Google's personalised search and privacy issues

Every company whether its Google or Microsoft needs people for its growth. The old but ever working concepts of cost differentiation or product differentiation still holds good. Microsoft built up a huge empire because it offered products to people which were not available at that time. The human and computer interaction was eased and that resulted in Microsoft becoming the biggest corporation in its right. Then came Google, the search engine. People can look out for almost anything. The world 'internet' was taken to new horizons.

But during the passage of time, users change, generation come in and go and so do the companies. Microsoft has been punished many times for the so called 'anti-competitive behaviour'. But will Google's new search algorithm and the monoply its trying to clinch be served the same fate. Sorry if I have taken so much time to come to the main point, but I think this was really important to discuss, to bring the two giants on the same platform and then start a debate.

There has been a huge buzz on the internet about Google's personalised results. During the last few days Google has been personalising the search results of anyone who uses its search engine, regardless of whether they’ve opted-in to a previously existing personalisation feature or not. The following article is split in two broad sections. One deals with the privacy issues and the other one with the diversity of search.

Do you like the idea of your web search history been analysed by someone? To personalise results, Google has to record what you’re doing, monitor your search queries and process it to give you the search results. Does it rings privacy alarm bells? A big corporate house and a global company like Google is able to track and save personal browsing behavior, likes and dislikes, political and religious views and much more by analysing the search terms and link clicks of every Google user worldwide. So it is highly likely that Google (seach engine) has a good picture of a google user likings and dislikings. Most internet users have preferred Google Search engine for the fact that it gives you unbiased results without interfering with your personal choice. This brings us to the point of diversity.

Suppose I am researching for some topic and during the first search I visited some sites and have got a fair idea of what they have to offer. In the earlier times, my second time search for the same topic would have given me different results and something new for knowledge. But with the personalised search it is highly likely I will get the same pages I visited earlier.

How dumb it that? Has Google forgotten that there is a bookmark button in most of the browsers? If I find something highly important and want to visit that source later, I will definetely bookmark it.

So why is there any need to save our search history or to build any search pattern?

Now next time you search for anything in Google be aware that your search pattern is being established and your search behaviour is known.

The last relevant point worth considering is the effect this can have on search engines future. In my opinion, Bing can certainly look at this as an opportunity and market its search engine as a more unbiased search engine.

In the end I would like to clarify that I am not against Google or Microsoft. Both the companies have given us (as users),plenty of things which we still use and will continue to use. But does this mean that they can impose their corporate desires on us and evade our privacy? For me this is not called for.

Big companies should never forget, its we people who make the company profitable and grow, not their corporate strategy and vision.

Risk Managers: Have you considered these questions? (Part- 1)

This discussion will be split into 3 articles, and will focus on questions which the Risk Managers should consider to check the effectiveness of their Risk Management Plan and to make any amendments if desired. (1)

Before moving onto the questions, it should be kept in mind that, Risk Management is a continuous improvement process in which stakes and uncertaintities are managed through learning the turbulence of the external environment and removing the discrepancies of internal controls by continuous monitoring, which keeps the business alive and provides competitive advantage.(2)

Therefore, the Risk Manager's responsibility to identify, assess, control and finance these exposures is always changing and in such dynamic environment, it is always helpful to step back and broadly gauge the requirements, process and implementation to address these risks.

The following questions highlight the areas Risk Managers should consider to ensure that their company's have a well managed Risk Management Framework to effectively address the key risk related issues.

Question:1

What Risk Management information needs to be communicated throughout the organisation?

This is pivot for any Risk Management framework and the needs for communication, even the information keeps on changing with time. Whether its a profit making organisation or a not for profit organisation, the financial information is always tied to its operations. So a Risk Manager should effectively communicate the information which financially affects the operations and management of the company. This can be split in three areas.

1. A Risk management manual that is accessed by the firm's operations and contains information on insurance coverage, deductibles, limits of liability, claims handling procedures and workplace safety programs.
2. The cost allocation received by each profit centre. This will show the insurance costs allocated (deductibles and premiuims), the formula which helps to derive the cost and making adjustments, prior to finalisation.
3. An annual risk management report that is targeted to the senior management. The report should include the overall cost of risk for the past year including benchmark comparisons to peer companies, accomplishment of last year's objectives and the newly set objectives for the coming year.

Question:2

How can risk management program costs be most effectively allocated?

