly urban populationin India, it is not a problem. But if we need it to performmore inclusively, we could run into a host of difficulties.India is home to more than 1000 languages and dialectsand for most Indians, English is not a first language (infact it may not even be a second or third language). IQ

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tests loaded with verbal content in English thereforetend to perform poorly in non-metro locations in India.A high investment option is to design tests in a varietyof languages - it would involve not only translation, butfinding parallel question content that is applicable inthe context surrounding that particular language.Recruiters therefore tend to fall back on the non-verbaland/or numerical segment scores to indicate intelligence.Unless the test is so designed (such as Raven'sProgressive Matrices which are entirely non-verbal),the interpretation arising from this proceeding mightbe faulty. Further, during the course of my doctoralresearch applying the multiple intelligences frameworkin a qualitative study, I discovered indications thatscores in verbal and numerical tests may be subject tothe effects of learning, practice and exposure. Forexample, in the case of math, there were individualswho confessed to a fear of numbers (math phobia). Itis not that they are unable to make sense of numbersin the course of their work, but that they experience anaversive response when compelled to take a testinvolving mathematical operations. On the other hand,there were individuals who were ostensibly good withnumbers (given their educational track record involvingdegrees in engineering, science and architecture), butdid not prefer to apply logic to solve problems. Theirtest scores therefore do not reflect their real ability withnumbers. In a study on third year undergraduates Ifound many Statistics majors reporting that they didnot like math because of the way it was taught. It isevident that scores on these tests are influenced by avariety of factors. It is important that the decision-maker carefully examines the content of the test toensure that it is relevant to the population being testedas well as to the job or set of jobs, and this is apart fromreviewing the reliability and validity coefficientsprovided in the manual. As Frost (1993) puts it, "howquickly a man can add or subtract becomes meaninglessin a practical sense when both the accountant andengineer will inevitably use a calculator or desktopcomputer which performs arithmetic operations amillion times faster than any human." When this duediligence is done and a test chosen, the results can befairly accurate.

In general, traditional tests of g or mental ability batteriesare appropriate for entry level management positionsor for those entering an organization with two-threeyears of experience. In service and knowledge orientedindustries such as banking, telecom, IT etc., they canbe used well even at the non-managerial level if suitablydesigned. g is a strong predictor of learning which iswhat is required in the initial phase of the employee'scareer. Many organizations are doing exactly this, buttheir reasons are different. In practice I have observedthat the more distanced managers get from the test-taking process, the lower their scores on traditionalmental ability tests. That is, at higher managerial levelswhere employees took their last test perhaps eight orten years ago, they tend to score very poorly on speededtests. Additionally, in India where formal learning andtest-taking are not a life-long phenomenon for mostpeople, test motivation suffers a good deal. HR managersthen tend to eschew testing for mental ability at a seniorlevel either because senior level candidates just refuseto take tests or try to negotiate around them, or becausescores of experienced candidates become quite low andrender meaningful interpretation impossible. My pointis that the practice of using mental ability tests at entrylevel is correct, but clarifying the why will help createan overall better strategy for employment testing.Additionally, even when used at the entry level, a mentalability test is more useful as a filter to screen out entirelyunsuitable applicants rather than a tool to assist in achoice between two suitable applicants. To explain,when recruiting from a large pool of applicants, HRmanagers could use ability tests to narrow down thelist of candidates who will go on to the next step in theselection process. But the decision to select cannot bebased on the test score. While a threshold level of mentalability is required for most jobs, beyond a point it losesits predictive power. For more experienced candidates,a different kind of assessment is probably called forsuch as Sternberg's suggestion of testing for practicalintelligence/ tacit knowledge using simulations. In somedomains, there are gaming options, usually as part ofassessment centers that provide a proxy for a mentalability test. Case studies requiring complex decision-making and moving away from the multiple-choice-single-answer format may help make a better selection

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decision. There are two challenges associated with thismethod - one that case studies or similar open-endedassessments require experienced assessors to evaluatethe candidate correctly, and second, that they have tobe specially designed to approximate job-relateddecisions as closely as possible since they are contextspecific. However, the investment may be justified bythe superior rigor of such a testing process. Further, theIndian view of mental ability accords well with the ideaof practical intelligence or a non-unitary view so thatsuch measures may have greater face validity, therebyimproving test motivation and reducing resistance evenwhen used for internal promotions or reassignments.

One last point which has not come up in the literaturearound mental ability testing for employment is thatdespite claims by researchers in the g camp about thepredictive power of intelligence, other factors too mayplay an important role in job performance, such aspersonality traits. The Big Five personality traits ofOpenness, Conscientiousness, Extraversion,Agreeableness and Neuroticism (emotional stability)have received a lot of attention as predictors of jobperformance. Of the traits, Conscientiousness has beenconsistently linked to job performance (Jimoh [2008],Rothman and Coetzer [2003], Mount, Barrick and Strauss[1999], Barrick, Mount and Strauss [1993], Behling [1998])and many practitioners in India swear by RaymondCattell's 16PF and Saville and Holdsworth's OPQ (alater derivative of the 16PF specially designed foroccupational use) for their utility in predictingperformance. Other popular tools include the FIRO-Band the DISC. David McClleland and his colleagueshave similarly done a lot of work to promote the useof competencies instead of intelligence in selectionpractices. While this article is not about personalityassessment, I bring in this aspect to give a perspectiveto the role of mental ability assessment in employmenttesting. While assessing mental ability can help makea better decision about selection/ promotion/ placement,it cannot be the only factor guiding the decision.

Conclusion

In sum, what is recommend as a strategy is using ajudicious mix of methods based on an understanding

of the options and the concerns surrounding each kindof assessment. In the Indian context, where socialcompetence, hard work and emotional control are seenas components of intelligence, it may be necessary toevaluate personality along with measures of cognitiveability. An important concept not covered in this articleis that of Daniel Goleman's (1996) Emotional Intelligencewhich resonates well with the Indian concept ofintelligence. Given the importance of the interpersonaldimension in the Indian vision of the intelligentindividual, the personal interview is also a critical sourceof information. Measures of general cognitive abilityused at the entry level as a filter and measures ofpractical intelligence at more senior levels will workwell for large organizations which have the size andscale to afford the investment. There is no doubt thatmental ability is important to work performance. It isconsistent with general wisdom as also supported byscientific research. The more HR managers are familiarwith the issues discussed and are able to make informeddecisions about how to use mental ability measurement,the better they would be able to add value to the selectiondecision.

ReferencesArmstrong, Thomas. (2009). Multiple Intelligences in the

Classroom (3rd Ed) ASCD: Alexandria, VA, USA.

Barrick Murray R, Mount Michael K, and Strauss Judy P (1993)Conscientiousness and Performance of SalesRepresentatives: Test of the Mediating Effects of GoalSetting. Journal of Applied Psychology, 78(5), 715-722.

Behling Orlando. (1998). Employee Selection: will intelligenceand conscientiousness do the job? Academy ofManagement Executive, 12(1), 77-86 Bhagvad Gita,Chapter 2, Verse 54-68.

Binet, Alfred. (1905). New Methods for the Diagnosis of theIntellectual Level of Subnormals. L'AnnéePsychologique,Vol. 12, pp 191-244. Translation by Kite, Elizabeth S(1916) In The development of intelligence in children.Vineland, NJ: Publications of the Training School atVineland.

Frost, C.F. (1993). The Changing Face of Intelligence. Giftof Fire, Issue No. 59-A, May 1993. Available on theofficial website of the Prometheus Societyh t tp : / /216.224.180.96/~prom/o lds i te /a r t ic les /changingface.htmlAccessed on September 23,2012Gardner Howard (2003) Multiple Intelligences AfterTwenty Years. Paper presented at the AmericanEducational Research Association, Chicago, Illinois, April2003.

