JIDNYASA 2014 Vol. I ISSN : 0976-0326 JIDNYASA : Thirst ...Return on Indian Central Public Sector...

JIDNYASA

Symbiosis Institute of Management Studies

“Make the Difference”

Thirst for Knowledge

Perspectives

Case Study

Book Review

Research Papers

• Economics

• Entrepreneurship

• Environment

• Finance

• Human Resources

• Marketing

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Symbiosis Institute of Management StudiesRange Hills Road, Kirkee Cantt., Pune - 411 020

Phone : 020 30213217 / 300 / 200Fax : 020 30213333

Visit us at www.sims.edu

ISSN : 0976-0326 JIDNYASA : Thirst for Knowledge JIDNYASA 2014 Vol. I

Brig. Rajiv Divekar, (Retd) Director, SIMS

Prof. Pradnya ChitraoFaculty, SIMS


Prof. Asha NagendraFaculty, SIMS

Prof. Komal ChopraFaculty, SIMS

Sonal Pandey Proof Reader,

Editorial and Media Relations SIMS

Akida WahiProof Reader,


Tanya BindraProof Reader,


Smita MishraProof Reader,


Nupur MaheshwariProof Reader,


Prof. B. R. LondheDeputy Director, SIMS

Prof. Pravin KumarFaculty, SIMS

Editorial Board

Executive Team

Board of Referees for JIDNYASA 2014

Dr. Indira ParikhFormer Dean of Academics at IIM-Ahmedabad

& Director of FLAME Academy

Mr. Arun WakhluFounder Director,

Pragati Leadership Institute Pvt. Ltd

Dr. Anuj Paul GosainStrategic Planning and Business Development

John Deere India Pvt. Ltd

Dr. A. K. DasbiswasProfessor. Emeritus Former Dean & Director.

ITM Business School. Mumbai

Dr. Ravi Sectham RajuProfessor. Sydney Cnirersity

Dr. Mukul Madahar MBA, Welfare Director, Cardiff University

Mr. Bhushan Joshi MD. kraflPov.ercon India

Dr. Neil Wilkof Partner. I lerzog. Fox & Neeman. Tel Aviv. Israel

Neil Wilk of heads the intellectual property and information tech-nology team. Specialist of Technology transfer and Internet law

Ms. Mohlni Sharma Administrative Officer. SIMS

Kunal YadavCover Design and Layout


Vision

Be the premier hub of management education for armed forces personnel and their dependents

Mission

• Champion excellence in management education services for the defence community

• Create and sustain professional research and knowledge based services

• Advance knowledge in business related disciplines in a cross-continental environment

• Develop an ethos of corporate professionalism in student managers

• Provide forum for sharing experience and knowledge between the academic-business-services fraternity

JIDNYASA : Thirst for Knowledge

JIDNYASA in Sanskrit carries a meaning that is in deep resonance with the

core ideology that goes behind any institute of learning in the world: The

Thirst for Knowledge.

The journal is a rich source of information on the various practices in the

business world today. It is a compendium of knowledge gathered from faculty

(both in house as well as external) and students and representatives from the

industry and is indicative of the direction in which the corporate world is

heading. The dynamic business scenario requires us to have clarity of vision,

which can only be achieved through enriching our perceptions. JIDNYASA

helps us in realizing this vision.

Jidnyasa has been launched with a dual objective. The first objective is to

nurture a culture of disciplined and focused research amongst student

managers and academicians. The second objective is to provide a medium for

industry practitioners to enrich themselves from the research and viewpoints

of scholars and experienced industry persons, and to apply them with suitable

modifications to the situations they are called upon to handle.

Guidelines For Contributions To JIDNYASA

1. Contributions to the inaugural SIMS annual Research Journal should be original and not

copied from someone else's research work. Citations and references should clearly mention

the source and its author. An undertaking from the contributor that the contribution is original

is required.

2. The articles/papers should be between 2000 to 4000 words. The case studies should be

between 2000—3000 words.

3. The font of the article should be Times New Roman 12 with 1.5 spacing between lines. A soft

copy of the same is required.

4. The articles/ papers should be accompanied by a one page abstract of not more than 200

words.

5. Papers/articles read out at reputed National/ International Conferences or contributed to

journals of national or international repute will be accepted for reprint provided the author

has not handed over exclusive publishing rights to the concerned Journal/ Institute. The

details of the same have to be clearly stated by way of a declaration to that effect that has to be

sent along with the contribution.

6. Research articles/ papers from students based on summer/ live projects will be accepted if

they indicate new findings or suggestions based on findings.

7. The Research Committee reserves the right to edit the contributions so that they fit the

guidelines of JIDNYASA.

8. In the Perspectives section, write-ups on current topics that call for rethinking or a different

perspective/ remedial action are invited in about 2000 to 4000 words. The same may be

backed by references and tables or charts. Such a write up should ideally be containing an

innovative and practical recommendation.

Subscription RatesPer Issue

1) For Institutions Rs 500/-2)For Individuals Rs 150/-3) For Individuals (by Hand Delivery) Rs 100/-

This time once again we have received contributions

on a wide range of topics that are very pertinent to

our changing times. In the Perspectives section, Dr

Mukul Madahar in his article, 'Inclusivity and

Innovation Challenge' discusses how while

inclusion is important for the sustainability of India's

growth, there are a lot of challenges in its

implementation. He looks at the common element in

these challenges namely, the people and what they

are taught. In his opinion, a well-structured

education system is required for India to implement

the inclusive growth agenda. Lakkshay Bussi in

“The Present World Economic Quagmire” talks of

policy paralysis (affecting Business sentiments) and

lowered manufacturing and exports as a result of

which India is expected to grow at a slow speed in the

current financial year..

The book review of 'What They Don't Teach You at

Harvard' by Mark McCormack informs us that the

book fills in the gaps between a business school

education and the street knowledge that comes from

day-to-day experience of running a business and

managing people. The book provides some good

advice for entrepreneurs and people thinking about

starting their own business.

In the case study section, we have Prof Swati

Khatkale's 'Deccan Chronicle Holdings Limited: A

Tragic Story ofAPublisher'. The case tries to find out

the causes of financial distress. It also illustrates

various options available to bankers & other

financial institutions to recover its loan. It also helps

find out options left for a defaulted company to get

back its profitability.

Self Help Groups in India- A Catalyst for Women

Economic Empowerment and Poverty Eradication'

by Dr Urmila Sharma and Prof Satish C. Sharma

'

discusses how SHGs will empower women– not just

through the access and control of credit and finances

but also by providing them with the space to express

themselves, and challenge the socio-economic

pressures that they have been suppressed by.

The Entrepreneurship section has a paper on

'Competencies of Entrepreneurs: Determinants of

Success' by Dr. Shagufta Sayeed that comes to the

conclusion that the competencies of being visionary,

innovative, a risk taker are the important qualities for

business success and the competencies of internal

locus of control, leadership and high powered are not

a good predictor and not prerequisite for business

success for entrepreneurs

In the Environment Section, we have Dr Surya

Rashmi Rawat and Dr Pawan K. Garga in 'Green

Marketing-The Greener Road Ahead' finding that

consumers belonging to different age & Income

group have a positive attitude towards certain

segments of Green Marketing.

In the finance section, Prof Stuart Locke and Dr

Geeta Duppati in their paper on 'The Risk Adjusted

Return on Indian Central Public Sector Enterprises'

conduct an empirical examination of financial

performance and governance of 84 Indian Central

Public Sector Enterprises (CPSEs). They find that

the role of government ownership and its impact on

financial performance is an important issue, across

the Asia-Pacific region where governments play a

significant role in the economic development.

In the HR Section we have Dr Surya Rashmi Rawat,

Ms Geetika Vijay, and Mr. Pratik Patnaik in 'Effects

of Economic Slowdown on Employee Employer

Relationship and Work Environment' conclude that

transparency, notifying targets in advance and giving

legitimate time to achieve goals are important ways

Editorial

1

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Editorial

Aadhar and Financial Inclusion

Why FDI in Retail ? A Study with Reference to Select Stakeholders

to handle pressure in an economic slowdown. They

recommend the developing of trust and faith over

each other, so that the members look at each other as

support systems rather than competitors leading to

synergistic output than the much abused lopsided

productivity. Dr. Surya Rashmi Rawat, Ajay Singh,

Cherry Gupta, and Prakash Verma in their paper

'Managing Stress Through Changing Lifestyle' try to

find out ways to efficiently resolve stress arising out

of increased workload in an organization, at the

individual and the organizational level. Meditation,

yoga, breathing exercises, music therapy are some of

the recommendations. Dr Ranjith Nayar and Dr

Smitha Nayar in their paper on 'Big Data and

Leadership for Innovation—An Aggregator Model'

examines leadership of innovation in the context of

finding new competitive advantages in a Big Data

driven world.

In the Marketing section, we have firstly

'Comparative Study of Customer Satisfaction in

Public Sector and Private Sector Banks in India' by

Dr P. K. Agarwal and Mr. Vijay Prakash Gupta that

tries to clarify the Customer Service satisfaction in

Indian banking Sector. The study revealed that there

exists a wide perceptual difference among Indian

(public sector) banks regarding overall service

quality with their respective customers, when

compared to Private sector banks. The said

perceptual difference in private banks is narrow.

'Marketing Environment and Adaptation to the

Changes' by Mr. Raghav Bhalla amd Ms. Nupur

Mantoo comes to the conclusion that a marketer

must know both the internal and external factors so

that he may get an edge as compared to everyone else

and be the ultimate seller of products and to attract

the potential buyers. Dr Umesh Mishra and Mr.

Ashish Saurikhia in 'Empirical Assessment of the

Impact of Demographic Variabes on Relationship

Quality in Telecom Sector' found that different

demographic variables have different impacts on

Relationship Quality. They found that subscribers of

higher income groups are least satisfied with their

telecom service providers as compared to lower

income groups.

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Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersVolume 1 of JIDNYASA : Thirst for Knowledge 2014

ContentsPerspectives

Inclusivity and Innovation Challenge

The Present World Economic Quagmire

Book review

What they don't teach at Harvard

Case Study

A Case Study on Deccan Chronicle Holdings Limited:

A Tragic Story of a Publisher

Economics

Self-Help Groups in India – A Catalyst for Women Economic

Empowerment and Poverty Eradication

Entrepreneurship

Competencies of entrepreneurs-Determinant of success

Environment

Green Marketing – The Greener Roads Ahead

Finance

The Risk Adjusted Return on Indian Central Public Sector Enterprises

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17

21

35

43

57

71

Dr Mukul Madahar

Lakkshay Bussi

Prof Swati Khatkale

Dr. Urmila Sharma, Prof Satish C. Sharma Ms. Priya Jha

Dr. Shagufta Sayeed

Dr. Surya Rashmi Rawat, Prof Dr. Pawan K. Garga

Prof. Stuart Locke, Dr.Geeta Duppati

,

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Research Papers

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Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select Stakeholders

Volume 1 of JIDNYASA : Thirst for Knowledge 2014


Human Resources

Effects of Economic Slowdown on Employee-Employer Relationship

& Work Environment

Managing Stress through Changing Lifestyle

Big data and leadership for innovation- An aggregator Model

Marketing

Marketing Environment and Adaption to the Changes

Empirical Assessment of the Impact of Demographic Variables on

Relationship Quality in Telecom Sector

87

101

109

131

140

Dr. Surya Rashmi Rawat, Geetika Vijay, Pratik Patnaik

Dr. Surya Rashmi Rawat, Ajay Singh, Cherry Gupta, Prakash Verma

Dr. Ranjith Nayar and Dr. Smitha Nayar

Raghav Bhalla, Nupur Mantoo

Mr. Ashish Saurikhia, Dr. Umesh Mishra

Mr. Vijay Prakash Gupta, Dr. P.K. Agarwal

Comparative Study of Customer Satisfaction in Public Sector and

Private Sector Banks in India 121

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Perspectives


6

Inclusivity and Innovation have been on the agenda

of many corporates in the 21 century. There is a lot

of pressure on corporates to involve as well as

develop for the . This discussion

highlights key issues/challenges related to

inclusivity, followed by looking into the higher

education sector in India (one of the key emerging

economies today) and identifying gaps and issues

within the sector and how shifting the educational

paradigm can be instrumental in achieving the

inclusivity agenda in organisations.

Most organisations of today are heavily involved in

innovation, both internally and externally. New

products and processes are being developed. Lately,

a number of organisations in high growth

environments, especially in emerging economies are

now concentrating on such means by which the

wider humanity can experience benefits of this

innovation i.e. 'Inclusiveness” is climbing higher in

the organisational agenda. The pressure is on

organisations to make both their and

INCLUSIVE. In a recent survey of the Indian

manufacturing executives, conducted by Accenture,

almost all respondents (98%) recognised the

“

In the same survey a

significant percentage of respondents acknowledged

that businesses that embrace inclusion will

outperform their peers /compet i tors i .e .

inclusiveness being on the agenda would lead to

having a competitive edge. In the words of Prime

Minister Manmohan Singh (April 21, 2012; cited by

Mello and Dutz, 2012),

st

“The Have-Nots”

Staff Products

benefits of a business model that includes the have-

nots” (Outlook, 2011, p2).

“Without inclusion, social

The Need:

and economic, the very sustainability of our growth

processes comes under question…”

have not's

The Challenges:

With inclusion rising up on the agenda for

corporations, there are still challenges associated

with it. The moment you try to ask these

organisations (think of the 98% mentioned earlier)

what they are actually doing about inclusivity, the

numbers start to change significantly.

Most organisations neither have the people nor

the policies (Such as HR policies to hire/retain

employees who are willing to experiment with

inclusive growth) to make inclusive growth a

reality.

Furthermore there is a commitment gap between

acknowledging the importance of inclusivity and

actually doing something about it.

Tapping the is not cheap. Significant

upfront investment is required to pursue this

agenda. In the process, profitability, which is the

main purposes for the existence of for-profit

organisations, sometimes need to take a back seat.

Something good for the country is not necessarily

good for the company. National growth and

organisational growth, many times, do not move

hand-in-hand.

Another finding of the Accenture survey was that

43% of the staff was reluctant to relocate to rural

areas. In a country where 70% of the population

lives in rural areas, this does not bode well for an

inclusivity vision.

Organisations are not really organised or

equipped to sell to the poor, which stems from a

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Inclusivity and Innovation Challenge

Dr. Mukul Madahar(MBA Welfare Director, Cardiff Metropolitan University, UK)

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Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersInclusivity and Innovation Challenge

lack of capabilities and talent of the people,

processes and policies. One of the suggestions is

to have partnerships with entrepreneurial small

organisations who have already mastered the art

of selling to the

Organisations lack inclusive growth culture.

There is lack of a culture that promotes or

implements inclusive business models into

practice. The organisations do not have the HR

policies to hire or retain people who are willing to

innovate and are willing to experiment. Until this

issue is addressed organisations will not be able to

shift culture in the direction of inclusive growth.

There seems to be a common element in all the

challenges: The People.An old axiom comes to mind

when evaluating the challenges:

In order to look into the problem,

I decided to take a step back and look at the supply

side of the organisations. This involved looking at

the foundation of these People and what they are

taught. It was thus decided to look at the education

sector, and in this perspective, specifically at the

higher education sector.

The Indian higher education budget is about $4.7 bn.

When compared to universities like California

Institute of Technology or the Harvard University

(which have annual expenditures of over $3 Bn

each), it is very small. Top Indian universities are

smaller as compared to the top World universities,

which on an average have 10, 000 students. Most of

these universities are struggling to recruit high

quality academicians. There is a shortage of around

40-50% within the teaching faculty. In spite of their

popular standing top Indian universities still do not

feature in the world's top universities. IIT-B was the

only university found placed in the Times Higher

Education magazine list in 2011 and that too in the

301-350 category.

Another aspect, which does not paint a pleasant

image, is the Gross Enrolment Ratio (GER). The

GER for India is 13.8% (i.e. only 13.8% of the

have-nots.

“As shall you sow,

so shall you reap.”

Indian Higher Education Challenges:

•

people eligible for higher education actually enrol

for it). This is very low when compared to other

countries. The GER for China is 23%, UK is 57%

and USA is 83%. India is little more than half of the

World average, which is 26%.

The Indian higher education is considered to be a

luxury only available to the brilliant and the affluent.

The unfortunate thing is that even the brilliant

struggle to climb up the ladder if they lack the

financial resources. The top institutes in India only

cater to about 5% of the population. Getting into the

top institutes is incredibly hard (Institutes like IITs

and the IIMs only have a 1.5% acceptance rate).

According to the Ernst and Young Report presented

at the FICCI HE Summit in 2011, the Indian higher

education sector is plagued with three fundamental

challenges.

As highlighted earlier, with a GER of

13.8% it is restricted to a limited population.

Some do not have the means and some do not

have enough learning and knowledge to get into

the top universities.

There is a significant disparity in GER

across the country and across different sects

within the country. It is interesting to compare:

GER of 31.9% in Delhi versus 8.3% in a state

likeAssam.

GER of 23.8% in urban areas versus 7.5% in

rural areas.

The SCs, STs and OBCs have significantly

lower GER as compared to others.

As mentioned earlier, there is a

significant shortage of teaching faculty, and

consequently the quality is suffering due to this

deficit. The curriculum is inconsistent and not

updated across all the institutes. Also,

infrastructure varies significantly across

institutes. (The report highlights that 48% of the

universities and 69% of the colleges have

infrastructure deficiencies). There exist a

significant number of unaccredited institutes,

Access:

Equity:

Quality:

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which offer sub-standard education and facilities.

The top universities are clearly small pockets of

excellence, a blended effect of the type of

students who get there and the infrastructure and

facilities provided at these places. These top

institutes do offer some programmes on

innovation and are often referred to as the

entrepreneurial incubation centres. However, the

innovation at these places is commercialised and

demand led, often sponsored by venture

capitalists, who have profitability on the agenda.

This still leaves the issue of inclusivity only

partially tackled.

In 1996 the Education Commission stated that

“ ”

(Cited by D.S. Cheema in Tribune, 18

September 2012). I think this statement from the

1990s is still valid. Now we shall look into what is

happening in these classrooms.

: I think competition is one aspect

that is inculcated in children from the day they are

born. From a HE perspective, one competes to get

into the top institutes; then once they get there,

they compete to get top grades, so that when

corporate recruiters come for campus recruitment

they are picked by the best ones and offered hefty

salary packages. Its competition all the way.

Where is the inclusion though?

: As highlighted earlier, the

ones who are bright and get better grades, get

better rewards. There is a general tendency

amongst the educators as well, who draw a line

between the bright ones and the not so bright

ones. The brightest clearly get more attention as

compared to the others.

: As students are busy

memorising and regurgitating what they are

taught, they neither have the time, nor are

encouraged to research. Due to shortage of

teaching faculty, the academicians are also under

pressure. When they struggle to actively research,

The destiny of India is shaped in her classroomsth

Competition

Survival of the fittest and the fight for highest

paid corporate jobs

Not enough research

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how can they encourage the students to do the

same?

In order to

make the learning environment and the learners

more inclusive we need to encourage more

collaborative learning within the classrooms. We

need to get rid of the divide between the good

students and the less able ones. Categorisation of

the students into high/low grades can lead to

unsustainable capacity behaviour and can be

damaging. Unlike individual learning (which is

more common), people engaged in collaborative

learning capitalise on one another's resources and

skills. Collaborative learning is a well-researched

area and there are claims that collaborative

learning increases interest in the learners and

enhances critical thinking. Collaborative learning

should also be encouraged between the students

and the educators. This is one aspect not

encouraged within the Indian education sector.

Even the top universities and institutes offer

narrow streams and courses. The research stays

within the traditional silos of subject areas. The

HE institutes need to attract faculty from different

disciplines and involve the students in more

research. Experts say that the size of the student

population and limited interdisciplinary research

at the top institutions keep them off global

ranking lists (FT, 2012).

We need to breed inclusivity within our institutes,

within our classrooms, between institutes and their

wider community context. . If we are successful in

achieving this, then the graduates will be more

inclusive in their mind-set and possibly carry it with

them into the workplace and the society at large. This

will help reduce the challenges to inclusivity

highlighted earlier.

The mind-set of the educators need to change and

concepts like collaborative learning need to be

practiced within our classrooms, right from

No signs of collaborative learning:

There is a lack of multidisciplinary research:

What Next?

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Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersInclusivity and Innovation Challenge

elementary education. Learning together rather than

individually inculcates more inclusivity within

students. The institutions also need to be inclusive to

the society and try to contribute by imparting

education to the have-nots. Initiatives like Coursera

(https://www.coursera.org/) need to be encouraged

at the top institutes.

The innovation within top institutes need to change

priorities. It should be moving from profit-based

innovation to inclusivity-based innovation. There is

a substantial body of research that talks about

benefits of inclusivity. The inclusivity needs to

become the primary agenda rather than pure

profitability. “Innovation for Inclusive Growth” has

emerged as the main theme for the Rajiv Gandhi

Centre (the portal for Imperial College Business

School's strategic commitments in India for joint

research initiatives, technology commercialisation

and educational programmes). The centre examines

how the can be served through low-cost or

resource-constrained innovation. This reiterates the

fact that inclusivity needs to be driving the

innovation agenda rather than just profitability. India

is an extremely heterogeneous economy and has a

highly diverse population, mostly operating in the

informal sector. Inclusivity-based innovation is

something that can better meet the needs of the

common people. In the words of Fred Harburg

(2011), “

Globally the private sector has played a key role in

filling the gaps within the HE sector. For example, in

the USAmore than 40% of the HE sector is catered to

by private institutions and the growth rate for this has

been higher than the public sector. Similar success

can be replicated in India. The private sector has

already played a substantial role in increasing

penetration and enrolment. The role of the state

governments will be crucial. With India targeting a

GER of 30% by 2020, the role of private institutions

will be noteworthy. The Prime Minister has invited

private sector participation in improving access to

have-nots

Without inclusion there can be no

creativity”.

quality higher education to disadvantaged groups in

the population. There is demand for HE institutes to

fill the gap, but the growth needs to be measured and

monitored for Quality, which clearly is the big

challenge. The top institutes need to take a step

forward and bring inclusivity into the mainstream

agenda. In the words of Pier Carlo Padoan (2011),

OECD Deputy Secretary General, and Chief

Economist, “

With almost 50% of the

population being under 25 and average age of 29,

India has everything going for it.All that is needed is

a well-structured education system, so that India can

address the inclusive growth agenda of the

government.

Inclusiveness does not come

as a residual – They need to be part of the

same policy strategy”.

after

growth

References

1. Cheema, D. S. (2012), To Ensure Quality, Teachers

must stay informed, The Tribune, 18th September

2012, Available at: http://www.tribuneindia.com/

2012/20120918/edu.htm#1

2. DeMello, L. and Dutz, M. A. (2012), Promoting

Inclusive Growth: Challenges and Policies, OECD

Conference, 8th May 2012, Hosted by OECD and

World Bank.

3. Ernst and Young (2011), Private Sector Participation

in Indian higher Education, FICCI Higher Education

Summit, November 11 & 12, 2011, New Delhi.

4. FT (2012), Higher Education: Students forced to play

numbers game, 25th January 2012 by Kanupriya

Kapoor.

5. Harburg, F. (2011), Your Brain on Innovation:

Without inclusion there can be no creativity, Chief

Learning Officer, July 2011.

6. www3.imperial.ac.uk/business school/research/

innovationandentrepreneurship/ieresearch/inclusive

innovationOutlook (2011), Inclusive Growth:

Closing the Commitment Gap, Issue No. 3.

7. Padoan, P. C. (2011), Challenges and Policies for

Promoting Inclusive Growth, OECD-WB

Conference, 24-25 March 2011, Paris.

10


The world is going through a real bad phase! With

central banks in most nations cutting their key rates

to boost their economy and government finding it

difficult to achieve fiscal consolidation in the present

scenario, the world is reeling under tremendous

pressure.

In Euro Zone, growth has become a farfetched

dream. The unemployment levels are way high and

hovering around 11-12% with some nations like

Greece and Spain experiencing a heavy

unemployment rate of 22-23%. It is almost like 1 in

every 4 Individuals doesn't have a Job. This scenario,

coupled with low Business and Investor sentiments,

growth can't happen as the consumer demand is

almost negligible. Euro-zone recorded negative

growth of -0.3% for the last 12 months and is

expected to grow at 0.5% in 2013. Thus help can

only come from the nations outside such as US, Asia

etc in the form of exports but a downturn in these

economies would be a serious blow to the euro-zone.

ECB will have a strong role to play here. The recent

announcement of purchasing unlimited bonds in a

sterilised manner will help contain sovereign debt

crisis in nations. ESM (European Stability

Mechanism), which finally has come into effect

from 8 of October, will send a positive message

outside, as Germany recently gave it a positive nod

along with other Euro-zone nations. ESM will be a

body that will provide euro-zone, financial

assistance in times of need. Post this EFSF

(European Financial Stability Facility) will be

responsible for giving Bailouts to 3 nations only -

Ireland, Portugal and Greece. The Inflation rate in

euro-zone is around 1.8-2.2%, which is not a good

th


Lakkshay Bussi(Symbiosis International University SIMS, Pune)

11

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sign as growth is the Inflationary numbers.

What is it that is going on in the West? US today

have a high unemployment rate of 7.8%

(tradingeconomics.com) which is expected to come

down to 7.5% in 2013 because of the recent QE

(Quantitative easing). The Business sentiments are

strong and consumers are increasing in numbers.

The housing market is gaining numbers as people are

able to find jobs now, which has resulted in lowered

employment, decreased house inventories and

below increasing house prices. The growth however is a

concern as US economy is expanding at the rate of 2-

2.5% with Inflation rates at a comfortable 2%. The

key interest rates are less than 1% which has led to

more lending and better Business sentiments.

Therefore it is unlikely that US will enter into

recession. Things however can change post elections

in November. On January 1 2013, two of the key acts

are getting expired. These are Tax Relief,

Unemployment InsuranceAuthorization and Job

12


creation act, 2010 (extension to "Bush tax cuts of

2001 and 2003") and Budget Control Act

"Fiscal Cliff"

. If these

two acts are not extended in 2013 then US may enter

into a state called . This term was

coined by Ben Bernanke, Chairman, Fed Reserve in

Feb 2012 and is a situation where the consumer and

Business sentiments will be hurt and US might enter

into a recessionary state along with Unemployment

levels touching new heights, though the budget

deficit will be reduced to a large extent.

In the other case, if these two laws are extended then

the deficit of the US govt. will rise again affecting

future spending by the govt., including cuts in its

defence spending. All in all, it will be really

interesting to see how the world's largest economy

handles this situation.

China today is also getting affected by the global

turmoil. Its growth has always been export-driven

and not domestic-consumer driven. HSBC PMI

(Purchasing Manager's Index) for last month was

What happens to the 3 Asian Big shots?? - China,

Japan and India?

13

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47.8, thus showing that manufacturing activity has

contracted due to decreased global demand for its

products. Today, when demand from most European

nations has waned coupled with low Business

sentiments, growth is just not on the right track. Its

economy is expanding at the rate of 7.5-8% with

Inflationary rates at a mere 2.5% which is way below

its target of 4% of 2012. China can thus play with its

monetary policies as there is a room to cut key rates

and boost lending, thereby boosting internal

consumer demand to propel its growth. This will also

improve its domestic housing market. There is

enough room for fiscal easing as well to ensure less

tightened regulations on various sectors which will

further boost growth.Japan today is fighting with its

extremely low growth (around 1%) and very high

public debt. Even after the Govt. is not cutting on its

spending and thinking on the lines of fiscal

tightening in the fear that it will affect its internal

consumers purchasing power, thus affecting its

growth (considering exports are down post Tsunami

clubbed with the impending world economic

crisis).This, the Manufacturing activity is also down

with PMI closing at 47 for the last month. The key

interest rate is thus kept at almost zero by BoJ, with

almost 3 cuts so far this year.

Finally, let us talk about India. Due to policy

paralysis (affecting Business sentiments) and

lowered manufacturing and exports, India is

expected to grow at 5-6% in the current FY.

Although we still have high inflation rate and fiscal

deficits, fiscal consolidation seems almost

impossible in the near future. However the recent

reforms of allowing FDI's in Multi-Brand Retail,

Aviation, Insurance, Pension funds gave some boost

to India Inc and Foreign investors which marginally

increased the growth forecast to 6-6.5% for FY2013.

Key lending rates are at almost stable levels and the

recent CRR cut further gave a push to the economy. It

is all upto the next Monsoons and exports to alter the

current growth numbers, considering India is still an

agrarian economy and a good monsoon drives the

economic wheel. It will further improve the

domestic consumer market and bring inflationary

rates down.

With all the permutations and combinations of the

economic situation across the globe, it would be

interesting to see where the world goes from this

quagmire!!

14


Book Review


16

There was a day when an MBAwould be a sure ticket

to riches and a promising career. However those that

have succeeded in business always tend to have a

competitive edge. In What They Don't Teach You at

Harvard Business School: Notes from a Street Smart

Executive by Mark H. McCormack, the author takes

you into the no nonsense business world. He has

made it in his own business and now he shares the

secrets of his success.

As he outlines in the beginning, he tries to convey the

people skills and the gut instinct needed to navigate

the shark infested waters of business Mark

McCormack is Founder, Chairman and CEO of

sports marketing company International

Management Group (IMG). He was named 'the most

powerful man in sports' by Sports Illustrated. He first

achieved fame as the manager of Arnold Palmer's

money interests and is largely responsible for

turning sports into big business with endorsements,

lines of clothing, television programming, and such.

In this book McCormack does not so much criticize

Harvard Business School as the title suggests, but

complements the traditional business school-

education with 'street smarts' - "the ability to make

active, positive use of your instincts, insights, and

perceptions." (Funnily enough, McCormack did not

even attend the HBS, he has a law degree from Yale.)

"My main purpose in writing this book is to fill in

many of the gaps - the gaps between a business

school education and the street knowledge that

comes from day-to-day experience of running a

business and managing people." He splits the 'street

smarts' and this book up into three parts: People,

sales and negotiation, and running a business. With

each part consisting of 4-to-6 chapters.

In the first part McCormack discusses matters

related to people, such as reading people, creating

impressions, preparation for business situations, and

improving your career. "Business situations always

come down to people situations. And the more - and

the sooner - I know about the person I am dealing

with, the more effective I'm going to be." In the

second part of the book - Sales and Negotiation - the

author discusses sales, negotiations and marketing.

Sales and negotiations are probably the strongest

point of both the book and McCormack, he really

excels here. ...The third part of the book - Running a

Business - is probably the weakest part of the book.

Although there are some great one-liners, it is clear

that the author is not that much at ease with writing

about organization structures, policies and

procedures. In fact, it looks like he despises most of

these subjects. However, in the final chapter he

provides some good advice for entrepreneurs and

people thinking about starting their own business.

This book is somewhat unconventional and is not

really a business/management book. The examples

from his experiences in sports marketing are

exceptional and extremely useful. And yes, it is a

great complement to the traditional business school-

education (although they are now covering some of

the subjects McCormack discusses, under the term

'emotional intelligence'). It is very simple to read and

relatively short (250 pages). Recommended to all

MBA-students, and yes also managers.

What They Don't Teach You atHarvard by Mark McCormack

17

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What They Don't Teach You at Harvard by Mark McCormack


18

Case Studies


20

Abstract

Deccan Chronicle Holdings Limited

While celebrating its platinum jubilee (75 years of

establishment), Deccan Chronicle Holdings Limited

(DCHL) faced a gamut of problems. DCHL, one of

the top English Newspaper Publishing House in

Southern India, recently ventured into other

businesses like IPL franchise - &

Life Style Retail- . Mismanagement and

unrelated diversification led to default on its non-

convertible debentures. It faced legal action from

banks & other financial institutions for non-

repayment of debt and misrepresentation of balance

sheet. Kotak Mahindra Bank even took actual

possession of its Hyderabad based Kodapur plant

under SARFASI Act 2002. This case goes into depth

to find out the causes of financial distress. It also

illustrates various options available to bankers &

other financial institutions to recover its loan. This

case can also be used in the class for finding out

options left for a defaulted company to get back its

profitability.

Deccan Chronicle Holdings Limited (DCHL) was

established as a printing & publishing company in

1938. It started publishing its flagship English

newspaper Deccan Chronicle as weekly newspaper

Deccan Chargers

Odyssey

and converted into a daily. In 1976, congress

politician and businessman T Chandrashekhar

Reddy acquired the company. T C Reddy had a

variety of businesses like bottling plants, aluminum

foil, hotels etc. His son, Mr. Venkattaram Reddy took

over as the chairman of the family business at the age

of 21. He had Diploma in Printing Technology and

was well versed with printing & publishing business.

But he was more known for his extravagant style of

having expensive cars, fine cigars and keen interest

in horserace bidding. His brother, Mr. Vinayak Ravi

Reddy was co chairman of the company. Mr.

Vankattaram Reddy's wife, Manjula Reddy worked

as senior features editor and their daughter Gayatri

Reddy as features editor. Their son T Vijay Reddy

was the Vice President (finance) of the company.

A Case Study on Deccan Chronicle Holdings Limited:A Tragic Story of a Publisher

Prof. Swati Khatkale(Assistant Professor, Symbiosis School of Banking Management)

Figure 1: Deccan Chronicle Newspaper

21

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A Case Study on Deccan Chronicle Holdings Limited: A Tragic Story of a Publisher

Vinayak Reddy's daughter Archana was marketing

head of the company.