Risk Management costs typically allocated to profit and cost centers include insurance premiums, self insured losses and sometimes department overheads. During the selection of your formula, choose the alternative with the following characteristics:

Communicate your operations effectively to gain acceptance. This will help in bringing out the people's view on different operational parameters which can be looked upon and help in re-engineering the business processes to gain optimal performance levels. Further this will help in reducing the claim costs by ensuring upto date safety procedures. This will further reflect on the type of insurance policy required and eradicating any excessive premiums involved.

Question:3

What steps are required to satisfy Risk Identification responsibilities?

Risk managers need to continually review multiple information sources to keep abreast with the current risk exposures to the organisation. These can be published resources like financial reporting, operation manuals and

internal audit reports.The other information sources that can be looked into consists of periodic minutes of meetings, written correspondence with all levels of organisation as well as with regulatory bodies. The changes to the country's economic policies and fluctuating interest rates.

The main challenge of risk management is the ability of its practitioners to speak a clear and comprehensible language and to invest in the creation of a strong, independent risk culture open to communication and meaningful to all people involved in daily business activities.

The next article in this three-part series will analyse the other set of questions for the Risk Managers to consider.

References:

(1) Lawrence, S. (2008). Ten Questions for Risk Managers. Risk Management (Feb., 2008)

(2) Clarke,C. and S., Varma (1999). Strategic Risk Management: the new Competitive Edge

25 Best Business Books

What makes a business book the “best”? Best-selling? Most influential? Timelessness? Categorical relevance?

Business Pundit sifted through numerous categories and resources to come up with this list of the 25 Best Business Books Ever. We didn’t concern ourselves with categories (management, sales, etc.) or timeliness of subject matter. Instead, we focused on the following question: Based on prominent reviews, academic use, and popularity, which business books would be considered “classics?” Of those, which are the best?

We think that really smart, successful businesspeople know that their education is lifelong and diverse. Nevertheless, while many corporate leaders will cite Sun Tzu’s The Art of War and Niccolò Machiavelli’s The Prince as invaluable business tomes, we stuck with books written for a business-minded readership.

Check this out ---------> 25 Best Business Books Ever

Source: http://www.businesspundit.com/25-best-business-books-ever/

Management Theories: A Help or a Hindrance?

The external environment has never been as turbulent as it has been from the start of this century. It has been characterised by chaotic, transformational and rapid fire changes. Right from the Enron chapter unfolding at the very beginning of the century to the United States Federal Reserve’s, re-writing of the rule book by helping Bear Stearns, these years have shaken the world tremendously. The turbulence is not on the other side of the Atlantic but also on this side, because the golden term “Globalisation” has played an important role. The narcoleptic ignorance of some managers who have failed to follow the basic fundamentals of management, which is internal control, has shaken the very idea of sustainable development in 21^st century.

With all this in mind and the responsibility to rectify these mistakes and not to make matters worse (act responsibly), the role of management and the so called, managers has become critical for the survival of any business or even society. Good managers are not born, they are made. They are fashioned by not only experience but also knowledge (either they make theories or build up on theories already provided). They know how to aim for the target that keeps on moving because they know that nothing is permanent. The ways of management, therefore, involve continual improvement either by mending the old ways to rectify the new problems or by inventing new ways to new problems, because managers main task is to provide results by “ Try it, Fix it , Do it.”

The point of discussing all these events here is to get insight of the challenges that lie ahead for managers.

Referring back to the beginning of last century and the generation of management thoughts, it can be seen that since then, there has been tremendous effort to generalise the theories despite the fact that the environment is changing. The reason for generalising the theories is that the people should have some basic idea of management to develop a common sense which will act as a first step in differentiating them from others.

An theory has three key components:

1. It makes a proposition or argues a point.
2. It is built on a number of observations.
3. It explains something.

Therefore it can be argued that, theories set a platform for a manager to compare the existing variables to the one already dealt within theory and helps him in finding the various outcomes by changing the variables. Variables can be referred to as the perception of an individual manager about the interests of an organisation, with the help of experience gathered in dealing with different situations.

As quoted by famous management visionary Peter Drucker, “The function which distinguishes the manager above all others is educational one. The one contribution he is uniquely expected to make is to give others vision and ability to perform. It is vision and more responsibility that, in the last analysis, define the manager.”

All the theories have an inductivist nature, that is, it infers ideas from many observations but the role of a manager is of a deductionist who tends to logically validate the concepts on situational merits. Therefore, all the theories will not yield same results in every situation, and this is where the experience adds valuable insights into the theory by providing justification about the circumstances and its impact.

