How to find a B-school dean?

Well, I wish I knew but it's useful to know that two French B-schools have brought in heads from the university system. FT reports:

ESCP Europe has become the latest French business school to look to the university system for its next dean. History professor Edouard Husson, who for the past two years has been the Vice-Chancellor of the Universities of Paris, has been appointed dean of ESCP from September 1. ESCP, like HEC Paris, comes under the auspices of the Chamber of Commerce and Industry of Paris.

 

......In March 2013 another French business school, EMLyon, announced the appointment of meteorologist Philippe Courtier, director of the Ecole Nationale des Ponts et Chaussées (ENPC), the engineering school in Paris, as its next president (dean). He took up the position in July.

 

A history professor and a meteorologist as b-school deans- that's serious out-of-the-box thinking! European B-schools have also not hesitated to look outside academia: they have brought in people from industry. So did ISB in India when it appointed Ajit Rangnekar as dean. There's no need to be fixated with the idea that the head of a B-school has to be an academic and, of course, still less with the idea that it has to be an insider.

A good start is to advertise the position and advertise widely. The ad must mention that people of eminence are free to make nominations: the worst thing any search committee can do is to expect highly talented people to put in applications, complete with covering letters and CVs. ('I am a professor of Marketing with a creditable record of publications and exposure to consulting and I write to ask that I be considered for the post of Dean at......'.)

Tackling the growth slowdown

Some people think the global environment is mostly responsible for the slowdown; others think it is 'policy  paralysis' or high interest rates or some combination of domestic factors. The RBI's latest annual report quantifies the impact of interest rates and global factors. Surprisingly, a large chunk of the industrial slowdown is not explained by other.

So what is it? It could be just supply bottlenecks, such as coal, natural gas etc. If that is so, I argue in my ET column (Don't blame slowdown on RBI), then we should simply focus on these. Not worry about grand things such as FDI in retail or insurance or pension reform or even cutting the fiscal deficit.

Yes, the deficit needs to be reined in and fuel subsidies need to be tackled at some point. But the priority right now is boosting public investment in infrastructure. If you can't cut subsidies to find funds for these, you have the forthcoming 2G auction revenues and you might try some quick disinvestment. We need some different thinking for a change, public discourse of late betrays mental paralysis!

N J Nanporia

N J Nanporia, the legendary former editor of the Times of India and the Statesman, passed away recently. I did not see any mention of his passing in any  paper and got to know about it after seeing a tribute in BS by Sunanda K Datta-Ray, himself a former editor of the Statesman. Datta-Ray says he got to know from friends who had seen an insertion for the sale of Nanporia's art collection.

If I am not mistaken, Nanporia, better known to TOI readers as NJN (his column was titled, ''One point of view"), succeeded Frank Moraes and preceded Sham Lal, both legends in their own right. He was half-Japanese (Datta-Ray says he was born in Kobe). How he came to India one does not know but he brought to journalism an excellent grasp of foreign affairs and a command over the language and a style that would have flattered the Times of London.

NJN's finest hour was the Chinese attack on India in 1962. The Chinese army overran Indian positions in the North-East as well as in Ladakh and came within shooting distance of Assam. Nehru made a pathetic broadcast to the people of Assam about his inability to defend them. There was a huge evacuation at Tezpur along with the destruction of official papers and currency notes. NJN, who had forecast China's troop movements with uncanny accuracy until that moment, made bold to say that China would not enter Assam. He argued that China's intention in attacking India was not acquisition or expansion but the humiliation of India in the eyes of the world and especially of the non-aligned movement. It wanted to send out a message that it was numero uno in Asia. That objective had been achieved with the rout of the Indian army and, therefore, the Chinese would now withdraw.

Lo and behold! China announced a unilateral withdrawal in the eastern front to positions it had held before the war. Assam remained safe. Nehru and the rest of India heaved a sigh of relief. The TOI was so proud of its editor's analyses that it brought out the entire lot in a collection after the war. I have heard that the government was so perplexed by NJN's accurate analysis of the course of the war that it had kept him under surveillance for a while, thinking he must be a Chinese agent!

