Sunday, November 24, 2013


Every profession is backed by its members and strength within its members. But In the case of ICAI(Institute of Cost Accountants of India) we have very less number of members as compared to industry demand. This has been the tradition of the institute over the last several years. We know from the time that when 14A and 14AA were taken away from ICAI that member’s strength is a big factor. Chartered Accountants have around 1.5 lacs members and their strength is growing whereas Company secretariats have taken the recent initiatives of making more members. Well more members are made by increasing the passing of student in various levels.

The institute needs to focus aggressively for increasing the members by increasing the passing percentage in Intermediate and Finals. This will increase the member’s strength and numbers which would be beneficial of the Indian economy and for the industry. This will also increase the prospects of practicing and would be able to match the demand of the Industry. One should think that every where ICAI or we cost accountants are losing the place since we have less members. I know many of my friends would say that if the institute increases the number of students passing percentage then the quality of the pass out candidates would be at risk. Well the course of the Institute is sufficient enough to equip a candidate to become successful Cost Accountants. Hence there is no requirement of raising the matter about quality and other such things building it as an obstacle for not generating more pass out. From 2009 if we  have taken the steps of increasing the members by increasing the intermediate and final passing percentage then today we should have generated sufficient number of members.

More final pass out, more intermediate pass out would create multiple promotion and would help the institute to generate more members to serve the Indian economy and the industries. We ignore the simple and small strength of the students but we forget that they are our future members of the institute. We should not forget that in the future also we will find many hurdles like this and challenges but we need members to face those challenges.  Strength of the members would help the institute to grow in the long term. We need more passing percentage so that members strengthen and students are converted fast into members.


Rising CAD is a big trouble for the Indian economy which is standing at the brink of getting negative ratings on its sovereign. From prime ministers economic council to every economist of the country has been trying to figure out the way for reducing the cad and getting India back on the track of FRBM.

Rising consumption of Gold and international crude prices are being tagged as the prodigal son behind the rising CAD. But the story stands out to be different when finding out the real reason behind the CAD. But it is being found that Government of India despite of having a professional solely designed for cost control and cost management that is COST ACCOUNTING and ITS COST ACCOUNTING RECORD RULES are not being given the proper justification. In the past several years it has been found that cost accountants are treated very poorly and this the prime reason behind current economic condition of India. The profession and its members who have dedication towards cost management are not being treated at par with Accountants.  They have been often removed from various position and their prime operational areas over the last couple of years and this is still being continued. The government of India fails to identify the value of cost management where as today cost accounting and cost management are an integral part of the decision making in countries like UK,US, CHINA and many other countries economic policy frame work. Indian government simply ignores the value of the profession here.

Government has ignored the real reasons behind the rising cad which has also lead to an unbalanced industrial growth. According to the Cost Accounting Record Rules (Break up of cost of Input Materials imported during the year) of the same states that when an manufacturing unit consumes imported goods and the same data is being compiled to analyzed to find the same availability of the material domestically. Economists around India have not turned to this data till data otherwise they must have got the solution of the rising CAD as well as development of those areas where imported goods are being consumed by the manufacturing units. Cost Accounting Record rules helps the governments and the Indian economy to have better understanding about the cost implication and it acts likes an barometer for measuring the cost. Today the Indian economy is struggling to get a GDP growth of8% followed with substantial growth in inflation.

We all know that India is now a global assembling hub which means that imported goods which are assembled and sold India. In the recent last 5 months of this year 2013 international commodity prices have come down which has given immense opportunity to the manufacturing units of India to built inventory of raw materials available at cheap valuation below the average normal prices. In my research I find that CAD is going to increase further since government has failed to the Cost Audit Report. We cost accountants have been neglected by the government for several decades but I find its high time that government should utilize the cost accounting profession to resolve the CAD issue. We are not being given the at PAR status of Accountants and have been neglected over a couple of years. Today the ministry of finance and RBI is struggling to get avenues for reducing the CAD and getting Indian economy in the path of 8% GDP growth. Cost Accounting record rules are of great help and the same is not being used properly by the Government of India.

Cost Audit Report & Cost Accounting Record Rules is huge beneficial to the government of India since through this report they can make those industries more competitive matching with the imported material. Coal is being one of such raw material which is being consumed through import. Government fails to understand that if the same coal is being made available domestically then it will not only reduce the CAD but bring employment and other ancillary growth of different industries.

