In this course you will know :
- Understand a wide range of demanding English texts and recognize implicit meanings.
- Develop the skills to express yourself fluently and spontaneously in English without much obvious searching for expressions.
- Practice how to use English flexibly and effectively for social, academic, and professional purposes.
- Learn how to produce detailed texts which use sophisticated organizational structures.
- Study subjects such as sport, money, the arts, and time.
- Focus on technical issues, for example, adding emphasis and hypothetical meaning.
Section – 1
Nandini is a maid who battles through life — literally. Her mason husband prefers to knock himself out every evening with cheap grog, whether he has worked or not (and there was a time when he would knock Nandini out as well till her sons — Ravi and Veera — grew up and threatened to leave their father only with his gums to wrestle with food).
There is no electrical connection in her house for years. But despite these hurdles, Nandini is brutally honest. She has every reason to pamper her needs with undetected dishonesty, but she never gives in to temptation. She may be a shade mechanical with the washing and cleaning responsibilities, but you could leave your wallet and almirah keys with her and nothing would ever disappear. And she never takes leave unless she is desperate. Like any mother, she dreams of her sons making it big someday. Ravi and Veera walk in sheepishly one day.
Ravi, Veera: Good morning, aunty.
Shraboni (the mistress of the house): Good morning. Sit both of you. Ravi, your mother says that you may be sent out of school?
Ravi: Yes, aunty. I am not able to study. There is no electricity in my house.
Shraboni: But I told you to come here along with your brother and study. My daughter cannot handle Tamil medium, but you can sit and study here.
Nandini: Madam, the teacher wants them to join the tuition class in the evening. He says that if they don’t they will not pass the final examination. But how can I afford Rs 500 every month. And Ravi says that the teacher does not teach even in his tuition class and is horrible as a subject teacher in school.
Shraboni: Yes I know that not all Government-run free schools are good. Why don’t you put them in a good Corporation school?
Nandini: It will be far away…
Shraboni: But they will get bus passes free…
Ravi: Aunty (hesitates and then speaks) if I spend so much time travelling, I will be late for my evening shift. I am earning Rs 550 every month.
Shraboni: Aren’t you in the ninth standard now? (turns to Nandini) Why do you send him to work? He must study if he wishes to do well in future.
Nandini: I asked him not to work. I am working in five houses morning and evening to manage the expenses. He disobeyed me and joined that restaurant as a worker. And after seeing his elder brother working, Veera too went and joined the restaurant. So both of them work there now. (pauses) The work is so difficult and they pay so little. (pulls Veera’s hands and opens them to show Shraboni) Look at his hands, madam. Look at the skin peeling off.
Shraboni: Why do you need to work, Veera? (Veera does not answer)
Nandini: I asked him to stop working, but he does not listen. He goes with Ravi every evening and returns late at night.
Shraboni: Is this all you want to be, Ravi, Veera? Workers in a restaurant? Unless you study, how will you come up in life and bring relief to your mother when she is older?
(Ravi hesitates for a long time and then speaks.)
Ravi: Aunty, we need the money… My father gives nothing to the family. He earns when he has work, hoards it and uses the money for his daily drinks when he does not have work. How can my mother manage alone? If she can work in five houses morning and evening, can wake up long before dawn and can go to sleep long after midnight, why can’t we work? How will she pay our tuition fees? What she earns is not enough.
Shraboni: But you are children and law says child labour is illegal. Anyone employing children will be penalised heavily. I agree with the policymakers because children like you should study instead of wasting your young life away working in restaurants, fireworks companies and hosiery units.
Veera: That is why the restaurant owner does not allow us to step out when we are there. The dishwashing area is fully covered and it is a hidden unit with very thick walls. There are no windows. It cannot be seen even if you walk into the kitchen.
Shraboni: Tell me, Ravi, is this your life’s goal — to be a dishwasher in a restaurant?
(Ravi hesitates, and looks at his mother)
Nandini: Speak. Aunty won’t beat you like your teacher.
Ravi: Aunty (hesitates) it is easy to ban child labour… Do we really like to work in such restaurants where the owners threaten to beat us if we sit even for a short while? We don’t like it one bit… But aunty we work silently because our earnings help my family. I and my brother earn Rs 800 a month.
My mother can now manage by working in three houses, instead of five. But she doesn’t want to give up the jobs… Tell me, aunty, is it wrong to save the money to get an electrical connection? We are saving our earnings to get an electrical connection. The actual charges are Rs 6,000 but we have to pay Rs 4,000 more.
Our electrician neighbor tells us that we need to spend another Rs 2,000 on wiring and switches, even if we have just a bulb in two rooms and a fan in one. Who will help us? Teachers want to make extra money, everyone wants more money. Everything is more expensive but my mother’s earnings have not increased at all. Who will help us, aunty? Will the people who made the law help families like ours? We would love to study in a good school like Ashu does, but can we afford it?
Section – 2
Raman’s mother, Sweta, is over 70, but her toothless smile still lights up a room. Her grandchildren, Anusha and Preeti, adore her, especially her tales about their father’s mischief as a child. Though Raman is close to 50 he is addicted to his mother’s fingers. Sweta would scratch his back for hours when he was a boy. His sleep depended on it then; now his well-being seems to hinge on his mother’s fingers. So soon after he returns from office, he pulls off his shirt, hitches up his vest, curls his back, and goes to his mother, whispering, “Ammu, quickly my back!” She gets her much-deserved respite when work keeps him away.
