FII's and FDI's a fact sheet

Yes profit is basic and primary objective for any Multinational Company or Domestic company, but how is the money made in profit used is lot different for these two? Foreign Direct Investment FDI) and Foreign Institutional Investment (FII) are the two main sources of foreign reserves for any country and thus they try their best to lure these money churning machines. By liberalizing the economy the host country allows the various Multinational Companies to establish and operate in its environment. Government of host county invest a lot to build basic infrastructure for these MNC’s and also provide them with a lot of other privileges like tax exemptions and subsidies. But is this a fair and a healthy deal for any host country? Let’s go through some of the facts given below:

The amount of investment done by FDIs and MNCs  in the host country is just only upto 30% of the earnings which are required for just meeting the basic needs of the company like salaries to employees, procurement of raw material, transportation etc. and the remaining 67 to 90% in the home country and the money is invested in the research and development etc.

The subsidies and exemptions that the government offers for setting up the industries to the MNCs is also a major area of exploitation. The MNCs get the land for setting up the plant, raw material at the subsidized rates and also concession in various taxes. The MNCs take the advantage of these subsidies to minimize their production cost and eventually they sell the processed goods in the developed markets at higher cost for making huge amount of profits.

The MNCs also exploit the loop-holes in various accounting standards to make profits which are generally not apparent in the financial papers and generally goes unnoticed. For e.g. The MNCs show the Plant and machinery at a lower price to that of the original market price or show some additional liabilities like loans which never existed in real life to evade out money into the tax havens.

MNCs employed about 7 million peoples from the third world countries in 1992. In very few countries this amounts to more than 5% of economically active population, meaning that the direct impact of MNCs on employment is insignificant. Moreover the MNCs employ a significant number of foreigners, usually in the well paid positions. Such expatriates often relocate to these countries by the parent corporations to help manage the firm, are growing fewer but still makes up 0.5% of employment in America and about 3% in Japanese firms. So there is lower propensity to employ the local peoples then local firms do.

Why do MBA during crisis?

-Chauhan Shiv Prasad
Yesterday he was at top position in a organization and he served the company for many years, he bought a good house, car and other facilities his kids study in good reputed convent school. But today he lost his job and has no money to pay back the loan he took for purchasing his expensive house and car and even no money to sustain education of his kids. Which way should he go?
This person and many other are prey to the cost cutting strategy of organisations. It seems to be non ethical but what to do? In order to save and sustain the organisation during the rough times of crisis CEO's around the globe employee most brutal strategy of layoffs.
Share markets are tumbling down with no signs of bull ride for investors, depleting wealth of investors, insecurity and unwillingness to invest and spend, companies booking heavy losses, red ink in balance sheets, layoffs etc. are surely some of the indicators of financial crisis. The wave of pessimism takes over the wave of optimism.
But according to me crisis is not the end to all things but it is just a beginning to take a new stride. And moreover the crisis is not going to last forever. Take example of America from the great depression of 1929 till 2007, American had seen many crises but still most of the fortune 500 top companies are Americans let it be Coca-cola, Microsoft, yahoo, Google etc. and America turns out to be a multi trillion economy, from present figures from Dow- jones show significant signals of recovery.
People come and say that we are already hit so badly by the crisis why should we waste our money and time on these courses? What is the need of doing it in the period of crisis? And my obvious answer would be:
During crisis you need to be the best as compared to others, you need to be creative, effecient, affective as well as outstanding in your way of working. Moreover when the economy recovers from crisis, companies start making profits and generally go for employing more employees with required skill sets and knowledge to work for them. So to reap the benefit and lead the race for getting a job as the economy recovers it is must to be more competitive by means of acquiring newer skill sets/knowledge. And more over what most of people think is a conservative approach but is generally a short term success approach and not a long term approach for success. For long term success you need to be innovative and develop yourself as much as you can by acquiring all those skills and knowledge that either you lacked or wanted to acquire but was not having time for when economy was growing. The investment in terms of time and money done at this time will generate enough future cash flows for you to enjoy life in Peace when others are still striving harder and harder to succeed.
Management is the only field which makes you multi-dimensional as it not only teaches the students the basic management theories about market operation, strategies, profit maximization, customer relations, organizational behavior, manpower planning, business ethics, corporate social responsibility, Company/ industrial and labour laws etc. but also provides with the necessary practical knowledge by means of industrial exposures, internships and interaction with faculty so that the management student learns in a better sense and employ various management theories and principals in real life situations. The companies require management graduates and post graduates for various processes so you can choose your specialization solely based upon your field of interest. Take for example if you take Finance you can go for Technical Analysis, portfolio management, Derivatives, Mutual funds, Insurance etc. and if you go for Marketing you can go for either of International Marketing, Industrial Marketing, Marketing research, Rural Marketing etc. If you go for HR you can go for manpower planning, training and development, conflict management etc.
During crisis companies need to be very efficiently use and manage the available recourses at hand to reduce costing and remain more competitive against competitors and retain customers. For that the companies require efficient managers (Management professionals) who are more competent in making strategies and implementing them in the organization in such situations. Every organisation wants to have assets and not liabilities, so prove yourself asset for the organisation in terms of your knowledge, skills, capabilities and attitude. So I can suggest you that it is must to become more tougher to stand against the odd times and fly with colors when fortune arrives. Even Darwin is of the thought “Survival of the fittest” so become the fittest of all, so that you can servive in any type of environment with ease.