The immediate outcome was that Nehru developed great regard and affection for the TOI editor and NJN became a confidante and advisor of sorts. This close relationship had an unfortunate fall-out. Nehru had always been wary of what he called the "jute press" and its influence on public opinion ( TOI was owned by Dalmia and Jain and Indian Express by Goenka) and he kept tabs on TOI through NJN.

Now, for some reason, a certain friction developed in the relationship between Shanti Prasad Jain and NJN. In a fit of pique, NJN dashed off a letter to Nehru expressing concern over the state of affairs in Bennett, Coleman and Co, which published TOI and other publications. This gave Nehru just the opportunity he was looking for to oust the Jains from management control of the company and appoint government directors to run it. (This was done under the aegis of the Company Law Board).

Later, NJN was to express contrition for his action and he admitted that his apprehensions about SP Jain and suggestion of interference in editorial matters had been without foundation. (He did so in articles he wrote for the now defunct Indian Post,  published by the Singhanias from Mumbai).  He even wrote that Jain had great affection for his stable of publications - it was a different world from the one he had inhabited- and he rather enjoyed the company of his journalists and editors.

This could, of course, not compensate the Jain for the loss of control over the Times group. A few years later, it became known that control would shortly be restored to the Jains.  NJN's position was clearly untenable and he chose to leave the TOI and join the Statesman. (The Economic Times' first editor, PS Hariharan, was also seen to be aligned with the government; he too left to become PRO at the Asian Development Bank). 

Much later, when NJN was out of a job, the proprietors of Bennett, Coleman and Co chose to be magnanimous. He was allowed to write a weekly column for the TOI's Sunday supplement, then edited by Fatma Zakaria (mother of Fareed Zakaria). The column was a great hit. Later, NJN wrote for Outlook magazine.

As editor, NJN had the reputation of being something of a snob and somebody who confined his interactions largely to the assistant editors who wrote for the edit page. One famous story is that at a party in Mumbai, he was accosted by somebody who complimented him on a piece he had written recently. NJN thanked him and said, "And what do you do?" Said the other, "I am your Chief Reporter!"

It doesn't surprise me to learn from Datta-Ray that there was not much of a market for NJN's column in recent years. NJN's sophisticated prose and turns of phrase would be beyond the current crop of readers. I did not think much of NJN's political analysis-at times he gave the impression of having mastered the art of writing 2000 words without saying anything in particular- but as a prose writer, he had few peers in journalism in his time

Maruti's Manesar plant

Maruti Udyog Ltd has announced that it will reopen its Manesar plant but only after dismissing about 500 workers allegedly involved in the recent disturbances leading to the tragic killing of one of its managers. I have been reading the news stories in the media to get a coherent account of what led up to the explosion of worker fury at the plant. I wasn't able to. A commentary in EPW has helped me gain some sort of perspective.

We cannot take seriously the insinuation that the problems are the work of 'Naxalites' who have infiltrated the workers at the plant. Nor can we subscribe to the notion that it was the result of vaulting  aspirations of a new generation of workers, who are keen to have the good things of life without regard for issues of affordability or productivity. It takes a lot for workers to rebel seriously in a situation such as Maruti's because the odds are stacked against them.

There is a fundamental asymmetry in management-worker relationships: the management has financial muscle and staying power, backed by support from the government which includes the police force and the labour department of the state. Workers eke out a precarious living and cannot do without their wages for long. To risk disruption and jobs and to incur the wrath of the law enforcement authorities would require serious provocation.

The EPW article tells us something about the immediate provocation:

A handful of workers we managed to speak to were unanimous in the view that the death of the Maruti Suzuki ­executive Awanish Kumar Dev “should not have happened”. According to a worker, Awanish Dev had agreed to take back Jiya Lal, the suspended worker, who had protested caste abuse by a supervisor during the A-shift on 18 July, but then Awanish Dev got a call from a senior, instructing him otherwise. Naresh Narwal, additional labour com­mis­sioner, and Gurgaon district administration officials told a joint trade union delegation that they too had received word that Maruti Suzuki management had agreed to take back the suspended worker the next day on 19 July and that the matter was almost resolved. Some B-shift workers we spoke to report hearing the same.What happened in the matter of a couple of minutes that changed the course of events that evening? 

