Research Paper of Hemant Kumar

ZENITH INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY RESEARCH
ISSN: 2231-5780 VOL.1 ISSUE 8 DEC. 2011 GUEST EDITOR
A KOTISHWAR
Associate Professor & HOD Department of Master of Business Management CMR College of Engineering and Technology, Kandlakoya (v), Medhchal Road, Hyderabad (A.P)
ZENITH
International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011, ISSN 2231 5780
ZENITH INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY RESEARCH Vol.1 Issue 8; December 2011; ISSN 2231-5780
SR. NO.
CONTENTS
PAGE NO.
1.
SURVEY ON SATISFACTION OF PARENTS- A STUDY OF SELECT SCHOOL IN HYDERABAD CITY, ANDHRA 1-17 PRADESH DR. GOPALA SUDARSHANAM CURRENCY FUTURES IN INDIA: AN INTRODUCTION
2. DHAREN KUMAR PANDEY ADAPTING THE SERVQUAL SCALE TO HOSPITAL SERVICES: AN EMPIRICAL INVESTIGATION OF PATIENTS PERCEPTIONS OF SERVICE QUALITY DR. MAMTA BRAHMBHATT, DR. NARAYAN BASER, PROF. NISARG JOSHI STUDY OF TRADE IN UNDER-GRADUATE BUSINESS EDUCATION BETWEEN INDIA AND OMAN
18-26
3.
27-42
4.
43-61
5.
DR. SHRIRANG RAMCHANDRA KANDALGAONKAR ROLE OF EMOTIONAL INTELLIGENCE ON THE PERFORMANCE OF EMPLOYEE WORKING IN SERVICE 62-72 SECTOR DR. IRA BAPNA, GITANJALI SHRIVASTAVA, EKTA CHITNIS AN EXPLORATORY STUDY OF GLASS CEILING IN INDIAN EDUCATION SECTOR
6.
73-82
www.zenithresearch.org.in
7.
MS ANITA SHARMA, PROF. SUSHAMA SHARMA, DR NEERAJ KAUSHIK CONSUMER PREFERENCES TOWARDS SERVICE INDUSTRY: A FACTORIAL STUDY OF HEALTHCARE 83-89 INDUSTRY DR. SIDDHARTH VERMA, UTKAL KHANDELWAL PANCHAYATS AND RURAL ELECTRIFICATION: A CASE STUDY OF WEST BENGAL DR. NIRANJAN MANDAL
8.
90-106
ZENITH
9.
FOREIGN DIRECT INVESTMENT IN THE INDIAN TELECOMMUNICATION SECTOR AN OVERVIEW
107-116
10.
G.PREETHA CONSUMER AWARENESS AT THE BOTTOM OF THE PYRAMID: A STUDY WITH REFERENCE TO THE 117-126 BANKING INDUSTRY IN INDIA DR.SURESH CHANDRA BIHARI CORPORATE SOCIAL AND ENVIRONMENTAL REPORTING AND DISCLOSURES:THE INDIAN BANKING EXPERIENCE
11.
127-137
12.
RAKHI SINGH, DR. DEEPAK TANDON SOCIO-ECONOMIC DETERMINANTS OF INTER-DISTRICT MIGRATION IN BOTSWANA, 2001: A TENTATIVE 138-145 ANALYSIS M.K. SUKUMARAN NAIR CREDIT RISK ASSESSMENT SYSTEM IN BANKING SECTOR
13.
146-174 DR. S. SUDALAIMUTHU, RAMASAMY PL ANALYSIS OF INVESTORS PERCEPTIONS TOWARDS MUTUAL FUND SCHEMES (WITH REFERENCE TO AWARENESS AND ADOPTION OF PERSONAL AND FAMILY 175-191 CONSIDERATIONS) DR.K.LAKSHMANA RAO IN-SERVICE PRIMARY TEACHERS ATTITUDE TOWARDS INCLUSION: SURVEY RESULTS FROM DISTRICT 192-197 KURUKSHETRA (HARYANA) ASTHA, SHARMA SUSHMA, BHARGAV SMRITI EDUCATION AND WOMEN EMPOWERMENT IN INDIA
14.
15.
16. M. SUGUNA A STUDY OF DATA MINING ACTIVITIES FOR MARKET RESEARCH MR. HEMANT KUMAR, DR. SARMISTHA SARMA AN ANALYSIS OF KHADI AND VILLAGE INDUSTRY SECTOR IN J & K 18. DR. DARAKHSHAN ANJUM
198-204
17.
