Vikalpa: The Journal for Decision Makers

China and India are being widely recognized as rising powers in the 21st century. With its track record of fast economic growth in the last two decades, China is already a global economic power. Based on India's more recent growth performance, India is steadily catching up with China as an economic power.

Despite fundamental differences in their political systems, both countries have acquired rising economic power due to open market economy-oriented reforms. China has the advantage of an earlier start than India in this respect. China started its economic reforms in 1978 and India in 1991. These economic reforms have miraculously transformed China into a global economic power. Although politically constrained, economic reforms have helped India to improve its growth trajectory and to further integrate with the global economy.

China and India have been following different paths for managing their rising power:

China has been credited with carefully evolving a grand vision and a grand strategy for transforming it into a ‘global power’ by the year 2020 (or so). Pragmatism and effective political will have been the hallmarks of the ‘calculated strategy’ adopted by China to achieve this objective.

India's economic power has been rising more due to the impulses generated by its entrepreneurs especially in the knowledge-intensive services and industries than due to its government's pursuit of a well-thoughtout grand vision and grand strategy for becoming a global power. Currently, China is nearly two decades ahead of India in moving towards acquiring significant global power.

The author's analysis of the existing and projected strengths and weaknesses of both countries in this paper leads him to the conclusion that both the countries have the potential to become global powers — China most probably by the year 2020 and India by the year 2050.

Further analysis of the existing and potential complementarities and competition in the economies of China and India indicates that there is a tremendous scope for forging mutually beneficial strategic partnership between them. A very useful beginning can be made in this direction by establishing mutually rewarding strategic alliances in these two countries at the business-to-business level. Progress in this direction can be expedited by supportive government policies and procedures.

Despite the existing deficit of political trust between India and China, the two countries have recently agreed to become strategic partners. Concrete moves towards operationalizing this strategic partnership can be initiated in two areas identified in this paper. These are:

strengthening cooperation at the international level for enhancing national energy security

further cooperation in negotiations at the World Trade Organization and other multilateral forums for collectively promoting the interests of all developing countries in the emerging new international trade and investment order.

University business schools are facing intense criticism that their traditional MBA and other graduate management curriculum fail to teach change management skills, employee development skills, employee recruiting skills, team-building skills, and the importance of ethical behaviour. Due to increasing technology, competition, and workforce diversity, today's leadership decisions are more complex than they were five years ago. The need for today's middle managers, senior managers, vice presidents, COOs, and CEOs to have more advanced leadership education has become critical, but the traditional Ph.D. and even the Doctor of Business Administration (DBA) have not become a recognized and acceptable viable solution.

In contrast to the traditional Ph.D. and DBA which is geared towards the engagement of theory and research, the advanced leadership knowledge involved in the Doctor of Management (DM) encompasses advanced leadership training that is practical and focused on leadership's complex impact on improving organizational culture and human resources development. While MBA programmes or the traditional business Ph.D. programmes are focused on finance, accounting, marketing, operations strategy, and quantitative research, DM goes a step further by also considering the importance of developing employees, organizational culture, and teams as a major aspect of strategy execution success. DM looks at management almost in an interdisciplinary way by blending leadership courses that touch on psychology, human resources management, communications, human relations, employee development, organizational behaviour, and traditional management science.

While traditional business Ph.D. and DBA programmes focus on skill development in order to effectively manage organizational operations and organizational process, DM focuses on people because without a properly developed and appropriately constituted staff, success will only be limited.

For many years, it was assumed that a doctorate degree was not applicable in the international business world. DM is a major departure of tradition by enabling executives to use a combination of pure leadership theory and applied research methods to define, implement, and evaluate the strategies necessary for organizational growth and survival in a 3-4 year programme without having to leave their full-time jobs. DM addresses the question: If the definition of management is getting work done through people, then why are traditional Ph.D. programmes so heavily focused on business and so little on employees and organizational development?

This paper examines the global film industry through a detailed discussion of four national players (US, Canada, China, and Hong Kong). According to Porter, the international competitiveness of any industry cluster is shaped by four characteristics of the domestic market: demand conditions, factor endowments, firm rivalry, and supporting industries. The authors assess the film industry in these countries in terms of the four factors of national competitiveness and conclude that only the US possesses all of them at this juncture. Moreover, they propose that the exclusivity of US interests in the global distribution system creates competitive dynamics that neither Porter nor critics such as Rugman have fully explored. It is in this context that this paper discusses co-production as an alternative means for nations to develop⁄improve competitiveness through exploitation of overseas markets.