This man-child now wonders if he should send his mother away to an old-age home for domestic “peace”. Raman’s wife, Seetha, cannot stomach the criticisms of her mother-in-law. Seetha is employed so she finds it impossible to give the attention Sweta needs.
Raman: Angel Mercy Home is the best around but each room there is cramped with beds. You can hardly walk. One bedside cupboard is shared by two boarders. Many aged people live under a thatched roof. In summer it certainly is hell because there aren’t enough fans. My doctor friend says many elderly people die during the summer.
Seetha: But she won’t be lonely. Just imagine, alone in such a large house. At Angel’s, she will have people of her age. We saw they have group activity; some even help in the kitchen. She will be happy.
Raman: There is a huge difference. Here, she has a room for herself; we wash her clothes and she is not forced to help. There she will have to wash her own clothes, wash her own plates … It is unfair to expect her to struggle at her age.
Seetha: We can always pay the dhobi to wash and iron her clothes…
Raman: Paying is not everything, Seetha. She needs me, she needs her grandchildren, and she needs you …
Seetha: Oh yes, she really needs me … that’s why she keeps saying that you could have got a better wife. Every time my friend Kavitha comes home, she hugs her and says, “You are so beautiful!” She has never said anything pleasant to me. My cooking tastes bad, my tea insipid …
Raman: Come on. At her age all she can do is pass comments. Ignore them…
Seetha: I just can’t take it any more …
Raman: I still believe it would be a sin to send her to Angel’s …
Seetha: She would be happier away from me. Either that or she wants to see me go away.
Raman: You are being nasty… She is not as crafty as my mother-in-law. Your mother will say things behind our backs; my mom is upfront.
Seetha: We have gone through that many times… and each time it is unpleasant. Raman: Your mom has many children to take care of her, and your dad is still alive. My mom has none except me. She lost two children. Not easy for a mother. My father is no more. Whom does she have except me? And you are driving me to send her away to an old-age home. How long do you think she will survive? Maybe 10 more years…
Seetha: I am not driving her away and maybe she will outlive us.
Raman: Again you are being nasty.
Seetha: No, I am not. It is a possibility.
Raman: So what if she lives to be a hundred? She will see her great-grand children. (pauses) But I don’t think she would like to see me die before her. It will be too much for her.
Seetha: Hope I go before that.
(Anusha and Preeti return from school and walk into the room.)
Anusha: What’s happening? Both so sullen? Fought again?
Seetha: No Anusha. We were discussing about keeping your grandma in an old-age home.
Anusha: Why? We went to an old-age home as part of social service. I did not like it. Many elderly people are unhappy. It is terrible to feel unwanted, mom. Why do you want her to go?
Seetha: It is not that I want her to go. We are discussing.
Raman: Where are you for her? You are with your friends or your phone. And Preeti is busy fighting with you. It is not enough to say Hi. Do you read her the newspaper? Do you talk to her about your school, and how you are doing? Sometimes you ask her to tell you stories, but do you bother to take her for a walk? Never. At least at Angel’s there will be group activities. That will prevent depression.
Anusha: There was a time when there weren’t such homes. And families were happy.
Seetha: Familial tension was the seed. Joint families broke up; nuclear families emerged. Anyway, your dad must decide.
Raman: We will give it a shot. If she doesn’t like it, we will bring her back. Now to find out what she thinks. (Turns to Anusha and Preeti) I don’t like to see your mom moving around with a long face and my mom passing snide remarks about her.
(Goes to Sweta. Anusha and Preeti accompany him.)
Raman: Ammu, I know you are unhappy here. My children have no time for you; you and Seetha do not like each other. I was thinking of putting you in a home. What do you think?
Sweta (her toothless smile): What do I think? (pause) I don’t think anymore. I am waiting (points to the sky and prays).
Raman: Stop talking rubbish. Tell me what you feel.
Sweta: I really don’t know. I will be among strangers. Anyway, who will scratch your back (turns to Anusha and Preeti), and who will tell stories about your dad? I really don’t know, Ramu. I feel lonely here, but I don’t know how the home would be. Take me there if that makes you happy.
Section – 3
Reema, the CEO of a multinational firm, has hardly any time to breathe. Except for her daughter, Ramona, for whom Reema has all the time for undivided attention, everything else is passé. For a change, Reema permits herself the rare luxury of tearing herself away from her 24/7/365 routine to meet her long-lost school friend, Vrinda. Lunch at the restaurant provides a fertile medium to nurture the bond afresh.
Reema: It is amazing that you find college lecturer ship interesting. I love to teach too, but the thought of teaching the same material year after year is disconcerting. That is probably why I never looked out for a lecturer’s job.
Vrinda: You are right, Reema. The syllabus is stagnant. An outcome of conventional wisdom, I suppose. (both laugh heartily) I guess it’s more convenient to teach the same thing every year than tread new ground. But I tell you the joy of teaching bright young minds is immense — motivating the weakest students without throttling the bright lot.
Reema: But where on earth do you get bright students today? The brightest lot opts for professional courses. Others only chase a degree, don’t you think?
Vrinda: Even when there are five bright students in a class of forty they keep me on my toes.
Reema: You have always had the talent to be a teacher. Remember when Shraboni Miss asked you to explain a theorem and you danced all the way to the blackboard, and proved the Pythagoras’s Theorem?
Vrinda: (laughs) Shut up. Dancing all the way I believe. We trembled in front of her. She was such a terror.
Reema: A terror, yes; but she was the one who encouraged me to study well.
Vrinda: Reema, you were very intelligent…
Vrinda: Idiot. I am talking about the past, and don’t keep interrupting me with your comments. (both laugh heartily) Your extracurricular activities kept you away from class. I sometimes wished I were like you — good in sports, excellent in debates, excellent in drama and music.
