Dec 17, 2011

December issue of Avant Garde is out!!!

The December issue of Avant Garde is out. Follow the issue at:

http://www.iitk.ac.in/ime/MBA_IITK/avantgarde/?p=539



Do leave your valuable feedback.

PR and Media cell wishes you all a happy reading


Contributed by:
Hitendra Kumar
MBA-2013

On campus interaction with alumnus, Mr. Manzil Kohli

Hi All,

Meeting an alumnus is always a fruitful experience, more so when the alumnus possesses a personality as dynamic as Mr. Manzil Kohli. One of the most active alumni of our MBA programme, Mr. Kohli is 2006 batch pass out. From being a core member of Antaragni, Techkriti and other student bodies to arranging many pan-IIT meets in US, Mr. Kohli always seems to be in thick of things. He joined IBM after completing his MBA and is currently in Indianapolis, USA working with PricewaterhouseCoopers LLP. He is influential and has very good rapport with a wide IIT Alumni base.
There was an air of excitement in the current senior and junior batch of MBA, who had gathered in the amphitheatre of new IME building. Smartly dressed, Mr. Kohli didn’t make us wait for long. The session began with each one of us introducing ourselves to him. Though he planned to interact with us through a presentation, the stitches in his mouth prevented him from doing so. Yet, he spoke about his life in and out of IIT. He spoke at length about how friends, acquaintances and social networks aid in the growth of one’s career. He wanted all the students to make an impression, be visible, grow their network and socialize. He urged all of us to actively participate in the organization of events like Antaragini and Techkriti. In addition to this, he also discussed placement related opportunities. He also shared his views on how the programme can be improved. He provided us with quite a few examples from his own life which made the session more interesting in all respects.

His take on life can be expressed in his own words:

“You must have ‘passion’ for at least one thing in your life; it could be anything, but more importantly follow that passion aggressively. That will make you different from others.”

He instilled a lot of positive energy and enlightened us about the path ahead. Mr. Kohli promised to meet us again next year, around same time of the year. After a two hour interactive and energetic session it was time to bid him farewell with the promise to meet again soon.
We wish him good luck for his future endeavours and hope that he continues to inspire people around him.


Contributed by:

Deepak Gaur
PR and Media Cell,
MBA 2013

Nov 27, 2011

Seminar: Innovative ways in Project execution (IOCL)

A seminar on “Innovative ways in Project execution- IOCL” was organized by the IME department. The speaker was Mr. Vineet Singhal, who is the Chief Project Manager at IOCL. Mr. Singhal has worked in diverse roles in the industry ranging from handling of EPCM consultants,plant maintenance management to estate management. The talk kicked off with an overview of the company i.e. how IOCL came into existence, location of its various refineries and its Supply Chain Management process. Then Mr. Singhal mentioned the various drivers for diversification into Petrochemicals ranging from renewable energy to Nuclear Power.

The discussion highlighted the project attributes, constraints and project management framework in general and its implementation in various projects of IOCL in particular. Mr. Singhal gave an insight of the project management system in refineries division. He mentioned that fixed price contracts transfer the risk to the seller. The students were enlightened about an extensively used project management practice called Front end loading, which is robust planning and design early in a project's lifecycle time when the ability to influence changes is relatively high and the cost to make those changes is relatively low. The focus of the talk later shifted to Project Management systems in Indian Oil for mega Projects in context to recently completed Panipat Naphtha Cracker Project with outlay of nearly Rupees 14000 crores and the ongoing Paradip Refinery project with outlay of nearly Rs. 27000 crores. The speaker shed some light on the innovations done at Indian Oil in project implementation strategies and management of risks, concerns and challenges faced during theserecent implementations.

The talk was wrapped up by interesting questions and free-wheeling discussion between the audience and the speaker.

Report prepared by:

Alok Jain
MBA Batch of 2013
PR & Media Cell

Nov 4, 2011

Prabandhan 2011: The annual management conclave

Prabandhan 2011, the annual management conclave of IME, IIT Kanpur was organized on 29th and 30th October 2011. This year’s ‘Prabandhan’ was based on the theme: Innovation. The conclave encompassed a wide range of events and activities such as guest lectures, online contests and a workshop based on Innovation.
The event flagged off with the opening address by Prof. N.K Sharma, who talked about various facets of Innovation based on his experience, and wished Prabandhan 2011 a great success. Mr. Vishal Sharma, Director, Deloitte Consulting started the guest lecture series by delivering a talk on“Innovations in IT to achieve business results”. He enlightened the audience about the way in whicha CIO’s role has evolved in the organizations over the years. He further discussed the various drivers of Innovation in Information technology. The lecture series next had a session with Prof. Jayanta Chatterjee and Prof. Satyaki Roy. This session invited application oriented participation from the audience whereby the participants were given various scenarios involving some present issues or concerns, and they had to come up with innovative solutions.

The first day had the preliminary round for the online B-Quiz also. It attracted participation from various B-schools across the country including IIMs, IITs, MDI, NITIE, IIFT etc. The B-Quiz also included mind-crunching questions based on pictures and videos, which were thoroughly enjoyed by the participants. The conclave also included a Case building Contest, whereby the participants had toformulate their own case, instead of analyzing one the traditional way. This was held in two rounds: Round 1 for abstract submission and Round 2 for the submission of the final case.
Day 2 began with a 5 hour long Innovation workshop. This workshop was organized by IME department in association with SIIC (SIDBI innovation and incubation center). Dr. Ahustosh Khanna, from IMI Delhi had been invited to conduct the interactive workshop for students. He holds a PhD in Innovation and Information Systems from the Department of Management, London School of Economics and Political Science (LSE), London, U.K. and has over 14 years of rich experience in consulting, academia and entrepreneurship in U.K. The students were introduced to the key fundamentals of Innovation such as linking innovation with economic activity, the innovation life cycle - the S curve and the Bell curve, and the wealth creation triad. The students were asked to come up with their own innovative ideas, which were then examined in lieu of the discussed concepts.

