In the past week, I was inquisitively asked by students about the demerger of Wipro business. Interestingly, we have heard about merger of businesses but rarely about the demerger of business. Let us understand why any business will undergo demerger. Demerger is basically separating entities from a single conglomerate. If these entities are focused on…
A challenging economy throws a lot of odd problems to a business. Especially in an economy in which inflation and interest rate are volatile, business managers and investors are a confused lot. I will try to shed some light on this confusion and a way…
As I teach entrepreneurship to my class at Sunstone, as I had expected, it’s been a tremendous learning experience for me as well. I divided the curriculum into 3 parts: Tactics of entrepreneurship: This is the tactical stuff about equities, fund raiding, co-founders, term sheets,…
I enjoyed the interaction with the Pune open coffee club members. We spent a lot of time on IT services industry as a whole and on your next phase of growth and how you can achieve it. I am happy to continue the dialog and…
In the previous article- why companies with excess capital do share buyback?, we discussed share buyback and its benefit for company and shareholders. Let’s do a small recap of the earlier article. We covered three aspects of share buyback. One is the signaling effect of…
We can't take a topic of techies being leaders and not mention Bill Gates, Mark Zuckerberg, Larry and Sergy, Steve Jobs etc. having created some of the largest companies in the world. Closer to home, we see Narayan Murthy, and the emergent E-commerce leaders as…
Are you a leader? Do you want to be a leader? Do you work with or for a leader? Most of us relate leadership to the roles or the titles conferred by organizations and find it difficult to understand role of individual leadership for performance.…
In the previous article, Why would a company having capital raise debt?, we talked about how shareholders are the owners of the company. Management runs the business and pays back its shareholders through dividends. In this article, we are going to discuss about share buyback,…
In my last article – Managers have infinite bandwidth, I put forward a thesis that managers have infinite capability. President Obama, Tim Cook, Jack Welch also have 24 hours in a day and they get a lot done. I have seen in my past C-level…
Let me explain a particular school of thought. If you wanted to go from Delhi to Mumbai, strategy can tell you how to get there in least time and least discomfort. Take out a map, pick out a transport, consider the constraints and go for…
I have had a really interesting thread of discussion running with our alumni group about managerial capability and bandwidth. Many managers feel overworked and under-appreciated. I have had the good fortune of being in a C-level position for a number of years and that gave…
A reader of an earlier article Debt: A powerful tool posed a question – Why would a company having capital raise debt? I will try to answer this question today. Every company requires capital/cash to run its business and maximize profits. This profit accumulated over…
"The urge to blame is based . . . on the fear of being blamed".- Doughlas Stone Have you been on either side of a difficult performance feedback? Or having to communicate to a client that you are way behind schedule? Or telling your manager that they…
One of my students Aditya Gupta raised an interesting question in my strategy class: “While reading certain material related to topic we are covering in Strategy module, I came across multiple sentences which implied 'commodity' being different from 'product' (mostly implying as if commodity is…
In the previous article, Interest rate: The price of money, we discussed about interest rate which is determined by supply and demand of money. Now, we are going to discuss a closely linked topic called inflation which covers supply side of money. Let’s understand how…
In my last post ‘Debt – A powerful tool’ we spoke about debt. Some readers had some confusion and hence, I want to take a simple example to help realize the power of debt. Let’s say you want to buy a piece of land which…
Debt, a source of capital A key issue today with companies is to raise money. They need this money to run their operations or achieve higher growth or more profits. Now, debt is easily available to those who have assets which banks can value.…
I had a very professorial discussion with a very experienced colleague of mine at our school about what a well-rounded professional is and if that’s valuable in an organization. I have sometimes heard parents of young kids trying to make them well rounded. What is…
I received some comments after my last article, Tale of Two Airlines: Jet Airways and Kingfisher – I, mentioning various strategic decisions of the two airlines. We can critically evaluate a lot of decisions, however, I would like to focus on debt and leverage only…
Leverage "Give me a place to stand, and I shall move the Earth with it”. In this statement, I think what Archimedes wanted was financial leverage. The concept of leverage is about amplification of force. In business, we amplify revenues and profits by taking leverage.…
Do you know about Murphy’s law? It is “Anything that can go wrong will go wrong”. Especially when it comes to cash, it is almost always true. You will run out of cash at a place where there is no ATM nearby. Now suppose you…
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