While the debate whether Management is an art or a science continues, it is interesting to look at the thought processes that go into making Management a unique subset of Philosophy. This article doesn’t claim that the modern day principles have been copied or anything close to that, it just brings out some amazing coincidences which actually enhance this claim.
India is the one of the fastest growing economies in the world. In the last five years, India has averaged a phenomenal 8.775% growth, as measured by GDP at constant prices. In spite of the ongoing economic downturn faced by the world, India’s growth rate is projected to remain the second highest in the world, next only to China. To sustain this tremendous growth led by infrastructure, services and manufacturing, India needs to be ‘Energy Self-Sufficient’. India’s energy demand has been growing at a far greater pace than its economy. As a result, as seen in figure 1, the gap between the GDP growth and power generation has been consistently increasing since the start of this century.
Read more: Public Private Partnership in Wind Power in India
It has been a natural tendency for the human being to hedge against any unforeseen situation, and protect himself. This has been going on since times immemorial, albeit in an unorganized fashion. If this need to feel safe is so very innate to the human mind then there must also be a business model which captures this as a opportunity. This is exactly what the insurance sector does. It feeds on the basic human need to feel secure.
Amongst the various forms of insurance possible, Life Insurance is the most predominant in India. The low life expectancy rate and dismal public healthcare system has only added to it being embraced even by the not-so-rich in our society. The life insurance industry in India has seen a high CAGR of 12% ever since the opening up of this sector to private players in 1999. However with penetration levels still low compared to other developed countries, the market size is expected to double in the next 5-6 years. A look at some of the reports from veritable sources would do well to illustrate the case.
Read more: Life Insurance industry in India and the role of Data Analytics
On 11 December 2008, a tsunami hit the already neck-deep-in-trouble world of finance. That day, the high-flying Bernard L. (Bernie) Madoff, former NASDAQ chairman and founder and primary owner of Bernard L. Madoff Investment Securities LLC, was arrested by US federal agents and charged with running a colossal $50 billion Ponzi scheme.
Let me briefly illustrate how a Ponzi scheme functions. Vito Corleone, a sinister swindler, offers Mario a 25% return on a six-month contract. This is an offer Mario cannot refuse, so he goes ahead and invests Rs 1000. After six months, Vito has to pay back Rs. 1250 to Mario. From where would Vito get the additional Rs. 250 ? He accosts Francis and offers a 25% return on a three-month contract. Impressed, Francis invests Rs 2000. From this amount, Vito pays Mario Rs 250 and keeps the rest. After three months, Vito has to pay Francis Rs 2500 but he has only Rs 1750 with him. So the ingenious Vito lures Marlon to invest in his contract. Subsequently, word had gone around about Vito and his investment schemes which are simultaneously high-yield, low-risk and short-term. Al and Robert decide to invest and turn up in Vito’s office. Vito always has enough money to pay back investors because more and more investments are coming in. As news spreads far and wide, an increasing number of investors are feeling left out and itching to jump in. This is a result of ensuring either abnormally high or unusually consistent return-on-investment. Note that Vito is not making any profit. He has adopted the ‘rob-Peter-to-pay-Paul’ principle by roping in new investors to pay the returns. He has successfully created a ‘bubble’.
Soft power refers to a country’s ability to influence others through its culture, history, ideas, music, philanthropy and most of all its weltanschauung. “The greatest source of power in international affairs today”, says Joseph Nye, Dean of Kennedy School of Government, Harvard University and the leading proponent of Soft power, “may lie in persuading other nations to see your interests as their interests.” Underlying this assertion – persuading others that our respective interests are aligned - is the fact that we live in a world where countries can no longer live in “splendid isolation”. Globalization has been the juggernaut propelling interconnectedness and global media the glue that binds people across continents.
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