Prabandhan 2011, in nutshell, was a huge success and got word of commendation for its events from the participants.


Report prepared by:
Alok Jain
MBA Batch of 2013
PR & Media Cell

Oct 22, 2011

The News: In Retrospection.

It’s a bit late this time around ...but I have a number of good news to share ... all are etched in everyone’s memory and can be recited without any hiatus... such was the charisma of events and so was our euphoria...

The IME party...the scintillating IME party ... conspicuous presence of all IME students, professors and their spouses mixed with flamboyant performance by students made it one of the memorable events in our premature IIT Kanpur life... It helped the students and the professors come closer. The excellent mimicry, poem citing and dialogue delivery by students left everyone mesmerized and took every professor back to their own student life (well, I guess so ;))... The party ended with few other-than-academic words by the professors.

The party was followed by small (sic!) Dussehra break which was first opportunity before us to head for home leaving all books and assignments locked in our hostel.

We came back and as if people knew that the break was not enough to re-energize us... so Antragini was organized ... Antragini as usual was at its top scale. The theme this time around was superhero. This four days long event changed the aura of IIT Kanpur... roads were made dance floor and thousands of people danced on the beats of DJ... A number of enthralling events ranging from rock show to fashion show kept us deprived of sleep... The icing on the cake was Sunidhi Chauhan’s performance which gave a perfect end to the event.

A party may end ... an event may wait for next year, but there is no dearth of parties here... we have celebrated many of our classmates’ birthday and the party is still on...


Last but not the least, our classmate Alok Jain, MBA 1st year, recently won Best speaker’s award at the Times of India Debate contest organized in Lucknow. Heartiest Congratulations to Alok.

Hope you too are living your life to the fullest and celebrating each small and big happiness.

Keep the party on!

See you soon !


Contributed by:

Hitendra Kumar
MBA, 1st year
PR and Media Cell

Sep 25, 2011

A seminar on “Cultural intelligence and communication for global effectiveness” at IME, IIT Kanpur

A seminar on “Cultural Intelligence and Communication for Global Effectiveness” was organized by the IME department, IIT Kanpur. The speaker was Ms. Shoma Mukherjee, who is a well-known consultant for MNCs and practices in the field of Business Communications, HR and Finance. She introduced the topic by mentioning that people from different cultures differ in a variety of ways. This means that there are several challenges in cross cultural communication in terms of communication style, attitudes towards conflicts, and approaches to completing tasks etc. And thus, in this globalized world, it becomes highly imperative to have an insight of these issues and make a conscious effort to overcome them

She went on to explain the Iceberg model of culture, which identifies a visible area consisting of behavior or clothing or symbols and a level of values that is invisible. Also she discussed Hofstede dimensions to distinguish between cultures which comprise of Power distance, Individualism, Masculinity, Uncertainty avoidance and Long term/Short term orientation. The participants were given an activity to categorize various statements with respect to these dimensions. Ms. Mukherjee further talked about Cultural intelligence (CQ) in terms of cognition, motivation and behavior. She told that CQ is rooted in four different, yet interrelated set of capabilities: metacognitive CQ, cognitive CQ, motivational CQ, and behavioral CQ. She also delved into Edward Hall’s dimensions of culture: High context and Low context, which are used to describe cultural differences between societies. All these concepts were illustrated in light of real world situations.

She concluded the discussion by highlighting the keys to effective cross cultural communication, like understanding cultural diversity, developing awareness of individual cultures, welcoming change and so on. Since the cultures vary largely, it is quite significant to be culturally intelligent, so as to work effectively in the multicultural environment. The participants found the seminar to be very interactive and informative, addressing cultural challenges that exist in today’s business environment.


Report prepared by:
Alok Jain
PR & Media Cell
MBA Class of 2013

Sep 22, 2011

A guest lecture on "Role of absorptive capacity in new high-tech product development" at IME, IIT Kanpur

A guest lecture was organized by IME department on 8th September on “Role of Absorptive Capacity in New High-tech Product Development”. The speaker was Mr Shashi Shekhar Mishra, who is a doctoral candidate in marketing area at Indian Institute of Management Lucknow, and his doctoral research is in new high-tech product development process.

The seminar began with an introduction to technological innovations and their transformation into successful new products, which is indispensable for high-tech firms. Mr. Mishra said that the researchers and practioners have well recognized the importance of firm-level technology acquisition intent (TAI) for successful realization of new products across various high-tech industries. Extant literature suggests the role of firm’s dynamic capabilities on new high-tech product development (NPD) process. Higher firm-level absorptive capacity is prescribed to stimulate firm’s external knowledge acquisition and overall performance. However, he also said that hardly has any research ever been attempted to explain the effects of absorptive capacity on TAI in the NPD process. His study tries to address this research gap in the extant literature by first developing a theoretical framework through a focused literature survey that explains the relationships between absorptive capacity and TAI, and subsequent consequence of TAI on NPD process. This is followed by empirical validation of the theoretical framework by conducting a survey on 215 high-tech product marketing firms across the globe.

The results of the path analysis indicate that while absorptive capacity and organizational learning directly influences the firm’s TAI, there is no evidence from the results supporting the direct influence of firm size on the same. Furthermore, TAI positively affects readiness-to-design and found to mediate the relationship between its organizational antecedents and readiness-to-deign. In addition, the results of hierarchical regression analysis reveal that, contrary to prevailing wisdom, absorptive capacity reduces the perception of organizational learning from the acquisition of a new know-how. However absorptive capacity is found not to affect the firm size-TAI relationship in any way. The study results clearly established that the TAI by the firm leads to smooth readiness-to-design in new high-tech product development processes.