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Gardner, Howard. (1983). Frames of Mind: The Theory ofMultiple Intelligences. Basic Books: New York.

Goleman, D. (1996). Emotional Intelligence. Bantam Books:New York.

Gottfredson Linda S. (1997). Why g Matters: The Complexityof Everyday Life. Intelligence, 24(I), 79-132.

Gottfredson Linda S. (1998). The General Intelligence Factor.Human Intelligence, ExploringIntelligence, 24-29.

Gould Stephen J. (1981). The Mismeasure of Man. Nortonand Co: New York.

Harris, Kevin A and Sykes Eric W: Professional Predispositions:Assessing Multiple Intelligences Theory inUndergraduates. http://kaharris.iweb.bsu.edu/ProfWritings.htm - accessed August2010

Herrnstein Richard J and Murray Charles. (1994). The BellCurve: Intelligence and Class Structure inAmerican Life.Simon and Schuster Inc: New York.

Humphreys, L.G., Rich, S.A. & Davey, T.C. (1985).A PiagetianTest of General Intelligence. Developmental Psychology,21, 872-877.

Jimoh, A.M (2008) Emotional Labour, Conscientiousness AndJob Tenure As Predictors Of Job Performance AmongUniversity Administrative Workers In SouthwesternNigerian. International Journal of African and AmericanStudies, 7(2), 27-38.

Lohman David F (1989) Human Intelligence: An introductionto Advances in Theory and Research. Review ofEducational Research, 59(4) (Winter 1989), 333-373.

Lohman David F (2001) Fluid intelligence, inductive reasoningand working memory: Where the theory of multipleintelligences falls short. Paper presented at the annualmeeting of theAmerican Educational ResearchAssociation in Seattle, WA, March 2001.

McClelland David C. (1973) Testing for Competence ratherthan for "Intelligence". American Psychologist, January1973, 1-14.

Misra, Girishwar (Eds.) (2009). Psychology in India (VolumeI): Basic Psychological Processes and HumanDevelopment. ICSSR: New Delhi

Mount Michael K, Barrick Murray R and Strauss Judy P (1999).The Joint Relationship ofConscientiousness and Abilitywith Performance: Test of the Interaction Hypothesis.

Preito L, Bermejo R, Ferrando M, Ferrandiz C (2005). MultipleIntelligences and Exceptional Children. Paper presentedat the European Conference on Educational Research,Dublin, Sept 2005.

Rao, K.R, Paranjpe A.C, and Dalal A.K (2008). Handbookof Indian Psychology. Cambridge University Press: NewDelhi.

Rothman S and Coetzer E.P (2003). The Big Five PersonalityDimensions and Job Performance. Journal of IndustrialPsychology 2003. 29(1), 68-74.

Shearer Branton (2006). Towards an integrated model ofTriarchic and Multiple Intelligences. http://www.miresearch.org/reports_and_papers.html

Shearer, C. Branton (1997). Reliability, Validity and Utilityfor a Multiple Intelligences Assessment for CareerPlanning. Paper presented at the annual meeting for theAmerican Psychological Association, Chicago.

Simonton DK (2006). Presidential IQ, Openness, IntellectualBrilliance, and Leadership: Estimates and Correlationsfor 42 U.S. Chief Executives. Political Psychology, 27(4) (Aug., 2006), 511-526.

Spearman, C (1904) "General Intelligence", objectivelydetermined and measured. American Journal ofPsychology, 15, 201-293. Available inhttp://psychclassics.yorku.ca/Spearman/

Srivastava A.K and Misra G (2007). Rethinking Intelligence:Conceptualizing Human Competence ina CulturalContext. Concept Publishing Company: New Delhi.

Sternberg R. J (1985). Beyond IQ: A Triarchic Theory ofIntelligence. Cambridge University Press: Cambridge

Sternberg R. J (2004). International Handbook of Intelligence.Cambridge University Press: Cambridge.

Sternberg Robert J and Grigorenko Elena L (2004). Successfulintelligence in the classroom.Theoryinto Practice, 43(4)(autumn 2004), 274-280.

Sternberg, Robert J and Grigorenko, Elena L (2001). PracticalIntelligence and the Principal.Research report publishedby the U.S. Department of Education. Available at http://tv.isg.si/site/ftpaccess/elogedusavoir/Practical%20Intelligence%20and%20the%20Principal.pdf accessedon September 23, 2012

Terman, Lewis M (1916). The Binet Scale and the Diagnosisof Feeble-Mindedness. Journal of theAmerican Instituteof Criminal Law and Criminology, 7(4), (Nov, 1916),530-543.

Thurstone L. L. (1946) Theories of Intelligence. The ScientificMonthly, 62(2), (Feb 1946), 101-102.

Thurstone, L. L. (1938) Primary Mental Abilities. Universityof Chicago Press: Chicago.

Visser B.A, Ashton M.C, and Vernon P.A (2006). g and theMeasurement of Multiple Intelligences: A Response toGardner. Intelligence, 34, 507-510.

Sangeetha Rajan is a psychologist, managementconsultant, trainer and educator and is a visiting facultyat IIM-Indore. She holds a doctoral degree awarded bythe Tata Institute of Social Sciences for researching themental profile of artists. This paper on intelligencemeasurement is an outcome of twelve years of work asa management professional applying psychometrics in theorganizational context and research work done towardsher dissertation.

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The corporate world is routinely reproached for itsdearth of women leaders. Consequently, the clutch ofwomen who have presumably shattered the 'glassceiling', are feted, felicitated, and held up as trophies.They are eagerly seized upon as role models by thoseon the fringes of success, perhaps to demonstrate that,notwithstanding stories in the media, organizations arenot laggards in the journey towards gender equality.So when Sheryl Sandberg, the personable COO ofFacebook, writes a book, it resonates in the corridorsof management institutes halfway across the world.Understandably so, because B-Schools are the incubatorsof prospective corporate executives, all of whom virtuallyexperience life through the social media.

Sandberg's pronouncements have been hailed as a clarioncall to women and derided with equal intensity forbeing overly facile. Further, her advice to women hasdrawn flak for addressing the concerns of a segmentof elite, affluent women who can afford thephenomenally high cost of hired help at home. Thisarticle is not merely about her book; it is also aboutreactions to her exhortations to women to 'lean in' totheir careers, realise their potential and set right thegender skewness in the corridors of power.

The polyphony of criticism she draws is testimony tothe contentious nature of any debate that hinges onproviding a level playing field. She posits that womenfail to seize opportunities, anticipating problems intheir attempts to achieve work-life balance, particularlyin the wake of pregnancy and childbirth. She urges themnot to leave before they have left... that is, not to prunetheir aspirations till push comes to a shove, and thedecision to pull out of the workforce becomes imperative.

One of her most significant observations is that womenare hamstrung by their diffidence. Karen Peetz, Presidentof BNY Mellon, the world's largest bank, echoes hersentiments when she says, 'What holds back women isnot lack of ability, but lack of confidence' (Business Line,18 October 2013).1 Since a display of confidence isgenerally misconstrued as a sign of competence, women

Perspectives on 'Lean In'Madhusri Shrivastava

are invariably bypassed in favour of men at selectioninterviews and appraisals. Indeed, research has revealedthat women's social conditioning often predisposes themto underplay their achievements. It is noteworthy thatfeminist scholars such as Juliet Mitchell (1966) haddrawn attention to the insidious ways in which domesticwork, maternity, sex, and the socialization of childrenare manipulated to create intangible mental bonds inwomen, making their inferiority and inequality seemnatural to them.

