The word Management as defined in the dictionary means the process of dealing and coordinating with people. Management is a never-ending loop that begins when one gets up in the morning and ends when one sets the alarm for the next day and goes to sleep.
Management is always conceptualized as a fancy degree from a Business school and jargons like Presentations, Entrepreneurship, SWOT, ROI, etc. Management is inevitably present and significant in all these fields, but what we often forget is that management is applicable in all walks of life. It covers all facets of our lives. We ignore this fact because we have been so used to doing these roles that we have forgotten about the management nature. Even a trip to Goa with friends or relatives requires proper planning so to effectively manage one’s schedule for an enriching experience.
If we deep dive into our daily life schedule, I see my mother implementing all my MBA lessons in some way and the best part is though those decisions or acts of her do not bring any life-changing decisions but are pivotal for the smooth functioning of the house.
The duties of a homemaker are frequently looked down upon, but as we look closely, we can see that becoming a homemaker demands immense management skills. One of the most difficult examples of management is managing an entire family, taking care of everyone’s special needs, settling petty conflicts among children, maintaining the bonds intact, ensuring food is prepared on time. All this might sound so simple when we compare it to the life of an MBA graduate but it is equally challenging and complex.
If we draw an analogy between the life of a manager and a homemaker, it is quite indistinguishable. The only difference is the nature of the work they both execute. Just like in an organization, A manager is the one responsible for streamlining the tasks, planning things ahead of time so that the needs of the clients are fulfilled on time, and addressing the grievances of its employees. In the same fashion, Homemakers must plan for the whole family, predict future challenges, multitask and make the most use of their resources, and be armed with plans for any last-minute hiccups.
Let us take a few examples where we see homemakers implementing various concepts of MBA.
Before buying any vegetable, she does a SWOT analysis for it and checks for if it is the best available product in the market.
She keeps a close record of all house expenses and makes sure every expense is recorded and gets tallied with the money she has in hand. In some or the other way, she exhibits great accounting skills.
She doesn’t have a degree but yes she is a perfect manager and a successful leader.
About the Author Sakshi Poddar a Computer Science Engineer by qualification is now pursuing MBA(Analytics from IIM Kashipur. She is a part of various student bodies like the Media and Public Relations Committee and Admission Support Body. She is an IT professional with 2 years of experience in Hewlett Packard Enterprise. She loves traveling and dancing. You can connect with her on LinkedIn
There are many B-Schools to provide you with the Knowledge of Management but is that enough? Is knowing it all enough? I believe it’s not. To be a successful manager you need to possess the art of applying the right knowledge (the craft), at the right time (the vision) and most essentially, delivering efficiently to the right people (the communication). Books and professor’s knowledge can tell you what different tools and frameworks you can use but which to apply where needs an understanding so deep it will be a tragedy to not call it an art.
A good manager must also have imagination and the audacity to redesign their organisations or the way they work, just as an artist needs vision, and a strong commitment to realise them.
One may argue about the new and improving scientific methods being taught to and applied by the up-and-coming managers for better decision making, or about those skills to derive unexpected success by making probable failure surrender to competence and nerve. But Management has always been more than that. Not all great students have been great managers, and not all great managers have started strong. It takes more than just the technical skills and intuition to be a good manager.
To be a good business manager, one needs to perfect their skills in dealing with people and express themselves verbally, just as an artist needs to master his craft.
Moreover, just like the art has no right or wrong similarly the managerial decisions can’t be labelled correct or incorrect. In fact, in management failures can lead to new opportunities. There is no perfect formula for success.
Therefore, I strongly believe that Management is an Art and the artist needs to keep on practicing the art to achieve the epitome of success in the career.
About the Author: Dr. Ankita Gabhane, Dentist is pursuing MBA from IIM Kashipur. She is an active member of different student bodies like the Cultural Committee and Admissions support body. You can connect with her on LinkedIn.
“All our dreams can come true if we have the courage to pursue them.” – Walt Disney
As per the above saying, anyone can become an entrepreneur who understands that entrepreneurship is a very long and arduous ordeal. MBA is also considered a gateway for achieving the entrepreneur dream. Every year, thousands of students take the CAT exam in the hopes of getting into a prestigious business school and taking the most sought-after course, the MBA. These students strive hard to gain admission to a prestigious institute such as IIM, with the hope of a better future and the drive to excel. Out of thousands of applicants, only a few hundred are admitted into an IIM. Some students hope to obtain a high-paying job after enrolling in an IIM, while others seek managerial training and an environment that will allow them to pursue their dream of becoming an entrepreneur. For those who want to start their own business and embark on an entrepreneurial adventure, IIM Kashipur is the place to be.