If Cost Audit Report is being utilized ten one can block the loopholes of misusing the import segment as well as one can find the scope of development of the indigenous industries compared to the imported ones. Cost Audit Report and Record rules serves an important role in various aspects where government of India can get lots of help for designing the economic growth of 8%+. The profession of cost accounting can be of great help for the Prime Minister Economic council.  
Written By Indraneel Kripabindu Sen Gupta

Saturday, November 16, 2013


European banks interest rates would be climbing down further in 2014 as the election of the European economy becomes due in May 2014. Currently in my research I find that Anti–European like the French National Front, the Dutch Party for Freedom (PVV) or British Independence Party (UKIP) may make up 25% or more of the future Parliament. Sluggish growth and high unemployment are the ruling factors in the euro-zone economy. Hence interest rate would be coming down so that consumers can borrow at cheap and more political interest would be involved. In between on Dec.17, Angela Merkel is due to be re-elected as chancellor by the Bundestag and hopefully she would be in the position again. In between the ECB and euro-zone banking system is busy in cutting down on lending and increasing their exposure to sovereign debt. 

In a recent report by rating agency Fitch shows that, in anticipation of stricter capital rules, the largest European banks increased their exposure to sovereign debt 26% in 2011 and 2012, while cutting corporate lending by 9%.Youth unemployment is around 8% in Germany, compared with 56% in Spain and this disparity is provoking the anti-Europeans. On other side the stress test would be mixed and hence to keep the foreign bond holders happy the interest rates would be lowered so that premium on the bonds increases. Moreover this would keep the bond holders happy and let them buy more sovereign debts. All these are interlinked and the biggest drama of political game is about begin in 2014 but prior to that the trailers of the same are going to be seen from December 2013.


 The recent reform polices in China indicates one thing very clearly that within the next 30 years Chinese economy would be the world largest economy followed with and stable GDP growth. The base of an economy is its human capital and the same needs to be nurtured for a stable economy. Currently we all know that china is facing the problem of lack of young man power and has an aging population. Further the labor market of china is no cheaper. China took the first step by removing the 1 child policy regime followed with abolishment of “re-education through labor” camps, significantly curtailing two policies that for decades have defined the state’s power to control citizens’ lives.

It is estimated that the policy could lead to one million to two million more births in China every year, on top of the approximately 15 million births a year now. The prospective baby boom “will provide more laborers to be ready for future economic activities in the long run. Further this new baby boomers would help the Chinese economy to solve pension pressure in the long run and will be good for care for the elderly within the household. This also reduce the government burden on social cost as well as helps the economy to design its taxation polices in the coming decades. The reason behind the reform policies further indicates that the Chinese economy is focusing on to perfect and develops the socialist system with Chinese characteristics and move ahead with the modernization strategy. Further as china is shifting it economy from export oriented to domestic the baby boomers over the next 20 years would provide the consumption based strong growth. Moreover china becomes the 2nd largest economy riding on the horses of export in developed economies and dumping its goods in emerging economies. But now with the current economic conditions that possibility no longer exists and hence consumption based stable economic growth is required for the next journey of becoming the largest economy.

 This new child policy would spook up the consumption growth and would spook up the demand of goods and services within the economy. Chinese citizens would plan more for the secured child future which would spook up the investments climate within the economy. Real estate, Gold, new investments would spook up the investments since planning for child’s future is a global phenomena. On the other side the major reform being laid are the "market-determined" reforms in the sectors including water, oil, natural gas, electricity, transport and telecommunications will create a more competitive environment in the former state-owned industries. It will further add more efforts to open up services sectors including finance, education, culture and health. China will allow companies and individuals to contract overseas construction and labor service projects at their own risks and endorse innovative ways of going abroad that include Greenfield investment, mergers and acquisitions, portfolio investment and joint investment.

On an overall basis this new economy policy is driven to boost up the consumption market within the Chinese economy which would lead the china into an super economy within the next two decades.
Written By Indraneel Kripabindu Sen Gupra and Hardik Bhatt


The management education should take a huge leap in the coming days. Management is being called as a science and hence there are radical changes in the management science which the society and the Indian economy is currently going through. We Cost Accountants have an huge role in the society and with this changing dynamics of the profession its is being felt that we need to come up with solutions much faster before the problems grow. Cost management followed with strategic management should be the part of practices for the members. When the members would be using the strategic management aspect in their practices the field would find a new growth. We need to come out of the traditional cost accounting practices and should indulge more in research and practical application of that research into the industries and business fields. I find that cost accountants should work more closely with the entrepreneurs of India so that their business growth would lead to a substantial growth in the employment opportunities in India. It is well know that we are the only institute which deals with cost and management practices.

