The Challenges faced by Finance Industry

The Finance Industry features a huge role to play when it involves making business purposeful. This sector currently faces multiple challenges, but the two most prominent ones are information asymmetry and financial illiteracy. The cutthroat competition within the industry has led to several institutions flouting norms. Wells Fargo may be a case in point wherein the culture and unsustainable targets led to employees committing fraud and the senior management turning a blind eye, therefore, enabling the act. Another even more potent example is that the concealment by HSBC in Mexico and Colombia for Drug Cartels. In both these cases, the institutions were excused by just paying fines, which was nothing more than seven days of profits for them. These institutions know that they are too big and influential to be jailed because they are too big to fail and thus can escape perhaps with the foremost notorious and irresponsible behaviours.

Definitely, the planet is ill-equipped to handle another Lehman Brothers, but that does not mean that the planet should need to see thousands of people being killed by the drug cartels that these institutions use to move their money. To prevent these and bring justice to already what has been done wrong, these firms should be held accountable, and therefore the CEO should be held liable for the actions of the institution.

As we steel ourselves against a post-Covid-19 economy, the long term of the finance industry looks drastically different. Additionally, to the changes within the way banking would be conducted, which is about to become highly digitized, monetary institutions’ role is also going to change. The whole world is looking ahead at an enormous recession. These institutions would need to be the first source of liquidity to the firms, which might stimulate demand within the economy
Edmans, A. (2011). Does the stock market fully value intangibles? Employee satisfaction and equity prices. Journal of Financial Economics.
Edmans, A. (2015). The social responsibility of business. TEDx London Business School. Available at
Gartenberg, C. (2018). Corporate Purpose and Financial Performance. Organization Science, Forthcoming.
Edmans, A. (2019). How great companies deliver both purpose and profit. London Business School. Available at
Edmans, A. (2020). Does Pieconomics Work?: from ‘Grow the Pie: How Great Companies Deliver Both Purpose and Profit (pp. 77-96).
Robert J. Rhee (2017). A Legal Theory of Shareholder Primacy

Relevance of IILM PGDM / MBA in the times of Covid-19

It is common understanding that a PGDM / MBA degree prepares you for Business Administration, so you study Management, Organizational Behavior, Human Resource Management, Finance, Marketing, Operations, International Business and a range of other subjects. However the 2 year programme at IILM also prepares you with certain other skills such as Effective Communication, Research and Analysis, Critical Thinking, Change Management, Ability to leverage technology, Dealing with pressure, People management, Teamwork, Decision making etc. which may be called soft skills but are actually life skills. Let me explain here how these are so relevant in the context of Covid – 19 which all of us are grappling with today.

Relevance-of-IILM-PGDM-MBA-in-the-times-of-Covid-19_2The current crisis is a situation that almost no one living today may have faced ever in his or her lifetime, hence there is absolutely no way that anyone could have been prepared for, in advance. When it struck, the reactions were quite similar among most, ranging from brushing it off to disbelief to despair, businesses were no different. However during these times of crisis, Effective Communication is of paramount interest. At IILM, students learn who to communicate with, what to say, how to say and when to say. Your stakeholders are the ones who need to hear from you to have that continued trust in you, how you are managing their interest is what you need to tell them and tell them early on. Any message that is delayed looks like an afterthought, so communicate early and communicate regularly. Keep it short but relevant and regular.

The times are different, the challenges are different, hence the solutions also have to be different. IILM teaches its students to read, research and analyze what is happening the world over and make sense of it and how it affects our businesses and organizations. It teaches them critical thinking skills and inculcates a sense of judgment and positive thinking to manage any crisis situation. As a manager / leader it is important to know that we must be able to adapt to change as per the situation. In the current situation when there is a complete stop to everything around us, it is imperative to follow what is required at this moment, which is staying safe and staying at home. If there is life, there will be a tomorrow and we can always plan and rebuild ourselves. There is just no point in being restless, take this time to spend with yourself, review what you have done so far, how you would do it differently, what you could have done better.

Relevance-of-IILM-PGDM-MBA-in-the-times-of-Covid-19_1Technology they say is a leveler, the digital march is going to make it even more uniform. As millions of people are homebound, their major source of information, inspiration, communication, distraction, entertainment is through technology. IILM encourages its students to be technology savvy and Leverage Technology to bring in effectiveness to their work and business. A case in point, in the times of Covid, technology has moved up a few notches, K-12, Higher education and a good number of businesses have gone online, organizations are rethinking the Work from Home concept, also as an effective cost saving tool. All classes at IILM have been conducted on zoom through paid licenses ensuring security and privacy of teachers and students online.

This is a situation which has put everyone under pressure, be it the government, the police, the doctors, the medical supply chain, the food suppliers, the transport for continuing the work assigned. All others are under pressure to stay at home, manage their job, remain balanced, remain strong, stay calm and help others in whatever way possible, big or small. The MBA / PGDM programmes at IILM by the very nature of its being fast paced with classes, tutorials, assignments, simulations, meeting industry experts in Round Tables or Guest sessions, Summer internships, Live Projects, Placements creates the right kind of pressure with tight deadlines and helps students manage time and manage themselves by dealing with pressure.