A survey carried out by Powell and Graves (2003)indicates that a good manager is universally seen aspossessing predominantly masculine characteristics.They contend that this 'masculine stereotype of thegood manager is self reinforcing and inhibits theexpression of femininity by women in managementpositions' (pp. 137-39). However, this general perceptionis in contradistinction to recent studies that link modestbehaviour to emotional intelligence, one of thedistinguishing characteristics of transformationalleadership (Chamorro-Premuzic, 2013). A considerablebody of research in management posits that themasculine traits valorised in discussions on leadershipare scarcely the ones modern organizations need forsuccess. On the contrary, the purportedly femininequalities of empathy and humility, and a reasonableability to question the validity of one's own decisions,help create an environment conducive to personal andprofessional growth. Women in the professionalworkforce are increasingly pointing out thatcontemporary research advocates the need to 'Leanback', not 'Lean In'. In her 2013 article for the ForbesLeadership Forum, Vaughan observes that

Sandberg glorifies traditionally "male"characteristics - outspokenness, credit-taking, andconstant presence in the work environment. Thesevalues may be linked with individual professionalsuccess, but do they actually translate to success

1 This is reflected in their linguistic styles too, further reinforcing theperception that they lack confidence. (Tannen, 1995).

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for society as a whole? Lost in the debate about howand how much we should be leaning in, we missthe point. Rather than telling women to matchmen's behavior, we should be encouraging everyoneto lean back, to emulate a more feminine leadershipstyle that is better correlated with society's well-being.

In accordance with expectations of stereotypicalbehaviour from managers, organizations are seeking toequip women for leadership roles: either by helpingthem acquire 'masculine' qualities, or by making theworkplace environment more woman-friendly, or else,by celebrating their 'special' qualities of interpersonalskills. Meyerson and Fletcher observe that the persistentclamour for a level playing field has made corporateorganizations introduce a slew of measures to assimilate,accommodate... as well as celebrate women. Such anapproach 'gives women stilts to play on an unevenplaying field, but it doesn't flatten out the field itself'((2000, p.130). Thus they argue that while the symptomsof gender bias are addressed, the bias continues toremain deeply entrenched.

Besides, affirmative action of any kind breeds resentmentand contempt amongst those who are outside its ambit.It reinforces the belief that the beneficiaries of thesediluted selection criteria are inferior in their abilities,and hence unworthy of the positions they occupy. Thefact that a felicitous fusion of socio-biological and culturalforces may place one half of the species in a positionof privilege is not easy to acknowledge!

In an attempt to explore the implications of issues raisedby Sandberg's book, a group of B-school studentsparticipated in a discussion. It emerged that in Indiabias often surfaces at the level of entry in the form ofinsinuating questions about the woman interviewee'splans for the future (read marriage). In the course ofthe interaction a participant interposed that employerswere predominantly concerned with ensuring that theorganization benefited from the time and resourcesinvested in a prospective employee. Of course, justicedemands that a competent woman not be penalised foracquiescing to societal norms such as patrilocality; fairdealing dictates that provisions be made for her to take

time off for childbearing and childrearing... butorganizations, by their very nature, are impelled by self- interest, and not by justice! It appears that talk ofgender equality in corporate organizations is meretokenism. Men endorse it wholeheartedly because it ispolitically correct to do so; women advocate itenthusiastically, while masking their own misgivingsabout the feasibility of the balancing act!

As they struggle to cope on the dual fronts of home andworkplace, even the most capable women faceallegations of irresponsibility and insufficientcommitment. Guilt is therefore a woman's constantcompanion; and to overcome its attendant anxieties,women redouble their efforts to be 'perfect', Thepressures and pulls of trying to 'have it all', of not losingthe hard- won privileges of the women's movement, aregenerating a crop of edgy, overly competitive women,out to prove they are no less efficient than men... andno less nurturing than their mothers!

Women in the developed countries too, have a long wayto go before they can achieve a level playing field. AnneMarie Slaughter, Sandberg's most vocal critic,demolishes the shibboleth that women can attain perfectwork-life balance. Young women today are acutelyconscious that they would be required to make morecompromises than their partners. We welcome womeninto the corporate fold, without insisting on a moreequitable distribution of household responsibilities.Slaughter contends that, while society has changed theway it looks at women, the manner of looking at menremains unchanged.

So do our young men think any differently from theircounterparts in the earlier ages on matters concerningwomen, work and domestic chores? It would be aninteresting exercise to take a quick sojourn through themind of a 'modern' Indian man, an icon of the youthbrigade. In his article 'Home Truths on Career Women'(2012) Chetan Bhagat expounds

....choosing a capable, independent and career-oriented woman can also bring enormousbenefits... [for] a man who marries a career womangets a partner to discuss his own career with. ...Aspouse who understands office politics and can


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give you good advice can be an asset. Two, aworking woman diversifies the family incomestreams. In the era of expensive apartments andfrequent lay-offs, a working spouse can help youafford a decent house and feel more secure aboutfinances. ...Of course, all these benefits accrue ifmen are able to keep their massive, fragile egosaside and see women as equals...

Presumably, this is the opinion of a man who can keephis ego aside. What is ironical is that the entire piecehinges on the 'benefits that accrue' to a man who hasa working wife. Juxtapose this piece with lines from theeighteenth century pamphleteer and reformer WilliamCobbett's advice 'On Choosing a Wife':

...a knowledge of domestic skills affairs is sonecessary in every wife that the lover ought tohave it continually in his eye... [because] loversmay live on aerial diet, but husbands stand inneed of solids...

Lest one be tempted to infer that Bhagat's advocacy ofa working wife constitutes advancement over Cobbett'semphasis on domestic skills, one should note thesuperficiality of the change in attitudes towardsprospective spouses. The Man's needs are central,primary; his spouse is the modern equivalent of theBiblical 'helpmeet'. Her value therefore, lies in her abilityto fulfil His need!

In her inimitable style, the redoubtable Americanfeminist Gloria Steinem once stated that 'some of uswomen are becoming the men we once wanted to marry'.But, she continued

...we figured out that not enough men are becomingthe women they wanted to marry. And that is thenext part of the revolution; right? We'll alwayshave two jobs until all the work of the home andthe rewards of the home and child rearing areequally shared by women and men. Like yes,raising daughters more like our sons is a goodthing. But how about raising our sons more likeour daughters? (2004)

References

Bhagat, C. (2012, July 29). Home truths on career wives.Times of India. Retrieved on 3 February 2013 from http://articles.timesofindia.indiatimes.com/2012-07-29/all-that-matters/32923106_1_indian-men-new-woman-life-partners.

Cobbett W. (1831). Advice to Young Men, and incidentally,to Young Women, in the Middle and Higher ranks ofLife. New York: John Doyle.

Chamorro-Premuzic, T. (2013). Why Do So ManyIncompetent Men Become Leaders? .HBR Blog Network.Retrieved on 26 October 2013, from http://blogs.hbr.org/2013/08/why-do-so-many-incompetent-men/

Vaughan, C. (2013). Lean in? No, Lean Back! ForbesLeadership Forum. Retrieved on 26 October 2013 fromhttp://www.forbes.com/sites/forbesleadershipforum/2013/09/20/lean-in-no-lean-back/

Krishnan, A., & Merwin, R. (2013, October 18). Women Quitwhen it Gets Tough. Business Line. Weekend Life (p.1).

Meyerson, D.E., & Fletcher, J.K. (1999). A Modest Manifestofor Shattering the Glass Ceiling. Harvard BusinessReview. January-February 2000.