 We need extensive research and innovation in cost management strategies and provide solution to the entrepreneurs of India so setup their business models. This would open up more challenges for the profession was well as for the practicing members. In my research I find that management problems are becoming more complicated and hence we need to bring solutions very urgently before they are being taken by someone else. The professional development of the institute would find a new shape when solution based model would be provided across the industries. The current economic uncertainty provides immense opportunity to the profession and to the practicing members which we need to indentify. I find the recently members are becoming more inclined for jobs rather for practicing, the prime reason being the lack of identification of avenues of new fields. Only the research and innovation division of the institute would not be sufficient to provide the break through. Private partnerships with industries and immense active participation of members from all angles would be required to bring the breakthrough for the profession.  The yardstick of investments should be mapped with the percentage of the GDP so that the professional development likes other professions. The research and innovation of the institute should widen the scope of practices and should give break through to the profession.

More seminars need to be focused for strategic management programmes so that the practicing members take leap ahead in the coming days in their fields. Industry experts should be invited to share the problems of the industries and the research and innovation should carry out the solutions for the same. This would create a win-win situation for the industry as well as for the profession. We need to come out of the traditional practices of auditing and should formulate strategies to block the loopholes in the system across the industries. Outstanding individuals, groups and institutions with sufficient long-term abilities would be the key for the development of the profession. In between I would like to mark one key area that research and innovation should be carried by all the members not subjective to an particular section. The biggest disadvantages of this type of operation would be that research would be delinked with the real world and this would create worthless outputs. Active participation of everyone is required for uplifting the profession development aspect of the institute. One question might come up that how to design the research innovation of the profession. The answerer is simple ‘We need to focus more on parties and deign the research and innovation accordingly’. When we focus more on practices we bring development in our research and innovation.

The point is not from where to start but the point is from where to end. All members need to come together like a society to develop the civilization of strategic management based innovation and development. Another thing which is highly required for any professional development is elimination of bureaucracy and outdated procedures since without this the development of the profession cannot happen. We must keep in mind that these two aspects needs to neglected at each and every step of research and innovation. If they are not neglected then the research would be much like a home servant and would have limited growth opportunities for the profession. We need research and innovation where practicing gets more members.
Written By Indraneel Kripabindu Sen Gupta

Saturday, November 9, 2013


US economies have made outstanding performance in its GDP growth by 2.8% but the real growth factors are diminishing. The consumer and business activity is dropping and the numbers are well clear that the US economic growth engines are skeptical about the long term movement of the US economy. In between the hedge funds and the big giants of the wall streets are more focusing on when the US will stop the bond purchase mechanisms and would find substantial growth from the US treasuries in the long term. Well that’s the prime aim for the Wall Street players and they are less inclined about the long term prospects of the US economy. Employment numbers have came down but in real terms people have stopped seeking employment and that’s why the numbers are falling.

Gross capital formation on the other side of US economy is much lower than Brazil over the last 1 year.US had an change of 0.4% where as Brazil had 0.10% change. Even Indonesia had an gross capital formation rate of 0.12% over the last 1 yr. Well for my friends gross capital formation means Gross capital formation (formerly gross domestic investment) consists of outlays on additions to the fixed assets of the economy plus net changes in the level of inventories. Fixed assets include land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases; and the construction of roads, railways, and the like, including schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings.

U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery. Half of the nation's 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls. In between the consumption pattern currently and next year 2014 would remain tepid since in an recent study it has been found that employers say they'll dole out raises averaging 3% in 2014, virtually matching annual increases in 2013 and 2012, according to a survey of more than 900 mid- to large-size companies by compensation consultant

In between the US bonds are being now being purchased by the US household. During April to June Quarter US households have parked around $170 billions into bonds where as foreign holdings have been around $110 billion during the same time. This clearly indicates that US households are parking more into bonds and less into equities. They are in sceptical phase and bound to react in this fashion. Asian economies like China are already the king of the US treasuries by holding around $1.28 trillion treasuries and Japan around $1.14trillion. My concern is about the long term fate of dollar and its trading capacity. I will not be surprised to find Renminbi as the trading currency in the coming days since China is aggressively looking for the same. Once this currency become an international currency it would be safe for the china to hold such huge amount of dollar denominated treasuries. Moreover china would be free from the pressure building upon its currency as an undervalued. But who will buy the bonds is the biggest question which urges US economy to stop the package. This nightmare might stop them moreover the premium charged on these bonds are too high. Its a too risky proposition but US economy have to find some alternative method to stimulate the economy.They have to run the economy on QE in any form. My fear is that they might stop the Bond purchase to prove that the US economy is stable but later on they might collapse and bring a more fearful recession for the global economy.