205-212
213-220
ZENITH
GLOBALIZATION AND ECOLOGICAL STRESS 19. DR. ASHISH MATHUR, NEELAM KALLA SEGMENT REPORTING (IFRS-14 AND AS-17); A STUDY OF COMMERCIAL BANKS IN KENYA AND INDIA 20. 237-247 DR. MARTIN ONSIRO RONALD, DR. RICHARD NYANGOSI, LUMUMBA MARTIN EMOTIONAL INTELLIGENCE AND ITS EEFETCS ON JOB PERFORMANCE: A COMPARATIVE STUDY ON LIFE 248-260 INSURANCE SALES PROFESSIONALS NIDHI YADAV CORPORATE SOCIAL RESPONSIBILITY: AN ANALYSIS IN SMES AT FARIDABAD REGION SANDEEP GUPTA, DR. PARUL KHANNA SLOW LEARNERS: THEIR PSYCHOLOGY EDUCATIONAL PROGRAMMES 221-236
21.
22.
261-278
AND 279-289
23.
24.
MS. SANGEETA CHAUHAN AN EMPIRICAL STUDY OF LIFE INSURANCE PRODUCT AND SERVICES IN RURAL AREAS
290-305
25.
HARNAM SINGH, DR MADHURIMA LALL A STUDY ON ROLE OF IT ENABLED SERVICES IN TECHNICAL EDUCATIONAL INSTITUTIONS IN HARYANA 306-313 AND PUNJAB REGION SUMITI SEHGAL, KAPIL KUMAR FLOURISH OR PERISH: CHANGE MANAGEMENT STRATEGY FOR EFFECTIVE ORGANIZATIONS DR. AKHILESH CHANDRA PANDEY A CASE STUDY ANALYSIS ON BSLI DREAM ENDOWMENT PLAN
26.
314-321
27.
S. SARAVANAKUMAR, B. L. SAIRAM SUBRAMANIAM, G.PERIYASAMI, G. BABY SAKILA PRIVATE LABELS IN INDIAN RETAIL INDUSTRY
322-334
28.
HARIPRAKASH
335-340
ZENITH
29.
PERFORMANCE AND LINKAGES OF RUBBER WOOD INDUSTRY IN KERALA DR. OOMMEN ZACHARIAH FACULTY RETENTION: A CHALLENGE FOR BUSINESS SCHOOLS RACHIT GUPTA, HEMANT CHAUHAN, PALKI SETIA HURCONOMICS IN BUSINESS ORGANISATION
341-350
30.
351-363
31. DR.A.SATHISH KUMAR, AMOLAK SINGH PUBLIC BEHAVIOR TOWARDS DIFFERENT MEANS OF COMMUTATION WITH REFERENCE TO DEHRADUN 32. TADAMARLA ANUPAMA, INUMULA KRISHNA MURTHY, K.DEEPPA A STUDY ON FUNDAMENTAL ANALYSIS OF ONGC 33.
364-371
372-382
34.
383-392 SUGANDHARAJ KULKARNI E- GOVERNANCE TQM (WITH SPECIAL REFERENCE TO ANDHRA PRADESH MARKETING FEDERATION 393-402 HYDERABAD) MS. ANITA DSOUZA IMPACT OF ISO CERTIFICATION ON TQM PRACTICES IN SMALL AND MEDIUM ENTERPRISES VIJAYAGIRI BIKSHAPATHI EFFICIENCY OF STOCK MARKETS - COMPARING THE BEHAVIOR OF STOCK INDICES OF NSE AND NYSE
35.
403-418
36. DR. A. PATRICK, MRS.R.SUSHAMA PERFORMANCE EVALUATION OF OPEN ENDED SCHEMES OF MUTUAL FUNDS 37. DR . VIKAS KUMAR UNEARTHING THE EPIDEMIC OF NON PERFORMING ASSETS- A STUDY WITH REFERENCE TO PUBLIC SECTOR BANKS IN INDIA DR.HOSMANI.A.P, MR.JAGADISH HUDAGI
419-427
428-446
38.
447-459
ZENITH
39.
WORKING CAPITAL MANAGEMENT OF INDIAN ELECTRICAL EQUIPMENT MANUFACTURERS-A 460-469 COMPARATIVE STUDY T.CHANDRABAI, DR.K.VENKATA JANARDHAN RAO THE CONSTRUCT OF THE LEARNING ORGANIZATION: THE DYNAMICS AND THE DIAGNOSTIC TOOL
40.
470-493
41.
A.V.L.N. RAO ASSESSING JOB SATISFACTION LEVEL OF EMPLOYEES IN A TERTIARY CARE HOSPITAL -A TOOL FOR TALENT 494-507 RETENTION MS. SYEDA AMTUL YAFE A REQUISITE FRAMEWORK FOR ASSESSMENT DEVELOPMENT OF LEADERSHIP COMPETENCIES
& 508-522
42.