Among all the newer IIMs, IIM Kashipur is emerging as a hub for entrepreneurial growth. The most important aspect for becoming an entrepreneur is the requirement of a unique and novel idea that demands the necessity for innovative thinking. Understanding this requirement IIM Kashipur serves as a spoke in the DIC (Design Innovation Center) community which is involved in building the thought of entrepreneurship in the young inquisitive minds. Help-Himalayan education learning program, Hum- Himalayan upliftment movement, Hill- Himalayan innovation of land to the laboratory are the innovative outreach programs introduced to enhance the culture of innovation, design thinking, and creative problem solving among the community by disseminating the knowledge in every sphere of the society.
Further, IIM Kashipur is assisting future entrepreneurs by adopting an academic program to assist future start-ups, as well as launching projects such FIED by the Entrepreneurial cell of IIM Kashipur. The Foundation for Innovation and Entrepreneurship Development (FIED) is a project aimed at developing and improving India’s entrepreneurial ecosystem. FIED is expected to incubate India’s most promising start-ups in the areas of tourism and hospitality, agriculture, art and craft, and education with the help of the Ministry of Agriculture, the Department of Science and Technology, the Government of Uttarakhand, and other supporting partners. FIED operates with the intention of being the leading incubator by 2025, with the goal of establishing India as a hotspot for entrepreneurship research, growth, and training, as well as assisting start-ups with funding and comprehensive mentoring.
FIED has successfully incubated 150+ ventures, has engaged 500+ entrepreneurs, raised 50 crores of funding, and has established a network of 100+ investors setting a stage for the budding entrepreneurs to learn and establish their dreams. It has also started two new ventures RKVY – RAFTAAR, and Drishti to promote the start-up culture in the young minds of the student fraternity. With the immense success of the very first program it undertook, RKVY RAFTAAR, FIED had a very successful start-up year. More than 350 applicants from across the country applied for the program, of which only 37 start-ups were chosen at the IIM Kashipur Campus for the two-month training program. Ultimately, 22 start-ups, up to 25 lakhs, obtained final funding from the Ministry of Agriculture.
RKVY – RAFTAAR: RKVY Raftaar – There are two programs offered to start-ups under RKVY Raftaar – Sahas and Saksham, which provide an opportunity to receive funding, mentoring & help for the launch and support of commercial products.
SAHAS: Sahas is mainly an Agripreneurship orientation program for startups at the pre-seed stage. The start-ups which are in the ideation stage and have their focus areas concentrated in increasing the efficiency of agriculture can apply to this program. The start-ups have the opportunity to receive 5 lakhs grant-in-aid after the successful completion of this program. The trainees who are selected for this program receive a stipend of Rs 10,000 for a period of two months. The focus areas of this program include – Sustainable inputs, Animal husbandry, Innovative food technology, Supply chain technology, Smart agriculture, Agri Fintech, Agri Biotech, Soil, water & weather technology, Farm mechanization, post-harvest technology, Fisheries, Farm fresh retail, Urban/vertical farming, ICT/IOT in agriculture.
SAKSHAM: Saksham is mainly an Agripreneurship incubation program for start-ups at the seed stage. The start-ups with at least a minimum viable product/ prototype based on innovative solutions in Agri and allied sectors. The start-ups have the opportunity to receive grant-in-aid up to Rs 25 lakh after the successful completion of the program. The start-ups would also receive additional help and mentoring for the successful commercial launch of the program. The program offerings and focus areas of the program are the same as that of Sahas initiative.
DRISHTI: Drishti is a start-up and incubator program by FIED for start-ups working in Edutech, Foodtech, e-commerce, and food safety. The initiative is mainly to mentor and supports the start-ups in the successful launch of the commercial products. The start-ups would also get an opportunity to connect with various investors and partners where they would be guided by industry experts on various growth strategies. The start-ups can avail of seed funding as well as an IIM certificate after successful completion of the program.
FIED of IIM Kashipur not only imparts the zest to achieve and follow up their dreams of becoming an entrepreneur in the minds of students but also helps the entire community to nurture and foster the start-up culture. With the DIC and FIED, IIM Kashipur never fails to astound us with its steps and ventures in sculpting an entrepreneur to serve the future community.
About the author:
Deshmaa R T who is a Biotechnology engineer by qualification is currently pursuing MBA (Analytics) from IIM Kashipur. She is a part of various student bodies like Media and Public relations committee, Quest – The Quiz club and Team Insite – Admissions Support Body. You can connect with her on LinkedIn.
