“This blog post is part of an 11-part series by Sidhartha Mohanty (IBS Ahmedabad 2005). Through this series Sidhartha aims to take you on a ride along with him as he went from being a young student to an MBA graduate to a corporate employee and ultimately an entrepreneur now.” So, this first series will give you an inside story of IBS campus placements.

Placements! The word is enough to stir up various emotions in management students. Apprehension, anticipation, terror (yes, that too) and of course nervous excitement through it all. Placement is the final hurdle before newly minted graduates place their first step on to the corporate world. The world of salaries, deadlines, cubicles, taxes and bosses who can be benign or bossy, colleagues who can be nice or nasty, clients who can be dandy or difficult.

Believe me, I went through all of that and more, when my placement season came around. It was the year 2005, the final year of my MBA. This is usually the time when everybody is out networking with their alumni. Some are busy doing their management research projects for the final year while some others are busy talking to placement managers about the schedule of those companies who are expected to come to the campus. Sleepless nights, dark circles, loss of appetite are very common during this time, so don’t worry if you exhibit all these symptoms. It is almost like what you felt before your first date.

Students are worried if they are going to get their choice of roles, their choice of company and most of all, their choice of salary. Some just want to get a job; but there are some who want to make a statement with the kind of job they bag and the kind of compensation they are able to bag. They feel they owe it to their parents/guardians, their classmates and their professors.

There are some however, who are worried about their English language communication skills and how to improve and do well in the placement interviews.

Worries and worries – passing out from a good B-school doesn’t always guarantee a job. Surprised? Yes it’s true. In fact, sometimes the companies see the rankings of the B-schools and if your school is not in the top 10 that year for some year, it is likely that they will give it a miss. Companies also have some criteria when choosing the management institutes they visit in a year.

I remember that year, my friends’ circle and I were not concerned with what our ranking was but we were worried about the type of companies that would be visiting us and whether we would get good placements.

Frankly, each campus had their fixed set of companies coming and recruiting students like us in Ahmedabad. But what happens if you don’t like the role and salary? What if you don’t like the company at all? What are you going to do? Are you going to search jobs outside off-campus? On your own? Through your own contacts? Via the alumni network? Would you be able to do that? Are you making a mistake by not taking up the offer/offers coming your way? What if you passed up this chance and you don’t get a job later?

These questions are likely to plague you during placements. Remember though that it is your efforts and networking that matters the most. A lot of it is in your hands – at least that is what it seems like at the time.

Those who have specialized in finance need a core finance role like corporate finance, investment banking etc., but not a sales role. In the same way if you have a marketing specialization, you need a marketing, communication and strategy role. Most favorite companies for such roles are in HLL, ITC, and Procter & Gamble etc.

If you are from the information technology field, you need an Infosys, TCS, Tech Mahindra etc. These companies will recruit you for an IT analyst role.

What if you don’t have choices and you are forced to take any role that is offered to you? Obviously you will not like it. That’s the real problem everywhere. So, if you have not networked or met industry people on your own then there it is likely that you might find yourself in this situation. But don’t panic, it’s really not a crisis, though you might think so at this time. I don’t think here the institute can help you, though you can certainly approach some of the career counselors and your professors for some advice and mentoring. Their perspective will help you. However, the final decision rests with you and remember its time to make your choices and live with them. This is your first test as an adult and as a future manager. Its time to start using the skills that you think you have acquired in the last two years.

By the way, our IBS-Ahmedabad campus had a good placement team (and it still has, last time I checked) which attracted lots of good companies on the campus.

I got into ICICI Bank straightaway on my very first attempt. I negotiated a decent salary package with a 2- day training session in Mumbai, which was a big thing in those days.

By the way, how can I forget those sleepless nights in the hostel where we were doing mock interviews among our batch mates and trying to find out our weaknesses and how to improve that?

Yes, placement is the time to put your hard-learned theories to the test. You have to impress the interviewers and prospective employers with your communication skills. You have to convince them that you are the person they are looking for. You have to project the right image. Above all, you have to get it across that you have what it takes to get the job, hold it and make a success of it. You have to make it clear to them that you will be an asset to the company.

Can you do it?

You might be the company’s biggest maker of rain. You may be a brilliant strategy maker. You might be exceeding the performance goals for your unit or your whole company. But after you leave the company one day then what will be the things you leave behind? The only thing which you will leave behind will be your leadership legacy and that is related to your style of leadership and your natural role as supposed to your titles and responsibilities.

Leading a team or a business unit is not an easy task and to become a great leader you will have to look within yourself. You have to examine which style of leadership you have and how effective it is. The most important thing about knowing your leadership style is that you understand the following things well which is very useful for becoming a successful leader-

• Your strengths and weaknesses
• Why you lead?
• The way you lead.
• Whether you can change your style of leadership easily?
• What kind of people you need to recruit for compensation of the areas of weakness

This evaluation is very necessary and you have to take some time out to understand where you stand in the style of leadership. Your style defines your values and perspective and knowing it will help you to communicate better with those you work with. Let us do this by understanding the different styles of leadership in detail and exercise this knowledge to evaluate yourself and improve the way you lead.