Reema: I didn’t have to be in class when I had such an excellent teacher (pointing at Vrinda) available whenever I needed her. You got a State rank and joined a top institution. I went out of the State to study. Soon after I joined the college, my parents died and I was left to fend for myself.
Vrinda: Uncle and aunty are no more? How?
Reema: The shower was electrified because of a power leak. Dad found mom lying inert on the floor. When he tried to save her, he too got electrocuted. My life was shattered in a flash. Relatives came in droves. My uncles swallowed dad’s property and one uncle even managed to corner the insurance claims, pretending to be my legal guardian. I was not even seventeen then. I protested but he produced a document with forged signatures of my father and mother that stated that that uncle was to be my guardian if anything happened to my parents. The document was registered long before their death. The sort of stuff done with documents is unbelievable.
Vrinda: How did you manage?
Reema: I borrowed.
Vrinda: But how did a bank agree to give you educational loan without any security?
Reema: I did not take a bank loan. Anyway, I cleared my bachelor’s degree, then the masters degree and then joined IIM Ahmedabad. It was smooth after that. This, Vrinda, is my seventh job. I realised that money alone matters. The rich are invariably respected. Corporate ladder is a game of chess. Cannot make a mistake if you wish to win. (pauses and looks at Vrinda) Enough of myself, now tell me how many children you have and what does your husband do?
Vrinda (laughs): I have one son, Sameer, and my ex-husband is a VP in a private firm.
Reema: Ex-husband? Why? How?
Vrinda: Incompatibility. Buying fancy toys and smart clothes is not what a child needs. Where was the love? He never spent quality time with Sameer, my son. He was never around when he pined for his dad. Meetings and business trips Raghu said all the time. I found out later he was more than close to one of his colleagues.
Reema: I think you were hasty. As a woman, don’t you think you should have weaned him away instead of declaring a war? Doesn’t love move mountains?
Vrinda: No Reema, I have no regrets. Marriage rests on trust, fidelity…
Reema: But attraction is a natural instinct. You can feel attracted to someone other than your husband. So can a man, isn’t it?
Vrinda: Being attracted is an instinct, but what matters is that instinct must be controlled. How else can you distinguish Homo sapiens sapiens from Canis lupus familiaris, the common dog? It is not that your or my hormones don’t begin coursing when we come across some men, but do we go and fall all over them?
Reema: Some do…
Vrinda: Yes, but not all. My husband should have had as much control over his hormone-induced behaviour as I have.
Reema: But that does not leave room for interpersonal differences, does it?
Reema: My God, you are just the same you were … how many years? … twenty? … yes, twenty years ago. Inflexible as ever.
Vrinda: Granted, Reema … a small price one must pay for refusing to negotiate one’s self-respect … Anyway, what about your family? How many kids?
Reema: Just one daughter. Ramona. The light of my life. I never married.
Vrinda: What do you mean? Adopted the girl or is she an in vitro child?
Reema: No she is a natural child… There was a time I thought she was a curse, a reminder of my helplessness during the most difficult period of my life. But she is not. She is all mine, mine, mine, Vrinda, mine. A long story, Vrinda…
Section – 4 (He who moves first, moves fastest)
SERVICE SAM, the legendary professor, was teaching Strategy. “The early bird catches the worm,” he said in his trademark style that peppered lectures with quotes, jokes, and examples. He was explaining the “First mover advantage.”
Battery (he wore powerful (!) glasses) yawned. “Sir, these proverbs are meaningless.” The class was shocked. Gosh! That sort of lingo was taboo. But Battery was on a roll. “You see, an English proverb says, `Look before you leap.’ And another crow, `He who hesitates falls.'” As the class roared in approval Sam smiled.
“If you want jargon, you shall get jargon,” said Debbie. She sported a new hairdo. Someone hissed, “Wow”. Debbie ignored the jibe and said, “First mover advantage (FMA) is a firm’s ability to get ahead of its competitors by being the first to market a new product category”. Phew. Flowers liked Debbie but he didn’t buy this idea of FMA. He said, “Today anyone can copy your product in six months flat. That’s all the head start you can have”. And asked rhetorically, “Then, where is the first-mover advantage?”
Complimenting Flowers for his very original thinking, Sam said, “There are three reasons as to why you can create FMA. One, if you start early you will have that much more time to accumulate technical knowledge. You can then use that knowledge to beat the competition. Two, you can pre-empt the competition’s access to scarce assets. For example, in the software industry by offering attractive pay packs and ESOPs you can stop the competition from poaching your most important asset, manpower. And finally by building an early base of customers and offering classy service you can create high switching costs.”
Debbie decided to borrow a leaf from Battery’s book. “So, it is no longer `he who laughs last laughs longest’. It is he who moves first, moves fastest’? Huh”. It was all that Battery could do to keep his cool. His first-mover advantage had gone! He said, “I agree with both Flowers and Sam.!” Debbie blinked. Somewhere she had read that to hold two diametrically opposite views in one’s mind and yet retain one’s sanity was the hallmark of a genius. And she knew that Battery was no genius. Mr. Power Glasses was saying, “Whether you can enjoy first-mover advantage would depend on two things. The first is the pace at which the technology is evolving. And the second is the pace at which the market is expanding.”
A backbencher screamed, “Explain please.” Battery was only too happy to do that. “Technological advancements can take place at different rates. For instance, in the glass industry (which dates back to 3500 BC) the technology hasn’t changed much. In contrast, the change has been dramatic in the computer industry.” Debbie interrupted, “The faster the change the lesser is the first-mover advantage.”
