Reforming business schools a must ?

World’s leading business schools are changing their course syllabus and re-making their business school image ensuring they catch up with time and the reputation upheld with high rating. This year Harvard Business School (HBS) announced the appointment of a new dean, Nitin Nohria, a first-class choice. The Kellogg School at Northwestern University has also recently selected a new head, and the Judge School at the University of Cambridge, the Ross School at the University of Michigan and the Booth School at the University of Chicago are all in the process of doing the same. Our local uni business faculties (NUS,NTU,SMU) are also trying to boost up it's image and maintaining the international standard every year and they too have excel in the top lists of preferred MBA courses in many of surveys done.

Elite business schools are plagued by self-doubt and the financial crisis has dealt them a double blow. It has damaged their pristine images, because so many financial analyse and bankers are MBAs. It has also dented their market: Wall Street laid off 240,000 people in the 18 months from the middle of 2007.

The business-school boom depended largely on the idea that MBAs were entry tickets to the world’s two most lucrative professions: investment banking and consultancy. These trades not only consumed more than half the graduates of the leading schools. They also underwrote the schools’ finances: students were willing to pay US$100,000 in fees and living expenses (and forgo even more in income) because they were all but guaranteed jobs in these high-paying industries.

Criticism of MBAs extends beyond consultancies and banks. People in many industries worry that business-school professors are more concerned with pure theory than with practical management (promotion is usually earned by publishing articles in academic journals rather than by teaching, advising businesses or gaining managerial experience). The professors themselves complain that their students are spending ever more time looking for jobs and ever less time studying. These problems are already taking their toll on the two-year courses that once constituted the ideal of business education. Students are gravitating to one-year MBAs, which are offered by 70% of European business schools, and more specialised courses. Lower-ranked business schools are already finding it harder to fill their places. The elite worry that the trend will eventually catch up with them too.

Yet business schools have an important asset: they are remarkably flexible compared with the rest of academia. Even before the financial crisis they had begun to implement far-reaching changes. Both Stanford Business School and the Yale School of Management have changed their curricula radically in the past few years. Business schools are also moving to globalisation. INSEAD led the pack by opening a second campus in Singapore: all its students have a chance to study in Asia as well as Europe. Almost everybody has leapt on the bandwagon. Of course business schools must not lose sight of their primary function. We must remain faithful to academic rigour and excellent teaching. Yet at the same time we have to regain the entrepreneurial fervour of the past; the world expects more than good functional graduates. Recent times have underlined the need for managers capable of taking a fresh look at opportunities unafraid to forge new alliances and practices outside of the norm. Schools have also struggled to make their courses less theoretical. Yale has replaced conventional subject-based courses (marketing and so forth) with “integrated” courses based on “constituencies” (such as investors, customers and employees). The University of Michigan’s Ross Business School gives students a chance to work with, say, hospitals in India and energy companies in Mozambique. Most schools are trying to employ more people with practical experience.

The new generation of deans will undoubtedly preside over dramatic changes. We must play the role of an entrepreneur in its purest meaning. It is no longer enough that we concentrate on functional training. We must constantly scan for projects to which we can add value. Once found, we must take a more developmental, consulting role, helping the project’s different stakeholders—companies, public bodies, research centres and universities—to create and manage the organisation.

Is the "Rising Yuan" going to help?

FROM a global perspective, the world has every right to expect large surplus savers, such as China, to reduce outsize current account surpluses. At the same time, the world community needs to be fair in putting equal pressure on large deficit savers, such as the United States, to address its saving problem.

Is it wrong to insist that China’s global rebalancing imperatives be addressed by a realignment in a bi-lateral exchange rate with the dollar. What matters most insofar as global imbalances are concerned is China’s broad multilateral exchange rate. China can hardly be accused of manipulation vis-a-vis the rest of the world. In real terms, the trade-weighted renminbi is up 7.5% over the past six months and fully 20% over the past five years. These is good reason to believe that a pro-consumption structural policy agenda, is likely to be a central feature of the upcoming 12th Five-Year Plan, could achieve far greater traction in promoting a timely and effective rebalancing. There is good reason for China to view a tight RMB/dollar relationship as an important anchor for an embryonic financial system. Washington’s China complaint seems especially off base when it comes to the renminbi. Yes, the United States has a large bilateral trade deficit with China. But it turns out that America ran trade deficits with over 90 countries in 2008-09. Given the unprecedented shortfall of US saving—a net national saving rate of -2.5% of national income in 2009—the US must import surplus saving from abroad in order to grow and run massive current account and multilateral trade deficits in order to attract the foreign capital.