Authoritarian Leaders

This style of leadership are generally seen in small organizations and untrained employees. Authoritarian leaders know exactly what has to be done, who has to do it and when it has to be completed. Although these kinds of leaders do not offer much room for wiggling but they often get the job done in time. But the drawbacks of authoritarian style of leadership are the absence of feedback and being dictatorial with the subordinates.

Democratic leaders

Democratic style of leadership encourages both employees and the management to take part in the decision making process. This style is present with the experienced workforce and is positive and motivational for all the stakeholders and employees. Since everyone is included in the process of decision making, they have to be knowledgeable about the business, the process, the product and the vision statement. The drawback is that they may require more time to get things done.

Delegative Leaders

This leadership is sometimes called laissez faire leadership because of its minimal interference in the efforts of the employees. The hallmarks of the delegative style are trust and confidence. The employees have freedom to make decisions and get their works done. The delegative style of leadership is popular in the organizations which have employees which are experienced and educated and like to become good leaders by themselves. This type of leadership style is good but leaders have to be careful in using the style with the employees who are insecure, afraid of making mistakes or have difficulty in communicating with the others.

Here are the signs if you follow a particular type of leadership-

Authoritarian Leaders

• You like to have power and a complete control.
• Your employees are allowed to do only what they’re told
• You only decide how to fix problems
• You don’t want to spend time for employee input.
• You tell your employees what to do, when to do it, and how to do it.
• Mistakes are not acceptable in your leadership.
• You don’t care what others think. You do what is best for yourself.
• You micromanage things.
• You do not trust your employees at all.

Democratic Leaders

• You listen to others, but you like to have the final word in the end.
• You like to have others also in the process of decision making.
• You recognize achievement and give it appreciation.
• You like to encourage collaborative work.
• You like your business to run through teams.
• You help employees grow and learn.
• You want to hear the employee opinions and work on it.
• You encourage employee inputs.
• You help employees to fulfill their potential.
• You want to have inputs from the employees when things go wrong.

Delegative Leaders

• Your are not an expert in every areas of your business.
• You want followers to have control over the things.
• You encourage group members to create their goals.
• You give freedom to group members to solve their own problems.
• You are not good at following up with employees.
• You give little input as you know employees know their job better.
• You give your employees the right to create their own objectives
• You encourage your employees to form their own decisions.
• You don’t want complete authority and do not want more authority than others in your organization.
• You distribute your power to the entire organization.

These leadership styles have advantages as well as drawbacks. If you really know which type of leadership style you have, then you can utilize it to achieve maximum results and you can also mix different styles to achieve maximum results from your leadership. Leadership does not come in a one- size- fitting-all package and leadership styles vary with different people and each one is good as the other. The only important thing is that you know your leadership style well and draw on its strengths to motivate, enthuse and lead your team in a positive path and manner. The ultimate aim should be to understand both your own leadership learning and to draw on the other leadership styles too. Don’t believe for the adage that “Leaders are the born leaders”. While some people are naturally able to excel as a leader some can really learn to lead provided it all is interesting for you. So know your style of leadership and learn from your weak points and adapt the strong points of every style. In doing that there is no doubt that one day you are going to be the excellent leader of your organization and can leave your leadership legacy as a benchmark for others to come!

Two years back I completed my MBA in IBS but during my journey I made some good moves and some really bad moves that affected my first semester’s performance. But I remember the blunders I committed and hence, I learn one must remember the lessons from them.

Among the wonders the first was adapting to the environment i.e. molding myself to the pedagogy of case study that the institute followed and dedicating myself with heart and soul into it. It is extremely discomforting in the beginning but you need to be stubborn to follow the guidelines and dedicate everything into academics so that you form a habit.

The second wonder was completing projects and assignments before time; which is rarely a case with engineers. It is a pleasant experience to write all your reports, assignments, projects word by word and then later have a chance to revisit and edit before submission. Even in group projects, I suggest you to ensure that on the first day of group meeting, each member’s contribution is clearly decided mutually and hence this will provide you essential time for research, content management, editing, designing and presentation.

The next wonder was learning to work under stressful deadlines that can make you have sleepless nights full of work and efforts. This skill really helps you prepare for real corporate life where the extent and amount of work cannot be entirely controlled by you. The more you are equipped, the better it is!

Moreover, I had to cultivate the habit of rising early and sleeping for restricted hours which makes anyone value time more and use it judiciously like money. This not only made me have greater working hours but also the luxury to do my daily tasks leisurely. This was somewhat of a self-discipline imposed only when I went ill once.

Back to back classes prepare you to deal with several challenges consecutively and accustom your brain with a tendency to be employed for long hours without any break. This is what happens in real life scenarios also because when one project ends, another comes up which is strenuous than the previous one.