As the name suggests, Deccan Chronicle's

operations dominated in Southern part of India. It

published various newspapers & magazines namely

Deccan Chronicle (English Daily), Financial

Chronicle (English Financial Newspaper), Andhra

Bhumi (Telugu Newspaper), Asian Age etc. In 2012,

Deccan Chronicle was the fourth largest English

newspaper in India. Deccan Chronicle was

publishing thirteen editions from Hyderabad,

Chennai, Bengaluru, Viishakhapatnam, Vijaywada,

Rajamundry, Nellore, Karimnagar, Coimbatore,

Kochi, Thrivantapuram, Kozhikode and Anantpur.

The circulation of newspaper in Hyderabad was the

highest around 5 lakh daily. It was followed by other

newspapers like The Hindu (5 lakhs), The Times of

India (2.5 lakh- 3 lakh) and The New Indian Express

(0.5 lakhs). According to a media consultant K

Satyanarayana Deccan Chronicle dominated local

advertising in English print media in Hyderabad

with 60% share.

On 1 April 2003, it merged with another publishing

house – Nandi Publishers Private Limited. In the

year 2003-04, it expanded its business by developing

a colour printing centre in Hyderabad. All this

increased its publishing capacity from 3,15,000

copies per hour to 4,35,000 copies per hour. In 2004,

DCHL brought its Initial Public Offer (IPO) in the

market. The IPO was 9.3 times oversubscribed,

raising 179 crores for the company. DCHL acquired

Asian Age Holdings in May 2005. It was a publisher

of English newspaper, The Asian Age, printed from

Delhi, Mumbai, Kolkata and London. Soon in 2007,

Deccan Chronicle's circulation reached average 1

Core Business Operations

Expansions

st

million per day. It ventured into the arena of financial

newspapers in April 2008, by launching Financial

Chronicle. Financial Chronicle was published from

Hyderabad, Chennai and Bengaluru. In the same

year DCHL made an alliance with International

Herald Tribune to publish business section of

Deccan Chronicle. Thus Deccan Chronicles grew

leaps & bounds with time.

With the growth, DCHL started diversification by

venturing into other businesses. On 5 September

2005, DCHL acquired 100% shares of lifestyle retail

chain Odyssey by paying Rs 61.2 crore in cash.

Odyssey was having a chain of retail stores selling

gifts, toys, stationary, books, music, multimedia etc.

The deal was considered highly overpriced as the top

line of Odyssey was only Rs 20 crore in 2005. The

price was more than 3 times of the turnover of

Odyssey. DCHL expanded Odyssey from 12 stores

in 6 cities to 46 stores in 13 cities in Andhra Pradesh,

Tamilnadu, Maharashtra and Karnataka. In spite of

the expansion, the Odyssey recorded losses. It

reported net loss of Rs 11.57 lakhs in 2010 against

profit of Rs 2.03 crore in 2009.

On January 24 2008, DCHL sported a new business

of Indian Premium League (IPL) franchise. DCHL

bought Hyderabad cricket team of IPL, Deccan

Chargers for $107 million (around Rs 589 crore).

The team was able to bring international cricketers

on the board like Adam Gilchrist, Andrew Symonds,

Chaminda Vaas, Herschell Gibbs & Shahid Afridi.

The team did not perform well in first season and

scored last. In the next session, it won the title. But in

2012, once again it stood the last.

DCHL also expanded its wings into Aviation

Industry by starting Aviotech. Aviotech commenced

its business in the arena of chartered flight services to

grab untapped private business aviation business in

Diversification of Business

th

th

22


India. Aviotech ordered 10-12 airplanes from Sukhi

Civil Aircraft. According to Kapil Arora of Earnest

& Young

With civil

aviation sector facing various difficulties of rising

fuel cost, depreciating Rupee, high taxes, high

airport costs; there is very thin hope that Aviotech

will churn any profits in the coming few years.

With increased diversification & expansion, the firm

could not sustain its profitability. DCHL reported

losses of Rs 166.24 crore in April- June 2012 quarter

from net profit in the same quarter in the earlier year.

Source: Moneycontrol.com

DCHL's troubles increased when Deccan Chargers'

ex CEO, Tin Wright sued the company in a London

Court for breach of contract. DCHL faced huge

compensation payment of £10.53 million to Tin

Wright.

The Company defaulted on the payment of Non-

Convertible Debentures (NCD) on July 2, 2012. In

“Chartered Flight services are in very

nascent stage in India and any volume & profits

can be seen only after 5 to 8 years.”

Financials:

Table1: Quarterly Results

The Default

2012, it even delayed the mandatory disclosure of

annual financial statements and published it only

after September 2012. The financial statements in

2012 showed a net loss of 1040 crores against last

year's profit of 162 crores. An year ago in 2011, the

company's balance sheet reported a strong liquidity

position with a debt of only Rs 313 crore and cash

position of Rs 264 crore and receivables of 258

crores. Still the CEO & chairman of the company

stated the problems rose due to liquidity crisis,

.” Astonishingly the debt

increased more than 10 times within a year to 3902

crores in 2012 from 313 crores in 2011.

In the suspicious situations after default, managing

director N. Krishnan resigned from the company on

25th July 2012. In December 2012, three more board

of directors resigned.

DCHL failed to pay Rs 100 crore to BCCI resulting

expulsion of Deccan Chargers. Therefore DCHLhad

to sell Deccan Chargers to Sun TV at a price of mere

Rs 425.2 crores on October 25 2012. During the

distress, the sale price of Deccan Chargers was even

less than its acquisition cost of 589 crores.

Since 25 July 2008, Deccan Chronicle Holdings

Limited had an investment grade A1+ rating of

CARE. On 1 July 2012, it paid Rs 300 crore debt but

failed to pay Rs 150 crore non-convertible

debentures to institutional investors like Pramerica

Mutual Fund and Canara Bank. Pramerica Mutual

Fund invested money of 1.3% of its liquid fund,

3.3% of ultra-short term bond fund, 6.2% of credit

opportunities fund,

“The

real issue is a liquidity crisis that has arisen due to

significant reduction in ad (advertisement)

spending by domestic and multinational

companies in India

Sale of Deccan Chargers

The Rating

th

th

st

Particulars Quarter Ended

Jun. 2012 Jun. 2011 % Var.

Sales 145.43 201.84 -28

OPM % -44.23 18.48 -339

PBDT -153.34 31.47 PL

PBT -166.24 18.02 PL

NP -166.24 12.18 PL

23


4.8% of dynamic monthly income fund and 5% of

dynamic fund in Deccan Chronicle Holdings based

on the credit rating. The rating agency CARE was

blamed to have A1 rating before default. The stance

of CARE was Deccan Chronicle had Rs 372 crore

cash/ FD balance and Rs 20 crore accruals and Rs

500 crore was raised by company from institutional

investors by December 31, 2011. Other argument

CARE officials made that the basic business of

Deccan Chronicle Holdings was running

successfully but it diverted funds to other

unsuccessful businesses. After default, CARE

downgraded the rating to D Grade on 2 July 2012.nd

Reasons of Failures

Aftermath of Default: Bleeding balance sheets of

banks & Legal Battles

According to various analysts & newspapers, the

acquisitions of DCHL went soar. According to the

Karvy brokers

. V Sundar Raja, founder,

www.sundartrends.in commented on DCHL,

According to financial analysts in

equitymaster.com,

Similarly Satish Kantheti, head of the

equity research division of Zen Securities Ltd

commented “

In July 2012, IFCI Ltd filed a petition in Andhra

Pradesh High Court for winding up operations of

DCHL due to non-redemption of NCD. With the

financial distress and default, the repayment of Rs

5000 crore bank loans also became questionable.

The depth of problems were estimated when it was

found out by Karvy Stock Broking Company that

DCHL has pledged shares twice for taking loans

from Karvy as well as Future Capital of Kishore

Biyani Group. According to Karvy Officials

“money raised for the media

company went into other areas for example Rs 50

crore went to Aviotech from Rs 170 crore raised

from Future Capital ”

"It

looks like the company made an investment of more

than Rs 1,000 crore in the last few years. In my

opinion, they must have invested in Deccan

Chargers. Recently they have interests in aviation

and in fact it is a surprise where they have invested

all this amount."

“All in all it is not a very happy

situation especially since some of the company's

investments appear to be made for reasons not

based on sound business acumen. The return on

these investments is not yet showing up in the

accounts.”

In my opinion, the current problem of

Deccan Chronicle is due to unrelated

diversification and the management's loss of

focus.”

“It is

very clear from the documents, that the depository

account holders, by using a forged letter,

Figure 2: DCHL's default toPramerica's Mutual Funds

24


committed a fraud on us and misrepresented the

facts that a higher number of shares existed in their

accounts for availing a loan against them, thereby

committed a breach of trust and forgery.”

DCHL's largest lender ICICI Bank created a

consortium with other three private sector lenders

Axis Bank, IDFC & Religare Finvest to recover the

loans. Canara Bank's 358 crore loan turned into an

NPA. As the financial statements did not show any

weaknesses a year ago, suspecting a fraud, Canara

Bank started forensic audit of DCHL by Deloitte.

Other Banks, who were planning 2300 crore

Corporate Debt Restructuring, halted restructuring

in the view of possible fraud. Religare Finvest filed

an FIR after two cheques amounting 6 crores

bounced on 1 July and 1 August 2012. Bailable

warrants were issued against the directors of DCHL.

Kotak Mahindra Bank took extreme step after giving

two notices to DCHL in October 2012 and January

2013. The Bank took actual possession of Deccan

Chronicle's Kodapur plant, building & machinery on

May 16 , 2013. This was the first legal possession of

DCHL's assets under Securitization and

Reconstruction of FinancialAssets and Enforcement

of Securities Interest (SARFASI) Act 2002. DCHL

faced another charge in July 2013 from Central

Bureau of Investigation (CBI) for fabrication of false

balance sheet and hiding actual borrowings. It is sad

story that how a publishing unit became tragedy by

itself. Deccan Chronicle had to think hard to find out

a way back to its profitability & regain its lost

reputation.

st st

th

Figure 3: Kotak Mahindra Bank's notice onthe gates of Deccan Chronicle's press

at Kondapur, Hyderabad.

Figure 4: Worried Bankers for loans given to DCHL

25


Source: Moneycontrol.com

Figure 5: Fall in share prices of DCHL

Table 2: Balance Sheet of Deccan Chronicle Holdings

Standalone Balance Sheet ------------------- inRs. Cr. -------------------

Sep '12 Mar '11 Mar '10 Mar '09 Mar '08

18 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 41.79 48.69 48.44 48.98 48.98

Equity Share Capital 41.79 48.69 48.44 48.98 48.98

Reserves -31.78 1,231.45 1,209.57 1,100.89 1,018.12

Networth 10.01 1,280.14 1,258.01 1,149.87 1,067.10

Secured Loans 3,070.90 313.12 328.87 354.5 792.7

26


Unsecured Loans 832 0 13.46 13.46 13.46

Total Debt 3,902.90 313.12 342.33 367.96 806.16

Total Liabilities 3,912.91 1,593.26 1,600.34 1,517.83 1,873.26


Application Of Funds

Gross Block 1,037.53 1,074.09 916.58 840.99 646.41

Less: Accum. Depreciation 260.12 210.21 146.53 103.47 67.02

Net Block 777.41 863.88 770.05 737.52 579.39

Capital Work in Progress 3,092.92 62.83 37.68 85.6 57.89

Investments 0 0 210.62 240.92 190.92

Inventories 21.08 133.41 62.04 129.91 30.15

Sundry Debtors 144.78 258.36 195.55 194.25 244.69

Cash and Bank Balance 15.87 264.2 41.56 59.59 2.75

Total Current Assets 181.73 655.97 299.15 383.75 277.59

Loans and Advances 165.48 151.62 185.51 98.49 190.03

Fixed Deposits 0 439.6 550.09 300.09 791.94

Total CA, Loans &

Advances 347.21 1,247.19 1,034.75 782.33 1,259.56

Current Liabilities 293.89 567.87 435.98 315.81 170.52

Provisions 10.75 12.77 16.77 12.74 54.59

Total CL & Provisions 304.64 580.64 452.75 328.55 225.11

Net Current Assets 42.57 666.55 582 453.78 1,034.45

Miscellaneous Expenses 0 0 0 0 10.61

Total A ssets 3,912.90 1,593.26 1,600.35 1,517.82 1,873.26

Contingent Liabilities 142.35 0.57 0 0 0

Book Value (Rs) 0.48 52.58 51.94 46.96 43.58

Source: http://www.moneycontrol.com

27


Standalone Balance Sheet ------------------- inRs. Cr. -------------------



Table 3: Profit & Loss account of Deccan Chronicle Holdings

28


------------------- in Rs. Cr. -------------------



Sales Turnover 786.08 976.16 892.5 814.94 782.37

Net Sales 786.08 976.16 892.5 814.94 782.37

Other Income 57.33 3.38 29.45 42.68 37.52

Total Income 843.41 979.54 921.95 857.62 819.89

Expenditure

Raw Materials 417.37 329.6 261.89 396.56 206.28

Power & Fuel Cost 17.18 11.76 7.21 0 0

Employee Cost 138.83 96.82 65.47 49.39 26.14

Other Manufacturing Expenses 233.38 84.73 48.49 46.18 28.01

Selling and Admin Expenses 0 149.89 50.98 48.58 30.41

Miscellaneous Expenses 344.92 10.64 6.89 5.98 2.33

Total Expenses 1,151.68 683.44 440.93 546.69 293.17

Operating Profit -365.6 292.72 451.57 268.25 489.2

PBDIT -308.27 296.1 481.02 310.93 526.72

Interest 733.88 59.01 45.13 70.93 76.79

PBDT -1,042.15 237.09 435.89 240 449.93

Depreciation 81.23 51.57 42.25 32.06 27.99

EBIT -389.5 244.53 438.77 278.87 498.73

Profit Before Tax -1,123.38 185.52 393.64 207.94 419.05

PBT (Post Extra-ordinary Items) -1,123.67 185.52 393.64 207.94 419.05

Tax -83.27 74.3 132.73 67.86 147.11

Reported Net Profit -1,040.40 162.58 260.92 140.07 271.94

Total Value Addition 734.32 353.84 179.04 150.13 86.89

Equity Dividend 0 0 72.93 48.98 73.38

Corporate Dividend Tax 0 0 12.39 8.32 12.47

Per share data (annualized)

Shares in issue (lakhs) 2,089.72 2,434.72 2,422.23 2,448.78 2,448.78

Earnings Per Share (Rs) -49.79 6.68 10.77 5.72 11.11

Equity Dividend (%) 0 0 150 100 150

Book Value (Rs) 0.48 52.58 51.94 46.96 43.58

Source: http://www.moneycontrol.com

29


References:

1. Appaji Reddem, “Deccan Chronicle's NCD default

scares investors”, moneycontrol.com, 31 July

2012, 10:43 pm, http://www.moneycontrol.com/

news/cnbc-tv18-comments/deccan-chronicles-

ncd-default-scares-investors_738283.html

2. Business Lines, “Banks may decide on Deccan

Chronicle debt rejig after forensic audit”,

S e p t e m b e r 1 2 , 2 0 1 2 , h t t p : / / w w w .

thehindubusinessline.com/ companies/ banks-may-

decide-on-deccan-chronicle-debt-rejig-after-

forensic-audit/ article3889580.ece

3. Business Standard, “Deccan Chargers is now

Sunrisers”, 21 December 2012

4. Firstpost.business, “Deccan: Chronicle of a flawed

diversification model”, August 9, 2012, Website:

http://www.firstpost.com/business/deccan-

chronicle-of-a-flawed-diversification-model-

412047.html

5. Goyal Rajesh, “Titanic Defaults are likely to

Do Irreparable Damages to Indian Banking

Industry”, Allbankingsolutions.com; http://www.

allbankingsolutions.com/Press-Release-Views/

Kingfisher-Deccan-loot.htm

6. IBN Live, “Deccan Chargers changed to Sun

Risers”, December 18, 2012, http://ibnlive.in.com/

news/ cricketnext/ipl-6-deccan-chargers-changed-

to-sun-risers/368632-78.html

7. KalavalapalliYogendrs & Pilla Viswanath, “Deccan

Chronicle-Hitting the headlines”, livemibt, 10

August 2012, ht tp: / /www.l ivemint .com/

Companies/ faicytUH784pSz3k0t4CZI/Deccan-

Chronicle--Hitting-the-headlines.html

8. Menon Amarnath K “Hyderabad gets new IPL

franchise, Deccan Chargers are now Sunrisers”,

Business Standard, 22 July 2013, http://www.

business-standard.com/article/ companies/deccan-

chargers-is-now-sunrisers-112122100110_1.html

9. Menon Amarnath K, “Hyderabad gets new IPL

franchise- Deccan Chargers are now the Sunrisers”,

India Today, Hydeabad, December 21,2012,

http://indiatoday. intoday.in/story/sunrisers-

st

st

th

nd

h y d e r a b a d - i p l - s u n - t v - b c c i - k u m a r -

sangakkara/1/238830.html

10. Moitra Sumit, “Concast drags Deccan to court over

default”, 23 December 2012, DNA, http://www.

dnaindia.com/money/1781051/report-concast-

drags-deccan-to-court-over-default

11. Sinha Shirish, “Deccan Chronicle: Private lenders

plan to team up to recover dues”, Business Lines,

M a y 2 , 2 0 1 3 ,

http://www.thehindubusinessline.com/companies/

deccan-chronicle-private-lenders-plan-to-team-up-

to-recover-dues/article4677221.ece

12. Sukumar C R & Menon Shailesh, “Deccan

Chronicle Holdings defaults on loan payments.”,

T h e E c o n o m i c Ti m e s , J u l y 5 , 2 0 1 2 ,

http://articles.economictimes.indiatimes.com/2012

-07-05/news/32551547_1_pramerica-dynamic-

fund-liquid-fund-fund-house

13. Sukumar C R, “Kotak Bank seizes Deccan

Chronicle's Hyderabad press assets”, The Economic

Times, May 15, 2013, web link: http://articles.

economictimes.indiatimes.com/ 2013-05-

15/news/39282075_1_dchl-pvp-capital-deccan-

chronicle-Holdings-ltd

14. The Hans India, “Deccan Chronicle printed press

s e a l e d ” , M a y 1 6 , 2 0 1 3 , h t t p : / / w w w.

thehansindia.com/2013/05/16/deccan-chronicle-

printing-press-sealed/

15. The Hindu, “Bank takes over Deccan Chronicle

press”, May 16, 2013, http://www.thehindu.com/

business/Industry/bank-takes-over-deccan-

chronicle-press/article4718786.ece

16. The Hindu, “Kotak Mahindra Bank serves

possession notice on Deccan Chronicle Holdings”,

8 January 2013, http://www.thehindu.com/

business/companies/kotak-mahindra-bank-serves-

pos se s s ion -no t i ce -on -deccan -ch ron ic l e -

Holdings/article4287502.ece

17. The Hindu, “Taxmen 'inquire' into banking

transactions of Deccan Chronicle”, Hyderabad, 25

June 2013, http://www.thehindu.com/ business/

I n d u s t r y / t a x m e n - i n q u i r e - i n t o - b a n k i n g -

rd

th

th


t r ansac t ions -of -deccan-chron ic le /a r t i c le

4850398.ece

18. The Indian Express, “Deccan Chronicle Holdings

promotors' properties attached”, 29 March 2013,

http://www.indianexpress.com/news/deccan-

chronicle-Holdings-promoters-properties-

attached/1094799/

19. The Sunday Gaurdian, “Banks face bad debts as

co rpo ra t e de fau l t” , 23 March 2013 ,

th

r d

http://www.sunday-guardian.com/investigation/

banks-face-bad-debts-as-corporates-default

20. The Times of India, “Kotak Bank takes possession

of Deccan Chronicle Press”, May 16, 2013,

http://timesofindia.indiatimes.com/business/india-

business/Kotak-Bank-takes-possession-of-

D e c c a n - C h r o n i c l e - p r e s s / a r t i c l e s h o w /

20075498.cms

30

22


Research Papers


32

22


Economics


34

Abstract

Self-Help Bank Linkage Programme

(SHG)

Investing in women is a proven way to fight poverty.

Women show a higher micro-loan repayment rate

and consistently invest more of their earnings in their

children and families than men. That is why nearly

70 percent of micro-loans donated through Micro, go

to women entrepreneurs. Microfinance programmes

like the

in India have been increasingly hailed for

their positive economic impact and the

empowerment of women. This is based on the view

that, women are more likely to be credit constrained,

have restricted access to wage labour market and

have limited decision-making and bargaining power

within the household. This article argues that true

women empowerment takes place when women

challenge the existing norms and culture, to

effectively improve their well-being.

The SHG movement in the state of Rajasthan has set

the ground for a major change process which will be

led by women and in the process will empower them

– not just through the access and control of credit and

finances but also by providing them with the space to

express themselves, and challenge the socio-

economic pressures that they have been suppressed

by. Without overburdening the SHG, the

introduction of the enterprise development process

can effectively address livelihood issues as well. In

the current scenario, where there are over 200,000

SHGs in the state, a structured and focused

programme can make a significant impact on women

and through them to the entire family.

Microfinance – also called micro credit, micro

lending, or micro-loans - is a highly successful

economic development tool to fight global poverty.

The term refers to the practice of

providing financial services to people in

impoverished countries who have no collateral,

credit history, or access to traditional lending

services.

Small loans or group loans

Micro Savings

Micro Insurance

Investing in women is a proven way to fight poverty.

Empowerment of women has become a significant

topic of discussion in regards to development and

economics . Ent i re na t ions , bus inesses ,

communities, and groups can benefit from the

implementation of such programmes and policies

Self Help Groups in India –ACatalyst forWomen

Economic Empowerment & Poverty Eradication

"microfinance"

Microfinance services can include:

•

•

•

Self-Help Groups in India – A Catalyst forWomen Economic Empowerment

and Poverty Eradication

Dr. Urmila SharmaProf. Satish C. Sharma

Ms. Priya Jha

(

(

(

Managing Editor, Woman World),

Chairman & Managing Director and

Honorary Professor (OB & HR), Maharaja Group of Colleges)

& Student, M.B.A., Maharaja College of Management)

•

35

Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersSelf-Help Groups in India – A Catalyst for Women Economic Empowerment and Poverty Eradication

Self-Help Groups in India – A Catalyst for Women Economic Empowerment and Poverty Eradication

that adopt the notion of women empowerment.

Nowadays, women are challenging the existing

norms and culture to effectively improve their

feeling of well-being and self-confidence.

According to our definition, the truly empowering

activities are those that reflect the changes that

women have effectively made to better their lives, by

resisting the existing norms of the society.

Access basic healthcare, like medicines and

regular check-ups.

Buy nutritious food for their children,

instead of relying only on what they can

grow.

Send their children to school and pay for

educational supplies.

Improve the living conditions for their

families.

Gain confidence and promote gender

equality.

A majority of microfinance programmes target

women with the explicit goal of empowering them.

There are varying underlying motivations for

pursuing women empowerment. The concept of

SHGs is predominantly used in the case of

economically poor people, generally women, who

come together to pool their small savings and then

use it among themselves. It has been experienced

that, the SHGs are generally formed through the

intervention of a facilitating agency; the pooled

savings are then used to make small interest bearing

loans among themselves. The members who borrow

the money have to return the same in weekly,

fortnightly or monthly instalments at predetermined

rates of interest. The group is solely responsible for

determining its periodical saving rate, internal

lending policy as well as interest rates. This process

Microfinance Enables Women Entrepreneurs

To:

SHGs and Women Empowerment:

•

•

•

•

•

helps group members imbibe the essentials of

financial intermediation such as prioritising needs,

fixing terms and conditions and maintaining

accounts. Self-help groups are started by Non-Profit

Organisations (NGOs) which generally have broad

anti-poverty agendas. Self-help groups are seen as

instruments for a variety of goals, including,

empowering women, developing leadership abilities

among poor people, increasing school enrolments,

improving nutrition and the use of birth control.

While the term 'Self-Help Group' or SHG can be

used to describe a wide range of financial and non-

financial associations, in India, it has come to refer to

a form of Accumulating Savings and Credit

Association (ASCA), promoted by Government

agencies, NGOs or banks. The mechanism of

lending through Self Help Groups (SHGs) has

gained wide popularity over the last few years, and

has been adopted as an important strategy by banks

for lending to the poor.

' ( ) are village-based

financial intermediaries usually composed of 10–20

local women. Microfinance programmes like, the

Self-Help Bank Linkage Programme (SHG) in India

have been increasingly hailed for their positive

economic impact and empowering women.

A distinction can be made between different types of

SHGs according to their origin and sources of funds.

Several SHGs have been carved out of larger groups,

formed under pre-existing NGOs for thrift credit or

more broad-based activities. Some have been

promoted by NGOs within the parameters of the

Bank Linkage Scheme, but as part of an integrated

developmental programme. Others have been

promoted by banks and the

. Still, others have

been formed as a component of various physical and

social infrastructural projects. Some of the

characteristic features of SHGs currently engaged in

Micro Finance are given below:

Self-Help Groups' SHG

District Rural

DevelopmentAgencies (DRDAs)

36


•

•

•

•

An SHG is generally an economically

homogeneous group formed through a

process of self-selection based upon the

affinityof its members.

Most SHGs are women's groups with

membership ranging between 10 and 20.

SHGs have well-defined rules and by-laws,

they hold regular meetings and maintain

records and savings and credit discipline.

SHGs are self-managed institutions

characterized by participatory and collective

decision making.

The concept of linking SHGs to banks was launched

as a pilot project by National Bank for Agriculture

and Rural Development (NABARD) in 1992. The

pilot envisaged, linking of just 500 SHGs to banks.

By the end of March 1994, 620 SHGs had been

linked to banks. The success of the pilot led to its

transformation into the SHG Bank Linkage

Programme with an ever-increasing number of

banks and NGOs participating therein. From modest

beginnings in 1992, the SHG Bank Linkage

Programme spread rapidly and in just over a decade

had emerged as the single largest microfinance

programme in the world. At the end of March 2006,

its coverage extended to 583 districts located in 31

States and Union territories. Over 22.38 lakh SHGs

had been linked to banks and cumulative loans of Rs

11,397.54 crore disbursed under the first

programme. Besides the participation of 4,896

NGOs and other agencies, a total of 44,362 branches

of 547 banks were involved in lending under the

programme. Women's groups formed over 90 per

cent of the SHGs. Over a period of time, three

different models of lending have emerged under the

programme. In the first model, the bank takes the

initiative in forming the groups, nurturing them,

opening their savings accounts and then finally

NABARD's 'SHG Bank Linkage Programme':

providing credit to them. In the second model, while

facilitating agencies like NGOs, Government

agencies or community based organisations take the

lead in forming groups and nurturing them, they are

provided savings and credit facilities by the banks. In

the third model, the NGOs, which have promoted

and nurtured the groups, also act as financial

intermediaries. Under this model, the banks lend to

these intermediaries for onward financing to the

groups or their members. In some cases, the

promoting NGOs organise the SHGs into

federations, which then take on the role of financial

intermediaries. Data published by NABARD reveals

that the second model has proved to be the most

popular. At the end of March 2006, 74 percent of the

SHGs linked were under this model; the first and the

third model accounted for 20 per cent and 6 per cent

of the SHGs respectively.

Despite the phenomenal growth under the

programme, certain areas of concern continue to

persist.

First, the focus on achievement in terms of numbers

has resulted in the qualitative aspects of the SHGs

not getting the deserved attention. Second, there

remains a strong regional bias towards the southern

states. As at the end of March 2006, while Andhra

Pradesh, the state with the largest share among the

southern states, accounted for 26.2 per cent of the

total SHGs and 38.1 per cent of the total loans

disbursed, Rajasthan, the state with the largest share

of SHGs in the northern region, accounted for only

4.4 per cent of the SHGs and just 2.1 per cent of the

total loans disbursed. Third, the quantum of loan

granted per SHG continues to be very low. In March

2006, the amount was Rs 37,582 for new loans and

Rs 62,949 for repeat loans to existing SHGs.

Considering that on an average an SHG has 14

members, the per capita loan amount in March 2006

was Rs 2,684 for new loans and Rs 4,496 for repeat

loans. Fourth, the issue of sustainability of SHGs has

37


also not been highlighted. Only since 2001,

NABARD has been publishing data regarding the

number of SHGs provided with repeat bank credit.

These data reveal that the percentage of SHGs

getting repeat bank credit has remained quite low,

indicating that most SHGs have had access to bank

credit on only one occasion.

NGO Strategies & Structures for Women

Empowerment:

The objectives of SHG promotion in India by NGOs

are expressed in a variety of ways with livelihoods

and empowerment at the centre. Barring a few

exceptions, these NGOs have been involved with

Micro Finance (MF) along with health, education

and natural resource management often, as part of an

integrated approach. However, NGOs are under

pressure to address the question of financial

sustainability of their MF programmes, an issue that

is increasingly being raised by international donors

and domestic funding sources. It has become

necessary for NGOs to demonstrate that their

mic ro f inance programmes can become

operationally and financially self-sufficient. At the

same time, NGOs are constrained by the question of

which legal form (most NGOs have been working as

registered not-for-profit societies) to adopt for

continued operations in this sector. This is further

tempered by the NGO objective of creating

community owned and managed financial

institutions built upon the SHG concept. These

pressures have brought about a period of transition

as NGOs struggle to discover the appropriate

institutional structure, both for themselves and the

community institutions promoted by them, given the

conditions attached to various sources of funds and

local and national legal and regulatory provisions.

For the flow of financial resources, the vision

invariably involves a linkage between the informal

SHGs and formal or mainstream structures of

financial services delivery. However, there is a

divergence between the long-term paths of SHG

development envisaged by the different SHG

promoters. While SHGs promoted by NGOs are part

of a approach, two broad

paths for long-term SHG involvement in financial

intermediation can be identified: -

(i) SHGs linked directly to banks on a permanent

basis;

(ii) SHGs/federations of SHGs linked to various

types of MFIs.

, an India based NGO (Non-Government

Organisation). It is a voluntary organisation

registered under the Societies Registration Act of

India. In 1983, a few young professionals set up

PRADAN, inspired by the belief that, well-educated

people with empathy towards the poor must work at

the grassroots to remove mass poverty. Soon, there

were several score professionals in PRADAN,

working in remote villages in many Parts of the

country, helping poor families enhance their

livelihoods through concrete action programmes.

PRADAN believes that the path towards conquering

economic poverty is through enhancing the

livelihood capabilities of the poor and giving them

access to sustainable income earning opportunities.

was founded in 1984, and

registered under the Rajasthan Societies

Registration Act. In 1991 it became the first

organisation in Rajasthan to recognise and react to

the growing problem of HIV/AIDs among the

population. GBS works to improve the living

standards and environment of Rajasthan. Their work

can be divided into three main categories:

Women's empowerment

The environment

HIV/AIDs prevention and relief

They have organised financial federations of SHGs

in village clusters to facilitate inter-group lending

and larger and more reliable sources of funds than

“Microfinance Plus”

PRADAN

Gram Bharati Samiti

•

•

•

38


provided under SHG-bank linkage.

(whose federations are non-financial), on the other

hand, has promoted a not-for-profit company to

provide parallel and competitive financial services

to the existing banking channels. Some NGOs have

chosen to transform themselves into financial

intermediaries or are in the process of setting up

independent satellite MFIs under the NGO umbrella

to act as intermediaries for SHGs or their

federations. While the range of experimentation is

high, the experience of these different models and

evidence of their reliability is still very limited.

Data obtained from NABARD revealed that 245

SHGs were linked to banks in Rajasthan at the end of

March 1998. These SHGs were spread over 12

districts of the State. However, 96 per cent of these

SHGs (235) were from seven districts,

Hanumangarh (95), Udaipur (74),Alwar (30),Ajmer

(10), Sawai Madhopur (10), Jodhpur (8) and

Chittorgarh (8). The remaining five districts

accounted for only 10 SHGs amongst them. The

study was based on secondary data. While secondary

data were obtained from NABARD and controlling

offices of banks.

Women's groups formed less than half (46 per cent)

of the SHGs linked to banks by the end of March

1998, as compared to a share of 78 per cent at the

national level. A majority of the SHGs (58 per cent)

were formed by NGOs and linked to banks. The

spread of SHGs, as well as existence of NGOs varied

greatly among the districts. While there was an

established NGO and a formal SHG federation in

existence in Alwar district, in Ajmer district, there

were no NGOs worth their name. In Hanumangarh

district, all the SHGs had been promoted and

financed by a single bank. NGOs, was adopted for

linkage by banks in all the remaining districts. In

Alwar district, while the NGO that had promoted the

MYRADA

Outreach of SHG Bank Linkage

Status of Linkage

viz.,

SHGs (PRADAN) had largely withdrawn from the

area, an SHG federation called Sakhi Samiti had

taken over its functions. The regular meetings of

Sakhi Samiti went a long way in providing guidance

and continuity to the SHGs. It was evident that the

role and responsibility of the promoting organisation

was very crucial to the sustainability of the SHGs. It

was observed that where the promoting NGO was

sincere and committed in its endeavors, the groups

had a greater tendency to sustain and mature.