Battery hated interruptions. Even as he stared at her, Debbie was busy elaborating on the second point, namely, market: “The pace of market evolution varies from industry to industry. For instance, the market for fixed telephones developed more slowly than the market for mobiles. Landlines needed 50 years to reach a household penetration of 70 percent. Cell phones have cracked it within a decade. There was a first-mover advantage in the former (slow market) and none in the latter (fast market).
The professor summarised: “Gradual evolution in both technology and markets creates the best conditions for generating first-mover advantage. If the technology changes slowly new entrants aren’t able to differentiate their products from that of the first mover. But if the technology changes rapidly, the product itself becomes obsolete quickly. Often such products are overtaken by versions from new entrants, who are not burdened with the innovator’s dilemma, that is, fear of cannibalizing prior investments.” As Sam paused for a sip of water, Battery whispered a translation of a local quote. “No mom likes to kill her kid!”
Sam continued. “Similarly if the market grows slowly, the first mover gets time to cultivate new market segments. The Great Depression was kind to 3M’s Scotch Tape on both fronts, namely, market and technology. At first, 3M thought the product would be used in factories to seal cellophane wrapped around baked goods. Instead, it was purchased by the middle class for repairing items that in more affluent times they might have discarded. The gradual growth of Scotch Tape’s appeal gave 3M the time to organize production and distribution. Technological change was also modest, enabling 3M to prevent later entrants from introducing superior versions. Scotch Tape so dominated its category that it became a generic name.”
When the technology leads and the market follows, early entrants face many years of flat sales. The furious pace of technological revolution attracts new competitors, who think their improvements will draw customers away from the incumbent. Only a company with deep pockets can survive such a market.
Sam then asked the class, “What happens when both technology and markets change rapidly”. Battery responded, “Then first movers become vulnerable. Netscape, despite its early start, was overtaken by Microsoft”. Flowers remarked, “Hey, but look at a different example. Intel. By putting all its technical and marketing muscle behind its product development and being `paranoid’ about competition, Intel dominated in its product category.”
Service Sam was suitably impressed. He summed up: “Ultimately, let’s remember that firms should not make the first move simply for the sake of doing so. After all, first-mover advantage occurs not when a company enters a market, but when it starts making real money in it.”
Section – 5 (It’s a jungle out there!)
THE lion roared, awakening all the wildlife in the forest. He caught a chimp and tightly held the prey down with his paws. “Your Majesty, please have some mercy,” pleaded the chimp. “Let me go. I will do anything for you.”
The lion said, “Here is the deal. Tomorrow we have a management meeting; the tiger thinks he is the financial expert with all the answers. If you handle the tiger on my behalf, I will spare you.”
At the meeting the next morning, a cheetah posed the first question, “How do you think a private company like the publishers of The Forest Times would raise money if they plan to expand operations?”
A bird volunteered, “When we migrate we need more food; similarly I think the newspaper will need more capital to expand. But how to raise it?”
The nervous chimp began, “Raise money through the public by issuing new shares. Suppose the company requires more than $500 million to establish the newspaper in the US, it is tough to raise this money solely from banks and other institutions. The company has to enter into a legal contract regarding payback terms and other aspects.
“However, if the company raises the money by issuing shares to the public, it enjoys the full benefits of expansion as it is not liable to pay back the money to the public. The individuals and the institutions who bought the shares benefit from the increasing price of the shares.”
The tiger, spotting a competitor in the chimp, said, “I think the company can raise the required capital by going through an investment banker like Merrill Lynch or Goldman Sachs.”
The chimp, gathering courage, said, “Your Majesty, there is also another way: the “Dutch auction”, which allows the investors to bid directly for the shares.”
“Huh,” the cheetah interjected. “Don’t you think the biggest advantage of going through the investment banker is that they have done it for many years, and doing it for another company is just a new assignment. Isn’t it like the Indian cricket team asking Tendulkar to play another one-day match? Since he has pulled it off so many times, the team management will not have any issues, right?”
The tiger smiled and said “I agree with the cheetah! Let us go back to our Forest Times example. If the management has decided to raise the capital by issuing shares to the public and the company chooses Goldman Sachs for doing the underwriting work, the basic paperwork for the company to go public and finding the actual worth of the company’s shares will be done by Goldman Sachs.
“If the company’s shares are worth $50 per share, then the investment banker will discuss about the upcoming opportunity to many institutions, such as Fidelity, and Vanguard, and major individual clients, such as Carl Ichan, and find a price that is acceptable to them but below the actual worth. If the stock is overpriced, major institutions and clients will not show interest to buy the shares.
“Even though the company is worth $50 per share, the underwriter will sell the shares for $35-40 to major clients. Thus, if the publisher of The Forest Times wants to sell 10 million shares, their income raised through the underwriter is around $350-400 million.
“If the company decides to sell the shares through the investment banker for a specific price, the company’s role is generally limited. The investment banker handles the rest.”
“Let’s see if this `banana-eating baboon’ can challenge this.”
All eyes were on the chimp. He said, “The biggest disadvantage here is that the company is actually paid a lot less than its worth by the investment banker. It might be very much possible for the Forest Times management to raise lot more money if they can directly attract the investors.”
A bear asked, “Isn’t this what Google decided to do about a year ago?”
“The bear should not be talking at all,” said the tiger in a belligerent mood. “His very name is not good for the stock market.”