43.
SATYA PRAKASH MEDAVARAM, DR. SINDHU HUMAN RESOURCE MANAGEMENT PRACTICES IN ORGANIZED RETAILING - A STUDY OF SELECT 523-534 RETAILERS DR D. MAHESWARA REDDY*; SURESH CHANDRA CH CHANGING WAVES IN INDIAN RETAILING: IMPACT OF CUSTOMERS PERCEPTION AND CRM ON INDIAN 535-551 RETAILING IN THE CHANGING BUSINESS SCENARIO MRS. SUDHA VEMARAJU EMPIRICAL STUDY ON SATISFACTION OF THE POLICYHOLDERS TOWARDS THE SERVICES PROVIDED 552-557 BY LIC OF INDIA IN MADURAI DIVISION DR. J. ARULSURESH PERFORMANCE OF COMMERCIAL BANKS IN INDIA DURING POST-LIBERALIZATION DR VIKAS CHOUDHARY, SUMAN TANDON
44.
45.
46.
558-568
ZENITH
SURVEY ON SATISFACTION OF PARENTS A STUDY OF SELECT SCHOOL IN HYDERABAD CITY, ANDHRA PRADESH
DR. GOPALA SUDARSHANAM*
*School of Management Sciences, Nalla Narasimhareddy Educational Societys Group of Institutions, Hyderabad, Andhra Pradesh, India.
ABSTRACT One of the most marketable things in recent days is SERVICE. It has great phenomenal growth in recent days. This service industry may include medical, hospitality, and education. Education sector previously has no firm intention regarding to its marketization. But now it is inevitable due to the attractive potential and advent of private sector schools into the field as more and more school are coming up and the competitive situation is slowly and firmly changing. In Hyderabad there are 15 International schools, 22 Montessori schools, 05 waldrof schools, 11 preschools, 11 aided schools, 04 girls schools, 27 CBSE un-aided Pvt schools, 07 ICSE unaided Pvt schools and 08 SSC un-aided Pvt schools. As the size of the schools is large the parents have become more particular about the school selection for their children. The present study has made an attempt to examine the satisfaction level of the parents with the school where their children are studying. An attempt is also made to find the motivational factors to opt for the school. Suggestions offered by the parents for improvement of the teaching methods, results and code of discipline are also included in the study. The present study revealed that 60 percentage of the parents are selecting the school based on the quality of education, 20 percentage based on the management of the school 11 percentage based on academic results and rest based on other factors like distance, discipline and amenities etc. regarding to the source of information for selection of a school 51 percentage of the parents depending on the friends and collages ,14 percentage on family members 12 percentage on relatives, 8 %, 5% and 10 percentage on neighbors, advertisement from school and other sources respectively. Regarding to the amenities 84%of the parents has said that the school had adequate amenities. And more interestingly 100 percent satisfaction has derived by the parents regarding to the academic result achieved by the school. Although parents overall satisfaction degree is high they have advocated few constructive suggestions for the further development of the school. Which includes improve upon the level of discipline, appointment of well trained & extensively equipped teachers, reduction of fee structure providing, qualitative computer education, implementation of English as spoken from strictly besides making tie ups with canteen contractor and hospital if any for providing medical facilities for the students. KEYWORDS: Satisfaction, Parents, School, Factors and Decision making. ______________________________________________________________________________
ZENITH
INTRODUCTION One of the mega trends of recent years has been the phenomenal growth of services industry. In the past the need to market their services has not really been felt by the education sector, as educational institutes such as colleges, schools or universities, especially in developing countries like India have always faced more demand than they could cope with. In some instances there used to be only few schools in the town and people didnt have much choice about the selection of schools. So in that circumstance there wasnt any need self for marketing of educational services. But today, due to the attractive potential and advent of private school in this field more and more schools are coming up and the competitive situation is slowly changing. In recent days people have also become more awarded and conscious about education and now they have a number of alternatives available to make a choice. This field has a high growth potential, due to this reason it is expected that in the near future more and more schools will be established. Even the schools facing heavy demands have been conformed to the questions of being able to choose the desired kind of target customers. In Hyderabad there are 15 International schools, 22 Montessori schools, 05 waldrof schools, 11 preschools, 11 aided schools, 04 girls schools, 27 CBSE un-aided Pvt schools, 07 ICSE un-aided Pvt schools and 08 SSC un-aided Pvt schools (www.ed.gov). LITERATURE REVIEW Many schools have attempted to measure parental satisfaction in order to gauge the quality of the education provided to children and to discover ways of improving the schools (Brown, Cheng, Yau, & Ziegler 1992; Hecht, OConnell, Michael, Klass, & Dwyer, 1992; Henderson, 1993; Pederson & Wilk, 1993). Increasing parents satisfaction is considered one way of improving the quality of the schools (Salisbury, Branson, Altreche, Funk, & Broetzmann, 1997). This notion is consistent with the basic tenets of the Quality Movement, a systemic approach to improving goods and services based on satisfying the consumer (American Association of School Administrators, 1992; Deming, 1982; Dobyns & Crawford-Mason, 1991). Parents satisfaction is similar to consumer satisfaction in that it affects the parents