Based on their analysis of the film industry of the US, Canada, China, and Hong Kong, the authors make the following observations:

There is a need to increase the presence of Canada⁄Canadian film co-productions with other countries as there may be greater opportunities for large Canadian producers to leverage both their US connections and their home country's treaties to create a unique pool of film-making resources.

The potential size of the Chinese film audience makes it attractive to other nations. However, the Chinese government's monopoly over film imports, pirated home versions, and denial of access to the official film distribution channels are major barriers to entry.

Despite the massive historical price gap between domestic and foreign movies, box office figures would suggest that Chinese audiences prefer the latter. Another popular option is cheap, pirated home versions.

Hong Kong's box office size, domestic box office share, and number of domestic productions have been decimated over the past decade and, hence, Hong Kong producers' main option is to find stronger opportunities in mainland China.

Being the only external co-production partner nation of China and Hong Kong, Canada has in place the foundations for a powerful competitive position in these regions relative to other foreign entrants.

According to the authors, further research in this field could include an analysis of coproductions within Europe or of emerging co-production blocs across other regions. For instance, Canada is currently in the process of concluding a co-production treaty with India which has the potential to clear barriers between the two powerful yet traditionally quite segregated film industries of the subcontinent and North America. This is indicative of the fact that the governments and the movie industries are gaining power to change the global competitive scenario in films.

This paper provides empirical evidence on the significance of financial risk factors in predicting default companies. Traditionally, credit decision process is built on accounting ratios derived from financial statements of the borrower. Combining various ratios through application of multivariate statistical techniques and testing their predictive power has been popular in credit risk quantification. Altman's Z-score model is the most acceptable model in this category.

In this paper, three forms of Z-score models are applied:

The first equation is developed by surveying the internal credit rating models of the Indian banks and the ratios selected are: current ratio, debt-equity ratio, and operating margin.

The second equation is similar to that of Altman's (1968) original equation with a slight modification: instead of debt-to-market value of equity, debt-to-book value of equity is considered. The other three ratios of the second equation are working capital to total assets, retained earnings to total assets, and earnings before interest and taxes to total assets.

The third equation is called as Altman, Hartzell and Peck's ‘Emerging Market Score Model.’ Except the asset turnover ratio, all the ratios of the second equation are considered.

In all the three equations, the coefficients are estimated by using the development sample of 112 companies.

The dominant variables discriminating the default companies from non-default ones are: current ratio, debt-equity ratio, operating margin, working capital to total assets, earnings before interest and tax to total assets, net worth to debt, and asset-turnover ratio. The classification accuracy of the second and the third equations is 82 per cent while that of the first equation is only 57 per cent. It implies that the most widely used two ratios — current ratio and debt-equity ratio — are relatively poor in predicting the default companies. Similarly, the ROC accuracy ratio is the highest for Altman's equation whereas the variables considered in internal credit rating models of banks is having a relatively low accuracy ratio.

To test the ability of the model in identifying the defaulting companies correctly, an unbiased diagnostic test of the model is conducted on two separate sets of defaulted firms. The results reveal the following :

The Altman's model is capable of predicting default in most of the sample companies.

The hold-out sample accuracy results show that the selected variables are capable of predicting default.

The analysis shows that the financial risk factors being considered by banks in their internal rating models are not very effective in comparison to other two models in discriminating the firms into default and non-default categories.

Banks can map the internal ratings with the Z-scores and scale this up to assign various credit ratings. By arriving at the coefficients on the basis of their own database, banks can develop Z-score calculators for various segments of borrowers.

The fund-based accounting system that was implemented in Bangalore Mahanagara Palike (BMP) is widely acclaimed for its comprehensiveness and effectiveness. The revenue and expenditure statements and balance sheets have been published under the new system for the last three years on a timely basis. The system has been running smoothly for a few years and is on steady stream and it can be taken as a case of successful implementation of accounting reform. It is an appropriate case to highlight the synergistic effect of synchronizing organizational change, reengineering of processes, modernization of accounting system, and automation of accounts. It is quite difficult in this process to single out the factors that contributed maximum to the effectiveness of the Modern Accounting System (MAS) as implemented in BMP. It is equally difficult to attribute everything to the new accounting system. It can also be seen as a case of change management in the accounting system domain.

