Indian Economy: News and Discussion (June 8 2008)

[Abhijeet]

Very true. But like it or not, it is mostly the MBA types who have the guts, cojones, drive and I would definitely think "irrationality"/ "blindness" whatever you call to just do it. The more "cerebral" types end up thinking too much and doing too little.

I think this is overstating it by just a teeny bit. In the tech industry, entrepreneurship seems to come disproportionately from technical people and not MBAs, which seems to make sense given how important domain expertise is in general. I don't think risk taking ability is well correlated with any particular educational degree. If you're talking about the finance world, of course, an MBA is in many cases a prerequisite for entry.

AshokS, well said about the lack of entrepreneurship among Indians in India, in general, although from what I am hearing that is changing rapidly especially with the reverse flow of people. In Silicon Valley, of course, Indian entrepreneurs are old news.

[Nayak]

Now, diss Infosys and Wipro and TCS all you want. One thing is clear in those companies, ETHICS AND INTEGRITY ARE NON NEGOTIABLE. When folks talk about the integrity and ethics of the IT industry in India, whose names come to mind ?. It is always Infy, Wipro and TCS.

Vina-gaaru, the vegetable oil company has it's own skeletons in the closet. It's recruitement practice is not entire free of unethical approaches. Wait and watch maadi.

But I agree with your post.

[vina]

I think this is overstating it by just a teeny bit. In the tech industry, entrepreneurship seems to come disproportionately from technical people and not MBAs, which seems to make sense given how important domain expertise is in general. I don't think risk taking ability is well correlated with any particular educational degree. If you're talking about the finance world, of course, an MBA is in many cases a prerequisite for entry.

How so?. Leave out HP and Cisco. Among the rest of the giants in the valley and in the tech field (Oracle, Mickey Soft, IBM, etc etc), many of them were non techies and were enthusiasts/dabblers/ non tech , more of the "marketing", "creative" and "general management" MBA types.

[vina]

And oh, like it or not a vast majority of the B Tech IITians are the flexible, smooth talking MBA types. Not that there is any shortage of hopeless nerds though. I think Bade Saar will vouch for it. They tend to make excellent entrepreneurs (and they are a big factor in the Silly Con valley startup scene). The fact, that they go that way into bijness and not ponder over the mysteries of the universe by doing pure science is one of Bade Saar's his favorite cribs.

But gosh. It sucks hard to be working on a Saturday. Thank god for BR for the "cigarette" breaks!

[Bade]

Gosh, vinaji the economics thread has become nukkadized with so many MBAs floating through here under the radar of the purists economist tinkerers...i meant thinkers. I better scoot out before Suraj maash come along with his whip.

BTechs can be fit into a square or a circular peg...very malleable onree as the saar says. Smooth talking types may become a rarity with the onslaught from the outbacks of Bihar and Kota. Even in my time the gult crowd was largely diverse sample of agrarians in majority. It can only get worse. We will get more nerds and real tinkerers and less anal-ysts coming out of the pipelines very soon. All in all good for the country. Nothing like real knowledge generation and banks to keep them. More useful than having pure money or is it wampum as you call it in the virtual banks. When the world comes to a near end or lesser the maal available to loot elsewhere even after an MBA from topless 15 Ivy leagues, it will be the native intelligence to build things yourself that will make one survive. No fancy theories will help and no begging from elsewhere for technology and knowhow either with nothing to trade. So it all comes down to the basics and a solid education the hard way. Gopis are also nice to have around for morale booster roles which I am sure was missed by the jihadi class at the madrassah.

Spoke too early looks like. The MBA jihadism has caught on with the PG breed too at the IITs. link

[Abhijeet]

How so?. Leave out HP and Cisco. Among the rest of the giants in the valley and in the tech field (Oracle, Mickey Soft, IBM, etc etc), many of them were non techies and were enthusiasts/dabblers/ non tech , more of the "marketing", "creative" and "general management" MBA types.

Google, Yahoo, Apple, eBay, Pixar, Adobe, Netscape and many others were all founded by tech types - dabblers or otherwise (although most of them had a CS/EE degree and were not just dabblers). There are lots of others but those are the ones I can think of right now. Of course later professional CEOs may have been brought in and they may have been MBAs in some cases, but the original founders were not.

To be clear, I don't disagree that low-level "nerdy" tech skills are completely insufficient to start companies and operate at this level. My disagreement is with the characterization that only MBAs have the risk taking ability or "big picture thinking" to make significant things happen. Things are rarely so black and white in the real world. I don't mean to put words in your mouth but this is the impression I get from your posts.

In general, I think the whole MBA discussion comes down to a very distasteful Indian (perhaps Asian) trait to want to prove yourself superior to others by virtue of your background: family, connections, education, and to narrowly categorize people on the basis of those. I'd really like to see the more American/Californian culture of constantly re-evaluating people and making them repeatedly prove themselves, and recognizing that diverse backgrounds among people are valuable, to make it to India.

