External Relationships
Introduction An organization is concerned with maintaining a healthy relationship with suppliers and customer, with whom they interact daily. However, for an organization to be successful, it has to maintain healthy and fruitful relation with all the stakeholders. These stakeholders may or may not be directly involved in the market. But they impact how business […]
Various Forms of Shareholders Ownership
The previous articles discussed how shareholders play an important role in promoting good corporate governance. This article looks at the patterns of shareholder ownership that are prevalent in organizations in the corporate world. To start with, any company whether it is private or public limited needs to have shareholders who contribute equity to the setting […]
Why Data is the New Holy Grail for Contemporary Marketers
What happens to the Data we Leave Online All of us who exist online and on social media websites as well as use Apps would have noticed that we enter a humungous amount of information about ourselves and our likes and preferences as well as dislikes and our objections. For instance, any registration to a […]
The Role of the Government: Legislation and Regulation
The often discussed and much criticized role of the government in regulating the corporate has gained all the more importance in these changing economic times. It’s time that the governments took more active role in regularizing the corporate through necessary means as we have learnt the painful way that the corporate crimes or the white […]
Importance of Integrated Marketing Communication
Integrated marketing communication plays an integral role in communicating brand message to a larger audience. Integrated Marketing communication helps in integrating all essential components of marketing to communicate similar message to potential and existing end-users. Integrated marketing communication goes a long way in creating brand awareness among customers at a minimal cost. Integrated marketing communication […]
All entities collect data for various reasons. Whether it is the government collecting data on economic growth, employment rate, budgetary purposes, or for welfare schemes, or it is the private firms collecting data on revenues and productivity, there is a need for data at all levels and for all entities.
Indeed, collecting data is the lifeblood of all entities since they need data to justify or reject the many options and strategic choices available to them.
No wonder the icon of the Indian Industry, NR Narayana Murthy, was fond of saying that “In God we Trust, Rest all have to Bring Data”.
This is the reason why many governments have dedicated departments for collecting data and on the other hand, the private firms often employ external agencies to collect data for them.
Moreover, technology has revolutionized the way in which data is collected by making it easier to centralize data collection and at the same time, ensuring that the data that is collected is very fine and granular.
Thus, data collection does rank as a high priority item for both governmental and private entities.
Having said that, it is also not the case that merely collecting data is enough, by itself. Indeed, the importance of collecting quality data that is reliable, accurate, and genuine cannot be overemphasized more.
This is because poor quality data distorts decision making and leads to bad decisions. For instance, if the government reports that unemployment has gone down and therefore, puts in place policies that do not take joblessness as a priority item, the whole edifice of the nation’s approach to welfare schemes and policymaking goes for a toss.
Indeed, this is what is happening in India right now wherein the employment statistics and other associated economic growth figures are being questioned by experts and doubted whether they are accurate.
In this context, it is worth noting that the governmental officers in charge of statistics and data collection have resigned due to the government’s reluctance to reveal the data about the true picture of the Indian economy.
Further, many respected economists worldwide have weighed in on the issue and have pointed to how the methodology for computing the GDP or the Gross Domestic Product is suspect since it inflates the growth rates through negative deflators whereas in reality, macroeconomic indicators point otherwise.
There are many disadvantages and downsides to collecting poor quality data or data that is questionable.
For instance, Greece is an example of a nation that fudged its numbers to gain entry into the Eurozone and once the financial crisis struck, it was forced to admit that it used questionable growth figures and had to be bailed out multiple times.
Apart from this, if we go back a decade or two, we find that the Asian Financial Crisis of 1997 which brought Thailand, Indonesia, and Malaysia to their knees was because of fudging and manipulating data about the Real Estate Sector as well as other key sectors in the economy.
Even in the corporate world, there is sometimes a tendency to do what is euphemistically called “Window Dressing” of data that presents the data that is collected in a favourable light and brushes under the carpet that data that reveals the true picture.
Tools such as the HR Scorecard need accurate and reliable data to perform efficiently and effectively, and hence, it is in nobody’s interest if faulty data is collected and used to justify decisions that can backfire in the longer term.
Talking about the longer term, as the saying goes, one cannot fool all people all the time, and hence, sooner or later, there would be payback for all the faulty data that has been collected and reported and this can lead to serious repercussions for all stakeholders.
We have given examples of countries that have suffered on account of faulty data. In the history of the Indian Industry, the erstwhile Satyam Computers is an example of how fudging data can lead to the demise of entire companies as well.
This corporate and its founders and the senior execs in cahoots with the auditors presented a rosy picture of the finances of the firm until it was no longer possible to hide such irregularities.
In recent years, there has been more regulatory pressure on corporates to report accurate data and in this regard, it needs to be mentioned that the good work done so far is now again under threat in the last few months.
In other words, there are serious issue related to excessive debt in the Indian Banks and for some time, it looked as though they were being forced to report their numbers accurately.
However, with the change of guard at the RBI or the Reserve Bank of India, it seems as though we are back to square one.
Lastly, just as households cannot sustain themselves without being genuine about their savings and expenses, corporates and governments too cannot go on forever by reporting faulty data.
Indeed, this problem is not restricted to a few firms or countries and is now an international phenomenon where reporting poor quality data has become the norm rather than the exception.
To conclude, data is integral to any entity and hence, steps must be taken to ensure that unreliable and inaccurate data does not vitiate our future prospects.
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