People are the most valuable resource that one can have. IILM students develop skills of working in teams and learn to respect one another, value their competence and contribution. People Management is what management is greatly about. Students learn through cases and role plays, how to take people along, how to keep them motivated and engaged with the organization when the chips are down. How to make people feel wanted and part of your team are skills that come with practice. As a manager, you are required to take decisions, most of the times with limited resources, limited information and in limited time. IILM teaches Decision making as a process, a step by step approach to make good decisions. With practice, one becomes adept at following the steps and can still be quick. But if you miss some part of the processes in order to be quick, you will be prone to making mistakes, costly ones!

Most importantly, IILM has an NGO club through which students learn to help and support the marginalized sections of the society. We believe empathy is something, which need not be understood and expected when you are in a spot, but the continued will to share and care for others whatever the situation be. IILM is proud of its 12000+ alumni who as Managers and Business leaders running their businesses responsibly and building the nation.

Prof.(Dr.) Kakoli Sen

Review of Mergers and Acquisitions deals in 2016-17: A record year for India

Mergers and Acquisitions (M&A) are considered to be one of the most important ways to expand the business inorganically and respond to the changing market conditions. The wave of M&A activities is not new across the globe and India. The last financial year 2016-17 was a record breaking period for M&A deals in India. The monetary worth of M&A transactions increased from $27.62 billion (2015-16) to $61.26 billion (2016-17). The reason of increase in the volume of M&A deals is the consolidation of various sectors such as telecom, energy & cement and increasing interest of Foreign Instutional Investors (FIIs) in the Emerging Indian market.

Source: Livemint

Graph 1: Representing deal value ($ billion) and no. of deals of M&A in India

The consolidation wave of merger in the cement industry included large players focusing towards building of capacity and bringing in synergies through the acquisition route. Some of the most strategic deals included acquisition of Jaiprakash Associates’ Cement Plants in five states and a grinding unit by Ultra Tech (owned by Aditya Birla Group) for $2.41 billion, Lafarge India’s 11 million tonne (mt) cement business acquisition by Nirma for $1.4 billion and ADAG Group’s cement capacity acquisition by Birla Corp’s (MP Birla Group) for $710 million.  This consolidation wave has led to concentration of 58 percent of market share in the hands of top five industry players.

Another most prominent consolidation wave has been witnessed in telecommunication sector. Idea Cellular led by Kumar Mangalam Birla agreed to merge with the Indian subsidiary of Vodafone (U.K. Telecom Company) for $23 billion to form largest telecommunication company of India. This merger will have a capacity to serve approximately 400 million clients by capturing 41% market revenue and 35% customer base.  Post the announcement of Vodafone and Idea merger, other telecom giants like Airtel and Reliance Communications (Rcom) also announced various mergers and acquisitions. In 2016, Rcom acquired Sistema Shyam Teleservices Ltd. (SSLT) operating under MTS brand which added approximately 6 million customer base. In 2017, Rcom announced its merger with Aircel which will lead to increase in its customer base by 81 million approximately. In 2017, Telenor’s Indian group was acquired by Bharti Airtel. Telenor is a Norwegian government entity operating in India since 2009. The major reason behind this telecom consolidation wave included spectrum gain; 4G Edge; increase in subscriber base; footprint in densely populated areas such as Andhra Pradesh, Bihar, Maharashtra, UP and Assam; and lastly to gain edge over competitors.

Other top ten acquisition deals in India includes Appirio acquisition by Wipro for $500 million, Geometric Limited acquisition by HCL Technologies for $200 million, Cutrus Payment Solutions acquisition by PayU for $130 million, acquisition by Flipkart owned Myntra for $70 million, The BIO Agency acquisition by Tech Mahindra for £45 million, acquisition by Firstcry for ₹3.6 billion, Caratlane acquisition by Titan Company Limited for approximately ₹3.5 billion, Happy Creative Services acquisition by Dentsu Aegis Network for $44 million, Ocular Technologies Sarl acquisition by Sun Pharma for $40 million and Forever 21 India acquisition by Pantaloons for $26 million.

The wave of consolidation among various sectors in India can be viewed as a catalyst for expontential and linear growth. M&A have become the integral part of the economies across the globe and will continue to trend, as inorganic growth is considered to be fastest and safest mode to grow the business. Furthermore, it becomes inevitable to grow business organically in the current era of volatility.

Does GDP Really Add Up? Going beyond the Traditional GDP

The GDP counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them…. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl…. Yet it does not include the beauty of our poetry or the strength of our marriages, the intelligence of public debate or the integrity of our public officials… it measures everything, in short, except that which makes life worthwhile.

–Robert Kennedy
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