6 AM Pacific

The Future of Business English

If you are in India you probably hear the phrase ‘Tell me’ many times a week from someone who just answered your call. The phone conversation goes something like this. ‘Hi, this is Basab.’ The other guy says ‘Oh hi Basab. Tell me.’

‘Tell me’ is a literal translation of ‘Bolo’ in Hindi or something equivalent in other Indian languages. This is a uniquely Indian phrase. Good English would require ‘Tell me’ to have an object at the end of it. Like ‘Tell me why’ or ‘Tell me something’. More »

Namaste America

Last week Al Gore was a guest on Jon Stewart’s Daily Show. He was there of course to talk about the Climate Crisis and his new movie the Inconvenient Truth. Since the audience at the Daily Show is fairly liberal, Gore got a very warm welcome from them. But what was strange was that Gore greeted them with folded hands. Damned if it didn’t look exactly like a Namaste. It was very casually done, no theatrics around it. I suspect he had done the very same thing many times before.

I was of course very tickled about it. I have long held the view that Namaste is a superior greeting to the handshake in the age of the Avian Influenza. Handshakes transfer germs and are a surefire way of spreading the virus when there is an outbreak. The WHO realizes this and has come up with the ‘elbow bump‘ which is just too hokey to work. Asian greetings like Namaste and the Japanese bow are, in this respect, superior. Although in Japan the formal greeting in business is still a bow, while Indian business (though not politicians) has completely adopted the handshake. Pity.

The other thing going for Namaste in the US is that it is closely associated with India and India is hot right now. India is of course in the news because of the nuclear deal still winding its way through Congress. As an investment destination for business it has to be number one or pretty close. Bollywood dancing is all the rage. You can find Kurti inspired women’s fashions all over the place. And Indian food in the grocery stores.

The big news is that from next summer, Indian mangos will be available in the US. Being that they are much superior to the Mexican variety I think that will win us a few more fans state side. Some say that the mangos are a fair trade for nuclear technology. Some say that we’re giving away the mangos too cheap! The mango deal was done during President Bush’s visit to India along with the nuclear technology deal.

The affinity between the two countries is good for both countries and for democracy everywhere.

Paperbacks in India

Every trip to India, I bring back half a suitcase full of books. My wife is a voracious reader of fiction and she reads a lot of Indian fiction too. Also, we want our children to read Indian mythology and other Indian stories and it’s impossible to get Indian childrens’ books in the US (there’s eBay retail opportunity for someone out there).

Of all the reasons why I buy books in India, cost is not one of them (unlike for Hindi film music and DVDs where there is a cost arb opportunity). But I think I may have to reconsider. I had just bought The Argumentative Indian’ by Amartya Sen in the US before going to India. It was the hardcover edition and cost about $25. In India the same book was available in paperback for less than half that price.

I know what’s going on of course. A book is an information product (like music, magazines, software and cinema). All of them are digitizable and the medium that carries them is immaterial (more or less) to the enjoyment of the product. All information products have a similar business problem. The marginal cost of producing the next copy is minimal and so variable cost has no bearing on the pricing of the product. For instance, the cost of a blank CD disc is insignificant compared to the price of the CD. So how does one price such a product?

In the case of books, the cost is not insignificant but it is much less than the price of the book (20% of the cost of a hardcover). So how does one price a book? The main technique is what I will loosely call ‘windowing’, though this is a term more widely used in the movie business. Publishers first come out with hardcover editions for (in the US) a $20+ price. With this they cover the well informed, price insensitive crowd. After a year or so comes the paperback with a price of around $10 that caters to the more price sensitive crowd.

However, there is another problem that publishers must deal with. Readers in different countries have vastly different purchasing power. How do they preserve their pricing model in the developed world without losing readers in developing countries like India? In the past they would just delay the launch of the book in India. However, in today’s global village, the media buzz around the launch of a new book creates demand everywhere at the same time. Postponing the book launch in India could mean lost sales.

So the solution is to launch relevant books in India simultaneously (or closely after) with the US market, but go straight to paperback. The different covers in a way justifies the different prices. For me, this is great news. I hate buying hardcovers because I do most of my reading on long flights and that is just extra weight to lug around. But many times, I just can’t wait. Paperbacks in India are like having your cake and eating it too.

Pricing of information products is one of the most fascinating subjects in business. My own company sells an information product. Many an hour has already been spent on how to price it. I’m sure this is not the last time I’ll be talking about this subject on this blog.

The Competitive Indian

Last week I did some travel within India while on my trip here. On the Mumbai to Bangalore trip I saw something really fascinating. The flight was more or less on time. When it landed in Bangalore, the airplane had barely steadied itself after landing (still taxiing) when about a quarter of the passengers on board stood up and started taking their things out of the overhead compartments. The plane was still taxiing when there had formed a line at the door. The stewardesses repeatedly announced that the plane had not reached the gate and that passengers were required to be in their seats, but to no avail. These were people in a hurry.