[DominicG]

Guys, I don't know if this is the right thread to post this, so I apologise in advance. I wanted to find out what kind of employment prospects there are for a foreign trained electrical engineer (fresh graduate) in India. I'll be graduating from a Canadian University in a few months, and I was hoping to get some guidance on employment in India in the communications, automation or chip making sectors. I'm quite apprehensive of applying to Indian companies because I'm not sure what they're looking for-I'm aware that engineering in India is very different than it is in North America, with waaay more emphasis on retaining theoretical knowledge. I'm unfamiliar with the interview process in India, so even though I might end up with an interview, I don't know how I'll do because I don't know what questions they might ask. Most Canadian companies have EIT (Engineer-in-Training) programs for fresh graduates to help them familiarise them with industry standards and equipment, programs that can be as long as 4 years that give you adequate training-is there anything similar in India? Do Indian companies prefer foreign trained graduates or avoid them? I've been invited informally for an interview at TCS, but I'm not sure what I'll be doing at a software company, since that's not my field. I've been told not to worry, and that newcomers are trained in the software they use.

Any help will be appreciated.

[Suraj]

Inflation recedes further to 5.91%

India’s inflation slowed to a 10-month low, giving policy makers room to implement further measures to stimulate economic growth without fanning prices.

Wholesale prices rose 5.91 percent in the week to Dec. 27 from a year earlier after gaining 6.38 percent the previous week, the commerce ministry said in New Delhi today. Economists expected an increase of 6.14 percent.

Governor Duvvuri Subbarao has lowered the Reserve Bank of India’s benchmark interest rate four times since October to protect Asia’s third-largest economy from a deepening global recession. Lower oil prices may allow for even more cuts from the central bank, which is due to release its next quarterly policy statement on Jan. 27.

“We expect further monetary easing over the next three months,” said Robert Prior-Wandesforde, senior Asia economist at HSBC Group Plc in Singapore. “India has not been able to escape the aftershocks of the global financial crisis.”

India’s central bank has responded to weakening growth by reducing its benchmark repurchase rate by 350 basis points to 5.5 percent in the past four months. The proportion of deposits that lenders need to set aside as cash reserves has also been cut to 5 percent from 9 percent.

[abhischekcc]

This is fun.

AshokS comes up with IIB as a top Indian institute - Indian Institute of Bankers.

I am sure you meant ISB - whose dean was on Satyam's board.

Sweetie, you people who think that having degree from a top US B-School gives you credibility with me, you need to think again. I have seen enough of you people to know how much *knowledge* and how much bullshit there is. Read (if you can) what other people have written about MBA shenanigans - PPT and bullshit specialists - and you know that it is the bullshit part that pisses people off.

Normal (2/3 tier) B-schools give 90% BS and 10% common sense. Ivy league, IIM etc give 90% BS, 1% common sense and 9% statistics. It is this substituting of common sense with statistics that created the sub prime crisis.

I mean, only an MBA from Ivy league would think that giving loans to unemployed people is good business.
I don't see any Symby grads in Shitybank, Goldman Sucks, Mary Lynched, etc. Do you?

This whole crisis is a direct result of the deliberate disconnect from reality that is part of MBA education - top B-Schools do this disconnect better.

TVS has a policy of not hiring *any* MBAs. They are doing quite well, thank you. The only Indian bank affected by sub-prime crisis is ICICI, and they have a predictable lust of degrees from top B-Schools.

This crisis has only laid bare the emptiness of B-School education. People are only not saying it openly.


>>Strike Two (you still need to answer Vina's question)
I already did. If you don't know how to read, that is your problem. It would help if you kindergarten before you did MBA/PhD in larceny.


>>So you wanted to play ball with the big boys...how does it feel?
Since you have been extremely civil to me, I will be extremely civil to you and tell you to stick your attitude right up your ass (or is it arse these days )

[abhischekcc]

No gurantees in life, but going to a top 15 b-school will ensure doors open up a lot easier for multiple reasons. Top companies directly recruit from the top 10 (usually 8 ) schools directly at the B-School level, your affiliation network is a lot more valuable, and the people you want to influence might have gone to the same school. That drops off substantially after the top 10, less so after the top 15, and good luck on anything after that.

So you admit that the success of *top* B-school grads is because of their alumni network, not inherent intelligence (or hard work).

[AshokS]

How so?. Leave out HP and Cisco. Among the rest of the giants in the valley and in the tech field (Oracle, Mickey Soft, IBM, etc etc), many of them were non techies and were enthusiasts/dabblers/ non tech , more of the "marketing", "creative" and "general management" MBA types.

Google, Yahoo, Apple, eBay, Pixar, Adobe, Netscape and many others were all founded by tech types - dabblers or otherwise (although most of them had a CS/EE degree and were not just dabblers). There are lots of others but those are the ones I can think of right now. Of course later professional CEOs may have been brought in and they may have been MBAs in some cases, but the original founders were not.

Without the dabblers, there would be little work for VCs, so the fact that they dabble is good! The VCs add value when the dabblers want to take it to the next level - by providing management experience, the networks, leadership teams and capital to make it work.

To be clear, I don't disagree that low-level "nerdy" tech skills are completely insufficient to start companies and operate at this level. My disagreement is with the characterization that only MBAs have the risk taking ability or "big picture thinking" to make significant things happen. Things are rarely so black and white in the real world. I don't mean to put words in your mouth but this is the impression I get from your posts.