The next was learning to work cohesively in groups with strangers and sometimes friends. You imbibe the value of honoring everyone; learning through experiences; adapting to professional behavior; respecting everyone’s strengths and weaknesses and turning the same to everyone’s collective strength. It really teaches you how to mold the situation so that everyone’s combined efficiency is used and substituted for each others weaknesses.

The unexpected wonder that I explored was learning from others and teaching them when required even when you didn’t know them. Helping friends is different but cultivating contacts for each others benefits is networking because each effort in the network you build grows your credibility. If self sufficiency existed, the society would cease to exist and people would remain loners!

Cultivating a habit to read is another wonder as you hardly read books accept during examinations. The hunger to read by the end of the course exceeds 100 pages a day and you seem to feel discomfort in its absence. This not only increases your vocabulary but also your knowledge and willingness to learn and read. This habit not only firms your command over language but also helps you understand corporate phrases and subject related jargon.

Among the blunders, that one must avoid, the first is letting your emotions overpower you. First of all stop taking things personally or attacking people emotionally because that builds bitter foes not friends or strengths. Never let emotions enter your professional life. Be neutral in every sense and avoid taking any emotional decisions regarding projects, assignments, groups etc.

The second blunder that I did was dedicating blind trust in friends. Remember till the time you complete your internship, you have to be careful about trusting anyone because friends are those who will sustain till the last day of the course. If someone sustains throughout, your friendship with them will stand every hurdle in life. Treat people as companions and not best friends forever till you compete with them.

Average grades in my pursuit to be excellent in everything, I didn’t focus on specializing in few subjects whereas maintaining decent grades in some. You must also not try to control everything, else you will end up controlling nothing! My projects scored full but in theory, I remained lagging. I forgot to make some subjects my strengths so that I could capitalize later.

Another blunder one cannot afford at a distance from home is study-life imbalance; which was a massive cause for my failures and dismal first semester. If you lose touch with friends, cousins, relatives and family, you are certainly about to harm your long term personal life. Result: a few close friends would change to friends with formality!

Dismal health was something that hit me when I was giving too much into socializing, studying throughout nights, sleeping less, cultivating dark circles, hair-fall and muscle stiffness. You or anyone for that matter needs ample rest to perform well. After all, it is you who has to come above study, work, preparation etc.

Resorting to hard work than smart work when corporate requires people to be smart and not hard working. Here you will actually realize that you have to get work done in the future and hence you must first be able to do it in the shortest and best manner with precision. Who cares for a person who does a comprehensive task in a whole day as compared to a person who takes a cut, copy, paste approach with smartness?

Being incompetent was one huge mistake I committed while not realizing that people around me were busy preserving their notes, assignments, sources of knowledge etc. You must remember that you must help others study or understand only when your own cup is full. Don’t push to the limits of indulging in people’s assignments when they ask for help at your cost!

Giving thought to what people think about you is another crime. How you conduct yourself is nobody’s business but yours! You are your own judge till the time you follow the institutions guidelines and nobody has power over you to judge or evaluate you otherwise. What you think about yourself is crucial than two things. One, what others think about and second, what you think about others!

I hope that my good actions would be seen as inspiration and implicated in moderation for your own betterment and my mistakes would prove to be a guiding light to those who are about to begin this journey or just begun this journey.

Emerging Markets are slowing and their divergence is increasing. Yet, they offer immense potential which is worth considering. Each emerging market today is different from each other. While China is going for a managed slowdown, India’s story is extremely positive on the back of reforms and pro-active business reforms from the Government of India.

Did you know?

• According to United Nations Conference on Trade and Development (UNCTAD), developing and emerging economies’ global foreign direct investment (FDI) share increased to 52% in 2013 from 29% in 2007. They overtook developed markets for the first time in 2012.
• In 2007, all the top 20 companies in Forbes 2000 list were from developed markets (US: 9; European countries: 10; Japan: 1). In 2013, 7 of the top 20 companies were from emerging markets (China: 5; Brazil: 1; Russia: 1; US: 9; Europe: 4).
• Developing economies share of world’s merchandise exports increased to 45% in 2013 — up from 34% in 2004. At the same time, the share of developed economies dropped to 51% from 63%.
• Between 1980 and 2000, just 5% of the world’s 500 largest companies were from emerging markets. This ratio is now about 25% and is expected to climb to more than 45% by 2025.
• The real average wage growth in emerging economies has outpaced the wage growth in the developed economies. In the years from 2000 to 2011, the real wages almost tripled in Eastern Europe and Central Asia, doubled in Asia, increased by around 20% in Africa and 15% in Latin America, while the developed economies had a meager 5% growth.

Five things that an emerging market will offer you:

1. Stability of employment:

Many emerging markets are boosting their efforts to grow employment in their respective countries. For instance, in India, the Government recently launched a program called ‘Skill India’ to create skill set ready workforce. The initiative will provide training to over 500 million youth by 2020, to make them employable directly. The skilled population can be assured of stability in their jobs as there is a dearth of employable people in many emerging markets. Additionally, stability comes from the fact that the jobs market in emerging economies are not yet exhausted (compared to some large developing economies) and there is a great potential to leverage job opportunities further.