THE COCONUT EYES

-Chauhan Shiv Prasad
We all might have experienced the situation where you fail to convince other (boss, wife, friend, teacher, parents, kids etc.) by all means and employing all knowledge and efforts, and we say that I was unable to do well or I am not worth his/her consideration, some where I was lacking etc.; I know that the answer would be surely “yes”. This is due to the concept I term as coconut eyes lets understand it in more detail. As the coconut is opaque and does not allow the light to pass through it and we can’t see through it similarly if we are prejudiced (have coconut eyes) we can’t see the reality and contradict it, as our thinking is being hampered by the prejudiced thoughts i.e. the mind is already preoccupied by prejudiced thoughts and there is no place for analyzing new thoughts.
As rightly said in Geeta “truth is in front of your nose “but people are not able to see it. It’s not always your own fault but many a times the other person is not able to listen what you want to tell due to partial listening. That does not mean he does not listen to you, but it is equally true that if the person is prejudiced about you then he becomes selective listener and listens to whatever he wants to and would try his best to put you down.
Being prejudiced (coconut eyes) is like a pigeon who closes his eyes when he sees the cat and thinks that even the cat is not able to see him; but this is not the reality. The cat can very well see it as well as eats him up. It can also be related with the incident when we deny something because we haven’t seen or even never thought of such a thing. Take for example of Alexander Gram Bell who founded the telephone and went to many companies to mass produce and market the product but was laid down by many, not because the telephone were not products worth marketing and they don’t have any demand but due to coconut eyes or lack of vision of those industrialists who thought it as failure and could not see the future. With the birth of new company “GE” which produced these phones and marketed them for the first time in the world all mouths which were contradicting had no words and were crying on their fate. Take for example of formation of Wall-mart by Sam Walton; before making of Wall-mart the concept of retail outlets for direct marketing was never being thought of. But the success of Wall mart made not only everyone to believe in the concept but also the new way of marketing in the 21st century.
When something is beyond solution at Intel what they do? It does not means that solution does not exist but at that very moment they turn to the most admired source which we always neglect and does not thing worth considering and that is the “children” of school that too of lower standards; it’s great to know that Intel people found many solutions in those classes only. So are leaders in the computers because they are not prejudiced but are adaptive and ready to learn new things from anyone who knows anything worth learning.
Or take example of India a few years back, developed nations used to look it with sympathy due to poverty, low infrastructure, non-hygienic conditions of living, corruption, illiteracy etc. nobody ever thought that this nation can ever become self sustained as well as leader in Information technology, so does that meant that we are not leaders in I.T. ?
It’s the bitter truth that needs to be admitted that what we think as impossible is not always impossible but it might be possible in some body’s thoughts and he/she may be capable in making it a reality. So don’t be prejudiced and do try to understand others with open mind and give him/ her full chance to prove him/her self. So don’t have the coconut eyes and let it be the tissue eyes so that light can penetrate through it and can see the world as it is.