PPOs are a major aspect for B-School students in securing a qualified and exclusive offer from companies that they wish to work for in the future. The idea to convert your Summer Internship into a full-fledged Placement Offer is not easy but not impossible too. This article provides a better glimpse of what one needs to keep in mind while looking to secure a PPO.
Agrigator, which is a seed-funded Agri-Tech Startup, is involved in Supply Chain and Logistics stream for providing a B2B Marketplace between the Producers and the Buyers. It was duly catering to HORECA outlets (Hotels, Restaurants, etc.) and FPIs by transporting food grains directly from Farmers and related sources, leading to a reduction in transaction costs, time, efforts, and simplifying the operations of such an unorganized system.
Keeping yourself in such a position, there are a few things that you can follow to slowly chart yourself and the learnings you receive in due course. Firstly, it is important to completely familiarize yourself with the ins and outs of the concerned organization and the sector that it functions in. Usual ways include following Annual Reports, Sector-Specific News from verified sources, Online Government Resources and Databases, and interaction with Industry Experts and the employees of the organization themselves. This will build up a robust base for you to understand your line of work for your project
Next, you must continue to interact with your assigned mentor or individuals who work in the same fields/organization to also understand the core competency, relative competition, domain-specific business strategies, and business models. This will ensure you are now settled enough to understand the assigned problem statement for the project and the outcomes/metrics that will measure your performance for the same.
Post this, it is time to directly jump into your project and use your acquired knowledge and resources to design a flowchart of your activities to arrive at a solution. This will involve a preliminary plan to proceed, important parameters to focus upon, following up on previously devised industrial practices, framework analysis, and carefully constructed notes on emerging trends and developments in the industrial market.
To make things easier, communicate with various stakeholders and experts that provide a concise view on the strategic feasibility, implementation, and impacts that a step of approach creates to resolve different issues. Gradually, clarity evolves to choose the optimal way to proceed that provides or maximizes the utility of the defined outcome. Typical meetings or regular brainstorming of ideas can greatly reduce doubts and little hiccups that you encounter on the way. Therefore, don’t rush to obtaining a solution without confirmation and thorough research of facts to avoid last-minute crisis. These little things go a long way to ensure that your final presentation is well received by the majority of stakeholders that reflects the ways and values the company aligns itself to.
Last but not the least, be prepared with anticipated questions and doubts that you are likely to face regarding the work you have done, outcomes achieved and the notes on the Final Presentation you will present to the concerned officials. It is no wonder that your Presentation skills should be excellent with the concise textual matter but supporting visual reports and facts that enforce your views and looks to the proposed solutions concerning various scenarios. Keep a cool mind and be confident. The rest is on your meticulous way to manage your time and efforts to the fullest.
Getting a PPO depends not only on how well you did, but how well you reflect your skills and knowledge to be part of the company! About the Author: Som Samantray, a Chemical Engineer by qualification has pursued MBA (Marketing and Data Analytics) from IIM Kashipur. He has been part of various student bodies like the Econs-Economics Club and TEDxIIMKashipur. He is a fresher and is an ardent reader of books and novels and a blogger. You can connect with him on LinkedIn.
Being a civil engineer who pursued an MBA in Operations Management, followed by enrollment as an FPM student in the Operations Management area, I had always classified myself as a person who was more (or only) inclined towards quantitative research. I always recognized and was fascinated by the power of numbers.
Then, in January 2018, We, a group of 15 research students, entered the qualitative research methods class. Some of us were excited about the qualitative aspect of research, and some were absolutely disinterested; I am ashamed to admit that I, then, belonged to the second category. I later realized that I had been keeping a blind eye towards the ‘dark’ aspect of numbers. I, in no way, wish to belittle the quantitative – orientation of research, but qualitative research is beautiful in its own way. The qualitative research articles, if well written, provide a vivid image of the phenomenon that leads the audience to discover deep meanings of human experiences.
I now understand that a good researcher should learn about both paradigms. The qualitative and quantitative approaches have distinct and complementary strengths. Both come with a different set of challenges and require different skills to overcome those challenges. For example, as a qualitative researcher, I can always adopt a grounded perspective where I do not need to identify the dependent and independent, nor do I necessarily need to propose hypotheses. My primary responsibility as a qualitative researcher is to capture individuals’ hidden meanings and explore the phenomena’ possibilities, but it is easier said than done. The experience is like deep-sea diving; we know we are looking for something, but we do not actually know what we are looking for.
