The Pygmalion effect was taught to us in management of organizations in the last term. The term is derived from the name of a sculptor in Greek mythology who carves a statue of a woman and falls in love with the statue, his love is so strong that he starts praying to the gods who bring the statue to life.
In psychology it is also called as “teacher –expectancy effect” wherein if a teacher believes that a particular student will do better than others or is more gifted than others then they unconsciously perform actions that will lead to the aforesaid students actually performing better than others and it becomes a self fulfilling prophecy.
Can the same be done in other places? Can you for example make your employees work better by erroneously assuming that they are more gifted than they actually are? Can you make a crooked politician work better by assuming that he in fact is a great person?
In management you probably can ( at least the article said so) I am not so sure about the politicians it seems to me that nothing can make them work except their own self interest , or am I too cynical?
Tuesday, October 23, 2007
Thursday, September 13, 2007
Good guys sleaze ball’s and jerks- The lemon theory.
In August 1970 George Akerlof published an article titled: The market for “Lemons” Quality Uncertainty and the Market Mechanism. This work was to fetch him the Nobel prize in economics in 2001. I came across this theory and the term “Lemon’s”- a slang used in the U S to refer to second hand cars of poor quality, in the first term in economics and came across it again in the last term in corporate finance.
Asymmetry of information about a particular product between the seller and the buyer formed the basis of the lemon theory.
In essence the theory states that sellers of bad quality goods have the incentive to sell off their goods to buyers at good quality goods prices. But since there is an asymmetry of information i.e. the buyer does not know whether the product being offered is good or a “lemon” he will assume that the product being offered is a “lemon” and will offer a lemony price which would drive the good out of the market. In fact this will proceed to such an extent that eventually there would be no market left at all.
This is a theory of economics but in the original paper George A. Akerlof gives an example of the employment of minorities which makes me believe that this principle applies to real life situations as well, an example of this is our political system. As more and more corrupt and criminal people join politics the honest people start leaving politics and governance and turn to the private sector which is theoretically a market with symmetrical information. In his paper Akerlof stated that things such as branding would increase the credibility of the seller’s and would tackle the asymmetry of information. A similar situation is seen in politics of our country as well where we see people banking on the Gandhi name again and again as it tells them that this product is not likely to be a lemon.
I routinely see examples of this theory in everyday life, just look around, see in your groups, a stupid moron who speaks a lot in the class or at work will make the smart ones around him go quiet and soon you will see a horde of morons grabbing the light as the smart ones take to the shadows to avoid being compared to these fellows.
A very good example of this was given by our corporate finance professor in class, he used the terminologies of good guys , sleaze balls and jerks. According to him all these three types of men are likely to woo a maiden. The average guy (according to the prof.) is a jerk. As there is asymmetry of information the girl is not aware who is a good guy and who is a sleaze ball. As a result she treats all of them as jerks, which drives the good guys away, now as the quality of the men falls the average falls lesser than the jerks and the girl also starts treating all at that level, which drives away the jerks as well leaving only the sleaze balls, no wonder really good looking women end up getting married to funny looking guys ;) .
Asymmetry of information about a particular product between the seller and the buyer formed the basis of the lemon theory.
In essence the theory states that sellers of bad quality goods have the incentive to sell off their goods to buyers at good quality goods prices. But since there is an asymmetry of information i.e. the buyer does not know whether the product being offered is good or a “lemon” he will assume that the product being offered is a “lemon” and will offer a lemony price which would drive the good out of the market. In fact this will proceed to such an extent that eventually there would be no market left at all.
This is a theory of economics but in the original paper George A. Akerlof gives an example of the employment of minorities which makes me believe that this principle applies to real life situations as well, an example of this is our political system. As more and more corrupt and criminal people join politics the honest people start leaving politics and governance and turn to the private sector which is theoretically a market with symmetrical information. In his paper Akerlof stated that things such as branding would increase the credibility of the seller’s and would tackle the asymmetry of information. A similar situation is seen in politics of our country as well where we see people banking on the Gandhi name again and again as it tells them that this product is not likely to be a lemon.