2. Growth in money:

One of the most important factors that you consider today is growth for yourself. Emerging markets will definitely provide you more growth opportunities than any developed economy. In its April 2015 World Economic Outlook, the International Monetary Fund stated that growth in developing and emerging economies will be 4.3% as compared to 2.4% in advanced economies in 2015. Although the pace of growth has slowed in many emerging markets, they will continue to account 70% of global growth share in 2015. The chances of creating wealth of self are bright in emerging markets.

3. Power to control:

In any situation, you will feel more powerful in an emerging economy as compared to a developed one. There are a variety of reasons for that. First being the size (Nominal GDP) of emerging economies which is smaller than the developed ones. Therefore the span of control is always higher. Secondly, the laws and regulations in emerging economies are not as stringent as in the developed ones. This gives enough room to people with money and influence to have a control over various things. However, this could be a short-lived phenomenon. As emerging economies tighten their regulatory and judicial systems, the ‘power to control’ will be more uniform across developed and emerging economies.

4. An opportunity to be among the global middle class:

Emerging economies will not be only rapidly growing but will also have young populations that will produce a surge of middle income consumers. The World Bank projects that 50% of the total global stock of capital will reside in the developing world by 2030 (up from 33% in 2010), illustrating the shift in the global distribution of wealth. These fast-growing countries will become the prime markets for global and home-grown companies. There is a great opportunity for professionals to start their own ventures in these economies and enjoy the long-term benefits.

5. Opportunity to innovate:

Emerging economies offer a lot of potential for indigenous and cheap innovation. Students who are smart and business minded will find their ways by creating new business models. These students will also be the creators of demand for new products and services. Many incubators have found success in emerging markets as the cost of innovating and failure is less as compared to matured markets.

Threats you need to plan for:

Political issues: Your plans in emerging economies can go for a toss if a particular country (you are interested in) has political issues. In the recent past several emerging markets such as Russia, Ukraine and some economies in the Middle East have witnessed political issues which have adversely impacted the societies, businesses and future prospects.

Ease of doing business: It is not always easy to start and run business in an emerging market. For instance, India ranks 158 out of 184 countries for starting a business in World Banks’s Doing Business 2015 indicators. Individuals who are planning to do business in an emerging market must have cordial relationships with the government and the local authorities for faster implementation of their programs.

Currency fluctuations: In the recent past, currencies of many EMs have fluctuated including that of Turkey, Brazil, Nigeria, Indonesia, Mexico, South Africa, etc. The emerging market currencies are highly dependent on the movement of US dollar and US fed rates. People who plan to do business in the emerging markets must have long term currency hedging contracts to avoid unnecessary loses.

The overall outlook for emerging markets remains strong and promising. Emerging markets such as Latin America and China, which have high trade exposure to the US are expected to benefit, while those reliant on demand from the Euro area will feel the pressure (Eastern Europe, Northern and Sub-Saharan Africa). Additionally the implementation of structural reforms (India, Kenya, Malaysia, Mexico, Nigeria) will raise business confidence, and encourage stronger investment and consumption. The immediate outlook for emerging markets is positive. IMF expects these economies to contribute 70% to global growth in 2015. EM is also likely to play a greater role in global trade as intra-EM trade is expected to rise to 33% of world trade by 2020. Individuals and students will continue to find solid opportunities for work and do businesses in emerging markets. We only need to find the right target and hit it at the right time.!

Some urban legends never die. The same holds true for quite a lot of false notions and misbeliefs pertaining to MBA. In this article, I’ll try to spell out the top 5 MBA related myths which still exist in the minds of thousands of aspiring business graduates every year. Here they are:

Myth # 1

MBA’s are masters of deceitful non-sense

A non-MBA businessman acquaintance of mine once told me that “manipulation by way of using fancy jargon is only what students are taught at B-Schools.” His opinion epitomizes the mainstream standpoint of people with pitiful ignorance about the course. The thought of explaining him that “Your pre-conceived notion is a subset of monotonically engineered old-school pontificate and an immediate need of paradigm shift is desirable” occurred in my mind but I didn’t say it aloud. On a serious note, I think this commonly perceived idea about MBA’s is terribly misinterpreted. And the usual business jargon time and again deployed by business graduates is often misconstrued as high and mighty arrogance.

On the contrary, lingual geek-speak of a B-School graduate is the culmination of two grueling years of hard-work in various areas of management education. The lingo, which may sound gibberish to a layman is a naturally ingrained ingredient for all management students. In fact, it’s a vital component for many marketers for all kinds of Brand-Building exercises. It considerably reduces the time of communication between two business associates. As far as deceit is concerned, we are all aware that it exists in every profession and depends on the ethics of a person. So, pin-pointing it solely on MBA’s is not a wise thing to do.

Myth # 2

Businessmen/Professionals don’t need an MBA degree

At the outset, I would like to clarify that MBA is not a prerequisite for managing a successful business. However, business education apart from imparting practical knowledge of business principles will help a person become aware of the stumbling blocks on which other businesses have struggled. It is particularly useful for aspiring businessmen who possess an entrepreneurial spirit but lack the analytical skills to undertake calculated risks to upscale their existing business or meticulously draw out and subsequently implement an innovative idea.

I am of the view that real-world business experience and a standard MBA curriculum complement each other very well. If one has prior business experience then he’ll likely derive much more from the course compared to an absolute fresher. The same hold true for working professionals in various fields. The confidence gained from the vast knowledge acquired will significantly increase the chances of success and also reduce the chances of failure for businessmen and managerial executives alike. It will give them an edge over others.

Myth # 3

Soft Skills classes need not be paid attention to

Why do top employers of the country hire say, an MBA in Finance when he can easily recruit a more technically suitable candidate say, a Chartered Accountant/CFA or even a simple post-graduate in Finance/Accounting. The primary reason is that they want a complete all-round package and a B-School is the best place for him to search for such versatility. In addition to the area of core competency, a business graduate is also expected to be an expert written and oral communicator, is adaptable, presentable and has the ability to negotiate on behalf on the company.

But the problem is Soft Skills are still invariably given lesser importance than they deserve. 90% of the students don’t understand its significance in the corporate world. Your technical skills will get you a job but your appraisals and promotions will be supremely dependent on your soft skills. Hard-skills can somehow be learned from books. That’s not the case with its softer counterpart, which requires proper training by specialized faculty who are expert in the domain of personality grooming and business etiquette. Ask yourself. Have you ever met a senior level executive in any organization who has a lackluster personality or a dreary disposition? I suppose not. Because at the top of the corporate ladder, there aren’t any.

Myth # 4

MBA is a short-cut to Success, Money and Fame

A generic belief prevails that an MBA degree from a premium institution is directly proportional to your career growth and the road to a 5 digit monthly salary. Please don’t get lured into the trap of a false sense of security. The confidence that is acquired post-MBA gives you a feeling of invincibility. But unfortunately the feeling is short-lived. I have met students from various B-Schools who are under-achieving professional failures, went into depression and out of jobs.

Always remember that getting MBA education is a great opportunity but nothing will be served to you on a platter. Nothing will be given to you as a birthright. You have to earn it at every step of the corporate ladder. Even an IIM degree does not guarantee success. You will need to consistently work hard and also accept failures as part of the game. The road to monetary success and personal growth depends on how ambitious you are and what are your individual priorities.

Myth # 5

During MBA, your previous educational background does not matter

Right from the selection process of B-Schools (though its perhaps unintentional), the evaluation tests are designed in such a way that it favors students from an engineering background the most. Then, during the entire course, it becomes relatively easier for people from Commerce background to understand the theoretical notions of business related subjects like Marketing Management, Managerial Economics, Financial Accounting and Basic Principles of Business Management. The 1^st two semesters are a piece of cake for them in many aspects. Being a science graduate, I genuinely felt that. It was an unforgettably hellish experience for me.

Then there are experienced professionals and businessmen, who are bound to have an edge over others owing to their practical knowledge of fundamental business concepts. Students who are at a major disadvantage are those who belong to the likes of arts, humanities, law or medicine branches. It can’t be belied that ultimately their grades will suffer because of that. They have to put a substantially extra amount of effort to match their mental wavelength. I, being a plain Science graduate had to face the same kind of problems especially during the first year. But this additional pressure undoubtedly makes the entire MBA journey more intense, dramatic and full of action-packed ups and downs. I am positive that you are going to love every second of it.

So, you want to do MBA after your graduation in another stream. Your decision to go for MBA is hopefully based on your cost-benefit analysis of investing the time and money in the near future versus gaining substantially more benefit in the long term of your life time. The benefits can be in the form of a higher level starting placement involving good company, greater responsibility and bigger package. Ultimately it may lead to faster growth trajectory for career, status, recognition and on the whole superior quality of life, greater job satisfaction and enhanced happiness.

Most students go for MBA based on herd-mentality thinking that when everyone is going towards MBA, I shall also do the same. They don’t do any financial planning or rather they don’t do any planning at all. The talents and aptitude differ from person to person; family circumstances and requirements vary greatly. What is good and appropriate for one may not be the same for another. Thus, one can see that decision making is based more on emotional and social factors than any logical and rational thinking and planning.

The MBA aspirant wants to get qualified and trained to enter the business world. He or she wants to succeed in business career which may be employment or self-business. Let’s consider what is most important in business, and fortunately it is common factor in every business is the way money is handled. All businesses are operated with money as the central nerve system for the purpose of generating more money. Every step in business involves money to be invested. Investment decisions are every day or rather every minute decision. The question is whether money is being invested in business as per well thought out rational plan or based on impulses, emotions and following others’ actions? To take an example, a large company may go for massive television publicity campaign for its products; if a smaller competing company also does the same, it will be doomed. Therefore, it is essential that during the MBA program, besides learning subjects like marketing, human resources, finance etc. the student must at all times keep his focus on learning how to deploy company funds and resources effectively and efficiently towards achieving the overall superior performance of the firm.