During this journey, I came to realize the beauty and power of text. Sometimes I can feel the ‘dryness’ associated with the numbers in quantitative articles because numbers in no way explain the human feelings that should have been captured. I now recognize and appreciate the mental and emotional strength of qualitative researchers because I believe that risks and concerns are more significant in qualitative research, mainly because of the researcher’s level of involvement with the research process and the participants.
If I am asked to clarify my stand regarding which type of researcher I would classify myself, I will find myself in a great dilemma. I would instead argue that one should appreciate the different values which are drawn out of the two different paradigms. A researcher who has familiarized himself with both the frameworks may develop a more profound intellectual capability. Reflecting on my learnings over the past years, I can conclude that I have developed more patience, and my inclination towards sheer objectivity has reduced. I have indeed developed slight but noticeable acceptance towards subjectivity and abstraction. I have grown to realize that there will always be things that can never be measured or analyzed quantitatively.
Today, almost three years later, my qualitative exposure surely helps me reflect on the quantitative work better. About the author:
Taab Ahmad Samad is currently a Ph.D. Student (Operations Management) from IIM Kashipur. He is currently working in the field of crowdsourced logistics. You can connect with him on LinkedIn.
“Reach high, for stars lie hidden in you. Dream deep, for every dream precedes the goal.” – Rabindranath Tagore
Let’s start with the journey of a student who gets admission in a prestigious institute like an IIM after persistent preparation and trading off career opportunities. With dreams of flying higher and higher, this student has a feeling of great achievement and an equivalent responsibility to do justice with this success. He sees a glorifying career ahead in the upcoming two years and is highly enthusiastic about making the most of his MBA life. But how does he paint the canvas of these two years? Which hues does he select? This entirely depends on his strong will and determination towards learning clubbed with the opportunities and motivation offered by his institute.
IIM Kashipur takes pride in playing a phenomenal role in the life of this student who enters the institute with the thirst for knowledge and the zeal to realise his dreams. During two years of post graduation, the institute instils in the students the feeling of “never settling down”. One of the integral parts of the culture is motivating the students to participate in case study competitions. IIM Kashipur faculties, the Placement Committee and Team Corpus leave no stones unturned to cultivate this culture of corporate and B-school competitions in the current and upcoming batches. They dedicatedly work round the year in this direction to bring the institute to unfathomable heights.
Achieving this milestone, IIM Kashipur has joined the league of other older prestigious institutions like IIFT, IIM Ahmedabad, IIM Bangalore and IIM Kozhikode that appeared in the top 5 ranks. Not only this, IIM Kashipur has become the only 2nd generation IIM to have made its place in the top 10 ranks.
This remarkable success is a reward for the diligence and determination of the students. Each and every honest participation and winning has contributed to the achievement. Throughout the year, students of both the years have meticulously planned for the competition season burning the midnight oil in the quest for their holistic development. Team Corpus created Corpus Community – a student group that dedicatedly works together to discuss and ace in the case study competitions. This community boosts collaboration among the students and with the resources as well as mentorship provided by them, it helps in optimising the hard work of all the participants. This creates a competitive environment and acts as a continuous source of motivation for the students. Also, viewing it from the other lens, Dare2Compete provides an excellent platform to the students to hone their skills in various domains by giving them a chance to participate in real-life case study competitions floated by eminent institutes and reputed companies. Hence, there is an air of unstoppable learning and fuelling the competitive spirit surrounding the student community.
The enthusiasm of the students can be reflected in the level of participation in a large number of competitions ranging from B-school to corporate. With these sincere initiatives, IIM Kashipur has got 8 National Winners, 5 National Runners up, 4 National 2nd Runners up, 24 National Finalists and 12 Semi-Finalists throughout the competition season who have bagged positions in reputed competitions like L’Oréal Sustainability Challenge, Xiaomi Mi Summit 2.0, Virtusa Business Cipher Challenge, CarEasy Spark, TVS Credit Analytics challenge, and many more. These competitions encompass different domains of management and thereby help the students to develop various skills like problem-solving, teamwork, creative thinking, fact-finding, and mental agility, especially relevant for employability.
IIM Kashipur is soon going to complete its 10 glorious years of establishment. This achievement has added to the magnificence of the celebration and has entrusted bigger responsibilities upon the fraternity.
This recognition is just the beginning of an extraordinary journey that will go on and on adding colourful feathers to the hat of laurels!
