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Indian Institute of Management Calcutta

Ajit Balakrishnan delivers IIM Calcutta Convocation Speech on Thought Leadership

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This past year, our 50th, was a banner year for IIM Calcutta. Our PGP class was placed in 4 days flat, in the All India Management Association survey we were ranked as No. 1 among management schools and we added a quarter-million square feet to our class-rooms and hostel infrastructure.

But, while all that is gratifying, the real measure of an academic institution lies in the extent it contributes to thought leadership. I want to share with you today how we have fared in that area.

The journey of an intellectual idea often starts as a working paper or a case, evolves into a journal article then as a conference presentation, finally as a book chapter or even a book. In a vibrant thought leadership system each leg of this journey is important. During this past year our faculty produced nearly a hundred research papers. These were published as working papers, cases, or presented as conference papers, as articles in peer reviewed journals, or as book chapters.

You will find the full list of papers published by IIM Calcutta faculty in the folder that is with you but please allow me to whet your appetite by summarizing a few of these. I freely admit that the ones I have chosen to summarize are an idiosyncratic choice.

Let me start with a paper that deals with an issue that is life and death for modern businesses-the Supply Chain challenge. How do you as a business respond fast enough to the sudden increase or decrease in customer demand that is a feature of modern business life. If you respond too slowly you pay for the lost sales opportunity, if you respond too fast you may end up with excess inventory. Prof. Rahul Roy of our MIS Group has mathematically modelled a Supply Chain as a management game for use as a teaching tool. The originality of this paper lies in the fact he has done this for items of inventory that are perishable. His paper, The Cake Game-comprehending perishability, was written together with a person from JDA, the leading supply chain platform provider which makes it doubly interesting. It was presented at the 15th Annual International Conference of the Society of Operations Management.

The second paper that I want to draw your attention to deals with a topic that dominates media headlines in India, the battle over telecom spectrum. Little thought has gone into the true underlying cause of this - the narrow definition of a slice of spectrum as being "owned" by each operator leaving some portions of spectrum idle and other portions hotly contested and every allocation decision being greeted by accusations of corruption. Professor Debasis Saha of our MIS group and Sadukhan of our Computer Centre have a paper that may bring some rationality to this world of smoke and mirrors. They devised an algorithm that dynamically allocates a common pool of spectrum using concepts from game theory. What is gratifying for me is that their paper, A Meta-heuristic based Fair Dynamic Spectrum Allocation Policyis written jointly with executives from BSNL and Wipro and scholars from Jadavpur University. Such cross-sector creative work is very exciting. It was presented at the IEEE 5th International Conference on Advanced Networks and Telecommunication Systems in December 2011.

The third paper that I’d like to draw your attention to today tackles the paradox of giant glitzy shopping malls in which our citizens window shop but only occasionally make a purchase. This phenomena has led this year to a crisis in the organized retail industry. Prof. Rohit Varman papercould possibly explain why this happens. He it says that t for Indians, shopping malls are much more than places to efficiently buy things; they are, his words, "spectacles of Western-ness and…symbols of progress and development....a masquerade through which young consumers attempt to transform themselves and to disguise or temporarily transcend their Third World realities". His paper, Consuming Postcolonial Shopping Malls, was published in the international Journal of Marketing Management in February 2012.

The collapse of Lehman Brothers in New York and the cascading global financial crisis brought home the inter-connectedness of the world financial system. The worlds’ financial markets seem to be part of a giant international social network where a problem in one centre cascades into a world-wide financial crisis. Ram Roy a Fellowship studentand Prof Utttam Sarkar used the mathematical techniques normally used in modelling social networksto to determine which international stock indices matter. Their paper was presented at the 2nd International Conference on Ambient Systems, Networks and Technologies, in Ontario, Canada, September 2011.

We all appreciate in a general way that news events can make stock market prices respond in a volatile manner and many researchers have attempted to mathematically model these fluctuations. Prof. Ashok Banerjee of our Finance and Control Group used high frequency firm-specific news as proxy for information flow and mathematically modelled the impact of news on volatility of stock returns in his paper, "Impact of information arrival on volatility of intraday stock returns". This paper is an early example of work from our Finance Lab, which as many of you know was singled out for mention by the Finance Minister in last year’s Union Budget with a grant of Rs 20 crores. The other aspect is that this work was done in collaboration with students at IIT Khargpur and people at The Centre for the Analysis of Risk and Optimisation Modelling, Brunel University, UK. Such inter-institutional collaborative work force-multiplies the quality and impact of academic research.

At this point I’d like to pause and demonstrate to you that IIM Calcutta faculty are not entirely preoccupied with esoteric mathematical models. Professors Bhaskar Chakrabarti and Raghabendra Chattapadhyaypaper focuses on the high stakes endeavour of improving the management of our panchayats. Their study of what management systems work achieving co-ordination between panchayats and theline departments of government should be of interest to government administrators. This paper was published in The Commonwealth Journal of Local Governance, Nov 2011.