Now come to the stage when the individual has successfully completed MBA course and entered professional life. At this stage the person would be required to invest the company funds and also his own personal funds to meeting their respective long term and short term goals. This is the time when the knowledge and grasp in the field of behavioral finance would be put to acid test.

The emerging field of behavioral finance examines psychological and sociological factors which impact the decision making process of individual investors and firms. Thus behavioral finance encompasses the concepts of psychology, sociology and traditional finance.

Psychology involves study of behavior and mental processes together with the effect of a person’s physical/mental state and external environment on these processes. Sociology involves study of human social behavior. It includes influence of group behavior on attitude and behavior of persons.

Traditional finance is concerned with assessing value and making business decisions. It includes functions of acquiring, investing and managing financial resources. Theories in academic finance are called standard finance.

It is observed that investors tend to make some very strange choices. Their behavior deviates from logic and reason. They think as a group and make irrational decisions. They exhibit many behavioral biases which influence their decision making. Some commonly observed biases are explained below;

1. Herd behavior: Investors generally follow what most other investors are doing. If the price of a share is consistently moving up, implying many people buying it, other investors also want to invest in the same share. The belief is that what everyone else is doing must be good and therefore I can indulge in it without applying any financial analysis. Thus investors often buy shares which already had a good run up and are at the peak. When the share price goes down they are left holding it and they want to retain it in the hope of its recovery. Much later they realize their folly when lot of damage has already been done.
2. Overvalue losses and undervalue gains: Investors are more affected by loss in value compared to similar gain in value. For example, if an investor has made two investments of identical value, when one advances in value by ten per cent and other goes down in value by ten per cent, the investor is more concerned with the loss than satisfaction over similar gain elsewhere.
3. Regret bias: Investors do not sell investments that turned out to be declining in value. They hold on to these investments hoping future price increase and break-even. In the process they incur much bigger losses. On the other hand investors are too eager to realize gains. Generally gains signal good investments and losses signal poor investments. The tendency to hold on to ‘losses’ and selling ‘winners’ violates basic of rational investing. The psychology behind such phenomenon is that people are averse to booking losses and thus internally admitting to themselves a bad choice or decision made earlier.
4. The present bias: It implies that investors want to shift good experience i.e., consumption to the present and bad experience i.e., making difficult decision regarding savings and investment to the future. This often leads to over-consumption and procrastination. Investors may be patient while examining two or more future return from investments, but become impatient while examining choices and decisions for the present.
5. Cognitive overload: Human beings have limited mental resources. Will-power and attention are important cognitive resource. In face of uncertainties financial decisions place high demand on these resources and these are quickly exhausted. Under these conditions decision quality suffers because decisions get driven by emotional impulses and short term view of the situation.
6. Power of framing effects: How a situation is presented to an investor might have major impact on his decision. The format that looks most informative and thus best suited for a financial expert may not help non-experts to arrive at good decision. For example, the quarterly balance sheet published by firms in newspapers is hardly of any use for general investors. Another example can be in the style of presentation by insurance firms and offers for new shares. Often only selective information arranged in a particular way is presented to investor who may get misguided and make inferior decisions.
7. Overconfidence: As human beings we overestimate our own abilities and skills. We have a tendency to forget and thus we fail to learn from our past mistakes which compound the problem.
8. Theory of cognitive dissonance: It states that people experience anxiety and internal tension when exposed to conflicting beliefs. Individuals try to reduce their inner conflicts either by changing their past values, beliefs and opinions or they try to rationalize their choice.

In summing up we can say that it is important for the MBA aspirant to understand behavioral aspect of financial planning and decision making. It would help him to make better choice of MBA College and course, depending on ROI rather than getting influenced by friends and other people around him. He would not just base his decision on the advertisements; rather will look far into the future. Also, since going forward he would be taking up managerial and senior positions in the corporate world; he is expected to understand how his behavioral aspects are impacting his decision making for the firm. It would help him make rational decisions which are in the best interest of shareholders.

Is India even a country? It’s not an outlandish question. “India is merely a geographical expression,” Winston Churchill said in exasperation. “It is no more a single country than the Equator.” The founder of Singapore, Lee Kuan Yew, recently echoed that sentiment, arguing that “India is not a real country. Instead it is thirty-two separate nations that happen to be arrayed along the British rail line.”

But the history has changed and a country which was known as the land of magicians and snack charmers only a few years ago has emerged as a most important business destination today. It was just because of impractical policies of rulers, the country has suffered a lot. It started with ideals of non- alignments post-independence and then tilted towards socialism. The country which needed capitalism most to eradicate its abysmal poverty, moved towards socialism under the falls dreams of sharing benefits equally among all countrymen, where were no such benefit existed or to be generated.