However, where the NGO itself lacked the vision

and long-term relationship with the SHGs, the

groups disintegrated.

The large-scale disintegration of SHGs as brought

out by the study portends a potential threat to the

SHGs bank linkage programme. In order to ensure

sustainability of SHGs, the quality of groups formed

is of prime importance. Group formation needs to be

handled in a professional manner by trained

personnel.At the apex level, NABARD should focus

on paying increased attention to the promoters of

SHGs. In recent years, when Government agencies

have ventured into group formation in big way, it is

very important that their functionaries are also

sensitized about the importance of group quality and

sustainability. The banks should undertake due

diligence of the promoting organisations before

releasing the funds. An initial guideline enunciated

by NABARD at the time of launching the Pilot

Project stated that the group members should have a

feeling of mutual help and should not have come

together only for the sake of getting bank finance.

This is still relevant and should not be lost sight of in

the race to achieve the ever-increasing targets for

forming SHGs. The amount and frequency of loans

availed by SHG members may appear to be low but

in relation to their savings; it varies between two to

three times of the total savings. For the poor persons

who have been exposed to bank finance for the first

Emerging Issues

39


time in their lives, this amount could be considered

adequate. However, for SHGs that continue to

sustain beyond a certain time period, say five years,

the amount of loan should increase considerably to

enable members to graduate to the economic activity

stage.

The time has come for NABARD to formulate a

suitable policy for matured SHGs. Both banks and

the promoting organisations have to be sensitized

about the financial requirements of SHG members

after the SHGs reach a degree of maturity. Such

members of mature SHGs who desire to graduate to

higher levels should have access to guidance and

finance to enable them to increase the scale of their

operation, either at the individual level or in the

group. Smaller groups of up to five persons, out of

the original SHG could be considered separately for

financing within the scope of SHG lending.

Since the amounts involved in these loans at the

individual level were not of much significance to the

banks, there was a tendency not to take a serious note

of irregularities in the repayment schedules of SHGs.

However, as the loans to SHGs also had a tendency

to slip into the irregular mode more often than not,

bankers need to exercise care and caution while

dealing with SHGs as they would in case of other

borrowers. Besides conducting personal visit to the

SHG and due diligence of the promoting NGO

before sanctioning loans to the SHGs, the post

sanction supervision and monitoring also requires to

be carried out seriously. These tasks can be entrusted

to the NGOs/ SHGs under the business facilitator

and correspondent models in terms of guidelines

issued by Reserve Bank of India (RBI) in January

2006.

"The self-help group model has been identified as a

potential pathway to alleviating poverty. The

number of poor women and men who are enrolling in

SHGs all over rural India has been increasing

Conclusion

remarkably. They are not only active in thrift and

credit management but are also taking up other

activities, such as natural resource management and

development work, l i teracy, knowledge

management, nutritional security etc. SHGs lay the

foundation for self- reliance through building up of

institutions, which have the capacity to generate

employment opportunities for the rural poor, and the

poorest, and lead to job-led economic growth."

Women are amongst the poorest and the most

vulnerable of the underprivileged and thus helping

them should be a priority and investing in women's

capabilities empowers them to make a choice which

is a valuable goal in itself but it also contributes to

greater economic growth and development.

References

1. Bali Swain R, 2006: Microfinance and Women's

Empowerment, Sida Working Paper, Division of

Market Development, Sida, Stockholm.

2. Cheston S and Kuhn L, 2002: 'Empowering Women

through Microfinance', Draft, Opportunity

International.

3. Fisher T and Sriram MS, 2002: Beyond Micro-

Credi t : Put t ing Development Bank into

Microfinance, Vistar, New Delhi.

4. Karlan, H., 2001: Microfinance Impact Assessments:

The Perils of Using New Members as a Control

Group, Journal of Microfinance, December.

5. NABARD, 2005: Progress of SHG – Bank Linkage in

India, 2004-2005, Microcredit Innovations

Department, NABARD, Mumbai.

6. Puhazhendi, V. and Badatya, K.C., 2002: SHG Bank

Linkage Programme for Rural Poor – An Impact

Assessment, paper presented at the seminar on SHG

bank linkage programme at New Delhi, micro Credit

Innovations Department, NABARD, Mumbai.

7. Puhazhendi V and Satyasai KJS, 2001: 'Economic

and social empowerment of rural poor through

SHGs', Indian Journal of Agricultural Economics,

Vol. 56. No. 3.

8. Sen, A.K. & Nussbaum M.C. (ed.), 1993: Capability

and Well-Being, in the Quality of Life.

40


Entrepreneurship


42

Abstract

Entrepreneurs can be found everywhere, doing just

about everything—from starting a new restaurant to

creating a new technology or invention. These

people often put their money or their reputations on

the line. Some wish to become rich and famous.

Others wish to make themselves, their families or

their communities better off. And some seek pure

adventure—to challenge the limits of their

capability. Regardless of motive, an entrepreneur's

goal is to improve the way of life and end up

benefitting a host of other people.

The culture of a region should foster innovation,

encourage risk taking, protect new ideas and allow

entrepreneurs to profit from their successes. The

present study attempts to make some contributions

to the literature, theory, and practices concerning

Entrepreneurial Success. The research will help

answer the questions:

How can individuals be equipped to become

“successful entrepreneurs” and use the tools of

entrepreneurship to improve social and

environmental impacts at the company level?

How can individuals with an interest in

becoming entrepreneurs be made aware of the

aspects and hence challenges that their passion

and creativity can help to address?

•

•

• How can professors design course materials,

learning experiences and curricula that help

students actively develop entrepreneurial skills

and attitudes?

By investigating these questions, potential findings

in the literature were revealed, which called for a

descriptive analysis of the behaviour and

competencies of an entrepreneur essential for the

success of any business. A questionnaire was

designed to study the aspects in Entrepreneurial

Success and to propose a New Model in

entrepreneurship” which was administered to the

respondents by using a combination of survey

method, and also by mailing questionnaires through

a link on website to entrepreneurs(self-employed)

and intrapreneurs (employed in leadership role).

Further to the data collection, the descriptive

statistics were derived to measure the strength of the

relationship of the respondent and each variable.

Since there was no strong prior theory to suggest

whether the relationship between Entrepreneurial

Characteristics and The Context, whether successful

or unsuccessful, was positive or negative, a two-

tailed test was performed. Normalisation of data was

tested by KS test, Shapiro test & Wilk test in addition

to Kurtosis & Skewness values. Based on the

secondary and primary study new model for

Competencies of Entrepreneurs-

Determinant of Success

Dr. Shagufta Sayeed

Associate Professor, Sinhgad Institute of

Business Administration and Research, Pune

43

Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersCompetencies of Entrepreneurs - Determinant of Success

Competencies of Entrepreneurs - Determinant of Success

practices of entrepreneurship is proposed.

Entrepreneurship, Intrapreneur, Success,

Competencies, Principles, Determinants.

To identify the competencies that will determine

a business success.

Keywords

Objectives of the study

•

Literature Review

Richard Cantillon

'speculator in an

uncertain environment'.

Jean Baptiste Say

the entrepreneurial function

as being comprised of coordination, supervision

and decision-making.

has been credited with the

introduction of the term 'entrepreneur'. In his work

'

published in the mid-eighteenth century, Cantillon

defines an entrepreneur as a

, another French political

economist, described

Essaisur la Nature du commerce en General'

Year Economist Entrepreneurial Role (ER)

Classical Era

1755 R. Cantillon Introduced the term: EntrepreneurER as

speculator

1800 J.B. Say ER as coordinator

Early Neoclassical Era

1890 A. Marshall ER as coordinator, innovator, arbitrageur

1907 F.B Hawley ER as owner of output (uncertainty bearer)

1911 J. Schumpeter ER as innovator

1921 F. Knight ER as responsible decision maker in an

uncertain environment

1925 F. Edgeworth F. Edgeworth ER as coordinator

Mature Neoclassical Era

1925 M.Dobb ER as innovator

1927 C. Tuttle ER as responsible owner in an uncertain

environment

Modern Neoclassical Era

1973 I. Kirzner ER arbitrageur and ‘alert to profitable

opportunities’

1982 M. Casson ER coordination of scarce resources under

uncertainty ER coordination of scarce

resources under uncertainty

1993 W. Baumol ER innovator and manager influenced by

existing incentive structure

Table 1: Main contributors to entrepreneurship in economic theory

44


Given the context of tradition where entrepreneurial

activities were not productive and often rent seeking

and economically destructive, our working

definition for entrepreneurship should emphasize

the difference between productive and unproductive

forms of entrepreneurship. argues

Though entrepreneurial activity is not limited to

business formation, given our interest in productive

business development, we focus our definition on

. In order to make our definition

appropriate for the present context, it should also

take into account the effect of the 'rules of the game'

on the development of

(inspired by Baumol

and further discussed by Dallago). Further in our

d e f i n i t i o n w e f o c u s o n

and in doing so divert the focus

from the distinction between

(Scase 2000) or

(Dallago 1997).

In addition, though solo self-employment (

) may not always be

viewed as a form of entrepreneurship in advanced

western economies, it can be argued that solo self-

employment is a form of entrepreneurship (Chilosi

2001). Given the utter 'newness' and lack of private

business ownership, solo self-employment demands

a relatively high level of innovative behavior and

risk-taking in the present context.

Therefore, our definition should capture that notion

that manifestations of entrepreneurship (i.e.

in the form of viable businesses, are

influenced by both the existing and historically

determined incentive structures (

Baumol that

entrepreneurs will seek wealth, power and

prestige with their innovative activities and that

positive environmental incentives can channel

innovative, entrepreneurial behavior in a

productive way (1993).

business creation

unproductive as well as

productive entrepreneurship

p r o d u c t i v e

entrepreneurship

entrepreneurs and

proprietors systemic and

economic entrepreneurs

self-

employed with no employees

innovative, risk-taking, market-oriented

behavior)

social and

economic

of

the innovative spirit that occurs when the

individual, social, legal, political and economic

conditions are sufficient

Wennekers

a n d T h u r i k p r o d u c t i v e

entrepreneurship

Productive entrepreneurship

is … the manifest ability and willingness of

individuals to

(a) perceive and create new economic

opportunities through innovative activity

(new products, new production methods,

new organizational schemes and new

production market combinations) and to

(b) introduce their ideas in the market in the face

of uncertainty and other obstacles; and

(c) their efforts result in a viable business that

contributes to national economic growth and

personal livelihood.

) within a given context. These incentive

structures have a direct influence on the

development of productive or unproductive

entrepreneurship. In essence, we argue that

productive entrepreneurship is a manifestation

.

Thus our working definition, based on

( 1 9 9 9 ) f o r

focuses on innovative activity

under uncertainty resulting in an economically

productive business:

Personality traits, organizational factors, and

environmental factors have been studied by

entrepreneurship researchers as causes of new

venture success; however, from 1961 to 1990,

research about entrepreneurs' traits found only weak

effects.

(Aldrich & Wiedenmayer, From traits to rates: An

ecological perspective on organizational foundings,

1993)D The weak results for traits were surprising

because new venture financiers and entrepreneurs

themselves pointed to entrepreneurs' personal

characteristics as dominant reasons for success

((Young & Sexton, Entrepreneurial Learning: A

Conceptual Framework, 1997D, 2001; (Smith,

45


2000). Recently, a growing cohort of psychology-

based researchers has renewed interest in

entrepreneurs' personal characteristics as predictors

of success by moving beyond the past focus on traits

to study competencies, motivation, cognition, and

behaviour. More complex models, better research

tools, and concepts that are closer to performance in

terms of causality have been used (Baron, 1998;

Baum, Locke, & Smith, 2001; Busenitz & Barney,

1997; Mitchell, Smith, Seawright, &Morse,2000).

Our empirical research extends and refines Baum et

al.'s (2001) 2-year study of the effects of five

categories of personal, organizational, and

environmental factors on new venture growth that

challenged entrepreneurship researchers' shift to

external (organizational and environmental)

explanations of new venture performance (Gartner,

1989). The Baum et al. (2001) study argued that

entrepreneurship researchers' conclusion that

personal characteristics are unimportant for new

venture performance missed important indirect

effects and personal characteristics other than traits.

Baum et al. (2001) amalgamated the following: (a)

three environmental variables (dynamism,

munificence, and complexity) to create an

environment factor; (b) four strategic management

variables (strategic focus, low cost, innovation, and

quality differentiation) to create an organization-

level factor; and (c) 10 personal characteristics to

create a trait, skill, and motivation composite. For

example, the motivation category is a combination

of goals, self-efficacy, and vision; therefore, the

relationships among goals, self-efficacy, and vision

and their relationships with other individual

difference variables were not examined. Baum et al.

(2001)D found that motivation and organization

factors have direct effects on new venture

performance; however, the effects of the trait and

skill composite factors were indirect through

motivation and organizational factors. Their study

supports the case for attention to entrepreneurs'

personal characteristics; their overarching purpose

was to provide a more fine-grained understanding of

the way entrepreneurs' personal characteristics

combine to affect venture success. Carland et al.

(1984), in an attempt to provide answers to the

questions that: 1) if entrepreneurs exist as entities

distinct from small and large organizations and 2) if

entrepreneurial activity is a fundamental contributor

to economic development, on what basis may

en t repreneurs be separa ted f rom non-

entrepreneurial managers in order for the

phenomenon of entrepreneurship to be studied and

understood? After reviewing literature of small

business and entrepreneurship and using

Schumpeter's work (1934), they defined an

entrepreneur “as an individual who establishes and

manages a business for the principal purposes of

profit and growth. The entrepreneur is characterized

principally by innovative behavior and will employ

strategic management practices in the business”.

This theoretical piece distinguished the entrepreneur

from a small business owner. Carland et al. also

defined a small business owner as “an individual

who establishes and manages a business for the

principal purpose of furthering personal goals. The

business must be the primary source of income and

will consume the majority of one's time and

resources. The owner perceives the business as an

extension of his or her personality, intricately bound

with family needs and desires”. This definition

recognized the overlap between small business

owner and entrepreneur but provided additional

support to Schumpeter's characterization of

entrepreneurship as innovation oriented.

Entrepreneur is one who understands the market

dynamics and searches for change respond to it and

exploit it as an opportunity.

46


Hypothesis

Statement of Hypothesis

Null Hypothesis

Alternate Hypothesis

Research methodology

Sample Selection

From the literature that has been reviewed within the

field of entrepreneurship, it was established that:

There is no universal definition of an entrepreneur.

Entrepreneurship is a complex concept, which has

many relationships and dependencies and cannot be

boxed in a single theory.

Six personality characteristics or competencies

(Visionary Leadership, Innovativeness, Risk Taker,

High Powered, Internal Locus of Control) were

hypothesized as key traits that an entrepreneur

should embody in order to be successful. The

research was set out to test the relationship of the

competencies and entrepreneurial success and to

study if there is any significant relationship between

them.

H Competencies viz.; visionary, leadership,

innovativeness, risk taker, high powered, internal

locus of control are predictors of business success.

H :At least one of the independent variables (out of 6

variables Visionary Leadership, Innovativeness,

Risk Taker, High Powered, Internal Locus of

Control) is the predictor of business success.

For the success of entrepreneurs the economic

environment plays a vital role and hence

entrepreneurs, employees in leadership position, ,

were included in the study.

To study the competencies of the entrepreneurs/

intrapreneurs in Pune face to face structured

interviews were taken to extract information about

them by carefully selected group of questions. The

sample had knowledge and experience of the topic

0:

1

being investigated.

a sample size of 100 respondents was selected to

represent the population which were comprised of

entrepreneurs and non-entrepreneurs.

A total of 122 responses to the survey were achieved

of which 100 respondents had completed the entire

survey. The 22 respondents who did not complete the

entire survey were dropped from the data set to

maintain accuracy in the data analysis and tests.

Questionnaire Table 2 summarizes the measurement

model latent variables, number of measurement

items, measurement description and format,

To study whether the competencies viz; visionary,

leadership, innovativeness, risk taker, high powered,

internal locus of control positively affect business

success.

Multiple Regression Analysis using backward

method

a. Predictors: (Constant), Visionary, Risk Taking,

Leadership, High Powered, Internal Locus of

Control, Innovation

b. Predictors: (Constant), Visionary, Risk Taking,

Leadership, High Powered, Innovation

c. Predictors: (Constant), Visionary, Risk Taking,

High Powered, Innovation

d. Predictors: (Constant), Visionary, Risk Taking,

Innovation

e. Dependent Variable: Success status of business

Model summary shows 3Rs viz. R, R and adjusted

UniverseAnd Sample Size

Instrument

PURPOSE

STATISTICALTEST

Level of significance: α=0.05

2

47


R . R is the multiple correlation between the

dependent and independent variables, R2 is the

coefficient multiple determination. Adjusted R is

the adjustment R considering number of sample size

and independent variables.

2

2

2

MODEL1

R = 0.0643

R = 0.413

Adjusted R = 0.375

2

2

Latent variable Indicators

Business success One 5-point scale

Visionary Five 5-point scale

Leadership Five 5-point scale

Innovativeness Five 5-point scale

Risk taker Five 5-point scale

High powered Five 5-point scale

Internal locus of control Five 5-point scale

Business background 1 yes or no question and 1 string question

Age 4 MCQ

Gender 1 M/F question

Community 10 MCQ

Table 2 : Measurement Model Results after Hypothesis testing and analysis

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .643a

.413 .375 .46712

2 .643b

.413 .382 .46466

3 .641c

.411 .387 .46296

4 .631d

.398 .379 .46582

Table 3 shows Multiple Regression Analysis model summary table

48


MODEL4

Insignificant variables removed i.e. leadership, high

powered and internal locus of control.

R = 0.631

R = 0.398

Adjusted R = 0.379

2

2

Model Sum of Squares df Mean Square F Sig.

1

Regression 14.297 6 2.383 10.921 .000b

Residual 20.293 93 .218

Total 34.590 99

2

Regression 14.295 5 2.859 13.241 .000c

Residual 20.295 94 .216

Total 34.590 99

3

Regression 14.228 4 3.557 16.596 .000d

Residual 20.362 95 .214

Total 34.590 99

4

Regression 13.760 3 4.587 21.138 .000e

Residual 20.830 96 .217

Total 34.590 99

Table 4 ANOVA test resultsa

It is interesting to note that there is no much change in

the 3 R values after the removal of insignificant

variables in Model 4.

R value of 0.398 shows that almost 40 % of the

variance in the dependent variable (business

success) is explained by the 3 independent variable

visionary, innovativeness, risk taker.

2

a. Dependent Variable: Success status of business

b. Predictors: (Constant), Visionary, Risk taking, Leadership, High powered, Internal Locus of

Control, Innovation

c. Predictors: (Constant), Visionary, Risk taking, Leadership, High powered, Innovation

d. Predictors: (Constant), Visionary, Risk taking, High powered, Innovation

e. Predictors: (Constant), Visionary, Risk taking, Innovation

49


ANOVA table is significant for all the four models

F(3,96) =21.138, p-value <0.05. Since the overall

model is significant we refer to coefficients table to

understand β coefficient of all the 3 independent

variables.

Table 5 shows Regression Coefficients test results

Coefficientsa

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) .198 .519 .381 .704

High powered .157 .108 .136 1.454 .149

Risk taking .241 .059 .332 4.073 .000

Innovation .204 .101 .229 2.007 .048

Internal Locus of Control .011 .096 .010 .110 .913

Leadership .061 .115 .054 .536 .593

Visionary .272 .103 .268 2.644 .010

2

(Constant) .216 .491 .439 .661

High powered .158 .107 .137 1.472 .144

Risk taking .240 .058 .331 4.135 .000

Innovation .206 .099 .231 2.087 .040

Leadership .063 .113 .055 .554 .581

Visionary .275 .100 .270 2.733 .007

3

(Constant) .340 .434 .784 .435

High powered .158 .107 .137 1.479 .142

Risk taking .236 .057 .325 4.112 .000

Innovation .231 .087 .260 2.665 .009

Visionary .282 .099 .278 2.844 .005

4

(Constant) .629 .390 1.614 .110

Risk taking .229 .058 .316 3.985 .000

Innovation .268 .084 .301 3.193 .002

Visionary .324 .096 .319 3.389 .001


50


Coefficientsa

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) .198 .519 .381 .704

High powered .157 .108 .136 1.454 .149

Risk taking .241 .059 .332 4.073 .000

Innovation .204 .101 .229 2.007 .048

Internal Locus of Control .011 .096 .010 .110 .913

Leadership .061 .115 .054 .536 .593

Visionary .272 .103 .268 2.644 .010

2

(Constant) .216 .491 .439 .661

High powered .158 .107 .137 1.472 .144

Risk taking .240 .058 .331 4.135 .000

Innovation .206 .099 .231 2.087 .040

Leadership .063 .113 .055 .554 .581

Visionary .275 .100 .270 2.733 .007

3

(Constant) .340 .434 .784 .435

High powered .158 .107 .137 1.479 .142

Risk taking .236 .057 .325 4.112 .000

Innovation .231 .087 .260 2.665 .009

Visionary .282 .099 .278 2.844 .005

4

(Constant) .629 .390 1.614 .110

Risk taking .229 .058 .316 3.985 .000

Innovation .268 .084 .301 3.193 .002

Visionary .324 .096 .319 3.389 .001


Excluded Variablesa

Model Beta In T Sig. Partial

Correlation

Collineari

ty

Statistics

Tolerance

2 Internal Locus of Control .010b

.110 .913 .011 .702

3Internal Locus of Control .016

c.172 .864 .018 .711

Leadership .055c

.554 .581 .057 .627

4

Internal Locus of Control .025d

.268 .789 .027 .714

Leadership .056d

.554 .581 .057 .627

High powered .137d

1.479 .142 .150 .721

a. Dependent Variable: Success status of business.

b. Predictors in the Model: (Constant), Visionary, Risk taking, Leadership, High powered, Innovation.

c. Predictors in the Model: (Constant), Visionary, Risk taking, High powered, Innovation.

d. Predictors in the Model: (Constant), Visionary, Risk taking, Innovation.

Table 6 shows Residuals Statisticsa

Minimum Maximum Mean Std. Deviation N

Predicted Value 2.6046 4.4679 3.7100 .37281 100

Residual −1.01387 1.30412 .00000 .45870 100

Std. Predicted Value −2.965 2.033 .000 1.000 100

Std. Residual −2.177 2.800 .000 .985 100


For risk taking

b = 0.229, t = 3.985, p-value<0.05.

For innovativeness

b = 0.268, t = 3.193, p-value<0.05.

For visionary

b = 0.324, t = 3.389, p-value<0.05.

Thus the multiple regression equation can be

presented as follows:

Business success = 0.629+0.229(Risk taking) +

0.268(innovation) +

0.324(visionary)

We therefore conclude that:

When risk taking is increased by 1 unit business

succeeds by 0.229 unit while the remaining two

variables remain constant.

When innovativeness is increased by 1 unit

business succeeds by 0.268 units while the

remaining two variables remain constant.

When visionary is increased by 1 unit business

succeeds by 0.324 units while the remaining two

variables remain constant.

Therefore visionary, innovativeness, risk taker are

the important qualities for business success.

Multicollinearity is not a problem since Tolerance is

above 0.1 for all the variables.

51


Excluded Variablesa

Model Beta In T Sig. Partial

Correlation

Collineari

ty

Statistics

Tolerance

2 Internal Locus of Control .010b

.110 .913 .011 .702

3Internal Locus of Control .016

c.172 .864 .018 .711

Leadership .055c

.554 .581 .057 .627

4

Internal Locus of Control .025d

.268 .789 .027 .714

Leadership .056d

.554 .581 .057 .627

High powered .137d

1.479 .142 .150 .721

Figure 1 shows Partial Regression Plot for dependent variable Success status of business for the

construct risk taking

Figure 2 shows Partial Regression Plot for dependent variable Success status of business for the

construct innovation

There is positive relationship between success status of business and risk taking since the regression line

shows an uphill.

52


There is positive relationship between success status

of business and innovation since the regression line

shows an uphill.

There is positive relationship between success status

of business and visionary since the regression line

shows an uphill.

The data suggests that the competencies of being

visionary, innovative, a risk taker are the important

53


Figure 3 shows Partial Regression Plot for dependent variable Success status

of business for the construct visionary

qualities for business success and the competencies

of internal locus of control, leadership and high

powered are not a good predictor and not

prerequisite for business success for entrepreneurs.

Reject the Null Hypothesis: Competencies viz;

visionary, leadership, innovativeness, risk taker,

high powered, internal locus of control are not

predictors of business success.

Decision:

Conclusion

References

These are the aspects that Entrepreneur should

imbibe as per the study conducted and its conclusion.

1. Aldrich, H. E., & Wiedenmayer, G. (1993). From

traits to rates: An ecological perspective on

organizational foundings. In J. A. Katz & R. H.

Brockhaus Sr. (Eds.),

(pp. 45–195).

Greenwich, CT: JAI Press.

Advances in entrepreneurship,

firm emergence, and growth


54

2. Young, J. E. and Sexton, D. L. (1997).

Entrepreneurial Learning:AConceptual Framework,

Journal of Enterprising Culture, 5(3), 223-248.

3. Smith, J. K., & Smith, R. L. (2000). Entrepreneurial

finance. NewYork: Wiley.

4. Baum, J. R., Locke, E. A., & Smith, K. G. (2001). A

multidimensional model of venture growth.

292–303.Academy of Management Journal, 44,

5. Carland, James W., F. Hoy, .W. R. Boulton, and J. C.

Carland (1984), “Differentiating Entrepreneurs from

Small Business Owners: A Concept ualization,”

Academy of Manage ment Review 9 (2), 354-359.

6. shodhganga.inflibnet.ac.in/bitstream/10603/

2022/8/08_chapter-1.pdf ‎

Environment


56

Abstract

In this era of globalization, it's a big challenge to

attract customers and even bigger a challenge to

retain them without causing damage to the

environment – the biggest need of hour. Today's

Consumer is well aware of the environmental issues

like; global warming and the impact of

environmental pollution. Thus no marketer can think

of ruling the market by compromising on any of

these issues. This eco-friendly concern of buyers and

manufactures gave rise to the phenomenon called

Green marketing.

Green Marketing basically signifies marketing of

Goods and Services in a manner so as to satisfy the

demands of consumer that too by causing minimum

detrimental effect on the environment.

Green marketing is in its infancy stage in India. The

consumers here are gradually learning the concept of

Green. In such a scenario, it becomes very important

to first identify the product category where it can be

launched safely and successfully.

The basic objective of this paper is to identify the

niche areas where green marketing could be

practiced successfully. The paper also attempts to

find the impact of income over the preference of

consumers towards Green products.

Research in hand is based on Primary as well as

Secondary data. Primary data will be collected

through a questionnaire survey and in depth

interviews over a sample of 400 women in Pune,

Maharashtra India, belonging to different Age and

Income groups.

The research conclusively proves that Consumers

belonging to different age & Income group have a

positive attitude towards certain segments of Green

Marketing discussed in details in the Paper.

: Green marketing, Organic Products,

Purchasing Power, Buyer Behaviour.

The first Earth Day, 22 April 1970 is often cited as

the birth date of environmental movement

and .

Advent of Green movement was not an overnight

affair. The pot had been simmering since the latter

half of 1960s. It was then that the green awareness

specifically related to the negative impact of

consumption pattern, the economic and population

growth on environment had started catching

attention of the masses. But it was only in the late

1980s, that a serious concern for green marketing

arose amidst the masses (Cohen, 2001).

Key Words

1.1 Introduction

(Dunlap

and Catton, 1979) (Cathy Sandeen, 2009)

nd


Dr. Surya Rashmi RawatProf. Dr. Pawan K. Garga

(Symbiosis Law School, Pune)

(H.P University Business School)

57

Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersGreen Marketing – The Greener Roads Ahead


1.2 Definition

Polonsky, Michael Jay (1994b)

1.3 Review of Literature

(Johri, 1998).

Ferraro C. (2009),

(Reitman, 1992).

1.3.1 The Demographic Factors and Green

BehaviourJain and Kaur (2006),

defined green

marketing as, “set of all the activities designed to

generate and facilitate any exchange intended to

satisfy human needs or wants, such that the

satisfaction of these needs and wants occurs with

minimal detrimental impact on the natural

environment.” It is basically a business practice that

considers consumers concern with regards to

preservation and conservation of the natural

environment.

There has been a sudden spurt in the consumer's

environmental concern. This emerging eco-friendly

wave is creating a win - win situation for both the

Industry and the market. It is offering various

competitive advantages and opportunities to the

ones who are practicing "green" in their process of

production and consumption

According to the growing threat

of global warming and environmental consciousness

is fast drawing attention from all the directions. The

governments, business houses and all the citizens of

earth are gearing up to fight out this evil. This

environmental concern is gradually changing the

buyer behaviour too. Consumers today are willing to

spend more in the name of good health and

cleanliness of environment.

According to a global research, 53% of consumers

(roughly 1 billion) determined the eco-friendly

image of a company as a decisive reason for making

them buy and use its products. It further stated that

the consumers are prepared to spend an additional 7 -

20% in order to buy pure "green" products and reject

the non-viable alternatives, offered to them by the

conventional market

observed that all

consumers do not ardently support the protection of

environment concern. The other truth is that 100% of

the population who supports environmental

protection is not influenced by "green" marketing.

One reason for this attitude could be lack of

awareness. The fact that population is suspicious of

the green claims by companies could also not be

denied as reason for their behaviour.

According to ),

occupation and economic circumstances are some of

the personal factors affecting consumer behaviour.

Various researchers tried to study the impact of

demographic factors over green behaviour. Some of

them concluded that green purchase behaviour

cannot be predicted on the basis of socio

demographic variable such as age, income,

education and gender. (

. The reason behind this inability is the

inconsistency observed in various such researches

studying the impact of these factors over the green

purchasing behaviour.

observed that the

psychographic variables are more significant in

explaining and forecasting the future green buyer

behaviour than the demographic factors.

Associating high prices with majority of green

products in comparison to the existing conventional

ones, people generally assume that income should

have a positive impact over the green consumer

behaviour. But the results of various researches

analyzing the impact of demographic factors could

never produce convincing results.

observed that despite the

inconsistency of results, the environmentally

conscious consumers are comparatively better

educated with higher income, and higher socio-

economic status, who have serious concern for the

environment.

Kotler and Keller (2009, 196

Shamdasani et al., 1993;

Schlegelmilch et al., 1996; Mainieri et al., 1997;

Straughan and Roberts, 1999; Shaw and Clarke,

1999)

Akehurst, G. et. al., (2012)

Balderjahn (1988)

58


Banyte et al. (2010) Bourgeois, J.C. and

Barnes, J.G. (1979)

1.4 Objectives of the Study

1.5 Research Methodology

and

noted that green buyers are

generally the ones who receive higher than average

income.

The basic objective of this research paper is to

identify the niche areas where green marketing

could be practiced successfully.

The paper also attempts to find the impact of

income over the preference of consumers towards

green products.

The product preference in each category viz, for

self, spouse or the children shall also be

researched.

Research in hand is based on primary as well as

secondary data. Primary data was collected

through a questionnaire survey and in depth

interviews over a sample of 400 women in Pune,

Maharashtra India, belonging to different Age &

Income group. The test sample belonged to four

different annual income groups i.e., Less than 3

Lacs, 3 Lacs to 5 Lacs, 5 Lacs – 8 Lacs and 8 Lacs

and Above as Ist , IInd , IIIrd and IVth Income

group respectively.

The correlation test shall also be applied to find

out the relationship between Purchasing power

and consumer's intention to buy green products

for themselves, their spouse and their children.

•

•

•

•

•

1.6 Findings and Discussion

1.6.1 Impact of purchasing power over green

buyer behaviour towards self

a. Buying No Green Product for self

b. Buying at Least One or Two Green Products

for Self

c. Product Preference for Self

According to the data collected 38 percent of the

population belonging to first income group

intended “not to buy even a single green product”,

where as in the second income group the strength

of people sharing same opinion went higher

touching close to 60 percent. In the third income

group number abruptly fell down to even less than

20 percent with number almost vanishing in the

last income group comprising of population

earning more than Rs 8 lacs annually.

The proportion of population intending to buy at

least one green product was close to 23 percent in

Ist income group, 18 percent in the second income

group and sixty percent in third income group.

The fourth income group does not see anybody

registering against “at least one green product”

rather 80 percent of this income group preferred

to buy at least two products. Even 22 percent of

the third group also consented for the same.

The data in hand reveals that 61 percent of sample

intending to buy at least one product preferred to

go in for Green Cosmetics, whereas remaining 39

percent preferred to go in for green or the organic

food. The sample intending to buy two green

products, chose to buy green cosmetics as their

first preference whereas organic food stood as

their second priority. The results have been

represented in the following graph.

59


Let's try to find correlation test between the

income group and sample's preference towards

buying goods for self, the spouse and their

children.

Fig. 1 Impact of Income over Green buyer behaviour towards self

INCGP SELF1

INCGP Pearson Correlation 1 .750(**)

Sig. (2-tailed) . .000

N 350 350

SELF1 Pearson Correlation .750(**) 1

Sig. (2-tailed) .000 .

N 350 350

60


d. Correlations between Purchasing Power and

Green Buyer Behaviour for Self

a.** Correlation is significant at the 0.01 level (2-tailed).