Would agree.... but having come from an eng background myself with an BS and MS along with an MBA, I find that an MBA opened up a lot more in terms of knowledge and potential.

Unfortunately the core problem is that most Indian "MBA only" institutions provide a glorified b-com education, trying to remediate core skills that their students lack due to either some systemic cultural issue or academic background. If that the case, they should call the degree something else than an MBA as it completely misses the real value of the degree. These institutions in my opinion, provide a a poor semblance of what they should be imparting on their students. Its somewhat akin to the difference between an MCA degree in India vs a Comp Sci degree. The former doesn't have the depth, though is "good enough" for the easy stuff. Instead of cultivating students with the right tools to change the Indian business environment, they are cultivating a network of "managers" and back office operations type people.

In the US to a certain extent, if a person did not attend a good MBA program, they will usually not emphasize it on their job application. Its the opposite situation in India from what I have experienced with staff there. There is a lot of bravado and hubris from graduates of these "MBA only" schools. These staff barely have the proper communication and analytical skills - let alone core business skills. There was one person on an account from Bangalore that had completed his MBA "training", from an institution of Indian repute, but not of international standards like ISB/IIM etc. Armed with his MBA, he felt he was management material and should lead a team. The poor fellow spent most of his time bickering with new "nerdy" hires to assert his dominance. He did not demonstrate leadership, he did not inspire confidence with his team, lacked any communication and analytical skills. In contrast one of his colleagues was from IIM Bangalore, that chap was talented, performed his job well, knew how to work the system, and was promoted accordingly. The difference in quality between the two was night and day - yet both guys received top pay with an MBA bonus. The Indian marketplace, due to a lack of options and qualified candidates, rewards both institutions essentially equally.

You can see a qualitative difference between the top tier Indian schools, the IIMs, ISB vs the other private Indian institutions (that contribute little if any to research and do not have advance graduate programs). The later appear to primarily profit driven to churn out so called MBAs that would be hard pressed to compete with the equivalent of a BCom in the US.

This is the root of the issue in Indian business education - by accepting lower standards of the MBA institutions in India and only having a small clique of institutions that are internationally competitive and ranked (IIMs, ISB, etc) - the efficacy of an MBA degree in India is highly dispersed and diluted. Of course there are not so great institutions in the US, but the graduates of those institutions are not payed a considerable differential to the general population. Only the top B-Schools (therefore internationally ranked) in the US get the big bucks - usually for good reason in what the students can provide in terms of value to their employers (the quality of the student, the education, the network, and the "access").

What I have noticed in India is that even borderline students attend a private MBA college and then are able to demand a premium in the Indian marketplace... For What?! In this respect I agree with you and others on this forum that a decent hardworking Indian B-Tech is more valuable than a par/sub par Indian MBA. That is probably why there is such a negative reaction to the degree in India and this forum.

The problem is larger than false prestige, what happens is that it handicaps the Indian labor force by not developing that formalized network of entrepreneurs, academic institutions, and investors to drive an innovation culture. What do you think drives the innovation culture in "California /US"? With the current Indian construct, the country ends up with either decent techies or at best back office "MBAs" - where is the bridge in between that connects the capital markets, the leaders, the experience, with the innovators? Why does the same Indian techie go to the US and make something of themselves more than a worker in an MNC? I think this is a structural deficit in the formal Indian entrepreneurial framework - partly due to lower standards for what passes as an MBA education.

[Abhijeet]

That's an interesting insight. My comments were not about Indian BTechs vs MBAs, or Indian industry (of which I have no direct experience), but about the tech industry in California, which I do know a bit about and which illustrates the point I was trying to make (that many of the most successful entrepreneurs don't have the degree in question).

I do think there is something like an Indian "power gene", though...the desire to lord it over others that the "bad" MBA you described had in spades. Unfortunately, from the experience of friends, this attitude is all too common among middle management in the big Indian IT companies.

[R Vaidya]

Impending polls may have pushed Satyam off cliff


http://www.dnaindia.com/report.asp?newsid=1220269

R Vaidya

[derkonig]

at credible Indian B-Schools like IIB and IIM-A

errm...which school is that?
The law of yindian engg colleges & b-schools unfortunately is that all the errmm ..."delectable" wimmins more or less ended up in gulli-nukkad colleges while the eye eye tees/yums, are yee cees were all left high & dry...

[AshokS]

Meant ISB... so many II-somethings (IIT, IIM, IIS, ISI, IIIT....crazy) in India, you loose track of the names

[Dileep]

Add the IGNOU MBA to the mix. A lot of the abduls here used to go for that. Most drop out of it.

[vsudhir]

Some things emerge:

1. Phoren schooled MBAs can't/won't in yindia zimbly because the rupee pay is too low to pay off their phoren study loans. That leave the desi mkt pretty much to desi B-schools. And no, IMHO supply of decent-quality MBAs vastly outstrips demand, esp in the current economy.