The only good news that is dangling in front of US economy is that it is going find independency from crude import over the next 5 years. The new production facility in Bakhen region in North Dokata is going to change the landscape of US economy. The Bakken and Eagle Ford shale formation increased U.S. crude production by almost 700,000 barrels a day over the past year. More the following six places  the Permian, Eagle Ford and Haynesville in Texas, the Bakken in North Dakota, the Niobrara in Colorado and Wyoming and the Marcellus in West Virginia and Pennsylvania are going to be the game changers for the US crude market. The regions combined to account for 90 percent of U.S. oil production growth and almost all the natural gas production growth in 2011 and 2012. Well GDP have climbed by 2.8% riding on the wheels of stock piles and not on the economic based factors.  It is quite less trustable for world economy to find the growth of the US economy to be consistent. Well for withdrawal of bond purchase US FED has less options to do so. 
Written By Indraneel Kripabindu Sen Gupta and Hardik Bhatt

Monday, November 4, 2013


Only participation of employees into the strategic discussion forum would not be sufficient unless their recommendations and their thought process and ideas are taken into real shape within the organizational strategy frame work. We cost accountants play an integral part in cost management and strategic management hence we need to get innovation and thoughts into the strategic frame work. A major aim of the process is to achieve the understanding of and commitment from all managers and employees. There is an requirement of commitment and participation from every employees into the strategic decision making process. If they are unheard and their recommendations are not taken into account then a time will come when they will not be committed into the objective achievement of the organization. In my research I find that there is an substantial financial and non financial development and achievement by adopting the strategic frame works. Balanced score card and Six Sigma can help an organization to new heights.

In my research I have found that by adopting Balanced score card and Six Sigma the strategic frame work helps an organization in the flowing ways:
1. It allows for identification, prioritization, and exploitation of opportunities.
2. It provides an objective view of management problems.
3. It represents a framework for improved coordination and control of activities.
4. It minimizes the effects of adverse conditions and changes.
5. It allows major decisions to better support established objectives.
6. It allows more effective allocation of time and resources to identified opportunities.
7. It allows fewer resources and less time to be devoted to correcting erroneous
or ad hoc decisions.
8. It creates a framework for internal communication among personnel.
9. It helps integrate the behavior of individuals into a total effort.
10. It provides a basis for clarifying individual responsibilities.
11. It encourages forward thinking.
12. It provides a cooperative, integrated, and enthusiastic approach to tackling problems and  opportunities.
13. It encourages a favorable attitude toward change.
14. It gives a degree of discipline and formality to the management of a business

Now in my research I have also found that why companies fails to achieve the strategic objectives:

1.     Lack of knowledge or experience in strategic planning—No training in strategic planning.
2.     Poor reward structures—When an organization assumes success, it often fails to reward success. When failure occurs, then the firm may punish.
3.     Firefighting—An organization can be so deeply embroiled in resolving crises and firefighting that it reserves no time for planning.
4.     Waste of time—Some firms see planning as a waste of time because no marketable product is produced. Time spent on planning is an investment.
5.     Too expensive—Some organizations see planning as too expensive in time and money.
6.     Laziness—People may not want to put forth the effort needed to formulate a plan
7.     Content with success—Particularly if a firm is successful, individuals may feel there is no need to plan because things are fine as they stand. But success today does not guarantee success tomorrow.
8.     Fear of failure—By not taking action, there is little risk of failure unless a problem is urgent and pressing. Whenever something worthwhile is attempted, there is some risk of failure.
9.     Overconfidence—As managers amass experience, they may rely less on formalized planning. Rarely, however, is this appropriate. Being overconfident or overestimating experience can bring demise.  Forethought is rarely wasted and is often the mark of professionalism.
10.  Prior bad experience—People may have had a previous bad experience with planning, that is, cases in which plans have been long, cumbersome, impractical, or inflexible. Planning, like anything else, can be done badly.
11.  Self-interest—When someone has achieved status, privilege, or self-esteem through effectively using an old system, he or she often sees a new plan as a threat.
12.  Fear of the unknown—People may be uncertain of their abilities to learn new skills, of their aptitude with new systems, or of their ability to take on new roles.
13.  Honest difference of opinion—People may sincerely believe the plan is wrong. They may view the situation from a different viewpoint, or they may have aspirations for themselves or the organization that are different from the plan. Different people in different jobs have different perceptions of a situation.
14.  Suspicion—Employees may not trust management

This the main reason that  when managers and employees understand what the organization is doing and why, they often feel they are a part of the firm and become committed to assisting it. For this their innovative ideas and thoughts should be included in the strategic frame work. They should be included in the decision making process and equal value addition should be gives to their thoughts so that the organization can get into a bonded internally to achieve the strategic objective of the organization.