Nonparametric Correlations


buyer behaviour towards Spouse

a. Buying No Green Products for Spouse

b. Buying at least one Green Products for Spouse

** Correlation is significant at the 0.01 level (2-

tailed).

The above Correlation table confirms the fact that

there is a perfect correlation between purchasing

power and the intention to buy for self. As we move

up the income group we see that the proportion of

population buying green is proportionately

increasing, a fact evidently supported by the findings

of survey too.

The data collected shows that in the first income

group 34 percent of the population refused to

buy “even a single green product”, in the second

income group the number further went up

touching 52 percent. But in the third income

group this number abruptly fell down to even less

than 20 percent. In the IV income group number

dipped to less than 2 percent.

In the I income group approximately 23 percent

of the population intended to buy at least one

green product, the number further went up to 30

th

st

percent in the second income group and touched

40 percent in the third income group. The fourth

income group did not register even a single entry

in this section.

While shopping for their spouse, the third and the

fourth income group came up with quite

encouraging results with more than 40 percent in

3 and close to 60 percent in 4 Income group

intending to buy more than two green products.

The 5 percent of 3 and 97 percent of fourth

income group also showed their preferences to

pick up three organic products for their spouse

respectively.

In this category those intending to buy only one

green product, preferred to go in for green food.

87 percent of those intending to go in for at least

two green products, preferred to buy organic food

as their first priority. 9 percent chose green

electronic appliances as their first priority with 4

percent going in for green cosmetics. In the same

category, majority preferred electronic

c. Buying at least two or three Green Products

for Spouse

d. Product Preference for Spouse

rd th

rd

INCGP SELF1

Spearman's rho INCGP Correlation

Coefficient1.000 .740(**)

Sig. (2-tailed) . .000

N 350 350

SELF1

Correlation

Coefficient.740(**) 1.000

Sig. (2-tailed) .000 .

N 350 350

61


appliances and automobile as their second

preference. Those going in for three Products

preferred green food, followed by green

electronics. The third preference was shared by

e. Correlations between purchasing power over

green buyer behaviour for Spouse

Fig. 2 Impact of purchasing power over green buyer behaviour towards Spouse

INCGP SPOUSE1


Sig. (2-tailed) .000

N 350 325

SPOUSE1 Pearson Correlation .711(**) 1


N 325 325

62


Organic Cosmetic and Green Automobile in

almost equal proportion.

** Correlation is significant at the 0.01 level (2-tailed).



buyer behaviour towards Children

a. Buying at least one Green Products for

Children

** Correlation is significant at the 0.01 level (2 -

tailed).

The above Correlation table reveals that there is a

perfect correlation between purchasing power and

the intention to buy for Spouse, a fact convincingly

supported by the Analysis of buyer behaviour

towards buying for spouse. We found that as we

move up along the income groups starting from first

group ranging from less than Rs 3 Lacs annually to

last Income Group of more than Rs 8 Lacs annually

there is a significant increase in the number of

population buying Green Products.

The data collected shows that there is not even a

single income group where sample is not ready to

buy at least one green product for their Children.

As the following graph reveals that in the first

income group close to 30 percent of the

population intended to buy at least a single green

product, in the second income group the number

goes higher touching 40 percent. But in the third

income group the number fell down to 23 percent.

Moving on to last income group the number goes

down to 4 percent.

Looking at the number of people intending to buy

at least two green products, the first group has no

representation, in the 2nd Income Group it is 2

percent with third group taking a big leap to 80

percent. But the fourth group saw a sudden

decline to 20 percent in this category. 90 percent

of the IVth income Group and 10 percent of the

third income group preferred to buy three green

products.

Irrespective of Income Group, organic food was

recognized as the first preference in every

category, weather intending to buy one, two or

three green products for Children with green

cosmetics and green apparels ending up as second

and third choice respectively.

b. Buying at least two or three Green Products

for Children

c. Product Preference for Children

INCGP SPOUSE1

Spearman's rho INCGP Correlation Coefficient 1.000 .684(**)


N 350 325

SPOUSE1

Correlation Coefficient .684(**) 1.000


N 325 325

63


d. Correlations between purchasing power over

green buyer behaviour towards Children

Fig. 3 Impact of purchasing power over green buyer behaviour towards Children

INCGP CHILD1



N 350 350

CHILD1 Pearson Correlation .635(**) 1


N 350 350

64


** Correlation is significant at the 0.01 level (2-tailed).


** Correlation is significant at the 0.01 level (2-

tailed).

The above Correlation table reveals that there is a

perfect correlation between purchasing power and

the intention to buy for Children. It's important to

note here that it's not just that the correlation is

positive but the amount of green products that

women are desirous and are actually buying for their

Children is also quite significant. The research

findings could not trace even a single woman who

could say that she does not want to buy any green

product for her child. The issue here was not

whether to buy or not, but how much to buy? The

research findings concluded that the number of

Green Products being bought for the Children went

on increasing from one to two to finally three as we

climbed up the ladder Income Group wise starting

from first group starting from less than 3 Lacs

annually to last Income Group of more than Rs 8

Lacs annually.

1.7 Conclusion

The research in hand concludes that there is a direct

correlation between the income group and Intention

to buy green product irrespective of the fact whether

the shopping is to be made for the Self, Spouse or the

Children. The research also infers that though Green

Marketing can be launched successfully in all the

product segments i.e., the ones usedby females, their

spouse and also their children but the children

segment promises the best returns as we saw that not

even a single sample irrespective of the income

group refused to buy green products for their

children. In the children segment too, according to

research findings the organic food is the most

promising sector followed by organic cosmetics and

then the green apparels.

The market for Spouse is comparatively less

promising. It's going to take some time. The most

preferred in this segment too was the organic food,

followed by green electronic appliances and the

green automobile.

INCGP CHILD1

Spearman's rho INCGP Correlation

Coefficient1.000 .631(**)


N 350 350

CHILD1

Correlation

Coefficient.631(**) 1.000


N 350 350

65


Women seemed to be more in love with their looks.

Majority of them agreed to go in for green cosmetics.

Avery small margin agreed for the organic food with

very few agreeing for green apparels and hardly any

one agreeing for the automobile.

Research reveals that the greenest of all the roads in

green marketing is the children segment. From the

preferences of sample it is clear that health of small

children is the first priority of every house hold this

attitude can safely be exploited by the marketers.

The results also show that the organic cosmetics and

the green apparels too have good market though

comparatively less.

For men, market is simply viable for green food. As

far as the green automobile and the electronics are

concerned though the acceptance has started but is

comparatively insignificant. May be with more

awareness of climate change, even these segments

too would prove beneficial.

For women, there is just one and only one green

product that is going to sell like hot cake and it's the

organic cosmetics, because rather than the internal

health it's the external looks that seem to matter the

most to women belonging to every age and income

group.

Spreading awareness about the environmental

degradation and the role of Humans in it through,

Marketers, Governments, NGO's and the

Academicians might change the plight to some

extent and facilitate the acceptance of Green.

The sample was restricted to a single geographic

area in India i.e. Pune. Therefore it is important to

verify the results in Pune like Cities in India so as to

make a generalized statement for the Indian Cities.

Being an empirical Research, rather than the buyer

1.8 Recommendations

1.9 Limitation and Future Research

behaviour, it was the human behaviour that posed a

major challenge. At times it appeared as if samples

are writing the responses as perceived to be expected

from them rather than their real preferences. In some

questionnaires People came up with stereotyped

responses.

The research in hand concluded by identifying the

Children segment as the Greenest of all segments. It

also stated that Organic food and Green Cosmetics

are going to offer a promising market in the men and

women category respectively. The future researchers

can verify these results in the other Cities

Resembling Pune in India. They can also check the

acceptance of Green Electronics and Automobiles

amongst the Men.

References

Books

Journals

1. Cohen, M. (2001), “The Emergent Environmental

Policy Discourse on Sustainable Consumption”,

E x p l o r i n g S u s t a i n a b l e C o n s u m p t i o n :

Environmental Policy and the Social Sciences,

Cohen, M.J. and Murphy, J. (Ed.), Pergamon,

London, pp. 21-37.

2. Kotler, P. & Keller, K. L. 2009. Marketing

Management. Pearson International Edition. 13th

edition. Pearson Education Inc. Upper Saddle

River.

3. Akehurst G., Afonso C, Gonçalves H. M., (2012)

"Re-examining green purchase behaviour and the

green consumer profile: new evidences",

, Vol. 50 Iss: 5, pp.972 – 988

4. Balderjahn, I. (1988). “Personality variables and

environmental attitudes as predictors of

ecologically responsible consumption patterns”.

, 17 (August), 51-56.

5. Bourgeois, J.C. and Barnes, J.G., 1979. “Viability

and profile of the consumerist segment.”

, Iss. 5, pp. 217-227.

6. Dunlap RE, Catton WR.(1979) “ Environmental

Management Decision

Journal of Business Research

Journal

of Consumer Research

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Sociology. 5:243-

273.

7. Grant (2007) as quoted by Sandeen C. (2009), “It's

Not Easy Being Green: Green Marketing and

Environmental Consumerism in Continuing

Higher Education”

Vol. 73, 2009 pp 99

8. Jain, S.K. and Kaur, G. (2006) “Role of Socio-

Demographics in Segmenting and Profiling Green

Consumers: An Exploratory Study of Consumers

in India”.

, 18(3), 107-146.

9. Johri, L.M. (1998) “Green Marketing of

Cosmetics and Toiletries in Thailand.”

, 15(3), 265-281.

10. Luck, Edwina M. and Ginanti, Ayu (2009) quoted

in Green Marketing Communities and blogs:

mapping consumer's attitudes for future

sustainable marketing. , 30 November -

2 December, 2009. Melbourne,Australia pp1

American Review of Sociology

Continuing Higher Education

Review,

Journal of International Consumer

Marketing

Journal of

Consumer Marketing

ANZMAC

11. Polonsky, Michael Jay. 1994b as quoted by

Polonsky, Michael Jay (1994), “An Introduction

to Green Marketing,” ,

1(2), UCLA Library, UC Los Angeles at

http://escholarship.org/uc/item/49n325b7, pp2

12. Reitman, V. (1992) “Green" Product Sales seem to

be Wilting.” , 18 May, B1.

13. Sandeen C. (2009), “It's Not Easy Being Green:

Green Marke t ing and Env i ronmen ta l

Consumerism in Continuing Higher Education”

, Vol. 73,

2009 pp 93-113

14. Ferraro C. (2009) “The Green Consumer,”

,April 2009.

15. Noor N. A. M., Muhammad A. (2012) quoted in,

“Emerging Green Product Buyers in Malaysia:

Their Profiles and Behaviours”,

– June 2012 Rome, Italy

Electronic Green Journal

Wall Street Journal

Continuing Higher Education Review

The

ACRS Thought Leadership Series

Clute Institute

International Conference

Reports and Conference Papers

67


68


Finance



70

Abstract

This paper presents an empirical examination of

financial performance and governance of 84 Indian

Central Public Sector Enterprises (CPSEs).

Currently, most CPSEs are 100% owned by

Government and some are listed on the Stock

Exchange. Of this smaller group, there is some

public shareholding, and other CPSEs seem to

acquire block of shares and the Government holds at

least 51% and more typically 85%. The study is

timely at this juncture as plans are formulated by the

Indian Government to sell very substantial block of

shares in these institutions to the public.

The period of study is 2003-2011 which

encompasses the establishment of the Maharatna,

Navratna and Miniratna categories of CPSEs.

Government had nominated these as being of

strategic importance and having the potential to

emerge as global players. Reforms to governance in

CPSEs were introduced in 2005, 2007 & 2009

through clause 49, pay

incentives linked to performance and grant of

autonomy. The efficiency of these reforms is

important in terms of reflecting overall financial

performance.

The issue of financial performance in State sector

enterprises is more pressing as a result of the global

economic downturn since 2007. The potential of

CPSEs to contribute to the reduction in poverty is an

imperative to review raising and a rising living

standards for a large and impoverished portion of the

population. The role of government ownership and

its impact on financial performance is an important

issue, across the Asia-Pacific region where

governments play a significant role in the economic

development.

The financial performance of Indian central public

sector enterprises for the period 2003-2011 is

examined in this paper. The announcement in March

2012 of an intention to sell down the Government's

holding of shares by releasing tranches to the public

increases the importance of considering CPSE

financial performance. The movement toward a

mixed ownership model, as proposed by

Governmen t , i s in pa r t , acco rd ing to

announcements, driven by a need to raise money.

Underperforming enterprises will realise relatively

less money than better performing enterprises and

Key Words: Financial Performance, State Owned

Enterprises, Mixed Ownership Model, Property

Rights Theory.

Introduction

The Risk Adjusted Return on IndianCentral Public Sector Enterprises

Prof. Stuart Locke,

Dr. Geeta Duppati,

Chairman,

Department of Finance, Waikato Management School,Universityof Waikato, New Zealand

Lecturer

Department of Finance, Waikato Management School,Universityof Waikato, New Zealand

71

Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersThe Risk Adjusted Return on Indian Central Public Sector Enterprises


the alternative of grooming them for sale presents

large opportunity costs.

Governments wishing to privatise public sector

enterprises that are underperforming are placed

between a rock and a hard place. Where there have

been prior attempt at reform it is important to

establish whether these gained traction and

materially lifted performance. Promoting CPSEs for

more public shareholding ownership needs to be

transparent and cannot be based upon hidden

subsidies or lucrative contracts with other

Government agencies which are in essence an

inflated transfer price to build an overly stated

bottom line. Maheswari and Ahlstrom , consider a

turnaround case for the Indian State owned

enterprise and it is clear that nearly every component

of management thinking needed to change.

The time series history of financial performance is

important and sudden unexplained spikes in the year

prior to a large public issue of shares is likely to be

viewed by the marketers suspiciously. Within the

CPSE portfolio there are three categories, which are

largely defined according to size, net worth and

turnover. The respective performance of these

subgroups and individual enterprises within each

category is also important. Some components of the

CPSE portfolio may perform relatively better and

this may provide guidance concerning what leads to

superior returns. If the conclusions of Neill &

Rondinelli, (2004, p66) that mixed ownership firms

“do have significantly higher levels of work effort

than State-owned-enterprises” then there is much

that one will need to alter.

The CPSEs play a critical role in the Indian economy

because enormous national resources are locked up

in the public sector enterprises. They influence

growth in the economy and consume significant

resources. The share of gross value addition of

CPSEs (net value addition + depreciation) to Gross

Domestic Product (at current market price) was 5.96

per cent in 2010-11 slightly down on the 6.44 per

cent in 2009-2010

With economic liberalisation post-1991, the sectors

that were the exclusive preserve of CPSEs were

opened to the private sector. The CPSEs increasingly

faced competition from both domestic private sector

companies and large multi-national companies. In

response to the pressures CPSEs were facing by

empowering those perceived as having a

comparative advantage in terms of strategic

importance; turnover, net worth and performance,

with higher levels of autonomy and financial powers

in 2007.

The remainder of the paper is organised as follows:

Section 2 outlines the background of the CPSEs;

Section 3 reviews the extant literature; Section 4

presents the data, and discusses the sample used to

test the hypotheses; Section 5 presents the analysis,

and Section 6 offers discussion, the findings and

finally presents a conclusion for the research.

The CPSEs are governed by the Companies Act,

1956 and regulations of various authorities like

Comptroller and Auditor General of India (C&AG),

Cent ra l Vig i lance Commiss ion (CVC) ,

Administrative Ministries, other nodal Ministries,

etc. The Department of Public Enterprise (DPE) is

the nodal department for all the CPSEs, and

formulates policy pertaining to CPSEs. It lays down

in particular, policy guidelines on performance

improvement and evaluation, autonomy and

financial delegation and personnel management in

CPSEs.

An address by President of India in the Joint

Parliament Budget Session followed by Finance

Minister's Budget Speech in March 2012 clearly

signaled a disinvestment policy for CPSEs. For

2012-13, the Finance Minister proposes to raise

.

Background

72


Rs.300 billion through disinvestment while

reiterating that at least 51 per cent ownership and

management control will remain with the

Government.

An earlier action plan for disinvestment in profit

making companies was approved on 5 November

2009. It includes:

Already listed profitable CPSEs (not meeting

mandatory shareholding of 10%) are to be made

compliant by 'Offer for Sale' by Government or

by the CPSEs through issue of fresh shares or a

combination of both.

Unlisted CPSEs with no accumulated losses and

having earned net profit in three preceding

consecutive years are to be listed.

Follow-on public offers would be considered

taking into consideration the needs for capital

investment of CPSE, on a case by case basis, and

Government could simultaneously or

independently offer a portion of its equity

shareholding.

The Department of Disinvestment is to identify

CPSEs in consultation with respective

administrative Ministries and submit a proposal

to the Government in cases requiring Offer for

Sale of Government equity.

No largely significant progress in implementing the

2009 intent is apparent and the 2012 announcement

in many respects is a repackaging of the earlier

intentions. For instance, the 2009 disinvestment

policy indicates CPSEs which earn profits for three

consecutive years should be listed on Bombay Stock

Exchange (BSE). The reality is contrary to this

policy.As of 25 Oct, 2012, only 45 CPSEs are listed

on the stock markets, although 120 CPSEs were

making profits for more than three years.

A process of enhancing corporate governance

commenced several years prior to the new

divestment strategy. The introduction of the

th

th

•

•

•

•

Securities and Exchange Board of India (SEBI)

Clause 49, (SEBI, Listing Agreement, Clause 49),

a new listing agreement between the stock

exchanges and the listed companies in the year 2000

has been revised a number of times. One notable

provision of Clause 49, as promulgated on 29

March 2005, relates to the

Board of Directors of a

listed company shall have an optimum combination

of executive and non-executive directors with not

less than fifty percent of the Board of Directors

comprising of non-executive Directors. Where the

Chairman of the Board is a non-executive Director,

at least one third of the Board should comprise of

Independent Directors and in the cases where they

are an executive Directors, then at least half of the

Board should comprise of Independent Directors.

Independent Directors are non-executive Directors

who do not have any material or monetary

relationships with the company, are not related to the

promoters or senior managers of the company, were

not executives of the company for preceding three

financial years and are not material suppliers or

substantial shareholders of the company.

The Government took steps to professionalise

CPSEs Boards, introducing Independent Directors,

with no conflicts of interest, to the boards. In

practice, however, the CPSEs face State control and

interference by various agencies of the State in their

commercial functioning. In spite of the autonomy,

the CPSEs have substantial locked-up potential and

it is thought they can give a better returns, if they are

managed professionally .

The power of performance measurement is

underpinned by Osborne and Gaeble who suggest

seven points: (1) What gets measured gets done. (2)

with

Board Composition.

According to Clause 49, the

Memorandum of Understanding (MoU) system

in CPSEs

th

73


If you don't measure results, you can't tell success

from failure. (3) If you can't see success, you can't

reward it. (4) If you can't reward success, you're

probably rewarding failure. (5) If you can't see

success, you can't learn about it. (6) If you can't

recognise failure, you can't correct it. (7) If you can

demonstrate results, you can win public support.

A process of negotiating a memorandum of

understanding (MoU) between the government and

the management of the enterprise specifying clearly

the objectives of the agreement and the obligations

of both the parties was established in 1986 following

the Arjun Sengupta Committee Report (1984). The

main purpose of the MoU system is to ensure a level

playing field for the public sector enterprises viv-à-

vis the private corporate sector. The management of

the enterprise is, made accountable to the

government through a promise of performance. The

government continues to have control over these

enterprises through setting targets in the beginning

of the year and by 'performance evaluations' at the

end of the year (PSE, 2011).

Performance evaluation is undertaken based on a

comparison of the actual achievements and the

annual targets agreed between the government and

the CPSE. The target constitutes both financial and

non-financial parameters with different weights

assigned to the different parameters. In order to

distinguish 'excellent' from 'poor', performance

during the year is measured on a 5-point scale .

According to Trivedi & Vittal, (1992), the MoU

system will internalize the changing priorities of the

government in a systematic way. In the absence of an

objective method for performance valuation, there is

a danger of extreme reactions which are either

difficult to enforce or justify. Second, the emphasis is

on achieving the 'target' for profit. The signal that is

sought to be conveyed is that any slippage on the

profit front is becoming increasingly unacceptable.

If an enterprise commits a certain level of profit, it

must ensure that it delivers that amount to the nation.

Financial performance has moved to the centre-stage

of MoU and policy. The main issue confronting

policy-makers is to devise ways of internalizing this

policy goal with clear and unambiguous signals

regarding what is expected in terms of financial

performance

The Jagannath Rao Committee's (Second Pay

Revision Committee) recommendations in 2006

recommended, MoU performance evaluation as one

.

Rating 2006-07 2007-08 2008-09 2009-10 2010-11

Excellent 46 55 47 73 67

Very Good 37 34 34 31 42

Good 13 15 25 20 24

Fair 06 08 17 20 24

Poor 00 00 01 01 02

Total 102 112 124 145 150

Table 1: Summary of the performance of MoU signing CPSEs (numbers)

74


of the basic criteria for Performance Related Pay

(PRP) . The Government accep ted th i s

recommendation and the MoU rating now forms the

basis of PRP. The PRP will be payable at 100%

eligibility levels when the CPSE achieves a MoU

rating of “Excellent”. In respect of “Very Good”,

“Good” and “Fair” MoU ratings, the eligibility

levels for PRP are 80 %, 60% and 40% respectively.

If the MoU performance of a CPSE is rated as 'Poor',

it will not be eligible for PRP irrespective of the

profitability of the CPSE. The benefit of pay revision

is allowed only to the employees of those CPSEs

which are not loss making and are in a position to

absorb the additional expenditure resulting from pay

revision through their own resources without any

budgetary support from the Government.

Challenges to the CPSEs remain in spite of the

reforms. The Aviation sector is a case in point. It is a

cash strapped sector with issues ranging from

increasing debt burden to the cascading effect of

taxes, which are identified as

The planning commission proposed a

projected total outlay for the sector at over Rs.

547.43b for the entire plan period of 2012-17,

including Rs. 329.6367b for Air India and Rs. 175b

for the Airports Authority of India (Hindustan

Times, 2012). Half of the "huge debt burden" of $20b

in 2011-12 was aircraft-related and the rest for

working capital loans and payments to airport

operators and fuel companies.

The measurement of financial performance in public

sector organisations commonly uses a return on

assets (ROA) approach. Reddy, Locke and

Scrimgeour (2011a) indicate that this is a robust

measure and does provide a reliable comparison

with private sector organisations. Their work notes

Review of Literature

key cost drivers and

the aviation turbine fuel (ATF) price accounting for

40 % of the airlines' operating cost (Hindustan

Times, 2012).

that the public sector organisations perform well in

financial terms and suggest the governance

structures which are largely divorced from

government intervention are primary contributing

reasons. Elsewhere, there is at least a popular

conception that the private sector will perform better.

Private enterprise are thought to have fewer

restrictions on behaviour of senior management than

those in SOEs, especially in terms of capacity to

innovate and obtain rewards for innovation . A

similar finding supported by property rights theory

suggests the differences in behaviour of managers in

State sector organisations compared to private

enterprises stems from ownership differences .

Alchian , argues that behaviour under public

ownership is different from that under private

ownership because the costs–rewards system

impinging on the employees and the owners of the

organization are different. He proposes that, under

public ownership the costs of any decision or choice

are less fully thrust upon the selector than under

private property. This line of argument predicts that

state-owned enterprises will perform less efficiently

than privately owned ones.

Politicians and bureaucrats, who are vested with the

job of monitoring on behalf of the larger public,

according to Kornai (1980), are not as good at

monitoring or designing incentive systems as

shareholders in a private company. Another reason

that managers in the public sector lack incentives to

perform is that they do not fear bankruptcy; thanks to

the 'soft budget' constraint, managers in the public

sector can expect to be bailed out by public funds. In

addition it suggested that SOEs are often chronically

unprofitable, at least in part because they are often

charged with objectives such as maximizing

employment and developing backward regions and.

Prior studies found that state-owned firms do not

Inefficiency Due to Multiplicity of Objectives

75


serve the public interest particularly well (Grossman

& Krueger, 1993) and state-owned firms are

typically extremely inefficient (Boycko et al., 1996`

and . The conclusion of these studies is that generally

the SOEs disregard social objectives and their value

and this combined with SOE inefficiency is

inconsistent with the idea that state ownership adds

value. According to Sheifer and Vishny , public

choice theory complements the property rights

approach and contributes to understanding

inefficiency in the public sector through a focus on

the behaviour of politicians and bureaucrats. Unlike

their counterparts in the private sector, managers in

the public sector lack focus because they are

expected to pursue a variety of objectives, not all of

which are related to financial performance.

This multiplicity of objectives arise from public

sector managers being answerable to different

constituents, such as legislators, civil servants and

ministers, each with their own objectives.

Politicians, who are answerable to constituents such

as labour, may push public sector managers to pursue

objectives, such as increasing employment which in

turn mitigates against profit maximization. Both the

property rights and public choice analyses suggest

that the behaviour and performance of managers will

differ between the public and private sectors because

both the objective functions are different and the

constraints are different. Neither is good

performance incentivised in the public sector nor is

bad performance penalised through takeover or

bankruptcy (Shleifer & Vishny, 1996).

Duppati & Mishra review the role of state level

public enterprises (SLPEs) in India , noting that a

blurred relationships between the general public as

principal owners of the state property and

government leaders as controlling agent exists. For

improvements to occur there is a need for accurate

Accountability and Performance

and timely information from state enterprises and an

appropriate process to monitor on an on-going basis.

Although a difficult exercise SOEs should strive to

achieve benchmark performance with appropriate

peers, domestic or foreign .

The study of Neill & Rondinelli , examines the

impact of ownership differences on the level of

corporate entrepreneurship, human resource

management practices, and worker effort among

state-, mixed- and privately-owned enterprises in

Thailand. The results suggest cautious optimism

about changes in ownership as a potential means for

triggering organisational changes that lead to

increased productivity for threatened economies.

Mixed ownership may be an effective substitute for

private ownership or, alternately, an effective

transitional form of restructuring state enterprises in

preparation for private ownership.

Dewenter and Malatesta (2001) find that public

offerings of stock by state-owned companies are

significantly more under-priced than public

offerings of stock by privately-owned companies,

and the under-pricing in the less developed capital

markets is consistent with various political

objectives of government officials rather than social

welfare maximization.

Risk-taking in SOEs may be punished rather than

rewarded . Risk-taking is an important component of

corporate entrepreneurship and, therefore, given

their advantage in aligning owner and manager

incentives, public enterprises should have higher

levels of corporate entrepreneurship than SOEs.

Richard and March (1992) argue that organizations

tend to evince norms of rationality. It would appear,

then, that the balance between the two forces

depends on the risk profiles of decision makers in

organizations. Risk-averse decision makers would

Impact of Risk and Industry on performance

76


avoid destructive behaviour, while risk-neutral or

risk-seeking individuals would be more inclined to

engage in it. Comparing PEs and SOEs with respect

to levels of corporate entrepreneurship, then,

requires estimating the risk profiles of managers in

private firms. Compared to incentives and

environmental influences discussed earlier,

predictions based on risk profiles are more

equivocal.

A study of Reddy, Locke & Scrimgeour (2011b)

investigates the nature of corporate governance

practices in public sector corporate entities in New

Zealand and their effect on financial performance.

Their findings indicate that public sector corporate

entities have universally adopted the New Zealand

Securities Commission recommendations to

establish subcommittees for audit and remuneration

and the results show that leverage has a positive

effect on performance when measured by all

performance measures and that leverage is

statistically significant. The results also show that

the existence of remuneration committee and

dividend pay-out has a positive effect on

performance.

There are 84 CPSES in the sample for the period

2003 to 2011. The Government categorised 88

enterprises as fuelling its requirements in terms of

size, turnover, and net worth to be termed CPSEs of.

Out of these, 4 were dropped because they were not

operating during the part of the study period. The 84

CPSEs are drawn from seven sectors, including

energy, minerals and metals, chemicals and

pharmaceuticals, engineering, Transportation,

Consumer goods & Services, Power sector and

Agro-based sector. As a portfolio the CPSEs are

broadly diversified and taken together should have a

low unsystematic risk.

Data and Sample

The data for the study are drawn from two main

sources. The financial data are obtained from the

database of Department of Public Enterprise,

Ministry of Heavy Industries. Information relating

to the corporate governance variables is drawn from

the Centre for Monitoring Indian Economy (CMIE)

database. Additional information is obtained from

the annual reports of the CPSEs and other GOIs

published documents as required. DataStream and

Reserve Bank of India reports are also used.

The research method followed is empirical drawing

on financial data available in published sources. The

major concern is with the performance of CPSEs

during the period 2003 through to 2011. The return

on asset (ROA) is chosen as the primary

performance metric. An underlying premise is that

owners should achieve a satisfactory return on

investment reflecting the risk involved or

alternatively expressed the opportunity cost of funds

needs to be covered.

The presence of outliers is screened using Grubbs'

test, which is also called the Extreme studentised

deviate aka ESD method. Normality of distribution

of variables is checked with Jaques-Berra test and

there is no reason not to accept the normality

assumption.

There are no apparent issues relating to the missing

data; the completeness of the databases is

encouraging. Five outliers in the net profits were

identified through the initial screening process.

Verification by cross checking with the financial

statements indicated two encoding errors into the

database. The remaining three values are replaced

with the mid points of the available data for that

particular company over the time period using linear

interpolation method as suggested by Lembcke

(2010).

77


Analysis

The testable hypothesis id stated as:

The performance of CPSEs over the period 2003-11

can be assessed by reviewing the time series of their

ROAs. The initial proposition is that they remain the

same over time.

H : ROA i = 2003…211, where ROA is for the years

2003-2011. A comparison of the mean/median over

the time period indicates in the broadest sense

whether there has been any general improvement in

ROA.An analysis of variance (ANOVA) or Kruskal-

Wallis (KW) test is appropriate for testing whether

the level of return is the same in each year. The

choice of test depends on whether the samples

distributions are normal in which case ANOVA is

appropriate and otherwise a nonparametric KW test

is better. Both theANOVAand KW test indicates that

ROAis not constant across 9 years.

The relative performance of the three divisions of

CPSEs is of interest. There is the potential for a size

effect within the CPSE portfolio. Fama & French

(1993) suggest that smaller firms are in general more

risky and accordingly will generate higher returns

than the larger firms. Based on turnover, size and

investment, the CPSEs are grouped under three

categories i.e., Maharatna, Navratna and Miniratna.

•

0 i

• ROA

ROA

ROA

Mah

Nav

Min

Where is the mean ROA of Maharatna

CPSE; and

is is the mean ROAof Miniratna CPSE.

A comparison of the mean of ROAs between the

three sub-samples of (1) ROA and ROA

(2) second, ROA and ROA and (3) ROA

and ROA is shown in Table 2. The paired t-

test results show significant difference in the mean of

ROA of Miniratna and Maharatna. The Mean

difference is 0.084 and is significant at 1% level of

significance. Likewise, the paired t-test results show

a significant difference in the mean of ROA of

Miniratna and Navratna. The Mean difference is

0.06652 and is significant at 1% level. When the

mean of ROAis compared between the Navratna and

Maharatna, the results show the mean difference of

0.14676 which is significant at 1% level. It is evident

that the mean of ROA for Miniratna Category is

larger than the other categories. The test-result do not

support acceptance of the null hypothesis at 1% level

of significance. The results, in Table 1, indicate that

Miniratna outperforms Navratna which in turn

outperforms Maharatna supporting the proposition

of the presence of the size effect in CPSEs' returns.

This is consistent with the size effect proposition of

Fama and French (1992).

Miniratna Maharatna;

Navratna Mahratna,

Navratna Miniratna

is the ROA of Navratna CPSE;

Details Mean diff t-values

ROA Miniratna and ROAMaharatna 0.0842457 18.85***

ROA Navratna and ROAMahratna 0.1467615 6.25***

ROA Miniratna and ROA Navratna -0.0665266 12.45***

Table 2 : Paired t-test-comparing mean of CPSEs ROA's over the

three categories and before (2003-2006) and after the reforms (2007-2011)

78


A benchmark reflecting the cost of investment is

necessary to ensure that Government is achieving a

return greater than its cost of funds. As an initial

starting point the 5 years Government bond rate (R )

a common proxy for the risk-free rate reflects the

cost of debt. This may be viewed as the minimum

return required by Government for its investment.

The (ROA-R ) figures can be computed across each

period. In essence the Government is using its risk-

free borrowing status to invest in risky ventures. In

cases where the ROA is not greater than R the

Government is necessarily drawing further

resources from the private sector or additional

borrowing to subsidise enterprises that are achieving

returns less than the risk-free rate, which is not a

long-term sustainable position for any government

engaged in managing commercial activities. The

f

f

f

numbers reported in Table 3 indicate that a positive

return above risk-free is achieved by CPSEs.

The inclusion of a risk adjusted benchmark into the

analysis can be based on several approaches. As the

portfolio of CPSEs is broadly diversified a beta not

dissimilar from the market portfolio is appropriate.

The return on the market proxy is the appropriate

benchmark. In the traditional capital asset pricing

model (CAPM) formulation:

The market premium (R -R ) is estimated as 12.79%

. In table 3 the Abnormal Return (AR) computed as

ROA [R + (R – R )] is shown for thOECD years

2003- 2011. An abnormal return of zero would

suggest that CPSEs are achieving a fair risk adjusted

return. The computation ofAR over time will reveal

m f

f m f

Return on Portfolio = Rf + β(Rm - Rf ).