2. The cream of desi MBA degreeholders who used to head abroad (the top half of day 0 placements in the IIMs in the days of yore) has also dried up for lack of demand/opportunities in the phoren Fin and tech sectors. Net result - expected returns to MBA edu has taken a major hit of late. Expect aspirations to meet reality. Not a bad thing, IMO.

3. Desi MBA students currently in massaland are in a bit of a soup - jobs drying up so quickly (the cliffedge thing happened actually) that none had anticipated so at the time of applying to B-school. Plus the handicap that these dudes need to find employers willing to sponsor a work visa, ever more difficult in these troubled times. Several are contemplating dropping out altogether or R2I but there pay is much lower.

4. The only folks who actually are able to leverage an MBA "education" well are likely the Exec MBA types - plenty of experience and they enter the program not expecting to "learn" any fancy wizardry but to gain a degree and access to a network.

5. It is indeed the old boys/alumni network that opens doors and where B-schools gain a lot of their clout from. The teaching is not very different school to school. Agree with abcc that a scientific or systems approach to "management" is likely the biggest gyan value add B-schools provide. Transplantation of best practices, mechanism design to deal with recurring situs etc is common-sensical and is usually bread and better for the mgmt consultants who dabble in multiple sectors, industries, clients etc. Whereas an engineer would be circumspect applying his often specialized gyan outside his industry, the MBA is seldom so.

General observations. Nothing profound about them.
Admittedly, moi has a deep interest in the B-school mkt and have been following the same over time. Would rather ny MBA bubbles burst - often and early - and that the desi edu sector (and the MBA one too) grow to be healthy, competitive and value-adding.

[rohitvats]

Since this is an open season for MBA vs Technical guys (engineers) and relevance of the MBA degree or diploma, here is my 2cent on the issue. But before I progress, let me confess that I’m also one of the back offices MBA (albeit with front office role) as per AshokS.

Point 1: First the Indian scenario with respect to the proliferation of “Business Schools” much like the NIIT centres in 90s. We need to go back a bit to understand this proclivity to get the MBA tag. The undergraduate education system in this country is seriously f*&^%d. The undergraduate system is legacy of the colonial days and what one studies is neither in sync with present times nor has any application value. You cannot earn your bread and butter if you’re only a graduate in India. While this argument holds across the spectrum for non techie guys, even for engineers there are not enough options available to pursue a decent paying technical profession, excluding the IT sector, where guys from non related field but with BE degree can also find job. Compare this with the US undergraduate program. IIRC, one study said that 13% of the under grads in US pursue the Graduate program. What they learn allows them to earn their bread and butter and live a decent life. Add to it the absolute lack of options even at PG level in India which will allow you to earn a decent living. Plus you’d not be very favourably looked at if you say you’ve a MSc in Economics or Stats. Time and again one comes across indivisuals with BTech from IIT-X and MBA from IIM-Y who have gone ahead and pursued totally different fields like economics.

This is where the B-schools enter (lets stick to only top 15-20 B-Schools). As AshokS said, they provide education which is mix of what you’d learn in college in US (there are variations in here also) plus the Marketing/Finance stuff. The B-school also solves a problem from the recruiter’s perspective. First, the fact you’re an MBA from one of these schools, means you’re amongst the top percentile of the student population (you managed to clear the examination and survive the course). It serves as natural selection for the companies. This is acutely brought out by the fact that people from different B-Schools get different salaries and designation in the same companies. IIM-X or XLRI or FMS means that you’re that much part of the top percentile. Also, academically, you’d expected to know more that what you’d learn in Indian undergraduate program and hopefully apply it in your domain. In Indian corporate system also, there is a definite need for people with specialized knowledge in Finance and marketing and other profiles. Things which an undergrad in the US does will be done by the MBA here.

Point 2: As abhishekcc has pointed out earlier, MBA is like liberal arts. It exposes you to multiple things/subjects and gives you tools to analytically evaluate a situation and develop solutions. Apart from specialized profiles in finance and marketing; there aren’t many roles for which MBA can teach you. You become more rounded in your understanding of the things. And the aspect of better communication is definitely there. The reason the degree comes into disrepute is because some people tend to have "know-it-all" attitude because they bested the rest of mortals to the coveted seat and survived the semsters. This attitude increases in proportion to the rank of the college. Another problem is companies do not have proper HR policies to groom and expose the freshers to the entire spectrum of the job profile, something which HLL does (and is quite famous) and some other FMCG companies. I accept there is not much Value Add (the much used and maligned cliche) that otherwise you can do if you're either not exposed to the system or have prior experience. I think the average work experience of a MBA grad in US is 4 years. When you come with prior exp you know what you're looking for what is the best fit for a problem. Its the case of been there done that.

Point 3: The techie versus MBA debate I guess is as old as MBA and techie degrees. Why do people forget that most of the guys who make it to the better B-Schools in India are from engineering background? It is not for anything that IIM-C is called the joint of the quants. Do supposedly good people become bad whence they cross the altars of B-School? I do not think so. There are some definite qualities one must possess to be able to survive in this big bad world. These are more encompassed in the Emotional Quotient (EQ) than IQ. Even in the vast majority of engineers there are guys who are better than others in domain of EQ and have something that will allow them to excel in other roles involving management, HR and other decision making abilities. Same applies to people for students from other fields also.

