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Thursday, October 17, 2013

#010 Delineation of incorrect decisions and corrupt decisions (CBI criminal case against Indian Coal Secretary)


CASE STUDY ON DIRECT RESPONSIBILITY VS. VICARIOUS RESPONSIBILITY.
LESSONS FOR young and even senior BUREAUCRATS AND BUSINESS MANAGERS. What I write here will apply equally both to private sector and public sector.

PUBLIC SECTOR
Public Sector includes Government Departments, public Corporate bodies, and Companies in which Government or its entities may hold majority shares.

PRIVATE SECTOR
Private Sector includes both closely-held Companies and widely-held Companies. Closely-held Companies include family-Corporate-groups. Widely-held Companies include MNCs and Professionally managed Companies.

I have used the words 'administrators' and 'managers', synonymously to cover both bureaucrats and commercial managers.

Before, proceeding with my analysis, I shall quote the trigger for this post.
Quote from Business Standard. Link to see full report:-
Click to go to Business Standard article

The Comptroller and Auditor General of India, in its report on coal allocation, had said Parakh recommended doing away with the opaque system of allocating blocks through the Screening Committee route. The CAG called him a "whistleblower", saying Parakh highlighted the difference in the cost of coal procured through linkage and those that were mined captively. Today, CAG's whistleblower has become CBI's conspirator.

Another quote from the same article.
...He was, beyond doubt, an extremely upright and honest officer. In fact, he was the first person to have taken a bold stand in favour of auctioning of coal reserves and doing away with the Screening Committee for allocation. ...

We shall take up two more quotes from the side of Mr. Parakh.
Link to see full report: NDTV.Com

...The PM cleared the decision... he is the final decision-maker...
...Even when you do the right things, you are victimised..."

Quotes from elsewhere.

...myself are conspirators, then why did they not think of the Prime Minister as a co-conspirator, then everyone is part of the conspiracy. ...

A bureaucrat's quote.
...Parakh will possibly end up spending his entire pension on fighting the case slapped against him...The underlying lesson for us seem to be to confine ourselves to just pushing files, and avoid any interaction with business representatives, NGOs or other experts to delve deeper into the issues...
...A meeting with anybody who is aggrieved because of a decision does not become a conspiracy. Even if it is a wrong decision it does not become a crime.
I think my decision was fair because both the companies - Neyveli Lignite Corporation and Hindalco - were equally entitled to the block. Hindalco is no less financially or technically strong and both the companies were equally eligible. But Neyvelli as a government company could have been given any other coal block under the government dispensation, whereas Hindalco (as private company) could not be. It could only be given blocks which were earmarked as captive blocks. I don't find any reason to believe that Neyveli has in any manner lost in this case,

ANALYSIS
Managers in key positions are to take decisions all the time. They cannot just push files.
Decision-making includes, making recommendations.
--solely.
--chairperson of decision-making, recommending, committees, work-groups, standing-committees, whatever nomenclature is used.

Managers may make mistakes while making decisions. Erroneous decisions again need further classification into many categories.
Environment-forced decisions.
Decisions arising out of inadequate job knowledge.
Decisions arising out of negligence.
Decisions arising out of fatigue and uncontrollable workload.
So on and so forth.

Another important classification.

Deliberate incorrect decisions, with conscious knowledge of their incorrectness.

Inadvertant incorrect decisions. Managers would not have taken these decisions, had they come to their notice, then and there.

MOST IMPORTANT CATEGORY:
Corrupt decisions.

TWO CATEGORIES OF CORRUPT DECISIONS.

Sole corruption of the decision-maker with help from his colleagues, and subordinates (downward-sharing of spoils).
Participation of the decision-maker in the trickle-down corruption from top-to-bottom.

TWO TYPES OF PARTICIPATION IN CORRUPT DECISION
Active Participation. The decision-maker takes initiative.
Passive Participation. The decision-maker acquiesces, when his area is encroached by others, believing that he was not a part of the scam or scandal.

TWO TYPES OF ACQUIESCIENCE
Acquiescence, when there was a duty to intervene, and assert one's own rights and obligations to discharge duties.
Acquiescence, when there was no duty to intervene.

THIN DIVIDING LINE
Dividing lines (delineations) among the above classifications are very thin. Besides, there is scope for overlapping circles (Venn diagram).

Mr. Parakh was bringing out his memoirs as a book, to serve as a lesson to aspiring bureaucrats.
One blog post will be too long for testing all these criteria in the Parakh-Birla case study.

