Recession.....What it is ?

What is recession?

This Story is about a man who once upon a time was selling Hotdogs by the roadside.
He was illiterate, so he never read newspapers.
He was hard of hearing, so he never listened to the radio.
His eyes were weak, so he never watched television.
But enthusiastically, he sold lots of hotdogs.
He was smart enough to offer some attractive schemes to increase his sales.
His sales and profit went up.
He ordered more a more raw material and buns and use to sale more.
He recruited few more supporting staff to serve more customers.
He started offering home deliveries.
Eventually he got himself a bigger and better stove.
As his business was growing, the son, who had recently graduated from College, joined his father.

Then something strange happened.

The son asked, "Dad, aren't you aware of the great recession that is coming our way?"
The father replied, "No, but tell me about it."
The son said, "The international situation is terrible. The domestic situation is even worse. We should be prepared for the coming bad times."
The man thought that since his son had been to college, read the papers, listened to the radio and watched TV.
He ought to know and his advice should not be taken lightly.
So the next day onwards, the father cut down the his raw material order and buns,
took down the colourful signboard,
removed all the special schemes he was offering to the customers and was no longer as enthusiastic.
He reduced his staff strength by giving layoffs.
Very soon, fewer and fewer people bothered to stop at his hotdog stand.
And his sales started coming down rapidly, same is the profit.
The father said to his son, "Son, you were right". "We are in the middle of a recession and crisis. I am glad you warned me ahead of time."


Moral of The Story: It's all in your MIND! And we actually FUEL this recession much more than we think we do!!!!!!!!!!!!


What can we take away from this story??
1. How many times we confuse intelligence with good judgment?
2. Choose your advisors carefully but use your own judgment
3. A person or an organization will survive forever, if they have the 5 Cs
* Character
* Commitment
* Conviction
* Courtesy
* Courage
The tragedy today is that there are many walking encyclopaedias that are living failures.
The More practical and appropriate views on this economic recession is:
"This is the time to reunite together for any small or a big organization,
this is the time to motivate and retain people which are the biggest asset,
this is the time to show more commitments to the customers,
this is the time show values of our company to the world,
and this is the time to stand by our Nation".

Lessons from Satyam

To start with, Satyam fiasco teaches everyone a lesson ,the hard way.
No one should resort to any kind of malpractices at any stage in his career.It keeps multiplying and eventually if not tomorrow ,the day after, truth will come out and that point the disclosure will bring more embarassment and shame.

Corporate Lesson:

1. The current regulatory dispensation focuses strongly, on what goes into making an independent director, but makes little effort to assess whether that person continues to remain independent, once he is on the board.

2. If, Satyam had to pay only a tenth of the price recommended by the promoters, to buy the two Maytas companies, one could make a cogent case, that, despite there being no obvious synergy between the two businesses, the shareholders would have benefited from a good opportunistic investment, at an attractive price.When faced with such grey situations, the appearance of opacity or inadequate due diligence can be avoided if shareholders had some way, to infer that directors have fulfilled their fiduciary duties.

3. As a fiduciary, independent directors should have the opportunity to meet with institutional investors to understand their views. How, after all does a director satisfy the demands of his role if he is unaware of the views of his shareholders? Although current regulations, correctly, would not permit the sharing of information between directors and select groups of shareholders, it does not, as far as I know, prevent shareholders from meeting directors and expressing their views on the company's strategy.

4. Shareholders on their part, have a right to know how their directors represent them.Details of dissenting views, in a board can convey useful information about the various options considered at a meeting.This would impose pressure on independent directors to be seen to be fulfilling their duty of loyalty rather than empathising with the top management.

5. It is not difficult for the regulators to bring the sunlight of transparency to board discussions, through a few changes in their disclosure guidelines as I have suggested above.

The possile solution: Hostile takeover.

1. I still see Satyam as a company that did business all these years amounting in at least 5000 crores if not more considering the number of Fortune 500 clients that they engaged with. Satyam's network covers 67 countries across six continents. The company employs 53,000 IT professionals across development centers in India, the United States, the United Kingdom, the United Arab Emirates, Canada, Hungary, Singapore, Malaysia, China, Japan, Egypt and Australia. It serves over 654 global companies, 185 of which are Fortune 500 corporations.

2. Given the above, I would prefer a big corporate house like Reliance or Birla which has good solid credibility behind it and which has little or no presence in the IT sector to take over Satyam and assure its customers and investors that they would clean up this mess soon and bring it back to where it was a few years ago. Satyam would be an excellent buy for the above considering its current market share price.

3. Now, this would help a customer who has signed a 7 year ERP/SAP deal with Satyam and is now halfway through it. The present fiasco would amount to huge losses to such customers. They would rather prefer the above so that their investors/shareholders are assured , the deal is re-negotiated and the project continues without much delay and could be completed in the timeframe.

4. Satyam is a also a good buy for offshore companies like Bearing Point PLC which do not have a ODC in India. India, being a booming market, with a legacy of good corporate governance, it makes more business sense for such offshore companies to set up a base here. Buying Satyam would make even more business sense given the clout of Satyam.

It is time

It is time the people of this country take over the country.
It is a shame that the minister says the coastal security is inadequate when he himself along with other ministers travel in a convoy of security cars surrounding him. It is a shame when he says look at the positive side ,the toll did not reach 5000 as was planned by the terrorists. The thing is we are not criticising ourselves adequately enough.In our country, the tendency is to cover the fuck ups and defeciencies in the system and be pompous of ourselves and move on. It is time we give the police similar sophisticated training and arms as possessed by NSG and the marine commandos. It is time to increase their number and give them reforms like their defence counterparts.It is time for a crisis management infrastructure to be in place in cities. Look at New york's 9/11 and the london blasts,the media there criticised the government , the intelligence and the security to such an extent that a report was sought and many of the above officials had to resign due to the relentless pressure. Astonishingly, as a result, the crisis management infrastructure and security was upgraded in no time. It is time we learn from them sooner than later.
In a TV interview, a former British secret service agent expressed surprise that India still does not have a stringent anti terror law in place.
It is time for the people of this country to take over the country.