I routinely see examples of this theory in everyday life, just look around, see in your groups, a stupid moron who speaks a lot in the class or at work will make the smart ones around him go quiet and soon you will see a horde of morons grabbing the light as the smart ones take to the shadows to avoid being compared to these fellows.
A very good example of this was given by our corporate finance professor in class, he used the terminologies of good guys , sleaze balls and jerks. According to him all these three types of men are likely to woo a maiden. The average guy (according to the prof.) is a jerk. As there is asymmetry of information the girl is not aware who is a good guy and who is a sleaze ball. As a result she treats all of them as jerks, which drives the good guys away, now as the quality of the men falls the average falls lesser than the jerks and the girl also starts treating all at that level, which drives away the jerks as well leaving only the sleaze balls, no wonder really good looking women end up getting married to funny looking guys ;) .
Sunday, August 12, 2007
Just In Time
Yesterday my term two midterm got over at 1200 hrs.and since
then I have been stuck in assignments . It seems my whole life
has become an assignment to be submitted in a wooden box at
a specific time ( usually 4 AM ). Most of our assignments are due
at 8 AM and most of the box is empty by 4 but full by 8 .We seem
to have learned the much vaunted art of " just in time delivery "
from Toyota already,at least as far as assignment submissions are
concerned.
I have just read an article which states that in the coming years
and even currently it is the central banks of China and India
which are responsible for determining the global monetory
conditions .It states "The days when central-bank watchers could
just focus on the Fed and perhaps the ECB in order to assess
“global” monetary conditions are over. They no longer control
the amount of money sloshing around the world and, as financial
markets become ever more linked, analysts will need to pay more
attention to central banks in the emerging world". A very
interesting article, which makes a lot more sense now , even
after a miserable showing in the global eco. exam , but as they
say in Hyderabad " I am here for the knowledge and not the
grades , only ".
then I have been stuck in assignments . It seems my whole life
has become an assignment to be submitted in a wooden box at
a specific time ( usually 4 AM ). Most of our assignments are due
at 8 AM and most of the box is empty by 4 but full by 8 .We seem
to have learned the much vaunted art of " just in time delivery "
from Toyota already,at least as far as assignment submissions are
concerned.
I have just read an article which states that in the coming years
and even currently it is the central banks of China and India
which are responsible for determining the global monetory
conditions .It states "The days when central-bank watchers could
just focus on the Fed and perhaps the ECB in order to assess
“global” monetary conditions are over. They no longer control
the amount of money sloshing around the world and, as financial
markets become ever more linked, analysts will need to pay more
attention to central banks in the emerging world". A very
interesting article, which makes a lot more sense now , even
after a miserable showing in the global eco. exam , but as they
say in Hyderabad " I am here for the knowledge and not the
grades , only ".
Monday, August 6, 2007
Net Present Value.
There is a very interesting concept in finance called NPV. It is the value today of an asset tomorrow , i.e. the current value of 200 000 Rs in 2015 for example. Apparently you can know beforehand what the present value of a future cash flow is. This set me thinking ( and I think really fast with a big dose of Bacardi inside me) can this concept be extended to real life as well ?.
I mean can I put a current value to future pleasure’s or sorrows?
Can I put a value to a future relationship? Or does a past relationship really fulfill the promise of its NPV then?
For example there were a few times in my past life when I thought that this is finally it, this is the women that I am going to settle down with. But it only happened when I finally met Jasmine . The NPV of those relationships at that time looked pretty promising but nothing came of them, so it cannot be extended to life, can it?
Guess not , a lot of friendships which I never thought would end have withered away over the years making me a little bit pessimistic ( I like to call it realistic ) towards life in general and friendships in particular. As it is said “good things don’t last” .This is particularly true of relationships, good relationships seldom last long. So enjoy the sunshine while it lasts , make merry , drink Bacardi , smoke a cigarette , curse the professor for giving you an assignment but enjoy every moment of it ‘cos guess what, the NPV of life in the future is nothing.
I mean can I put a current value to future pleasure’s or sorrows?
Can I put a value to a future relationship? Or does a past relationship really fulfill the promise of its NPV then?