Rant On/That aside, I do have an issue with Finance junkies. Excellent as they are with their modeling skills, they never seem to understand that their model is at best an approximation of real world. The most important input is the set of assumptions that one makes based on the one's understanding of the market dynamics (in a particular field and not restricted to bonds/equities). We were telling such finance whizkids from Real Estate PE funds from December 06 about the non viability and sustainibility of Real Estate scenario in Bangalore and Hyd. but nobody seemed to listen. They took their numbers and it made perfect sense when the NPVs and IRRs came within expected returns set. Most of them are out of business. / Rant Off

[vsudhir]

IIM-C is called the joint of the quants.

More appropriately, the place where quants meet joints... you got to get 'high' before you can contemplate high-flying careers et al.... ..... IIRC 'joint distributions' meant different things inside Acad block and out.... seriously, Joka has a 'MIT incubated' reputation to live upto and with ISI located int he same city (faculty sometimes shared) the numbers game there can get heady.....

/OK. "nuff OTs from moi. Back to Ind Econ onlee.

[Sagar]

Believe me. The "Finance" abuse of any statistics is chicken feed compared to what goes on in Economics and other social "sciences".

excellent post. You brought out well the deficiencies of models in non-engineering applications.

I have never agreed with "Social Studies" and "Economics" being classified as "Science". In fact the Nobel Prize for Economics is the biggest con job of all. It has convinced a large population on our planet that Economics is completely deterministic and that the so called geniuses in Austria or Chicago (take your pick) can predict the future if they had all the data.

[Harshad]

So what was the key thing that happened in Sathyam ?. It was purely an ethics and integrity issue. Now, diss Infosys and Wipro and TCS all you want. One thing is clear in those companies, ETHICS AND INTEGRITY ARE NON NEGOTIABLE. When folks talk about the integrity and ethics of the IT industry in India, whose names come to mind ?. It is always Infy, Wipro and TCS

Remember Phaneesh (Punish) Murthy?

Sh!t goes around everywhere. Only when it hits the fan, you see it.

There is no way you can get Gov contracts in India w/o bribing the officals. No one wants to talk about it publicly. But they all do it. Cause if you dont someone else will.

Ethics! My eyes!

[vina]

Remember Phaneesh (Punish) Murthy?

What about him ?. It was one Individual who was harassing another female employee. It wasnt Infy who was doing it or condoining it. Infy fired him and paid the woman damages. That was the honorable and right thing to do. Dont get the point about Phaneesh.

In fact, NRN publicly stated when asked about his biggest mistake, it was him, and that too on TV.

[CalvinH]

Remember Phaneesh (Punish) Murthy?

What about him ?. It was one Individual who was harassing another female employee. It wasnt Infy who was doing it or condoining it. Infy fired him and paid the woman damages. That was the honorable and right thing to do. Dont get the point about Phaneesh.

In fact, NRN publicly stated when asked about his biggest mistake, it was him, and that too on TV.

VinaJi, Infosys/NRN who take so much pride on being the champion of ethics took their time in firing him. Unlike Satyam the verdict was not instant though it was more or less clear from the beginning that he has a role in it(Compare it with someone who was fired immediately for accidently forwarding a suggestive email to a female collegeue). The reason he was the blue eyed boy of the top leadership and a rising star in the company. He was also personal favorite of NRN.

I think what NRN accepted as his mistake was that it took them 3 months in firing him and that too only when they were left with no options but to fire him. I can bet NRN would have know from the day 1 when the scandal broke that he has a role in it but they (Infosys) kept exploring avenues to see if he can somehow manage to come out clean.

I dont think there was anything honorable in it.

[putnanja]

The three months is to ensure that a proper inquiry was held and due process was followed in firing Paneesh. Without that, Infy would be exposed to law suits and dragging the issue longer than necessary would just harm the company image. They took their time, did a proper inquiry and when the result implicated paneesh, took action as required.

[Vipul]

NRN came clear on this issue only after infosys was dragged to the court and made an out of court settlement to pay damages.Since money had to be paid there was no way it could be done without making full disclosures.

[Muppalla]

Infosys has great ethics and somelese has no ethics is useless argument as everyone works in the dynamics of IT consulting work and no one is ideal in reality.

Every IT consulting company proudly anounces how rigourously it follows ethics and all the processes around the concept of ethics. Most of the reasonably big to biggest consulting companies have a section related to ethics during new-hire orientation program. In my company these are part of the core values and the annual assesment has a section to evaluate core values. The reality is much dismal. In my experence and the information I gathered from sales/marketing type friends, unethical behaviour to capture contracts is rampant and this has nothing to do with Indian companies and exactly same behaviour is existant with equal volume in all non-Indian companies as well.

In some cases this goes with-in the legal framework so that no one can even catch it as un-ethical. Most of the consulting companies around DC hire the retired Government officials. The rule is not to use them with the same agency that they worked during the first year. This is no big deal and one year is nothing. This is to get contracts using their contacts inside the agencies and also to know what systems are coming up bids and how should one respond to the RFPs. No one breaks the rule here openly but just imagine the negotiations (between the IT company's VP and the Government's top honcho) to get the top honchos on board. The amount of salary and perks that is paid to these folks is exhorbant and in fact most of these folks are just below average in any aspect. Most of the negotiations happen at happy hours and over dinners.