But this episode only provided the spark to an explosive situation. The following factors seem to have been at work:

• Management's refusal to recognise the workers' union  until the workers first agreed to form grievance and welfare committees
• Management's unwillingess to implement the long-term wage settlement for casual workers and not just for for permanent workers. (There is huge gulf in wages between the two and casualisation has become the norm for many companies)
• Worker discontent over harsh working conditions including the limited breaks available for meals and toilet visits.

How the Manesar affairs pans out will have important implications for industrial relations. If management is allowed to ride roughshod over workers' sentiments and legitimate demands with the connivance of the state government and if it is emulated by other companies,  there is risk of a dangerous backlash in the years to come.

We are revisiting land acquisition and envrionment policies that have worked to the disadvantage of the poor for decades. It would be tragic if industrial relations were reworked to suit management and came to militate against the interests of workers.

Leadership training and research

Leadership is a big deal in management. Open any issue of the Harvard Business Review and you are bound to find something on the subject- the latest issue has three articles. Books on leadership are truly legion. Training programmes in leadership are amongst those widely subscribed to. I sometimes regret I didn't get into this business. It seems easy to do- you can get away with almost anything as long as you present it plausibly- and it is enormously lucrative.

Leadership material falls into several categories: great men ('Leadership lessons from Gandhi'), books ('Leadership lessons from the Gita'), business ('Leadership in the services industry'), etc. Then, you have things that are fairly eclectic: eg. Climb the leadership ladder in eight easy steps.

Interesting, then, that we should have a book now by somebody who has spent a lifetime in training and research in leadership that suggests that much of the stuff is bunkum. Barbara Kellerman of the Kennedy School of Government has done just that with her recent book, The End of Leadership.

Her basic thesis is hard to dispute. The days when people at the top dictated things and people down below just followed are over, whether in politics or in the corporate world. People no longer look up to leaders as they used to and followership is as important as leadership. (The latter includes things like standing up and saying 'no' to your boss). Leadership training has, however, failed to make the necessary adaptation.

I would go further. It is not just leadership training that needs to change. The basic business model is broken and it needs to be replaced with something more egalitarian and decentralised. But those in the business of teaching leadership won't say so because the ones at the top will not pay them for saying such things.

More in my ET column, Leadership industry in crisis.

Jagdish Bhagwati on plagiarism

Jagdish Bhagwati comments on the Fareed Zakaria plagiarism episode in the FT and then goes to say that it has become a big problem in academia as well. He suggests ways in which institutions of higher education can deal with it:

Universities have become victims of plagiarism by students in an age when there is free access to information and assignments can be written by simply copying huge chunks of text, even entire essays, from the internet.

Once difficult to perpetrate, plagiarism is now so easy that a university such as Columbia will explicitly warn incoming students of the dire consequences, such as expulsion, if a student is caught...a remedy that I find useful is to ensure that a fraction of the grade depends on multiple-choice examinations where one cannot steal or copy.... 

...Universities should also ensure that big fish such as Mr Zakaria who are caught plagiarising are firmly dealt with: letting them off with a soft rap on the knuckles can only breed cynicism among students who are exhorted not to plagiarise. Withdrawal of honorary degrees and expulsion from boards of trustees are among the punishments that should be automatic once plagiarism has been acknowledged.

Much of the plagiarism is, I guess, wilful but, in a PC and Internet world, there is a heightened probability of oversight. You are writing up an article for a newspaper or magazine, you find something you can use, you cut and paste and then carry on with the rest of the piece, hoping to cite the reference later... in the rush to meet the deadline, you forget to reference the quote.... You attach the article and press the 'Send' button, heaving a sigh of relief..... until all hell breaks loose.