According to my experience, employers tend to look for some academic background of a candidate. The initial screening of the application and the qualification give them the idea of person’s knowledge (but this process requires the personal attention of the recruiter, not mere keyword picking by some software). Therefore, it can be pointed here that theoretical understanding of various concepts and management techniques is a pre-requisite for a person at the beginning of his/ her career.

Suppose there are hundreds of things in the future which are not known and there are some theories based on past experiences which reflect the basic mechanisms to spot few uncertainties. Expressing this in terms of probability it can be said that a manager is better of having a probability above 0 than be completely ignorant.

But many entrepreneurs and successful businessmen, will argue that they have never learnt any theory or stepped inside a Business School, and still they are successful. I agree to them, but the point I would like to stress here is that, all the management theories have been invented, worked upon by people before generalising them. The one common feature of all these persons has been that they have been able to look beyond the ‘status quo’ and have used their expertise to innovate at every stage. Their experiences can be termed as “Management by Innovation”, which is a subject in itself and so proved by the biographies and writings about their management practices which are Principles of Management in themselves. These ‘Management Innovators’ have been able to create questioning and problem solving culture by continually seeking exemplars and analogies from different environments (by using external change agents to explore new ideas) and enabling people to ‘think out of the box’. The solutions invented/ generated have been put under both internal and external validation processes.

In the end, I would like to conclude it by saying that, “Strict adherence to theories can darken the path of development (as everything in this universe is in a state of continuous motion) and too much reliance on experience will not be able to unfold the mysteries that lie ahead. So managers should have a ‘Practitioner Approach’ in which their continual quest for new ideas, new interpretations and new corporate cures, should either enrich the existing theories or set practical examples for the generations to follow.” After all the main responsibility of the manager is to Promote Learning in the Organisation (which sometimes depend on his sphere of influence).

Understanding Uncertainties: Introduction to Risk Management (Part-1)

Risk is everywhere, so is the return. It is only a matter of how well the uncertainties are perceived and clearly understood to take a successful path. But this is not as easy as it appears on this screen. This particular post will use Lee Lacocca’s famous quote to develop a basic understanding on Risk Management.

Quoting the words of Lee Lacocca, the former Chairman of Chrysler, “If you cannot afford to take a risk, then you cannot afford to compete.” This statement has its upsides and downsides depending how people perceive its meaning, but the key to success depends upon how your risk appetite governs and manages the risk surrounding your business.

Strategies are formulated to manage uncertainties, but the total number of risks (defined from the uncertain world) assessed and the flexibility to adapt to uncertainties determines the key to business’s success. Underestimating uncertainty can neither defend the business against threats nor provide the advantages of exploiting the opportunities. As in case of Digital equipment Corporation in 1977, that failed to recognise the need for personal computers.

Lee Lacocca’s comment about risk affordance and competition does not say that an organisation should take too much risk to be successful. Neither has it said that taking less number of risks hold the business back. What he means by saying affording risks and competition is all about taking managed risks by adapting to the uncertainty surrounding the business in order to compete not only with competitors in the business segment but also within the organisation. The business is like a cart pulled by several horses (like reputation, finance, strategy, corporate governance, operations, environment, markets, regulations) and for moving it forward it is necessary to form a balance between all the horses. For example the collapse of Northern Rock not only shook the business but also instigated the fears of economic slowdown in UK. Once Northern rock’s success was owed to its forward looking business (strategic) model but the recent failures indicated that the basics of money supply chain in banks were forgotten (with nothing in stock to fund the loans). This has not only shaken the finance of the bank but has also unearthed the nature of internal controls and corporate governance. Too many risks associated with sub prime lending were ignored because the focus was only on returns not risk and return both.

The following sections analyse the validity of Lee Lacocca’s comment and the complexities of Risk management on the four levels of Uncertainty[1](faced by the decision making board of the organisation) evaluated on the scale of the organisation’s total cost of risk (Which can be opportunity cost of capital, cost of financial distress, reputational risk, cost of compliance to regulations).