During the dot-com boom time, the decision to use services of which company is decided in golf courses and there was no real evaluation of why one is chosen over the other.

It is the customers' greed that is driving this behavior and every company does something or other at various level to be competitive. What is matters is how companies are able to control it and at what level. Most of the companies does not allow this beyond the top level and that keeps the lid closed. In many mid sized companies this is allowed at salesman level and these companies are vulenarable as in the case of Satyam-Worldbank fiasco.

The NRIs(not all of them) who arrived here earlier and the ones who think they achieved everything by leaving India(due to fear of loss of jobs to ones living in India) blame the Indian companies as they are jealous of India's IT growth. It is a sour grapes mentality. They go to the level of saying that the good multinational (non-Indian) companies are also polluted because of the influx of corrupt Indians. These folks also make sure to tell these to videshis and feel proud of that behavior. Inside India, one city/state people blame other city/state for not having ethics in their companies. Hyderabadi/Telugu folks has maximum negative image in this campaign and they are also the largest contingent across the globe in IT. Now Satyam is like a recorded proof to this image.

[vishnua]

Good post Muppalla.

There is saying "Untill your caught your a Dora (lord). Once caught you are a theif".

What ethics?. Name any Non-MNC and look at the history of that and you will find something in the records not to mention what actually goes on.

Long Long time ago my Ex Boss told me the following about US. There 2 sets of rules how US operates for that matter you can apply all of the "international community" .

One set is for outside the US and other is inside the US.

In later years it became very clear what he meant. i was very young at that time ( late twenties).

[KarthikSan]

Wasn't Infosys part of the "land mafia" that wanted a gazillion acres of land all over KA? I'll trust TCS as part of the TATA group. But IMO Infosys is just another bunch of crooks. Any time a company is praised too much by themselves then it's a sign that there is something fishy. JM2P.

[vina]

You guys have no idea of what you are talking about. I have worked for the Tatas. Yes. They are the cleanest among the "traditional" businesses in India. But Infy and Wipro have among the stronger ethics and integrity systems comparable to the best anywhere globally. That is something they dont use as a fig leaf/nice to have wallflower kind of thing.

Lets face it. The Andhra based companies have terrible ethics. Hyderabad was known as the shady back yard for crooks trying to jump into the IT/Vity band wagon back in the early 90s itself. That aside, scratch beneath the surface of other "prominent" hyd companies in stuff like Pharma etc, you will see very similar poor ethics and integrity. The other company with piss poor integrity and ethics is the Mega Refiner. Most Dilli based "lala" companies such as the former DCM group , again. terrible scene. Go outside It/vity and outside a select few "traditional" groups, the integrity and ethics scene in traditional Indian businesses was the pits. IT/Vity and the success of rank outsiders and noobs like Infy and Wipro was what made them clean (or atleast pretend to clean and put all the corporate governance and ethics stuff, even if largely slogans) up their act. Satyam I think will sound the death knell for the "andhrapreneur" story. This is a massive set back to Andhra and the Telugu entreprenur's already poor ethics and integrity image. It will take a fundamental change in business culture, value systems and a very long time before anyone starts believing anything out of those parts. At best, those guys will get treated like the Real Estate kind of sector, full of scamsters and low level and high level crooks , a distateful deal that needs to be done , out of compulsion, if at all, but best avoided in most cases.

[KarthikSan]

@ vina --> Not trying to be rhetorical. I'm just curious about how you are so sure about the ethics of Infosys and Wipro. They are little more than body shoppers themselves, aren't they?

Andhra is not the only state to have non-ethical businesses. A certain liquor baron from KA was known to be the father of all Gordon Gekkos of the world. Buy an ailing company, strip it bare, ratchet up the hype and sell it to the first idiot he finds. I can only see where all the "good times" of his airline have gone! Pick a state and you can probably name at least a few business groups like that.

[vina]

@ vina --> Not trying to be rhetorical. I'm just curious about how you are so sure about the ethics of Infosys and Wipro. They are little more than body shoppers themselves, aren't they?

Sometimes , when you don't know something, it is better to listen. Obviously, you have no first hand experience in either dealing with them or working with them, but based on empty bazaar talk from a bunch of losers, nor do I think you know anything much about the IT services industry in general.

Forget about the horse dump your loser pals who shopped themselves out across on some H1 or whatever visa some 10/15 years back and felt they had "arrived", dish out to you. That is the reason why they and the companies that shipped them across are in the garbage dump they are right now, while their pals who stuck with the top desi companies actually have a career, cash in the bank and a life to look forward to , rather than having their world collapse around them.

[vina]

Andhra is not the only state to have non-ethical businesses. A certain liquor baron from KA was known to be the father of all Gordon Gekkos of the world. Buy an ailing company, strip it bare, ratchet up the hype and sell it to the first idiot he finds. I can only see where all the "good times" of his airline have gone! Pick a state and you can probably name at least a few business groups like that.