What we are going to read about will be sort of a story (Fairy Tale! Nothing short of that!) of ‘The Spring in the North’! – The Spring rejoiced by young entrepreneurs, startup owners, industry experts, faculties, college and school children from across the country. Yes, we are talking about Uttishtha – The Annual Entrepreneurship Summit of IIM Kashipur – The Spring of Entrepreneurship!
Here is the story by Team E-Cell about how they managed to pull off the event amidst difficulties posed by the pandemic!
Uttishtha is the much-awaited Entrepreneurship Summit which has an objective of revolutionizing how people view entrepreneurship and create an indelible impact in the entire startup ecosystem of the country and beyond!
The restrictions imposed on us due to COVID-19 and taking into consideration the safety of all the stakeholders of the event, we were forced to organize an event of such high magnitude on a virtual platform, which in turn meant restructuring of the entire Summit.
We, the entire E-Cell Team, decided to break the entire summit into small tasks and decided to go about the event in a phased manner. Subsequently we divided the entire summit into 3 phases, namely, the planning stage, the preparation stage and the summit!
So, we divided the team according to the preferences and expertise of the members and set off on our Voyage of “Making Entrepreneurship Bloom”!
The Planning Stage:
We all knew that Uttishtha’21 was going to be a completely new experience for all the stakeholders and we precisely knew that to create maximum value for everyone we had to restructure the entire summit upside down and planning or ‘Out of the Box’ sessions, we used to call them, were going to be the most important element of the entire summit!
In Uttishtha’21, as we were revamping almost everything, we decided to go beyond the mainstream in everything we were doing! While deciding the theme of the event, our thought process was to keep a theme that portrayed new beginnings, asked people to get rid of their winter blues (COVID blues!) and focus on embarking on the journey of 5R, namely, Rejuvenation, Regrowth, Resurrection, Renewal and Regrowth! So, with a decision to keep the whole Summit light and bright, we decided to keep the Theme – “Spring”, or the “Spring of Entrepreneurship”, more holistically!
We believe, the first major challenge that came towards our way in the planning stage was in the form of event crafting and flow mapping! We knew, that events of last year needed a major revamp, if we were to create the Summit engaging and create value for the people involved! Last year Uttishtha, had events like Startup Exhibitions, Entrepreneurship Bootcamp and Expo, which could not be conducted online given the nature of the events. So, we needed to come up with events which could fill the space of these events and so we started brainstorming on the needs and wants of all the stakeholders and subsequently came up with new events such as Not Clubhouse – focused panel discussion sessions, firechat conversation – a dialogue between experts from completely different areas, co-founder dating – a virtual internship fair for students across the country, among others! The molding of events according to the theme of the summit and requirements of the stakeholder involved, was a fun-filled experience!
We believe, ‘Uttishtha’ is an epitome of collaborative effort and it sees contribution and cooperation from each and every member of the IIM Kashipur community. After the planning of events and identifying the work areas, it was very important for us to gather support from the community and form an enthusiastic team comprising people who were motivated enough to work on the event diligently. Given the lack of physical interaction with the people involved, in a virtual setting, it was a bit difficult to find the real potential of the applicants. But after due process, we were lucky enough to have found a team, where members were on their toes to make the best out of the opportunity provided. Given the virtual nature of the event, the division of the functional teams had to be revamped where traditional functional teams such as arrangement teams, People management team and promotions team among others had to be dropped off the chart and made way for new teams such as virtual platform team, Audience engagement team and social media team among others.
The Preparation Stage:
Uttishtha’21 being virtual posed a lot of challenges in the execution of ideas, but along with the challenges involved, it also provided us with a lot of opportunities with respect to the extended reach of the event.
The main challenge that the team had to endure while executing the plans was the possibility of miscommunication at times due to lack of physical interaction leading to redundancy of work. Also, too much follow up on the tasks slowed down the process of execution of plans. Although these were challenges which were natural to come in a virtual setting, the dedicated and mindful work of different functional teams ensured smooth operations throughout.
The teams working on onboarding industry experts, dignitaries, speakers, startup founders, school administrators and students had a large pool of people to target given that there was no need to look after travel and lodging arrangements of the guests and with the click of a button experts could join the sessions. This not only allowed us to reach out to people beyond boundaries, but also opened wide range of opportunities for the teams to reach out to people of high stature. One approach that stand out during the whole process was the use of quirky tweet threads on twitter to reach out to people. The choice of this unconventional way led to us having onboarded a lot of good speakers and industry experts.