Table 3: CPSEs Mean ROA compared with benchmarking Portfolio

Time Mean ROA Rf ROA - Rf Rm ROA - Rm

2003 7.0 5.33 1.67 18.12 -11.12

2004 10.3 5.56 4.74 18.35 -8.05

2005 12.4 6.59 5.81 19.38 -6.98

2006 14.6 7.32 7.28 20.11 -5.51

2007 14.1 7.82 6.28 20.61 -6.51

2008 15.8 7.92 7.87 20.72 -4.92

2009 13.4 6.62 6.78 19.41 -6.01

2010 12.8 7.51 5.29 20.30 -7.50

2011 12.9 8.32 4.58 21.11 -8.21

79


the possibility that enhanced management

techniques, better governance, and clearer

instructions from the owners has impacted on the

returns made to Government and value added to the

economy.

In Table 4 the significance level testing for ROA – R

and ROA – R is presented. The mean of ROA of the

CPSEs is above than the cost of debt as measured by

the risk free rate. The difference in the mean is 0.056

which is significant at 1% level. When the mean of

the market premium is compared with the mean

ROA of the CPSEs, the difference is -0.07, which is

significant at 1% level. As the sign is negative this

indicates the performance is poor given the return

that could be achieved elsewhere for the same level

of risk. The test results suggest that the mean ROA

significantly underperformed when compared to the

mean of market returns on BSE 200 and the t-value is

negatively significant. This signals challenges to

CPSEs to operate efficiently in the open market.

f

m

Government introduced potentially significant

governance reforms for CPSEs in 2005. A

reasonable presumption is that when Government

enacts policy changes to enhance governance this in

turn should be reflected in the performance of the

enterprises. While the governance changes were

promulgated in 2005 there may be some time before

these translate into greater ROAs. The analysis does

not look just to the event but rather to comparing a

pre and post reform period considering these sub-

period ROAs.

The paired t-test presented in Table 5 compare the

mean ROA between the before and after CG reforms

period.

The return on the various instruments, over the

period 2003 – 11, is shown in Figure 1. The slowness

of CPSEs recovering from the global financial crisis

is apparent. It is evident from Figure 1 that the stand

alone performance results are positive along the

timeline. A generous interpretation could be that the

CPSEs are performing well and adding value.

Likewise, when their performance is compared with

the risk free, the mean ROAdifference is significant.

This indicates higher performance of the CPSEs. But

The mean increase in ROA after the reforms

is 0.027 or 3% and the t-test statistics are significant

at 5 per cent level. The results indicate the

improvement in the performance following the CG

reforms.

Details Mean diff t-values

5 year GOI Treasury Bond 0.056 9.09**

ROA –Rm -0.07 -11.71**

Table 4: Paired t-test comparing the ROA of the CPSEs with Market Portfolio i.e.,

BSE 200 Index and Market securities rates

Table 5: ROA compared with before and after reforms

Details After Reforms Before Reforms t-test

ROAafter and ROA before 0.1379 0.1116 2.63***

80


when the cost of borrowing is deducted (ROA – R )

there remains a positive return. However, when an

adjustment is made for the risk of the portfolio of

CPSEs a significant under performance is evident.

CPSEs performance across the study period has

remained relatively stable in nominal terms. This

suggests a degree of robustness when compared with

the difficulties experienced in many economies

associated with the global financial crisis. The ROAs

are above the cost of debt but are not positive when

compared to a risk adjusted rate of return

benchmark. This is problematic as Government

moves toward a more mixed ownership model.

The opportunity cost of investing funds in

underperforming assets has two key dimensions.

f

Conclusion

First, the Government is not getting the return on

funds it should have received given the riskiness of

the portfolio. This then has implications for what

didn't get funded because of the inefficiencies in the

CPSE sector. Health, education, infrastructure

investments etc could have received very significant

amounts of money if the ROA achieved was

appropriate.

An alternative argument associated with this point is

to say that the Government was using CPSEs to

achieve social policy, and this is just a hidden

subsidy so the Government budget isn't as large. This

suggestion leads to the second way of looking at the

issue. The private sector has contributed the funds to

the CPSEs and continues to do so. If the private

sector had the funds, then a return of 15-20% pa

would have been achieved and Government taxation

receipts would have been higher to subsidise Health,

Figure 1 Comparing ROA with the Benchmark Portfolio Returns

81


Education, infrastructure etc. Instead a lower ROAis

considered reasonable and senior officials get pay

rises based on MOU standards of good achievement.

There is a very real efficiency loss and an equity or

distributional issue that some may consider

distasteful.

The reforms introduced in 2005 do appear to have

had a positive impact. The impact is small compared

to the achievements in the private sector where the

same general rules of directorship and Board of

Directors apply. The key difference is how the State

sector interprets the wording about independence. A

selection procedure that draws on ex-managers from

public sector departments and enterprises may not be

the best way to reduce the imbalance between

private and public sector performance.

Can the MoU system and the PRP incentives

currently in place be effective control mechanisms,

improving the performance of CPSEs? Evidence

suggests the Alchian (1977) view that behaviour

under public ownership is different from that under

private ownership because the costs–rewards system

impinging on the employees and the owners of the

organization are different if observed. This line of

argument predicts that state-owned enterprises will

perform less efficiently than privately owned ones.

The findings are consistent with Jensen and

Meckling (1976) who propose that agency problems

are more acute under public ownership and

management. The idea that CPSE managers will

perform only if they are monitored and incentivized

is reflected in the MOU concept. However, the

analysis would indicate that the impact is not

satisfactory. Potentially, the issue is spread broadly

across the State sector and there is no incentive to set

stretch budgets for CPSE performance or anywhere

else. If there is a general systemic failure then

movement to a more mixed ownership model with a

prohibition on State sector enterprises having cross

shareholdings will lead to improvements in salary

levels and performance. The entrenchment comes at

a cost of up to 10% ROAeach year.

The findings are also in line with Sheifer & Vishny,

(1992) reflecting the multi-oversight bodies,

suggesting too many cooks spoil the broth. In India,

the CPSEs are governed by the Companies Act 1956

and regulations of various authorities like

Comptroller and Auditor General of India (C&AG),

Cent ra l Vig i lance Commiss ion (CVC) ,

Administrative Ministries, other nodal Ministries,

etc. Trivedi (1994) rightly observes that one of the

reasons for the poor performance of the Indian

CPSEs is that there are multiple principals with

multiple goals. For instance, Secretaries to the

Government of India have to answer to a number of

agencies and institutions of the State. In addition to

the Parliamentary committees such as the Public

Accounts Committee, newly created Standing

Committees and Parliamentary procedures such as

questions, motions and debates place pressure on

CPSEs. Senior Government officials have to deal

with the Comptroller and Auditor General, enquiry

committees and commissions, Prime Minister's

office and the Cabinet Secretariat. Each of the above

agencies considers it to be its duty to hold

government off ic ia ls responsible . Such

arrangements are not readily reconciled with the idea

of creating autonomous CPSE that are charged with

performance and have a Board which is held

responsible. The need for multiple players to have a

say comes at a very real economic cost.

Further research is required into what will happen

under a mixed ownership model where Government

owns only a little over 50% of the shares. Can the

current CPSEs be groomed to a point where they are

attractive investments for the public and can

generate returns that will ensure when tranches of

shares are sold down they will achieve a price that

reflects a sustainable economic return.

82


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84


Human Resources


86

Abstract

Keywords: Economic Slowdown, Employee –

Employer relationship and their Behaviour.

This is an elaborate study on the effects of Economic

Slowdown on the management and employees.

During economic slowdown, managements

generally go for sudden retrenchments, cuts on

various incentives/perks, increase in workload etc to

set a balance between output and cost. The fear of

losing the job anytime leading to piling up of stress is

a common feature amongst the employees. It is thus

imperative to understand the behaviour of

management and employees so as to find out ways

and means to handle such situations. Due to intense

pressure and stress during slowdown the employee-

employer relationship also gets affected, it may

result in major layoffs further leading to fear among

the employees. These aggressive cost cutting

measures might lead to high absenteeism, low

turnover, less job involvement and hence the low

productivity.

The research paper is based on extensive primary

data collected through questionnaires. The

secondary data through articles, journals, books,

reports and discussion papers have also been duly

referred to.

1.1 Introduction

The Great Recession also known as Long Recession,

the Lesser Depression, the Global Recession of 2009

or global economic decline of 2009 began in

December 2007. The recession emerged majorly in

September 2008. The global recession is classified

into two phases, the active phase and the passive

phase. The liquidity crisis where there is a negative

financial situation which occurs due to the lack of

cash flow is marked as an active phase of the global

recession which occurred on August 7, 2007. This

happened when the BNP Paribas terminated

withdrawals from three hedge funds citing "a

complete evaporation of liquidity.

In 2006, there was a massive effect on the financial

institutions globally leading to cascading effects

over series of events. The cause of this damage was

the bursting of the United States hosing bubble

(economic bubble) which happened due to the drop

in price of the Case-Shiller home price index on

December 30, 2008. It further crashed the values of

securities tied to United States real estate pricing.

This credit crisis resulted to the global economic

recession affecting and causing detriment to the

economic world from the period 2007 to 2009. By

mid-2008, the recession after hitting the U.S.

Effects of Economic Slowdown on Employee-Employer Relationship & Work Environment

Dr. Surya Rashmi Rawat, Geeta Vijay, Pratik Patnaik(Symbiosis International University, Symbiosis Law College, Pune)

87

Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersEffects of Economic Slowdown on Employee-Employer Relationship & Work Environment

Effects of Economic Slowdown on Employee-Employer Relationship & Work Environment

economy spread over to many important countries in

the European Union and Japan.

The recession had a major impact on the business

world throughout the globe. Many companies

including private and the multinationals situated in

different countries had to face the detriment of firing

and resigning of employees working in their

company and changes in the management process

and decisions. The employees had many factors to

consider alternatives for their job and career growth.

The recession had major impact not only on the

financial functioning of the company but also on the

other aspects of the companies. This aspect can be

broadly classified on those who are the reasons

behind the working of the company, the management

and the employees.

This paper makes an attempt to study the impact of

economic slowdown on the employee - employer

relationship and their behaviour.

The Asian Continent is experiencing serious

consequences of this crisis due to “ ”.

The countries who have their markets primarily

outside their national boundaries or which are

depended on exports suffered the most.

Countries with higher reliance on the sell abroad

markets are expected to be affected more than other

markets with stronger internal or domestic demands.

India is one of the world's fastest-growing tech

markets, thriving mainly on exports and thus is

bound to experience the shudders of global monetary

catastrophe. IT spending as a percentage of revenue

normally varies from 3.5% in manufacturing

companies, 5-6% in global retail chains to about

9.5% in the banking industry. These could see

marginal decline as companies will tend to hold

spends on new IT deployments.

2. Literature Review

2.1 Impact of slowdown on IT sector

Domino Effect

A recent study by Forrester reveals that 43% of

Western companies are cutting back their IT spend

and nearly 30% are scrutinizing IT projects for better

returns. The slowing U.S. economy has seen 70% of

firms negotiating lower rates with suppliers and

nearly 60% cutting back on contractors. With

budgets squeezed, just over 40% of companies plan

to increase their use of offshore vendors. The IT

services and outsourcing market is currently

undergoing a structural transformation that will have

a profound impact on the IT business.

Clientele have started to decrease project scale and /

or delay new expansion. They are also trying to

move the business to cheaper offsite pastures for cost

cutting; some of the south-east Asian countries are

cheaper than even India. The impact is likely to be

higher for discretionary outsourcing expenditures

rather than for critical, on-going Application

Development and Maintenance (ADM) services.

Indian IT companies which are resolute on more

vital ADM services contracts of outsourcing of long

term could demonstrate more stable income.

Furthermore though optional expenditures are

reduced but projects which have been undertaken

already will continue especially those in advance

stages. Fitch expects IT companies to report

marginally positive revenue growth (in dollar terms)

over 2009. With decisions on IT budgets being

deferred and sales cycles having elongated from 3-6

months to 6-9 months, companies are seeing a

significant drop in client additions. Moreover, the

number of targeted large deals has more or less dried

up. According to TPI, mega deals have fallen to

levels lower than those seen in 2001.

Bryan Finn, founding partner at consultancy

Business Economics, says: "What happened in

September made a short, sharp recession much less

likely."

2.2. Effect of Economic Slowdown on Employer-

Employee Relationship:

88


This is prone to incline the equilibrium of the

psychological contract in favour of employers. Mark

Eaton, director at Personal Group, says: "For the past

10 years this has been steadily moving in employees'

favour, to the point where potential employees were

effectively interviewing employers for jobs. I think

the pendulum will now swing back."

In tough economic times, employees are more

concerned about job security than career growth

hence are not keen on switching jobs. Staffs are also

more interested in the long-term viability of their

employers, says Uzair Bawany, group managing

director at Contact Recruitment, which serves the

finance sector. "Candidates want to know about the

strength of companies and whether they will be the

next to go under. These are questions we have never

heard before," he says.

Paying high pay packs is not enough, instead,

employers need to revise the way they regard staff.

"If they see employees as a cost rather than an asset,

they will be preoccupied with trying to get that cost

down," says Barwick.

The dilemma is that many employers are under

demands to cut costs, so even if they are not looking

at direct layoffs, they are at least looking at cutting

other bites and perks and other benefits that are

generally bestowed on employees.

One way of employers making savings is to consider

the use of tax-efficient benefits offered through

salary sacrifice arrangements. This can produce tax

savings for employees as well as savings on national

insurance contributions for both employee and

employer.

Employers will also be keeping a tighter restraint on

salaries. Staff, however, does not always look fondly

on perceived controls in this area. In the public

sector, there is already a large ballyhoo regarding

government's decision on cost cutting. Hannah

2.3. Reducing Costs

Reed, a senior employment rights officer at the

Trades Union Congress, says: "At this stage,

employees and unions are saying to employers that

they need to be realistic in terms of pay increases,

which should reflect increased living costs."

The economic situation could also influence the

beneficial provisions such as Pension. Mark Groom,

director for HR and tax services at Price water house

Coopers, warns the decline could slap any defined

benefit pension schemes still operative. Exact

figures difference according to the accounting

method used, deficit does not yet appear to have

grown significantly, although in the long term it may.

On the other side of the coin, Bawany has seen many

employees wanting to take control of their own

pensions to reduce the possibility of losing their

investments along with their jobs. "Employees want

portable pensions and some people are putting these

with fund managers," he explains.

Many employers are also considering creating

business reward according to business performance.

Ben Wells, head of managing change and

engagement at Buck Consultants, says: "Variable

pay gives employers the ability to control cost and

pay out reward when they can afford it. Something

we saw happening with two or three clients even

before the downturn, is offering pension

contributions based on performance. It can even be

extended to things such as the flexible benefits

allowance. In this way, employers can engineer

reward packages targeted at appreciating key

performers."

However, there is a danger in cutting back the

benefits budget too far. Paul Roberts, a healthcare

consultant at IHC, is concerned by the ongoing

course of employers to cut more and more on

medical expenses bill through because it will result

into cost-plus contracts which require employers to

2.4. Taking Control

89


assume the risk for claims incurred for a set period.

Insurers levy an administration charge for handling

these claims.

Ironically, given the poor performance of stock

markets in the past few months, this may the time

ripe to encourage staff to invest in all-employee

share schemes, because shares are of better value but

also to promote a culture where everyone works to

improve organisational show.

Conversely, organisations that support their

employees for their development and treat them well

will stand by the organization better during difficult

times. Michael Wellin, director of consultancy

Business Transformation and author of Managing

the psychological contract, says: "Employees will

think, 'this is a really good place to work'."

This applies even if redundancies are made, so long

as any decisions are considered fair and employers

maintain a constant dialogue with staff. Ceri

Roderick, head of assessment at business

psychologists Pearn Kandola, says: "Tell people

what is going on and give them as much transparency

as possible.”

1. To study the employee - employer relationship

during economic slowdown.

2. To find out factors causing a behavioural change

in the employee - employer relationship.

3. To study the impact of economic slowdown on

organisations.

The research is based on primary data collected from

a sample of 60 people from the area of Senapati

Bapat Road, Aundh, University Road and Kalyani

Nagar of Pune city.

Data was collected through questionnaire and in

3. Research Methodology

3.1 Research Objective

3.2 Research Method

depth interview of the sample belonging to income

groups ranging from 3 to 12 Lakh and age group

ranging from 15 to 45 years. Secondary data in the

form of articles published in books, journals,

magazines, research papers, newspapers and reports

was also referred.

The data has been collected from two categories of

people in the organisation i.e., the management class

and the employee class of different IT (information

technology) companies in Pune area. The sample

size was adequately represented by both the

categories. Multiple choice and close-ended

questions were used for collecting the responses. 5

point Likert scale was also adopted to measure the

intensity of both categories towards certain factors

constituting the work environment.

Pr imary data has been analysed using

method of

statistical analysis. There were two types of

questionnaires, one for the employers/management

and the other one for employees. The analysis of

responses so collected helped us gain an insight into

their behaviour changes during economic

slowdown. The data so collected has been

represented in the following graphs, pie charts and

percentage tables.

The employers and the people working at

managerial levels were given the questionnaire -I.

Their responses gave us the idea of how do they deal

with their employees and what are the different

employment techniques adopted by them during

economic slowdown. Following are the graphs, pie

charts and percentage tables prepared on the basis of

primary data.

The sample comprised of 23% of females and 77%

of males showing that the strength of male managers

4. Findings, DataAnalysis and Interpretation

DESCRIPTIVE STATISTICS

4.1 Employer's/Management'sAttitude

90


is significantly higher to that of female ones. The age

group of people at managerial level was mainly

observed to be ranging from 36 to 45 years with

income mainly in the bracket of +12 lakh annual

package.

Figure 1 clearly reveals that the majority of

management people said a clear 'NO' to

retrenchment benefits given to the employees facing

retrenchments. The pie chart indicates that despite

majority of the management saying 'No' to the

retrenchment benefits, there are many managers

who believe that there 'May Be' certain retrenchment

benefits given to the employees facing the layoff.

4.1.1 Layoff – Retrenchment benefits

4.1.2 Cuts on Various Incentives or Perks

4.1.3 Increase in Expectations of Output from the

Employees

Simple Percentage Table-3

It is evident from the pie chart above that the

majority of management does impose cuts on

various incentives or perks during economic

slowdown. However, there are few management

people who may or may not impose cuts on various

incentives or perks. They are in the 'May Be'

category. There are fewer still that do not impose any

cuts on various incentives or perks whatsoever.

Attribute scale Frequency Percentage

Yes 7 23.33

No 13 43.33

May be 11 36.66

Total 30 100


Figure 1


Yes 13 43.33

No 8 26.66

May be 9 30

Total 30 100


Figure 2


Yes 11 36.66

No 10 33.33

May be 9 30

Total 30 100

91


Maximum number of the management expects

extraordinary increase in output from the employees

during economic slowdown. However there are

many who do not expect any increase in output from

the employees and there are other few who may or

may not expect an increase in output from the

employees during economic slowdown.

4.1.4 Effect on Post Recruitment Trainings and

Other Employee Grooming Programmes


According to the data depicted above it is essentially

clear that the post recruitment training and other

employee grooming programmes get affected during

economic slowdown.

Figure 5 has been arrived at on the basis of 5 point

Likert scale with 1 representing the least preference

and 5 showing the maximum preference towards the

act which according to management people is the

best way to handle the retrenchment issue. Figure 5

reveals that according to the majority the best way to

handle a retrenchment issue varies from

circumstances to circumstances, it's difficult to come

up with set formulae. Adequate notice period along

with adequate monetary compensation to the

retrenching employee surfaced as the second best

option by the sample.

4.1.5. Best Procedure for Retrenchment

4.1.6 EconomicalAlternatives


Figure 3

Figure 4


Yes 17 56.66

No 7 23.33

May be 6 20

Total 30 100

Figure 4


Yes 5 16.66

No 14 46.66

May be 11 36.66

92


Evidently, majority of the management does not look

out for economical alternatives during economic

slowdown. However, there are some who may or

may not look out for economical alternatives. Only a

handful of the management feels the need to look out

for economical alternatives such as outsourcing.

According to Figure 6, Answering to the question on

their perception about the impact of slow down over

internal environment the management/ employer

felt that the working environment suffered the most

due to deterioration of employee – employer

4.1.7 Effect on the Internal Work Environment

relationship. Even the management - employee trust

& faith over each other got affected significantly.

The lower level employees were also given the

employee questionnaire. The responses given by

them helped us understand the way the management

deals with their employees and various employment

techniques during economic slowdown and the

employee's behaviour towards the management.

Following are the graphs, pie charts and percentage

tables prepared on the basis of the data collected.

From the survey analysis it was observed that the

number of male employee is significantly higher

than the female. The age group of the people at

employee level majorly hovers around 15-26. The

people at the employee level vary in the distribution

of income. However, most of them fall in the 3-5 lakh

income groups. The survey was conducted in the

private sector i.e. the IT sector.

4.2 Employee'sAttitude

Figure 5

Figure 6

93


4.2.1 Effect of Economic Slowdown on Salaries


4.2.2 Fear of Being Fired


It is evident from the figure 8 that there is no effect on

the salaries of the employees during this period.

However, there are a small percentage of employees

who believe that there is an effect of salaries cut

down during the economic slowdown. It was noted

that 7 % of the employees felt that the cut down on

salaries were 10% or less, while 10 % felt that the cut

down was between 11 to 30 %.

According to the data depicted above, it is evident

that the percentage of employees believing this

aspect between 'Yes' or 'No' is the same followed by

may be. This clearly shows that there may or may not

be fear among employees of being fired from the job

during this situation.

4.2.3 Other Job Opportunities



Yes 5 16.66

No 25 83.33

Total 30 100

Figure 7


Yes 13 43.33

No 13 43.33

May be 4 13.33

Total 30 100

Figure 8


Yes 9 30

No 11 56.66

May be 4 13.33

Total 30 100

Figure 9

94


Figure 10 represents that majority of the employees

do not give preference to look out for other job

opportunities during this period. A considerable

number of employees have shown their concern on

other job opportunities by way of 'Yes' or 'May Be'.

According to Figure 11, it was found that majority of

the employees experience an increase in work load

during this situation. Very few percentages of

employees do not experience this change.

4.2.4 Increase in Work Load


4.2.5 Support of Management

The results for the above mentioned graph has been

arrived on the basis of 5 point Likert scale with 1

being the lowest and 5 being the highest. It was

observed that close to 70 % of the employees

experienced support from the management.

From the above pie chart it is clear that economic

slowdown does affect the career growth of

employees to a large extent. There are though few in

numbers who do no experience any such downfall.

4.2.6 Effect on Career Growth


4.2.7 Effect on Employee to Employee

Relationship


Attribute Scale Frequency Percentage

Yes 20 66.66

No 10 33.33

Total 30 100

Figure 10

Figure 12

Figure 11


Yes 20 66.66

No 10 33.33

Total 30 100


Yes 14 46.66

No 15 50

May be 1 3.33

Total 30 100

95


From the above data, it can be deduced that there is a

very minor difference between employees who

believe that economic slowdown does affect

employee to employee relationship from those who

do not. The third aspect of 'May Be' is clearly very

low on this aspect.

4.2.8 Measures taken during economic slowdown


arrived on the basis of 5 point 'Likert Scale' with 1

being the lowest and 5 being the highest. For every

measure, a scale of 1 to 5 was drawn and the people

from the employee level were asked to rate what

measures they took during this period. It was

observed that the employees preferred the increase

in level of efficiency followed by extra working

hours. Employees developed competitive attitude

with each other and also tried to maintain a good

rapport with the management.

4.2.9 Resignation due to increased Work Load


Figure 12

Figure 13


Yes 2 6.66

No 22 73.33

May be 6 20

Total 30 100

96


From the data available, it was found that majority of

the employees do not consider resignation as an

alternative due to increase in work load during

economic slowdown. However, 7 % did consider it

as an option.


arrived at on the basis of 5 point Likert scale with 1

being the lowest and 5 being the highest. For each

factor a scale of 1 to 5 was drawn and the employees

were asked to rate the internal work environment.

From the above graph it can be deduced that

economic slowdown affects the management to

employee relationship the most. Chain of command

and delegation of authority stands equal on this

4.2.10 Effect on Internal Work Environment

aspect followed by employee to employee

relationship which is affected the least according to

the employees during economic slowdown.

The Proportion of male employee as well as

employer was higher than the females in each of the

categories. The strength of male employers was

76.66% where as that of employees was 66.66%

respectively. Females in both the categories were

23.33% and 33.33% respectively. It was observed

that 43.33% of the management/ employers did not

vote for retrenchment benefits to the employees. The

analysis and interpretation of the data revealed that

the economic slowdown led to heavy cost cutting

over the incentives and perks. Due to economic

pressure the employers also wanted to extract high

returns through minimum input and hence

increasing the workloads of the employees.

It was observed that the post recruitment training and

other employee grooming & development

programmes also suffered during economic

slowdown. However, it has come to the notice that

organisations do look at outsourcing as an

alternative to cost cutting. The survey conducted in

the city of Pune revealed that employers were in a

spree to cut down cost but the salaries of their ace

employees were not affected at all. However, the

Figure 14

Figure 15

97


threat of losing job always was always perceived as a

major challenge by every employee.

Despite the constant fear of being fired, surprisingly

the survey revealed that no one was very keen to look

out for new job opportunities rather they said that

they have started saving the money by cutting down

their unnecessary expenditures to safe guard their

future. The fear that every organisation is going to

meet with the same fate may be the reason for this

attitude. Where on one hand the economic slowdown

led to increased work load for every employee on the

other hand the career growth of employees did not

grow proportionately. This indirect proportional

relationship between the performance and the

promotion directly influenced the “employee-

employer” and the “employee- employee

relationship”. In fact this run for survival of the

fittest led people to consider their team members

more as rivals than their co-workers, thus defeating

the basic spirit of camaraderie and the synergistic

effect. The data indicates that the support and

motivation of the management during economic

slowdown towards the employees continued to be

high.

Survey revealed that employer's while going for cost

cutting kept employee's concern as the first priority.

They offered adequate notice period to the

employees before making them quit the job. The

study also revealed that there was as such no fix rule

regarding handling of retrenchment. Depending

upon the circumstances, the employer either chose to

offer the adequate monetary compensation or

allowed a notice period.

The internal environment of an organisation

4.3 Discussion

4.3.1 Economic Slowdown and the Management/

Employer's behaviour

4.3.2 Internal Environment

constituted by its employees and employers and their

respective relationships got seriously affected. It

was not just the employee- employer relationship but

the employee- employee relationship too that was

influenced by the economic slowdown.

As revealed by the survey, the employees do not

perceive changing job as a good option, they rather

prefer to strengthen their position in their respective

jobs by adopting measures such as improving level

of efficiency and putting extra working hours. This

attitude is in fact their way of responding to the

competition from fellow men and maintaining a

good rapport with the management.

Cordial employee-employer relationship is an

essential ingredient bringing prosperity in the

organisation. Mutual trust, positive motivation and

every able support from either side play a vital role in

it. The external environmental factors like recession

or slowdown can simply shatter the harmonious

internal environment. People start eyeing fellow

man as a rival than as a support.

The survey finally concludes that transparency,

notifying targets in advance and giving legitimate

time to achieve goals are important ways to handle

pressure in such circumstances. There are no general

salary cuts as such but extra perks and incentives are

compromised to accommodate cost effectiveness.

Generally the employees, according to the survey are

very well treated but no fresh recruitments take

place. The employee and customer centric business

is the major reason for this trend.

We arrived at the following recommendations on the

basis of interpretation of data collected.

4.3.3 Employee's Behaviour

5.1 Conclusion

6.1 Recommendations

98


1. Dignified retrenchment benefits should be

offered to the employees laid off, since it is

difficult to find alternative job during economic

slowdown.

2. Cutting down salary is also not recommended as

it might demotivate the employee morale. To

handle the cost burden slashing of additional

benefits and not the salary could be an option. For

better and effective output in service and winning

employee loyalty, the management should make

sure that there is an environment of stability so

that they have no fear of removal from the job and

thus could give their 100 per cent.

3. The management should not over burden the

employees with higher work expectations as it

might lead to stress and affect the employee

morale & dedication towards the work and

organization. A healthy work environment could

be a better answer to deal with it as it strengthens

the bond between employees - employer

relationships.

4. Post recruitment trainings and employee

grooming programmes are very essential not only

for the employee but also for the organization; as

such trainings help the employees to deliver

better service to the organization through their

refined skills in an effective manner.

5. Support and motivation play an important role

during economic meltdown to keep things rolling

in the worst of circumstances. We observed that

the management was very supportive during

economic meltdown but motivation was

relatively lacking, hence providing an

environment of motivation is very essential at all

levels of work. The employers should concentrate

more on positive motivators (Herzberg's

motivators) than on the Herzberg's hygiene

factors.

6. The economic slowdown is bound to affect the

employee –employee as well as the employee-

employer relationship. It's very important to

develop the feeling of trust and faith over each

other, so that the members look at each other as

support systems rather than competitors leading

to synergistic output than the much abused

lopsided productivity.

It was limited to a small, convenience sample size.

The use of a larger sample and a longitudinal rather

than a cross-sectional design would strengthen the

further studies. It was limited to IT (information

technology) sector and therefore, many companies

had policies of not filling such questionnaires. Some

employees hesitated to give the actual situation as

they feared that management might take an action

against them. Results were based on observation

over the study period, which may vary over different

periods of time. The approach towards the

management and employees became difficult as the

questions were confidential.

Since, there has not been much of research work

done in this area; this research paper will help gain an

insight on this aspect of economic slowdown.

Limitations and Future Scope

Bibliography

Journals

Reports and Discussion Papers

1. DeloitteTouche Tohmatsu India Private Limited,

(April 2009).

2. Electronic International Interdisipinary Research

Journal (EIIRJ) {Bi-Monthly}, ISSN 2277-2456,

Volume-I, Issue-III

3. SherVerick, Iyanatul Islam, The Great Recession of

2008-2009: Causes, Consequences and Policy

Response, IZADiscussion Paper No. 4934

Global economic slowdown and its impact on the

Indian IT industry,

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4. Larry Elliott, The Guardian

(August 5, 2012).

5. Larry Elliott, The Guardian. Retrieved.

(August 6, 2012) http://www.employeebenefits.

co.uk,Dt. 18 January, 2013

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http://www.worldsweeper.com.http://www.2007.br

igaderoad.com/Citylife/CityNewsView.asp?NewsT

ype=yrwothvnom&newsid=1164

7. http://www.employeebenefits.co.uk/resource-

centre/analysis/impact-of-economic-downturn-on-

"Three myths that

sustain the economic crisis”

"Five years

ago the banks stopped lending to each other."

Gregory P. Smith, Leading Your Workforce During

an Economic Crisis (February 17,2013),

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psychological-contract-between-employer-and-

employee/7912.article

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sacrifice%20-%20Your%202011-12% 20guide.pdf









11. https://www.ashgate.com/pdf/SamplePages/

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100


Abstract

Key words

1.1 Introduction

In the past few decades suddenly the significance of

the word stress and its management has gained a lot

of attention all over the globe. Globalization,

industrialization, changing demography etc are

some of the reasons adding to it. The changes in the

environmental factors are gradually adding to stress

in various forms such as increased work load.All this

calls for an efficient stress management system.

The objective of the present research paper is to find

out ways to efficiently resolve stress arising out of

increased workload in an organization, at the

individual and the organizational level. The

conclusion is drawn on the basis of analysis and

interpretation of data collected through

questionnaire survey and in-depth interview of the

professionals working in Pune city. The end of the

paper talks about certain recommendations to

manage stress.

Stressors, Work-Environment, Work-Stress, Stress

Burnout, Stress Management

Stress in a layman's language is considered to be

negative pressure. It is considered to be caused due

to something bad e.g. boss giving formal reprimand

to employee for poor performance. In reality the

positive incidents may also lead to stress e.g. moving

to a new location on promotion. The first form of

stress is called as distress the latter form is eustress

( There are numerous

definitions describing job stress; however the best

definition of stress as given by Richard S. Lazarus

says, “Stress is a condition or feeling experienced

when a person perceives that demands exceed the

personal and social resources the individual is able to

mobilize” ( ).

According to medical science stress is defined as

“Organism's total response to environmental

demands or pressures”. Stress results from

interactions between people and their environment

that are perceived as those that exceed their adaptive

capacities and threaten their well-being. Over the

past several decades United States, Sweden, UK, and

Germany have identified a number of work related

psychological risks over and above, the traditional

occupational health risk . The element of perception

indicates that human stress responses reflect

differences in personality as well as differences in

physical strength or general strength. In the present

study we are only concerned with work stress and its

impact over human beings.

It is very common to hear from professionals as to

how stressed out they are from their work. Employee

stress is a serious problem today before every

employer and employee. The increased competition

due to globalization seems to have direct impact over

the workload of companies. Stress is in most cases

Fred Luthans, 2005).