This must be every writer's nightmare, particularly columnists who are under pressure to regularly churn out pieces. Every columnist must hope and pray he doesn't get tripped up. This is, of course, not to justify the failure to cite sources.

Finance crunch in US universities

It should be no news that American universities are facing a financial crunch. In today's economic scenario, one would expect state funding to be cut and donations not easy to come by. One would also expect universities to cushion the impact through higher fees. All three are happening, as an article in the Economist points out.

The details are interesting (and both these are quotes from the journal):

• The average cost of college per student has risen by three times the rate of inflation since 1983. The cost of tuition alone has soared from 23% of median annual earnings in 2001 to 38% in 2010."
•  Federal support for higher education remains at historically high levels, but states have cut back

The article contains an interesting nugget: for-profit universities (which are doing well) also get subsidies from the government. Apart from raising fees, universities are responding by trying to prune administration costs and merging colleges across various campuses.

But raising fees forever cannot be an option. How are universities to restore their finances? One answer may be to eliminate extravagant expenditure on libraries, hospitals and the like (they need some of these but can make these facilities more utilitarian). A more radical option may be to make research focused on specific goals or to reduce the size of tenured faculty. In other words, a new balance between teaching and research may have to be found. US universities will balk at such solutions on the ground that they would lose their pre-eminence. But then they may find that a full-blown financial crisis forces even more unpleasant solutions.

Ambedkar - greatest Indian since Gandhi

I am not a fan of polls that decide an individual's greatness but I find it very satisfying all the same that a CNN IBN- Outlook poll ended up with B R Ambedkar getting the highest votes for the title of the 'greatest Indian after Gandhi'.

I don't know whether the title refers merely to chronology or whether it is meant to signify rank, that is, that Gandhi is number one and Ambedkar is next. If so, the ranking is bound to be bitterly disputed. I guess it will come down to how you measure greatness- in terms of the impact somebody had on the people of India or the worldview that somebody espoused.

If the latter is the criterion, then Ambedkar has few competitors, not only in India, but anywhere in the world. His is a liberating, egalitarian view in which all men (and women)  get an opportunity to realise their potential. There is fundamental fairness and decency to Ambedkar's vision of India, as also a progressive or forward-looking dimension. If India is to realise its potential, not just in terms of growth or military power, but in terms of uplifting all sections of India, then the Ambedkar view is one that commends itself.

The Outlook issue on the subject is a collector's item; I have read several of the pieces in it already. S Anand's article deserves special mention. Anand asks how it is that Ambedkar ending up at the top of this ranking when this did not happen in earlier rankings. He explains:

Sceptic that I am, this “victory” for Ambedkar is most likely a result of the presence of a burgeoning internet-savvy, mobile-wielding, dedicated Dalit middle class that is almost invisibly making its presence felt. Still largely kept away from mainstream media, the private sector and our universities—which have undisguised disdain for Ambedkar’s greatest weapon, reservation—the Dalits, in India and abroad, have fashioned their own websites, mailing lists and blogs such as Round Table Conference, Dalit & Adivasi Students’ Portal and Savari, a YouTube channel called Dalit Camera, besides scores of Facebook groups.

Anand mentions the heart-rending story of Ambedkar's attempt to get his terrific work on the Buddha (The Buddha and his Dhamma) published:

The greatest exponent of Buddhism after Asoka had ruthlessly been kept out of this Buddha Jayanti committee presided over by S. Radhakrishnan, then vice-president and a man who embarrassingly believed that Buddhism was an “offshoot of Hinduism”, and “only a restatement of the thought of the Upanishads from a new standpoint”. Worse, when Nehru replied to Ambedkar the next day, he said that the sum set aside for publications related to Buddha Jayanti had been exhausted, and that he should approach Radhakrishnan, chairman of the commemorative committee. Nehru also offered some business advice, gratuitously: “I might suggest that your books might be on sale in Delhi and elsewhere at the time of Buddha Jayanti celebrations when many people may come from abroad. It might find a good sale then.” Radhakrishnan is said to have informed Ambedkar on phone about his inability to help him.