One of the tasks, that took substantial amount of our time was choosing an ideal virtual platform for the Summit. It proved to be an exhaustive process, given we had certain criteria such as neat user interface (UI), easy accessibility and usability, and comprehensiveness with respect to functions among others in our mind. We tried out nearly 12 virtual event platforms before narrowing down on “Airmeet” for conducting the Summit, which we believe served our purpose well.
The digital media team had a humongous task in hand, given they were responsible for creating all the buzz around the event and getting the word across boundaries. They came up with innovative ideas to promote the event to the best of their abilities. With the support from Media and Public Relations Committee (MPRC), the team was able to forge meaningful partnerships with various media partners such as Amar Ujala, Campus Beat among others which helped the team in multi-channel promotions of the event. The digital marketing team came up with numerous creatives and took advantage of all social media opportunities (paid as well as unpaid) to promote the Summit.
The Summit (5th March – 7th March):
Team Uttishtha Meet! Date (4 March, 2021), Time: 10:00 PM! Each and every member from the entire team was there. We all had our cameras switched on! We all were from different functional teams, we all had completely different tasks assigned, but one thing common in all of us was the satisfaction we had with the level of preparedness for the summit that was going to commence next day morning. We all were pumped up and were fully motivated to make the summit a memorable one for everyone and enjoy the three-day summit to the best of our abilities.
Finally, the Spring of Entrepreneurship was here! The first day started off as a warm breeze with esteemed speakers showering their wisdom on the attendees. The first day saw the presence of dignitaries like Mr. Arun Pandey (Chairman and MD, Rhiti Sports), Subhadeep Sanyal (managing partner, Omnivore) among others. We expected that getting the speakers and attendees accustomed to a fairly new platform like ‘Airmeet’ and ensuring the smooth internet connectivity throughout the sessions were something which might play spoilsport during the events, but we are proud of our Techno-savvy team which kept technical issues at bay throughout the Summit.
The Second and third day were going to be crucial days of the event given we had events lined up in those two days which overlapped too, the risk we had to take because of the limited time we had and plethora of events planned out! We had Clear Harvey workshop for school students, Udaan – a national level B-Plan competition, speaker sessions, panel discussions with school administrators planned out, which led to many of them overlapping. But unconsciously, the bond in the entire team and the culture passed on by our seniors helped us sail through roadblocks smoothly and conduct the events in a synchronous manner. It was great to see people taking ownership for their responsibilities and coming forward to take additional responsibilities! Last minute cancellations of few of the experts was something we always had in our mind, and we are happy that we had backups and plans to deal with those situations!
Overall, we can say that Uttishtha’21 was a roller coaster ride for each and every member of the team. Each turn had some challenge for us and we are proud and happy that we had our experienced seniors (our partners, supporters and mentors), who were not only there to show us the path but were there to handhold us through the trouble times. The support from the entire IIM Kashipur community helped us in making the event a national success!
Uttishtha’21 is indeed an epitome of collaborative effort!
As the entire world went into the first-ever lockdown of the century, all except the medical staff were confined to their homes. This ensured that everyone stays safe, but every sector of business went into a state of despicableness.
Reason? SUPPLY CHAIN DISRUPTION!
Such is the power of supply chain network especially in this era of Globalization! Any wrong decision can lead to a world full of chaos and violence.
Fortunately for us, the world leaders ensured there was enough supply of essentials required for survival. And now that Covid-19 vaccine shots are being administered, the hopes of Supply chain normalcy seem to be cropping up.
However, one major event that took place towards the fag end of 2020 that could potentially change the way International trade and supply chain worked until now was the U.S. Elections.
As I write this article, Joe Biden is the president-elect and what could it mean to the Supply chain?
During the Presidential debate, Joe Biden emphasized negotiating with the Pacific nations to restructure the international trading rules in order to reduce dependence on China. This would help other Asian & Arabian Countries to improve their economy as they would have the liberty to export more with limited competition from China.
Joe Biden is particularly wanting to support the United States-Mexico-Canada Agreement (USMCA) so that the United Nations’ powers in terms of framing laws for international Supply Chain & International Trade are strengthened. The manufacturing sector in this region will see a boost as North American Countries are given incentives for Automobile manufacturing, especially that of Trucks & cars. With strong agricultural laws, the farmers will get access to the markets in all three countries.
Manufacturers in the US who offshore production and sell the products or services back in the US, have to pay a heart wrenching cumulative tax of 30.8%, to solve this issue. Biden’s policy focuses on local manufacturing, he promised to direct $400 billion in federal procurement towards manufacturing and emphasized on Made in America label.