Robins P. Stephen, et.al, 2012


Prof Surya Rashmi Rawat, Ajay Singh,Cherry Gupta, Prakash Verma(Symbiosis International University

Symbiosis Law School, Pune)

101

Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersManaging Stress through Changing Lifestyle

directly proportional to work. This increasing stress

not only influences individual performance but it

also affects the functioning of an organization. An

effective model of organization behaviour along

with several activities is required for a particular

company in order to efficiently rule out the various

problems associated with stress.

discussed the impact of

stress over the function of emergency departments &

communities. According to the author, combating

stress effectively requires more than offering

individual coping skills and access to counselling for

first responders. The impact of stress must be

recognised from a variety of sources, including

organisational factors & approach to stress

prevention in a multi stage and comprehensive

manner, paying attention to primary stage

interventions.

in his paper

analysed demographic factors & lifestyle of an

individual based on exercise, alcohol consumptions

& smoking which accounted for a significant

increase in varying health diseases. He concluded

that lifestyle behaviour deserves increased attention.

in his report discussed

different approaches for stress reduction. According

to him changing employee perceptions of the work

environment through strategies such as increasing

participation, communication and social support,

reducing role ambiguity and conflict and enhancing

control over work tasks can play vital role in

controlling stress.

) stated that the

academic stress levels have increased in the last 15

years. Academic stress is high as compared with

other occupations and there is a difference in the

level of stress in different countries.

1.2 Review of literature

Responders, C. A. (2007),

A. Murphy, G. E. (Vol. 9 Issue 4)

Steve Harvey, et al.(n.d.)

Judy M. Hogan, et. al.(2002

To understand stress and its management lets now

understand the three sources of stress i.e.

environmental, organizational and individual.

Human beings work within organizations and the

organizations work under a changing environment.

Further we see that the uncertain business

environment influences the business and the

working environment. Also, the employee-

employer relationship with in the business

influences the level of stress.

Events in the environment

initiate a cascade of physiological responses.

Working of a company is affected by both the

external environment and the internal environment.

Both the factors have a vital role to play in enhancing

the efficiency and also dropping it down.

1.2.1 Factors

Environmental Factors:

Macro External Environment

Fig 1

102




Micro External &Internal Environment

Fig 2

Robins P. Stephen,

et.al, 2012).

Fig 1 and 2 represent the external as well as internal

environmental factors affecting business.

Environmental uncertainty influences the design of

an organizations structure, it also influences stress

levels among employees in that organization. For the

present study only external environment factors

have been considered as these seem to play a vital

role in influencing the stress levels in an

organization. When the

economy is contracting, people become insecure

about their job security. For example, due to the

recent downfall in U.S. economy many

organizations became insolvent leading to a large

amount of unemployment.

It basically refers to as to the

impact of changing political conditions over stress.

Political uncertainties don't tend to create tensions

among North American's the way they influence

people from Haiti or Venezuela (

Economic Uncertainties:

Political Uncertainties:

Technological Uncertainty:

Task Demands: -

Task Demands

Organizational Structure

Organizational Leadership

2. Interpersonal Demands

In the 21 century, new

innovations are very common, so as to keep in pace

with the changing trends and to be up-to-date with

recent technological advancements is important as

an organization has to adhere to the technological

standards. This causes a problem for employees

because new innovations can make an employee's

skill and expertise obsolete in a very short time.

Computers, robotics, automatic machines are a

threat to various employees which causes stress in

their lives.

When we talk about an

organization, there are various factors which cause

stress. Here the scope of our discussion is limited to

intra-organizational factors (factors within the

organization). Pressures to complete work within

stipulated time, working under the autocratic nature

of boss and unpleasant co-workers are some

common examples which cause s t ress .

Distinguished categories under organizational

factors are as follows:

These are stressors associated with

a specific job a person performs. Some occupations

are by nature more stressful than others. The jobs of

surgeons, air-traffic controllers and professional

football coaches are generally more stressful than

those of general practitioners. These are the basic

problems associated with . It's

basically the stress due to professional differences,

which depends upon profession to profession. For

example, working in an overcrowded office, in a

cabin where everyone can see you and where

interruptions are constant, could increase anxiety

and stress or high speed of assembly lines also causes

stress

covers two sub-heads

under it,

1.

st

Organizational Factors:

(Robins P. Stephen, et.al, 2012).

103


It defines the level of differentiation in the

organization, the degree of rules and regulations and

interpersonal demands. Organizational structure

shows us how the roles, power and responsibilities

are assigned, controlled and coordinated and how

information flows between different levels of

management. Excessive rules, lack of participation,

autocratic style of governance, a rigid formal

structure, downwards chain of command

(communication channel), and no informal

communication are some common defects in an

organization's structure which creates stress in lives

of employees.

A typical individual works

about 40 -50 hours a week. But what these

individuals in those 120+ of non-working hours

experience and the problems that they encounter in

those 120+ hours can spill over to their jobs. Our

final category then encompasses factors in the

employee's personal life. Primarily these factors

include that of family issues, personal economic

problems and inherent personality characteristics.

National surveys consistently show that people hold

family and personal relationships dear and marital

difficulties, breaking of a relationship and trouble

with children, these are some of the problems faced

by the employee's and these problems create a lot of

stress among them.

Economic problems created by individuals who over

extend their financial resources is another important

factor that can create stress for employees and

distract their attention from work.

some

researchers feel that it is a type of stress while others

think it is one of the components of stress. Burnout is

nothing but the consequences of “losing a sense of

basic purpose and fulfilment of your work”.

According to John Izzo, a former HR profession in

the occupation development area suggests that,

“getting more balance or getting more personal time

Individual Factors:

Burning out(Fred Luthans, 2005),

will help you with stress but it will not help you with

burnout.

According to Chzristina Maslach, “As a result of

extensive study, it is believed that burnout is not a

problem of the people themselves but of the social

environment in which they work.

The basic objective behind this paper is:

1. To identify individual perception of professionals

towards stress and its causes.

2. To study common practices to overcome stress in

organizations.

3. To study the impact of work-stress over the

personal lives of people.

4. To identify the organizations, helping in Stress

Management.

In this paper we shall also study the influence of

stress over varying age groups.

The research is based on primary data collected

through 50 questionnaires and in depth interview of

the college students and professionals from Pune

city. Two age groups i.e.18-35 years and 35-55 years

were considered in the study. Secondary data in the

form of articles published in books, journals,

magazines, research papers, newspapers and reports

were also referred.

The analysis of the data was done through Pie-Charts

and Percentage Evaluation.

On the basis of literature review drawn from various

books and journals (as mentioned in the

bibliography) and the data collected from the survey

of population, the following findings were collected.

Pie-charts were drawn on the basis of data collected

from the questionnaire survey. These pie-charts are

2.1 Objectives of the study

2.2 Research Method

3. Findings and Discussion

2.2 Findings

104


classified according to the age groups, the upper age

group i.e. from 35-55 years and the lower age group

i.e. from 18-35 years.

The following pie-charts describe the main reasons

for stress with respect to different age groups.

The pie-chart for upper age group clearly reveals that

work environment, work pressure and family are the

major reasons for stress for people belonging to that

age group. In the second age group, in addition to

other reasons for stress, 23% of the population voted

for love as one of the major factors leading to stress.

In terms of percentage, the followings have been

perceived as the most significant factors.

Work Pressure 35%

Love 23% & Family

Pressure 23%

2.2.1 Pie-Chart 1

Figure 3

Figure 4

A) Upper age group:

B) Lower age group:

2.2.2 Pie-Chart 2

Figure 5

Figure 6

A.) Upper age group:

B.) Lower age group:

The following pie-chart is based on what people do

in order to overcome stress.

Figure 5 reveals that the upper age group people

prefer yoga/mediation, reading and short holidays to

overcome stress rather than eating and watching

movies. According to figure 6, lower age group

people prefer watching movies and reading though a

s i g n i f i c a n t c h u n k i . e . , 11 % g o e s f o r

yoga/meditation.

yoga/mediation 20%,

reading 20%, and short holidays 20%

watching movies

22% and reading 20%

105


2.2.3 Pie-Chart 3

Figure 7

2.3 DataAnalysis and Interpretation

The following pie-chart depicts the common

diseases observed in the people undergoing severe

stress at the work place.

If we study the pie-chart, headaches are considered

to be the common disease in both the age groups with

blood pressure voted second.

Now that we have established the findings, after a

collective study, it is noticed that working hours does

not influence stress significantly. The responses of

individuals with higher work hours were same as

those of lower work hours. What influences stress is

that is the main factor which could be

deduced from both the age groups? Family problems

work pressure

are common in both the age groups. Work

environment is another factor but in case of

individual employees only. Talking about diseases,

headaches are the most common consequence of it.

However, individuals preferred to have activities

like job rotation, yoga camps, employee

involvement programmes etc. in order to overcome

stress.

After due analysis and interpretation of primary and

secondary data collected we can convincingly

conclude that long working hours, political

environment and technical environment have a

major role in building up stress. Isolation and family

pressure were also identified as the stress builders

leading to intense feelings of anger, frustration,

anxiety and poor mental health. Surprisingly

according to significant proportion of people,

cigarettes and drugs tend to relieve stress but their

long term use is injurious for health. Most focus

groups identified unhealthy work environment and

acrimonious employee-employer relationship as

1.1 Conclusion

Questions Asked Common Answers

Age Group 35-50

Common Answers

Age Group 18-35

Main Reasons for Stress Work Pressure: 35%

Work Environment: 20 %

Love: 23%

Work Pressure: 19%

Work Environment: 19%

Activities done for managing

Stress

Reading: 20%

Short Vacations: 20%

Yoga/Meditation: 20%

Watching Movies: 22%

Reading: 20%

Common Diseases Headaches: 39%

Blood Pressure: 23%

Headaches: 39%

Blood Pressure: 23%

106


the important factors enhancing stress. The study

also revealed that inefficient management and

incompetent employees are prone to stress.

Greater consideration should be given to

understanding the wider environmental and

organizational factors that contribute to poor mental

health in employees. Many corporate houses like

Deloitte Consulting in Pittsburgh are creating nap

rooms to let employees catch some sleep during the

work day and to improve their mental health

There are various ways to overcome stress.

However, we have found some common and easy to

use methods which would help in overcoming stress.

Brings short-term stress

relief as well as lasting stress management

benefits. Yoga incorporates breathing exercises,

meditation, and light exercise. One session

brings initial stress relief and continued practice

brings greater resilience to stress. It's one of the

more potent stress relievers. For e.g. there are

various 'asanas' (positions) of yoga which work

towards overa l l re laxa t ion of body

'Sheershasana'

Breathing exercises provide

convenient and simple stress relief and the best

part is that they can be used anytime, anywhere,

and they work quickly. Basically it calms down

the heart beat and eases blood flow in our body

simultaneously increasing oxygen content.

The physical act of laughing releases

tension and brings positive physiological

changes. Finding ways to work more laughter

into your day can be an effective route to stress

relief. For example, in various towns people tend

to attend laughter sessions in the morning as a

substitute to exercise.

(Stephen P. Robins., 2003).

5.1 Recommendations

1. Meditation and Yoga:

(Saraswati, S. J., 1992,

February 1).

2. Breathing:

3. Laughter:

4. Music Therapy:

5. Time Management:

(Fred

Luthans, 2005).

6. Organizational Structure:

(Gupta, C., 2011).

7. Col legial Model of Organizat ional

Behaviour:

8. Academic Training:

(Singer, P. (1997, March 9).

Music can alter your

physiology in ways that help you to relieve

stress. It's an enjoyable, passive route to stress

relief. Formal music therapy sessions can help

with a variety of stress-related issues. Music acts

as natural stress-reliever.

Honing your time

management skills can allow you to minimize

the stressors that you experience and better

manage the ones you can't avoid. When you are

able to complete everything on your "to do" list

without the stress of rushing or forgetting, your

whole life feels easier. Time management helps

an individual in order to reduce the work load

and it also helps to ease up role overload which

occurs due to excessive workload

A behaviour of an

organization depends upon its structure.

Organization structure can prove to be beneficial

to employees provided it is based on a collegial

based approach. Furthermore, organizational

communication, organizational culture and

behaviour are various other factors which

interpretively come under the purview of the

organizational structure

The basis of this model is

partnership with managerial orientation of

teamwork. The employees are motivated

towards self-discipline and are self-motivated.

There is a need for the

academic training of professionals at both the

master's and doctoral levels in occupational

health psychology and stress management.

Workplace Wellness focuses on training

corporate employees in methods to deal with

stress and avoid repetitive strain injuries, opened

14 months ago

107


9. Creating Awareness for Health:

(A. Murphy, Vol.9 Issue4).

Employees

should receive continuous education concerning

the health risks associated with various work

design variables as well as specific risk factors

associated with their work and work

environment.

Traditionally, stress management recommendations

have emphasized individual accommodation

strategies. The two most common and significant

predictors of stress are job type and supervisory

status. Stress management techniques and

Mediterranean diet education seem to be beneficial

for blood pressure reduction. Such intervention

could possibly serve as a complementary treatment

along with drug therapy for treatment of high normal

blood pressure.

Bibliography

BOOKS

JOURNALS

1. Benson, D. H. (1968).

Harvard University.

2. Gupta, C. (2011).

New Delhi: Sultan Chand & Sons.

3. Luthans, F. (2005). New

York: Mc Graw Hill.

4. Stephen P. Robins. (2003).

San Diego: Pearson Education.

(n.d.). Retrieved from Mindtools

6. Saraswati, S. J. (1992, February 1).

1. A. Murphy, G. E. (Vol. 9 Issue 4). Lofestyle

Practices and Occupational Stressor as preditors of

The Relaxation Response.

Business Organization and

Management.

Organizational Behaviour.

Organization Behaviour.

5. Meditation - Relaxing with sustained concentration.

Yoga, Tantra

and Meditation in Daily Life.

health outcomes in urban fighters.

, pp. 311-327.

2. AL, K. (2013). Stress management and dietary

counseling in hypertensive patients: A pilot of

additional effect. .

3. Frank Landy, J. C. (1994). Work Stress and well

being. .

4. Judy M. Hogan, J. G. (October, 2002; Vol. 9 Issue#

04). Stressors & stress reactions among university

personnel.

, 289-310.

5. Rosen, D. C. (2013, February 19). Work Stress and

Employee health : A multidimensional Review.

.

6. Responders, C. A. (2007). The need for a

multidimensional approach to stress management.

, 27-

36.

7. Steve Harvey, F. C. (n.d.). Organizational

Interventions and mental health in a workplace: A

synthesis of International approaches. , 1-56.

1. Singer, P. (1997, March 9). A Company Offers Help

in Managing Stress. .

2. Zimmerman, E. (2010, January 16). When Stress

Flirts with Burnout. .

1. www.mindtools.com

2. india.org

3. www. .org

4. www.ssrn.com

5. www.mayoclinic.com

6. www.irsst.qc.ca

7. http://link.springer.com

Internal Journal

of Stress Management

Cambridge University Press

International Journal of Stress Management

International Journal of Stress

Management

Journal of Management

International Journal of disability management

IRSST

The New York Times

The New York Times

ARTICLES

WEBSITES

www.cambridge

heinonline

108


ABSTRACT

INTRODUCTION

The emergence of Web 3.0 and Big Data have

changed the business landscape and made speed as a

key differentiator for sustenance of competitive

advantage of enterprises, particularly businesses.

Given the complexity of managing the new Web in

an enterprise, implications on CEOs' focus on

management are not discussed in literature.

This paper studies the role of Big Data in innovation

and investigates how CEOs can leverage on the new

IT tool(s). It introduces the

as a way to manage the

new leadership role required for innovating

enterprises in the new era of Big Data and its effect

on competitive advantages.

This paper examines leadership of innovation in the

context of finding new competitive advantages in a

Big Data driven world. Rapidly evolving IT has

given us for real time data analytics leads to

availability of multiple new opportunities in the

market space that, unless taken up rapidly, can

disempower existent businesses rapidly. Speed is

thus the essence and hence the Big Data driven world

requires a leadership role that aggregates available

Nayar-Lanvin Model for

Leadership of Innovation

Key Words: Big Data, Semantic Analytics,

Leadership Framework, Innovation

potential opportunities, sifts through these,

aggregates resources and (internal and external)

talents, in order to actualize the sifted opportunities.

I. T. IS KEYTO NEW INNOVATION

IT is the key to new innovation (Mann 2012). The

widespread use of IT in the 1990s spurred a new

industry built not only on stand-alone applications

but also on the internet which rapidly became

commonly available as a tool for interconnectivity

between people. Web 1.0 (document exchange;

lacking participation) has limitations and this led to

Web 2.0 which boosted collaborative innovation.

: Web 2.0 covers a range of technologies,

most commonly, social networks, blogs, wikis,

podcasts, information tagging and prediction

markets. The phenomenal use of Web 2.0 (mostly,

Social Networks) gives enterprises access to vast

amounts of data, giving rise to a lot of opportunity

for services innovation.

Web 3.0 or Semantic Web ties each data

item on the web to other data items of like kind,

regardless of their location. It is a major step up in the

evolution of the Web, with significant features

broadly classified under two key functionalities:

greater interoperability, and computers deriving

meaning. These features enable users to search for

contextually appropriate content instead of character

strings. Thus, Web 3.0 browsers will make searching

Web 2.0

Web 3.0:

Big Data and Leadership for Innovation-An Aggregator Model

Prof. Ranjith NayarProf. Smitha Nayar

( ),

(

Mohanlal Sukhadia Univ,Udaipur,India

Asinnova LLP Singapore)

109

Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersBig Data and Leadership for Innovation-An Aggregator Model

easier and intuitive – operating on cross-application

data and allowing intelligent questions. This is

useful both for innovators and for end users. End

users will be able to type-in complex search

questions – equivalent of conditional searching in

programing – instead of using the results of one

search to feed the next search. With repeated use,

Web 3.0 enabled browsers will, like personal

assistants, 'learn' what users want, and need less

structured queries.

Big Data is the very large volume of structured and

unstructured data generated by social networks,

smart devices and the 'Internet of Everything' (or

M2M, machine to machine network connection).

Two definitions commonly used are, the data centric

“data that cannot be fit into a relational database”,

and the user centric “subjective state a company

finds itself in when its human and technical

infrastructure cannot keep pace with its data needs”

(Aziza 2013)

Every interaction of a person on the internet adds a

little more information about the user's publically

known profile. This makes it easier for marketers to

target products to individual requirements rather

than to demographic approximations. If big data is

ubiquitous, an individual's profile is easily available

and takes the guessing out of meeting strangers, and

every individual becomes less unknown or

unpredictable. The Economist Intelligence Unit says

that more companies in US have a Chief Data

Officer, to make use of the massive volumes of data

available to them from the Web. Thus social media

captures comments, likes and suggestions from

customers and potential demographics that can be

studied in order for the company to make appropriate

strategic choices (Giles 2012).

Big data, accompanied by cross-database correlation

WHAT IS BIG DATA?

and analysis, enables services to be personalized to

the extent of individually tailored solutions in, say,

health care, and marketing. Other service functions,

transport for instance, could, in the reverse, dispatch

dynamically their services based on where traffic is

accurately predicted to congregate.

Today businesses can measure their activities and

customer relationships with unprecedented

precision. The arrival of smart devices and Web 2.0

has led to an explosion of data on the Web. This is

particularly evident in the digital economy, where

clickstream data give precisely targeted and real-

time insights into consumer behavior. CISCO's

Chief Technology and Strategy Officer, Padmasree

Warrior predicts three vectors of differentiation –

data differential with more and more devices and

sensors churning out that data over the 'internet of

things'; experiential differential driven by customer-

pushed needs; and a velocity differential that is

driving the shift to cloud computing ('Saas') with IT

as a service, not a data centers investment with

delivery time constraints. Although IT companies of

the future will have to solve these three problems,

what is important here is not the data, but the

analytics that will be applied to make the business

process a better process (Warrior 2013).

The browser will gravitate towards being the

database of the future. Big data, super intelligent

content and knowledge management services are

clearly the medium term future. Innovative

applications based on Big Data will help service

providers foster closer ties with customers, partners

and employees. With Web 3.0, elaborate and

complex virtual worlds where social interaction

drives business operations can be realized through

the Internet (Laurent 2013).

: The following paragraphs

examine the various applications of Big Data today:

Big data alters marketing

strategies and customer relations marketing (CRM).

Role of Big Data

Big Data and Marketing:

110




The main enabler is data – mostly structured data.

More accurate and timely the information available,

more realistic is its usage for service innovation. A

shift from reactive to predictive and proactive care

will follow, and change the face of healthcare. Big

Data from Web 2.0 and semantic data analytics will

make available patient centric data so large that

individualized care can be tailored to fit exact needs

(Rometty 2013). Emerging technologies are poised

to personalize consumer experience radically via

On-demand Marketing (Dahlström and Edelman

2012)

Companies that are

measure their operations more carefully, taking

these very large volumes of data and creating more

analytical types of management practices, are

dramatically outperforming their competitors.

The pervasive use of IT has made customers an

unsolicited business partner, as purchases and

searches are tracked to tweak everything from

websites to delivery routes … Rather than model

hypothetical market scenarios, businesses can now

get an answer in real time. … IT reduces the

'hypothesis-to-experiment' cycle time. Such

packages are even available off-the-shelf. These

packages (covering pricing, inventory management,

labour scheduling, and more) can be cost-effective

and easier to install than internally applications.

It is said that you can't manage what you don't

measure. Because of big data, managers now know

much more about their businesses, and directly

translate that knowledge into improved decision

making and performance. This is especially true for

retail management, since so much of life-cyle of the

retail industry is now digital. Once shopping moved

online, of customer understanding has increased

dramatically. Online retailers could not only know

what is bought, they also know how customers

Innovation of Operations:

Big Data and Retail Management

navigated through the site; how much they were

influenced by promotions, reviews, and page

layouts; and similarities across individuals and

groups.

Smart leaders see using big data as a management

revolution. But as with any other major change in

business, the challenges of becoming a big

data–enabled organization can be enormous and

require hands-on—or in some cases hands-

off—leadership. Nevertheless, it's a transition that

executives need to engage with today (McAfee and

Brynjolfsson, HBR Oct 2012)

Is 'big data' the same as 'analytics'?Almost – but with

three key differences:

Volume: As of 2012, about 2.5 exabytes of data are

created each day, and is doubling every 40 months or

so. Walmart collects 2.5 petabytes of data every hour

from its customer transactions. A petabyte is one

quadrillion bytes, or the equivalent of about 20

million filing cabinets' worth of text. An exabyte is

1,000 times that amount, or one billion gigabytes.

Velocity: Real-time or nearly real-time information

makes it possible for a company to be much more

agile than its competitors.

Variety: Big data takes the form of messages,

updates, and images posted to social networks;

readings from sensors; GPS signals from cell

phones, and more.

Computerized Data Analytics is in early stages of

development. However, most companies do not

have a Big Data plan for themselves. High-

performing companies will embed analytics directly

into decision and operational processes, and take

advantage of machine-learning and other

technologies to generate insights in the millions per

second rather than an “insight a week or month”

(Davenport 2013).

Data is a competitive advantage. Hence, Database

Big Data and Analytics

111


management is a core competency of Web 2.0

companies (O'Reilly, 2005). As more and more

devices are connected to the new platform, new

innovative applications become possible. Creating

of innovative services requires data on targeted

audience. The winner will be the company that first

reaches critical mass via user aggregation, and turns

that aggregated data into a system service.

After a

period in which innovation was concentrated on the

scale and breadth of data, technology providers have

begun to focus on velocity. For the first time,

business leaders can ask their databases specific ad

hoc questions and receive immediate answers. But,

greater speed costs more. Data showing a live search

for lower-cost service options on the company's

website might prompt instant ideas for new sales.

are able to provide customers

better service at restaurants. In new data driven

restaurants, every item sold, tip received, and every

moment of a restaurant experience is recorded,

profiled, and analyzed. Startups like Slingshot build

data solutions tailored toward the restaurant business

(Kolb and Kolb 2013). This change is powered by

transaction data. Orders are entered instantly into the

computer system and trends and anomalies

analyzed. This change to data driven business is an

example of companies building analytics tools

tailored to small business needs. Kolb and Kolb

predict 5 developmental directions to watch, most of

which predicted to happen within the next 3-5 years,

while others are already happening:

1. New applications will crunch data in real time and

tell users what is interesting by learning what they

find interesting

2. Better visualization and presentation of graphics,

leading to easier understanding, and faster

decisions.

3. Self-service data intelligence using Data

'Velocity for Insight' as a business necessity:

Service analytics

Discovery tools

4. Natural intuitive data interfaces (touch, voice,

gestures) abstract away complexity, enabling

finding valuable information without expertise.

Apple's Siri and Microsoft's Kinect train people

to use voice and body gestures respectively.

These modes of input combined create interactive

environments that let you explore the data and

interact with it.

5. Collaborative: Data that needs to be evaluated is

simply too big to look at efficiently. The new

types of interfaces (as explained above) will

alleviate that problem.

This new data centricity leads to more and more

individual-customer-specific innovation giving

more customer tailored services. This makes it more

attractive toAsian innovation needs.

Big Data and Analytics could be the twin forces

driving innovation in Asia – one provides

information while the other sifts through it for

precious insight. In Asia, applications are endless,

given the heterogeneity: Asian companies tend to

work on existing products adapting these to local

community needs, driven by diversity of Asian

marketplace, price sensitivity, and features its target

customers need. Contextual search has a major role

here.

Since cost and social factor alleviation are two major

considerations inAsia, a major role will be played by

the open and free access to governmental and

research data. This is called Open Data.

Governments and states hold gigabytes of data. This

data is beginning to be used for making cities safer.

City administrations like San Francisco lead Web 3.0

open-source government efforts, opening public

information – train times, crime statistics, health-

ASIAN INNOVATION

Open Data


112

code scores -- to software developers who then use

this data to create innovative applications tailored to

residents' needs (Kazan, C. 2010). For instance, with

the data and the analytics, a department could

receive a daily report of possible crimes including

likelihood, location, and timeframe, all with ranges

and calculated probability – and take action for

crime prevention. This is just one way government

could use data and analytics to make societies better,

and the wealth of data available to the government is

staggering. If cities start using data to its full

potential Data Science teams can create

transformative tools with this wealth of information.

(Kolb, Jeremy 2013). Police in Maryland and

Pennsylvania are taking an even more data science-

driven approach, crunching databases of tens of

thousands of crimes and looking for patterns.

Software automates decisions once made by police

officers and judges, and this move to data-based

decision making has dramatically decreased the

percentage of repeat offenders among parolees

(Kolb and Kolb, 2013).

Governments are now putting large data sets on the

Web in data.gov and data.gov.xx sites. The notion of

Open Data, data made freely available, could be used

for innovative applications based on interoperable

databases used for social uplift and poverty

alleviation. Food-policy experts believe that a

crucial step toward that goal is to give farmers,

scientists and entrepreneurs unhindered access to

agricultural data which is generated at research

centers worldwide (Patel, 2013). For instance, apps

on farmers' phones could club information about that

areas soil condition, matched with best seed and

fertilizer information for that soil type and, further,

with locational information of seed distribution

centers. Making such “what if” scenarios a reality

will require increasing amounts of free, accessible

agricultural research data that is easy to use, not just

by humans but also by machines. Much of the data

has been collected by scientists at universities and

research centers – like plant genomics, weather

conditions, data sets on crops for certain soils,

rainfall changes, signs of pests and diseases, and

anticipated prices at local markets – and made

purposefully inaccessible for security or privacy

reasons.

Google's Ray Kurzweil, winner of the US National

Medal of Technology and Innovation, predicts that,

powered by Semantic Web, computers will have

emotional intelligence by 2029. Google is making

strides towards understanding complex natural

language and with it the ability to move well beyond

recognizing keywords and onto understanding the

emotional and intelligent content of web pages and

of users' search requests.

The challenges presented by Big Data will only

continue to grow as companies generate more new

information day-by-day, minute-by-minute.

NEW LEADERSHIPFRAMEWORK

Most leadership frameworks are built for the

business and organisation models of the 20th

century. However, with 'Velocity for Insight'

becoming a business necessity, driven by Big Data

and the emerging information driven world,

leadership roles too need to change, so that

businesses – and other organisations – can remain

competitive in an age of transient competitive

advantage.

INSEAD Business School, Paris, and the World

Economic Forum jointly published The Global

Innovation Index (GII), Global Information

Technology Report (GITR) and the forthcoming

Global Talent Index 2013. These can be seen as a

framework of three indices that define the

competitiveness of countries

(http://www.insead.edu/facultyresearch/centres/ela

b/).

INSEAD's Global Indices – A Country level model

113


These reports index countries on innovation

parameters and list the effects of new trends and

practices in innovation at the global level. Taken

together, thus, it follows that leadership requires an

Information Technology environment as well as

human talent or skills.

While not explicitly a framework, the three vectors

effectively constitute a framework for innovation

leadership at a macro level.

This section discusses the

(Nayar 2013), and its extension: the

. The 3i framework

postulates intentionality (innovation strategy),

influence (diffusion of leadership intentionality) and

human skills or talent pools (which could include

communities of practice, and open innovation) as

necessary building blocks for sustainable innovation

in enterprise. These vectors help ensure a culture of

innovation by disseminating the leadership intent

and strategies widely within the organisation,

capitalizing on new ICT social networks and other

Web 2.0 tools including Wikis and blogs. Emergent

technologies like Web 3.0 based Semantic

Innovation Management (Ning and O'Sullivan

Nayar-Lanvin frameworks for Enterprises

3i (Intent-Influence-

Intelligence) Framework for Sustaining Innovation

3A framework of

leadership for innovation

2006) help aggregate the diffused innovation while

Semantic Analytics help aggregate the structured

and unstructured data generated by the Web 2.0

tools.

The significance of this framework is that it meets

the necessity and sufficiency requirements for

sustained innovation in any firm. Any one of these

vectors is insufficient by itself to sustain innovation

in the firm. For instance, if the enterprise has the

right talent (the vector of collective intelligence) or

pool of innovators, the pool will be able to produce

innovation in their designated functional area, say

new products development. However, this is a

management of innovation; it does not inspire new

service innovation or operations innovation which

can change the firm into a firm of innovators. Next,

in the presence of two of the three vectors, say

intentionality (clarity on leadership intent and

strategies) and, say, the right talent (the vector of

collective intelligence); but with the absence of the

dissemination of that intent and the associated

strategies, innovation with remain flat or 2D, and

will not be multidimensional.

This is indicative of a 'tall' organisation, with layers

of hierarchy. Flat innovation occurs in firms that

operate in the present – an existent strategy, for

instance and is not sustainable.

The strength of the framework is that it describes

with sufficient simplicity a complex array of

characteristics (like ontology, intentionality,

engagement, social networks, Web 3.0 technology,

and talent retention) into one simple framework.

The simplicity is also seen in the fact that the

framework specifies vectors, rather than axes in the

strict sense of the term, since an axis has an origin

(zero value) and extends to infinity whereas a vector

merely indicates direction or size, without defining a

1.1.1. Strengths and weakness of the 3i

framework:

114


gradation. Further, the cross-effect of the vectors can

be studied. The area between any two axes defines

the appropriate plane. The

the plane between talent- and influence- vectors,

thus describes the area where 2D / planar innovation

happens, as described above. Similarly, the

intersection of the vectors could be examined for

identifying potential competitive advantages.

The weakness of the framework is that it does not

cater to the implementation of the innovation

strategy. This weakness is partially addressed in the

detailed discussion of each vector and outside the

scope of discussion here, and partially by the

extended 3Aframework of leadership for innovation

(fig 2).

The 3i framework is consistent with the proposed by

Prahalad's, the INSEAD's global indices, Bain's

leadership model and, IDEO's model. The basic

elements of Prahalad's opportunity gap management

framework are paralleled in the 3i framework

- 'Strategic Intent' element is the same as the Intent

vector of the 3i framework,

- 'Core Competencies' element matches 3i

framework's Talent Vector.

- Fourth dimension (“energizing the whole

organisation, and sharing mindset and

motivation”) matches exactly the 3i framework's

Influence vector,

- “Creating new competitive space” is equivalent

of 3i's resultant vector (innovation)

We now extend the 3i framework (for sustained

innovation) to capture the leadership requirements.

As mentioned above, the weakness of the 3i

framework is that it does not account for the

talent confluence plane,

1.1.2. Comparisons with frameworks in

literature

BIG DATA AND THE NEW LEADERSHIP

MODELIT ENTAILS

implementation aspects of the 3i vectors. It details

the required component vectors but does not

prescribe how to seed and grow these vectors.

Instead, the individual components of the vectors are

treated as individual building blocks or Lego blocks.

The emergence of Big data and the rapidly evolving

IT capability to speed up real time data analytics has

led to the availability of several opportunities in the

market space, which unless taken up rapidly can

disempower businesses rapidly. Speed is thus the

essence and hence the Big Data driven world



aggregates resources available as well as internal

and external talents, in order to actualize the sifted

opportunities.

The emergence of Big data and the rapidly evolving

IT capability to speed up real time data analytics has

led to the availability of several opportunities in the

market space, which unless taken up rapidly can

disempower businesses rapidly. Speed is thus the

essence and hence the Big Data driven world



aggregates resources available as well as internal

and external talents, in order to actualize the sifted

opportunities.

