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Fundraising Spree on for Indian Banks

Profitability and NPA are the two extremes that need to be balanced for banks. Since a long Indian banking sector is on a continuous fight to draw a balance between them. Recently the Central Bank decided to take control over NPAs with a huge capital infusion into the banking sector. But the outbreak of COVID-19 derailed all efforts and the problems of NPAs have been resurfaced and touched the new height which seems to be very difficult for the Indian economy to stand with.

Stress in the Banking Sector

The Indian banking sector is reeling under stress for a long time. Indian banks have been tested over the past few years after the RBI forced them to review their assets under strict criteria that eventually resulted a surge in bad loans. To add their woes, borrowings have also slowed due to lockdown. These stresses are more apparent in state-run banks than in the private sector.

Reason for Stress

According to a few economists, the primary cause of this situation that has slammed all banks are the fall of IL&FS in October 2018 and the ongoing pandemic. India is expected to fall into a recession this fiscal year due to COVID, which has affected over 2.6 million people and caused 70000+ death in the country. It is the most discussed and worrisome topic in the Indian economical circle that there are chances of getting caught in the recession since 1979.

According to RBI, the ratio of non-performing assets total advances could soar to over 12.5% by March 2021 from 8.5% as of end-March this year, prompting the country’s central bank to push banks to raise capital, which now totals over 1 trillion rupees ($13.4billion). Additionally, the Financial Stability Report (FSR), noted the NPA ratio could jump as a high level as 14.7% in the event of severe stress.

Fundraising a Way out

RBI Governor advised all banks to improve their governance and sharpen risk management skills. Banks need to raise capital on an anticipatory basis instead of waiting for an adverse situation. It is necessary for both public and private sector banks to build up adequate capital buffers.

As a result, financial institutions are on a fundraising spree via debt instruments and equity offerings. The latest bank to join the fundraising spree is Axis bank which on said had raised 100 billion rupees by issuing shares to Qualified Institutional Buyers for INR 420.10. Other financial institutions, mortgage lenders, HDFC also closed a deal to raise INR 140 billion via various instruments. At the same time, the largest private bank of India, ICICI bank also wishes to raise INR 150 billion. Later State Bank of India, India’s largest lender also joined the league and announced to raise INR 250 billion to maintain its capital requirement. Not only banks but similar signals are also been sensed from Non-Banking Financial Companies which might have to raise money. In total, it is approximately $13 billion could raise to tackle the NPA challenge.

Governance

At present, Indian banks are in dyeing need for reforms. The Bank exposure to stressed sectors, loan-loss cover, and pre-provision earnings determine the urgency of their capital requirements, which is more pronounced for state banks. Recently 5 members committee has been formed by RBI under the Chairmanship of former CEO of ICICI bank, Mr. KV Kamath. This committee makes recommendations on the required parameters to be factored into the resolution plans. A resolution to the problem of the corporate debtor insolvency and its consequent inability to pay off debts. The committee will submit its recommendation to the RBI. The central bank will then notify the same along with modification including the restructuring of loans if any in 30 days.

Support from Government

Over the last five years until March 2020, India had pumped around 3 trillion rupees into banks to remain capital requirements. In the future, we may expect more infusion of cash from the government eventually to support the banks and consequently to save the economy.

 

Aditya Verma

PGDM 2020-22

IILM, Greater Noida

Dr. Kumar Saurabh

Asst. Prof-Finance

IILM Graduate School of Management, Greater Noida

INDIA – AN OPPORUNITY IN CHALLENGE

Blogpost By:- Prof Sonika Sharma (OB & HR), sonika.sharma@iilm.edu

Ongoing pandemic has changed our world in many terms. The community of nations has come to realize, how vulnerable it is to a crisis like COVID 19. Despite having all the economic muscle, robust industrial ecosystem and military might, the powerful and mighty countries are found helpless and they are forced to have a rethink about their capabilities. This crisis has blurred the stereotype distinction between developed, developing and non-performing economies. Needless to say here, India is not left untouched by the impact of COVID 19. A country which was on its way to address the core problems like basic education, health for all, raising farming income, rural infrastructure and employment generation has been distracted from its path.

As the old adage says, there is an opportunity in every crisis. India is given a chance to remodel its policies and strategy about developing its huge human resources. A population of 1.35 billion with over 65% under the age of 35 is wealth in real tangible terms. If we take our lessons well from history, we find that Europe rose from the ashes after the Second World War. Japan became an economic powerhouse after nuclear destruction and South Korea joined the club of the developed world.