The federal department many times in the past has claimed that manufacturing certain products is not feasible in America and that has given a huge market to other countries. Biden, while addressing this point, stressed using IT Technology to publish it on a specific website built for the same purpose. Once such requirements are posted on this website, tenders can try their hands on producing such products thus getting eligible for the 10% advance tax credit policy.
During almost all his campaign rallies, Biden mentioned the need to directly support small manufacturers, especially those headed by women, this would ensure the creation of jobs and keep the national per capita income increasing. Biden said he would direct $300 billion towards R&D of electric vehicle technology, 5G, Artificial Intelligence – this ensures procurement of parts required for the same and to ensure smooth supply chain, he promised to amend Custom laws and make it easier to buy.
He said & I quote “While medical supplies and equipment are our most pressing and urgent needs, US supply chain risks are not limited to these items. The US needs to close supply chain vulnerabilities across a range of critical products on which the US is dangerously dependent on foreign suppliers.” This prepares the U.S to be ready for a probable 2nd wave of Covid-19 & any kind of crisis in the future.
Biden spoke about how supply chains laws and the federal Government’s purchasing power can ensure smooth manufacturing of critical parts used in the United States’ defence systems. In this way, not just the end product but also the supply chain of manufacturers receives a boost. Biden mentioned the need to be environment friendly and has pledged to utilize the $500 Billion federal government spends on Zero Emission & 100% clean energy vehicles. This would again create more manufacturing & thus more jobs & thus a bigger growth in the US economy. He also mentioned he would bring in stricter laws that would govern the readiness of environment-friendly technologies in all infrastructure projects, thus, giving opportunities for renewable energy innovation & thus impacting supply chain networks.
All in all, most of Biden’s policies focus on reducing the dependence on China for products & supply chain services. This would only help America as they are moving towards becoming leaders in Mass production, Supply Chain services.
We’ll have to wait & watch how the American labour class reacts to this, since the labour costs are higher in America and the Chinese workforce is almost 5 times larger than in the U.S, the next 4 years is expected to witness intense geopolitical tensions. All the countries that are in Joe Biden’s good books might receive some goodies. In the Post Covid-19 era, America might overpower China on these lines & India must continue to maintain cordial relations with them by being diplomatic on issues & at the same time strive hard to increase in-house production of goods & services through schemes like Atmanirbhar Bharat.
A career in MBA Finance is one of the lucrative and sought-after opportunities in the business world. But the irony in India is that when we go back into a student’s education journey, commerce subject which deals with all the basic nuances of finance & accounting is still not preferred as the desired subject as compared with science stream.
We often tend to confuse Finance with just accounting and calculations. But, the application of real finance is not just about numbers and calculations. It’s much more beyond that. It requires you to have:
Strong calculative abilities of Commerce
Analytical thinking process of Science
And behavioral understanding of Humanities
This third aspect of finance which is been ignored for decades but recently is becoming one of the hot topics for researchers. Due to the complexity and irrationality of human behaviour, it becomes difficult to take this factor into consideration for organized analysis. But this factor builds up the basis of most of the previous innovations in finance. Behavioural finance is like salvation to mathematical finance just like Friction is to Newton’s forces. For example, the birth of one of the major financial instruments in history is Insurance which is a result of irrational human behaviour explained by Kahneman and Tversky in terms of Prospect Theory.
When the fear of loss and uncertainties prevail, insurances emerged as a strong instrument for risk management. Thus, encouraging people to take risks and invest, leading to an increase in the liquidity of markets. It clearly explains human behaviour in cases of profits and losses.
The Prospect Theory graph clearly depicts that when we lose Rs. 100, our pain would be much more in comparison to the happiness in gaining Rs. 100. Thus, the magnitude of happiness and pain doesn’t vary linearly with the amount of money.
On the basis of this human behaviour, insurance policies proved to be very successful in monetizing the irrationality of human behaviour. There are various other such phenomena in human behaviour like social contagion, cognitive dissonance, anchoring, overconfidence, etc. which answer the events like the randomness of the stock market, people’s decisions and other such cases of the finance world.
Out of the 74% literacy rate in India, only 24% have finance literacy which is one of the major factors responsible for the economy of any nation. When people lack the ability to manage their own personal finances, how can we expect a nation to have a strong economy? Many people are still unaware of the power of compounding, time value of money, credit opportunities, etc. to make use of it for their improvement of financial status. Thus, it becomes very necessary for financial managers, strategists, and policymakers to discover innovative ways to bridge this gap. It is high time that we move away from the narrow approaches of finance and introduce new frameworks in the correlation between accounting and behavioural finance which will include markets, people and their behaviour.