Mitchell, J. (1966). Women: The Longest Revolution. NewLeft Review. Juliet Mitchell. Women's Estate. Penguin1971.(p.182, pp. 75-122). http://www.marxists.org/subject /women/authors /mitchel l - jul iet / longest-revolution.htm

Porter, E. (2013, September 24) To Address Gender Gap, IsIt Enough to Lean In? New York Time. Economic Scene.Retrieved on date 25 October 2013 from http://www.nytimes.com/2013/09/25/business/economy/for-american- women-is-it-enough-to-lean-in.html?_r=0

Steinem, G. (2004). Leaps of Consciousness. Keynote speechdelivered by at the 3rd Annual Women & PowerConference, organized by Omega Institute and V-Dayin September 2004. Retrieved on 27 October 2013 fromhttp://www.feminist.com/resources/artspeech/genwom/leaps.html

Tannen, D. (1995). The Power of Talk. Harvard BusinessReview. 73(5), 138-148.

Madhusri Shrivastava is a faculty in the area ofCommunication at the Indian institute of ManagementIndore. Her research interests include Communication,Cultural Studies, Literature and Media studies.


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Volume 4 Issue 4 January-March 2013BOOK REVIEW

Ram Charan, who echoed Thomas Carlyle's view ofEconomics as a 'dismal science' in many of his writings,has written a book on the subject he dislikes, viewingit through a different lens. Conventionally economieswere referred to as Western, indicating the advancedeconomies of the west like the US, Europe etc., and theunderdeveloped or lesser developed or developingeconomies of the East (barringJapan) like South Korea,China, India and other SE Asian counties. But Charantakes a distinct view that economic power is shiftingfrom the North (US, Western Europe, Japan etc.) to theSouth (countries that fall below the thirty-first parallel)like China, Middle East, India, Brazil, Sub-SaharanAfrica, South Africa, Mexico etc.).

He notes that wealth is moving from North to Southwhere companies and their leaders display fierceentrepreneurial drive, creating jobs and prosperity, andachieving double digit growth for their countries. TheSouth companies are rapidly building scale and arechallenging companies from the North on all fronts.Charan opines that the South is driving change and theNorth is afraid of it.

Charan feels that many business leaders from the Northare blind to the magnitude of the changes that are takingplace. While some are taking proactive steps bytransferring technology, brands, know-how and realassets to South, in pursuit of higher growth for theircompanies than can be achieved in their home countries,many continue to blame cheap labour, currencymanipulation, protectionism etc. of the countries of theSouth. Charan warns that leaders of the North willignore the changes or shifts at their own peril. He listssix realities that are facing the leaders, not only in theNorth but also in the South:

Global Tilt : Leading your Businessthrough the Great Economic Power ShiftSatheesh Kumar T. N.

l. The world is in an inevitable transition to a more evendistribution of opportunity and wealth. This is due tothe people's desire for a better life. While the road maynot be straight or smooth, the direction of the journeyhas already been set.

2. The global financial system which connects theeconomies of all countries every second of the day, ishighly unstable. The basic problem is that no one trulyunderstands how it works but its malfunctioning hascaused recessions and destruction of economies, be itthe South East Asian currency crisis in 1997 or thefinancial meltdown in the 2007 to 2009 period fromwhich many countries are yet to recover. Uncertaintywill continue to be the norm for some more time intothe future.

3. We are in a war for jobs. Although total employmentwill continue to increase globally, every country wantsa larger share of the job cake with the explicit purposeof strengthening its middle class, improving its standardof living, increasing its financial reserves, and also toensure political stability. Despite all the talk about theworld being one, nationalism and protectionist policiesare still the driving forces, with no clear agreementabout the rules of the game.

4. Emerging countries of the South are creating theirown rules for economic progress and executing theirplans to win jobs and resources for their people. Manycountries like China, Singapore and Taiwan have expliciteconomic strategies, different from the free marketpolicies of the countries of the North. Others like Braziland India are in the process of shaping their ownstrategies. Many of them follow protectionist policiesand their governments are proactive to protect theircountries' self-interest.

Ram Charan (2013). Global Tilt : Leading Your Business Through the Great Economic Power Shift, RandomHouse Business, Price: Rs. 699/-, Pages 336, ISBN: 9781847941060.

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5. Companies are competing against countries - not justother companies. The competition equation shiftsdramatically when a country's government supports adomestic company with the idea of achieving worlddominance. State-sponsored companies, with all theirresource back-up and objectives not necessarily skewedto profit requirements, can act in peculiar ways differentfrom market demands, and hence can scale up quickly,decide to lower prices and to reduce returns, influencingthe returns of an entire industry.

6. Companies from the North may themselves be sowingseeds of competition in exchange for access to emergingmarkets. In 2007, China welcomed US and Europeanaircraft makers to build plants in China on the conditionthat they form joint ventures with domestic companies.Such relationships lead to open exchange of information,whereby technology and knowledge can flow in. TodayCommercial Aircraft Corporation of China (COMAC)is gearing up to compete head-on with Boeing andAirbus with a plan for a homegrown narrow-bodyaircraft set for launch in 2016. The same could be trueof India also. In certain industries, non-Indian companiesare allowed to establish and /or expand if they giveIndian firms ownership stake. In certain areas likedefence and nuclear business, Indian companies musthold a majority stake.

Charan goes on to explain how political power can shiftas a consequence of economic power shifts. For example,the US influence in the South is seen to be declining.Brazil, for instance, has refused to go with the US inits sanctions against Iran for nurturing nuclearambitions.

While some of the advantages of the South as adestination for funds flow or low cost operations maydecelerate over time, the tilt will continue due to variouseconomic advantages like market size, and will drivechanges in the global economic landscape, reshapingthe competitive dynamics and industry structures acrossthe globe. Some African countries prefer to deal with

China over America because, whereas America pushesfor a democratic ideology, China does not.

Today, the country which has money has the power.The countries which hold promise of high economicgrowth opportunities enjoy even more power. Economicpower creates political power and not the other wayaround. Many countries have set up sovereign wealthfunds which use the money for acquiring assets or otherkey resources that give such countries immense politicalclout. According to Charan, three-quarters of all suchmoney is in the middle east or Asia, most of itaccumulated from the sale of natural resources like oilas in the case of middle-east countries, or from massivetrade surpluses as in the case of China.

In Chapters 2 to 7, Charan explains the tilt or economicshift in more detail and suggests how companies andtheir managements have to deal with this tilt, in termsof strategy, leadership, organization structure etc. Thelast chapter explains how companies must drive growthwhen major markets like the US, Japan and Europe arestagnating, and how to stay competitive in markets likeAsia, South America and Africa where costcompetitiveness is the key. Charan points out that it ispossible, narrating some real life examples.

A commendable book, one of the first detailing the shiftin economic power from the erstwhile developedcountries to the fast developing countries, and how thisaffects companies, top leaders, the very organizations.A handy companion and must-read for today's CEOswho operate in a global economic scenario. Charan'strademark simplicity in explaining complex business(economic) issues is once again the plus point of thebook.

Satheesh Kumar T.N. is a Professor in DC School ofManagement and Technology, Pullikkanam, Kerala. Heteaches Human Resource Development, CorporateFinance and Strategy. His interests include CorporateGovernance, Leadership & Management Education.

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The book celebrates the distinctiveness of India as aplace to do business. The essence of it is that those wholearn to be successful here can succeed in other unfamiliarand difficult environments as well. The book makes apersuasive argument that rather than looking for wayto quickly skim the market, it makes sense formultinational companies (MNCs) to make long termcommitment to this unique land.Rather than gettingoverwhelmed by the chaotic nature of Indian businesslandscape, MNCs should learn how to innovate andsucceed in a humungous price conscious but demandingmarket with its atypical set of requirements. Thoughthe biggest barrier to succeed in India seemingly stemsfrom internal culture and mind-set at headquarters ofMNCs. Propensity to look at the new market for easygains using sales-oriented approach, inability to trustlocal leadership adequately combined with tendency torigidly replicate products, business models andoperating systems that have worked at home marketdrives many MNCs business in India into a "midwaytrap"; insignificant as compared to global growth andprofits.