On the next leg of my journey from Bangalore to Delhi I did not see this rush for the exit. Which is surprising if you know Dilliwallahs. So I wondered a little about it.

Later, I came to this conclusion - the people who formed the line knew that there was an aerobridge at the Bangalore airport. Therefore, if they got off the plane first they would actually get out of the airport first if they didn’t have checked baggage. In Delhi there was a bus to ferry us to the terminal and so there was no advantage in trampling over old women and children to be first off the plane. If my conclusion is correct, we are in for more stampedes as our airports modernize and have more aerobridges. Sobering thought, that.

In a more serious vein, is all this competitiveness good or bad for us as a nation? (Some of you may contest this conclusion that we are ultra competitive simply by pointing to our cricketing performance). I think that on balance it is good for us. While we do have to put up with the occasional dent in our Honda Accords from aggressive SUVs, it still has its advantages. It is Darwinism at its best. The students coming out of colleges today are tough. They know that if they don’t make it in the job market there is no social security safety net to break their fall. They also know that in the growing private sector the only thing that matters is merit. Hard work will pay. And when they do start making the big bucks, the marginal rate of tax is a moderate 30-35%. Compare this with the European social states where you can maintain a pretty good lifestyle on dole but if you make the mistake of working hard for a decent income, the state can take more than half of that away from you in taxes.

So the next time someone cuts into the check-in line at the airport in front of me, I’m going to think calm thoughts. Here’s someone who wants to get ahead in life, I’ll tell myself. May his tribe increase.

Technology and Democracy

In the last two weeks much has been said about the actions of Google, Yahoo, Cisco and Microsoft in China that are apparently aiding the Chinese government in repressing dissent. In the congressional hearing Congressmen, playing to the galleries, subjected representatives from the four companies to some pretty intense questioning. When politicians ask questions in a public hearing that is being televised they are more interested in making political statements and less in the companies’ answers to the questions. Rhetorical questions like ‘how can you sleep at night?’ which was one of the questions, can be translated as ‘Voters in my constituency, I am concerned about freedom of speech around the world, an American value that I know is dear to you.’

The American press, in general, has found the companies to be at fault. This is not surprising given that the media is the biggest commercial beneficiary of free speech. You’d expect them to be less balanced about something that threatens their raison d’être.

So are the four technology companies at fault for aiding the Chinese government curtail freedom of speech? I think this is a complex issue that does not lend itself to a snap judgment. What the four tech giants were doing was obeying the law – the Chinese law. Not complying with China’s law, would have harmed their business interests in China and perhaps the well-being of the company’s senior officials in China. It was lawful and pragmatic. Is that so bad?

It could be. A company’s management often faces choices that may be all legal, but are not all equally ethical. Some of those choices may violate the stated values of the company. In a rapidly evolving industry sometimes the laws have not ‘caught up’ with the state of evolution of the industry. In such cases, very often the industry will come up with self-regulatory mechanisms. For instance, in the early days of the e-commerce boom, customer data privacy was a big issue that was first tackled through self-regulatory mechanisms before laws could be enacted. E-mail spam went through the same cycle. In these cases, ‘good’ business behavior emerged before the governing laws were framed. Similarly, some commentators say that American businesses adopted a self-imposed economic boycott of South Africa in the days of the apartheid. This was well before the US government and the UN mandated a boycott.

China, however, is not South Africa. The stakes are much higher. We are talking about a country that will soon become the second largest economy in the world. I can just picture the management of Google on an investor conference call saying that they had decided to pull out of China because complying with Chinese laws on censorship would put them in conflict with one of Google’s values (‘Don’t be evil’?). It would be ugly. Guaranteed.

Then there’s the question - is what they are doing really ‘evil’? If so, how evil? On a scale of 1 to 10 where would you put Yahoo aiding the Chinese government in identifying Falun Gong web-site owners? On that same scale, where would you put the US government asking Google to hand over usage data related to terrorist like activities (I guess they want to know about anyone searching for ‘build a nuclear bomb in your garage’)? How about if the US government asked Google to hand over search phrases and click-stream data on suspected terrorists? To Google’s credit they have staunchly refused to do this. The matter is now in the courts.

Obeying the laws of a country is has binary states. You either do or you don’t. Being ethically or morally right is not binary. There are vast grey areas. And when the stakes are high like they are in China and you are managing a publicly listed company it is not easy to take the high ground.