Level 1 of uncertainty refers to the future which is clear enough to develop a precise strategy, but the point here is how the information is gathered, assembled and fitted to generate a clear view. Ryanair developed a strategy to provide low cost, no frills airlines by splitting the cost of their tickets and developing a new term, Ancillary revenue in airline industry and saw a linear growth in their customer base in the last decade.[2]Whereas British Airways attempt to launch low fare airline succumbed to failure.[3] No matter the two airline companies competed for the same sector in which the stronger failed and the small firm managed to succeed. The success of Ryanair was confirmed by the strong market research and budgetary controls which helped it to manage the risks leading way to generous returns

Level 2 of uncertainty refers to the future which has few discrete scenarios. The analyst cannot predict the true outcome but can rank the outcomes depending upon the probability and impact of pre-defined scenarios. In this level of uncertainty, the risk and return depends upon the strategy selected and often brings up trade-offs at different times. The success of the business depends upon the flexibility of strategy to switch from one mode to another (using both forward and backward approaches of Scenario Planning)[4] without sacrificing the marginal returns originating from the risks defined in a particular strategy.[5] The launch of personal banking through internet and phone banking has emerged only after rectifying the mistakes and increasing the controls. Crimes like internet theft have emerged from this innovation but the banking sector along with the Information Technology Security have continuously worked together to mitigate this risk and keep the business alive. On the other extreme where companies could not predict the discrete future outcomes or have stuck with the strategy, ‘one size fits all’ have borne the price. IBM was late in recognition for the need of personal computers and stuck with its big iron mainframe computers and was significantly left out of the competitive race.[6]

Level 3 of uncertainty refers to range of potential future outcomes, in which the actual outcome cannot be specified. The companies which plan to enter into a new business venture or new product or entering into new geographic market often faces this situation. Microsoft launched its products and services in China by intensely studying the risks associated with Chinese market and reaped in huge profits.[7] The recent example is the launch of one of world’s cheapest car ‘Nano’. Tata judged the need for cheap car in the Indian and Chinese market and came up with an innovative design, which is bound to revolutionise the car industry.[8] Whereas, Walt Disney Company’s 1992 foray into Europe accounted for $ 1 billion losses by 1994, because it could not examine the risks associated with the European market and expected same levels of returns as in US.[9]

Level 4 of uncertainty refers to an environment which is virtually impossible to predict. But the organisation should tend to bring it towards one of the three levels discussed above by incremental integration of possible outcomes either by shaping the future or adapting to the changes in the environment. The classic example of this is also Microsoft. During 1980’s, Microsoft’s commitment was to provide software services but for competing in this new sector, Microsoft though working on building its own operating system Windows, was working simultaneously with IBM for OS/2 for graphical interface computing and with Apple for writing Excel and Word for Apple operating system. Similarly in the most recent years, Microsoft has ventured into operating system for mobile phones (Windows Mobile), gaming sector (XBOX) and instant messaging with MSN.[10] But recently, fine imposed by European Union regulators for failing to comply with anti-competition ruling linked to Microsoft’s failure to provide rival firms with more information about its software (which has been Microsoft’s success policy)[11], and the Google’s initiative to provide online software services by setting up state of art facility in US will test Microsoft’s initiative to manage these risks.[12]

Predicting the future outcomes through carefully understanding the uncertainties is only the half way of understanding the importance of Risk Management. The other half of this topic will be discussed in the next post following soon.

Below is the list of References to some good literature and citings for the examples used above:

---

[1] Courtney, H., J., Kirkland and P., Viguerie. (1999). Strategy under uncertainty. Harvard Business Review. Boston : Harvard Business Review Press

[2] http://www.ryanair.com/site/EN/about.php?page=About

[3] http://www.christainwolmar.co.uk/articles/express/aug27,04.shtml

[4] Salim, G. and D., McNamme.(1999). The Risk Management and Internal Auditing Relationship: Developing and Validating a Model. International Journal of Auditing.

[5] Hamel, G. and C., Prahalad. (1999). Competing for future. Harvard Business Review. Boston : Harvard Business Review Press

[6] Bower, J. and C., Christensen. (1999). Disruptive Technologies: Catching the Wave. Harvard Business Review. Boston : Harvard Business Review Press

[7] http://money.cnn.com/magazines/fortune/fortune_archive/2007/07/23/100134488/

[8] http://news.bbc.co.uk/1/hi/business/7180396.stm

[9]McGrath, R. and I., Macmillan. (1999). Discovery- Driven Planning. Harvard Business Review. Boston : Harvard Business Review Press

[10] Raynor,M. (2007). Solving the strategy paradox: how to reach for the fruit without going out on limb. Strategy and Leadership

[11] http://news.bbc.co.uk/1/hi/business/5171126.stm

[12]http://news.co.uk/1/hi/technology/5132806.stm