Today, thanks to a website (or several websites) dedicated to his memory, we have access to all of Ambedkar's works. That's how I discovered him myself - about six or seven years ago- and was shocked that I had remained unaware of his greatness all these years. Anand quotes a historian as saying that Ambedkar was "intellectually head and shoulders" above Gandhi, Nehru and other Congress leaders.

This is entirely true. He had a PhD from Columbia, a DSc from LSE and had also qualified as a barrister. Reading his works, one is struck, first, by the depth of his scholarship. This was a man who was steeped in public life and the world of action, who tirelessly fought for causes and laboured on the Indian Constitution, and yet found time to produce several works, at least a dozen of which could qualify as doctoral theses. One is also struck by his forensic mind and his dispassionate tone. Ambedkar had much to be angry and bitter about and yet very little of it intrudes into his scholarly analysis. He lays out the evidence and then proceeds to derive conclusions in a clinical way.

It is natural that the dalits should have claimed him as their icon but it is also unfortunate in a way because Ambedkar deserves to be  presented as a figure with universal appeal, somebody to whom all Indians, irrespective of caste, class and religion, can look up to as an authentic icon for the twenty first century.

Anna's flop show

Anna and his team have called off their fast and have indicated that they would like to enter politics. Both items have been hotly discussed in the media.

Why did they call off the fast? Because it was evident that support for the anti-corruption movement was negligible. Many reasons have been given as to why support has dwindled since last year: corruption fatigue, the unreasonableness of Team Anna's positions, the fact that parliament is now processing the Lokpal Bill etc. The one I find most plausible was given by a friend who happens to be a businessman.

My friend says that the numbers last year were swollen overwhelmingly on account of support from the RSS- and the RSS would have its reasons for throwing its weight behind an anti-Congress movement. Members of Team Anna thereafter made disparaging remarks about the Sangh Parivar, causing the RSS to distance itself from the agitation this time.

If this interpretation is correct, it suggests that the Anna movement lacked popular support even last time and was primarily the creation of the media. Past anti-corruption movements, such as the JP movement in the 1970s, have also been made possible by political parties throwing their weight behind a charismatic or clean figure. The Anna movement petering out on account of lack of any political support thus makes sense.

Many have pointed out that converting the movement into a political party or backing one of the political formations would further erode Anna's standing. Creating a new political party to fight the elections would be an uphill task and would again involve serious compromises.

All this is correct. But the problem is more fundamental. Corruption is not about some individuals being bad guys, the decent guys being those who don't take cash bribes. It is the more sophisticated forms of corruption, such as a politician' next of kin getting contracts for a legitimate business in exchange for favours done to a business group, that are significant in scale and truly dangerous. These are next to impossible to root out. You can stamp out small-time corruption- and this will make life easier for the ordinary man- but stamping out big-time corruption is a tall order.

Corruption is not about individuals, it is about the basic economic and political structures. When a whole system is weighted in favour of a few haves- politicians, businessmen, bureaucrats, professionals or, broadly, the upper middle class - what you have is an exploitative structure in which the beneficiaries are all accomplices in corruption. The middle class manager who looks the other way when his company indulges in dubious practices; the academic who lends respectability to a company or to the government; members of the police force who collude with those in power; media persons who turn a blind eye to rapacity on the part of the powerful; all these are party to corruption in one form or another, regardless of whether there is acceptance of cash bribes or not.

If you have moved up the corporate or bureaucratic or academic or media ladder by not raising your voice against what is questionable, you are party to corruption. I find it amusing that some former members of the establishment are shouting themselves hoarse over corruption after having retired from service. Friends, what were you doing when you were in power?

The font of all corruption is the corporate world. Politicians are merely lesser partners in corruption as the bigger portion of the spoils goes to businessmen, with bureaucrats, managers, policemen and others getting their share in way or another. And  yet we heard very little from Team Anna about corporate corruption.