PRELIMINARY OBSERVATIONs
ybrao a donkey's observation
What is this 'could have been given any other coal block under the government dispensation?' Was the Neyveli Lignite Corporation given any such coal block to compensate for the block diverted to Hindalco? Was Neyveli simply armtwisted to share the coal-block with Hindalco. Did Mr. Parakh and his Screen Committee heard, what Neyveli had to say about the diversion?
It is very clear that injustice was done to a Government Corporation. A Government Corporation is owned by Indian Nation and Indian State. Hindalco is owned by private individuals who do business for profits and build empires, collect huge dividends and bonus shares. Private Sector CEOs squeeze millions as salaries and perquisites from their Companies, whereas public sector CEOs are paid pittances. Parakh can never say that Neyveli and Hindalco are equally meritorious. His logic is outright defective. This gives rise to suspicion of corruption. Only question which will then remain, is whether Coal Minister, PM, PMO, and others who pushed through the proposal have shares in it. It could not have been a sole affair of one Screening Committee chairman! The buck cannot end there.
First-of-all CBI should collect complete evidence to prove under which classification the decision falls. It is not just sufficient to say that there was a criminal conspiracy.

Incorrect decisions do not become crimes. CBI should prove corruption on the part of Mr. Parakh. Else case will go to dogs and CBI will become a laughing stock.

Withdrawing coal intended for a Government Corporation, and alloting it to a Private Company, is sufficient evidence to arouse suspicion. But it will not be suffice to convict Mr. Parakh.

CBI should thoroughly check up whether Mr. Parakh has received any quid pro quo for his decision, whether right or wrong. In India, bribes, kickbacks, and quid pro quo are common, even for taking RIGHT decisions.

CBI should check up whether Mr. Parakh accumulated assets disproportionate to his known sources of income and wealth.

CBI should check up whether Mr. Parakh has stashed any funds abroad in tax-haven islands and countries which allow code-numbered accounts.

CBI may have to track foreign accounts and real-estate deals of all the connected officials in PMO, Coal Ministers from time to time, as well as the Prime Minister himself, even if a formal case is not registered against them. This should be a part of conducting comprehensive inquiries/investigations. No need of registering cases or arresting people, or formally questioning people.

This investigation needs a decade of unwavering, competent, dedicated and hardwork. CBI itself admited before Supreme Court, that CBI lacks independence. Hurrying up things under courts' directions or slowing down under direction from bosses will waste public money, as had happened in case of Bofors Guns case.

About Prime Minister's involvement (as Coal Minister as well as Prime Minister), we have to discuss first-of-all whether he was a part of decision-making or not; whether his responsibility is direct or vicarious.

In other words, we have to write at least ten blog posts here.

Thursday, February 28, 2013

#009 VICISSITUDES-OF-THE-WALL-STREET:

✰ VICISSITUDES-OF-THE-WALL-STREET: Wall-Street-Businessmen and American-Congress-men are all co-conspirators. But why were rajat-gupta and rAj-rAjaratnam singled out for imprisonment? It is the fun of the World-Capitalism and the Euro-American-Capitalism!
And this gentleman, Rajat Gupta was one of the guiding-beacons for the Indian School of Business, Hyderabad.
Will his sishyAs (disciples) imitate him?

Monday, July 25, 2011

What a great Innovating Company

Forbes has released its list of top 100 Innovating Companies in the World.

The list contained, among the top 15, three Indian Companies.

1. Hindustan UniLiver
2. B.H.E.L. (Bharat Heavy Electricals Limited)
3. Infosys (second ranked I.T. Software Company.

Indian Citizens, particularly the commons, do not directly use the products or services of BHEL and Infosys. Hence, there is not much reason for concern. OK.

Hindustan UniLiver in India is engaged in manufacturing and distribution F.M.C.G. (Fast Moving Consumer Goods) such as



* Kwality Wall’s
* Axe
* Liril 2000
* Brooke Bond Taj Mahal
* Clear
* Sunsilk test
* Dove Anti-perspirant Deodorants
* Brooke Bond Taaza
* Dove Haircare
* Pureit
* Active Wheel
* Rexona Soap
* Annapurna
* Axe Body Spray
* Pond's
* Pears
.


The Company is, by and large, leader in most product lines.

The website of the Company http://www.hul.co.in also is shouting from roof-tops as under:


HUL recognized as among the world’s most innovative companies

Forbes ranks HUL sixth globally
.

So far so good. Okay. Will the Company explain how great it is in its innovations?

How it is different from other sellers in the market, both from organised sector and unorganised sector. -- Big, medium and small competitors.

All of them more or less follow the same methods, strategies and techniques. For example, everybody raises the sale-price of their products quite silently, almost surreptitiously. All of them simply reduce the quantity of the contents of the packets/satches/pouches/bottles/cans and print the net weight in small print. Though it is a statutory requirement, they either omit to print or print in very small letters the unit sale price of the product.

