The Hindu Business Line : Raghuram Rajan asks IIMA grads to listen to inner voice

ON Saturday, when the International Monetary Fund's Chief Economist, Dr Raghuram Rajan, became the youngest chief guest and the first alumnus to come back to the convocation of the prestigious Indian Institute of Management, Ahmedabad, he donned the role of a senior.

"My advice to you is to reach out and explore. Try different things. Be unconventional. You will never starve, your degree from this institution assures you of that," Dr Rajan told the graduating students.

Reading out a prepared speech, he sought to explain his concepts of maximising shareholder value. The concept, he said, meant a perfect balance between meeting customer expectations and exceeding them on the one hand and having very clear limits on how mean a company could be even while staying within the limits of law.

Talking about a "cholesterol principle", he said that a multinational bank had a policy wherein a customer looking for an exchange rate quote on the phone was given a ridiculous figure. If the deal worked, it would translate into a windfall for the bank. If the customer discovered that he was being cheated, the executive would simply say that the figure quoted was a "mistake". Dr Rajan used the example to highlight the importance of trust between an organisation and its customers, as also among the employees and shareholders of the company.

Earlier in the day, the IIM-A Director, Prof Bakul Dholakia, said that the institute had decided to refrain from a fee hike for the new academic year. The decision of not raising the fees was taken at a IIM-A board meeting that was chaired by the Infosys Chairman, Mr N.R. Narayana Murthy. The decision is part of the rationalisation of fee structure being undertaken by all the six IIMs in the country, Prof Dholakia said.

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