Due to all such experiments, the country came to a halt in 1991 and grappled in a crisis. It had no sufficient foreign exchange to cover its important and hence, had to mortgage its gold to Bank of England. It was a low moment for India. The lesson was learnt the hard way that socialism will not help anymore and it will have to take a paradigm shift from the existing mechanism. The Indian economy was opened thereafter and it started migrating from socialism to capitalism.

After that historic move in 1991, India is an $ 8 trillion economy (on PPP basis) today in 2015. Due to steps taken in the right direction, it has successfully lifted millions of Indians out of poverty. This would not have become possible, had it not adopted globalization and encourage trade and investments. Today, India has emerged as one of the most important business destinations in the world. Everyone wants to be here in India and it is said that 21’s century is India’s century. Here, I have discussed some of the key opportunities which can attract any businessman towards India.

Opportunities

1. Huge market size

India is a country with population of 120 crore plus people. This makes it one of the largest consumer places in the world. And out of this, approximately 40% population is from middle class.This middle income group is rising as poor are entering into middle income group and existing middle class is moving towards higher income group due to growth of the economy. Given this fact, it is very difficult to ignore this population and its growing disposable income for any company. India is one of the fastest growing economies of the world and it is expected to rank amongst the world’s top 3 growth economies and amongst the top 3 manufacturing destinations by 2020.

Further, the reality is that the growth in the western countries has become stagnant or is slowing down due to combination of variety of reasons. Hence, it has become absolutely necessary for any company to have presence in India to generate their next phase of growth.

2. Strategic location

India is strategically located in the South East Asia. The products manufactured in India can be easily supplied to neighboring countries like Pakistan, Sri Lanka, Bangladesh, Nepal, Bhutan, Maldives, Myanmar etc. The beauty is that these countries are also not developed yet and can be new markets. Further, there are some “homogeneous markets” in this region like Pakistan, Bangladesh, India. Considering availability of infrastructure and other resources, it is easy to serve these markets while having presence in India.

3. Availability of resources

India has pool of abundant resources which are available at comparatively lower prices.

• There are approximately 50 crore people in India which are from working class. This makes it one of the largest countries with such a largest manpower, just next to china. And this workforce is increasing by 1.2 crore a year.
• The majority of this work force is young, which gives advantage of “demographic dividend”. Due to this, India will have a largest pool of young people, even surpassing to China.
• Availability of strong technical and engineering capabilities backed by top-notch scientific and technical institutes. India produces largest chunk of English speaking doctors, engineers, accountants, management graduates, teachers etc in the world.

4. Infrastructure

Though India is lacking on infrastructure but it is improving with focused efforts in this sector. It has some advantages like large railway network, reasonable air connectivity, and improving road connectivity. Further, India has a coastline spanning 7516.6 kilometers, forming one of the biggest peninsulas in the world. It is serviced by 13 major ports, 200 notified minor and intermediate ports which facilitates majority of trade. It is also important to note that India is also endowed with rich mineral resources.

Challenges

However, there are some areas of concerns. In a recent World Bank report on ease of doing business, India slipped to 142th number. This is not a good score at all and indicates that there is lot to be done. There are certain challenges which make it an unattractive business destination. These are..

1. Uncertainty of policies

Uncertainty in business freaks. Foreign business community finds it very difficult that policies change overnight in India with the change in the government /authority. Due to uncertainty on certain taxation issues, resource allocation, land acquisition etc has sent wrong signals in the international investor community. It is necessary to ensure a stable regime to encourage trade and investment in the country.

2. Corruption

India ranks 158th in terms of ease of starting business in India, according to the recent World Bank report. One of the major factors affecting business sentiment is omnipresent corruption. Am sure, all of us at some or the other time would have experienced it. It is more prevalent in the government functions but is also somewhat visible in private sectors. India ranks 85th among 175 nations on perceived corruption index, according to Transparency International, the global watch dog on graft and abuse of power. This is detrimental to foreign investment as foreign business community is not able to build trust in the system. The governments need to focus on transparent and clean administration.

3. Unnecessary and old laws

Some of the Indian laws have become laughable. These outdated laws have lost their relevance in today’s modern era and have become a tool to collect bribes. And hence, the same need to be repealed. Recently, the government has identified some 100 laws which are old and burdensome and is considering repealing them, which is a welcome move.

Conclusion

In spite of all these challenges, India is a place to be in 21’s century. The sheer size of market, growing income, availability of resources etc. is compelling factors for foreign companies.

For India, it is a once in a lifetime opportunity. At this juncture, all factors are in favor and if India catches up this growth trajectory, then no one can stop it. But if it misses this growth momentum, then there will be few possibilities to move millions people out of poverty and it would be a country of poor people for a long time again. Let’s hope that with the new government in place, India catches up and works towards investment friendly measures to make it more attractive business destination.

Note – T he above article has been written in personal capacity and does express employer’s views.