Strategic management policies helps an organization helping firms avoid financial demise, strategic management offers other tangible benefits, such as an enhanced awareness of external threats, an improved understanding of competitors’ strategies, increased employee productivity, reduced resistance to change, and a clearer understanding of performance–reward relationships. Moreover Businesses using strategic-management concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities. This achievable only when the organization understands that employees are equally important into the part of strategic frame work. Balanced score card helps to bridge the gap of employees and internal strategic frame work. Firms that have nurtured their managers and employees, shared organizational objectives with them, empowered them to help improve the product or service, and recognized their contributions can turn to them for help in a pinch because of this interaction. The 4 pillars of balanced score card helps to design the path of achieving the strategic objectives of the organizations. The reason behind why every firm is not successful is that Balanced score card and Six sigma are not applied simultaneously into the system. Companies which apply various cost management and strategic tools into their business operations are the biggest gainers in the long term. We cost accountants are very much well equipped with these tools hence strategy framework designed by us are efficient enough to create long term  tangible value of an organization. 
Written By Indranil Kripabindu Sen gupta & Hardik Bhatt

Design Internal Control and Strategic Frame work By Six Sigma.

Growing complexity of business has increased the demand of strategic management and develops new business models. For cost accountants the challengers are big enough to design the strategic frame work with these changing market dynamics.  In this article I would like to discuss the process of designing the strategic frame work Strategic management allows an organization to be more proactive than reactive in shaping its own future; it allows an organization to initiate and influence (rather than just respond to) activities and thus to exert control over its own destiny. Strategic management simplifies the business objectives and its long term visions. Moreover in my research I find that strategic frame work can be designed by using Six Sigma principles the following three questions which are the most important for an organization to frame its strategic road map.

Where are we now?
Where do we want to go?
How are we going to get there?

Identifying an organization’s existing vision, mission, objectives, and strategies is the logical starting point for strategic management because a firm’s present situation and condition may preclude certain strategies and may even dictate a particular. This is also the starting pint of framing internal control structure of an organization. In my research I find that applying Six Sigma in strategic frame work can be of great help and the organizational structure would get new heights compared to the peer group. Six Sigma helps to define the existing condition and internal control system of an organization.

 In internal control audit we design certain questions well these questions can be designed with more accurately if Six Sigma principles are kept in the process. Defining the situation and deriving standards to measure the same should be the best process of developing the strategic frame work of an organization. Six sigma helps to analyze the current situation and hence the cost accountants by adopting the six sigma principles can easily design the frame work to measure the strategic changes incorporated aligning with the organizational objectives. The strategic-management process is dynamic and continuous.

A change in any one of the major components in the model can necessitate a change in any or all of the other components. For instance, a shift in the economy could represent a major opportunity and require a change in long-term objectives and strategies; a failure to accomplish annual objectives could require a change in policy. Hence measurement of the strategic frame work is required which can only be designed by adopting the Six Sigma principles. Strategic management allows an organization to be more proactive than reactive in shaping its own future; it allows an organization to initiate and influence (rather than just respond to) activities—and thus to exert control over its own destiny. Six Sigma would helps to derive understanding of and commitment from all managers and employees to achieve the strategic  objectives of the organization.

Controlling the changes and new strategic initiatives are the biggest challenges followed right after the process of designing the same. Six Sigma principles helps to control and design the frame work for controlling the strategic frame work. Therefore, strategy formulation, implementation, and evaluation activities should be performed on a continual basis, not just at the end of the year or semiannually. The strategic-management process never really ends. Hence internal control and strategic frame work are designed based upon six sigma principles can be of great help in the long term. Six sigma principles would work like a direction tool for design the internal control and strategy of an organization. Further in my research I find that cost accountants who are new in this filed should adapt to the six sigma principles since adopting these principles would act as a guide for designing the frame work of internal control and strategies for various segments of the business.
Written by Indraneel Kripabindu Sen Gupta & Hardik Bhatt

Sunday, November 3, 2013

Combination of Six Sigma and Balanced Score Card…value creation.