The author, Ravi Venkatesan, has helmedIndian businessof two world classMNCs, spanning two ends of industrialspectrum - engines and software, namely Cummins andMicrosoft. He led both to great heights of growth andsuccess. So, when he speaks through this book, it makesa compelling reading. He combines his personalexperience and interviews with CEOs and senior leadersof around thirty companies in different industries, aswell as discussions held in various forums withaccomplished country managers. Venkatesan has triedto address the fundamental question as to how MNCsshould approach India as a business landscape, as"winning in India" is important not only for its in-situmarket but also for other emerging markets that are

Conquering the Chaos: Win in India, WinEverywhereKajari Mukherjee

similarly challenging. The author has provided practicalperspectives and actionable advice using real-worldanecdotes, which are aimed at operating managers.

Doing business in most emerging markets is tough. But,both in its potential and its challenges, India is prototypeof many other emerging markets. Market potential ofall such markets is tempered with varying combinationof corruption, volatility, chaos, governance issues, weakinstitutions and poor infrastructure. India, with itsunique amalgamation of huge potential, substantialmanagerial capability, decent talent pool and developedinstitutions acts as cauldron for MNCs to hone theirstrategy. There is not one India, but many India co-existing that demands atypical strategy by MNCs. Basedon annual income data, the entire country can bestratified as a flattish pyramid with a fat base. The smallaffluent segment at the top - "the Australia at the topof India" as Steve Ballmer of Microsoft calls it, resemblesthe markets of home country and thus MNCs feel mostat ease to sell global products at global prices. But, theirbox of ready templates fail to deliver as MNCs try todeepen their presence in the price-sensitive, quality-conscious, features-demanding middle market. Crackingthis middle market requires considerable innovation,who perhaps wants "70 percent of the value of the globalproduct at 30 percent of the price". Then, there is thebottom of the pyramid, who survives on less than $2a day; they represent not an opportunity to earn fortune,but "an opportunity to earn trust and goodwill throughcorporate social responsibility and shared valueinitiatives".

Venkatesan lists out the criteria for real success in Indiafor a MNC, namely, the company is leader in its industryin the local market, delivers 10-20 percent of the newgrowth in revenues and profits on global basis and usesthe domestic production capability to win in other

Ravi Venkatesan (2013). Conquering the Chaos: Win in India, Win Everywhere, Harvard Business Review Press,Boston, MA, Price: Rs 895/-, Pages 232, ISBN 9781422184301.

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markets. The author cites JCB, Cummins, Microsoft, GE,McDonalds as some companies that have scored wellon these parameters. Such companies straddle the marketpyramid, create localized business model, take a longterm view of growth and leadership, treat India as ageographic profit center and develop resilience to dealwith India's corruption, uncertainty and volatility.

Most MNCs, after initial days of quick success, enterinto midway trap where growth is determined by theindustry tide; the driving force is no longer with thecompany. Only those companies who can get out of thisfrustration zone can move onto to the market leadershipposition. One oft-repeated but still missed out point isthat MNCs consider India as an extension of their ownmarket, and are surprised and distressed when theyfind that it is not so. The author argues that this is soas most MNCs hand over responsibility of Indian marketto the global sales or international business unit at thecorporate. Indian market is not ready to accept mostgoods, and sales leadership has many other markets,more amenable to their goods. Thus, India continuesto rank much low and at times disappears altogetherfrom their radar. Rather, what a complex market likeIndia needs is an entrepreneurial general manager,reporting directly to the CEO or similar top managementof the MNC to ensure unwavering attention, appropriateand timely decisions and most importantly, investmentswith longer payback period.

Next, MNCs need to modify their operating models thatbalance the local responsiveness, spanning customeropportunities, market shifts, and competitors' moves,and global standardization. They also need growingresilience to deal with corruption and cope withvolatility. The author makes a very important point -that barring a few industries, it is possible to do businessin India without being corrupt and having to bribe.What is needed is conviction and serious focus from thetop. A culture of compliance and strong local leadershipgives signal to the business landscape of what thecompany will do, and more importantly not do. Thesocial memory is respected and many times much moreeffective in thwarting undue expectations.

Emerging markets require capability to deal with

turbulent environment. The author suggests that thefirst step to develop resilience to operate in India startswith making country managers explicitly accountablefor the image, reputation and influence of the companyin India. He quotes respected former Chairman ofHindustan Unilever Ashok Gangulywho talked aboutthe unwritten philosophy that guided the companysince independence - that what's good for India will begood for the company. History of past imperialismresults in rather ambivalent attitudes of Indians towardsMNCs. They are welcome for financial muscle and latestknowhow, but there also remains lurking fear of theirhegemony tendencies. Thus MNCs may do well inadopting the deep commitment of HUL to the countrythat Indian society appreciates.

The book discusses at length how to make joint ventureswork, and shares lessons from JVs that have workedwell. However, while listing the JV failures in India, thebook misses out on the spectacular failure of certain JVsof earlier era like Proctor & Gamble - Godrej JV. Onewishes to understand how the contours of JVs, standardsof due diligence, and appreciation of opportunities,expectations and challenges of respective partners haveevolved in last twenty years.

The only chapter that seems superfluous in the bookis the one devoted to growing leaders for business. Allthe challenges highlighted and panacea suggested isstaple to any book devoted to leadership. That thechapter has to cite examples from ICICI, and Tata Steel(HUL being the only MNC) underscores themundaneness of the discourse.

The reader may have another grouse. The list ofsuccessful MNCs in India from which major learningare culled seem to be surprisingly small. So after a timethere are not many interesting examples being cited,rather a few are being analysed time and again. So, thismay lead to reader fatigue. Also, almost all studies arefrom MNCs that are giants. There are many smallerMNCs who have also entered India. Examples of howsome of these coped up with opportunities, diversitiesand adversities of the country is sorely missed, especiallyas they will be more resource constrained compared tothe giants. Lastly, there are copious examples from a

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MNC with century old presence in India, namely HUL.Nothing new seems to emerge from the discussion- allexamples are generally known. Also, some may arguethat HUL did benefit from a very long learning curve;so deeply is the company identified with Indian milieuthat it is the only one in Unilever stable with countryname tagged.

The book lays lot of emphasis on changing mindset,leadership qualities, trust and visceral understandingof emerging markets by the global CEOs as a recipe forsuccess. These may sound rather cliché at some levelas these seem to be too person-centric and linked to theCEO's idiosyncratic personal liking of high contextculture and country, which most emerging markets are.Also, building resilience to run a business withoutsuccumbing to petty corruption and managing to copewith volatility could have been bolstered by real lifeexamples; otherwise to reader it may sound too utopianto be true.

Venkatesan earmarks bulk of his attention to the roleof leadership in making MNCs succeed in India. Therole of right country manager to grow a business cannotbe overstated. A personal anecdote may not be misplacedhere. I had been closely associated with a MNC thatstarted operations in China and India almost at sametime. The Indian outfit worked as per template andclocked the mandated profit per quarter as required byglobal headquarter. The result was that ten years afterits entry, it was still a moppet compared to others insame industry. Chinese country manager, on the otherhand, took a different strategy to grow the business.He insisted with global leadership that in an emerging

market, looking for quarter on quarter profit is neitherviable nor justifiable. Thus, he invested in gainingtraction in the market, rather than look for quick wins.Result was painstakingly created industry and universityassociations, and presence in various forums across alleconomic clusters in the country. As service offering ofthe MNC was extremely new to the Chinese market,to build credibility, he initiated the practice of gratisservice such that client understood the heft of thedeliverables. In ten years' time, not only was the businesslargest in its industry but it had also managed to createnovel product and service offerings, which were adoptedby the parent company for global growth. The divergencein fate of both companies was glaring by 2007, Chinesebusiness had a seat in the high table of global decisionmaking, and Indian leadership was up for a change.