loyalty and commitment to the schools their children attend (Bhote, 1996; Salisbury et al, 1997; Scheuing, 1995). Dissatisfied parents can move to other school districts or send their children to private schools. Although parents are not the sole consumers of the education their children receive, satisfying parents is thought to be key in promoting community support for schools (Salisbury et al, 1997). The literature regarding parent satisfaction suggests that this satisfaction is based on a variety of experiences that the parents have with the school. Meeting the expectations of parents is thought to be essential for creating satisfaction (Olson, 1999). In this regard, the background of the parents, notably their cultural background, has been found to be related to their expectations (Carnevale & Desrochers, 1999). Furthermore, we expected parents who participate in more school activities to be more satisfied. We also expected that parents of successful students to be more satisfied than parents of less successful students (Himmelstein, Graham, & Weiner, 1991). In addition, previous researchers have found that parents overall satisfaction is based on their
ZENITH
satisfaction with specific aspects of the childs schooling, such as teachers, transportation services, and cafeteria food (Salisbury et al, 1997). Satisfied parents should also be those who feel informed about their childrens school experiences, think that the school values their involvement, and who believe their children to be safe in school (Salisbury et al, 1997). OBJECTIVES OF THE STUDY This study was taken-up in the city /town of Hyderabad as an intention to explore the parents satisfaction. The significant objectives of this research are: To study and understand the parents satisfaction towards their childrens school. To study the factors affecting the parents satisfaction. To determine the factors that parents considered while selecting the school for their children To study the psychological factors impact on selection of a schools. RESEARCH METHODOLOGY Parent Satisfaction Survey provides an invaluable tool to help schools enhance their services and the educational opportunities they provide. This research was descriptive in nature for achieving above mentioned objectives; the survey method was used to collect the responses from the parents. Primary data was collected through questionnaires; secondary data was collected from earlier published magazines, texts and research papers. And the geographical area for the research was confined to Hyderabad town only. SAMPLE TYPE Here respondents are parents whose children are studying in 1st to 10th standard i.e. in high school-level at a school that is Suprabath Model High School located in Hubsiguda of Hyderabad in Andhra Pradesh. This school is a recognized private school, managed by the Nalla Narasimha Reddy Education societys Group of Institutions, headed by Sri Nalla Narasimha Reddy Garu. The medium of instruction in the school is English. The sample size was kept at 200, which was fair enough to achieve the reliable results to an extent, for our objectivity. The sampling method used was non probability sampling, i.e., convenience sampling technique was used for surveying the parents.
ZENITH
TOOLS USED FOR DATA COLLECTION AND ANALYSIS Data, which is a vital aspect in any research, has been collected through various resources. This has been segregated under two heads: PRIMARY DATA Primary data is the first hand information which has been collected directly from the parents. This data has been obtained by administering a questionnaire under surrey method. Parents are asked to rate their satisfaction about each of a core set of qualities and features, and the importance of each to them. The questionnaire was a structured one consisting or closed ended questions. Some of the responses were gathered on a 5-point importance scale, where: 5=most important, 4=important, 3=somewhat important, 2=not much important and 1=not at all important. SECONDARY DATA The secondary data is an integral part of any research study or a research report as it provides information as key variables, which play a major part in the actual research. The sources of secondary data collected includes: The internet, various business journals, magazines and newspapers. Further the responses were analyzed by the way of different statistical tools like percentages, simple averages and weighted mean method. RESULTS AND DISCUSSION The responses collected from the respondent through the questionnaire method were analyzed. All closed ended questions were analyzed by the way of percentage method and weighted mean method. The results were as follows: A) FACTORS CONSIDERED BY THE RESPONDENTS IN SELECTION OF SCHOOL The question was asked regarding various factors which parents had considered, questions includes fine point rating scale as mentioned earlier. Respondents have rated the different factors per their importance and finally arrived at a weighted mean for every factor. The following table gives the results for this question:
ZENITH
TABLE 1: FACTORS CONSIDERED BY THE RESPONDENTS IN SELECTION OF THE SCHOOL

S.NO FACTORS CONSIDERED FOR SELECTION WEIGHTED MEAN 24.83 39.66 21.33 24.56 24.26 26.20 22.80 32.00 26.13 27.80 28.60 37.40 24.28 25.86 21.30 www.zenithresearch.org.in 5
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
Location of school Quality of teaching. Fee structure. No of students in a class (maximum). Number of teachers/student-ratio. Goodwill/reputation of school. Sports and other co-curricular activities. Discipline in school. Qualifications of teachers. Computer education. Academic results. Management of the school. Distance. Amenities provided by school. Other factors.