After 2008 the quality of service and product has taken new shape and formats. Cost management and accosting tools are being used extensively to derive and build growth and value proposition among various business segments. In management theory there are thousands of quality metrics which would provide substantial opportunity to grow the management and business skills. In my previous articles I have been writing a lot and discussing about Balanced Score card but I find that using Six Sigma with the same can create long term sustainable business growth in all terms.   Balanced score card and Six Sigma are few of the deadly combination of management principles which can create a long term business growth which could further enhance the growth prospect of the Industry in the long term. But in my research I find that Six Sigma is one of the key metric which might look into complicated but in real terms it is one of the best management policies to improvise the quality of service and products. Six Sigma helps to control the changes being brought into the systems and also like balance score card it measures the performances  of its new strategies. Markets like India where quality of service and product are   under much questions six sigma helps to bridge the gap and improve the management quality over the time. Businesses use sigma to measure quality because it is a standard that reflects the degree of control over any process to meet the standard of performance established for that process.

Six Sigma follows the steps of DMAIC (Define, Measure, Analyze, Improve, Control) methodology to analyze processes in order to root out sources of unacceptable variation, and develop alternatives to eliminate or reduce errors and variation. Today I will discuss about using the Six Sigma in customer satisfaction process which would develop the business growth.

Customer satisfaction is one of the key aspects of business and application of Six Sigma can be of great improvisation to the system.  Voice of the customer is the key to be heard to bring improvisation within the system, service and product. This is the first steps of defining the problems and at the same time designing steps to measure the problems of customer satisfaction. In the process of defining the customer satisfaction we find the following aspects
1.      Specifications
2.      Expectations
3.      Delighters

Specification about products, expectation from the service and the product and delighters are the ones where customers expect something beyond the common proposition of value being offered. Specification becomes more based on knowledge based and is currently under huge demand since the entire sales process of products and services have been converted into an online platform. Online platforms are extensively getting into brief product specifications and reviews comments so that the consumer can get better understanding of the products. Delighter segments is also being equally given focus where recently in this Diwali all the online shopping portals gave extensive discounts on its products which leads to providing something beyond the peer competitors. Well competitors can easily copy the delighter segment but the specification and expectation are key behind improving the customer satisfaction levels. Proper analysis of the three above principles would help an organization to design its products and service s accordingly.

Developing effective website and online sales portal is an easy step if Six Sigma principles are applied in the initial stage. This results into less errors and more perfection in delivery of value and services to the end user/consumers. Developing six sigma into the process leads to an system where various segmentation of clients can be made. We must remember that not all customers create equal value. In order to discover growth opportunities, gain a competitive advantage, and build loyalty into the business strategy, it is helpful to segment customers. Now if we don’t apply Six Sigma then we would never be able to derive customer segmentation properly in the initial phase of the business.

Six Sigma helps to define and measure the value of service to be offered. Proper analysis is being carried out to develop the perfect combination of strategies to develop the value proposition for the consumer. According to the general theory it is being found that the greatest value might come from a small portion of the customer base. Part of the challenge is to understand how these customers define and prioritize the various needs and expectations they have of the products and services provided by the process. Hence listening to the minds of the consumer should be priority for value creation and product designing. In between if balanced score card is being used with Six Sigma then just imagine the long term value and growth a company can achieve from its business model.

 The Value-Added concept can also be applied to internal business operations. Just getting adapted to the 4 pillars of balanced score card can be of great value creator in the long term followed with every step of Six Sigma being applied the quality enhancement is created to a new heights. In my research I have developing extensive combination of cost management principles and strategies using the various tools to develop a sustainable and competitive business and industry in the long term. One of the biggest resembling points of balanced score card and Six Sigma is that they both define the matter and develop strategies to measure. But Six sigma further helps to control the changes being adopted into the systems and follow the same. 
Written By Indraneel Kripabindu sen Gupta & Hardik Bhatt


Business process has now turned to be complex followed with everyday changing dynamics of the same. Many organizations still follow the traditional Strategy formulation process where the senior team management takes the decisions based on available facts, formulates the strategy passes  the same to the lower level management to execute followed with an monitoring system. This process of management policy frame work is traditional in terms of today’s changing market dynamics and complicated business process. It is a single-loop feedback process in which the objective has already been determined and will not change.