For example there were a few times in my past life when I thought that this is finally it, this is the women that I am going to settle down with. But it only happened when I finally met Jasmine . The NPV of those relationships at that time looked pretty promising but nothing came of them, so it cannot be extended to life, can it?
Guess not , a lot of friendships which I never thought would end have withered away over the years making me a little bit pessimistic ( I like to call it realistic ) towards life in general and friendships in particular. As it is said “good things don’t last” .This is particularly true of relationships, good relationships seldom last long. So enjoy the sunshine while it lasts , make merry , drink Bacardi , smoke a cigarette , curse the professor for giving you an assignment but enjoy every moment of it ‘cos guess what, the NPV of life in the future is nothing.
Wednesday, July 25, 2007
A day in my life at ISB
00.00hrs. Here comes a new day while I am still trying to grab the concepts taught the week before, it comes the way it has always come from day one of the course ,like a stealthy burglar just sneaking past you when you are trying to make some sense of the past one, gotta keep glued to the chair and make a linear program that makes sense to me, at least.
02.00hrs.Still can’t make head or tails of the linear program, better catch some sleep have to attend class tomorrow.
07:30hrs.triiiiiiiiiiiiiing….. get up sleepy head 45 min. to class, shave , eat, have a bath (not necessarily in that order) .
08:16hrs.phew! made it ( with a paper glass of coffee in one hand and mouth full of sandwich), the prof is here and will throw some gyaan on a case about contact lenses for chicken, I must admit I learned about prescribing contact lenses for humans in ophthalmology but not about contact lenses for chicken (for those who are interested they are not really contact lenses in the traditional sense i.e. they do not correct the chicken’s vision ).The whole class is full of people like me ie with coffee cups and red eyes (half also have a day or two of beard’s the other half is naturally gifted).So the chicken case starts and there are dissenting voices everywhere nobody agrees with anybody else, but by the time it is over everybody has been able to work it out ,Amazing.
10:20 hrs. The chicken case is over ,time for a cup of coffee and then rush for DMOP
10:45 hrs. The prof. is in (he was actually in 5 min. before ,these are the only guys I have never seen getting late), now we start with Decision Making And Optimization ( DMOP for short, sometimes I think it should be called D MAUT = The Death), we had a joke in the medical college that went “respiratory system is the graveyard of medical students” as maximum guys used to fail in respi cases, I just hope this is not the graveyard of management students.
10:50hrs. I am lost, it is all over, five minutes into the lecture I am regretting leaving medicine and coming here , when will I be able to make sense of this ?. I hope it is in this lifetime.
12:56 hrs. It is finally over , gotta give credit to the guy he is one of the best, tries to explain the silliest of queries with the most amount of patience I have seen so far. Let me go and grab some lunch.
13:30hrs.The guys at Goyal dining hall are sadists , they enjoy cooking seven course meals when they know that nobody will be able to do justice to it , will even the scores in the term break. Now let me sit down and work on excel ,I am the only bloke in the whole batch who has never seen it before. Sudhanshu is working on DMOP , Kiran is reading Global Economics.
15:30hrs. Time for a tea break , we fight for five minutes on whose turn it is to make tea and who will wash the dishes , true democracy at work ,finally a compromise is reached I will make the tea, in the same period Sudhanshu will smoke a cigarette (outside the room) and Kiran will update his blog, after that Sudhanshu will do the dishes and I will try and update my blog while Kiran will tell us what he read in GLEC.
15:40hrs.Everything over ( had tea, smoke, Kiran updated his blog, I could not ) back to the chairs, let me start with corporate strategy have to read a case about DELL , how just in time inventory helped them, wonder if this can be applied in a hospital ?
18:30 hrs. Time to break from studies, will go and play something (tennis , badminton , squash ) depending on which court is empty and which racket can I borrow.
19:30hrs.No luck today all courts were full , had to do a bit of running and tried to learn how to put the basketball in the hoop, let us have some dinner and go back.
20:30hrs.Finished dinner had a walk, suddenly remembered that a DMOP assignment is due tomorrow and a party at the recreation centre is due tonight, man!, why do assignments and party’s clash, call up the study group to find they are already working on the Assignment, rush to meet them and try to understand how to optimize a pirates haul (a problem we were given).