All the competitors, with no exception of our most Innovative Company, make tall promises of the quantities and qualities of their products.

An innovation should really help the cause of the consumers, either by increasing his satisfaction from using the product, through improvements in quantity or quality or some other tangible characteristic.

The Company owes a moral duty, if not a legal duty, to explain how it is more innovative than its competitors of organised and unorganised sectors.

Monday, June 06, 2011

Review what? Review what is given?


Mr. Manmohan Singh, the President of India has recently reviewed the 'nuclear disaster preparedness of India'..



Q: What did he actually review?

Ans: Reviewed the details presented to him by his assisting officials and advisers.



Q: What did the advisers prepare and present?

Ans: What they perceived as that which their boss wanted.



Q: What did their boss (Prime Minister) want?

Ans: The proposed new Private Sector Nuclear Plants in collaboration with U.S.A. and France have to take off. The P.M. wants an assurance that all is hunky-dory with the agreements India has entered with those countries and their suppliers. He wants an assurance that India can easily and safely live in the midst of the junk nuclear plants delivered by the overseas suppliers.



Q: How do you know that Officials and Advisers fed to the PM all that is rosy and hid all that is risky?

Ans: Otherwise, their jobs will not stand or get extended.



Q: Why are you writing this in a 'Management Issues Blog'? You should have written it in the Indian Politics Blog.

Ans: This example applies not only to Indian Politics, but also to the Business Management Issues globally, apart from the Politics of different countries.


Employees whose jobs are at peril or in jobs which need constant upliftment, are bound to produce status and progress reports which satisfy not only their bosses, but also the bosses of their bosses and the bosses of the bosses of the bosses of the bosses.

Bosses too need such employees only. Reason: They might have already taken decisions and arrived at conclusions. They need only that which bolsters their conclusions and decisions.

This happens both in businesses and Politics.

The Trainers in Management Institutes and Business Schools have, therefore, to make this aspect very clear, to their apprentices. Or else, the trainees go out with great hopes and end up as a square pegs in round holes when they face the actual work situations with their bosses.

Either Business Schools should tune to the Business Environmental Needs, howsoever implausible and principle-less they may be - or - the C.E.O.s have to accept true business scholars trained on Ralph Waldo Emerson's 'The Great American Scholar' model.


Thursday, May 26, 2011

Should Managements go into doldrums when stock-price trumble?

Stock-prices may tumble for numerous reasons apart from the performance of a Company.


*A Company's share-prices may plummet owing to reckless speculation by global players.

*A Company may perform well. But the industry, of which the Company is a part, may not perform equally well. The share-prices for the industry may collapse. It is not a reflection on the functioning of a Company. I do not say that Management of the prosperous Company should be totally complacent, sitting on its own laurels.

It may sometimes, be late for the industry-wide sickness to become incipient in the prosperous Company. The Company Managers may have to be alert. But they need not panic.

*A Company may have already started on a trajectory of healthy growth which others in the arena might not have done. The first Company in this case need not change its already healthy course, simply because
...to continue.

Is decision-making without procrastination really workable?



Procrastination is natural to humans

A sparrow built its nest in a farm and was living with its kids. They were eating grain in the farm and living comfortably.
One day, when the sparrow went out, the farmer came and found that grain was being eaten by the sparrows. He muttered loudly: "These sparrows are eating away all my crop. I shall send my eldest son next Sunday and he will remove the nest."
When the sparrow returned, the kids were melancholic and told their mother about what the farmer said. The sparrow said "No need to worry. The farmer's eldest son will not come and remove the nest."
Two weeks went by. One day, the farmer came again, when the sparrow was away. This time he said that he would send his second son for removing the next, next Sunday, and left.
As usual, when the sparrow returned, the kids expressed their apprehensions about the farmer's second son. The sparrow said "Nothing to worry. The second son will not come."
Two more weeks went by. One day, the farmer came again and angrily pronounced that he would send his third son next Sun and get the next removed, and left.
The sparrow asked the children not to worry and continued.
Two more weeks elapsed. The farmer came again. By that time, the sparrow kids developed their wings and are ready to fly. The farmer announced that he would come next morning with axes and ladder to remove the nest.
When the sparrow returned, the kids conveyed the message of the farmer. Now, the sparrow realised that there is something to worry. It and the grown up kids fled the place to a new safer abode. The farmer came next day and removed the next.
Thus delegation sometimes, does not work. In managing large organisations delegation is of great importance. The success of many businessmen can inter alia be attributed to their delegational skills and follow-up.
I am an addicted and regular procrastinator. My kids remind me about this story which I used to tell them in their childhood and ask me to be more active.

Why do Managers suffer from clutters of mind?



CLUTTERS

What is a clutter?
A confusion, disorder and a jumble.