“But the bear is right,” said the chimp. “Actually, instead of raising the shares in the traditional way where investment bankers have the maximum leverage for the price of the share, Google thought that the investors, who are going to buy the shares, could decide the actual price of the stock. This is known as the Dutch auction.”
A parrot said, “In a traditional auction house into which I once hopped, when someone had to sell a product, they started with the lowest price and the highest bidder got the product. That is because, they have just one product to sell and there are many bidders. But what happens in this scenario?”
The chimp answered, “When it comes to selling shares directly to the public, there are many shares, normally in millions, available to the public and it is not possible for one bidder to acquire all the shares.
“So, in the Dutch auction system, anyone can compete for the rights to own the shares. Each bidder can quote the number of shares that he intends to buy along with the price of the shares that he is willing to pay.
“Let us assume that The Forest Times decided to go for the Dutch auction selling about 100,000 shares to the public. Can I get some bidders, please?”
The pack of animals volunteered and the woodpecker etched this information on a tree: Lion, 10,000 shares at $1,000; tiger, 20,000 shares at $500; cheetah, 30,000 shares at $300; parrot, 75,000 shares at $100; and bear, 80,000 shares at $50.
“Even though more than 100,000 shares have been requested by you, the bidders, only 100,000 shares are allocated by the firm. The company starts allocating shares starting from the highest bidder till it reaches the bidder up to which it can allocate the original shares requested.
“The company can allocate shares from lion to parrot but not to the bear as the total number of shares are exhausted before it could do for the bear. And for the parrot, it can allocate only 50,000 shares and not 75,000 shares as she had originally requested.”
“Even though each bidder is willing to pay a different price, in a Dutch auction, all the bidders are given the same price and that is the price that is offered by the last bidder.”
The lion confirmed, “So, in this case, the parrot offered to buy at $100 and every bidder is allocated the shares at $100 even though I was willing to pay up to $1,000. Since the bidding process takes place directly among the investors, the biggest advantage for The Forest Times is that they are likely to get more premium than going through the investment banks.”
“But there is a catch,” warned the chimp. “The business should be an attractive one, like Google to make the individual investors to participate in the auction.”
“I might be the king of the jungle,” said the lion. “But this chimp is definitely the `champ of the forest’.”
Section – 6 (Does it pay to get a foothold in BPO?)
SHREYA adored her dad. She often wondered whether there could be a better father. Now the CEO of a manufacturing major, he had handled factory operations when SHREYA was a kid.
She remembered the night when he took her to the factory to see how the plant worked. That night SHREYA had decided that she would never work in a factory! “No night shifts for me,” she had told herself. And hence she decided to do CA! Some original thinking, indeed.
To SHREYA the name Raman Roy spelt sheer magic. He, the father of Business Process Outsourcing (BPO) in India, was her new icon. To her he was the Tendulkar of business.
She had read somewhere that the BPO industry was to the 21st century what the information technology industry had been to the 20th. It was offering mind-boggling job opportunities and had placed India in the global spotlight.
In a different context, her professor had once told the class that geographical boundaries had begun to collapse. The new world belonged to trans-national organizations. Production would be carried out in one part of the world, marketing in another, design and development in a third, money would be raised in a fourth, the organization itself would be headquartered in a fifth and routine accounting and other back-office operations would be carried out in a sixth part! Wow. Part six, she later learned, was BPO.
Come July 6, she would be a CA. Should she join a BPO, she wondered.
That evening, sitting with the gang at the coffee pub, she poured her heart out to China. He said, “My friend works in a BPO and handles their South African operations.” “Wow,” said SHREYA. “Where is he based? Johannesburg or Antwerp?” she asked, all excited. “Neither,” said Rinku, the journalist. “In fact, he works next door! Sitting in India, he does the accounting work for South African clients.”
China explained, “He works between 4 pm and 12 midnight, Indian Standard Time. And there is this girl who works for their US operations, between 9 pm and 9 am, Indian Standard Time.”
“Night shift,” screamed SHREYA. “I thought only factory workers worked night shifts.”
China decided to rag SHREYA. “When the outsourcing concept emerged years ago, the first outsourced transport, then security, and then later water service. And now accounting! Your profession is in illustrious company.” SHREYA ignored the jibe. “It’s not that,” she said. “Thanks to C. K. Prahalad, companies are simply focusing on their areas of competence and outsourcing the rest. HR, investment banking, back-office operations and IT too are being outsourced,” she added, remembering what she had read the other day.
And closed out saying, “The arrival of the Internet and the availability of cheap and abundant telecom bandwidth are hastening the process.” Rinku decided to add his say. His dad, when he started his chartered accounting practice in the mid-1970s, had gone around scouting for clients. A senior professional had told him: “Whatever you do, do not get into maintaining books of accounts for clients! That’s a donkey’s job! You must do high-end jobs of the Datsun variety.” To Rinku, the irony was impossible to miss. Today companies, big and small, were vying with each other to set up BPOs that essentially offered accounting services!
SHREYA asked, “Do you think that a slot in a BPO company is a good place to start? Will the work experience in a BPO count?” Under different circumstances, Rinku would have loved to pull SHREYA’ legs.”There are divided views on the subject,” he said. “One view is that a stint with a solid manufacturing company would provide the right kind of grounding. After all, accounting is a staff function. An accountant should sit where the heart of the business operations, the line function, is.”
China supplied the other view. “In a BPO, you’ll learn how to set the right processes. Moreover, since clients are global companies you’ll become familiar with global benchmarks. You will probably learn more about international accounting standards.”