23:00hrs.Still trying to work out how much of what loot (gold coins, jewels, ivory, silver) should the pirate take, man there are four more q’s and it has to be submitted by 7:00am, also have a party to attend.
23:05hrs.Wife calls up and I suddenly remember that it was my son’s first day at school today, ask her how it went, it seems he was crying and she is getting all worked up. I try to pacify her and tell her that it will all work out, she is finally okay and I tell her that I have to go back to the assignment (but I forget to mention the party , now I wonder why ? must be getting forgetful.)
23:45hrs.I get back to the team, they seem to have miraculously solved three questions in my absence,no wonder they don’t mind my absences. The chances of completing the Assignment , Attending the party and Sleeping, all in the same night, suddenly seem much brighter , but wait , the pre reads for tomorrow’s lectures, oh man ! I forgot those, here goes the sleep.
00:00hrs. Here we go again,one more day has slipped stealthily by…….
Monday, July 23, 2007
Leisure time and goofing off.
One more term has gone by and I am more lost than ever.
Have no more idea about the subjects that I was studying
in term 2 now ,than I had at the begining.The only subject
which I thought I knew was global economics but now after
appearing in the exam of global economics I wonder if I ever
knew anything about it.The only thing which I really think
I learnfed in glec(as it was called in isb)was the concept of
"Leisure Time".According to economists anytime that you
are not working is known as Leisure time.So you might be
waiting in line somewhere or washing the clothes or worst
but all that is leisure time, I really liked this concept.
It makes life pretty simple,either you earn money or you are
enjoying Leisure.
Another word that I had learned in term 1 was Goof Off.
Apparently to goof off means to evade work or responsibility,
according to me this is what should be called leisure time.
I think there is seldom a Leisure greater than knowing that
you are goofing off and will still get paid for it and it feels bad
to realise that such pleasurable movements are going to be
few and far in between .Term three is supposed to be a real
Killer which makes me think how to classify term two ?
A rapist perhaps? Ciao for now more later.
Have no more idea about the subjects that I was studying
in term 2 now ,than I had at the begining.The only subject
which I thought I knew was global economics but now after
appearing in the exam of global economics I wonder if I ever
knew anything about it.The only thing which I really think
I learnfed in glec(as it was called in isb)was the concept of
"Leisure Time".According to economists anytime that you
are not working is known as Leisure time.So you might be
waiting in line somewhere or washing the clothes or worst
but all that is leisure time, I really liked this concept.
It makes life pretty simple,either you earn money or you are
enjoying Leisure.
Another word that I had learned in term 1 was Goof Off.
Apparently to goof off means to evade work or responsibility,
according to me this is what should be called leisure time.
I think there is seldom a Leisure greater than knowing that
you are goofing off and will still get paid for it and it feels bad
to realise that such pleasurable movements are going to be
few and far in between .Term three is supposed to be a real
Killer which makes me think how to classify term two ?
A rapist perhaps? Ciao for now more later.
Wednesday, June 20, 2007
Life and first movers advantage.
Last term in economics I was taught a concept called first movers
advantage which explained how an industry which moves first
into a new market would be at an advantage in Comparison to
others by the mere fact of being the first mover.At that time I
thought that it was quite true in real life as well.Just how true
it is, was brought home by the recent election Results.
We have just had elections for professional clubs which Were
contested very keenly by everybody including some of my close
friends. In general people who had made up their minds earlier
and were deeply committed to it got selected and People who
made up their mind late suffered.
Losing leaves a very bitter taste in the mouth but is also strangely
cathartic, especially when you embark upon an Endeavour in which
the chances of a loss are much higher than Those of a win. There
are two ways to approach a target which appears unassailable:
1. Give up and don’t do anything.
2. Get up and give it your best shot.
Personally I believe that the second is the best option . I have
always thought so theoretically but in practice have chosen the
first option most of the times. This time I chose the second
option and even though it did not work out it feels much better
to have done it .
Winning would of course be the best but having a good fight is in
it selves a great amount of fun. From this I have derived a rule of life :
“ sometimes winning is the best thing sometimes it is losing but
at all times fighting for something you believe in is better”.