All in all, the book is a quick and easy read for operatingmanagers of MNCs. They can do soul searching basedon the three parameters of success suggested. After all,it is not easy to win in a market with high dose of bothvitality and volatility.

Kajari Mukherjee is an Associate Professor in IndianInstitute of Management - Indore. Her research interestis in organization design; she uses complexity paradigmto examine theoretical perspectives of organization. Shealso consults and researches in areas of compensationmanagement and corporate social responsibility. Prior tojoining academics, she spent two decades in corporate,both public and private sector. She brings in a uniquecombination of experience, having handled both linerole,as head of departments and consultant role as headof projects.

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Subroto Bagchi (2013). The Elephant Catchers: Key Lessons for Breakthrough Growth, Hachette India, Price:Rs. 499/-, Pages xii + 232, ISBN: 9789350095836.

Elephants have been a source of inspiration to humansfrom times immemorial. In the days of yore, maleelephants were used in war; elephants were also used

for lifting and transporting heavy or very heavy logs.They help zoos and circuses to earn money. They havealso motivated creative people to develope/invent newproducts. For instance, Juhaim Ibnu Abdul Jabbardeveloped EDD (Elephant Deterrent Device) that helpselephants as well as human beings. When an elephant

becomes wild, not only the life of the elephant but alsohuman lives are in danger. Juhaim Jabbar's product isintended to help both human beings and elephants insuch situations. Elephants have inspired elephantcatchers who in turn have inspired Subroto Bagchi inframing a caption for this book. Interestingly, the name

of the book itself invites one to learn. The enthrallingtome under review is an engaging account of theendeavours of a few path breakers and path makers.In the words of Vivekananda, the strongest force onearth is the force of an idea (Singh, 2012). The workunder review is a treatise on ideas being converted into

actions, idea-generators and working ideas.

Is it possible to educate 8500 students in an institution,ensuring balanced growth with stability, camaraderieand allround development without charging any feefrom the students? Is it possible to flourish in the presentscenario without sophisticated computerized

information systems? Can an organization attain growthwithout any strategies in place? Can a commercial bemade out of people who have left this world for theirpermanent abode? Moreover what are the advantagesthat accrue from commercials featuring stalwarts wholeft this world long ago? Can a road leading to the

airport also serve as a second runway for a 747 jumbojet? How do firms invest in capacity creation for the

The Elephant Catchers: Key Lessons forBreakthrough GrowthWallace Jacob

future? Are intelligent, intuitive and hardworkingindividuals necessarily good problem-solvers also? Whatcan be the implications if the CEO and the heads of theHR and finance functions are related to each other byfamily ties? The book under review provides lucidanswers to the aforementioned unsettling queries.

The book under review has been effectively divided intosix sections. The first section contains four engagingchapters which set the tone of the book. The second

segment contains five chapters which provide deepinsights into the modus operandi of some of the realicons of change and development. The third sectioncontains two chapters. The fourth segment containsthree chapters which keep the reader glued to the book.The penultimate section contains six chapters and theconcluding section contains two captivating chapters.

The first chapter explains how an institution, set up bya religious trust which has been in existence for almostsix centuries, provides education and residential facilities

with food to almost 8500 students at no cost to thestudents and yet functions effectively, efficiently andsuccessfully. The chapter dwells deep into an actualself-regulating system which does not use the latesttechnological gadgets or complex algorithms. The secondchapter dissects the complex relationship between

strategy and scale. The chapter contains brilliantexamples drawn from Unilever, IBM and Apple. Throughexamples of Marriott International, the third chapterexplains how the latest technological developments canbe used to provide customers comfort in times of stress.The chapter also throws light on the methods employed

in Singapore to build a lasting infrastructure. The fourthchapter traces the trajectory of a business from itsinception, infancy, growth to stability phases.

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The fifth chapter explains how Subroto Bagchi and histeam managed to win a contract from a EuropeanTelecom giant despite the propensity of the Europeanfirm to build acollaboration with one of the two otherwell-known companies. The chapter explores thesubtleties of emotional reasoning and logical reasoning.The sixth chapter is a monograph on Sales Managementand the Peter Principle. The seventh chapter containsthe detailed exposition of a strategy used by a firm toreduce a partner firm to merely a resource provider andbecomes the de facto service provider. The eighth chaptercontains a few important eye-opening facts related tomergers and acquisitions. The ninth chapter explainshow the media is unfairly trying to control businessesand alter the mind-sets of the readers/viewers. Thetenth chapter enlists the responsibilities and functionsof the board of directors. In the eleventh chapter SubrotoBagchi lists the lessons pertaining to consultancy serviceswhich he himself learnt while working in a very bigorganization.

The twelfth chapter is on the brand value and the logoof a company. The thirteenth chapter explains how thefourth estate can be used favourably by an organizationor a company. The fourteenth chapter is devoted tocorporate social responsibility (CSR).

The fifteenth chapter dwells on the differences betweenhiring people for their education, years of experience,pedigree, and hiring people on the basis of their abilityto build, capacity to think differently. The sixteenthchapter dwells on the role of leaders in an organizationand conundrum such as 'White space time', and 'lock-step'. The seventeenth chapter examines the intricaciesof the Agile methodology and its benefits over thetraditional Waterfall model. The eighteenth chapterfocusses on the issues businesses need to focus on atdifferent stages after their inception. The nineteenthchapter lists the key areas that leaders and second-rungleaders need to lay focus on. The twentieth chapterdwells on the travails of succession planning. Thetwenty-first and the twenty-second chapters dwell onplanning for the tough times that a business or a companymight have to face.

However the reader may have a misgiving after reading

the work under review. On page 55 the author speaksof Philip Kotler's 4Ps (Product, Price, Place andPromotion). The erudite Philip Kotler has no doubtwritten several books on Marketing Management but4Ps was a term coined by E. Jerome McCarthy in 1960which has since been used by marketers throughout theworld. On page 67 the author says, "In India, even afterthe laws relating to Foreign Direct Investment (FDI)have been altered, restrictions remain in certain sectorsof the economy" without providing much practicalevidence. When the reader pursues a book related toManagement he is more interested in finding out whichlaw(s) has/have been altered? Which are the new laws?And how do they directly and indirectly (or adversely)affect businesses? Besides some of the business modelstouched upon in the book could have been explainedmore comprehensively. Simply writing a few fancyterms without comprehensive explanation is a well-planned recipe for disengaging the reader.

Nonetheless, the work under review is a fast-pacedthriller which simplifies many complex and abstrusetheories, hypotheses and conjectures. It will be ofimmense help to the champions of risk management,disaster management, economics, and business ethics.It contains real-life management practices being carriedout at Sparsh Hospital in Bengaluru, Missionaries ofCharity (having its caring presence in nearly 133countries) and a few other multinational companies. Inshort the book will enable the reader to develope a deepcomprehension of C.K. Prahalad's concept of 'nextpractices' and the hidden insecurities in some of theknown business models.

Refrernces

Singh, Jaswant (2012), The Audacity of Opinion: Reflections,Journeys, Musings, Amaryllis: An imprint of ManjulPublishing House Pvt. Ltd., pp 27

Wallace Jacob has done his M. Phil. in Management. Heis presently working as a Senior Assistant Professor atTolani Maritime Institute, Pune, where he teachesPrinciples of Management and Project Management. Hisbook reviews have been published in journals of IIMLucknow, IIM Indore, IMI New Delhi, BharathidasanInstitute of Management, Tiruchirappalli. He has alsopresented papers in various conferences.

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I had the first opportunity to attend several of SwamiSamarpananandji's lectures in a course for the executiveparticipants at IIM Indore. Swamiji is a champion ofthe rare art of presenting deep spiritual thoughts andlessons smoothly through simple anecdotes and stories.After "Tiya - A Parrot's Journey Home", he reveals hisknowledge and talent once again in Param. While thestory is full of soothing anecdotes and words, it alsobrings out some tough lessons of life.