SHREYA was concerned. But what about switching jobs? An HR consultant had once told her, “Your first job is crucial to your career. Choosing your first job is like marriage. Marry in haste and repent at leisure. In either case, one needs to be sure and well-informed.” Would she be able to switch from a BPO to, say, banking or manufacturing?
Rinku said, “Over time it is possible to switch from BPO to manufacturing and vice versa. In today’s world, you need man-management skills more than technical skills. Moreover, in an IT-driven world, skills in handling automated processes are invaluable. A BPO experience can come in handy.”
China remarked, “In any case, with many well-managed companies moving out of manufacturing and focusing on design, brand management, and other high value-adding jobs, the traditional argument that you must work in a manufacturing company is slowly but surely losing ground.”
SHREYA who wanted to work abroad because that experience would provide her the necessary fire in the belly wondered whether there would be global mobility in a BPO career. China provided the ultimate answer. “Every job is like the curator’s egg. It comes in a package — with the good, the bad, and the ugly, all rolled in one. You must pick up the good and learn from it.”
As they walked out of the coffee pub, SHREYA remembered what she had read in a magazine. That in fiscal 2004 India’s BPO industry had recorded sales of $3.6 billion and that by 2008 the figure would touch $24 billion.
So far, only the US and the British firms had outsourced work to low-cost economies, but other rich economies such as France, Germany, Italy, and Japan would soon follow suit. So global mobility seemed to be very much on, she told herself.
Section – 7 (A stormy therapy)
A stormy therapy
“DOCTOR Sam, Room No. 16, stat,” announced the hospital paging system. Dr Sam rushed to Ms Goodman’s side. She was suffering from acute breathing problem.
The doctor, after attending to her, asked, “Do you need anything else?”
She said, “Can I get a newspaper? I want to know the latest on the hurricane.”
The doctor did not want her to do that. He simply said, “Actually, I was wondering why hurricanes are named after women.”
Ms. Goodman laughed. “For many years, hurricanes were known by the order in which they appeared in a particular season, like hurricane 1, 2, and so on. Such numbering made communication difficult between monitoring stations and ships. In the early 1950s, the government’s meteorologists decided to name the hurricanes after women. This made communication easy. However, naming them after women created controversy.
“Thus, in 1978, the government decided to name hurricanes alternately after men and women and they start with A and go up to W. Thus for 2005, the names start with Arlene and go up to Wilma and in 2006, the hurricane names start with Alberto and go up to William.”
The doctor complimented her saying, “You have phenomenal memory.”
The on-call nurse, who was changing the IV fluids, added, “How ever-powerful a country may be, it cannot escape nature’s fury. A developed country may have technological systems to predict such disasters. And this alerts the people and minimizes damage to lives. But damage to property cannot be prevented.”
Ms. Goodman, invigorated by the discussion, said, “Natural disasters impact the economy. A powerful hurricane can cause inflation or recession depending on the areas affected and the administration’s response. Can you tell me which industry gets affected first?”
The doctor volunteered, “The insurance industry. The insurance companies have to pay huge amounts to affected residents and industries. Hurricane Katrina is likely to cause damage to $60-80 billion. However strong the insurance company’s balance-sheet may be, such damages will affect the earnings and growth of an insurance provider. The insurance companies then will hike rates for future residents and industries.
Ms. Goodman said, “The interesting thing is that if the insurance industry spends $60 billion in repaying for the residents and industries, and if no hurricane hits for the next decade, the insurance industry will make more money than it lost from the hurricane, over the long run.”
The doctor said, “I think the next big economic impact of a hurricane is the loss of jobs. People would suddenly be out of jobs and that would cause a recession as the spending capacity of the affected people comes down.”
“No, doctor,” Ms. Goodman said. “I see it differently. If an area is hit by a hurricane, it is nearly impossible for the federal government to relocate all residents and industries to a different state. Thus, the government provides facilities for new constructions to be built. Even though the industries and residents get affected by hurricanes, rebuilding requires a lot more effort and money. This allows for fresh job opportunities to be created. Such rebuilding takes place much faster. This also allows for more people to move into those areas.”
The nurse asked, “So, does this cause inflation or deflation?”
The doctor replied, “I think such fresh opportunities and jobs increase employment, thus causing inflation. Destruction due to hurricanes creates loss of wealth, but new constructions create wealth.
“Assume a new construction costs $50,000 in materials and $50,000 in labor. The land costs another $20,000. So the total cost for the building is $120,000. But as soon as the construction is complete, its value is worth say $170,000. Thus an artificial wealth worth $50,000 is added to the economy.”
Ms. Goodman, ignoring the mild discomfort in her chest, said, “When the same construction is destroyed by a hurricane, there will be a loss of $170,000, which would hurt the balance-sheet of the insurer. When things are abundant and people have limited buying power there is deflation.
“But I do agree with my doctor that the loss of jobs would create deflation. The Fed, however, is likely to increase the money supply by loosening the federal monetary policy. This would cause inflation and balance out the deflation caused by loss of jobs.”
The nurse smiled, “Ms Goodman, five minutes ago, you could hardly breathe. Now you are waxing eloquent about the economic impact of hurricanes. I am amazed at the transformation.
Ms. Goodman laughed, “You know who must be even more amazed — Alan Greenspan. He has to manage the monetary policy to balance the economy. On the one hand, people need jobs and, on the other, the prices are rising owing to energy shortage and reconstruction work. Thus, Alan Greenspan has to find a balance that would neither cause deflation nor inflation.”
The doctor intervened, “So, what should investors do when a massive hurricane hits?”