This sort of rhymes with my favorite song “The bug” by Dire Straits :
“sometimes you're the windshield
sometimes you're the bug
sometimes it all comes together baby
sometimes you're a fool in love
sometimes you're the louisville slugger
sometimes you're the ball
sometimes it all comes together baby
sometimes you're going to lose it all".
Makes sense doesn’t it : )
advantage which explained how an industry which moves first
into a new market would be at an advantage in Comparison to
others by the mere fact of being the first mover.At that time I
thought that it was quite true in real life as well.Just how true
it is, was brought home by the recent election Results.
We have just had elections for professional clubs which Were
contested very keenly by everybody including some of my close
friends. In general people who had made up their minds earlier
and were deeply committed to it got selected and People who
made up their mind late suffered.
Losing leaves a very bitter taste in the mouth but is also strangely
cathartic, especially when you embark upon an Endeavour in which
the chances of a loss are much higher than Those of a win. There
are two ways to approach a target which appears unassailable:
1. Give up and don’t do anything.
2. Get up and give it your best shot.
Personally I believe that the second is the best option . I have
always thought so theoretically but in practice have chosen the
first option most of the times. This time I chose the second
option and even though it did not work out it feels much better
to have done it .
Winning would of course be the best but having a good fight is in
it selves a great amount of fun. From this I have derived a rule of life :
“ sometimes winning is the best thing sometimes it is losing but
at all times fighting for something you believe in is better”.
This sort of rhymes with my favorite song “The bug” by Dire Straits :
“sometimes you're the windshield
sometimes you're the bug
sometimes it all comes together baby
sometimes you're a fool in love
sometimes you're the louisville slugger
sometimes you're the ball
sometimes it all comes together baby
sometimes you're going to lose it all".
Makes sense doesn’t it : )
Of weathermen and global economics.
The weather has improved in Hyderabad and has become
quite cool. My Hyderabadi friends tell me that this is the
way it is going to be now. We are well and truly into the
second term and are playing a Marketing game called markstat.
In this all study groups are managing An electronics company
each and are competing in a virtual market.
The first round has just got over and everyone is threatening
to destroy The competition by slashing prices in the next round.
Quite fun but very time consuming. So much so that you long for
the week days to go back to the class and get some rest there.
One of the subjects that we are reading this term is global
economics. The subject is made extremely interesting by a
movie called “ commanding Heights “ which is screened in
class. It deals with the changing world Order in economic
terms ,and is very interesting and instructive . The Prof.
who is taking this course is one of the best I have met and
is equally Remarkable .He makes a really boring subject
very interesting and gives A lot of funny one liners.
I will try and keep a track of them here, today’s Best was :
“If the weathermen predict the economy and the economists
Predict the weather everybody will be better off “.
This is currently my favorite subject as it officially expects
me to read all the current affair magazines that I can and
I can always honestly tell my study group that I am studying.
quite cool. My Hyderabadi friends tell me that this is the
way it is going to be now. We are well and truly into the
second term and are playing a Marketing game called markstat.
In this all study groups are managing An electronics company
each and are competing in a virtual market.
The first round has just got over and everyone is threatening
to destroy The competition by slashing prices in the next round.
Quite fun but very time consuming. So much so that you long for
the week days to go back to the class and get some rest there.
One of the subjects that we are reading this term is global
economics. The subject is made extremely interesting by a
movie called “ commanding Heights “ which is screened in
class. It deals with the changing world Order in economic
terms ,and is very interesting and instructive . The Prof.
who is taking this course is one of the best I have met and
is equally Remarkable .He makes a really boring subject
very interesting and gives A lot of funny one liners.
I will try and keep a track of them here, today’s Best was :
“If the weathermen predict the economy and the economists
Predict the weather everybody will be better off “.
This is currently my favorite subject as it officially expects
me to read all the current affair magazines that I can and
I can always honestly tell my study group that I am studying.
Monday, June 11, 2007
First Impressions
It has been more than fifty days that I joined ISB , when I look back at the first term I do not understand where the time has gone . It has to be the fastest fifty days of my life . It feels like F1 racing , highly charged superfast paced.
