PRIVATIZING CHINA By Carl E. Walter & Fraser J.T. Howie John Wiley & Sons (Asia) Pp: 335 Price: Rs 1,642

Ideologies don't particularly stand a chance before the market. And, the Middle Kingdom is no exception to this. In their book Privatizing China, authors Carl Walter and Fraser Howie capture the maturing of the Chinese stock market over the last decade. The constraints could not be worse- on the one hand, the state-owned enterprises' unceasing need for capital, and on the other, the state's vice-like grip on ownership of the assets.

The result was a distorted market, a good part of which remained illiquid. What nudged the state to incrementally dilute its ideological stand was the force of economic activity in Shenzhen and Shanghai. This approach, however, perpetuated the distortions in the market as the State resorted to patchwork-it floated several classes of shares that, initially, stirred in watertight compartments; cherry-picked parts of state-owned enterprises that were packaged for market offerings. A fallout of the latter move was that post-listing, inefficiencies resurfaced. Worse, pricing of public offerings was formula-driven and not market discovered, resulting in rampant insider trading and scams.

Ironically, while the state-owned industries were able to raise capital though equity offloads, the government could not. When it put its shares on the block, the markets went on a free fall. Interestingly, that prompted the state to take a relook at its ownership profile and redesignate its class of shares. Clearly, waltzing with the markets is a one-way ticket. The book captures the ingenuity of the market players, whose zeal to wedge open the ajar door, never mind the means, was limitless. Parallel markets were created, to say the least. Surely, the elders of the Han Dynasty would be smiling upon the market developments in China-for, it was during their time that the Silk route trade blossomed.

-Balaji Chandramouli

BREAKTHROUGH MANAGEMENT By Shoji Shiba & David Walden CII Pp: 267 Price: Rs 280

These aren't days of incremental competition. Can you think of any company recently that won a market segment because it priced its product or service marginally lower than that of its competitor? These days, when markets change, they do so because of sudden upheavals-in technology, (China) pricing, or scale. Digital cameras, internet telephony, electronic fuel injection, wireless are just some examples of such changes. In the case of India, the change has been due to the entry of new competition. Suddenly, old, family-managed groups had to take on global corporations. If the BPLs and Onidas had to compete with the Sonys and Samsungs, the Hindustan Motors and Premier Autos had to deal with the General Motors and Toyotas of the world. What should a company do? Shoji Shiba, one of Japan's best-known quality gurus, has a name for the response: "breakthrough management"-that is, "a fundamental change in an organisation's direction". That's what Ratan Tata effected when he drove truck-maker Tata Motors into passenger cars (It's a different story that Tata Motors will need more breakthroughs to truly challenge the global auto giants.)

How do you effect such a fundamental change in an organisation's direction? Also, why do some companies manage to make this quantum leap and others fail? You'll find answers to these questions and more in Shiba's new book. Shiba, who's been advising Indian companies in the auto industry for more than a decade now, admits that it is not always possible to anticipate paradigm shifts. Just the same, he says, CEOs must learn to pick up signals and act upon them. In the book, Shiba offers several useful tools and techniques for breakthrough management. Any CEO who wants to ensure his company's long-term survival should buy a copy of this (subsidised) book.

-R. Sridharan