The case of the BMP illustrates the changes that were brought about in the accounting system. The new accounting system — MAS — adopts the best of fund-based accounting system, accrual system, and reporting system. Its contrast with cash accounting system, its advancement over the old system, and compliance with national accounting standards are also discussed. The organizational and change contexts are presented to help understand the drivers of change. The salient features of the accounting system implemented in BMP are:

compatibility with accounting standards

granularity

dovetailing accounting system to organizational reengineering

comprehensive management information

reporting system.

The implementation is analysed as a case of change management process of implementing of accounting reforms in municipal organizations. MAS is analysed through the framework of management control system which helps to integrate various dimensions of institutional factors that go with accounting reform. MAS is also analysed for its contribution towards accounting information for strategic control, management control, and operational control. It was observed that even though the system has features for decision making and control, it is primarily used for operations and compliance. The focus is still more on transactional level than control or decision level.

The case raises interesting issues about the following:

the purpose of the accounting reform

sustenance of the old system

demand for the new system

areas where accounting reforms took off

areas where reforms did not happen

incentives to maintain status quo and incentives to change which are discussed through the control system framework.

One area where we can find the reasons are the triggers for change. The change drivers are discussed in terms of changes in the financing pattern, exposure to market borrowings and ratings, introduction of user charges, and passing of Transparency Act. Ultimately, it is suggested that the change drivers, though helpful, in ushering in the changes, can slow down the pace if the signals are weak. Weak signals could result in reinforcing the existing agency relationships.

Harmonious inter-generational continuities require the male and the female of the species to engage with each other through interdependence. The chronic under-representation of women in politics everywhere, long after women secured justiciable equal rights in many democracies, intrigues scholars. Political participation varies by ethnicity, age, religion, and culture but that does not account for gender. Patriarchy, discrimination, domination, and oppression are historically castigated but there can also be other reasons. This study explains that underrepresentation of women persists because motives and power-bases to improve their political participation are not easily mobilized due to psychological differences in how men and women acquire and exercise political influence. Strategies suiting intra-group mobilization of women for securing greater inter-group influence are different from those that suit men. Thus, what appear as ‘deficits’ of political skills inhibiting acquisition of political power by women are dissolvable with designed interventions. Indeed, men may appear challenged were they to compete with strategies more suited to women.

Gendered identities affect processes of inclusion, exclusion, representation, and participation of women in politics in various ways. The dynamics of disharmony in management of gender differences is traceable to different repertoires of response choices with which men and women build relationships and form groups. This study analyses gender differences in coping with anxieties and defending against anxieties and identifies sets of causal triggers that produce disharmony as outcomes arising in the form of deprivations and taboos during the process of growth and identity formation.

Coping responses to anxieties are substituted and complemented by primitive and developed defences traceable to the way men and women are cared for as babies, infants, children, and adolescence through to adulthood. The repertoire of coping responses as well as primitive and developed defences evolves differently for men and women. This is immutable in some respects, modifiable in others, through practices embedded in psychosocial aspects of gender identities, child-rearing practices, and culture. The two horns of the women�s dilemma pressurize them either into behaving like men or evolving creative and innovative strategies. The latter is challenging since the required talent, planning, organization, and mobilization cannot be wished into existence by rational or emotional pleas for equal representation.

The major findings of the study are follows:

Human dignity, equal freedom, social cohesion, and global harmony, as desirable goals, are beyond reach if social justice is sought only through demands, disputes, claims, and entitlements over substantive and procedural equality of rights.

The pursuit of equality as a policy requires to be underpinned with deeper analysis of the sources of conscious and unconscious human behaviour (of individuals and groups) that produce inequitable outcomes.

The restoration of gender balance in the political arena can have the greatest and most lasting impact on sustainable ways to design and govern world affairs in the pursuit of harmony.

This paper urges women and men to experiment with designing strategies that suit women and test whether such strategies redress the political under-representation of women.