This pandemic has provided a window to us for raising the quality of our educational institutions who are preparing our students in the fields of scientific research, engineering, medicine, agriculture and management as these are the core areas where a lot of qualitative changes has come and still yet to come. If India desires to be counted amongst the nations having a world-class workforce, this is the time for a serious re-look at our education sector. Best of our students get admission in the premier colleges and universities across the globe and this is a testament to their mettle.

The demand for domain experts will give birth to a whole new class for employment. Students from engineering, medicine, manufacturing and management sectors will have immense opportunities as both government and private sector employers will be willing to pay better remuneration to the aptly skilled manpower.

India can only go upwards from this level of economic health in every sphere. It will be logically correct to say that a whole generation of working professional shall be rendered useless when faced with the new, demanding technological advancement in every field. Revolutionary up gradation in skillset will be the key to success for growth and survival. A very promising future awaits the management students, equipped with the right kind of knowledge and specialization. Next three decades and going to be the growth period for service and manufacturing sectors in India and resultantly the country will become a big employer.

Since 1993, IILM is contributing to India’s growth story by providing responsible education across its 6 campuses with a global alumni network of over 12,000+ members. Today, after 25 years of its inception, IILM has been delivering superior quality education consistently and incessantly. The IILM ethos is focused on identifying and nurturing the next generation of thought leaders through intuitive education and experimental learning.

Written By:-

Prof Sonika Sharma (OB & HR)

sonika.sharma@iilm.edu

Solving complicated problems with Design Thinking

For the world’s most beloved brands like Apple and Ikea, Design thinking has been the reason behind their intentional and human-centric products. Design thinking encourages the business to be more empathetic in their approach in rendering a solution/product by putting themselves in the customer’s shoes to understand the needs, desires, and potential problems. It is about providing a solution by visualising the product, telling a story rather than selling a feature.

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To explain, I will share two real stories.

The first one is about the company GE Healthcare*
Those of you who have undergone an MRI Scan or got it done for a family member would know that the scan machines, however sophisticated they look, have the ability to scare. Having an MRI Scan is generally not a pleasant experience for adults, let alone children. Children often struggle to stay still during the process (often crying) given the frightening experience. The Chief Designer at GE Imaging Machines was shocked by this and felt as though something had to change. By applying Design Thinking, he decided to observe children going through the scanner while also having conversations with not just children but doctors and educators. Through the conversations and observations, he found that rather than being seen as an elegant piece of technology, the MRI Scanner was considered to be a scary machine by young children. As a result, CT Pirate Island Adventure was created. The MRI scanner was made to look like a pirate ship and it transformed the traumatic experience into a kid’s adventure story where the patient had the starring role. This transformation brought about a dip in sedation of children prior to the scan by 70% Another story is about Starbucks*. The food and the beverage industry were experiencing a drop in sales and poor margins. Starbucks decided to interview hundreds of customers to better understand what they expected from their coffee shops. Through the insights gained from these interactions, it was evident that the customers were expecting an atmosphere and ambience that gave them a sense of belonging and relaxation. As a result, Starbucks positioned round tables strategically to make solo coffee drinkers more comfortable and less self-conscious.

Design thinking is a process that helps us to solve complicated business problems. The concept of Design Thinking questions the prescribed process and steers the designer to be conscious and mindful of the methods that help to get him/her unstuck. It requires a drastic change in mindset to ensure successful application and that itself is a difficult task. The mindset that needs change are about answers that are not clear from the start, the failures that are powerful tools for learning, the focus on human centricity and making the iterative process a way of life for unexpected solutions.

Some of the strategies or mindsets that can help to apply design thinking are :

Human Focus: Your customers are not sheer numbers and therefore it is an imperative to understand their feelings, hopes, fears, and unique stories. Once you get to know and empathize with them, you may think of your product/solution and how you market it, in a completely different light. Ethnographic research and quantitative market research will set your intuition for informed decisions.

Flare-And-Focus: In design thinking, using divergent thinking, or “flaring,” helps to discover opportunities and explore ideas. This helps to broaden the base of thinking and consider different stories before arriving at a solution. Once you have a variety of themes or concepts, using convergent thinking or “focusing,” helps to narrow down choices and make informed decisions. Using flare and focus catalyses your creativity with a focus to deliver the project within time and resource constraints.

Iterative Process Focus: Imagine investing in a big campaign, only to discover that it did not resonate with your customers after having spent so much time and resources on it. For instance in product design, the cost of failure significantly increases further along the process. One of the ways to lower these risks is by constantly testing our hypotheses, by making our concepts tangible and testable with users from the initial stages until the very end. Knowing how to give and receive feedback leads to a culture of openness and constant improvement.

To summarise, I would state that your intention for business changes when you view it through the lens of the customer. In Design Thinking, you solve problems that meet the customer’s need and that for any business is the sole objective of being in business.

*Source:https://medium.com/@shaynam85/6-companies-that-have-successfully-applied-design-thinking-2d8bddf4e9e2

Covid-19 –Political Obligation and Government Compulsion

The current state of epidemic not only urges the government to take harsh measures but also the people to cooperate with it for their own survival. Letting go of their right of self-preservation the people need to understand that the measures are for their own good.

Hobbes had once stated “Out of it, any man may rightly spoil or kill each other, in it none but one. Out of it we are protected by our own forces, in it by the power of all. Out of it no man is sure of the fruits of his labour, in it all men are. Lastly out of it, there is a domination of passions, war, fear, poverty, slovenliness, solitude, barbarism, ignorance, and cruelty, in it, the domination of reason, peace, security, riches, decency, society, elegance, sciences and benevolence”. This is a situation which seems to persist in India and around the world currently. When the people are anxious and cautious at the same time. When the citizens are looking towards the sovereign for the answers to their questions and support for their well being. There is peace and havoc; there is ignorance and awareness that simultaneously persists.

Here the measures of a complete lockdown by the Indian Government at the early stages has been up lauded across the world. Yet the Indian populace even in this state seems to be defying the government orders as a part of their leisure routine not understanding the severity of the situation. The recent incident of the conglomeration of crowds at bus stations is sheer ignorance on their part against the world wide pandemic.

The government of India needs to be praised that they have been working on meeting up with all the flaws in the scenario and bringing in satisfactory measures in the social, economic and health scenario. It is now up to the people of India to understand the severity of the situation and heed to their obligation towards the state which is abiding by the dictates of the state.

Government and Public Policy

 

The debate on the role of government in an era of automation, internet, globalization and climate change has been going on for long. Historically, the government’s chief duty has been to provide security and public services to its citizens while levying taxes and collecting revenues in return. Discussions have been galore on whether governments will be largely redundant in an interlinked world where technology and supra national authorities will become the major players. Paradoxically with the immense growth in technological progress, the regulatory role of the government has come into focus as well as the view that the government should act as a facilitator of advancement.  The Antitrust cases against Google, Facebook, Apple and Amazon bring to light this tension between the government as a defender of privacy and rights of its citizens while the claim of these companies is that they have ‘spurred innovations’. With the onset of the corona virus pandemic, the lens through which governmental action can be examined has been further widened.

Covid 19 has resoundingly brought out the importance of health and economic policies to the forefront which have comprehensively demonstrated the importance of government and its public policy. The classic definition of public policy by Thomas Dye aptly fits the current thought process- ‘public policy is whatever governments choose to do or not to do.’ Sweden is an interesting case where the government chose what ‘not to do’ by adopting a comparatively lax approach to enforcing social distancing by legal measures instead it relied on societal norms. Governments may regulate behaviour, organize bureaucracies, distribute benefits or extract taxes- or all of these things at once. The government through its monetary and fiscal policies is often seen stimulating a depressed economy like doling out stimulus packages in India, EU and USA, curbing inflation which may otherwise make food unaffordable to the common wo-man (Refer to the RBI governor’s recent statements which point to this policy goal[1]), giving assistance to those who are unemployed (case of MNREGA) or opening markets for growth and jobs (such as Indian agricultural sector reforms).

Governments are expected to impose lockdowns to curb the spread of an epidemic but also ease into ‘un-lockdown’ when economies start going into recession.  For example, the pandemic response by the New Zealand Prime Minister Jacinda Ardern’s government which has been universally praised for its preventive actions and levels of preparedness. Thus, policy-making is an intricate process, shaped and prompted by multitude of factors, actors and their interests. The defining characteristic of this process though is ‘complexity’.

