2005-06-15

The purpose of my ISB-life

Global Economics (GE) is my favorite subject for the Term II. Perhaps I should have become an economist. The reasons for my liking are a, the subject gives a macro framework within which all firms – hence managers – operate; b, I have much better chance of handling this subject than the others.

An aside: People working in dealing rooms would know, the US comes out with scores of economic data. There is one data release almost every day. And every FOMC (meeting of Federal Bank members) meeting is highly awaited because it decides the FED rate (akin to our Bank rate announced by RBI). Why do the US data affect Indian players? We operate in global economy. Foreign Exchange market is the largest market in the world and huge amounts of profits, or losses, are made on foreign exchange trading. US$ - Indian Rupee (INR) movements are highly affected by the US data. So is the stock market. The FII (foreign institutional investor) inflow into stock markets will depend on the interest rate differential between the US and India (even after adjusting for inflation). In perfect markets, there is no arbitrage; but there are no perfect markets. The FII inflow will decide how much of INR is available in the market, which in turn will decide bond rates and call rates.

In nutshell, the entire economic-financial system is an intricate web, the understanding of which is ‘far from easy’ and a ‘highly desirable thing’. These are the kinds of things which I will learn in GE. What I have known is, what can be called, the tip of an iceberg. I look forward to knowing more of GE. I will give more updates on GE as the term progresses.

Not to say that Competitive Strategy (CS) is any less important and interesting. I spent a whole lot of time browsing the past issues of Harvard Business Review (HBR). There is a huge wealth of information and rich stock of ideas on strategy. But Strategy is not science. It is an art, or shall I call it intuitive. If Porter says one thing; Hamel & Prahalad say something else. Late Sumantra Ghosal has his own views. It is quite easy to get lost in the deluge of these ideas, each great by its own measure, and end up getting confused on what strategy is or what strategy is not.

As far as this term and the coming terms are concerned, I have 'decided' that I am going to change my approach to studying. I am not going to stick to the prescribed syllabus and readings. I am going to go beyond these and dig deeper into the related, well-known books and articles. The important objective is to get a thorough hang of the subjects through which I will develop “my own independent ideas” on each of the topics/subjects. Because when I go back to the industry and make decisions, I cannot keep resorting to a Porter/ Kotler /Galbraith model to help me make and explain my decisions, of which I will be the owner and the consequences for which I will be responsible.

Having made this decision and discovered the true purpose of my ISB-life, I feel extremely happy and satisfied.

3 comments:

Dinesh said...

A long time reader, I truly enjoy reading your blogs - full of intersting insights; such candid account! Keep posting n have fun at ISB.

Pani said...

Follow your blog, yes really it is a candid blog!.

itheabsolute said...

Hi Dinesh / Pani

Thanks a lot.

Cheers

2005-06-15

The purpose of my ISB-life

Global Economics (GE) is my favorite subject for the Term II. Perhaps I should have become an economist. The reasons for my liking are a, the subject gives a macro framework within which all firms – hence managers – operate; b, I have much better chance of handling this subject than the others.

An aside: People working in dealing rooms would know, the US comes out with scores of economic data. There is one data release almost every day. And every FOMC (meeting of Federal Bank members) meeting is highly awaited because it decides the FED rate (akin to our Bank rate announced by RBI). Why do the US data affect Indian players? We operate in global economy. Foreign Exchange market is the largest market in the world and huge amounts of profits, or losses, are made on foreign exchange trading. US$ - Indian Rupee (INR) movements are highly affected by the US data. So is the stock market. The FII (foreign institutional investor) inflow into stock markets will depend on the interest rate differential between the US and India (even after adjusting for inflation). In perfect markets, there is no arbitrage; but there are no perfect markets. The FII inflow will decide how much of INR is available in the market, which in turn will decide bond rates and call rates.

In nutshell, the entire economic-financial system is an intricate web, the understanding of which is ‘far from easy’ and a ‘highly desirable thing’. These are the kinds of things which I will learn in GE. What I have known is, what can be called, the tip of an iceberg. I look forward to knowing more of GE. I will give more updates on GE as the term progresses.

Not to say that Competitive Strategy (CS) is any less important and interesting. I spent a whole lot of time browsing the past issues of Harvard Business Review (HBR). There is a huge wealth of information and rich stock of ideas on strategy. But Strategy is not science. It is an art, or shall I call it intuitive. If Porter says one thing; Hamel & Prahalad say something else. Late Sumantra Ghosal has his own views. It is quite easy to get lost in the deluge of these ideas, each great by its own measure, and end up getting confused on what strategy is or what strategy is not.

As far as this term and the coming terms are concerned, I have 'decided' that I am going to change my approach to studying. I am not going to stick to the prescribed syllabus and readings. I am going to go beyond these and dig deeper into the related, well-known books and articles. The important objective is to get a thorough hang of the subjects through which I will develop “my own independent ideas” on each of the topics/subjects. Because when I go back to the industry and make decisions, I cannot keep resorting to a Porter/ Kotler /Galbraith model to help me make and explain my decisions, of which I will be the owner and the consequences for which I will be responsible.

Having made this decision and discovered the true purpose of my ISB-life, I feel extremely happy and satisfied.

3 comments:

Dinesh said...

A long time reader, I truly enjoy reading your blogs - full of intersting insights; such candid account! Keep posting n have fun at ISB.

Pani said...

Follow your blog, yes really it is a candid blog!.

itheabsolute said...

Hi Dinesh / Pani

Thanks a lot.

Cheers