Without a fix to America’s saving problem—highly unlikely in an era of trillion dollar federal budget deficits—forcing the Chinese to appreciate the RMB versus the dollar, or imposing trade sanctions on them if they don’t, is like rearranging the deck chairs on the Titanic. It would shift the Chinese piece of the US trade deficit to someone else—most likely to a higher cost producer.

IT ALL sounds so simple. Let the renminbi appreciate and the world's economic problems will be solved. Yet, when you think about it, this is a distinctly implausible claim. The idea that an adjustment in one relative price in the entire global economy will rid the world of imbalances and lead to a new economic nirvana doesn't really make sense.

There are doubts to these and they need to relook at some of the pending events :

The Japanese yen has risen dramatically over the last forty years—from JPY380 against the dollar at the beginning of the 1970s to around JPY90 more recently. Despite this momentous rise, Japan's current account surplus has steadily gotten bigger as a share of its GDP. When the Japanese tried to do in the late-1980s exactly what is now being asked of China—shift away from export-led to domestic demand-led growth—it all ended in tears.

The Japan's experience shows, countries run current account surpluses for structural reasons that may have nothing to do with the value of the nominal exchange rate. Inadequate social security provision and a poorly-developed consumer credit system undoubtedly play a big role in boosting savings relative to consumption in china's situation. China uses a currency target partly because of a lack of credible alternatives. No one has any idea of what is really going on with Chinese money supply while an inflation targeting regime is highly problematic for any country with low per capita incomes, where the typical consumer basket is heavily weighted towards food and energy, the prices of which are highly volatile from year to year.

Discussion of the nominal exchange rate ignores the obvious point that it's the real exchange rate that ultimately matters. Let's face the fact, China was cut off from the rest of the world for over 500 years. Now that it's opening up, it can flood the world with workers who are prepared to accept wages a tiny fraction of those being paid in the West. Western workers have enjoyed a "monopoly" on access to global capital for most of the 20th Century, rewarding themselves with wages well above the market-clearing price. Nominal exchange rate adjustment won't prevent Chinese workers from undercutting their Western equivalents.

Admittedly, the terms of trade will likely move in China's favour whether or not there is nominal exchange rate adjustment. But the way that's playing out at the moment is through some hefty wage increases in China accompanied by deflationary pressures in the West. Whether through nominal or real exchange rate appreciation, however, this simply means that China's buying power over the world's scarce resources will slowly improve and, by implication, the West's will diminish, most obviously through rising commodity prices in dollar or euro terms. A rising Chinese real exchange rate will lead to a redistribution of income from commodity-consuming to commodity-producing nations.

Knowing to "Kill" an offshore well....

DIVERTER PROCEDURE WHILE DRILLING ON A FIXED RIG

Where shallow casing strings or conductor pipe are set, fracture gradients will be low. It may be impossible to close the BOP on a shallow gas kick without breaking down the formation at the shoe. If a shallow gas kick is taken while drilling top hole then the kick should be diverted.

Drilling shallow sand too fast can result in large volumes of gas cut mud in the annulus and cause the well to flow, also fast drilling can load up the annulus increasing the mud density leading to lost circulation and if the level in annulus drops far enough then well may flow.

When drilling top hole a diverter should be installed and it is good practice to leave the diverter installed until 13 3/8" casing has been run.

SHUT-IN PROCEDURE WHILE DRILLING ON A FLOATING RIG

1. Stop drilling

2. Pick drill string off bottom to predetermined shut in point. Stop the mud pump. If flow is excessive begin next step immediately and strip drill string to close in predetermined point once well is secured.

3. Close upper annular and open choke line fail-safe valves.

4. Ensure well is shut in and begin recording shut in pressures.

5. Pass word to the OIL COMPANY REP and DRILLING CONTRACTOR REP of the well condition.

6. Pick up circulating kill assembly if it is to be used.

7. Check space out then close upper pipe rams.

8. Adjust BOP closing pressure as required for stripping and landing drill string on upper pipe rams.

9. Close hang off rams with reduced pressure. Reduce annular pressure.
(Note: there will be pressure trapped between annular and rams)

10. Land drill string on upper pipe rams, adjust BOP closing pressure and down weight on upper pipe rams to prevent the hydraulic effect on the drill string