ZENITH
Source: survey data. From the data given in table-1 it can be seen that parents are giving more importance to factors like: Quality of teaching, Management of school, Discipline in school, Computer education, and Academic result. Apart from the major factor listed above there are some other factors which the respondents also considered while selecting the school like: Safety of children, Ventilation in the class room, Amount of donations for admission, Periodic evaluation of the students and the feedback given to the parents, Establishment of parents committees /meetings and Behavior, character of teachers. But the predominant factor in selecting the school for their children is quality of teaching followed by the Management of the School. B) LEVEL OF THE OVERALL SATISFACTION TOWARDS SCHOOL Here the researcher has made an attempt to find the level of satisfaction of the parents regarding to various amenities provided by the School. An attempt is also made to find the overall opinion of the parents on the school. The details are furnished as under. TABLE-2: LEVEL OF THE OVERALL SATISFACTION TOWARDS SCHOOL LEVELOF SATISFACTION TOTAL NO OF RESPONDENTS PERCENT
Low
127
63
High
73
37
Total
200
100
Source : survey data: Looking at the data in table 2, it can be seen that 37% of the respondents i.e. 74 out of 100 didnt have any complaint about their childs school and they are fully satisfied but 63% i.e. 126 out of 100 are totally dissatisfied.
ZENITH
(C). FACTORS AFFECTING OVERALL SATISFACTIONS OF PARENTS/DECISION MAKER FOR SELECTION OF SCHOOL & SATISFACTION DERIVED BY THE PARENTS TABLE-3: TYPE OR DECISION MAKING &LEVEL OF OVERALL SATISFACTION Level of overall satisfaction
Decision maker
Low
High
Total. No...Of Respondents 125
Both(wife and husband)
75(40.04)
50(22.96)
Any spouse
40(18.71)
20(11.29)
60
Others
05(1.25)
00(0.75)
05
Total
120
70
190
Not answered
10
Total
200
Source :survey data: Figures shown in the bracket indicates the expected frequencies Looking to the data in table-3, 63% of the respondents i.e. 126 out of 200 said that they jointly (both) decided about the school, 30% of the respondents i.e., 60 out of 200 said that any of the spouse (husband and wife) had taken the decision while 2% i.e. 4 out of 200 said that others except the parents had taken the decision regarding the selection of school. 5% i.e., 10 out 200 respondents had no opinion on this regard. (D). SOURCES OF INFORMATION USED FOR SELECTION OF SCHOOL SATISFACTION DERIVED BY THE PARENTS
www.zenithresearch.org.in 7
ZENITH
TABLE 4: SOURCES OF INFORMATION USED FOR THE SELECTION OF SCHOOL AND LEVEL OF OVERALL SATISFACTION Source Of Information Level Of Overall Satisfaction Total..No...Of Respondents Low High
Friends and colleagues
68 (30.6)
34 (18.7)
102
Family members
18 (8.71)
10 (5.29)
28
Relatives
12(7.74)
12 (4.53)
24
Neighbors
10(4.98)
06 (3.02)
16
Advertisement from school
06(3.11)
04 (1.89)
10
Other sources
12(6.22)
08 (3.78)
20
Total
126
74
200
Figures shown in the bracket indicates the expected frequencies: In response to the question regarding source of information used while selecting the school, 51% i.e., 102 out of 200 said that they get to know about the schools friends and colleagues 14% i.e. 28 out of 200 said from family members 12% said from relatives 8% said from neighbors 5% said from advertisement through hoardings, banners and 10%, i.e. 20 out of 200 said from other sources.
Source: surrey data.