In all, the present research contributes significantly to the existing marketing literature by explaining the role of absorptive capacity on NPD process, and provided useful insights to the managers who are involved in the development of new high-tech products. The seminar ended with a vote of thanks from Prof S.C Mishra.

Contributed by:

Saurabh Awasthi,
MBA 1st Year, IIT Kanpur

Sep 19, 2011

A seminar on "Market Basket Rules as Input to Improve Inventory Performance" at IME, IIT Kanpur

IME department organized a seminar on “Market Basket Rules as Input to Improve Inventory Performance” and invited Dr. Pradip Kumar Bala to deliver his valuable lecture on it. Dr. Bala is associate professor at IIT Roorkee in Department of Management studies. Dr. Bala introduced the association rules, also known as market basket rules, in the context of retail items.

Market basket rules have been widely used in marketing, shelf allocation in retail stores, web designing in commerce etc; however, according to him, the works on applications of these rules in the area of operations management have been limited so far. He mentioned that recently a few works with applications of market basket rules in inventory management have been applied. According to him, the knowledge of correlated items in the form of association rules can be of tremendous importance in designing inventory replenishment policies and hence, it must be accounted for. The research incorporated in his current work makes an attempt to account for demand correlation at transaction level in retail inventory management. The cost of joint replenishment for correlated items is often found to be much less than the total cost of individual item replenishment. However, just the knowledge of the names of items with correlated demand, and a type of relationship are not always sufficient. We need to know the probabilities or probability distribution of joint demand. When the number of items increases, the complexity of the demand relationship among the items increases dramatically, making it infeasible to calculate all probabilities of joint demand in advance.

To overcome this, he suggested to make use of the association rules which are mined from the past transaction data. The impact of association rules can be used to compute the profitability measure which forms the basis of grouping items with high probability of purchase in the same group. Replenishment policy can be designed for each group separately with higher profitability of inventory operation. The research suggests a measure for profitability index and an algorithm for grouping the items based on the profitability index.

Finally the seminar was wrapped up with queries from faculty and students of the department, which churned out some interesting perspectives and left the attendees with many issues to mull over.

Contributed by:



Vivek Agarwal
MBA, 2011-13
IIT Kanpur

Sep 1, 2011

Latest edition of monthly IIT Kanpur e-Newsletter: Avant Garde is out!!!

Well, the wait is over... The “team” is out there with a fantastic September edition of IIT Kanpur e-Newsletter: Avant Garde

The world has been witnessing change of late in the form of Jasmine revolution, Wiki-leaks, Japan’s crisis and several other events of big and small scales... India also saw, and continues to see, a “change” in mindset against corruption... and so “the change” has not been elusive to Avant Garde as well.

Avant Garde, with few new enthusiastic and energetic editors and equally ecstatic contributors, looks at its new level in this edition. The articles on Hero-Honda split, technological revolution of tablet-pc, and change in attitude of people toward corruption by MBA 1st year students; insight into Strategic Process Improvements in Internal Operations‘ (Apollo Health Street) by Nabarun Sengupta (MBA 2nd year) truly exemplify the theme of this edition: “Change: the eternal constant”.

I, personally as well as on behalf of PR and media cell, congratulate the Avant Garde team for bringing forth such a fantastic issue and hope that all of you enjoy reading this edition.

Avant Garde can be reached at:
http://www.iitk.ac.in/ime/MBA_IITK/avantgarde/

Happy reading :)




Hitendra Kumar
PR and Media Cell
MBA 1st year, IIT Kanpur

Aug 29, 2011

Alumni Interaction @IITK - Visit by Shamim Akhtar (MBA 2007)

It was a dull, humid Sunday evening and despite the dullness in air, there was a buzz of excitement among the students of MBA2013 and 2012, who had gathered in front of canteen of Hall 8. We were all very eager to meet Mr. Shamim Akhtar, an alumnus of MBA, batch of 2007, from IIT Kanpur. He has worked in SBI Caps for 3 years after his MBA and is currently working in Arab National Bank in Saudi Arabia.

After a wait of around 15 minutes, Mr. Shamim – a very young looking, smartly dressed person - reached the canteen. He was quickly introduced to us by a student from our senior batch after which we all settled in a circle in the open air and the much awaited informal session with him began. After a self intro, he was bombarded with questions from everybody who had gathered. He patiently explained to us the career path he chose and how he had crafted it through the MBA course and means of various certifications. He discussed with us the importance of various certifications highlighting mainly the Finance related certifications. He also enlightened us about the kind of job and works that MBA graduates are offered in banks. He explained this to us through means of various examples quoted from his own job experience in the 2 banks that he had worked with. We also cleared our doubts about the impact of down rating the US on India and how this would impact our job opportunity, especially in Finance sector.

His focus then shifted to the existing course structure offered in MBA at IIT Kanpur and discussed pros and cons of it with us. During our conversation, he reminisced his days in our campus. He vividly remembers all faculties who had taught him and every detail of his college days.

He instilled in us a lot of positive energy and enlightened us about the path ahead. Shamim had set an exemplary behavior before us by showing an active involvement with his Alma-mater ever since he passed out in 2007. After one and a half hours of a very fruitful interactive session, it was finally time to bid him ‘goodbye’.

Contributed by :

Nimisha Raveendran
Lead - Alumni Relations
Alumni Relations, PR & Media Cell
MBA 1st Year, IIT Kanpur

Aug 27, 2011

Rocking Freshers Nite '11

After a month long storm of unending cases, presentations and surprise quizzes, MBA freshers got their first opportunity to party at IIT Kanpur. The much awaited fresher’s party was thrown by seniors on 20th August at the old Students Activity Centre of IIT-K. The welcome party was marked by mile wide grins and high spirits with Rubal and Arpita being the comperes of the night.