BODY CLUTTER?
Filling body with junk and excess food. Accumulation of secretions and solids.

What could be a DRESS CLUTTER?
-- Confusion on
== what to wear;
== what others think about our dress.
== wearing excess apparels

What could be a JOB CLUTTER?
-- Confusion on
== type of job, want to do
== working methods
== priorities.
What could be a HOME CLUTTER?
-- Disorderly
== guest arrivals;
== furniture;
== electrical fixtures;
== malfunctioning pipes;

What could be a LUST CLUTTER?

-- Multiple relationships;
-- Irregular sex;
-- Confused talk with the beloved;

MIND CLUTTERS

-- Accumulation of
== excess knowledge
== knowledge which will never be used

What could be a MONEY CLUTTER?

-- Numerous bank accounts;
-- No account of income and expenses;
-- No plan;
-- Simultaneous idle funds and borrowing;

MIND CLUTTERS
What are mind clutters?

-- Loaded minds.
== Minds become unmanageable.



How mind clutters may arise?

-- Collection and piling up of useless information.
How to minimise mind clutters?

-- By remaining focused.
== Filter info input at the reception stage itself.

What dangers may be found in excessive filtering?

-- excess specialisation.
-- knowing too much about too little.
-- we cannot tackle divergent problems.

What are common sources of mind clutters?

-- ears, eyes.
-- books, news papers, magazines and periodicals.
-- beliefs and internal thought processes.
-- talkative unfocused friends and relatives.
-- excess internet browse.

Why Business Managers are losing their self-respect?



CONTEMPT FOR OTHERS
HUMAN RELATIONS
SELF RESPECT


SELF RESPECT AND CONTEMPT FOR OTHERS ARE NOT MUTUALLY EXCLUSIVE.
INSTEAD, THEY ARE MUTUALLY INTERDEPENDENT.


DESIRABLE PERSON: A person with high self respect and low contempt for others
9,0 shown in the picture.
UNDESIRABLE TRAIT: Person with low self respect and high contempt for others. 0,9
as shown in the picture.

Normally, when people read more and more, advance into age, people tend to have a high self esteem and high contempt for others. Actually, it should be low contempt for others.

What did Samuel Johnson say on "some contempt" shown by Milton to others?
QUOTATION FROM SAMUEL JOHNSON

"It appears in all his writings that he had the usual concomitant of great abilities, a lofty and steady confidence in himself, perhaps not without some contempt of others; for scarcely any man ever wrote so much and praised so few. Of his praise he was very frugal, as he set its value high; and considered his mention of a name as a security against the waste of time and a certain preservative from oblivion."

What is the tendency of modern writers?

The modern writers tend to shower praise on others profusely. May be this is born out of a need to get along with people, get things done. The praise is a sort of investment on the praised person, if it becomes necessary to approach him for any help.

Won't frequent praise become flattery?

It is happening now. Nobody takes a praise seriously. Particularly in business. Politicians expect praise and also for money for favours.

Saturday, October 20, 2007

Global Managers should either learn or teach bribing

In a recent international survey on corruption, 66% of interviewed Corporate Managers declared that they did not get their due business in India because they did not bribe.


In Nov. 2006, addressing a Conference of the CBI, the then President of India, Mr. Abdul Kalam wanted to see a Corruption-Free India. In the same meeting, he Prime Minister of India, Mr. Manmohan Singh spoke about good governance.

All that is just naught. The President retired and left to a new teaching Chamber. The PM is caught up in the India-US Nuclear deal.

Now, we can take it for granted that corruption is not going to recede.
What the global Managers doing business with India will do?
Nothing. They have to learn bribing.

Thursday, June 29, 2006

Why do successful managers make routine claims of hard-work?

HARDWORK?
Can we see a successful Business Manager, who does not claim that:
1. his/her success is due to extreme hardwork;
2. unshakable belief in oneself;
3. United States is a meritocracy; other coutnries are idiocratic;
4. his/her personality was shaped by his/her parents.


Observations
*There can be hundreds of reasons for failures or successes.
*Environment is one determinant.
*Successful Managers say that they could create favourable opportunities from an adverse environment.
*We may come across two types of situations:

--A situation where the dividing line between a grand success and a dismal failure is too thin.

e.g. A Presidential Candidate who loses by a narrow margin owing to last-minute change in the voters' outlook, for reasons beyond the candidate's control.


--A situation where the gap between efforts needed and efforts made is too wide. The situation may turn ugly when no attempts are not made to bridge the gap.

e.g. A Presidential Candidate did not meet even 1% of voters and fail to at least inform them about his/her candidature. He may have to make hectic efforts during the last leg to make good the gap. But, suppose that he just abandons his campaign and blames somebody else.
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