ZENITH
(E).OPINION ON MANAGEMENT OF SCHOOL AND SATISFACTION DERIVED BY THE PARENTS TABLE-5 OPINION ON MANAGEMENT OF SCHOOL & LEVEL OF OVERALL SATISFACTION Opinion On Management of School Excellent Level Of Overall Satisfaction Low 106 (54) high 75 (37) 181 Total..No.Of Respondents
Poor
16 (8)
03(01)
19
Total
122
78
200
Source: survey data Figures shown in the bracket indicates the expected frequencies: In response to the question regarding parents opinion on schools management 91% i.e. 182 out of 200 said that they believes the management of school is excellent while 9% i.e. 18 out of 200 told that they are not satisfied with the school management. (F).OPINION ON AMENITIES PROVIDED BY SCHOOL AND THE SATISFACTION DERIVED BY THE PARENTS TABLE 6: OPINION ON AMENITIES PROVIDED BY THE SCHOOL AND LEVEL OF OVERALL SATISFACTION
Opinion on amenities Provided by school Not adequate Adequate Total Source: survey data
Level of Overall Satisfaction Low 31 (15%) 96 (48%) 127 (63%) High 03(1%) 70(36%) 73 (37%)
Total...Noof Respondents 34 166 200
ZENITH
Figures shown in the bracket indicates the expected frequencies. In response to the question regarding parents opinion on amenities provided by the school like playground, clinic, canteen facilities etc, and 83% i.e. 166 out of 200 said that they believe that the amenities provided by school are adequate. While 17%, i.e 34 out of 200 said that they felt that the facilities were inadequate. (G). SATISFACTION WITH THE COMPUTER EDUCATION PROVIDED BY THE SCHOOL AND SATISFACTION DERIVED BY THE PARENTS TABLE-7: SATISFACTION WITH THE COMPUTER EDUCATION PROVIDED BY THE SCHOOL AND LEVEL OF OVERALL SATISFACTION Satisfaction with the Computer Education Satisfied Not satisfied Total Level of Overall Satisfaction Low 126(63%) 0(0%) 126(63%) high 74(37%) 0(0%) 74(37%) 200 0 200 Total.No.Of Respondents
Source: survey data: Figures shown in the brackets indicate the expected frequencies. In response to the question regarding parents satisfaction with the computer education provided by the school, 100% i.e. 200 out of 200 said that they all are satisfied with the computer education provided by the school while nobody had a negative opinion in this regard. (H). OPINION ON ACADEMIC RESULTS ACHIEVED BY THE SCHOOL AND SATISFACTION DERIVED BY THE PARENTS TABLE-8: SATISFACTION WITH THE ACADEMIC RESULTS ACHIEVED BY THE SCHOOL AND LEVEL OF OVERALL SATISFACTION Satisfaction with Results. Level of overall Satisfaction Low Satisfied Not satisfied Total Source: survey data Figures shown in the bracket indicates the expected frequencies.
10
Total.No.of Respondents. 200 0 200 (100%)

High 74(37%) 0(0) 74(37%)
126(63%) 0(0) 126(63%)
ZENITH
In response to the question regarding parents satisfaction with the academic results achieved by the school, 100% said that they all are satisfied with the academic results achieved by the school, while nobody had a negative opinion in this regard. The academic results achieved by the school will not have any effect on overall satisfaction(i).satisfaction with the quality of teaching provided by the school and satisfaction derived by the parents: TABLE-9: SATISFACTION WITH THE QUALITY OF TEACHING AND SATISFACTION DERIVED BY THE PARENT Quality of Teaching Level of Overall Satisfaction Low Excellent Poor Total Source: survey data. Figures shown in the bracket indicates expected frequencies. In response to the question regarding parents satisfaction regarding quality of teaching, 90% (180 out of 200) said that they believe the quality of teaching was excellent, while 10% i.e. 20 out of 200 have told that it was poor. (J) OPINION ON SPORTS RELATED ACTIVITIES TABLE-10: OPINION ON SPORTS RELATED ACTIVITIES RUN BY SCHOOL AND SATISFACTION DERIVED BY THE PARENTS Satisfaction with sports, related activities Satisfied Not satisfied Total Source: survey data Figures shown in the bracket indicates the expected frequencies. Level of Overall Satisfaction Low 102(51%) 21(10%) 123(60%) High 73(37%) 04(02%) 77(40%) 175(88%) 25(12%) 200(100%)
Total..No..Of Respondents.
high 58(30%) 16(7%) 74(37%) 180(90%) 20(10%) 200(100%)
122(60%) 04(3%) 126(63%)
Total.No.Of.Respondents.
ZENITH
In response to the question regarding parents opinion on sports related activities run by the school 88% i.e. 176 out of 200 have said that they are satisfied with the sports related activities by the school while 12% i.e. 24 out of 200 told that they are totally dissatisfied with it. (L). OPINION ON LEVEL OF DISCIPLINE TABLE-12: OPINION ON LEVEL OF DISCIPLINE MAINTAINED BY THE SCHOOL AND SATISFACTION DERIVED BY THE PARENTS Opinion on the Level of Discipline Level of Overall Satisfaction Total...No...Of Respondents.