The 3i framework implies – among other things –

that the leadership that drives the 3i vectors plays an

aggregating role, aggregating opportunities that the

external environment offers (see the External

Influences side of the Total Innovation Management

pyramid; Nayar, 2013) at the confluence of the

Influence and Intentionality vectors, aggregating

talent (team competencies of the TIM pyramid,

including crowd sourcing and extended

communities of practice) and aggregating resources

(see the Management Platform of the TIM pyramid)

including strategies and skill sets. Technology

Fig 2: Nayar-Lanvin Framework for Leadership

115


elements help to aggregate the voices of all the

elements of the supply chain, from suppliers'

suppliers to customers' customers.

If efficiently done, listening to the network

effectively, harnesses these voices and helps

leadership aggregate opportunities. It bears mention

that many industries miss these signals due to

inattention, and miss emerging trends, leading to

wrong strategy definition.

This framework is thus the framework of leadership

for innovation, i.e. a leadership that causes agility to

take advantages of rapid changes taking place in the

external environment. While the skills-set (talent/

people/ intrinsic intelligence) needed may not be

available within the organisation, IT collaboration

(Open Innovation / crowd-sourcing) makes this

available to an agile leader.

The leadership must be, of course, capable of

attracting and retaining such amorphous talent – this

is the talent aggregation role.

The triple aggregator role of leadership will enable

innovation to occur in an enterprise. This 3A

framework is called the Nayar-Lanvin Framework

for Leadership of Innovation, and is introduced here

as a concept. Further study needs to be donede novo

to test its strengths and weaknesses.

Web 3.0 – also known as the Semantic Web since it

manifests itself as a web of data, rather than a web of

documents – is a quantum change on the method of

linking data by a method of ontology of meaning.

Functionally, it overcomes limitations of the

conventional Web (now also known as Web 1.0) as

well as of Web 2.0 which encompasses social

networks, blogs, microblogs, and 'wikis'. The new

Web tools aggregate the 'Wisdom of Crowds' for

superior decision making and focus collective effort

on prioritized outcomes (Cake 2011).

Leaders need to compare strengths and weaknesses

of new frameworks they implement. Studies of

national or regional innovation strategies measure

the effectiveness of innovation systems, like

INSEAD's Global Innovation Index, and the Nayar-

Lanvin frameworks for leadership and innovation.

This paper addresses two common questions – how

can innovation be made a sustained practice in an

enterprise, and what role do specific parameters

(such as leadership or emergent IT tools like Big

Data) play in boosting innovation.

The Future is Web 3.0:

Conclusion

Reverences

1. Aziza B (2013) “Big Data Isn'tAbout 'Big'”, Forbes

2. Cake M, (2011) Management 3.0: The Web 3.0

"Central Brain" to coordinate innovation,

collaboration, workflow and outcomes across

industry and across the world.

3. Graud R, personal communication, November 03,

2011.

4. Giles J (2012) http://www.sas.com/resources/asset/

EIU_SAS_BigData_120822.pdf

5. Mann A., (2012), reported by Joe McKendrick, Are

Management

Innovation Exchange.

116


IT leaders just too busy for innovation?

http://www.zdnet.com/are-it-leaders-just-too-busy-

for-innovation-7000001762/

6. McAfee and Brynjolfsson, Big Data – The

Management Revolution, HBR Oct 2012

7. Kolb, Jeremy (2013) How Big Data and Analytics

will Change Society http://applieddatalabs.com/

content/how-big-data-and-analytics-will-change-

society

8. Nayar R (2013) “Retooling Strategies for

Leadership for Innovation” (Doctoral thesis)

9. Nayar R, Venugopalan K, Narendran R, Nayar S,

(2012). Semantic Web as an Innovation Enabler, C.

Mukhopadhyay et al. (eds.),

DOI 10.1007/978-81-322-0746-7_41,

Driving the Economy

through Innovation and Entrepreneurship:

Emerging Agenda for Technology Management,

© Springer

India 2012

10. Warrior P, (May 2013), quoted by Kirkland R.

Connecting Everything: A conversation with

Cisco's Padmasree Warrior

11. Laurent (2013) “Interface: Where We're Headed

with Web 3.0” http: / /www.information-

management.com/issues/20_4/where-were-

headed-with-web-3.0-10018222-1.html

12. Dahlström and Edelman (2012) (McKinsey

Quarterly, Apr 2013) http://www.mckinsey.com/

insights/marketing_sales/the_coming_era_of_on-

demand_marketing

13. Rometty G. (2013) http://www.information-

management.com/news/big-data-transformation-

from-luxury-to-necessity-underway-for-insurers-

10024307-1.html?portal=health-care

117


118


Marketing


120

ABSTRACT

With the introduction of liberalization policy and

RBI's easy norms, several private and foreign banks

have entered the Indian banking sector giving birth

to cut throat competition amongst banks to acquire

large customer base and market share. Banks have to

deal with many customers and render them various

types of services. If the customers are not satisfied

with the services provided by the banks then they

will defect which will impact the economy as a

whole since banking system plays an important role

in the economy of a country. Also, it is very costly

and difficult to appease an unsatisfied customer.

Since the competition has grown manifold in the

recent times, it has become a herculean task for

organizations to build loyalty; the reason being

today's customer is spoilt for choice. It has become

imperative for both public and private sector banks

to perform to the best of their abilities to retain their

customers by catering to their explicit as well as

implicit needs. Many a times it happens that banks

fail to satisfy their customer; something that can

cause huge losses for banks and so, the need for this

study arises.

The purpose of this research article is to examine the

customer satisfaction among a group of customers

towards the public sector & private sector banking

industries in India. This study is cross sectional and

descriptive in nature.

Businesses need to attract and establish a customer

The researcher tries to makes

an effort to clarify the Customer Service satisfaction

in Indian banking Sector. Descriptive research

design is used for this study, where the data is

collected through a questionnaire. The information

is gathered from the different customers of the two

banks, viz., PNB and HDFC Bank located in the

Meerut Region, Uttar Pradesh. A hundred bank

respondents from each bank were contacted

personally in order to seek fair and frank responses

on quality of service in banks. The service quality

model developed by Zeithamal, Parsuraman and

Berry (1988) has been used in the present study.

The analysis clearly shows that there exists a wide

perceptual difference among Indian (public sector)

banks regarding overall service quality with their

respective customers, when compared to Private

sector banks. The said perceptual difference in

private banks is narrow.

Key words: Customer Satisfaction, Customer

service, Banking, Service quality.

Introduction

Comparative Study of Customer Satisfaction inPublic Sector and Private Sector Banks in India

(A Case Study of Meerut Region of U.P.)

Mr. Vijay Prakash GuptaDr. P.K. Agarwal

(Research Scholar Uttrakhand Technical University Dehradun)

(Professor, MIT College of Management, Moradabad)

121

Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersComparative Study of Customer Satisfaction in Public Sector and Private Sector Banks in India

Comparative Study of Customer Satisfaction in Public Sector and Private Sector Banks in India

market and would need to retain it through

satisfaction. That is the key to its business

performance ( ). In order to attain

this goal, a company should have a high satisfaction

rate from its clients. The increasing competition,

whether for profit and non-profit purposes, is forcing

the business sectors to pay much more attention to

satisfying its customers (

). Researchers suggest that increased levels of

customer satisfaction and loyalty are frequently

attributed or linked to positive outcomes for a firm

( ).

Measurement of the rate of customer satisfaction is

also a measurement of how products and services

supplied by a company meet or surpass customer

expectation. It is seen as a key performance

indicator. This is due to the fact that one of the factors

needed in order to attain high competency and high

competitiveness is a high market share through an

increased, established and well-sustained customer/

client population. Industries are beginning to

understand the concept that their customers, the

people who purchase their products and use their

services, are the primary drivers of their position on

the profitability ladder. Satisfaction is a

multidimensional construct which has been

conceptualized as a prerequisite for building

relationships and is generally described as the full

meeting of one's expectations ( ). It is a

feeling or attitude of a customer towards a product or

service after it has been used ( ).

Industries recognize that the support of the customer

requires a complex infrastructure which should not

only design, produce, and distr ibute a

product/service that can be used by the customer

without fear of defect, but should also contain a

mechanism whereby the customer is effectively

supported ( ).

( ) found out that firms that reported

higher satisfaction levels also showed significantly

Johnson et al.2000

Management library,

2008

Colgate, 1999

Oliver, 1980

Jhan and Khan, 2008

Lowenstein, 1997 Anderson and

colleagues 1940

higher returns. They said that an annual 1% increase

in customer satisfaction is worth an 11.4%

improvement in current return on investment.

Basically, customer satisfaction is a psychological

state; hence, care should be taken while measuring it.

Competitors that are prospering in the new global

economy recognize that measuring customer

satisfaction is a key. It has been a growing trend

today for banks to move away from a transactional

based marketing approach to a relationship-based

approach that has recognition of the lifetime value of

the customer as its core. Satisfaction with banking

services has been an area of growing interests to

researchers and managers.

General Banking Scenario in India

The general banking scenario in India has become

very dynamic now-a-days. The picture of Indian

banking was completely different as the Government

of India initiated measures to play an active role in

the economic life of the nation. Another Work done

by Parasuraman, Zeithaml and Berry (Leonard L)

between 1985 and 1988 provides the comparison

between the customers' expectation of performance

and their perceived experiences of performance.

This provides the measurer with a satisfaction Gap

which is objective and quantitative in nature.

According to Garbrand, customer satisfaction

equals perception of performance divided by

expectation of performance. So, we can identify

where we need to make changes to create

improvements and determine if these changes, after

implementation, have led to increased customer

satisfaction.

“If we cannot measure it, we cannot improve it.” -

Lord William Thomson Kelvin (1824-1907).

The Indian banking system is characterized by a

large number of banks with mixed ownership. The

commercial banking segment comprises of 27 public

sector banks (in which the Government has majority

122


ownership), 40 private sector banks, and 33 foreign

banks. In 1991, by comparison, public sector banks'

share of the total assets of the banking system was a

little over 90 percent.

The Reserve Bank of India was nationalized on

January 1, 1949 under the terms of the Reserve Bank

of India (Transfer to Public Ownership) Act, 1948. In

1949, the Banking Regulation Act was enacted

which empowered the Reserve Bank of India (RBI) to

regulate, control, and inspect the banks in India.

The Banking Regulation Act also ensured that no

new bank or branch of an existing bank could be

opened without a license from the RBI, and no two

banks could have common directors. By the 1960s,

the Indian banking industry had become an

important tool in facilitating the development of the

Indian economy. The Government of India issued an

ordinance and nationalized the 14 largest

commercial banks with effect from the midnight of

July 19, 1969. A second dose of nationalization of 6

more commercial banks followed in 1980. The stated

reason for the nationalization was to give the

government more control of credit delivery. With the

second dose of nationalization, the Government of

India controlled around 91% of the banking business

of India. Later on, in the year 1993, the government

merged New Bank of India with Punjab.

Research Methodology

Objectives of the Study

1. To determine the perceptions of customers

regarding the service quality in banks.

2. To study and compare the perceptions of the

customers in and public (PNB) & private (HDFC)

banks.

The study provides a comparative analysis of the

performance of PNB & HDFC banks in Meerut

Region.

Research Design

Scope of the Study

Data Collection

Descriptive research design has been used for this

study and a survey has been done for fact-finding

inquiries of different kinds. The data is collected

through a questionnaire. The information is gathered

from the different customers of the two banks, viz.,

Punjab National bank and HDFC Bank located in the

Meerut Region, Uttar Pradesh. A hundred bank

respondents from each bank were contacted

personally in order to seek fair and frank responses

on quality of service in banks.

The service quality model developed by

has been used in this

study. The main assumption of the model is that

service quality is a multidimensional concept. These

dimensions contribute to the assessment of the

service quality in any setting. The statements in the

construct are one-dimensional and performance

based, which incorporate the statements of

'SERVQUAL' model that can be used as

measurement . The 24

statements have been grouped under five

dimensions. In order to ascertain the perception of

service quality, Likert's 10-point scale has been used

for its suitability to estimate the range and variations

in the perceptions.

Present study has been restricted to time period from

April 2012 to June 2012 in Meerut region, PNB &

HDFC banks of Meerut region has been taken as a

representative unit of public sector banks and private

banks respectively. A survey of 100 people each

from both the banks was conducted who were the

general customers of the banks. Professors,

businessmen, Engineers and persons from self-

employed category, etc, have been surveyed.

Primary data was collected using the questionnaire

Zeithamal,

Parsuraman and Berry (1988)

(Cronin & Taylor, 1992)

123


and personal contact approach. The respondents

were approached personally in order to seek fair and

frank responses on quality of service. Secondary

data was collected from the internet, published

reports and the fact sheets of PNB Bank and HDFC

Bank. For analysis of the data, weighted Mean has

been used.

Customer satisfaction, a term frequently used in

marketing, is a measure of how products and

services supplied by a company meet or surpass

customer expectation. Customer satisfaction is

defined as

According to many

authors, customer satisfaction is the feeling of a

customer in the process of what has been received

against what was accepted, including expectations

and perception about a purchase decision and the

need & want associated with it.

Satisfaction means a feeling of pleasure because one

owns something or has achieved something. It is an

action of fulfilling a need, desire, demand or

expectation. Every rationale customer compares the

cost (price) and benefit (utility) of any product or

service. Customers compare their expectations

about a specific product/service and its actual

benefits. This comparison results into three types of

customers: (expectations are

more than actual performance of the service);

(actual benefits realized from


Customer satisfaction

Definition of Satisfaction

"the number of customers or percentage

of total customers, whose reported experience with a

firm, its products, or its services (ratings) exceeds

specified satisfaction goals. Customer satisfaction is

the primary mental state of customer which

comprise of two things (1) expectations before

purchase (2) perception about performance after

purchase” (Oliver 1997).

dissatisfied customers

satisfied customers

services are equal to or more than expectations);

(actual performance and

expectation are exactly equal).

reported that overall satisfaction is

the outcome of customer's evaluation of a set of

experiences that are linked with the specific service

provider. It is observed that an organization's

concentration on customer expectations resulted

into greater satisfaction

It is said that satisfaction is a function of

customer's belief about fair treatment

Customer satisfaction has become important due to

increased competition as it is considered a very

important factor in the determination of a bank's

competitiveness

Satisfaction is a post purchase evaluative judgment

associated with a specific purchase decision

The customer

satisfaction is indispensable for the successful

survival of any organization. Continuous

measurement of satisfaction level is necessary in a

systematic manner

To measure customer satisfaction with different

aspects of service quality,

developed a survey research

instrument called SERVQUAL. It is based on the

premise that the customers can evaluate a firm's

service quality by comparing their perceptions of its

service with their own expectations. SERVQUAL is

seen as a measurement tool that can be applied across

a broad spectrum of service industries. In its basic

form, the scale contains 24 perception items and a

series of expectation items, reflecting the five

dimensions of service quality.

Their findings suggest that, in reality, SERVQUAL

scores measure only two factors: intrinsic service

quality (resembling what is termed functional

quality) and extrinsic service quality (which refers to

the tangible aspects of service delivery and

indifferent customers

Westbrook (1981)

(Peters and Waterman,

1982).

(Hunt, 1991).

(Bartell, 1993; Haron et al. 1994).

(Churchil and Suprenant, 1992).

(Chakravarty et al.1996;

Chitwood, 1996; Romano and Sanfillipo, 1996).

Parasuraman, Valerie

Zeithaml and Berry

124


resembles to some extent what Gronroos refers to as

technical quality). Generic dimensions customers

use to evaluate service quality are credibility,

security, access communication, understanding the

customer, tangibles, reliability, responsiveness,

competence, courtesy.

Financial liberalization and deregulation has

increased the competition among banks to attract

potential customers. Every banker tries to provide

superior services to keep satisfied customers. In

India, emergence and growing popularity of Indian

banking products has raised competition among

Indian banks. Indian banks have had to face

numerous challenges in the recent age. Firstly, they

are competing with their peers and secondly they

have to cope with the conventional banks.

A satisfied customer is the real asset for any

organization to ensure long-term profitability even

in the era of great competition. It is found that a

satisfied customer repeats his/her experience to buy

the products and also creates new customers by

communication of positive message about it to

others On the other hand, an

unsatisfied customer may switch to alternative

products/services and communicate negative

message to others. So, organizations must ensure the

customer satisfaction regarding their goods/services

developed

SERVQUAL instrument to measure the dimensions

of service quality that is frequently used by

researchers.

It consists of 24 items that are compiled into five

dimensions: tangibility; reliability; responsiveness;

assurance and empathy.

This study applied five dimensions of service quality

that are explained as under:

Customer Satisfaction in Banking

SERVQUALScale

(Dispensa, 1997).

(Gulledge, 1996).

Parasuraman et al., (1988, 1991)

Reliability

Tangibles

Responsiveness

Assurance

Empathy

Figure-1.1 Expectation-Outcome Experience of

Customers

- This dimension shows the consistency

of services towards performance and dependability.

- This dimension shows the physical

aspects of the services as physical facilities,

appearance of personnel and tools & equipment used

for provision of services.

- This dimension reflects the

willingness or readiness of employees to provide

quick services to customers.

- This dimension indicates the

employee's knowledge, courtesy and their ability to

incorporate trust and confidence.

- This dimensions shows the magnitude of

caring and individual attention given to customers

Source: Generated

Figure 1.1 reflects the expectation-outcome

experiences of bank customers. Customer

satisfaction leads to better profitability by retaining

existing customers and attracting new ones. Every

organization deploys a reasonable amount of capital

to have satisfied customers. Satisfied customer leads

to delighted customers that eventually create the

sense of brand loyalty among customers.

The sequence of customer satisfaction in reference

to satisfied customers, delighted customers and loyal

customers is expressed in figure 1.2

Expectatio

ns before

Purchase

Real

Perform

ance

Deman

Satisfacti

on

OR

Switch to

Other

125


Figure-1.2 Customer Satisfaction for better

Performance

SERVQUALQUESTIONS

1. Tangibles:

Source: Generated

For actual survey respondents, instructions are also

included, and each statement is accompanied by a

seven-point scale ranging from "Strongly Agree--5"

to "Strongly Disagree--1". Only the end points of the

scale are labeled; there are no words from number 2

through number 4.

1.1 Banks (refer to Media -Print & TV or the

appropriate service business throughout the

quest ionnaire) have modern- looking

equipment.

1.2 Employees at banks are tidy in appearance.

1.3 The physical facilities at admirable banks are

visually pleasing.

1.4 The ATM's of this bank are technologically well

equipped

1.5 Tangible Materials (e.g., brochures or

statements) associated with the service are

visually attractive in an excellent bank.

1.6 TheATM's of this bank are adequate in numbers

1.7 The internet banking services of this bank are

widespread.

2.1 Banks act upon the service right the first time.

2.2 When banks promise to do something by a

certain time, they do so.

2.3 When customers have a trouble, excellent banks

show a sincere interest in solving it.

2.4 Banks make available their services at the time

they assure to perform so.

2.5 Banks persist on error free proceedings.

3.1 Employees of banks enlighten customers

exactly when service is to be performed.

3.2 Employees of banks give quick service to

customers.

3.3 Employees of banks are always enthusiastic to

help customers.

3.4 Employees of banks are never too active to act in

response to customer requests.

4.1 The activities & behaviour of employees of

banks instills calm in customers.

4.2 Customers of banks feel safe & secure in their

transactions & dealing.

4.3 Employees & staff of banks are constantly

courteous & polite with customers.

4.4 Employees of banks have the knowledge to

answer customer questions.

5.1 Banks gives customers individual attention.

2. Reliability.

3. Responsiveness:

4. Assurance

5. Empathy

(Price) = Expectation (Benefits)

Satisfied Customers

Happy Customers

(Customers) Loyalty towards

Brand

Long-term Profits

(Better Performance)

126


5.2 Banks has operating hours convenient to all

their customers.

5.3 Banks has employees who give customers

personal attention.

5.4 Employees of Banks understand the specific

needs of their customers.

These findings do not undermine the value of

achievement in

identifying some of the key underlying constructs in

service quality, but they do highlight the difficulty of

measuring customer perceptions of quality.

notes that the majority of researchers using

SERVQUAL have omitted from, added to, or altered

the list of statements purporting to measure service

quality.

With reference to the objective of the study, the

major areas of questioning and analysis are

concerned with perceptions of service quality and its

dimensions:

As declared,

perceptions were considered on a five point

“strongly agree” to “strongly disagree” scale.

The analysis of Table-1 shows that there exists a

broad perceptual distinction in Indian (public sector)

banks concerning the quality of service for their

respective customers, whereas the said perceptual

Zeithaml, Parasuraman, and Berry's

Anne

Smith

Analysis and Interpretation

responsiveness, assurance,

reliability, tangibility and empathy.

Overall Service Quality

distinction in private banks is narrow.

The mean of PNB (142.48) when compared to mean

of HDFC (167) shows that there is a difference in the

quality of service being delivered by PNB as

compared to the quality of service expected by their

respective customers. In other words, service quality

delivered by banks such as HDFC is higher than that

of PNB.

The data in Table-1 illustrates

that there are important perceptual differences on the

responsiveness dimension of quality of service of

their customers. PNB (20.04) shows that the bank is

far below the perceptions of their customers on the

said dimension when compared with HDFC (27.08).

The element wise analysis of this dimension shows

that PNB is falling on the perceptions of their

customers on communicating to them about

performance of service, employees providing

prompt services and willingness to help customers.

Overall Service Quality

Dimension-WiseAnalysis

1. Responsiveness:

Servqual Dimension PNB Mean HDFC Mean

1. Responsiveness 20.04 27.8

2. Assurance 26.08 27.36

3. Reliability 27.72 32.44

4. Tangibility 46.68 48.76

5. Empathy 21.96 30.64

Overall Service Quality 142.48 167


1. Always willing to help customers 4.28 7.72

2. Never too busy to respond to customers requests 5.36 6.08

3. Telling customers exactly when service will be

performed

5.12 7.52

4. Giving prompt service to customers 5.28 6.48

Responsiveness (1+2+3+4) 20.04 27.08

Table 1: Perceptions of Customers about banks Responsiveness

127


2. Assurance: The perceptual variation between

PNB (26.08) and HDFC (27.36) in table 2,

customers are low as is evident from the mean. The

respondents of PNB and HDFC have given almost

equal rating on assurance dimension to both the

banks. The factor wise analysis illustrates that

HDFC is greater than the perceptions of their

customers as far as trust worthiness and courteous

with customers. The number of PNB customers is

greater than HDFC customers in feeling safe while

transacting with the bank and having sufficient

knowledge in answering questions to the customers.

3. Reliability: The breakdown of reliability

dimension of service quality shows major variations

in the observation of PNB from their respective

customers. PNB (27.27) in table 3 shows that it falls

below the expectations of their customers in

delivering quality services, whereas HDFC (32.44)

is greater than the perceptions of their customers in

this dimension. The factor wise analysis of reliability

explains that PNB is far below the perception of their

relevant customers as far as keeping promise,

interest in solving problems, and providing service

at promised time are concerned.


5. Feeling safe in their transactions 7.28 7.04

6. Having knowledge to answer customers questions 6.16 5.76

7. Consistently courteous with customers 6.08 7.92

8. Behaviour of employee will instill confidence in

customers

6.56 6.64

Assurance (5+6+7+8) 26.08 27.36

Table 2: Perceptions of Customers about banks Assurance


9. Performing service right the first time 6.4 6.68

10.Provide service at promised time 5.24 6.92

11. Promise to do in time 5.12 6.36

12. Interest in solving the problem 4.72 6.68

13. Error free records 6.24 6.0

Reliability (9+10+11+12+13) 27.72 32.44

Table-3: Perceptions of Customers about banks Reliability

128


4. Tngibility: The data in Table-4 brings to light the

distinction in the perceptions of the customers of

banks PNB and HDFC on tangibles. The data tells us

that banks such as HDFC (47.74) are exceeding the

perceptions of their customers when compared to

PNB. PNB with a mean of (46.32) falls below the

perceptions of their customers on this dimension of

service quality when compared to HDFC. The

element wise breakdown of tangibility shows severe

short fall of perceptions among banks like PNB on

up to date equipment, physical facilities available in

a bank, neat appearance, materials in banks and

internet facility as perceived by their relevant

customers. While PNB have outperformed HDFC

regarding numbers ofATM's available.

The data analysis of Table-5 relates the

factors that banks such as PNB (21.96) are distant

from their customers regarding delivery of quality

services when compared with HDFC (30.64). There

exists a wide gap between the perceptions of banks

such as PNB and their customers as is evident from

there mean.

5. Empathy:

Table 4: Perceptions of Customers in relation to banks Tangibility

Table-5: Perceptions of Customers about banks Empathy


21. Giving customers personal attention 5.76 7.02

22. Giving customer individual attention 6.00 7.08

23. Convenient operating hours 4.24 8.24

24. Able to understand the specific needs of the customers 5.96 7.04

Empathy (21+22+23+24) 21.96 30.64


14. Tidy in appearance 6.04 7.02

15. Physical Facility 5.68 6.76

16. Innovative Equipment 7.00 7.08

17. Internet banking services 5.48 7.72

18. ATM Technically equipped 8.24 7.84

19. ATM’s in sufficient numbers 7.56 4.08

20. Material in banks 6.32 7.24

Tangibility (14+15+16+17+18+19+20) 46.32 47.74

129


Conclusion:

The researchers found in their research that the

highest customer satisfaction is demonstrated in the

responsiveness areas such as willingness to help

customers and friendly attitude of staff, followed by

the reliability areas such as customer guidance and

customer support. On the other hand satisfactions are

moderate in the tangibles area, such as infrastructure

facilities and decor, followed by empathy area such

as banks business timing and return on investment.

Due to the wide variation of responses, both public

and private banks need to consider the weak areas in

order to meet customer requirements. This study

derives its basis from various research findings and

is also in line with empirical findings with respect to

customer satisfaction by other researchers.

To summarize, the outcome of the research lead us to

the following conclusions and guiding principles of

implication in both public sector & private sector

banks:

1. To be successful in banking sector, banks must

provide service to their customers that at least

meets or, exceeds their expectations. The present

study will provide some sort of guidelines to the

policy makers (managers) of banks to take

appropriate decisions in improving the quality of

services in Indian banking.

2. The customer satisfaction in terms of service

quality is a relational marketing paradigm. The

relationships are mostly viewed from the

perspective of the firm providing the services. For

service firms (in our case the banks), building

strong relationships is important for improving

customer satisfaction through service quality.

3. Public sector banks like PNB fall much below the

perceptions of their customers on all dimensions

of service quality. Private Banks such as HDFC

bank are exceeding the perceptions of their

customers on all dimensions of service quality.

4. The development of new products should be

according to the customer's need. A regular

service should be given to the customer through

the department website, brochures and other

sources by conducting regular surveys. The result

can be used by the department to come up with a

new product such as a printed documentation for

delighting their customers.

Although, overall both public and private sector

bank customers are satisfied with their banks, due

to wide difference in responses both public and

private sector banks should concentrate on their

weak areas in order to meet their customer's

expectations and this study provides some sort of

guidelines to managers of banks for taking

suitable decisions to give more satisfaction to

their customers.

References

1. Agarwal Jyoti: International Journal of Computing

and Business Research (IJCBR) ISSN (Online): 2229-

6166, Volume 3 Issue 1 January 2012

2. Chavan Jayshree International Journal of Business

and Management Invention ISSN (Online): 2319 –

8028, ISSN (Print): 2319 – 801X www.ijbmi.org

Volume 2 Issue 1 ǁ January. 2013ǁ PP.55-62

3. Thakur Satendra, Singh A. P INTERNATIONAL

JOURNAL OF MANAGEMENT RESEARCH AND

REVIEW,Aug -2011/ Volume – 1/Issue- 1 /Article No

-3/ ResearchArticle

4. Waqar ul Haq ,IOSR Journal of Business and

Management (IOSRJBM)ISSN: 2278-487X Volume

1 , I s s u e 5 ( J u l y - A u g . 2 0 1 2 ) , P P 0 1 - 0 5

www.iosrjournals.org

5. Journal of Arts, Science & Commerce , E-ISSN 2229-

4686 , ISSN 2231-4172

6. Government of India, 1991, Report of the Committee

on the Financial System (Chairman: Shri M.

Narasimham) (New Delhi).

7. http://www.Indianbanks.org/

8. http://www.rbi.org.in/home.aspx.

9. http://www.iba.org.in/.

130


Abstract – Track (Marketing)

Marketing Environment and Adaption to the

Changes

Introduction

As we know, the business world is one which is

changing in a very dynamic way and coping up with

such diverse changes may be somewhat an adverse

challenge to many business firms.

There are many ways to cope up with the

surrounding changes in the business world and one

of these ways is by getting a clear understanding of

the markets that surrounds the firm. A firm should

work by understanding their stand in the market and

by deciding their target market and potential buyers.

A firm knows its potential buyers even before the

product goes into production and thus moulds and

plays with the tactics so that they may be more

appealing to that particular group so as to reap the

profits at the highest level possible.

The basic objective of this research paper is to get an

understanding of how does the market work and how

various changes can either make a firm or break a

firm.

Keywords: Market Change, Market

The first thing is to understand what exactly is

marketing. Marketing is about identifying and

meeting human and social needs. One of the shortest

and good definitions of marketing is meeting needs

profitably.

TheAmerican MarketingAssociation has provided a

formal definition – Marketing is an organizational

function and a set of processes for creating,

communicating, and delivering value to customers

and for managing customer relationships in a way

that benefit the organization and its stakeholder.

The market environment is a marketing term and it

refers to factors and forces that affect a firm's ability

to build and maintain successful relationships with

customers. Two levels of the environment are:

– consists of small

forces within the company that affect its ability to

serve its customers &

- consists of those societal forces that

affect the firm.

There are various internal and external factors that

affect the marketing environment which will further

be expanded and explained throughout this paper.

The internal factors and external factors that affect

the working of a company are– Internal Factors

consists of – Shareholders, Employees, Suppliers,

Manufactures.

- Marketing managers must work

closely with other company departments. Finance

is concerned with finding and using funds to carry

out the marketing plan. The R&D department

focuses on designing safe and attractive products.

Purchasing, worries about getting supplies and

materials, whereas manufacturing is responsible

Micro (internal) environment

Macro (external)

Environment

• Employees

Marketing Environment andAdaption to the Changes

Raghav Bhalla, Nupur Mantoo(Symbiosis International University Symbiosis Law School, Pune)

131

Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014Second Edition of JIDNYASA : Thirst for Knowledge 2014 Why FDI in Retail ? A Study with Reference to Select StakeholdersMarketing Environment and Adaption to the Changes

Marketing Environment and Adaption to the Changes

for producing the desired quality and quantity of

products.

- Suppliers are an important link in the

company's overall customer value delivery

system. They provide the resources needed by the

company to produce its goods and services.

Supplier problems can seriously affect

marketing.

– The manufactures also play an

important role in the environment and the

marketer has only a little control on them because

if the manufacture produces goods that as the

directions asked by the firm, then the goods can

be sold as per the future estimates that are marked

by the marketer.

External Factors consists of – Political and Legal

Environment, Social Environment, Technological

Environment, Economic Environment and Natural

Environment.

As we know demand

is defined as the desire for a product backed by

willingness and ability to pay for it. Thus it is not

only the people but also their ability to buy a

product that is vital for a marketer.

Culture is set of beliefs

and customs pertinent in a society. A marketing

campaign must be in tandem with the beliefs. The

market should adjust the decisions with respect to

the cultural and social beliefs.

Nature is the source of

raw material for the production a product. The

raw material may be renewable, infinite or

depleting. In all the cases the raw material shall be

preserved and wastage must be minimized. Also

the pollution should be minimized to preserve the

ecology.

Technology

changes every fortnight. Obsolesce happens

faster than it is spelt. Thus a marketer must be

•

•

•

•

•

•

Suppliers

Manufactures

Economic Environment -

Social Environment -

Natural Environment -

Technological Environment -

aware of recent technological updates. Being

technologically upgraded and using the latest

technology provides a competitive advantage

over the competitors. There are unlimited

opportunities for innovation and every

competitor tries to exploit the new usage of the

product.

It consists of

Government Regulations, policies, social groups

etc...Any kind of business must abide by the legal

policies of the nation. The Law is for the purpose

of protecting customers from exploitation by the

business man, to protect the interest of society and

also to protect companies from unfair

competition.

This subject, though extensively researched, hasn't

been exhausted yet, since, new factors may arises

which may affect the balance in the market. This

research makes a significant step towards

understanding what brings about that change and

whether something can be done so as to predict the

future change.

This paper has been conducted to give a basic

understanding of how certain factors affect a firm

and if they can adapt and cope with the change. This

paper will provide a greater insight into the mind of a

lay man to show him as to how the marketer changes

ideas so that he may be more appealing to consumers

and to the target markets that he is promoting to.

1. MARKETING ENVIRONMENT AND THE

FACTORS INVOLVED -Author: William King

The author had said that the environment that

surrounds the market and those factors that affect

the working of the environment are divided into

Internal and External factors.

2. HOW DO ELEMENTS OF A MARKETING

ENVIRONMENT AFFECT MARKETING

DECISION-MAKING? –Author: Mary Strain,

• Political and Legal Environment -


132


Demand MediaThe author of this article quoted

The

author had stressed on the various factors that

affect the marketing environment and end up

influencing all of the marketer's prospects. The

author had included and had given a brief on

factors such as the taste and preferences, the

competitor etc.

This article throws light upon the various social

factors that the marketer must keep in mind when

planning a new product.