Each of the juniors had to take the stage one by one but the catch was to ‘Strictly come Dancing’. Everyone got to see the widest range of dance forms at a single place ranging from salsa, bhangra to someone barely shaking a leg.


The seniors pitched in to break the ice and convince even the most resolute. Then, everyone had to introduce themselves, where juniors were asked about their relationship status, interests etc. People came up with amusing responses for status ranging from “Complicated” to “Confused”. Each of the junior was given interesting tasks to perform and showcase his/her talent as a means to judge for Mr. And Miss Fresher 2011. The juniors got to see the other side of the seniors as there was healthy ribbing and teasing as proposals flew to some of the ‘eligible’ bachelors and bachelorettes of the senior batch.
This was followed by two brilliant performances presented by the junior batch. One of them was ‘Choreography’ that weaved a story through silent acting and songs, which really fascinated the audience.


Another performance was a skit which had mimes of Bollywood stars like Amitabh Bachan, DevAnand etc. Finally, ten people were shortlisted for Mr. Fresher and Miss Fresher title. The next round began with Question & Answer which tested impromptu response and novelty of ideas. Finally, Himanshu and Vijayta bagged the crown. Also, Vivek, truly deserving, walked away with the title of the best entertainer of the night.

Music at DJ enticed all to shake their legs and what not. The MBA batch let their hair down and raised the temperature.


Along with it, people headed for the delightful food. The party manifested exuberance and zeal at its full flow. It marked the beginning of both celebrations & hard work that students would be encountering for the coming crucial two years at IIT Kanpur. The medley of song, dance, light hearted banter and feverish dancing highlighted the true spirit of MBA@IITK where everyone dances to the music but on his own tune, where the world comes to a standstill as you take the stage and show your hidden talent. The junior batch discovered many a hidden talent as well as a deeper connection to the senior batch through Fresher’s Nite 2011.





Contributed by:
Alok Jain
PR and Media Cell
MBA, IME, IIT Kanpur

Apr 21, 2011

Seminar: Some aspects of liquidity of stocks in the Indian stock market

Speaker :Dr.Devlina Chatterjee
Indian Institute of Science Bangalore

Background of the Speaker:

Devlina Chatterjee got her BTech in Agricultural Engineering from IIT Kharagpur in 1989. She subsequently got a PGDM (Agribusiness) from IIM Ahmedabad, MS degrees from Penn State University (Agricultural Engineering and Agricultural Economics), and her PhD in Management Studies from IISc Bangalore in 2010. She also worked in industry for a total of eight years at organizations like IFCI, New Delhi; GE Capital, Bangalore; and Antrix Corporation, Department of Space, Bangalore. Her work experience in these organizations has included evaluation of project proposals, statistical analyses of credit card business data, and contractual negotiations in the space image marketing business.

The seminar:
Dr. Chatterjee began by stating the focus of her study, the liquidity of individual stocks traded in electronic market. She went on to quote Black and Kyle to elaborate on liquidity. According to Black, a market is said to be liquid if it is continuous and efficient. Kyle gave the transactional properties of such a liquid market as tightness, depth and resilience.
As Dr. Chatterjee told, it is difficult to quantify the multidimensional nature of liquidity and a solution to this, forms the focus of her paper. Her paper delves into this by finding the relation between the various proxies which can be used to quantitatively describe liquidity.

She utilised factor analysis and survival analysis to test two models, one which measures the various macro and micro proxies to find the factors which would help quantify liquidity and second, which finds how long it takes for given order to be executed.
The data for this analysis was taken from NSE in two time intervals and covered 124 and 127 stocks in the two intervals respectively.

In the first model, the multi-dimensional nature of liquidity was studied first through factor analysis of eleven commonly used liquidity proxies – trading volume, turnover, frequency of trading, turnover ratio, price range, liquidity ratio, relative bid ask spread, order depth, market depth, immediacy, price elasticity of buy/sell. The study revealed that across two different market conditions, five factors emerged consistently: depth, spread, volume, price elasticity and relative activity. Thus the 3 transactional properties as stated by Kyle are verified.

In the second model, execution probabilities of limit orders were studied using logistic models and survival analysis. The covariates used in the analysis were price premium, volatility, relative bid-ask spread, order imbalance, trading activity, depth, relative activity in script, last traded price of stock, short term changes in trading activity, time of day and day of week.
In related prior studies, the history of the entire limit order book had been reconstructed using high-frequency data and heavy computation. Here, using much less data, the idea of hypothetical orders, and interval censoring, most appropriate distribution of survival times were obtained. The covariates which were found to determine these were price premium, closing price, log of depth, volatility, relative activity and firm order size.
Finally Dr.Chatterjee closed the presentation by observing that, both the models developed in this study made good out-of-sample predictions as well.
The seminar was wrapped up with a free-wheeling discussion between Dr. Chaterjee and the esteemed faculty of IME Dept., which churned out some interesting perspectives and left the attendees with many issues to mull over.

Contributed by:
ArpitaPandey
PR & Media Cell,
MBA, IME Dept
IIT Kanpur

Apr 14, 2011

Finatics Lecture Series – Sustainability Strategy and Triple Bottom Line Reporting

Speaker Details: Mr. Anindya Sengupta, Manager-Sustainability & Climate Change, PricewaterhouseCoopers Pvt. Ltd.
Mr. Sengupta has been Assistant Manager in IOCL and is currently working on Greenhouse Gases credit programs, GRI-G3 Sustainability reporting.