Low Satisfied Not satisfied Total 67(34%) 58(29%) 125(63%)
High 57(28%) 18(9%) 75(37%) 124(62%) 76(38%) 200(100)
Source: survey data, & Figure shown in the bracket indicates the expected frequencies. In response to the question regarding parents opinion on the level of discipline maintained by the school 62% i.e. 124 out of 200 said that they are satisfied with the way discipline is maintained by the school, while 38% i.e. 76 out of 200 told that they were not satisfied. (K). OPINION ON INFRASTRUCTURE OF SCHOOL TABLE-11: OPINION ON INFRASTRUCTURE OF THE SCHOOL AND SATISFACTION DERIVED BY THE PARENTS Opinion on Infrastructure Adequate Not adequate Total Source: survey data. Figures shown in the bracket indicates the expected frequencies.
12
Level of Overall Satisfaction Low 120(60%) 06(3%) 126(63%) High 72(36%) 02(1%) 74(37%)
Total..No...of Respondents. 192(96%) 08(4%) 200(100%)

ZENITH
In response to the question regarding parents opinion on the infrastructure of the school 96% .i.e. 192 out of 200 said that they believe the infrastructure is adequate while 4% i.e.8 out of 200 respondents have told that it was not adequate. (M): OPINION ON THE FEE STRUCTURE TABLE-13: OPINION ON THE FEE STRUCTURE AND SATISFACTION DERIVED BY THE PARENTS Opinion on the fee Structure Level of Overall Satisfaction Low High Moderate Low Total Source: survey data. In response to the question regarding parents opinion on fee structure 47% i.e. 94 out of 200 said that the fee structure is high 35% i.e. 70 out of 200 have said that he fee structure is moderated and 18% i.e.36 out of 200 have said that fee structure is law. FINDINGS Parents while making a choice of school had mainly considered the factors like quality of teaching, discipline in school, computer education, management of school and academic performance. Apart from this other factors like evaluation pattern, quality of syllabus, safety aspects enough amenities emphasis on teaching exclusively in English. Policy on donations and private tuitions from school teachers behavior and private tuitions from school teachers, behavior of teachers, training programmer for teachers etc. also play an important role in decision making. In majority of the cases. Husband and wife together taking the decision regarding to the selection of the school. The references of friends and colleagues, relatives and family members are the best sources of information. They really influence the final decision of 68(34%) 40(20%) 22(11%) 130(65%) High 30(15%) 30(15%) 10(5%) 70(35%) 98(49%) 70(35%) 32(16%) 200(100%) Total.No.of Respondents.
13
ZENITH
parents regarding the selection of the school for their child. So in this sector word of mouth publicity plays very important role. Most of the parents are not fully satisfied with the existing school of their child and their overall satisfaction towards the school is low. Many of the parents are expecting computer training effectively. Even they are ready pay excess amount for that separately. FACTORS AFFECTING OVERALL SATISFACTION OF PARNTS The above study repeats that the following factors affect the overall satisfaction derived by the parents for the school. Quality of the teaching provided by the school. Level of discipline maintained by the school. Management of the school. Amenities provided by the school. Sports related activities/initiatives taken up by the school. The study also indicates that the factors like source of information used for the selection of the school, decision maker of the school, infrastructure of the school, and fee structure of the school do not affect the overall satisfaction derived by the parents. SUGGESTIONS
In order to improve the satisfaction derived by the parents towards the school, the following suggestions have been offered: The school needs to improve upon the level of discipline in the school. It needs to come up with suitable policies for maintenance of discipline. Currently school has some punishment measures in case of violation of rules/regulations but it has to be strict enough in implementing these measures. Parents are highly satisfied with the quality further suggested that teachers may use modern teaching-aids such as multimedia, audio-visual aids to supplement their teaching work and
ZENITH
by that to create a better learning experience for students. As far as the fee structure is concerned, many parents feel that is considerably high. As this school is a private school, it charges fees in different heads like school development fees, building maintenance fend etc. the school should not overcharge and should maintain ethical concern in pricing its services. Parents are satisfied with the overall management and policies devised by the school management. But donations for new admissions and tuition services delivered by school teachers still remain controversial issues. It is the duty of the school management to maintain ethical concern in the procedure for granting new admissions and do not bag to donations in any form. Indian government has recently passed a law instructing all school management to restrict their teachers from doing private tuitions. The school should consider above issues and should plan and strictly implement a relevant policy for it. Parents were of the opinion that the school needs to improve upon the amenities provided by the school by adding canteen facilities and medical services and transport facility. The school needs to give tie-up with canteen contractor and a hospital respectively for above mentioned purpose. The school can also appoint a doctor who can be made available for regular medical check-up of students. BIBLIOGRAPHY 1. American Association of School Administrators (1992). Creating quality schools. Arlington, VA: The American Association of School Administrators. 2. Bhote, K. R. (1996). Beyond customer satisfaction to customer loyalty: The key to greater profitability. New York: American Management Association. 3. Brown, R.S., Cheng, M, Yau, M., Ziegler, S. (1992). The 1991 Every Secondary Student Survey: Initial Findings. (ERIC Document Reproduction Service No. ED 351 385). 4. C.R. Kothari: research methodology methods and techniques 2008 Edition wishwa prakeshas New Delhi. 5. Carnevale, A.P. & Desrochers, D.M. (1999). School satisfaction: A statistical profile of cities and suburbs. Princeton, NJ: Educational Testing Service.