The idea that a corrupt economic structure can be combated by the creation of a new institution, peopled by the very same members of the existing power structure, is sheer nonsense. We need to strengthen democracy in many ways and that means strengthening the existing institutions, not creating some new institution will sweep aside all ills. We may well end up with a Frankenstein monster, the mother of all corrupt institutions.

Are you corrupt? Here is a simple test. Did you have the courage, in the environment in which you are located, to speak up when you were supposed to? Or did you choose to look the other way?

A return to Glass Steagall?

Sandy Weill, the architect of Citibank's transformation into a huge universal bank, has triggered a huge debate by suggesting a separation of commercial banking from investment banking alone the lines of Glass-Steagall. Like many others, he seems to think that banks have become too big to manage and that it is not correct to have depositors money funding trading activities.

In an article in FT, Luigi Zingales of Chicago university, throws his weight behind G-S. He  thinks  a straight separation would be superior to the restrictions on trading proposed under the Volcker rule. He also argues that separation would lead to more numerous and smaller investment banks and this would make for greater liquidity. Further, today's universal banks wield too much clout and this must be curbed.

I am not persuaded by these arguments. For one thing, Zingales mixes up bigness with scope of operations; even if investment banking were hived off, many commercial banks would still be too big for comfort. Secondly, there are benefits to banks as well as customers from combining commercial and investment banking activities. Independent investment banks would have to access funds at a higher cost, for instance. Banks can offer loans at a lower price if they can make up through fee income from investment banking. Indeed, it is the perceived benefits from combining operations that brought about the combination in the first place.

We must contain risk not through separation but simply through superior risk management that is driven by regulation. One element in this approach could involve shrinking the size of banks, although the mechanics of this would need to be worked out. (For instance, who will buy the assets in today's conditions?). Another element would be public ownership of a few large banks; this would reduce incentives for big gambles that apply under private ownership. The thrust has to be on improved regulatory norms for risk that go well beyond Basel 3 norms.

More in my ET column, How not to break up banks

Media hysteria over power blackout

The breakdown in power supply in the north over two days was terrible. But does it warrant the sort of media hysteria we have seen? I am not conversant with the technical aspects of the situation. But, yes, if technology can spot and cut off excessive demands on the grid from any state, certainly we should go for it. And I take EAS Sarma's point in today's TOI article that we should be investing in maintenance of existing facilities and not just in additions to capacity. These points apart, are there indeed "lessons" to be drawn from the episode, as the media has been making out? I am not at all sure.

Does the power breakdown say anything about our economic growth prospects, as Ramachandra Guha seems to suggest in the FT? Not at all. Is it anybody's contention that if you wish to be seen as a credible economic power, you should not be having breakdowns at all? Well, as the new minister of power has pointed out, the US has had a power breakdown a few years ago and it took longer to restore supply. And don't forget the blackout in New York city a few decades ago and the riots that followed. Are to conclude this renders Sushil Kumar Shinde unsuitable for the Home ministry or for the power ministry itself? Do we judge a minister on the basis of a single episode or do we look at his broader record? Just to clarify, I hold no brief for Mr Shinde either as Home minister or Power minister, I am just posing questions that would apply to any minister.

These kinds of disruptions cause enormous inconvenience and suffering to people and we should do our best to avoid them. But to regard these as proof of national incompetence or a reflection on our future prospects is, to put it mildly, to be getting carried away. The lesson, if any, is one that the media needs to reflect on: every murder does not become a national crisis, every report on corruption does not mean scams are the norm, and every ministerial lapse does not mean the political system has failed.

Incidentally, I have become an ardent fan of Doordarshan news in recent months. You get the news of the day, national and international, without any varnish, and with very few commercial interruptions, and news time is not the usual suspects bashing each other in some discussion on current affairs. The current affairs discussion has a separate slot, and the one in Hindi at 7:30 pm is of pretty high quality, with a whole range of uncommon faces presenting their views- and doing a great job too. Ditto for the discussions on Lok Sabha TV and Rajya  Sabha TV.

Try the national channels sometime, you will find these a refreshing change.