After immensely informative sessions by Mr. Alok Sheel, Ms. Shivani Datta, and Mr. Manu Maudgal, Finatics Lecture Series came to the last lecture of the day, and one on an important emergent phenomenon of Sustainability Strategy, which is being taken up very seriously by the corporations and brands globally.
The lecture was organized into three sections: Sustainability and Triple Bottom Line basics, Sustainability Reporting and Global Reporting Initiative, and discussion of some of the related recent issues. Mr. Sengupta began with the introduction of Sustainability Strategy and explained the importance of the same in the current industry scenario. He explained how various brands are taking up this issue and utilizing it to their advantage by including it in their marketing strategies. The example given was of ‘Aquafina’ brand of bottled water and inclusion of the tagline ‘Giving back more water than we take’ on its label. He defined triple bottom line as a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments. He explained the key steps of the management approach towards corporate sustainability and told how CEOs rank these issues high these days on their agendas.



In the next section, he talked about steps involved in corporate sustainability reporting (refer to the image below) which are as: Global Reporting Initiative, Sustainability Data Management, and Assurance of Sustainability Reports; and shared the sector-wise reporting standards and the broad content of such reports. He briefly discussed GRI (Global Reporting Initiative) G3 Guidelines related to the same and again the managerial issues dealing with the reporting of sustainability initiatives. He further described the key challenges faced while developing these reports, which broadly are: Sustainability awareness and capacity building, Sustainability data collating and recording system, and Strategic stakeholder consultation.



The last section of the lecture involved general discussion on the issues related to the topic. The entire session was very interactive with questions and doubts posed from the sides of both: students and faculty. What made the last section even more interactive was the discussion of some real-life scenarios and issues currently being faced by corporations in various industries. Such cases gave a good understanding of the issues to the students, and helped them realize the intricacies involved in sustainability reporting and the formulation of such strategies.
The session was closed with the concluding remarks about these issues and with the inception of the thought of how one should align himself/herself with the future needs of the environment and our responsibilities related to the same as upcoming managers.

Contributed by:
Rubal Mehta
PR & Media Cell
MBA 1st Year, IIT Kanpur

Finatics Lecture Series - Carbon Markets and Clean Development Mechanism

Speaker Details: Ms. Shivani Datta, Manager, Climate Change & Sustainability Services from Ernst & Young Pvt. Ltd.

Ms. Shivani Datta presided over the talk about CARBON MARKETS and CDM among an eager and enthusiastic student crowd. She started off her talk by reiterating the present Global concern about over-consumption of resources, contribution by industry on climate change, how the roadmap was laid particularly in the last two decades to tackle Climate Change internationally through various summits organized by UN starting off with the RIO Earth Summit and birth of UNFCCC in 1992 and how the KYOTO Protocol got its acceptance worldwide in 1997 till the end of its first commitment period in 2012. The green house gases and its global warming potential over the last century was also enumerated thereby giving a brief summary of the articles to be followed and the roles of both the developed and developing countries according to Kyoto Protocol. This is where the speaker started highlighting what CDM is, its features, specificity and the challenges faced by it.
Clean Development Mechanism which is one of the mechanisms under the Kyoto Protocol allows a country with an emission reduction commitment and to implement an emission reduction project in developing countries. Such projects allow a company to earn Certified Emission Reduction (CER) credits which is saleable in future thereby meeting the Kyoto targets.
The twin purposes of CDM are
1. To assist developing country parties in achieving sustainable development.
2. To assist developed country parties in achieving compliance with part of their quantified emission limitation and reduction commitments under Article 3.
The features of CDM were broadly CERs, Market driven, Eligibility timeline, sustainable development and GHG reduction. Another concept of Additionality was introduced which is a fundamental issue in the carbon offset market. In order to determine additionality a project should have been started after January 2000 with due consideration of CDM at the start of the project. Several questions were raised doubting whether ‘financial additionality’ exists, how it would benefit other projects and how it would help in alleviating the barriers.



The various steps involved in Additionality are
 Identification of alternatives to the project activity
 Investment analysis
 Barriers analysis
 Common practice analysis
An investment analysis is basically done considering the factors like project returns with CDM revenue and without CDM revenue, Internal Rate of Return Hurdle rate and the CDM cash flow after which the CDM Project Cycle is implemented. According to IPCC’s 4th assessment report (2007), the Global Sectoral Emissions constitutes for about 45 % by Energy Supply and Industrial emissions. A few generic CDM Possibilities are in Energy Efficient Projects, Infrastructure Projects, Renewable energy & Fuel Switch Projects, Plantation Projects. According to current statistics there are 2950 projects which are registered for CDM implementation till date and more than 5600 projects are in the pipeline.
In the final part of the talk the speaker highlighted about CER Trading and its value accretion curve and finally wound up with the challenges faced by CDM like uncertainty, evolving procedures at each Executive board meeting, stricter validation, and unclear framework after 2012 and the pricing of CER.
Finally the curtains came down with her last words quoted by Mr. Paul Kelly that “Carbon is the currency of a new world order”.

Contributed by:
Arvind Rajendran
PR & Media Cell
MBA 1st Year, IIT Kanpur

Finatics Lecture Series - Harnessing Markets for Climate Change Mitigation

Speaker : Manu Maudgal, Indo German Energy Programme, Bureau of Energy Efficiency, NewDelhi

Climate change is a burning topic, which deserves the attention of both activists and Governments together. Governments nowadays understand the challenges of climate change and they are ready to include it in their growth plans. The speaker, who holds a key position in German Society for International Cooperation (GIC), has experience in multiple roles and gave the audience an introduction to the current scenario of the crisis in the world, energy crisis, water shortage and global warming; all three occurring at the same time.

He explained the need for becoming a ‘low carbon economy’ and how it can be achieved by in three steps; neutralizing things which can be neutralized, reducing those which can be reduced and finally replacing them with which we can’t do the above two. He also raised the concern, “Is producing more and consuming more” a real growth or is it just an increase in national GDP. IPCC’s prescription of restricting the increase in global temperature to 2°C by 2050 and what all is being done were also brought about in the talk.