There is a difference between an 'unsuccessful business' and rank fraud. The liquor baron you are talking about played the consolidation game perfectly and has an unshakable grip on that business. Full marks to him on that. What he is doing is using the monopoly position in that business as a cash cow to enter other areas.

He hasnt been successful in many areas and has exited . But in airlines , he is a long term player and is going to stay the course. In fact, in the liquor business he hasn't been stripping assets and I dont think he sold any of the F&B properties ever. Airline business is crazy, because there is an 'irrational' player (Air India) who can support infinite losses , a ridiculous regulatory and taxation environment (across, center, states and everything) and despite that , I am actually frankly surprised that any private airline managed to exist at all in India. It is not a business I would be in. But that is a bad judgment call, not fraud.

[markos]

@ vina --> Not trying to be rhetorical. I'm just curious about how you are so sure about the ethics of Infosys and Wipro. They are little more than body shoppers themselves, aren't they?

Sometimes , when you don't know something, it is better to listen. Obviously, you have no first hand experience in either dealing with them or working with them, but based on empty bazaar talk from a bunch of losers, nor do I think you know anything much about the IT services industry in general.

Forget about the horse dump your loser pals who shopped themselves out across on some H1 or whatever visa some 10/15 years back and felt they had "arrived", dish out to you. That is the reason why they and the companies that shipped them across are in the garbage dump they are right now, while their pals who stuck with the top desi companies actually have a career, cash in the bank and a life to look forward to , rather than having their world collapse around them.

C'mon, Get off your high horse and stop pretending that you know everything about thse companies and other know nothing.

TCS, Wipro,INFY all did bodyshopping and they still do that. Most of these companies have questionable ethics though none of them may be outright foolish as Asathyam, but that doesn't mean practices of these other companies qualify them to be put on a pedestal.

Not too long ago TCS was sued in US courts for withholding the IRS tax refunds. TCS is probably one of the biggest abusers of L1 visas. Most of these companies do doctor resumes of candidates. Many of these companies have CIO buddies(rumoured to be on the take) in certain corporations and as those buddies move from company to company, they give sweet deals to these vendors(some of the sweet deals include ability to place candidates without any interview even if they are purely staff augmentation - i.e. bodyshopping - projects).

[KarthikSan]

@ vina --> Not trying to be rhetorical. I'm just curious about how you are so sure about the ethics of Infosys and Wipro. They are little more than body shoppers themselves, aren't they?

Sometimes , when you don't know something, it is better to listen. Obviously, you have no first hand experience in either dealing with them or working with them, but based on empty bazaar talk from a bunch of losers, nor do I think you know anything much about the IT services industry in general.

Forget about the horse dump your loser pals who shopped themselves out across on some H1 or whatever visa some 10/15 years back and felt they had "arrived", dish out to you. That is the reason why they and the companies that shipped them across are in the garbage dump they are right now, while their pals who stuck with the top desi companies actually have a career, cash in the bank and a life to look forward to , rather than having their world collapse around them.

I asked a sincere question and I'll probably listen if you provide some facts/sources etc. instead of all the rhetoric and abuse. And my "loser pals" who quit Infosys to get an H-1 or do whatever they did are actually better off than they were before. Thanks for your enlightenment.

[vina]

C'mon, Get off your high horse and stop pretending that you know everything about thse companies and other know nothing.

Thats funny. Given the "sense" and "knowledge" you have displayed on matters like "education in india" and "racism of Indians" and other stuff , which you obviously have profound knowledge of, I can very safely say that I do know a lot more than you about big IT companies in Bangalore and Chennai.

TCS, Wipro,INFY all did bodyshopping and they still do that.

IBM makes electric type writers. HP is an oscilloscope company out of a garage. Allright.

Most of these companies have questionable ethics ... Most of these companies do doctor resumes of candidates

Hello ? . I am not talking about your company's ethics and your resume, which may fall under "most". I am talking about some specific companies, where if you or someone else on your behalf puts in false resumes or misrepresents in a bid , you are fired. Got it?

Many of these companies have CIO buddies(rumoured to be on the take) in certain corporations and as those buddies move from company to company, they give sweet deals to these vendors(some of the sweet deals include ability to place candidates without any interview even if they are purely staff augmentation - i.e. bodyshopping - projects).

Yawn.. CIO's dont give your body shopping shell company the time of the day , they give "sweet deals" and are therefore "on the take". Oh, but when they do give you business, they are being nice and above board .

Funny. Next time there is a large billion dollar bid, and that too with a consultant, like Gartner, TPI, Equa Terra, or Everest , who put their reputation and relationship survival at stake, they invite the Wipros, Infosys and TCS of the world along with IBM and Accenture to bid and they don't invite your body shopping shell company in New Jersey. Why , they too must be on the take of course!.

After all, if they can invite Infy, TCS and Wipro , who are just "body shoppers" (as certified by an ex Infy guy, who did some great things after that other than just earning his salary we hear), surely they should invite your body shopping shell company in NJ too right?

[CalvinH]

Sometimes , when you don't know something, it is better to listen. Obviously, you have no first hand experience in either dealing with them or working with them, but based on empty bazaar talk from a bunch of losers, nor do I think you know anything much about the IT services industry in general.