This complex process of public policy making involves primarily the government along with the multitude of government bodies, organizations, lobbies, businesses, contractors and ordinary citizens. It crisscrosses almost every aspect of modern day life- banking and financial transactions, education and healthcare, transportation and infrastructure, trade and foreign policy, social and humanitarian policy, environmental and regulatory policy. One of the immediate and decisive responses of governments in Germany, France, Denmark and Sweden to the covid crisis, for example, has been in providing a direct wage supplement to employers just like wage subsidies on the condition that they not lay off workers Government policies have become absolutely crucial to curbing and coping up with the pandemic but also in solving the ongoing abyss that economies currently find themselves in. In response to the call by businesses and industry leaders for more government action, sweeping interventions and well targeted relief measures, German Chancellor Angela Merkel and French President Emmanuel Macron have proposed a €500 later €750 billion European Fiscal Response, on top of what countries already planned to do nationally.

Recognizing this growing relevance of public policy, IILM offers a variety of public policy courses as part of its post graduate programs. These courses recognize the complexity of today’s world and the ramifications of public policy on businesses, economy and society. Students can choose from various electives in public policy like political economy, international trade policy, international institutions, foreign policy, environmental policy among others along with lectures and interactions with experts on various facets of public policy making in India. The role of government institutions, stimulus packages, sectoral reforms and defense upgradation cannot be overemphasized in overcoming the challenges that we face today. Governmental policies will largely determine the course ahead in terms of recovery from the pandemic and re-energizing the economy and people.

To know more about public policy response to the COVID 19 pandemic and public policy courses at IILM, please write to me at Bidisha.banerji@iilm.edu

[1] https://economictimes.indiatimes.com/news/economy/policy/with-its-eyes-on-inflation-rbi-may-halt-rate-cuts-for-the-foreseeable-future/articleshow/77666027.cms

Will India Emerge as the Global Production Hub?

Will India Emerge as the Global Production Hub?

Due to the COVID-19 pandemic that originated in Wuhan, China, the world is facing a major existential crisis. This virus has led to massive destruction and deterioration of resources across the world. It poses the biggest threat to humanity as the number of deaths is increasing at a rapid pace each day. The Governments of all countries are trying to cope with this crisis in the best possible way.

Shifting of Manufacturing Base

Amid all this, there has been a shift in the mindset where big companies or Multinational Corporations (MNCs) are planning to de-risk their supply chain and shift their manufacturing bases from China. The major reason for this is the massive disruption caused to businesses due to actions taken in the wake of the outbreak. Globally, business houses are considering India as an ideal place for shifting their manufacturing setups. They are exploring the option of relocating their supply chains to diversify their business operations. This could be seen in the case of the tech giant Apple which is planning to shift one-fifth of its production capacity from China to India.

Moving out of China

Even though, India ranks at number 63 on the global index on the ease of doing business and China stands at 31 which is way ahead of India. But still, the Governments of various countries are expressly promoting the idea and encouraging a production shift by including it in their economic packages. They are actively assisting firms that are taking action to move their manufacturing units to other countries. For instance, Japan is ready to spend a hefty amount of around USD 2 Billion to support its firms for changing their locations from China to other countries or Japan itself. Also, as the President of the US has explicitly blamed China for this pandemic and global suffering, so the other countries are also unanimously supporting this view.

India a Favorable Alternative

India is being considered as a favorable alternative to China, and the Indian Government is planning on measures that could be taken to attract foreign investment. For the purpose, a committee of bureaucrats and joint secretaries of various ministries and departments has been set up. The Government had announced various schemes in March 2020 which are inclined to give incentives for boosting manufacturing setup in India. The propaganda is to reap the greatest benefits during this time due to this shift in mindset where India is becoming an upcoming choice for most multinational organizations. Because of its market size and being a potential hub for exports, along with quality personnel and talent India has a golden opportunity to take advantage of such manufacturing migration.

Diversify

There has been a huge dependence by developed countries like Japan, the US, South Korea, etc. in China because of the availability of cheap labor. There is a popular saying that “Never put all your eggs in one basket.” So, these countries are rethinking and reapplying this strategy and are now expected to help India in the forthcoming years. There are almost 1000 foreign firms that are considering India as a potential destination for their manufacturing setups. Most of these firms deal with mobiles, medical devices, electronics, and textiles.