The drawback of this type of system is that if there are certain changes in the market dynamics the same feedback is never forwarded to the senior management team who have created strategy. Hence the senior management gets delayed feedback of the real changes in the market. Senior managers need feedback about more complicated strategies and more turbulent competitive environments. The planned strategy, though initiated with the best of intentions and with the best available information, may no longer be appropriate or valid for contemporary conditions. This is the key place where every organization fails to grow consistently over the time. Organizations itself create a dead lock system   which slows the growth of the organizations. Peer competition remains the key focus for growth but the loophole of feedback system gives immense momentum to the competitor to grow their business. This entire feed back process is a part of the learning growth phase of the Balanced score card.

In my research I find the SME segments utilizes the efficient system of feedback process of learning curve aspect of Balance score card. They are more open to receive the customer satisfaction feedback and design their products accordingly and their process too. This is one of the prime reasons that SME tends to grow their business more strategically. They implement the Balanced Score card pillars initially at the time of development of their business process. In my research I find that large organization needs to develop and follow these tree steps which have been provided by Robert Kaplan in his Balanced score card strategy implementation process which as follows:

1.       A shared strategic framework that communicates the strategy and allows each participant to see how his or her activities contribute to achievement of the overall strategy;
2.       A feedback process that collects performance data about the strategy and allows the hypotheses about interrelationships among strategic objectives and initiatives to be tested; and
3.       A team problem-solving process that analyzes and learns from the performance data and then adapts the strategy to emerging conditions and issues.
 Apart from efficient feedback system I find that where the business process is complexes the following test can be applied like
1.       Correlation
2.       InifiQtive Review
3.       Anecdotal Reporting
4.       Management Garning/Scenario Analysis
5.       Correlation Analysis
7.       Cross- Functional Teams
Adopting the Balanced score card steps helps to develop  common channel for sharing of information which leads to development of strategy based on facts gathered from various segments of an organization. It helps to link individual efforts and accomplishments to business unit objectives which further leads to a consistent growth of an organization. For example if an organization requires extensive knowledge up gradation for selling various products then only making decision about the training would not solve the issue. How long is the delay between quality improvements and increases in customer retention?  This is being derived from proper feedback system.

 Well the above strategies might fall short of the management capabilities but they are more helpful in getting and developing proper management decision making. The main aim of Balanced score card is to get the same into an integral part of the organization business process and align it to respective business goals. A formal, periodic strategic review meeting plays a critical role in the executive team strategic-learning process. Unfortunately, most management meetings focus on operational, not strategic issues. The prime reason of today’s business failure is that strategy is less discussed and more focus gets into short term achievement of business objectives. In my research I have found many times and I have shared many times that short term objective achievement leads to a long term crash of the business vision and its mission. Proper implication of Balance score card could help an organization to grow and achieve the short term mistakes which could affect the long term objectives of an organizations.
Written by Indraneel Kripabindu Sen Gupta & Hardik Bhatt.


Understanding consumer behavior is the key aspect while designing the product packaging stage of any product.The reason behind writing this article is that in my research i have found that consumer behavior is changing in this festive seasons that we need to develop the strategies for designs the products and other aspects related to that aligning with the changes.Well by consumer behavior we mean the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Now in the recent research it is being found that there are various stages under which consumer behavior pattern is being mapped like wise:1)Utility based product and consumer behavior 2) Value based expressive consumer behavior,3)Ego defensive based consumer behavior and last 4)Knowledge based consumer behavior. In my research I have found that the consumer market is taking radical changes and with the explosion of online business the market is set to take a huge change and jump in the coming years.

Under utility based consumer behavior its is being found that products are categorized based upon the utility speed of the product. The best example can be given is the quality of medicine which gives quick relief to an client who is suffering with cough and cold. The medicine which provides quick solution to ordinary problems of life are the best category of products which helps to earn maximum revenue for the company. Products under this category are quick brand builders of an organisation.

Under the value based product categorization the buyer is more concerned over the depth of the value he will derive from an product. This is one of the most competitive area of product designing where one has to deliver maximum value to an product compared with its peers. In my research I find that value based buyers are also a cream segment of the consumer market who are also the leader for other consumer too. Other consumers just love to follow the value based consumers across the market. Product designing faces one of the strongest challenge while deigning and developing markets for these value based consumers.