There lies a lot of opportunities in the domain of financial risk management using behavioural finance. Though the implication of this concept has various challenges due to randomness and complexity yet it can be accomplished when the researchers and corporate leaders will work together in the right direction. We are heading towards a more complex world where simple answers are not suitable anymore. We will have to develop an ecosystem to sustain and grow in future.
One can refer to works of researchers like Professor Robert Shiller, Daniel Crosby, Kahneman and Tversky, etc for more understanding on the subject and topic of behavioural finance. This is a potential field waiting to get explored to its core. A lot of new developments can be seen in this direction in the upcoming time.
Few lingering questions which every common investor has in his mind are how can the stock markets and the economy growth move in the opposite direction? Will the market crash due to poor economic growth anytime?
While the Covid-19 pandemic forced all economic activities to a total halt, pushing major economies into a recession, the markets around the world on the other hand had a mixed response showing a steep fall during the initial pandemic breakout and steadily recovering over time to race all-time highs in Indian and US exchanges.
The empirical analysis of the annual GDP growth rate and the historical market performance of leading stock exchange indices of major countries such as USA, Japan, China, and India respectively over the decade show little correlation between the growth of countries’ GDP and performance of stock markets.
Japan faced one of the worst decades of economic growth battling recession and unemployment having a maximum GDP growth rate of a mere 2% in the last decade. While Nikki_225, the benchmark index of the Tokyo Stock Exchange had lost more than 60% of its value over the decade, sharp falls in the index during this period was the result of external events such as Fukushima’s nuclear crisis and the European Sovereign Debt crisis in 2011. The rally in 2013 which surged more than 70% due to the weakening of Yen and expansive economic policy was short-lived as the market plunged by ~60% at the end of 2013 due to the weak GDP growth of China and quantitative easing of US Federal Reserve during the same period.
Though China’s economic growth declined gradually from 10% to 6% over the decade, it was still having the highest growth rate among the developing countries. The Shanghai composite index grew a mere 16% over the decade despite the country having the highest GDP growth among the major economies. The Chinese exchange majorly influenced by the domestic investors who were largely inexperienced and traded using borrowed capital persuaded by the Chinese state-owned media during the period of 2015, saw a bubble in the market with the index soaring more than 150% over the previous year despite the country having poor manufacturing and economic growth. However, the bubble was short-lived and consequently busted as it lost 40% of the value in the month of June and continue to fall subsequently due to the devaluation of Yen.
The turbulence of Chinese stock markets combined with slowing growth of China’s GDP, falling oil prices, and weakening of the Japanese Yen against the US dollar and Brexit event resulted in a global sell-out during the period of 2015–16 which impacted all major stock markets around the world including US and India.
Despite having low GDP growth of around 2% over the decade, US markets have continued to grow over where the leading indices such as Dow Jones Industrial average, S&P 500 and NASDAQ Composite have yielded returns of over 200% primarily driven by innovation and technology. FAANG companies due to the power of the platform model, network effects have had a compounded annual return of more than 20% individually over the decade. Markets also saw an emergence of new business models and sunshine sectors such as electric vehicles, e-commerce, AI & Cloud computing, alternative energy, OTT etc which continue to have positive investor sentiments.
Globalisation and foreign trade are also important factors to consider why the performance of the Indian stock markets has little correlation with economic growth as the manufacturing sector contributes only ~15% of total GDP compared to China and Japan which has ~ 30% and ~20% respectively. The major sectors such as IT, Pharma, Breweries and Distilleries, Precious Metals, Automobiles are export-oriented which relies on the US and the global economy. Sectors such as Refinery, Paint, Aviation are highly dependent on the price of crude oil as India is one of the major importers.
FII also has a significant factor to play in controlling the direction of the stock markets. Indian equities saw a record inflow of $23 Bn (Rs. 1.6 Lakh Crore) in 2020 as the global investors were optimistic about the strong economic recovery, vaccine progress and low mortality of Covid-19 in India compared to western countries. This liquidity provided by FII continues to drive the market sentiments forward leading the prices to soar all-time high across multiple sectors.
The performance of the stock markets does not rely only on the economic growth of the country. Other factors such as the nature of its constituents, the impact of FII, technology & innovation and global events can also impact the markets. Markets can be both forward-looking and reactive to economic events and will correct themselves in the event of any bubble during times of weak economic growth.