“Ah! Here is a man with money,” Ms Goodman joked. “The best thing an investor can do is to find stocks that will profit from such hurricanes and invest in them. The stocks that are likely to go up are those of Caterpillar due to its heavy duty trucks, energy stocks like Valero, Schlumberger and those of steel industries such US Steel, Cleveland Cliffs, etc.
“The stocks that are likely to go down are insurance industries such as All State and airline stocks such as American Airlines and Continental.”
When they were alone, the nurse complimented the doctor, “You were amazing! How did you know what she was interested in?”
The doctor quipped, “She loves to talk about storms, stocks and her sons. It was easy, I am one of her sons.”
Section – 8 (Cut, copy and paste)
“IF YOU copy from one source, you are guilty of plagiarism. If you copy from several sources you are lionised for researching.”
As the class smiled, at his borrowed witticism, Service Sam added, “Ladies and Gentlemen, I want neither.”
Did he want neither ladies nor gentlemen to be present in the class or did he mean that he neither wanted plagiarism nor research, wondered Debbie, the baby faced topper.
It was then that the professor dropped the bombshell. “Folks, your summer project reports must be hand written, not word processed!” Sam was known to go bonkers but Boka felt that the professor had exceeded even his known levels of eccentric behavior.
“I dislike cut-paste jobs,” said Sam, as if to offer some kind of explanation for his bizarre requirement.
At the B School everyone understands cut-paste. Professors equate it to copying.
When a new book appears in the market, people are known to remark, “It is a cut paste effort”. When someone is a prolific writer, peoplesay he is good at doing a `cut and paste’ job.
Sam went on to mention that if the option to “cut-paste” existed, the credit had to go to Microsoft, the global software giant.
When working with Microsoft applications, one could `cut’ a portion and `paste’ it wherever required, in the same file in the same folder, in a different file in the same folder or in a different file in a different folder. While working on a LAN, one could cut paste entire folders from one address to another. But today, the term has negative connotations. Phew.
Boka felt that Sam was throwing the baby along with the bath water.
Not just that, he felt that there wasn’t anything really wrong with cutting and pasting. And that over the ages, people had been rewarded for this play.
“Sam, I disagree with you. Look, even innovation isn’t invention.”
The class sat up. Boka taking on any professor was always a treat to watch. “Come again,” said Sam, a shade irritated.
Flowers (because he always wore a floral shirt) decided to join the slanging match. “Sam, innovation is less of serendipity and more systematic hard work,” he said. A backbencher sounded out, “Genius is 1 percent inspiration and 99 percent perspiration.”
Goggles (because he always wore goggles outside class) had an engineering background and quoted Louis Pasteur, “In the field of observation, only chance favors the prepared mind.”
Debbie jumped in, “Innovation is usually not about radical breakthroughs. In fact, it is often about lifting an idea from one context and applying it to another.”
Boka supported her: “Innovation is about taking a tried and trusted technology to a new market or bringing a new technology to the existing market.
It is about applying what has worked in one industry, in another”. Flowers summarised, “In short, the basic approach to innovation consists essentially of “cutting and pasting.” Even the great Thomas Alva Edison did exactly this.”
“Proof,” said Sam. He believed in facts and examples rather than pompous arguments. The class of 2006 was ready for it.
Goggles added, “Sam, serious research work in management takes place by “cutting” an existing methodology in one context and “pasting” it to another.
It can also happen by “cutting and pasting” a new methodology on an existing database.
Event studies developed by the great scholar in the area of finance, Eugene Fama, have been “cut and pasted” in several applications of management.
Similarly, game theory has been “cut and pasted” in several research studies.” Sam wasn’t pleased. “Specifics, specifics” he said.
Flowers mentioned, “Edison’s inventions were not entirely original. They were extensions and blends of existing knowledge.
Edison’s team used its knowledge of electro-magnetic power from the telegraph industry, where they first worked, to transfer old ideas that were new to the lighting, telephone, phonograph, railway, and mining industries. The phonograph blended old ideas from products that these engineers had developed for the telegraph, telephone, and electric motor industries.
Edison’s laboratory’s work on telegraph cables later helped its engineers transform the telephone from a scratchy-sounding novelty into a commercial success.” Sam had to agree reluctantly.
After all, it was he who had in a different context applauded Edison for delivering on his promise of “a minor invention every ten days and a big thing every six months or so”.
In six years of operation, Edison’s team had generated more than 400 patents.
Debbie stepped in. “The steam engine was used in mines for 75 years before Robert Fulton wondered how it could be used to propel boats, and developed the first commercial steamboat.
Nobody had done what Fulton had with that rather local, specific knowledge.
He was the first to apply it to the altogether different problem of powering boats”. Boy, was Service Sam stumped.
A backbencher decided to bring the discussion closer home. “The essence of case writing”, he said, is all about `cutting and pasting.’
A case writer, “cuts and pastes” information from different sources”. Boka, an ardent case writer, rose in defence.
“If the data and information are skilfully regrouped, such rewriting can lead to something very original. Indeed, leave alone violating copyrights, it can create new intellectual property.
Consider an article in a well-known magazine consisting of 20 sentences.
These sentences can be rearranged in 20! Or 2432,902,008,176,640,000 ways without changing one word of the article! Not all of these rearrangements will make sense.
But if someone can do the rearranging intelligently, it can lead to a new article that will look and feel far different from the original piece and convey a very different message.
And imagine the endless possibilities that exist if we combine different articles and books!” Debbie added.
“Cut-paste can be a creative tool for those wanting to apply ideas from one context in another.
Only when we resort to blatant copying, do problems arise. But let us not blame the technique. Let us blame the users.” The class screamed, “Long live cut-paste. Long live Microsoft.”