This line is apt to describe

the article because the market in the 21 century is

one the . This means that every firm

that needs to launch or that needs to stay on top of

the market must cater to the needs of the society

and needs of the people at the large.

The method used for this paper was a basic Survey

wherein a Questionnaire was distributed amongst

people of different age groups.

The reason for choosing a market survey as

compared to any other form of research

methodology was because of the factor variation.

When doing the market survey, the opinions of

various people from different age groups play a key

role to determine a perfect answer or conclusion that

is considered to be unbiased.

We chose not to stick with the results of the authors

of other research papers is because the attitude and

the ideologies of people change from time to time

and because this would be considered as the most

'The marketing environment is everything your

company must take into consideration when

developing and presenting a new product.'

3. SOCIAL ENVIRONMENTAL FORCES IN

MARKETING – Author: Daphne Adams

'Successful marketing

depends partly on the ability of a company to

manage its marketing programmes within its

social environment.'st

Buyer is King

Research Methodology

recent conclusion while stepping into the mind of the

consumer. At the end of everything, the consumer is

considered at the King of the market and the products

are made or amended in accordance to the needs of

the consumer.

Many other authors may have also used market

survey as their method of research but the fact that

this is the most recent one conducted which provides

a perfect and unbiased answer which at the end will

help us to understand as to how the minds of people

work because we all can be considered as consumers

and it help us to understand as to what people keep in

mind when purchasing a particular product.

The basic objective of this research paper is to get an

understanding as to how the marketer adapts to the

changes in the marketing environment as well as

keeping in mind of not losing consumers but to

attract more consumers no matter what changes have

taken place.

For any product to be successful, the marketer must

always be ahead of the game such that before the

competitors think about it, the marketer must already

be in implementation mode. The apt phrase – 'DOG

EAT DOG' can be considered here because if the

strategy adopted by the marketer fails, the sales and

profit margins fall as the products won't sell and will

lead to a domino effect.

A remarkable example of how the environment

affected a firm was the most recent Patent case of

As we know that both Apple and Samsung are

leading brands for telecommunication and computer

gadgets. The conflicts were always there as they

were considered to be the pioneers in that industry

but there was a suit filed by Apple against Samsung

on the infringement of the Apples patent rights for

the iPhone and the iPad which were copied by the

Objective of Study

APPLE v SAMSUNG.

133


Galaxy Tab and the Galaxy series of phones.

The reason for this case to be chosen was because

one factor of the internal environment is

–

In the lawsuit filed by Apple against Samsung in

April 2011, Apple stated that the South-Korean

firm had ripped off the design and technology of

Apple products.

In response, Samsung counter-sued, saying that

Apple had infringed a number of patents to do

with 3G.

Apple had also stated that Samsung copied the

"look and feel" of theApple iOS range of devices,

namely the Galaxy line of smartphones and

tablets.

Apple is seeking $2.5 billion in damages, and

Samsung is also seeking financial restitution.

This is a perfect example of how certain internal

factors of the environment, which can be controlled

not fully but only to a certain extent can affect the

working as well as the sales of a particular firm.

The most leading tax case in recent history is the

The environment factor that this comes under is the

The and the case are as follows:

Essentially the Vodafone Hutch deal involved

transfer of shares of a non-resident Cayman Islands

based entity between two non-residents (Hutch and

Vodafone). Apparently the transaction had no link

with India and therefore the related parties to the

transaction indeed assumed and claimed that no tax

on this deal is payable in India. But the Indian tax

authorities thought otherwise. The Indian tax

authorities issued notice to Vodafone under section

201 of the Indian Income Tax Act 1961 so as to show

cause as to why it should not be treated as an “assesse

Competition.

These are the Facts laid down

Political and Legal Environment.

Facts Judgment

•

•

•

•

VODAFONE HUTCH DEAL.

in default” since it (Vodafone) had failed to

discharge its withholding tax obligation with respect

to tax on gains made by Hutch on the sale of shares to

Vodafone.

In addition, the Indian tax authorities decided to treat

Vodafone as an agent of Hutch under section 163 of

the Income Tax Act 1961 to recover the tax dues. On

Vodafone's challenge to the notice, the Bombay High

Court on December 3, 2008, approved the Indian tax

authorities jurisdiction to initiate investigation so as

to determine whether the over $11 billion

Hutchison-Vodafone transaction was liable for

capital gains tax in India. Finally on January 20,

2012, the Supreme Court ruled in favour of

Vodafone. The Supreme Court disagreed with the

conclusions arrived at by the Bombay High Court

that the sale of CGP share by HTIL to Vodafone

would amount to transfer of a capital asset within the

meaning of Section 2(14) of the Indian Income Tax

Act and the rights and entitlements flow from Term

Sheet, loan assignments, brand license etc. form

integral part of CGP share attracting capital gains

tax.

Consequently, the demand of nearly Rs.12,000

crores by way of capital gains tax, would amount to

imposing capital punishment for capital investment

since it lacks authority of law and, therefore, stands

quashed.

Marketing strategies are fundamental aspects in any

business organization and they play a critical role in

determining the level of productivity and

profitability, the level of competitive advantage, and

in influencing the market share and dominance. It is

through marketing strategies that organizations are

capable of realizing its stipulated goals and

objectives. Other than these factors, marketing

strategies are necessary for shaping the overall

Research Method

134


picture of an organization and the manner it presents

itself to the outside community.

As part of our research we conducted a survey and

the research is purely based on primary data in the

form of questionnaires

This research was undertaken in Pune City, and it

involved conducting a survey with a portion of

employees of TATA Company and students at the

Coffee stop where the branch of TATA Company is

located. This region was selected because it is the

place where people come during their break time and

hence, a lot of information can be obtained from the

selected participants. Other information will be

obtained from secondary sources such as the articles

published in books, journals, the internet, research

papers and reports were also referred to obtaining

general information relating to the topic.

The sample belongs to the annual income group of

80,000 - 10, 00,000 and between the Age Group of 0

till 60+. This research proposal utilizes the positivist

research philosophy based on the marketing

strategies and the marketing environment that can be

observed.

Which form of marketing strategy would

you prefer to buy your product?

Findings and Discussions

Question –

Marketing strategy is the process businesses use that

allows them to focus their strengths and limited

resources to pursue opportunities and avenues that

will increase their sales and give them a competitive

advantage in the market.

The Visual form of marketing strategy allows the

customers to get such a view that would help them to

understand the features and how the product work.

The audio form of marketing works in such a way

that helps the customer to know what new products

have been released. Free Samples provides a

tangible part to the product as the consumer gets to

taste/use the product that has arrived into the market.

The Print Media provides special offers and such

attractive advertisements that induce the consumer

to buy.

In our teams opinion visual media provides the

biggest and the most pure scope for marketing as it

gives the consumer an insight into the working of the

product.

In accordance to the survey that was conducted, the

response that was unanimous for the question raised

which was – '

And 40% of

the participants answered Visual media, which

includes television commercial or advertisements,

What marketing Strategy was most

preferred when purchasing a product?

135


30% of the participants chose Print media which is

the second highest as people see the advertisements

in the newspaper and the discounts are given on the

purchase which attracts the people. 20% of the

participants go for audio followed by 10% for free

samples.

- Do you believe in companies that follow

the Green Marketing Strategies?

Before answering the question with regards to Green

marketing, some participants had asked as to what

exactly is green marketing and the answer that was

given is – 'It is the process where the firm does

everything keeping in mind the natural environment

and sustainability. It is the process of producing

goods that satisfy the needs of people with using the

organic form of raw material and to protect mother

nature so that there can be a healthy future for the

coming generations'.

Green market strategies, green market companies

and green marketing products boosts the confidence

amongst the companies or the firms.

The answer to Question 2 had received an absolute

positive notion and 100% of the participants agreed

Question

that Green marketing strategies should be given an

importance.

Since Question 3 is in continuation with Question 2,

the answer that it received was of various kinds as

people thought of answers such as 'Go Green

Campaigns', 'Using environment friendly resources',

'PaperlessAdvertisements', No plastic bags

– Do you like the concept of purchasing

goods via the internet, why?

With the introduction of the internet, there came

many changes to the way a company might carry out

a particular marketing strategy. The internet is a

dynamic system, with both companies and

consumers having to adapt to the rapid pace at which

it moves. For companies, this means that the

competition has become global. When the question

of internet purchasing was raised, 70% of the people

had answered the question in affirmation and the

remaining 30% had answered in the negative aspect.

When asked for the reason for purchasing for the

internet, the people that answered in the positive had

given the same reason which is, that it is very

convenient.

Question

136


Whereas, those that answered in the negative had

given the reason that those goods aren't reliable and

there is no physical use of the goods.

The main reason that 70% of the people answered in

the affirmative in regards to this question is because

they all had said that it allows us to sit at home and

yet shops for the favorite brands that we like and that

we want and provide with many facilities such as

cash on delivery, exchange of the products, money

back guarantee etc. Whereas the remaining 30%

answered in the negative was because they all said

that the products may be defective, second hand or it

doesn't feel the same compared to when you go and

see the item that you wish to buy.

– Do you think political parties affect the

marketing strategies in India?

Question

137


70% of people think that Political parties may a role

in the working of firms and the remaining three feel

that the firm can still run the same way no matter

what political parties is at the center.

As we know, that in India the political parties have a

very high influencing power such that they can shut

down companies in a matter of days.

In India, the concept of can be concerned as

common as it provides the firm to run without any

difficulties.

Another aspect which can be considered can be if

there is a company that has friendly relations with the

ruling party and then the tenure of that party comes to

an end, then the new party that comes to party can

close down the company.

– Do you feel that society affects the

marketing strategies in India?

The societal concept balances company profits,

consumer wants and societal interests by

determining the needs of target markets and

delivering superior value in a fashion that improves

or maintains consumer and societies' wellbeing,

therefore obtaining and promoting long run welfare

of the consumer, company and society. The social

factors can also be considered as a very big reason

Hafta

Question

for change in the recent times. Hence society plays a

very big role in the success or failure of products.

Since the dawn of the 21st century, the views of how

goods are sold has completely changed for which the

society is the main reason. Since then, the marketer

makes products which will benefit the society and is

acceptable in society.

Out of everyone who filled this questionnaire, 70%

of the people felt that society's needs play an

important role in the working of a firm and thus the

marketer must keep in mind these needs when

planning the product and the remain 30% felt that the

needs may or may not be important.

As it has been discussed, this whole paper has

brought about one conclusion and that can be

considered to be the main factor which can be the

biggest job of a marketer, namely the Environment

that surrounds a business. The key point that is to be

noted is that everything in and around the business is

changing and the marketer must be up to date with all

these changes.

Hence it can said that the marketing environment is

such that there are changes that take place every day

and the marketer must know what is it that people

Conclusion

138


want which may include things such as online

purchasing or maybe goods which are made with

eco-friendly materials which can be said is what

people want in their products.

A marketer must know both the internal and external

factors so that he may get an edge as compared to

everyone else and be the ultimate seller of products

and to attract the potential buyers.

As already explained earlier, since the dawn of the

21 century, the entire landscape of the marketing

world has taken a 360 degree turn. The reason for this

change is because the consumer.

Until the 19 century, it was considered that the

'Seller is the King' and post the 21 century, that

aspect as changed to the 'Buyer is the King'.

Keeping that fact in mind, the marketer used to

product good that he knew would be sold by itself

without any advertisements or promotional scheme

and now there are many factors that need to be taken

into consideration.

The marketer must be on top of his game so that he

may reap all the benefits and still have the loyalty of

his consumers. The marketer needs to keep in mind

that rather that

(post 21 century).

The only recommendation that the marketer can use

is that he must always think 2 steps in front as

compared to his competitors. Since the 21 century is

technologically advanced, it is up to the marketer to

reach people through any forms, be it the internet or

by televisions commercials or the most common

tactic of personal selling.

With the change in the marketing environment, to get

a good base, the marketer must use all the resources

in hand. He must make sure that he reaches people in

rural areas as well. He has to ensure that places

where the internet isn't available, the backward areas

also need to know about his product and how it will

benefit the consumer on using it.

Recommendations

st

th

st

st

st

he needs the consumers the

consumers need his product

Limitation and Future Scope

References

The various limitations that were faced by us when

doing the research paper was that the time period for

completion of the paper was less therefore a deep and

intensive research couldn't have been done.

Another limitation was faced when people were

asked to fill the questionnaire. Some of the people

would be un-cooperative and others would falsify

information as well as the information published by

various author would provide misleading

information. When searched about a topic, it would

be published in a different context.

There were several aspects which couldn't have been

covered due to time constrains and if given the

chance in the near future, we would like to go into an

indebt research regarding various topic which were

just brushed upon in this research paper such an the

Internet and how it has brought about the change in

the marketing world as well as other topics such as

the marketing strategy used by companies pre the

21 century and how the adapted and have become

on the leading pioneers of the 21 century in their

respective industries.

st

st

Books

Articles

Websites

1. Marketing Management – Philip Kotler, Kevin Lane

Keller,Abraham Koshy, MithileshwarJha.

2. American MarketingAssociation, 2004

1. Marketing Environment And The Factors Involved -

Author: William King

2. How Do Elements Of A Marketing Environment

Affect Marketing Decision-making? – Author: Mary

Strain, Demand Media

3. Social Environmental Forces In Marketing – Author:

DaphneAdams

1. www.wikipedia.com

2. www.articles.everyquery.com

3. www.smallbusiness.chron.com

4. www.mcmurry.com

139


Abstract

Key Words:

1. Introduction

The purpose of this study is to understand the

association between Relationship Quality and

d e m o g r a p h i c v a r i a b l e s i n t h e m o b i l e

telecommunication services industry in India. This

study is conducted on Telecom industry since it has a

major contribution in the service economy. The

study examines the impact of various demographic

characteristics of the customers on Relationship

Quality within mobile telecommunication sector in

the Meerut city of W (UP). Relationship quality is

constructed with two dimensions namely

Satisfaction and Trust. The findings reveal that

different demographic variables have different

impacts on Relationship Quality.

Relationship Quality, Satisfaction,

Trust, Demographic Characteristics, Telecom

Industry

Despite the economic and social benefits of mobile

telecommunications to the Indian economy and

market, and its all pervasive impact across the social

and economic strata of the country; there is little

marketing or management research done in this

sector. This lack of adequate research in the mobile

telecommunication sector may prevent it from

acquiring knowledge useful for the growth of

Telecom industry as a whole. Turel and Serenko's

(2006) opinions on the importance of Relationship

Quality measurement for mobile phone users,

economic growth, and the development of the

society make this research more potent for the

developing economies like India. Therefore, it is of

great importance to gain more understanding in the

area of Telecom industry with references to

demographic indices and Relationship Quality.

The study examines the impact of various

demographic characteristics of the customers on

Relationship Quality within telecommunication

sector in the Meerut city of W (UP). The study uses

variables which have been used in the previous

studies on mobile telecommunication services by the

researchers in different part of the world. These

variables are gender, age group, occupation,

educational qualification, and income group

Since almost all companies are trying to implement

Relationship Marketing tactics on their existing and

prospective customers, it has become essential to

measure the quality of relation or interaction they are

enjoying with the target segment. Relationship

Quality (RQ) is a manifest of positive relationship

.

2. Literature Review and Conceptual

Framework

2.1 Relationship Quality

Empirical Assessment of the Impact ofDemographic Variables on Relationship

Quality in Telecom Sector

Mr. Ashish Saurikhia

Dr. Umesh Mishra(

(

PhD Scholar, Patna University, Patna)

Professor and Principal (Vanijya Mahavidyalaya, Patna University, Patna)

140


outcomes that reflect the strength of a relationship

which meets the need and expectation of involved

parties (Smith, 1998). RQ refers to a customer's

perception of how well the whole relationship

fulfills the expectations, predictions, goals, and

desires the customer has concerning the whole

relationship. This relationship forms the overall

impression that a customer has, concerning the

whole relationship they have with any service

provider (Wong and Sohal, 2001).

Professional relation is grounded on the service

provider's demonstration of competence, whereas

social relation is based on the effectiveness of the

service provider's social interaction with the

customer (Wong and Sohal, 2001). This is crucial

because customer sees RQ can be achieved through

the salesperson or service employee's ability to

reduce perceived uncertainty (Zeithaml, 1981)

through interpersonal interaction. Gummesson

(1987) argues that interpersonal or social

interactions are important in developing good

relationship with the customers.

On the basis of the literature review, we have

identified two dimensions of Relationship Quality-

Satisfaction and Trust, which are discussed below.

Hennig-Thurau et al. (2002) argue that for

customer's satisfaction by the service provider's

performance, firm is identified as a key component

of RQ (Baker, Simpson and Siguaw, 1999, Morgan

and Hunt, 1994).Customer satisfaction has gained

new attention within the context of the paradigm

shift from transactional marketing to relational

marketing. Satisfaction has been treated as the

necessary premise for holding customers (Hennig-

Thurau and Klee, 1997).

Trust can be defined as an attitude, characterized by

the belief in the counterparty's reliability, for

2.1.1 Satisfaction

2.1.2 Trust

example, supplier or client. According to Morgan

and Hunt (1994), it has been hypothesized that trust

is a major factor which influences brand loyalty.

Chaudhari and Holbrook (2001) have found that

trust is directly related to loyalty and purchase. It is

that factor which helps the organization and

company to sustain even in times of uncertainty

(Moorman et al. 1993).

Only a few researches have been conducted to

establish relationship between demographic

variables and their relation with Relationship

Quality. This section gives a brief overview of earlier

relevant research works.

Ndubisi (2006), on the basis of his research on

Malaysian bank customers, argues that the

measurement of the 'underpinnings' of relationship

marketing can predict customer loyalty. At the same

time, he also finds significant gender difference in

the trust and loyalty relationship and concludes that

women are significantly more loyal than men at

higher levels of trust (Gaurav, 2008).

Mensah and Nimako (2012) explore the influence of

customer demographic variables on complaining

and non-complaining motives and responses in

mobile telecommunication industry in Ghana. The

study finds that complaining motives are

significantly influenced by marital status only. The

study also finds that non-complaining motives are

influenced by marital status and age. Moreover,

complaining responses are found to be significantly

influenced by gender, marital status and the

education of consumers. The authors suggest

management and marketing practitioners to

consistently collect and examine vital demographic

information about their customers in order to

understand customers better for effective complaint

management and customer loyalty.

2.2 Demographic Characterist ics and

Relationship Quality

141

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Empirical Assessment of the Impact of Demographic Variables on Relationship Quality in Telecom Sector

Singh (2013) aims at investigating the overall

customer satisfaction in the mobile phone services in

India with special reference to Maharashtra, and the

relationship between satisfaction and demographic

variables. The results obtained in his research

indicate that the combination of age, gender, income

and employment variables show weak relationship

with customer satisfaction.

In the backdrop of divergent findings, it becomes

pertinent for the researcher to investigate the impact

of demographic characteristics of the customers on

Relationship Quality in the context of Indian

telecom industry.

This study involves the survey method for collecting

the data with the help of questionnaires. The survey

has been conducted in the Meerut city of Western

U.P.

Convenience sampling technique has been

used to select the telecom subscribers (customers)

for the survey. The questionnaires were distributed at

shopping malls, multiplexes, colleges, offices, and

parks where telecom subscribers with diverse

demographics and employment status are likely to

be found. The researchers have personally

administered questionnaires to all respondents and

received 100 valid responses out of 163

questionnaires for telecom subscribers. The

collected data regarding the telecom subscribers'

perceptions of Relationship Quality is analyzed

using quantitative techniques. However, small

amount of qualitative research has also been

employed to develop the scale items of Relationship

Quality before moving onto the quantitative

research.

3. Research Methodology

3.1 Research Method

Individuals who have been using mobile

telecom services are the target respondents for this

study.

3.2 Questionnaire Design

4. DataAnalysis and Interpretation

4.1 Sample Profile

A self-completion questionnaire with closed

questions in English language has been developed

for primary data collection from the mobile phone

users. The questionnaire is composed of two

sections: Section I and Section II.

Section I consists of 10 items related to the two

constructs of the research model related to

Relationship Quality i.e., Satisfaction and Trust.

Several items on each construct are developed and

adopted from relevant literatures [Chu (2009),Aydin

and Özer, (2005), Tian .(2008), Morgan and

Hunt(1994), Mouri (2005), Oliver (1997), Fornel

(1992), N'Goala (2007), Keaveney (1995), Wulf

(2001)]. Few items for all the constructs are

developed with the help of focus group discussions

with 15 telecom subscribers. The constructs are

measured using a multiple-item measurement scale.

Measures for all the constructs have used a five-

point Likert-type response format, with “strongly

disagree” and “strongly agree” as the anchors. The

respondents have recorded their assessment

of the items on five-point Likert-type scales (1=

strongly disagree, 2= disagree, 3= neutral, 4= agree,

5= strongly agree).

Section II is about the telecom subscribers'

individual characteristics with 5 questions related to

their gender, age, occupation, educational

qualification, and family income.

Table 1 shows the profile of the 100 telecom

subscribers surveyed in the Meerut city of W(UP) on

the basis of five variables (gender, age group,

occupation, educational qualification, and income

group).

et al

et

al.

142


4.3 Reliability Testing

Table 5: Reliability Analysis

For the two constructs that this study focused on, it is

necessary to measure internal reliability of each

construct with its different number of items. To test

the internal reliability, the Cronbach's alphas are

calculated for the items designed for the same

construct. Table 5 shows the calculated values of

Cronbach's alpha for both the constructs. All the

values are above the cut-off point (0.7) which

indicates that both the constructs have strong

internal consistency.

4.4 Mean Scores

4.5 Hypothesis Testing

H1:

• H1a:

Table 6 provides the mean scores for all the 2

dimensions of Relationship Quality on 100

responses.

On the basis of the theoretical framework discussed

in section 2, following hypotheses have been

formulated to test the significance of difference in

the telecom subscribers' perceptions of Relationship

Quality dimensions across demographic variables.

There is a significant difference in the

perceptions of Relationship Quality dimensions

between males and females


perceptions of Satisfaction between males

and females

Variable Categories Response (%)

Gender Male 54.5

Female 45.5

Age Group 18-25 years 12.2

26-35 years 30.3

36-45 years 36.4

46-60 years 17.7

60 years and above 3.4

Occupation Student 10.7

Employed 41.3

Business 31.3

Homemaker 16.7

Other 0.0

Educational Qualification Upto 12th

Standard 9.3

Diploma or Certificate course 11.7

Graduation 9.6

Post-Graduation 69.4

Income Group Rs 84,000-2,00,000 5.3

Rs 2,00,001- 5,00,000 46.7

Rs 5,00,000- 10,00,000 34.7

Rs 10,00,000 and above 13.3

Table 1: Profile of the Respondents

Construct Number of Items Chronbach’s alpha

Satisfaction 5 0.808

Trust 5 0.848

143


• H1b:

H2:

H3:

H4:

H5:


perceptions of Trust between males and

females


customer's perceptions of Relationship Quality

dimensions across the age groups



dimensions across the occupations



dimensions across the educational levels


customers' perceptions of Relationship Quality

dimensions across the income groups

The hypothesis H1 has been tested by using

Independent Samples t-test whereas MANOVA test

has been used to test the hypotheses H2-H5.The

Statistical Package for Social Sciences (SPSS 19.0)

software has been used for employing the statistical

tests.

The results obtained through independent samples t-

test on Relationship Quality perceptions between

gender categories i.e., males and females are

presented in Table 7. It can be noticed that there is no

significant difference between perceptions of males

and females in case of Trust dimension, whereas

significant differences are observed on the

Satisfaction (t = -3.385, p<.01) dimension.

Therefore, H1b is rejected and H1a is accepted

Variable Categories Satisfaction Trust

GenderMale 3.09 3.09

Female 3.58 3.11

Age Group

18-25 2.18 3.17

26-35 2.89 3.13

36-45 3.52 3.07

46-60 4.04 3.10

above 60 4.75 3.00

Occupation

Student 2.02 3.20

Employed 2.86 3.11

Business 3.79 3.08

Home maker 4.35 3.07

Educational Qualification

Upto 12th standard 3.11 3.07

Diploma or Certificate Course 3.40 3.16

Post Graduate and above 3.53 3.08

Post-Graduation 3.30 3.10

Income Group

84,000-2,00,000 4.60 3.00

2,00,001-5,00,000 3.82 3.09

5,00,001-10,00,000 2.91 3.11

10,00,000 and above 2.09 3.18

Table6: Mean Scores for Relationship Quality -Demography Wise

144


indicating that there is no significant difference in

the perceptions of Trust between males and females

whereas there are significant differences in the

perceptions of the Satisfaction between males and

females. Further from Table 6, it can be noticed that

females are more satisfied (mean score = 3.57) than

males (mean score = 3.08).

The summary of MANOVA results for demographic

variables (age group, occupation, educational

qualification, and income group) is reported in

Tables 8 and 9. Results in Table 8 indicate that there

are significant differences in the customers'

perceptions of Relationship Quality dimensions on

the bases of age group (Wilks' Lambda=.666,

F=2.635, p<.01), occupation (Wilks' Lambda=.894,

F=10.692, p<.01), and income group (Wilks'

Lambda=.338, F=8.070, p<.01), whereas there is no

significant difference in the customers' perceptions

of Relationship Quality dimensions on the basis of

educational qualification. Therefore, H2, H3 and H5

are accepted and H4 is rejected.

*p<.01Results exhibited in Table 9 suggest that on

the basis of age group, there are significant

differences in the customers' perceptions for

Satisfaction (F=3.236, p<.01) whereas for rest of the

dimensions, there are no significant differences in

the customers' perceptions. From Table 6, it can be

noticed that customers in the age group 18-25 years

Levene's Test

for Equality of

Variances

t-test for Equality of

Means

F Sig. t df

Sig.

(2-

tailed)

SatisfactionEqual variances assumed 1.255 .265 -3.385 98 .001

Equal variances not assumed -3.421 97.911 .001

TrustEqual variances assumed .073 .788 -.628 98 .531

Equal variances not assumed -.627 94.467 .532

Table 7: Results of Independent Sample t-test for Relationship Quality between Males and Females

Effect Value F Sig.

Age Group Wilks’ Lambda.666 *2.635 .003

Occupation Wilks’ Lambda .394 *10.692 .000

Educational Qualification Wilks’ Lambda .765 1.690 .072

Income Group Wilks’ Lambda .338 *8.070 .000

Table 8: MANOVA Summary for Demographic Variables

145


are least satisfied (mean score=2.18) and customers

of age 60 years and above are most satisfied (mean

score=4.75) as compared to the customers in the

other age groups.

Table 9 also indicates that customers of different

occupations have significantly different perceptions

for Satisfaction (F=32.801, p<.01) but they don't

differ significantly on the perceptions for Trust.

Moreover from table 6, we can notice that

homemakers are most satisfied (mean score=4.35)

followed by business class subscribers (mean

score=3.79) whereas students are least satisfied

(mean score=2.02).

Subscribers from different income groups differ

significantly on the dimensions Satisfaction

(F=11.013, p<.01), but their perceptions on Trust are

not significantly different (see Table 9). Also,

perceptions for Satisfaction show a decreasing trend

with increase in the income of subscribers (see Table

6).

In this study, the impact of demographic

characteristics of the telecom subscribers on

Relationship Quality has been examined.

Relationship Quality has been considered to be

constituted of two dimensions i.e. Trust and

Satisfaction. It has been found that

5. Conclusion

•

•

•

•

•

Trust does not have any impact on any of the

demographic characteristics of the telecom

subscribers.

Satisfaction is has an impact on all the

demographic characteristics except for the

educational qualification of the subscribers.

Males are less satisfied with the services of

their telecom service providers than their

female counterparts.

Young telecom subscribers (within the age

group 18-25 years) and students are least

satisfied with their telecom service providers.

Subscribers of higher income groups are least

satisfied with their telecom service providers

as compared to lower income groups.

TSPs should put more effort in satisfying males,

younger customers, students and subscribers of

higher income groups. Companies should place

more emphasis in satisfying these customers, as they

seem to be less happy in general and have higher

expectations from the companies. Therefore,

programmes should be designed purposely to raise

satisfaction levels of these customers should be

emphasized. These may include; lowering the

prices, improving the networks, and improving the

customer care services along with the

implementation of relevant and more appealing

Relationship Marketing strategies.

Source Dependent Variable Type III Sum of Squares Df Mean Square F Sig.

Age

Group

Satisfaction .437 3 .146 *3.236 .027

Trust .122 3 .041 2.760 .048Occupa

tion

Satisfaction 2.823 2 1.412 *32.801 .000

Trust .004 2 .002 .140 .869

Income

Group

Satisfaction 1.422 3 .474 *11.013 .000

Trust .085 3 .028 1.926 .133

Table 9: Follow-up Test-Univariate ANOVAs for Age Group, Occupation and Income Group

*p<.01

146


6. Limitations and Scope of Further Research

· Convenience sampling has been used to select

the respondents and the study is based on a

sample of 100 respondents only, which make the

findings of this study probabilistic. Therefore,

results of this study should be read with caution.

· Because of the time and other resource

constraints, this study limits itself to the

geographic extent of Meerut city of W (UP).

Future research needs to use more diversified

samples to test the Relationship Quality

dimensions used in this study in order to check

the generalizability of the research findings.

· The Relationship Quality scale developed in this

study is based on qualitative research only.

Future research can be done to test and validate

the scale by using statistical techniques like

FactorAnalysis.

· The study is based on the perceptions of telecom

subscribers only. The perspectives of Telecom

Service Providers regarding Relationship

Quality should also be addressed and

investigated in future researches to better

understand the problem domain.

Appendix 1

Questionnaire

I am conducting a survey of Indian mobile

telecommunication markets. In the following

questionnaire, I would like to know your attitudes

and behaviours related to Relationship Quality with

the Telecom Service Provider (TSP) you are using

presently. This survey is a part of my research work,

and your kind help is crucial for my successful

completion of the same. Your response will be

anonymous; data will be combined and analyzed as a

whole. Please attempt to answer all the questions and

click one appropriate box that best suits your

perspective for each statement.

For each of the following statements, 5 denotes

“strongly agree”, 4 denotes “agree”, 3 denotes

“neutral”, 2 denotes “disagree”, and 1 denotes

“strongly disagree”.

Your participation in this study will be greatly

appreciated. Thank you very much for your time and

assistance.

1 2 3 4 5

1. I am satisfied with the overall service quality offered by my TSP.

2. I am satisfied with the professional competence of my TSP.

3. I am satisfied with the performance of the frontline employees of my TSP.

4. I am comfortable about the relationship with my TSP.

5. I am satisfied with the grievance handling procedure of my TSP.

1 2 3 4 5

6. My TSP is reliable because it is mainly concerned with the consumers’ interests.

7. The billing system of myTSP is trustworthy.

8. The reputation of myTSP is trustworthy.

9. The policies and practices of myTSP are trustworthy.

10. The service process provided by myTSP is secure.

147


Section I

Satisfaction

Trust

Section II

1. Please indicate you gender

2. Into which one of the following categories

does your current age (in fall?

4. P lease ind ica te your educat iona l

qualification

5. Into which of the following category

a. Male

b. Female

years)

a. 18-25

b. 26-35

c. 36-45

d. 46-60

e. 60 and above

a. Student

b. Employed

c. Business

d. Homemaker

e. Any other- Please specify

a. Upto 12 Standard

b. Diploma or Certificate course

c. Graduation

d. Post-Graduation

th

3. Which one of the following categories best

describes your current occupation?

does

our annual family Income approximate)

fall?

a. Rs 84,000-2,00,000

b. Rs 2,00,001- 5,00,000

c. Rs 5,00,000- 10,00,000

d. Rs 10,00,000 and above

y (

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Prof. Komal ChopraFaculty, SIMS

Sonal Pandey Proof Reader,


Akida WahiProof Reader,


Tanya BindraProof Reader,


Smita MishraProof Reader,


Nupur MaheshwariProof Reader,


Prof. B. R. LondheDeputy Director, SIMS

Prof. Pravin KumarFaculty, SIMS

Editorial Board

Executive Team

Board of Referees for JIDNYASA 2014

Dr. Indira ParikhFormer Dean of Academics at IIM-Ahmedabad

& Director of FLAME Academy

Mr. Arun WakhluFounder Director,

Pragati Leadership Institute Pvt. Ltd

Dr. Anuj Paul GosainStrategic Planning and Business Development

John Deere India Pvt. Ltd

Dr. A. K. DasbiswasProfessor. Emeritus Former Dean & Director.

ITM Business School. Mumbai

Dr. Ravi Sectham RajuProfessor. Sydney University

Dr. Mukul Madahar MBA, Welfare Director, Cardiff University

Mr. Bhushan Joshi MD. kraflPov.ercon India

Dr. Neil Wilkof Partner. I lerzog. Fox & Neeman. Tel Aviv. Israel

Neil Wilk of heads the intellectual property and information tech-nology team. Specialist of Technology transfer and Internet law

Ms. Mohlni Sharma Administrative Officer. SIMS

Kunal YadavCover Design and Layout


JIDNYASA 2014 Vol. I ISSN : 0976-0326 JIDNYASA : Thirst ...Return on Indian Central Public Sector...

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Transcript of JIDNYASA 2014 Vol. I ISSN : 0976-0326 JIDNYASA : Thirst ...Return on Indian Central Public Sector...