The speaker then showed the available options to deal with the above concern by scaling up National programmes, Sectoral mechanisms and by initiating more and more Clean Development Mechanisms (CDM). Reduction in the Transaction costs by using publically accessible credible databases and internationally accepted simple monitoring and verification methodologies is also a way we can think upon. He said that this is a global concern and its high time when each and every sector of the economy should come forward and work in tandem.

In response to this concern, what exactly is already being done by the government? To answer this, he started with the Eight National Programmes as the national plan for climate change and then explained the two government schemes the REC mechanism and the PAT scheme in detail. Renewable Energy Certificate (REC) also known as a green tag is a tradeable non-tangible energy commodity which certifies that 1 megawatt-hour of electricity is generated by renewable sources. He also explicated how these REC’s can bring about more competition in the renewable energy sector and at the same time make individual states overcome geographical barriers in harnessing renewable energy. Perform Achieve and Trade (PAT) scheme is about enhancing cost effectiveness of improvements in energy efficiency in energy-intensive large industries and facilities, through certification of energy savings that can be traded. This particular scheme covers eight industrial sectors like iron & steel, railways, thermal power plants etc.
The lecture was very impressive for all the audience and throughout his speech the speaker emphasized on need to shift from “Consumption Driven Growth to Sustainable Growth”. The faculty present also added vibrancy to the lecture by raising pertinent questions which helped the audience grasp the nuances of the talk.

Contributed by:
Vishal Vivek Jacob
PR & Media Cell
MBA 1st Year, IIT Kanpur

Apr 13, 2011

Finatics Lecture Series - The Global Financial Crisis, Sustainable Growth and rise of G20

Speaker Details: Mr. Alok Sheel, Joint Secretary, Dept of Economic Affairs, Ministry of Finance, Govt of India.
Mr. Sheel has been handling Govt of India's relations with the G20, the World Bank and other multilateral financial institutions.

Mr. Sheel discussed the various aspects of global financial crisis, its causes, structural changes through the world economy and the rise of G20. Besides this, some key takeaways or lessons learn in terms of policies implemented during crisis and its significance for India, the ways in which this recession has affected the globe and how can G20 help world back on its pre-crisis growth curve were discussed.

The major incidents which preceded this crisis were low cost of capital, increasing risk tolerance, low interest rate which discourage savings and encouraged leverage and finally, lax financial regulation from US government. But, the major event which triggered of this domino effect was US subprime housing crisis. Although, subprime housing loans form a very small part of US housing market, which in turn is a small part of US financial sector, it caused a crisis which US has never witnessed since the great depression of 1929. The major reason for that is most of the things were inter-related in this globalized world. The fact that most of the subprime mortgages were mixed with various other securities to launch Collateralized Debt Obligations or CDOs which were frequently traded among the various wall street bankers is well illustrated by the below picture. The problem with these loans were that they were distributed to many of the people who were incapable of paying them. They bought houses using these loans thinking the prices can only go in one direction, northwards. But, they suddenly found themselves in a soup when the interest rates of their floating rate loans increased. Suddenly, their housing equity became negative which forced them to leave the house as it was worth less than what they had to pay for. Also, during the short boom when their housing equity was positive, Wall Street firms left no stone unturned in saddling these guys with debt.



Another reason given for this crisis has been globalization. The capital which aids globalization is highly mobile and keeps on shifting to search for low cost raw material, cheap labor. This has lead to China becoming a manufacturing hub with more than 40% of US companies profit coming from that region. But, the problem with this kind of growth is immobility of labor because of which their employment suffers. The corporations and their few owners earn lot of profits from outsourcing, but, the local employees are left behind without jobs and sources of income. They are forced to lead their lives on borrowed money. This has been one of the reasons why US debt has increased to the highest ever peace time level i.e. more than 80% of the GDP in late 2000s.

Another reason for this great crisis is the runaway increase in size of largely unregulated US “credit default swaps market” and the repeal of “Glass Steagall Act”. The credit default swaps market grew to more than the size of US stock market, US mortgage security market US treasuries market combined together as demonstrated in the picture below.



Apart from this, the Glass Steagall Act which was introduced in 1933 to stop speculation in market after the great depression was withdrawn in 1980.

This recession was tackled by using various fiscal and monetary stimulus as per Keynesian economics. These included various quantitative easing measures like reducing interest rates to effective zero and purchasing short term government bonds. The problem with such policies are most of the tools have been blunted by rampant globalization and lack of market levers which are still controlled by the government. But, the coordinated efforts at the G20 levels ensured a coherent policy response at the world level has definitely stymied this crisis.

The aftermath of this crisis has been increased leverage across all the countries and cyclical debt traps may extend beyond the PIGS. According to Ken Rogoff, “the current debt levels in developed countries are unsustainable and are impairing growth. The most part of US debt is financed by countries like China and India, by maintaining sufficient foreign reserve of globally accepted currency. This is a kind of paradox as in classical economics funds are supposed to flow downhill, but, in this they are flowing uphill from developing to developed economics who are trying to fuel their consumption driven growth through high levels of public debt.

According to most of the experts, India can become a biggest economy of the world. As per William Buiter, “India can surpass China as largest economy by 2050”. This can happen due to India’s younger population and Indian government emphasis on developing knowledge based economy. According to the Economist, “India will add 136 million new workers as compared to 23 million expected from China”. To achieve this, India must use G20 forum to its advantage by ensuring greater roles and responsibility for itself at the world level.

The audience was really appreciative of the depth and breadth of knowledge and the ease with which Mr. Sheel conveyed complex financial situations and brought a fresh perspective to it. Finatics lecture series started off with a flourish thanks to him.

Covered by - Neeraj Agarwal
PR & Media Cell
MBA 1st Year, IIT Kanpur

Apr 6, 2011

Finatics - MBA Annual Financial Conclave

MBA, IME Department, IIT Kanpur presents





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Prizes worth 45000 to be won !!