Relaxing the Norms

If India is going to substitute China as a manufacturing hub in the coming years, then major reforms in the structure need to be implemented and relaxing the norms and regulations for carrying out businesses with ease. The problem that India faces is the lengthy rules and red tape that deters potential investors from grabbing opportunities and taking actions for establishing production hubs. It is a time-consuming process for getting licenses and approvals for starting a business in India. Therefore, there is a need for certain relaxations in these proceedings so that there is a fair chance of attracting business opportunities to the entrants and has the scope to expand and diversify existing businesses. This would boost companies in making their businesses flourish.

India, having foreseen this golden opportunity needs to move faster in this direction and must improve the infrastructure that is a pre-requisite for any upcoming development. The authorities can take pro-active and prompt decisions so that India does not lose this fair chance as it is not alone in this race to attract investment. Many other countries are eagerly looking to grab this opportunity. It is the right time for India to sustain and populate its “Make in India” scheme and become self-reliant or “Atmanirbhar” as proposed by our Honorable Prime Minister. This is the time to join hands and fighting this pandemic to come out of it stronger and prosperous. This crisis has pushed the economy by many years but this single chance of reviving it by becoming the global manufacturing hub ought to be grabbed with both hands.

What are your suggestions for India to capitalize on this golden opportunity to attract investment from global MNCs? Do comment.

Deeksha Garg

PGDM Student

Dr. Kumar Saurabh

IILM-GSM

Let’s smart it out!

 

Did you know the pseudo names of the digital natives? Did you know turning into a smart campus can play a vital role in achieving the enrollment goals of a college or a university? Welcome to the world of GenZs… yes, our very own digital natives!

Students are no longer just students, they are consumers. Yes, you heard me right… consumers!! Today’s students are armed with social awareness. Their choices are based on purpose, value, and experience. For this reason, institutions should now reflect on their objectives and reshape how they move forward using advancements that other sectors have adapted to. The higher education landscape is at the junction of an amazing digital shift. A gradual yet robust shift toward being a Smart Campus.

Enter the smart campus

What, precisely, is a smart campus? Smart Campus links devices, applications, people, and technology to enable novel experiences or services and further develop operational efficiency. Some innovative experiences include wayfinding, smart parking, transit, wait times for cafeteria, finding lost belongings, and more. A Smart Campus starts with universal, dependable wired and wireless connectivity – indoors as well as outdoors.

How can educational institutions turn smart 

Our 21st-century world is being restructured by rapid technological change. But no change can happen overnight. It takes planning, strategizing, a common understanding, and a holistic vision. A study by Deloitte (https://www2.deloitte.com/content/dam/Deloitte/us/Documents/strategy/the-next-generation-connected-campus-deloitte.pdfsays, the vision of a smart campus relies on a diverse stack of technology capabilities that should have the following layers: presentation/channels, analytics and automation, data platform, integration, enterprise applications, infrastructure, security and risk. Having said that, once the IT infrastructure is in place, the next step is to form intuitive platforms to make interactions effortless and persona centric. For example, voice technology could be used to enhance lectures by professors. A “smart” way to keep your campus sustainable is ensuring your entire system is flexible enough to adapt to the dynamic world of technology and integration. Traditionally, campuses are local in their reach and scale. A smart campus, however, should allow for global scalability that leverages digital tools and technologies to provide data-driven experiences.

Enabling contextual, personalised and interactive campuses

In the competitive landscape, universities must adopt smart campus technologies to remain ahead in the race. The design of a smart campus is paramount to the success of the implementation. Institutes need to envision and create a synergy leveraging user experience, mobility, digitalisation, safety, artificial intelligence, and embracing cloud benefits. Investments made today towards smart campus initiatives will catapult such institutes to the next orbit of growth.

IILM University continuously works to build on innovative practices, leveraging emerging technologies to enhance the student experience. We understand that campus is the epicentre of all activity and therefore we leverage technology and strategies in a way that improves the experience of the students. To learn more about us visit www.iilm.edu.in

Do leave your comment on what you think of the smart campus impact on future learning.

 

 

 

 

 

 

 

 

Paradigm Shift in Higher Education

The unprecedented situation created by the global pandemic has put the spotlight on the education system. Most of the institutions of learning are moving to online platforms, and the focus has shifted to Digital Technologies in Education. The world is forging a new paradigm for learning.

The Pressure on the Indian Education System: As per AISHE portal of MHRD, in 2019 India had 37.3 million students enrolled in higher education, in 993 universities, and around 42,000 colleges and 10,700 standalone institutes of higher learning. Our current gross enrollment ratio from school to college is only 1:4, and this number for tribal areas is lowest at 1:7.