Admired by everyone for his technology savviness,Param is a person who has lost his real identitysomewhere in the cyberworld, realising this only at hissurprise answer to his friend Jing's question - whatwould you like to do if you were to die in seven days(and with it the thought, what stops you from doingit now, in Param's mind)? This sets Param off on a lifechanging journey during which he meets numerouscharacters and lives unforeseen experiences.

Through thought provoking one liners (a selectedcollection is presented in the following Table) Swamijipersuades the reader to reconsider the unsocial impactof the largely accepted 'modern' style of living. Today'sbizarre truth that "people of The City never stuck to ajob or relationship for long" represents the restlessnessin people's minds while moving from one place toanother, and from one person to another, in a neverending search for the elusive mental peace.

Poppy, the continuously barking dog, represents ourinner voice, the conscience, which is always trying toguide us to do the right thing, but which we humanbeings often choose to ignore, just like we ignore a dogbarking in the street. Poppy leads Param to The Village,and later, also back to the railway station, representingour conscience's continuous faithfulness to us; of itsbeing with us in all our journeys.

ParamMadhukar Dayal

The story of the fight between jackfruits and pumpkins,which is resolved when both of them realise that theyare fruits, reminds one of the otiose struggle betweensegments of mankind across the planet, however, withlittle hope of their being as lucky as the mentionedfruits! The story of the clod of earth and the wormhighlights the purifying pain that one has to go throughbefore achieving proximity to the Divine, for whichthere are no short cuts.

Swamiji hilariously redefines friends as "close, casual,and cyber" (neither close nor casual!). The megacity'scitizens sleep overnight and "get up drained andexhausted" in the morning! The plight of new generationis brought out in the words: "India, the land of wisdom,is struggling to become the land of illusions. Everyoneis trying to become what he is not, instead of being whathe is." A concept elaborated further in the Mask partylater in the story.

Chilli and Polta, two village kids, remind onecontinuously of the immature child in each of us. Poltais in continuous pursuit of money and fame, the short-cut way! And, Chilli, reflects our 'get the desired result,somehow, anyhow' side pulling the meaning of 'endsjustify the means' a stretch too long! Once, Chilli bringsin a (stolen) pumpkin as gift for Param to get goodmarks in his exam!

Subtly, Swamiji raises the concern that "...young peoplein India seeking employment never asked what job theywere supposed to do. They only wanted to know thepay and perks"!

Polta's creative thinking, which we perhapssystematically drain out from our children in the schools,is demonstrated in his mutiplicity of answers to thenumbers that can be derived from the use of only twoand three (two thirds, 1, 1.5, 5, 6, 8, 9, etc). In my own

Samarpan (2012). Param (New Delhi: Harper Collins Publishers), Price: Rs. 150, Pages 205, ISBN:9789350293904.

The only thing worse than being blind is having sight but no vision.

- Hellen Keller

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experience, I have tried asking students, what wouldbe forty nine squared (only one student, who had hadsome lessons in Vedic mathematics from a Guru, wasable to answer in one of the sections I taught). And, onceexplained how a common formula learnt by all, (a minusb) whole squared, can be used to find it mentally in afew seconds, students are awed! Surprisingly, on askingwhat would be one hundred and fifty seven squarednext, extremely few are able to use (a + b + c) wholesquared to work it out mentally!

Swamiji points out the drop in our society's moralvalues and its cause through Kisan's voice: "...themorality of a moralist lies in finding the immorality ofothers." Also, through the Pandit's voice, Swamijiexplains that "Achievement inspires awe in those whounderstand it, and invites ridicule from those who donot understand." "I will shoot you" coming from thevillage drunkard, Tarang, reflects in the precise wordshow human beings feel several times every day ininteracting with their bosses, colleagues, and so on!

Table

– Jing and he (Param) had grown up together and continued to be good friends, which was rather unusualfor the younger generation of The City.

– People of The City never stuck to a job or a relationship for long.

– Yesterday's real is today's virtual, and today's virtual is tomorrow's real. There is no real differencebetween the real and virtual.

– Collective cheating is mere inflation, while individual cheating is cheating - something that mustnot be tolerated.

– The train has existed even before this earth was born, and will continue to exist even after it dies,because it is an idea. And ideas know no death.

– Behind the suavity lies the savage. Scratch a little, and you get the fangs of the barbarian insteadof the smile of the gentleman.

– Poppy, the dog: "To be loved and caressed we must be owned and chained..." represents the humandilemma about love which often reduces to being a desire to own and possess (or lust?).

– I can't read. That saves me from encountering a lot of lies.

– Spoken through Chilli's voice: "Those who can, bribe and cheat; those who cannot, pray." and "Successmatters; not the path we take to attain it", similar to the profound quote "The end excuses any evil"by Sophocles (in Electra, c. 409 BC), and more popular in another form as "Ends justify the means".

– Through Chilli's voice again: "Tell us something about your vices and sins. We don't have much ofthose here in the villages!" Also, not failing to take a dig at Param's impatience by asking him whetherhe is married and following it with "My father says he learnt patience only after his marriage. Nowit is clear to me why you are so impatient with us."

– Everyone is trying to be what he is not!

– Through Ludo Baba (partially re-worded): "Society teaches to serve yourself and talk about others.But the hidden dimensions of life lie in serving others and talking to your own self - silently".

– Ordinary people feast, but the great ones fast.

– Mobility sometimes requires the support of stability.

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The introduction of Maddhu is subtly followed by theexample of a bird, Mynah, trapped in a bush. Paramtakes care of the trapped bird and heals her with justa little effort, demonstrating the little help, support andguidance that today's lost souls, like Maddhu, need toreturn on the right track but which our society is unableto provide. Polta's desire to keep it in a cage reflectsour society's system of dumping criminals in jails andforgetting about them instead of developing effectivemechanisms of corrective and curative systems. Paramgets bruised in pulling the bird out of the bush reflectingthe mud slung on anyone in our society who tries touplift a lost soul. We have rapidly forgotten the wordsof our wisest, Mahatma Gandhi, "Hate the crime, andnot the criminal."

Suyash, the wise cobbler, reminds us of the dignity ofwork and that it is not important how others look atyou; what is far more important is how you look uponyourself! The village idlers at the tea shop, who havelearnt to blame the government, karmas, and god foreverything, portray today's misdirected youth in oursociety.

The example of Ferris Wheel portrays inevitable upsand downs in our lives, with the common complaintof dearth of happiness and abundance of sorrow,represented through the words: "...how can a kilo ofdelight compensate for the giga of fright?" It teaches

us that the ride is circular and an up after a down, justlike a down after an up, is inevitable.

The debate between a river and a tree represents thelink between perpetual motion (the river), eternalstability (the tree) and their connect with all life formsin the universe. Sona, the deer, represents the largenumbers of (gold like) distractions that sway us fromour goal, at times even making us forget our friendsand family (Poppy, in the story). Swamiji reminds ushow fragile the thread of relationship between twohuman beings is, one storm and it is broken. While itcan be repaired again but a sore 'knot' remains in itpermanently. Indra, the rope climber, reminds us notto forget our childhood dreams and pursue them. Ialready see that the story has many more dimensionswhich will reveal themselves when I read it again!

Madhukar Dayal is a faculty in the Information SystemsArea of Indian Institute of Management (IIM) Indore. Heis a Fellow of IIM Ahmedabad specializing in Computers& Information Systems Area. Dr. Madhukar Dayal hasserved as a Gazetted officer in the IRSME service of IndianRailways for over twenty years. His wide experience spansRailway operations, Information Technology projects,R&D, as well as, teaching. His research interests includecombinatorial optimization, tree search algorithms,scheduling, and exact multi objective multi processor(compute cluster) algorithms for NP-hard problems. Hecan be reached at [email protected].

