Mount 
Rushmore and the Statue of Liberty are two things one instantly identifies with US of A. Another classically American term (thanks to Hollywood) is Mafia. The bestselling book, The Godfather, and the movie adaptation where actor Marlon Brando enacts the role of Don Vito Corleone have made ‘mafia’ as well known, if not better than Mount Rushmore!
In the book (and the movie), the Tattaglia and the Barzini families declare war on the Corleones. At stake is control over al the illegal activities in New York. The Don is pumped with bullets but survives. The Don’s mercurial son Sonny Corleone unleashes a wave of revenge attacks that rattles the Tattaglias and the Barzinis. But Sonny is impulsive and is lured to his death. The Don calls for a peace meeting and the five major ‘families’ of New York agree to declare a truce. They also agree not to poach on each other’s territory, and consumers. Hollywood and the media call it the Mafia. If Adam Smith was a 20th century economist, he would have called it a cartel.
As sector after sector in India experienced wave after wave of consolidation, there are serious concerns emerging about a clutch of cartels stifling competition and stiffing the Indian consumer. In layman’s terms, a cartel can be described as a loose (usually informal and always unethical, if not illegal) association of companies in a sector. In a cartel, the companies outwardly ‘compete fiercely’ with each other; in reality they collude with each other, fix prices and raise entry barriers so high that a potential rival cannot barge into the sector even though the profits are alluring and enticing. Economics tells us that competition is good for the consumer; theory also tells us that companies relentlessly compete with each other to grab more market share. But that’s theory. The reality is Finance Minister threatening Indian cement companies with punitive action if they continue to indulge in price fixing. The reality is Vijay Mallya announcing that Air Deccan will raise fares within hours of Kingfisher Airlines acquiring a strategic stake in Air Deccan. The reality is Indian telecom companies refusing to allow the consumer to migrate from one service provider to the other without a change on her mobile phone number. And of course, the reality is a few mafia dons carving up illegal activities in the city of Mumbai!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
For More IIPM Info, Visit Below....
IIPM Mumbai Parables - Stories that change life
IIPM International Student Exchange Programme
IIPM, ADMISSIONS FOR NEW DELHI & GURGAON BRANCHES
IIPM, GURGAON
ARINDAM CHAUDHURI’S 4 REASONS WHY YOU SHOULD CHOOSE IIPM...
IIPM Economy Review
IIPM :- Cicero's Challenge is going global
The Indian Institute of Planning and Management (I...
Time for Awards at IIPM
Rushmore and the Statue of Liberty are two things one instantly identifies with US of A. Another classically American term (thanks to Hollywood) is Mafia. The bestselling book, The Godfather, and the movie adaptation where actor Marlon Brando enacts the role of Don Vito Corleone have made ‘mafia’ as well known, if not better than Mount Rushmore!In the book (and the movie), the Tattaglia and the Barzini families declare war on the Corleones. At stake is control over al the illegal activities in New York. The Don is pumped with bullets but survives. The Don’s mercurial son Sonny Corleone unleashes a wave of revenge attacks that rattles the Tattaglias and the Barzinis. But Sonny is impulsive and is lured to his death. The Don calls for a peace meeting and the five major ‘families’ of New York agree to declare a truce. They also agree not to poach on each other’s territory, and consumers. Hollywood and the media call it the Mafia. If Adam Smith was a 20th century economist, he would have called it a cartel.
As sector after sector in India experienced wave after wave of consolidation, there are serious concerns emerging about a clutch of cartels stifling competition and stiffing the Indian consumer. In layman’s terms, a cartel can be described as a loose (usually informal and always unethical, if not illegal) association of companies in a sector. In a cartel, the companies outwardly ‘compete fiercely’ with each other; in reality they collude with each other, fix prices and raise entry barriers so high that a potential rival cannot barge into the sector even though the profits are alluring and enticing. Economics tells us that competition is good for the consumer; theory also tells us that companies relentlessly compete with each other to grab more market share. But that’s theory. The reality is Finance Minister threatening Indian cement companies with punitive action if they continue to indulge in price fixing. The reality is Vijay Mallya announcing that Air Deccan will raise fares within hours of Kingfisher Airlines acquiring a strategic stake in Air Deccan. The reality is Indian telecom companies refusing to allow the consumer to migrate from one service provider to the other without a change on her mobile phone number. And of course, the reality is a few mafia dons carving up illegal activities in the city of Mumbai!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
For More IIPM Info, Visit Below....
IIPM Mumbai Parables - Stories that change life
IIPM International Student Exchange Programme
IIPM, ADMISSIONS FOR NEW DELHI & GURGAON BRANCHES
IIPM, GURGAON
ARINDAM CHAUDHURI’S 4 REASONS WHY YOU SHOULD CHOOSE IIPM...
IIPM Economy Review
IIPM :- Cicero's Challenge is going global
The Indian Institute of Planning and Management (I...
Time for Awards at IIPM
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