As per World Bank the world is in a learning crisis due to the poor quality of education. The current education systemin India is also failing to cope with the demands placed on it. 90% of the Indian universities are below par. How can we provide quality education within our limitations?

Tech in Education: Embracing technology to teach is the opportunity and the answer for the way forward. Technology in teaching has greater reach and here to stay. We in India leverage this push provided by technology to address the limitations of the pandemic. A session on zoom has a greater reach than a traditional classroom lecture. Online-classes and recorded courses will build on the current system. This will bring more quality control and outreach.

Online education is a paradigm shift towards blended education. Going forward, use of artificial intelligence, virtual and augmented reality will bridge the gap of synchronous education environments. EdTech will be data-driven, will use immersion technology, video content and allow for personalization and adaptive learning.

Skills vs Degrees: Degrees are not going to be important. Learning specific disciplines will lose focus. We will see cross-discipline, inter-discipline learning aligned to individual’s focus and needs. There will be close integration between academia and industry. As things change rapidly, every organization will be a learning organization. Corporate India is beginning to feel obsolete – it will need to help the employee to figure what to learn.

Self-Directed, Lifelong Learning:  We are evolving from specific degrees in specific time-frames to lifelong learning. Learning will be in blocks as when the individual requires it. The boundaries between discipline will blend and students will redefine their own purpose-driven program. Our understanding and expectations of what education is, will change accordingly.

People are by nature curious, with a desire to progress. The next generation of students will be self-directed. It will be the responsibility of the learner to be able to define their own path. This will lead to a focus on the accountability and responsibility of the student.

Our job as educators is in inspiring and keeping curiosity alive.

To know about how IILM is incorporating technology for virtual classroom delivery and inclusive education, please visit our website – www.iilm.edu

The Virtual Team Revolution – It’s here to stay!

With the current pandemic situation across the globe, every organization is affected. But has the work stopped? The answer is – No! For the majority of organizations who have successfully established a strong digital culture, it is ‘Business as Usual’. Virtual teams are no more the future. They are here to stay.

Remote Teams – An Old or New Phenomenon?   

A virtual team is one whose members are geographically scattered in different locations communicating and collaborating through technology. Are geographically scattered remote teams a recent concept? If you think it is a new phenomenon, you are right but only partly. While technological advances, the Internet and the global workforce have created better conditions for remote teams in recent times, but they have been around for centuries. All kings and emperors such as Ashoka and Akbar and many others in the western world whose empires spread over large areas managed geographically dispersed remote teams. They created efficient and effective processes for communication and implementation to manage their empires through these remote teams, however, some teams worked efficiently while others struggled.

‘Work From Home’ (WFH) has become a buzz work in recent times. But the fact is that even the concept of working from home is not new. Historically speaking, for most of the trades, work from home was the common way of working. If we look at traditional occupations such as farmers, bakers, tailors, shoemakers, potters, weavers and blacksmiths etc., – they have always worked from homes.

The first Industrial Revolution extricated workers from their homes and pushed them into factories. With the introduction of electricity and public transport systems in the early 20th century, workers were further separated from their home as they began working in offices equipped with telephones, telegraphs, and the typewriter. But this concept soon faced a reverse wave in the 1970s because of the OPEC oil crisis that resulted in very high fuel costs and made commuting exorbitantly expensive.

People began looking for solutions for work to go on without workers having to commute. Jack Nilles, sometimes called “The Father of Teleworking” conducted the first formal tests of telecommuting and it soon saw rapid growth. In the 1980s, J.C. Penney began hiring home-based call center agents with the Clean Air Act leading many large businesses to offer telecommuting. The National Telecommuting Initiative created in 1996 in the US, soon flowed to other parts of the world.

20th century was the era of great technological advances that resulted in increase in telework and virtual teams. Personal Computers, cellular phones, voicemail, and then the internet explosion were factors that paved the way for the virtual workplace as we understand it today. In the year 2020, when organizations are globally affected by the COVID-19 pandemic, working virtually has come to the rescue of many organizations and businesses because they were able to continue their businesses and curtail losses.