What could make it a lot easier is if the US government stepped in and made some rules here. Like the Foreign Corrupt Practices Act, maybe there should be a Foreign Abetting Repression Act which prohibits American companies from collaborating with repressive governments. I see serious implementation problems here, but that’s what Congressmen are good at – legislating on complex matters. Such a law would make it a level playing field, so Yahoo wouldn’t have to worry that if they took the high ground in China, Google would eat their lunch. These four companies are great companies and I’m sure that given the chance they would do the right thing.

After all, the softest pillow is a clear conscience.

Infosys getting the attention of class-action lawyers

In another development it seems like my old employer Infosys,
like TCS, has also caught the attention of the class-action trial lawyers. Some
law firm seems to be soliciting interest on the internet from Infosys employees
who, in the past have worked overtime in California and have not been paid
overtime. Interestingly, if you search for ‘Infosys’ on Google, the top-most
sponsored link is from this web-site. Someone obviously thinks this is worth
the trouble.

Interestingly, IBM has a similar overtime class-action
lawsuit brewing. Many law firms are behind this one, including Lieff Cabraser,
the firm suing TCS. So Infosys is in good company on this one, with IBM.
Unfortunately, that is the only good thing you can say about the situation. A
lawsuit like this, if indeed it materializes, can be expensive, distracting for
management and can damage the company’s reputation.

The claim itself, that the company’s employees were asked to
work overtime without payment, is not going to get more than a shrug, at least
in the Bay Area. Silicon Valley runs on Jolt Cola and other higher forms of
caffeine that allow IT workers to minimize sleep and maximize work. Whether its
IBM, Infosys or the latest start-up, IT workers in general put in more than 8
hours of work a day. Before we start feeling sorry for them, we should remember
that an IT worker is well paid and in-demand. His skills are highly
transferable in a huge global market for IT workers. I don’t believe he needs
the kind of protection a unionized auto worker has (and see what that’s done to
Detroit) - neither in the US, nor in India.

I do hope the Infosys overtime ‘fishing expedition’ fails.
Otherwise, it will be bad news all around – for IT services companies, for
clients and yes, for employees as well.

Class action lawsuit against TCS

Last week was a pretty interesting week for the business of global business
– our focus in this blog. Google, Microsoft, Yahoo and Cisco were raked over
the coals in a congressional hearing for aiding censorship in China. More on
this later. First let’s look at the class action lawsuit against TCS in
California.

An Indian employee of TCS America sued TCS for ‘unjustly
enriching itself by requiring all of its employees in the U.S. who are not U.S.
citizens to endorse and sign over their federal and state tax refund checks to
Tata’. The law firm involved, Lieff Cabraser is a well-known plaintiff’s law
firm that pursues class-action lawsuits and has quite a track record doing it.
It regularly features on the National Law Journal’s ‘Plaintiffs’ Hot List’.

A law firm specializing in class-action lawsuits takes no
upfront fees from its clients (the plaintiffs – in this case the TCS
employees). It works for a cut of the settlement that the plaintiffs get. Since
they are dealing with individuals, they could get as high as 30% of the
settlement. Since this is an all or nothing game, the law firm will be very
careful in picking their lawsuits – the target should have deep pockets and
there should be a reasonably good chance of winning the case. Once they sink
their teeth into something they are very hard to shake loose. All of this is
bad news for TCS.

The news on the lawsuit has few details. It seems like TCS
had contracts with Indian employees working in the US that allowed TCS to take
the tax refunds from the IRS (US tax authorities) back from the employees. To
the American public this will sound totally egregious. So why would TCS do
this?

My guess is that TCS had good intentions. They probably
wanted to guarantee a certain post-tax income to their Indian employees in the
US. The amount of tax one pays in the US can vary widely depending upon not
just your monthly income but also the duration of your stay (if it is less than
a year), which state you are resident in and dozens of other federal and state
tax rules. The employee’s tax can vary widely depending upon which client they
are assigned to and the duration of their engagement. So (TCS perhaps thought)
why not relieve the employee from worrying about all this? Why not guarantee a
post tax income to every employee? To do that TCS would have to be able to take
employee tax refunds back from employees if the refunds pushed the employee’s
income including the refund over the promised post-tax income.

Noble intentions, but they seem to have had unintended
consequences. I hope TCS resolves the matter quickly and satisfactorily. PR is
a major weapon for trial lawyers. If this thing goes all the way, they will
drag the Tata name through the American press. There will be collateral damage
to everyone in the Indian offshore industry. I hope it doesn’t come to that.

Another TTDMSTM

Here’s another one for Things That Don’t Make Sense To Me.

In Indian restaurants, why is the quarter plate kept on the left of the plate? Think about it. We’ve been brought up eating with one hand - the right hand. Assuming the rotis go on the quarter plate shouldn’t they be on the right? Why should the table be set by Western customs?

And while we’re on the subject, should the glass be on the right or the left? My vote is it goes on the left.