AGE is not a barrier to learn. I chose this topic as there are many people who think that after certain age they cannot study and so they give up. It spoils their career and constraint them from growing. It is human psychology that after age of 25 one cannot study as a person has many household responsibilities and he need to do well in that. Traditional mindset is that once a person starts earning, he/she only needs to concentrate only on work and effectively manage household activities. Is the traditional thought which is going on since long, True? To get more clarity on this we will try to figure out what Age is? How does it impact on an individual’s life?

Age is effect of time on a person. Certainly as and when a person gets older he/she physically becomes weak and they can feel the impact of being old. As and when time pass person gets more responsibilities and they gets more inclined towards it. Single handedly managing many things brings them into more stress and cannot concentrate on personal development. They gets surrounded by complexities of life and gets less time to think about future and growth prospect linked to the same. They need to take care of their spouse, family and society and fulfill responsibilities towards them. In this course they don’t get time to learn and enrich themselves with knowledge. Learning and getting knowledge is equally important as other responsibilities because if they don’t do so their career gets constraint from growing and at one point of time they get stuck.

“Old age is like everything else. To make a success of it, you’ve got to start young.”

Learning is defined as the social process of construing and appropriating a new or revised interpretation of the meaning of one’s experience as a guide to action. One of your most treasured values is the love of learning. Learning is something that impacts nearly every facet of your existence, every day. You should constantly learn new things, or refresh on existing knowledge. Even when you are not learning, you should apply skills or knowledge on logic problem in a puzzle book, in order to exercise your mind. Without an individual’s drive and desire to learn he/she would have never, so it is very important to have constant desire and motivation to learn. Learning new information, such as history and social science is vital to our evolution as a civilization. We must learn from our past, our societal flaws, and our behavior in order to become a better individual. The individuals that ignore or resist learning opportunities become mentally good for nothing.

Those who cannot or will not stop to examine, study, and analyze the world around them seem to have little or no ability to apply any form of analysis upon them, thus may not achieve a level of self-actualization. Those without any motivation to learn seem to lead a unconscious existence. They appreciate things less and hence are more socially awkward, are more likely to be fearful or prejudicial against things they do not understand. As a result they are less emotionally fulfilled, but they cannot understand why. It is common to say that ignorance is bliss, but from what I have seen that is only illusion, because those who are ignorant, lack the self reflection necessary to understand how unblissful they are. It is true that knowing hard truths can make people depressed, angry, frustrated, but not knowing keeps you in just a vulnerable or dangerous position without the benefit of knowing what to expect or how to prepare.

Henry Ford once said “Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young.”

Importance of Learning:-

1) Personal Development – Learning helps in enriching knowledge and knows more about current affairs. This helps in personal development which is very important for an every individual. Personal development includes activities that help improve awareness and identity, develop inner talent and potential of an individual; it also builds human capital and facilitates employability, enhance quality of life and contribute to the realization of dreams and aspirations.

2) Career growth – If an individual keeps on learning than it helps him to grow in career and attain zenith in the same. Career Development is the lifelong process of managing learning, work, leisure, and transitions in order to move toward a personally determined and evolving desired future.

3) Self Actualization– A theory of Human Motivation, Maslow explicitly defines self-actualization to be “the desire for self-fulfillment, namely the tendency for an individual to become actualized in what he is potentially. Constant learning can help individual satisfy his self-actualization need.

4) Confidence- Constant learning makes a man confident on its own as he is aware of many things which are going around the world. Confident person works well and always be happy and do away with stress and negativity.

“As you grow older, you will discover that you have two hands, one for helping yourself, the other for helping others.”

There are many examples of business tycoon who studied after being settled in career, in order to grow and attain zenith in their field.

1) Ratan Tata {Chairman of TATA sons} – Ratan Tata studied in Mumbai at the Campion School and completed his secondary education at the Cathedral and John Connon School. He completed his Bachelors in architecture with structural engineering from Cornell University in 1962 and the Advanced Management Program from Harvard Business School in 1975 when he was 38 year old. Is 38 years too old to get a degree?

2) Kumar Mangalam Birla {Chairman of Aditya Birla group} – K.M. Birla has B-Com degree from University of Bombay & holds and professional degree of Chartered Accountant. After completing CA he joined business after sudden death of his father. After completing few years in business he went to London for masters. He also did his MBA from London Business School UK.

Learning is a continuous process and the true learner always looks avenues to learn from anybody and everybody. There is no bar on learner’s age or the age of the teacher. A young child can teach you something which you may have not learnt till now. Similarly, every old and poor man can teach you something very important.

Have you ever heard someone say, “I’m too old to learn”?

Did you believe them? I hope not.

There are many people in their 50’s and 60’s going back to college to earn their degree. At that point in their life they are probably doing it because it is something they want to accomplish. The likelihood of improved earning power is no longer the motivating factor.

It doesn’t necessarily have to be academics.

Keep Learning and keep growing, you are not old to stop learning. You should always feel young when you want to learn something.

“Never stop learning, because life never stops teaching”