The first two weeks were fun and not representative of what was in store, the next two were full of very strange subjects ( for me ) like managerial economics , and statistics . The first one I could understand a little bit , the second went right over my head, way way over.
Before I could grapple with the subjects it was mid-term time and I was transformed to my first professional exam days of M.B.B.S when I was struggling with human anatomy ,and remembered the promises I had made to my selves of never getting into anything of that sort again ,instead here I was twelve years later again dreading another exam.
However the things did not end there the whole period from the mid terms to the end term exams passed in a blur , it just seemed that I had become an extension of my chair and that the world around me was moving .Professors came from abroad taught in the class and there I was sitting in my chair trying to get a grip on things.
Before I knew the final exams were there and I was out of term one and into term two.
The first two weeks were fun and not representative of what was in store, the next two were full of very strange subjects ( for me ) like managerial economics , and statistics . The first one I could understand a little bit , the second went right over my head, way way over.
Before I could grapple with the subjects it was mid-term time and I was transformed to my first professional exam days of M.B.B.S when I was struggling with human anatomy ,and remembered the promises I had made to my selves of never getting into anything of that sort again ,instead here I was twelve years later again dreading another exam.
However the things did not end there the whole period from the mid terms to the end term exams passed in a blur , it just seemed that I had become an extension of my chair and that the world around me was moving .Professors came from abroad taught in the class and there I was sitting in my chair trying to get a grip on things.
Before I knew the final exams were there and I was out of term one and into term two.
Saturday, June 9, 2007
orthopaedic surgery and MBA ?
People are always asking me, An orthopedic surgeon doing an MBA? Why?
Sometimes I am at a loss to explain this decision even to my own self, especially when I come out of the exam room, totally ba ffled as to what the hell was I answering for the last two hours ,like it happened in the statistics paper this Tuesday.
Why?
I mean I was happily settled with a promising career and a happy family life, why the hell did I get back to this grind of reading again ?
The truth is that I wanted to change over or in the words of an old friend of mine. "I want to do everything in this one life ". So here I am now at ISB Hyderabad, trying to make head or tails of Multiple regression, Interactions and leverage plots and thinking how easy orthopaedics was.
Was it a wise decision? Would I recommend it to another person? The truth is I do not know, it is too early to tell .The one thing that I can tell for sure is that the choice of the Institute was the right one. Whether I get a good job at the end of this one year at ISB or not this one year would be sufficient to change my life for the good forever.
Would I recommend it to someone else?
Answer is it depends , if some level headed guy asks me I would say yes unhesitatingly , but if a guy who was not sure of what he wanted were to ask me I would say no ,again unhesitatingly.
The truth of the matter is that these kinds of decisions are always big gambles, you never know whether they will leave you rich or a pauper. I will only be able to say sometime later in my life whether it worked out or not, till then it is just a shot in the dark.
Sometimes I am at a loss to explain this decision even to my own self, especially when I come out of the exam room, totally ba ffled as to what the hell was I answering for the last two hours ,like it happened in the statistics paper this Tuesday.
Why?
I mean I was happily settled with a promising career and a happy family life, why the hell did I get back to this grind of reading again ?
The truth is that I wanted to change over or in the words of an old friend of mine. "I want to do everything in this one life ". So here I am now at ISB Hyderabad, trying to make head or tails of Multiple regression, Interactions and leverage plots and thinking how easy orthopaedics was.
Was it a wise decision? Would I recommend it to another person? The truth is I do not know, it is too early to tell .The one thing that I can tell for sure is that the choice of the Institute was the right one. Whether I get a good job at the end of this one year at ISB or not this one year would be sufficient to change my life for the good forever.
Would I recommend it to someone else?
Answer is it depends , if some level headed guy asks me I would say yes unhesitatingly , but if a guy who was not sure of what he wanted were to ask me I would say no ,again unhesitatingly.
The truth of the matter is that these kinds of decisions are always big gambles, you never know whether they will leave you rich or a pauper. I will only be able to say sometime later in my life whether it worked out or not, till then it is just a shot in the dark.
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