Forget about the horse dump your loser pals who shopped themselves out across on some H1 or whatever visa some 10/15 years back and felt they had "arrived", dish out to you. That is the reason why they and the companies that shipped them across are in the garbage dump they are right now, while their pals who stuck with the top desi companies actually have a career, cash in the bank and a life to look forward to , rather than having their world collapse around them.

C'mon, Get off your high horse and stop pretending that you know everything about thse companies and other know nothing.

TCS, Wipro,INFY all did bodyshopping and they still do that.

Wrong. How do you define bodyshopping by the way?

Many of these companies have CIO buddies(rumoured to be on the take) in certain corporations and as those buddies move from company to company, they give sweet deals to these vendors(some of the sweet deals include ability to place candidates without any interview even if they are purely staff augmentation - i.e. bodyshopping - projects).

Bad Example. Most of the top consulting companies have buddies at C level. All big 4 consulting companies have C-Level connect. Most of their accounts are through that connect only. Just see how many of these (former) C-Level are then hired by these companies as partners or independent consultants.

At least two of these companies you have mentioned have stopped doing staff augmentation unless absolutely necessary. Ask any management guy in these companies. Dont get things out thin air and brand them as facts.

[markos]

TCS/Wipro/INFY etc. are involved in plenty of body-shopping - i.e. staff augmentation - contracts. In some large companies where I found consultants from these companies were purely in staff augmentation mode. The reason these companies were selected were because of the rate - often they could provide a "blended" rate - combination of onshore and offshore rate - in the low $30s or high $20s per hour. In return for the low rate, their favorite CIOs will let them bring anyone in as long as they have been with the company for x number of years (so usually resumes are modified so that anyone can be dumped on such client sites since there is no interview). When some of these companies had some strategic high visibility projects, they usually hired niche consulting companies to provide the expertise in that specific technology/functional area and then augmented the commodity skills with lowcost providers.

Those companies were getting 1000s of consultants from these vendors, that doesn't mean they were not doing anything other than staff augmentation function. Often IT execs in those companies simply substituted their US contractors with INFY/TCS/Wipro/Satyam contractors. When employees in those companies complained about the quality of the contractors, IT execs bluntly told them that they were saving a ton of money (mostly on paper) and they need to work with those contractors to get them upto speed. Fortunately some of those client companies have fallen by the wayside with the credit crunch and whatever savings they made in IT was not really enough to save those companies...

So don't give me the BS about how these so-called tier-1 companies are not involved in staff augmentation which is what typical body-shoppers also do. Just because they provide a 1000 contractors for a client as the sole provider in exchange for a cheaper rate doesn't change that fact

Details of TCS withholding IRS refund
http://www.indiadaily.com/editorial/7022.asp

US Citizens of the company, however, were not asked to sign over their returns, the lawsuit alleged. Vedachalam, who transferred to the bay area in 2000 from Bangalore, was assigned by TCS to work as a project manager at target, where he made USD 50,000 a year.

From 2000 to 2005, the refunds he signed over to TCS totalled USD 25,000 , according to the lawsuit filed in San Francisco's federal district court

If this is true (esp. the part about paying $50k for a PM in San Fransisco which may be below prevailing wages for that area for that type of a position and then withholding tax refunds), I don't see TCS as a very ethical company.

[markos]

here is an article on SEI CMM ratings from CIO magazine
http://www.cio.com/article/32138/Softwa ... ype?page=1

After a few initial niceties, the executive leaned across the table to Smith and another lead appraiser who had accompanied her to the meeting and asked, "How much for a Level 2?"

"That’s when I got up and left the room," Smith recalls. "The other appraiser stayed. And the company got its rating."
....
Indeed, CIOs who look to CMM for guarantees won’t find them, says Rick Harris, director of application development for OnStar, a division of GM that provides communications inside the company’s vehicles. He recalls confronting a manager from one of his CMM Level 5 offshore outsourcing companies who did not know how to do a testing plan for software. "My people had to train him to do it," he says. On another occasion, Harris’s staff discovered that the offshore provider had fallen far behind schedule in one of its projects but had not told him. "You’d think a Level 5 company would have told me months before that the schedule was slipping and we needed to do something," he says.

Like gartner and TPI that vina quoted, SEI is also very reputable....

[Abhijeet]

Details of TCS withholding IRS refund
http://www.indiadaily.com/editorial/7022.asp

US Citizens of the company, however, were not asked to sign over their returns, the lawsuit alleged. Vedachalam, who transferred to the bay area in 2000 from Bangalore, was assigned by TCS to work as a project manager at target, where he made USD 50,000 a year.

From 2000 to 2005, the refunds he signed over to TCS totalled USD 25,000 , according to the lawsuit filed in San Francisco's federal district court

If this is true (esp. the part about paying $50k for a PM in San Fransisco which may be below prevailing wages for that area for that type of a position and then withholding tax refunds), I don't see TCS as a very ethical company.

This is true.

[Suraj]

Folks, last warning. If you can't stick to thread topic I'll lock this thread and clean up or merge posts with Nukkad or IT threads as applicable. Thanks.