It was then that someone delivered the knockout punch. That, Abraham Lincoln’s famous “For the people, of the people, by the people” definition of democracy had its source in a different context in the Bible! As the gong went, Sam walked out a puzzled man. Hey, where had he gone wrong?
Section – 9 (Discussion on disruption)
SERVICE Sam was teaching a new course titled “Managing Innovation.” There was rapt attention as everyone realised that in the outside world it was innovation that segregated the men from the boys.
But as was his won’t Sam wasn’t discussing banal inanities. He was now pushing the class into the insights of the celebrated innovation guru and HBS professor, Clayton Christensen. “Any guess on Christensen’s path-breaking book?” asked Sam, certain that despite their high IQ none in the class would have read it.
Well, he couldn’t have been more wrong. The resident quizzer asked, “Would it be The Innovator’s Dilemma? Flowers put up his hand. “That book talks about two kinds of technologies: one, sustaining technology and two, disruptive technology”. Boka joined the discussion.
“Sir, sustaining technologies improve the performance of established products, in line with what the principal customers in major markets want.”
The lollypop faced Debbie remarked, “Then there are disruptive technologies which dramatically change the rules of the game brings to the table a very different value proposition. New customer segments love such technologies”.
Goggles closed out, “Products based on disruptive technology are typically cheaper, simpler, smaller and more convenient to use.” Wow. Sam was impressed.
Since the discussion had been rather technical thus far Sam decided to offer some examples of disruptive innovation. He believed that examples drove home the concepts better. And there were examples galore. Small motorcycles introduced in North America and Europe by Honda, Kawasaki and Yamaha had disrupted gas-guzzlers like BMW, creating a new class of users. Transistors had disrupted vacuum tubes.
The Walkman had virtually killed large stereo systems. PCs had knocked the bottom out of mainframes. The business model of health maintenance organizations had disrupted that of conventional health insurers. Internet appliances like the Blackberry were slowly overthrowing personal computers.
Sam said, “In each case the new product offered an inferior performance, relative to the existing product, but was cheaper, more convenient and user friendly”.
The girl in the middle row (GITMR) spoke, “this perhaps has to do with unbundling the features and offering only what is relevant.” Sam agreed. “Often customers do not want more than what they can use. At least, they will not pay for the extra features”. Flowers whispered, “The MS Office suite has several features 50 per cent of which customers rarely use.”
Sam continued, “Market leaders improve technologies faster than what the market can absorb, so as to provide superior products that would help earn higher margins. And this is where disruptive technologies get in”. Debbie remarked, “These products begin by under-performing but over time catch up. Take PCs. When they arrived, they were slow. They did not even have a hard disc. Today, PCs can perform many complicated processing operations”. She could not have been more right.
Sam brought the discussion back to sustaining technologies.
“On the other hand, products whose features match market needs today overshoot market needs tomorrow. Many customers who once needed mainframe computers for their data processing requirements no longer need them. These customers can meet most of their needs with the help of desktops that are linked to file servers. In other words, the processing needs of many computer users have increased more slowly than the rate at which computer vendors have improved their designs!”
Flowers remarked, “It doesn’t matter a jot whether the speed of my computer processing is doubled if all that I do with it is Word, Excel and power-point.” He was bang on target.
Flowers chipped in. “In their attempts to stay ahead of their rivals, by developing superior products, many companies rapidly move up-market, over-satisfying the needs of their original customers. In doing so, they create a vacuum at lower price points. It is into this vacuum that the disruptive innovators enter”.
Sam added: “The innovator’s dilemma surfaces because established companies are not comfortable about investing in disruptive technologies. Disruptive products look inferior; offer lower margins and at least initially target emerging markets. The most profitable customers of the current market leaders generally don’t want the disruptive technologies.
“The market leaders are used to listening to their best customers and identifying new products that promise more profits and more growth. They are therefore rarely able to build a business case for investing in disruptive technologies until it is too late.
“This is in a way linked to the way established companies take decision. They believe in sound market research and good planning, followed by planned execution. Such companies get paralyzed when faced with disruptive technologies, which are characterized by great uncertainty and lack of market data. The current market leaders demand market data when none exists and make judgments based on financial projections when neither revenues nor costs can be known with reasonable accuracy. Market leaders also have a cost structure tailored to compete in high-end markets. Their business model makes it difficult to operate in low-end markets.”
Sam asked the class: “How do you think the market leaders should deal with this mindset problem?”
Boka responded: “Successful companies are used to a certain way of working. It will be difficult to change that mindset. So it makes sense to create an independent profit center with a cost structure tailored to achieve profits at the low margins characteristic of most disruptive technologies. The new unit must be shielded from the bureaucracy of the parent organization. This is the only viable way for established firms to harness this principle. This is exactly how IBM developed the personal computer.”
Flowers added: “I think talking to the most valuable customers does not help beyond a point. These customers want new features that make the product too complicated for most other customers. Instead, companies must try to understand what the average customer is looking for and make an inexpensive, no-frills product that can meet this requirement. Then the chances of success are greater.”
Sam summed up: “All this talk about customer relationship management (CRM) needs to be taken with a pinch of salt. CRM is focused on the needs of the existing markets. It is essentially pampering the largest and most lucrative customers. It is precisely because market leaders are good at listening to customers and incorporating their suggestions that they become vulnerable to attack by disruptive innovators who go beyond the existing customers and try to identify new segments”.
That’s precisely what Drucker had meant when he had said, “looking at the needs of people who are not consumers today is as important as looking at the needs of those who are.”
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