The Bright and Dark Sides of Virtual Teams

Several studies have found that virtual collaboration is more difficult than in a collocated environment. The disadvantages include difficulties in communication and coordination, reduced trust, and an increased inability to establish a common ground. Physical teams, on the other hand, have proximity that promotes frequent communication and the development of closer and more positive interpersonal relationships. Regular physical presence of team members helps in strengthening social ties that helps to reduce conflict while the distance in virtual teams decreases closeness and affinity, which can result in increased incidence of conflict. Some other issues of remote teams spread across different geographical locations can be that they have to negotiate multiple time zones that require them to reorganize their workdays to accommodate others’ schedules which may lead to frustration and confusion, especially if coworkers are regularly unavailable for discussion or clarification of task-related issues.

Do Virtual teams have any advantages? Yes, Virtual teams have many advantages too.   Remote teams are attractive for companies looking to hire for roles that are hard to fill. They can use remote working as a perk to attract applications for “location independent” positions. These organizations have the added advantage of being able to hire from a larger, more diverse pool of applicants. Then there is cost effective in terms of salaries as they ca hire people at lower salaries when compensation is not connected to living in a big, expensive city.

Other positives of remote virtual teams are that they are less career restrictive for employers and employees with many companies adopting remote as part of their company culture with a work from home option.

Uberization of Jobs

With the pandemic situation looming large across the world and in India, many organizations are actively adopting the work-from-home (WFH) model, and it can be predicted that many jobs could go the Uber way. Uberization of work means that employees can decide which hours of the day they will log in. This is more applicable for tasks that are homogeneous, like that of call centre employees where technological developments are making it easier to monitor remotely.

In India, Axis Bank had been preparing for a WFH model even before the pandemic struck, which made it possible to keep 700 of its call centre executives active even after the lockdown was announced. SBI chairman Rajnish Kumar said in a recent interview that the bank was planning to move to a Work-From-Anywhere model rather than just work-from-home. In the early weeks of the lockdown, HDFC Bank MD and CEO Aditya Puri had said that the bank was going to shift permanently to a WFH model for a third of its employees.

Tech companies, financial services and many other industries are moving towards virtual teams where they will play a large part in the new normal making it imperative for current and aspiring managers and leaders to equip themselves with a  new skill  –  the skill of Managing Virtual Teams. IILM, in step with the current trend, is offering a specially designed course called ‘Managing Virtual Teams’ for its management students and working executives who would like to upgrade their skill. This course discusses how to manage virtual teams so that they can outperform physical or collocated teams. Learning this skill is not an option but a necessity for managers and business leaders today to keep pace with the current world scenario.

To know more about the innovative and industry benchmarked courses, please write to me at atima.mankotia@iilm.edu.

IILM’s Commitment to Inclusive Education

Dear Students and Parents

Hope you all are keeping safe and exercising the mandated precautions.

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For over 2 decades IILM has focused on education which is Global, Responsible & Inclusive; we are delighted to welcome everyone who applies and gets selected to study the “well-known” & “industry-endorsed” MBA.

We believe that ‘Learning has no Lockdown’ & we are focusing on a ‘growth mindset’. IILM is planning to begin online academic activities and interaction with students from June 15. For our new students, we have planned pre-term and bridge courses that will help students connect with their peers and help them forge friendships. The education will have a strong blended learning direction, with a strong focus on the jobs of the future.

We also observe that students are facing many challenges such as uncertainty about their exams and results, admission processes, entrance exams for institutes of their choice, reopening of campuses and the pandemic is having a significant impact on their education and career, planning.

These are issues everyone is aware of and everyone is discussing in many forums but there is one issue that is not being highlighted enough and that is the impact of the economic downturn due to Covid-19 on the students.

The process of deciding on higher education is an important decision and there is a possibility, financial hardships are prevalent across many families, at IILM we understand these are difficult times, with a lot of uncertainty and disruption in daily lives.

So to enable education for all

  • IILM has decided to reduce the total fee payable for the MBA program for intake 2020
  • For the 1st year, we have waived off the program fee and we will be charging only the tuition fee

Even for the hostels, since the students might not be able to avail the facility immediately, the hostel fee is waived off. Only whenever a student decides to avail the hostel (boarding, lodging facilities) they shall pay only pro-rata (of the annual charges) calculated from the month they avail the facility.

Also for any student who is facing financial hardship and is constrained for the fees, we are evaluating & addressing, all such cases with a proactive solution, where student education is not hampered and remains continuous.

Hopefully, these measures will be helpful to our students and their families.

We are with you, stay safe and healthy.