Ego based consumers are the most easiest one since their value is based on the price levels of the products. To them the price of expensive goods brings value and derives egoistic based product value. Advertisements capitalizes on this segment and en cashes the value of the consumer through high price tag levels. They differentiated by expressing that high prices products are only for the premium class of the society and less for the common class. This is an integral part of rich class society and hence product designing becomes more easier and price designing becomes the critical part. Well in a market like India I have witnessed that products having high prices gets value of ego based clients and are automatically categorizes as rich products. One of the best example can be apple based computers and gadgets which is only being consumed by certain cash rich based consumer.

Knowledge based consumer behavior is the segment where consumers buying decision are based on extensive research at their own end. One of the key example of this market segment is the online sales where it is being found that consumers are having extensive knowledge about various offerings and better pricing available on online sales portals.  These consumers prefer extensive research based information on products and this segment of the market is growing constantly with an rapid space. Online sales market is suing extensive knowledge based sales process where buyers prefers to read the review and gather information about the products  prior to purchase.

 Hence its is well clear that gone are days when products used to be designed and developed for an one segment of the market. The current market is divided into various segments hence the challenges of product designing is extensive and competitive. 
Written By Indraneel Kripabindu Sen Gupta & Hardik Bhatt

Saturday, November 2, 2013


Chartered Accountants are again back on the stage of making stupendous growth in cooked financial papers. Auditing standards have been shattered and it is quite clear that its high time that the Indian government should provide Cost Accountants an equally opportunity like the Chartered Accountants in financial accounting.  This time the ICAI President Mr. President Subodh Agrawal is involved into the matter. I find its an high time to provide Cost Accountants an equal right of Financial Audit since if the president of an Institute is involved then what we can expect from the other members of ICAI. We have given the protection of the Indian economy in the hands of thieves who are prudent enough in financial manipulations.

Doesn’t it seems that too much stress and dependence have been given over the years from Global Trust Bank to Satyam and Now Gujarat Nre Coke industries matter. ICAI talk a lot about its auditing standards and its auditing practices but this time they have proved repeatedly that they are king of cooking financial numbers and depriving the value of the investors and share holders of this country. They are busy is filling up the pockets by making false balance sheet and doing wrong practices in auditing. In the recent case which has come it is quite surprising to find that how a Chartered Accountant firm who has given a clean chit to the financial papers of Gujarat NRE Coke, a company listed both on BSE and NS. The company is telling shareholders that in its consolidated financial statements, 91% of its assets and 64% of its revenues (which are in Australian subsidiaries) are unaudited. Well the entire audit was guided by ICAI President Mr. President Subodh Agrawal who is the chairman of the audit committee of Gujarat NRE Coke.

The Indian auditor of the consolidated financial statements (a Kolkata-based firm) mentions it as "Other Matter" in the audit report and says he has relied on "Management approved financial statements" as far as Australian subsidiaries’ accounts are concerned. The auditor of the Australian subsidiaries (Grant Thornton in Australia) says they cannot express an opinion on the financial statements since they have doubts on the company's ‘Going Concern’ assumption, valuation of impairment and assets, deferred tax assets, recoverability of trade receivable and completeness of contingent liabilities.

Few of the matters which have been found very much surprising is about the dates of the auditing report on which the Indian chartered Accountant firms as affirmed the financial statements to be correct. The Indian auditor’s report is dated 30 May 2013 while the Australian auditor’s opinion (or refusing to issue one) is dated 15 August 2013. Did the audit committee/company disclose the Australian auditor's opinion to the Indian auditor. Moreover even after the Australian auditor Grant Thornton in Australia) says they cannot express an opinion on the financial statements the Indian Auditor did not withdrew his earlier clean chit report affirmed to the company  despite of the Australian Auditor report.  Moreover according to the statements of the Indian Auditor the audit was carried according to the guidelines of the  ICAI President Mr President Subodh Agrawal .

But being a president he did not take any steps to review the audit reports for the company. Questions which comes in mind is that why did they not inform shareholders of such a critical development? Does the ICAI President have any moral right to continue in office and preside over the fate of other members’ disciplinary cases. Now what we can expect from ICAI members if the President itself is involved in such practices. ICAI gives presentation about ethics and business practices and professional practices but itself they are doing all wrong practices. How can an president ignore the report of an Australian Auditing firms appointed by the same company and despite of its reports of significant threat doubts ICAI President ignores the report and gives clean chit is matter of high concern

 This is what the note of the Indian auditor says: (Page 51 of annual report) ( )
Written By Indraneel Kripabindu Sen Gupta.

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