Pre- Clinton methodology

To top it all, consider 2.6%, 2.0%, 2.5%, 0.6% & 1.9% – a string of five quarters of below 3% growth, which has only happened 12 other times in the past 60 years. One can go on and on with statistics. But, the figures would appear to be even more disappointing considering the fact that all official indicators by the Federal Reserve, like employment, inflation et al run counter to the day to day experience of a common man! Take inflation for that matter, John Williams, an economist & specialist in government economic reporting calculates the Consumer Price Index (CPI) based on the pre- Clinton methodology and according to the methodology of the 1980s (no hedonic adjustments for quality improvements in manufactured goods & different weighting of the CPI basket of goods & services). According to him, adjusted to pre-Clinton Era methodologies, annual inflation was about 6.2%, in March and reset to the methodology of 1980, the SGS Alternate Consumer Inflation Measure rose to 10.2% in March (see chart to your right). US is perhaps already in recession, sans an honest admission by the Fed. But one must give them due credit for putting up a brave face, backed by a barrage of ‘cooked up’ statistics

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Anil appears most vulnerable

It is in the power sector that Anil appears most vulnerable. There is the uncertainty hovering over this sector because of the inability or unwillingness of state governments to reform and revamp the state electricity boards. Without this revamp, power generation remains a financially risky proposition because bankrupt boards simply do not have the cash to pay for the power that they purchase. But a bigger strategic threat, as mentioned earlier, is gas. When the brothers split, it was agreed that Mukesh-controlled Reliance will sell Godavari gas to Anil-controlled RNRL at $2.8 per mmbtu. The Ministry of Oil & Gas has put a spanner in the works (Anil camp loyalists say it was done at the prompting of the Mukesh lobby) by ruling that the price is too low.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Astounding patriotic commitment

But what kept Kihachiro and his team slogging on with an astounding patriotic commitment was the fact that Honda had drilled into this team that it was purely their vision, and not any other senior’s vision, that was going to determine how Honda fared in the US. In other words, the organisation was committed to zero vision at the top, but at the same time, passionately nurturing magnanimous vision at the level just below. The trust that the corporation placed in Kihachiro resulted in Honda capturing a mind boggling 50% of US market within ten years of entering its shores.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative