Monthly Archives: November 2014

My MBA Experience So Far…

I hail from a family business background and we are into the construction of roads. It has been about thirty years since my parents started the company, and today we have about a thousand employees. I have actively been involved in the business. According to me, the three years I have spent is sufficient time to understand all the functional areas of the company, and today I would like to take our business to a global platform. To be able to accomplish my goal I require knowledge that only an MBA program can equip me with, and this learning would also help me gain the trust of my people. Learning the business by experience will only teach us how to run the existing business better, but I require practical exposure and all round knowledge to be able take the business to the next level. I wanted to be a part of my business and not let go of it completely in order to pursue a post graduate degree. Hence, I was on the lookout for an opportunity that would help me balance both. I came across MYRA School of Business and was completely impressed by their faculty and the beautiful campus. It also had a big advantage for me as it is located in Mysore, and is close to my home town from where I could continue to stay connected to my business. During my interview, Professor Nagananda and his never diminishing energy levels inspired me.
It has been four months since the commencement of my two year program here at MYRA, and we have completed nine subjects till date. Every subject has been unique and has definitely added value, and taught me its importance in the real world scenario. I have always related every subject to my business and analysed how problems could be solved at my company, with respect to the learning in that subject. I have also interacted closely with the high profile professors who come from various well recognized universities and, are here with us at MYRA for a period of two weeks and teach us their respective subject. I have also discussed certain prominent issues regarding my company with them and they have helped me look at the problem in ways that I was unaware of.
We started the course with the leadership subject, taught by Prof. Minu Ipe. She asked to us to write two reflection papers on any of the topics taught. These concepts that were taken up in class, and taught to us are related to the topics that we would deal with in the future on a regular basis. When I wrote the reflection paper, I got to know what exactly I thought about these concepts. This helped me expand my thinking horizons. For instance let’s take the topic of ‘Change’. Change is something which is necessary in every organization. But I did not know how to deal with implications of change. When I wrote the reflection paper on this topic and discussed it with her, my whole perception towards ‘change in an organization’ transformed. Family managed businesses have certain inherent culture that is brought into the organization due to our parents and their way of approaching the business. This culture may or may not be best suited for expansion of the company after a certain point of time. The leadership subject taught me to recognize this culture, the core values of my company and helped me build on the outcomes of my learning.
The following subject was financial accounting taught by Prof. Radha B. Radhakrishna. In two weeks he showed us how to make, analyse and interpret a balance sheet. This is something which the commerce students take months to learn. Once I was done with this subject, I was able study my company’s balance sheet and analyse where we stand as an organization. Prof. Radha was more like a mentor to all the students, who want to pursue a career in finance.
I could go on and on about each subject and how it changed my way of thinking. But personally, I feel MYRA is an overall bonanza package. I could emotionally connect with the professors which helped me discuss with them the problems I face in my business. All the MYRAcles are from diverse backgrounds. This helped me think in multiple ways and gave me a new dimension for every situation. We also get many industry experts who come and talk to us, and this increases our exposure on how the industry works in reality.
The overall experience I have at MYRA is very different and unique. It has actually helped me change my perceptions towards many subjects. It has also helped me deal with the issues in a more effective manner. It has made me independent in ways I did not expect and helped me learn to live alone, out of home and manage the business too. After joining MYRA the issues in my business seemed common, and are faced by many managers. Thanks to all the professors and industry experts who help us learn the happenings of the world. I am glad to be a part of MYRA.

 

Adarsh P Bavikatte
PGDM 2014-16

The Riskiness of Risk: Then and Now

Browsing in the bookstore of a business school is always interesting. You get a sense of what students want to read and what faculty feel they should read. There are the usual showpiece classic texts beyond student means, and low-price ‘quickie’ books much disdained by their professors. During one such foray into a bookstore recently, I chanced upon Duffie and Singleton’s Credit Risk, more specifically a well-worn paperback version of the 2005 monograph. I picked it up and thought of old friends and old times.

We were a diverse group appearing for the qualifying exam in the statistics Ph.D. program at Stanford University more than twenty years ago. We came from places like China, Hong Kong, Korea, Germany, Israel, India, and the US. Our abilities and interests ranged from abstract mathematics to computer programming, from clinical trials to stock markets. We were hunting for dissertation advisors and thesis topics.

Receiving serious consideration from many of us was the Graduate School of Business (GSB) at Stanford and the scary, sophisticated things underway there in the guise of probability theory. This was a subject that caused me more than a little grief in my courses and I duly steered myself more towards other areas. But several of my classmates felt the call and signed up for Professor Darrell Duffie’s course at GSB. They told the rest of the rapid transitions from rigorous theory to financial applications and vice versa. They told us of difficult assignments and the fear of failure – in short, a typical Stanford experience.

But times were such. Using deep mathematics like stochastic calculus, financial instruments like credit default swaps were being designed and analysed. The future – yet to come – was to be somewhat ambivalent about all that. Today, decades and several financial crises later, thousands of miles away, re-reading the topics in Credit Risk brought back the excitement of those adventurous times and the care and caution we perhaps should have all had.

Other times … Applying financial technology to the bustling practical world of retail consumer finance (think credit cards and personal loans) is a challenge. GE, particularly GE Capital, is a commercial organization with a firm determination to stay ahead of the competition. As scientists in the company’s R&D wing, GE Global Research, we were conscious of the need to make money – or at least not lose money – while taking advantage of the latest advances in finance research.

Ten years ago, much of this research was focused on understanding correlations. Correlations, be they between assets in a portfolio or between products being sold together, are complex beasts. They ebb and flow with time and external events; they indicate empirical linkages that often seem to have no fundamental explanations in terms of asset quality.

To say that we were struggling was a bit of an understatement. Work from several institutions pointed to techniques such as copulas, and we duly tried many such techniques out.  (One of the interns working with us then went on to become a star in academia based on his thesis on such matters.) While the theories were elegant and often quite beautiful, they seemed to be cavalier about crucial aspects of correlations between actual assets. Reading chapter 10 of Credit Risk now is a sobering experience.

Most experts today believe that we need a new generation of both mathematical as well as financial innovation to sort all this out. This is a relief for us practitioners (perhaps we weren’t that stupid after all?) and distressing at the same time (“so if the folks at Stanford don’t know what is going on, are we at GE on a wing and a prayer?”) Clearly there is still much to learn.

At the MYRA School of Business in Mysore, life goes on these interesting times. We must be deep and rigorous in our teaching and research, yet we must ensure that it reflects the complexity of real enterprises. We must promote entrepreneurial growth and shareholder value, while steering clear of dubious ethics and financial excesses. We must create a new generation of capable and knowledgeable managers, who are at the same time responsible citizens and leaders.

This will not be easy, but we will be wrong not to try. Along the way, we will tell you what we are finding out and learning. In turn, do tell us your thoughts. Connected, we can accomplish much. Together, we can do more.

abhinanda sarkar

Dr. Abhinanda Sarkar

Associate Dean and Director of Research

MYRA School of Business

November 3, 2014