In another policy oriented paper, Professor Sudip Chaudhr looks at the impact of India switching from a process patent regime to a product patent regime in pharmaceuticals. You will recall that our Product Patent regime, that we had adopted in 1970 what whathad given birth to the a large and vibrant pharma industry in India and also made drugs in India available at some of the cheapest prices in the world. Prof. Sudip Chaudhri’s study points out that the switch back to the product patent regime has made large Indian pharmaceutical companies, who are the major R&D spenders in the country, focus on the larger and the more lucrative markets of the developed world. His work appears as a chapter, The Pharmaceutical Industry in India after TRIPS in the forthcoming book The New political Economy of Pharmaceuticals in the Global Southby Palgrave Macmillan.

Many of our faculty members had engaged with the challenges and dilemmas of economic growth. Prof. Mritiunjoy Mohanty examines why high rates of per capita income growth co-exists in India with rising unemployment as well as democratic contestation (presented at the University of Massachusetts Amherst May, 2011); Prof. Amitava Bose examines the inflation- growth relationship in India in one paper and the reasons for intersectoral disparities in growth in another; Prof. Manisha Chakrabarty examines what policies will enhance individuals’ capability to succeed in the labor market and improve their earnings; Sasanka Chanda and Prof. Sougata Ray examine whether developmental programs, microcredit and Gandhian innovation can be pillars of a bottom of pyramid strategy, Nimruji Jammulamadaka examines the adhocism in microfinance policy formulation and in another paper the conflict between tribals and mining interests in Orissa; Bhaskar Chakrabarti studies the contested identity of Junglemahal Maoists; Suman Nath and Bhaskar Chakrabarti provide a fascinating account of the Political Economy of Potato Cold Storages in West Bengal; Annapurna Shaw studies the differential effect of the repeal in 1999 of the Urban Land (Ceiling and Regulation) Act and published her paper in the Journal of Eurasian Geography and Economics.

As you know, we have a giant software services industry but not enough academic work on management issues in that industry. This past year saw a number of studies across different faculty groups at IIM Calcutta on this topic: what makes for optimal outsourcing contracts (Preetam Basu), what determines user involvement in software projects and another paper on the use of simulation to judge software requirements volatility (both by Rahul Roy), what makes for Agile software companies (Subir Bhattacharya), HR practices that possess option value in software companies (Prodip Seth); Explaining Sophistication in Collaborative Technology Use (Sanjiv Vaidya and Priya Seetharaman).

Our Finance and Control contributed a number of papers: three papers from Prof Rama Seth: the first on what determines bank risk exposure, the second on how Central Bank Target Rates affect Term Structure of Interest Rates and the third on foreign bank’s lending behaviour during recessions. There are also papers on how earnings management affects corporate governance (Manju Jaiswal), , the use of neural networks to forecast one day stock volatility (BB Chakrabarty), using the real options method for investment decisions in the oil industry (Ashok Banerjee) and a paper on how to price telecom infrastructure in a monopolistic market (Ashok Banerjee).

The papers that I have recounted so far are just a few examples of the good work being done here at IIM Calcutta during this past year; please dip into the folder before you for the full list of nearly a hundred papers.

There is another aspect of our work at IIMC we are proud of and that relates to scholarly conferences that we host. The India Finance Conference in December, 2011, donejointly with IIM Bangalore, the 15th Annual International Conference of the Society of Operations Management, in December, 2011 and the conference on Management Education for A Sustainable Tomorrow, November, 2011 are some examples.

These conferences attract scholars from the leading management schools from around the world and we are justifiably proud of that.

But even more importantly these conferences provide a platform to stimulate scholarly work in the 3000+ management schools we have in India. As I remarked last year, when our nation’s leaders founded IIM Calcutta 50 years ago India was a very poor country that had problems in even feeding its population. Through those difficult early years government funded us in the hope that such public investments would trigger a qualitative change in the whole of management education in this country.Thus, I am glad that through our conferences we were able to trigger research papers from institutions as diverse as Ramjas College, Delhi University, The Institute for Financial Management and Research Chennai, The Institute of Information Management & Technology Aligarh, Shri Mata Vaishno Devi University J&K and even The North‐Eastern Hill University Shillong, to name a few of the many dozens who have benefited. We take seriously our responsibility to help bring all these institutions to a world class level.

Finally, I am glad to report that the Ministry of Human Resources, Government of India, has requested IIM Calcutta to take the lead on organizing a world management conference. This conference, planned for later this year will hopefully do for IIMs and Indian management schools what the Literature Festival at Jaipur has done for Indian writing- put it on the map of must attend conferences in the world. We are grateful for being given this opportunity and are hard at work on it. I also hope that we will see many of you at that important event.

Thank you.

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