ON-CAMPUS LECTURE SERIES

 CDM Project Consulting, Sustainability, and Project Viability
By Ms. Shivani Datta – Manager, Climate Change & Sustainability Services, Ernst&Young

 Policy Analysis & Development for CDM, Sustainability Initiatives in Industry, and the role of regulators in carbon markets
By Mr. Manu Maudgal – Technical Expert, Indo German Energy Program, GIZ GmbH

 Environmental Finance and Green Accounting
By Mr. Anindya Sengupta – Manager, Climate Change & Sustainability Services, PriceWaterhouseCoopers

 Global perspective of macro-economic policy initiatives, challenges related to sustainability and Indian policy in G20
Mr. Alok Sheel – Joint Secretary, Department of Economic Affairs, GoI


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Official Management Portal: MBA Universe

Jan 22, 2011

Seminar: Financial Risk Management: A Brief Overview

Date: 14th January, 2011

Speaker: Dr. Puneet Prakash

About the speaker:

Dr. Puneet Prakash is an Assistant professor at Virginia Commonwealth University since 2005. He holds a Ph.D in Risk Management and Insurance from Georgia State University, an MBA from IIFT, Delhi, PG Diploma in Development Policy (IGIDR), and M.Sc. (5-year Integrated) from IIT, Kanpur. He is also a visiting faculty to IIT Kanpur, Fall 2009.

Abstract of the talk:
The seminar started with a brief discussion on market and the categorization of market participants into risk averse, risk neutral and risk seeking behaviors. Dr. Prakash then proceeded to discuss the Modigliani – Miller theorem that Corporations are risk neutral and that if investors want to manage risk they could do it as an individual rather than through the company. The underlying assumption is that a company and a individual have the same capability to manage risk. As this assumption is not a universal truth, not all corporations are risk neutral. Any discussion on risk management invariably involves Jensen’s inequality and this seminar was no exception to this. Dr. Prakash explained in brief Jensen’s inequality for the benefit of the audience which had some undergraduates apart from the usual MBA students.

The concepts of hedging the risk, risk premium and insurance were then dealt with. Dr. Prakash then proceeded to answer when corporations manage risk and their value functions. He also touched upon locating the expected bankruptcy point and expected bankruptcy costs. To ensure that the mixed audience carried his point home he interspersed theory with real life experiences, examples and analogies. Dr. Prakash then explained what is known as integrated risk management. He then mentioned the categorization of risk into operational (business) and financial. The fundamental generic risk management matrix was next on his agenda. This was followed by a small brief on how to practice ERM (Enterprise Risk Management) and what are the origins of financial risk.

The process of financial risk management was then taken up. Dr. Prakash then described various properties of risk viz. coherence, monotonicity positive homogeneity and sub-additivity. He then went on to elaborate on how to compute value at risk given the distribution of return. What followed this macro level discussion was a micro level mathematical model for financial risk management. Financial risk was broken down into market risk, default/credit risk, interest rate risk and liquidity risk. He then discussed generalized extreme value distribution (Fetcher Distribution) which is also known as limit theorem for extreme values) an then he explained how short selling could take a firm from inefficient to efficient part of risk return curve. The informative two hour talk concluded with capital asset pricing model.

Prepared By:
Atul Mishra(matul@iitk.ac.in)

Published By:
PR & Media Cell, MBA-IIT Kanpur (prmba@iitk.ac.in)

Jan 14, 2011

Seminar: Dynamic Credit Rating Standards- Why do they vary over time?

Date : 7th January, 2011

Speaker: Dr. Puneet Prakash

Biography of the speaker:

Dr. Puneet Prakash is an Assistant professor, 2005 – current, at Virginia Commonwealth University. He has done his Ph.D in Risk Management and Insurance from Georgia State University. He completed MBA from IIFT, Delhi, PG Diploma in Development Policy (IGIDR), and M.Sc. (5-year Integrated) from IIT, Kanpur. He is also a visiting faculty to IIT Kanpur, Fall 2009.

Abstract of the talk:
In the paper mentioned, it is examined as to why credit rating standards change over time. Drawing upon the literature on certification intermediaries, it is argued that rating standards are related to the economy-wide credit quality distribution, and as the distribution changes, so do the standards. Empirical tests verify this predicted relationship. In particular, with a rise in economy–wide dispersion of the distribution of credit quality, rating standards become more stringent. However, an increase in mean probability of economy wide default risk has the opposite effect. These findings are robust to not only alternative specifications of measures of location and dispersion of the economy-wide credit quality distribution, but also to the stickiness in ratings.



Dr. Puneet started the discussion by explaining the motivation of the CRAs (Credit Rating Agencies). He explained that the topic has a keen association with the long-term debts. When a firm seeks for some investors, investing companies want to know the credit-worthiness of these issue companies. He then explained the role of CRAs in the society in this context. He explained that a Credit Rating Agency acts as:
a) An information intermediary to come in and analyze Balance Sheet of the issuer. It removes information asymmetry between the issuer (firm seeking for debt) and the investors
b) A monitoring unit: It charges a fee for the service it offers in this respect
c) A Certificate intermediary: It provides an assurance of quality for the issuer.

He next moved on to mention that a credit rating agency takes into account, how much money of its own the issuer is putting into a debt. CRAs have a role of increasing social welfare, collecting information and disseminating it.

The next major topic that he discussed was CRAs and the current crisis they are facing. He explained that in the current scenario, many companies are frequently changing their standards to maintain their market shares. He indicated that these companies have started ignoring interest rate changes in the economy. And as a result, CRAs also ignored interest rate risks. As of now, though, CRAs are regulated much strictly.

Next he came to the main Research Question. He explained a few concepts with the help of three research papers, as enlisted below:
• Blume M., F. Lim and A C MacKinlay (BLM), 1998, “The declining credit quality of U.S. Corporate Debt: myth or reality?”, Journal of Finance, 4, 1389-1413
o Rating Standards become stricter over 1975-1995
• Zhou, 2001, “Credit Rating and Corporate Defaults”, The Journal of Fixed Income , Vol. 11, No. 3: pp. 30-40
o Rating Standards become lag over 1981-1998
• Gordy and Heitfield, “Estimating Default Correlations from Short Panels of Credit Rating Performance Data”, 2002
o Rating standards are time-varying, to explain rating through the cycle

Dr. Puneet followed Gordy and Heitfield (as highlighted above), as the base paper to next explain as to why do CRAs vary their standards over time? He explained that standards are dynamic because they are tied to the underlying economy wide credit risk distribution. So, one should not expect any trend over time. He mentioned that when the average quality of companies as a whole declines, standards are lowered (market share argument). In this case, the CRAs believe that if they do not lower their standards, they will lose their market share. This is due to the fact that the client may get a good rating for more defaults from another CRA in this case. He also argued that as the dispersion of the distribution of credit quality rises, standards are tightened (reputation argument). As its implication, it becomes evident that rating standards have no trends. Instead, these are tied to the underlying risk distribution.

Dr. Prakash then went into the theoretical underpinnings of the model used and developed in the research paper. He stated that a Rating agency is a profit maximizing firm. It is also assumed that a market is characterized by information asymmetry. Ultimately, the problem reduces to a Seller’s problem:
Max (θ – c (θ, t) – P); where θ: debt
C: Cost of obtaining θ
t: Efficiency parameter
P: Price a seller pays to the CRA

On the basis of these theoretical Implications, certain Empirical predictions can be stated as:
• t is time varying:
• P is:
o Directly proportional to the mean value of the underlying quality E(t)
o Inversely proportional to the dispersion

Hence, the dispersion of the distribution of credit quality is taken as a scaling parameter.

He further introduced the issues of measurement where certain mathematical models were explained, based on the Merton model. A ‘Rating Agency model’ was introduced as an econometric model. It was mentioned that the rating thresholds represent the standard different CRAs have. For example, a rating of AAA may mean 10 default points for one CRA while 8 for the other.

The last part of the seminar was the Q/A round, where Dr. Puneet addressed to the students’ and faculties’ queries. The seminar closed with a vote of thanks by Dr. Subhash C. Misra, Faculty, IIT Kanpur. The session proved to be very informative for the students, as they become aware of the major forces affecting the functioning of the rating agencies in a free economy.

Prepared By:
Rubal Mehta(rubalm@iitk.ac.in)

Published By:
PR & Media Cell, MBA-IIT Kanpur (prmba@iitk.ac.in)

Jan 4, 2011

Seminar: Integrating Global Marketing and R&D Management at Novartis

On 29th Dec. 2010, Dr. Subhanu Saxena, the Global Head of Marketing and Sales, General Medicine of Novartis visited the department and provided insights into pharmaceutical industry. During his long career at Novartis, he has handled many challenging roles, dealt with diverse business conditions and travelled to various parts of the globe. His commitment to the field of healthcare is supplemented by his passion towards ancient Indian literature and philosophy.

The seminar was aimed at sharing the speaker's insights in the healthcare industry and share with the audience the various challenges, innovations, technological initiatives and management practices prevalent at Novartis.

Dr. Saxena began by sharing with the audience some information on the healthcare industry in general, and Novartis in particular. The high financial margins of Novartis are indicative of the robustness of business along with diversification of interests to strengthen revenue flows of the company. The amount invested in R&D is very substantial and points out the high priority given to innovation and new drug development over generics. To foster this spirit and ensure high success rates in research, the focus has been on the value proposition of a drug to justify its business case as well as the health economic cost modelling to justify further investments.

Dr. Saxena then proceeded to breif the audience the internal workings of Novartis in the drug testing and clinical trials stage of drug development, called Integrated Product Strategies (IPS). The various stages of drug testing were thoroughly explained emphasising the various checks and procedures prior to human trials. This point was in response to a students query regarding the clinical trials and their thoroughness in detecting side effects during human trials.

Dr. Saxena also shared with the audience the inherent costs associated with new drug development. Since statistically, the discovery of a drug without side effects and having potency is very small, hence the drug discovered needs to be having sufficient revenue generating capability to offset the losses incurred during R&D. This is done by Novartis through the Pathway based R&D approach. By this method, diseases are researched to determine the common pathway of the disease as well as the drug used to treat it. By this, a drug discovered for a rare strain of disease can be used to treat a more widespread ailment, thus expanding the target segment and improving the business case for drug development.

The structure of the company was also explained in depth to show the working of a geographically spread, technology focussed and globally integrated organization. The structure illustrated numerous key aspects of the organization such as preference for in-bred talent pools, diversity in higher management, re-shuffling of verticals to increase exposure and integration of functions for improved synergies.

The audience also were engaged in interactive discussions with the speaker as they looked to gain first hand information about the healthcare sector from his extensive experience. In response to a faculty's query, Dr. Saxena elaborated on how interpreting and acting on consumer behaviour analysis was a vital cog of the product marketing and sales functions to increase their acceptance and boost market shares. In response to a student's query on the cannabalization of sales by generic drug companies limiting the revenue stream from developed drugs, Dr. Saxena shared with him that Novartis has a generic company which is 2nd largest in the world. In this way, the revenue lost is still benefitting Novartis's generic arm.

In conclusion, all the present faculty and students from various students were treated to a highly interactive and informative session by an industry stalwart. The interaction helped all the students understand operations of large firms in competitive environments and got a glimpse into the thought processes of higher management dealing with diverse challenging scenarios while balancing social responsibilities.