11. Close wedge locks and adjust compensator to support drillstring weight to BOP plus 20,000 lbs.

12. Bleed off any trapped pressure between the annular and rams.

13. Open annular.

14. Complete recording of shut in pressure build up and pit gain.

15. Decide kill programme. 

SHUT-IN PROCEDURE WHILE TRIPPING ON A FLOATING RIG

1. Set slips below top tool joint.

2. Install full opening safety valve, torque connection and close safety valve.

3. Close upper annular and open choke line fail-safe valves.

4. Ensure well is shut in and begin recording shut in pressures.

5. Pass word to the OIL COMPANY REP and SENIOR DRILLING CONTRACTOR REP of the well condition.

6. Make up the top drive or circulating kill assembly.

7. Open safety valve.

8. Complete recording of shut in pressure build up and pit gain.

9. Decide kill programme.

KILL METHODS - GENERAL

The objective of the various kill methods is to circulate out any invading fluid and circulate a satisfactory weight of kill mud into the well without allowing further fluid into the hole. Ideally this should be done with the minimum of damage to the well.

If this can be done, then once the kill mud has been fully circulated around the well, it is possible to open up the well and restart normal operations.

Generally, a kill mud which just provides hydrostatic balance for formation pressure is circulated.

This allows approximately constant bottom hole pressure which is slightly greater than formation pressure to be maintained as the kill circulation proceeds because of the additional small circulating friction pressure loss.

After circulation, the well is opened up again and the mud weight may be further increased to provide a safety or trip margin.

CONSTANT BOTTOM HOLE PRESSURE KILL METHODS

There are three ‘constant bottom-hole pressure’ kill methods in common use today which are:

• Driller’s Method
• Wait & Weight Method (also known as the ‘Engineer’s Method’)
• Concurrent Method

These three techniques are very similar in principle, and differ only in respect of when kill mud is pumped down.

Shutting a Well

Heavy rain does not mean abundance of water....Singapore

THERE were no sales, just splash at some parts of Orchard Road one morning when a flood turned roads into tea-coloured canals within three hours, from 8am.

It was mid of July 2010, a whopping 101mm of rain - about 60 per cent of what normally falls in the entire month of June - led to flash floods in several other areas too.

The prime shopping belt, Orchard Road, was the worst-hit, but flooding was also reported in Bukit Timah Road, Veerasamy Road in Little India, and Thomson Road.

The flood waters spilled into underground carparks, soiled luxury handbags costing thousands of dollars at the Hermes boutique, and rendered equipment and furnishings at the three-day-old Wendy's restaurant useless.Stores at Lucky Plaza were not spared either, and retailers there said the flooding was the worst they had seen in years.

WHEN the word water appears in print these days, crisis is rarely far behind. Water, it is said, is the new oil: a resource long squandered, now growing expensive and soon to be overwhelmed by insatiable demand. Aquifers are falling, glaciers vanishing, reservoirs drying up and rivers no longer flowing to the sea. Climate change threatens to make the problems worse. Everyone must use less water if famine, pestilence and mass migration are not to sweep the globe.

The language is often overblown, and the remedies sometimes ill conceived, but the basic message is not wrong. Water is indeed scarce in many places, and will grow scarcer. Bringing supply and demand into equilibrium will be painful, and political disputes may increase in number and intensify in their capacity to cause trouble. To carry on with present practices would indeed be to invite disaster.

Why? The difficulties start with the sheer number of people using the stuff. When, 60 years ago, the world’s population was about 2.5 billion, worries about water supply affected relatively few people. Both drought and hunger existed, as they have throughout history, but most people could be fed without irrigated farming. Then the green revolution, in an inspired combination of new crop breeds, fertilisers and water, made possible a huge rise in the population. The number of people on Earth rose to 6 billion in 2000, nearly 7 billion today, and is heading for 9 billion in 2050.

Industry, too, needs water. It takes about 22% of the world’s withdrawals. Domestic activities take the other 8%. Together, the demands of these two categories quadrupled in the second half of the 20th century, growing twice as fast as those of farming, and forecasters see nothing but further increases in demand on all fronts.

Meeting that demand is a different task from meeting the demand for almost any other commodity. One reason is that the supply of water is finite. The world will have no more of it in 2025, or 2050, or when the cows come home, than it has today, or when it lapped at the sides of Noah’s ark. This is because the law of conservation of mass says, broadly, that however you use it, you cannot destroy the stuff. Neither can you readily make it. If some of it seems to come from the skies, that is because it has evaporated from the Earth’s surface, condensed and returned.