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Dhandha is the most common term used for businessthroughout India. The book on ‘Dhandha’ is acompilation of success stories of some Gujarati businessmen. It is written in a simple and inspiring manner thatmotivates the readers. This book is duly forwarded byShri Narendra Modi.

The book ‘Dhandha’ sketches some Gujarati businessmen: Bhimjibhai Patel-one of the country's biggestdiamond merchant; Mohanbhai Patel-the leadingmanufacturer of aluminium tubes; Dalpatbhai Patel-themotelier who went to be a mayor in US; Jaydev Patel-the New York Life Insurance agent, who sold the policiesworth $2.5 billion; Hashu and Hersha Shah-owner of100 hotels in US. The common thread in all these storiesis that all these people believed in a single trail ofbusiness. The book demonstrates the power of ambitionand highlights the incredible capacity of hard work andincredible business sense of Gujarati businessmen.

The book not just describes the businessmen, but narratesthe role of the whole family; how they faced challenges,troubles and obstacles and how they helped duringunpredictable events, the failures they faced; The bestthing are their amazing attitude for success anddetermination to work. This book distinguishes theGujaratis from the rest of the world when it comes tobusiness and shows it in a beautiful manner. The bookalso reflects on female empowerment: how they havecontributed to the success of their partners. The Gujaratiwomen showed that none of the efforts go waste if oneput their heart and soul to achieve what one wants.

The first story of this book is titled as "DIAMONDS AREFOREVER", which is dedicated to Bhimjibhai Patel, thatproves 'nothing is impossible'. He didn't know anylanguage other than Gujarati but he proved that languageis not a barrier in the way towards success. He wasconfident and knew key points about diamond industrywhich is most important component of his business. Hebelieves 'luck favours the brave'. He started his incredible

Dhandha: How Gujaratis Do BusinessJitender Kumar

journey with just Rs.15 and worked for 19 hours a dayto make his life better. He always wanted to adopt andlearn new things and spent his initial days in learningthe art of cutting the diamonds. He strongly believedthat only hard work, practical approach and the inbornsense of business can make him a successfulbusinessman. After crossing many hurdles, he becamecountry's biggest diamond merchant. Bhimjibhai notonly followed his dream, but also helped his brotherto get settled.

The second story "THE CIRCLE OF LIFE" refers toMohanbhai Patel (leading producer of collapsible tubesin the world). The story discussed about one whoexperimented with a new machine tool for producingophthalmic nozzle tubes (used for packing eye ointment)with aluminium (usually tin is used all over the world).He tried not for twice or thrice but about 30 times touse aluminium. It shows dedication, determination andthe never giving up attitude. He believes that workshould be done not just at 96 or 97 percent but at 100percent. Mohanbhai worked for Tata Company atMumbai before establishinig his business. The booknarrates how busy business schedule insisted him fornot visiting home for weeks, take rest for only 3 hoursa day etc. It shows dedication of Gujarati's for thebusiness and the quality of hard work with huge patience.The determination to establish the best in the world isreally inspiring. The entire family worked as a team andtheir real risk taking ability made their dream true. Itreflects the supportive nature of the family.

The third story "MOTELIER BECOMES MAYOR" isabout Dalpatbhai Patel who studied in US, and graduallybecame the first motelier in the region. Like many others,he came to US and experienced many ups and downs,but with time all difficulties were healed up. He hada friend cum motivator, Maganbhai who alwayssupported Dalpatbhai and helped him in every intricatecircumstances of life. Their partnership proved to be

Shobha Bondre (2013). Dhandha: How Gujaratis Do Business. Random House Publishers India PrivateLimited, Price Rs. 199, Pages 284, ISBN: 9788184004243.

Jitender Kumar

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a great success. They are practical and calculative aboutthings. Neeta Patel, wife of Dalpatbhai Patel proved hercapabilities regarding business by managing the motels.It narrates that the Gujarati woman is not less than theman in any way. This story is not just about the successof a businessman but about the person, who alwayswas considerate towards people and helped others.Because of these qualities he was selected as the mayorin US. The chapter shows how one person managed tworesponsibilities at a time and also showed the qualitiesof a successful entrepreneur.

The fourth story, "LIFE OF A SALESMAN" is aboutJaydev Patel. The story describes a Gujaratibusinessman's journey towards success and how hestruggled in his initial days and ultimately got thestatus of the Top Agent out of 9000 agents of New YorkLife Insurance. He started his career as a teacher andthen chemist and finally ended with that of an Insuranceagent. His talents to sell policies are unbelievable andpraiseworthy. Due to his implausible marketing skills,he sold $2.5billion worth of policies that was a greatsuccess and made a history. But success did not cometo his life immediately; sometimes he was not able tosell even a single policy. But his patience did not lethim down and his wife always motivated him. She didnot lose her patience even when Jaydev lost his job.Jaydev Patel believed that his relationship with hisclients is never limited to a professional level, ratherit was always an emotional involvement. He adoptednew techniques to sell his policies. The great exampleof his marketing skills is that he sold policy to theattendant who fills gas in his car at service stations.Selling process took long time but he did. He remaineddown to earth and his emotions are always attached tohis schools, family values and his culture. As a socialworker, he renovated three schools in his village.

The last story "NOT ONLY POTELS" revolves arounda couple Hashu and Hersha Shah. Like others, they alsohad a dream of achieving reputable position and cameto Harris Berg. Both of them worked tirelessly to fulfilltheir dream. They did not have any money to begin butthey had sharp intellect, will power and great capacityfor hard work. They started with a small motel of 11rooms and they pursued their dream to be bigger andtoday, they are the owners of over 100 hotels havingabout 11000 rooms. They provide employment to 650people and also contribute to social service organisations.

During their hectic schedule they did not forget to instillsound values in their children. Jay and Neil, both arehighly qualified. With their business skills andinnovative ideas, Jay and Neil took the business to newheights. The role of Hersha Shah was remarkable, asshe led a pampered childhood but she worked hard andfaced challenges. Behind every success story there is adark face; this story also captures hurdles like recession,robberies, disaster and flood. But they never took theirstep back. The real businessman is one who overcomesall the difficulties and hard times and converts theminto never ending success.

The concluding section shed light on the lives of mostof the successful people which reflects that there is nosingle mantra that causes success. Rather it results froma combination of vision, passion, perseverance,enthusiasm, willingness to learn from failure andunending capacity for hard work. Reading the bookDhandha is quiet interesting and is a fascinating bookfor the upcoming entrepreneurs. The book citesinnumerable instances about human behavior and makesus learn lessons of humanity. The common threadrunning through each of these stories is the incredibleamount of hard work, preservence and patience. Despiteof their conservative backgrounds, they are the examplesof working in unfamiliar land, often doing double shiftsto raise the capital and taking risk. The contribution oftheir families are nicely captured in the book. Thegenerosity of Gujarati businessmen and their abilityto remain rooted to their origins as narrated in the bookis commendable.

Some parts of the book needs more clarification. Thoughthe book covers good success stories, putting all energyin earning money without taking care of their family,society and friends reflects money-money culture whichmay not be correct.

Jitender Kumar is presently working as an AssistantProfessor in Finance at Department of ManagementStudies, Deenbandhu Chhotu Ram University of Science& Technology, Murthal, Sonipat, Haryana. He earned hisPhD in 2012 from Haryana School of Business, GuruJambheshwar University of Science and Technology, Hisar(Haryana). He has attended more than 10 conferences/seminars at national and international level and has morethan 10 research papers published in reputed Journals.He may be contacted at jitenderkumar.mba @dcrustm.org.

Jitender Kumar

Final Vol. 4 Issue 4 - IIM Indore

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