Scarce or plentiful, water is above all local. It is heavy—one cubic metre weighs a tonne—so expensive to move. If you are trying to manage it, you must first divide your area of concern into drainage basins. Surface water—mostly rivers, lakes and reservoirs—will not flow from one basin into another without artificial diversion, and usually only with pumping. Within a basin, the water upstream may be useful for irrigation, industrial or domestic use. As it nears the sea, though, the opportunities diminish to the point where it has no uses except to sustain deltas, wetlands and the estuarial ecology, and to carry silt out to sea.

Priced or not, water is certainly valued, and that value depends on the use to which it is harnessed. Water is used not just to grow food but to make every kind of product, from microchips to steel girders. The largest industrial purpose to which it is put is cooling in thermal power generation, but it is also used in drilling for and extracting oil, the making of petroleum products and ethanol, and the production of hydro-electricity. Some of the processes involved, such as hydro power generation, consume little water (after driving the turbines, most is returned to the river), but some, such as the techniques used to extract oil from sands, are big consumers.

Let's remind ourselves, water is precious, one day may come and money might not even buy you the liquid. Let's us continue to use it prudently and educating the public constantly the importance to save as much and not waste, in future, we may need to recycle our own waste product, i.e. urine, and consume the recycled product to survive.

Back to basic ..... "less is good"

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The idea that “less is more” has many adherents in architecture, design and fashion, the technology industry has historically espoused the opposite view. Products should have as many features as possible; and next year’s version should have even more. As prices fall, what starts off as a fancy new feature quickly becomes commonplace—try buying a phone without a camera, a car without electric windows, an SLR without autofocus, auto detect, etc, — product design companies everyday are in the move to add new and more features in an effort to outdo their rivals. Never mind if most of these new features are excess and not being applied or used by consumers. In the product design race and to capture more consumers to the ideas or features, more is always good to have nevermind if need to have.

Are there signs that technologists are waking up to the benefits of minimalism. Consumers are more and more into looking for things to just work, and strong demand from less affluent consumers in the developing world not wanting complicated features and paying more for not using them. It is telling that the market value of Apple, the company most closely associated with simple, elegant high-tech products, recently overtook that of Microsoft, the company with the most notorious case of new-featuritis. True, Apple’s products contain lots of features under the hood, but Steve Jobs has contain with a knack its techno for concealing such complexity using elegant design. Other companies have also prospered by providing easy-to-use products: think of the Nintendo Wii video-games console or the Flip video camera. Gadgets are no longer just for geeks, and if technology is to appeal to a broad audience, simplicity trumps fancy specifications.

Another strand of techno-austerity can be found in software that keeps things simple in order to reduce distractions and ensure that computer-users remain focused and productive. Many word software now have special full-screen modes, so that all unnecessary and distracting menus, palettes and so on are disabled or hidden; rather than fiddling with font sizes or checking e-mail, you are encouraged to get on with your writing. If the temptation to have a quick look at Facebook proves too much, there are programs that will disable access to particular websites at specified times of day; and if that is not draconian enough, there are even some programs that can block internet access altogether. A computer on which some features are not present, or have been deliberately disabled, may in fact be more useful if you are trying to get things done as likely you will feel that the processing speed now works faster than before. There are no distracting hyperlinks on a typewriter.

Frugality is the essence of invention ?

The coming of “frugal” innovation—the new ideas that emerge when trying to reduce the cost of something in order to make it affordable to consumers in places like China, India and Brazil. The resulting products often turn out to have huge appeal in the rich world too, especially in the present era of belt-tightening when all of us in this continent are facing up to the economic crisis. The netbook, or low-cost laptop, was inspired by a scheme to produce cheap laptops for children in poor countries, but has since proved popular with consumers around the world. Tata devised the Nano, the world’s cheapest car, with India’s emerging middle classes in mind; it is now planning to launch it in Europe, too, where there is growing demand for cheap, simple vehicles. Of course, there are pros and cons to such cheap vehicle, safety is one big concern to the users.

All this may offers grounds for hope. If the feature-obsessed technology industry can change its tune, perhaps there is a chance that governments—which have also tended to be inveterate believers in the idea that more is more—might also come to appreciate the merits of minimalism. 

What about today's rig building business, where some rig owners always looking for more drilling features into their rigs and do not mind paying for these extras??   Are they getting their returns higher and faster than those rig operators with basic functional rigs which are also capable of "drilling" the wells with though lower dayrates as compared. Probably these expensive or rich rig owners should start to look at simplicity and the risk of running into well accidents may also be beneficial in the sense "less is safer" !