ZENITH
6. Deming, W.E. (1982). Quality, productivity, and competitive position. Cambridge, MA: MIT. 7. Hecht, J.B., OConnell, P.A., Michael, N. Klass, P., & Dwyer, D. (1992, April). Common factors underlying public opinion of local schools from five rural, mid-west communities. Paper presented at the annual meeting of the American Educational Research Association, San Francisco, CA, April 20-24. (Eric Document Reproduction Service No. ED 349 145). 8. Henderson, R.L. (1993). Public opinion survey of an extended-suburban school district in central 9. Himelstein, S., Graham, S., & Weiner, B. (1991). An attributional analysis of maternal beliefs about the importance of child-rearing practices. Child Development, 62, 301-311. 10. Indian journal of marketing: oct 2006 New Delhi. 11. Lovelock Christopher: services marketing Pearsons education 2001. 12. Olson, L. (1999). ETS Analysis Tracks Parent Dissatisfaction, Education Week, XIX (9), October 27. 13. Pederson, S. & Wilk, S. (1993). Iowa behavioral initiative: How can schools better serve students with behavioral needs? What families have to say: A survey report. (Eric Document Reproduction Service No. ED 373 494). Parent Satisfaction 1/30/03 29 14. Philip kotler: marketing management analysis planning implementation and control prentice hall 10th millennium Ed 2000. 15. Ravishanker: services marketing the Indian prospective excel books new delhi-2010
16. S.M. jha: services marketing Himalaya publishing house revised ed-2008 17. Salisbury, D.F., Branson, R.K., Altreche, W.I., Funk, F.F., Broetzmann, S.M. (1997). Educational Policy, 11 (3), 286-308. 18. Scheuing, E.E. & Christopher, W.F. (1993). The service quality handbook. New York: American Management Association. 19. Scheuing, E.E. (1995). Creating customers for life. Portland, OR: Productivity Press.
ZENITH
20. School survey Experts 2011, UK 21. www.ed.gov 22. www.greatschool.net
17
ZENITH
CURRENCY FUTURES IN INDIA: AN INTRODUCTION

DHAREN KUMAR PANDEY*
*Research Scholar, Faculty of Commerce, Banaras Hindu University, Varanasi, India.
ABSTRACT The introduction of currency futures in India has passed a journey of almost one and a half year and many changes have been implemented in the trading system in this regard. The main theme of this paper is to assess the speed in which the growth of currency futures in India has accelerated. It also aims at analysing the volatility of the currency futures. In order to study the growth of the currency futures, the number of contracts traded and open interest at NSE and MCX have been inclusively compared. Attempt has been made to check whether the daily returns of the NSE and MCX on currency futures are normally distributed. For this purpose the changes in the daily value of Rupee as compared to Dollar has been calculated for every month seperately and the data have been used for the Kolmogorov Smirnov Test to test the hypothesis that the returns are normally distributed. With the measure of skewness and kurtosis it has been found that the returns are normally distributed and, thus, the null hypothesis is accepted. The currency futures have received a good response from the investors as well as the hedgers. initially currency futures were started for USD-INR contracts but recently trading in Euro-INR, Yen-INR and Pound-INR contracts have been introduced in January 2010. Average turnover of these instruments in the National Stock Exchange and MCX Stock Exc hange (MCXSX) in December was nine times higher than a year earlier. These exchanges are currently clocking an average daily turnover of over Rs 20,000 crore in currency products while it was just Rs 2,400 crore in January last year. The risk involved is comparatively low in this case and currency futures has proved to be a good tool for hedging the risk involved in the currency of a country (currency risk). It is hoped that the currency futures market will develop more faster and it will be a good choice for all the market participants in the near future and it will find its way in the Indian economy. KEYWORDS: currency futures, open interest, volume traded, currency risk. ______________________________________________________________________________ I. INTRODUCTION
By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives. These instruments enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it a process that has undoubtedly improved national productivity growth and standard of living. ......Alan Greenspan (Former Chairman, Board of Governors of the US Federal System) Currency Futures means a standardised foreign e xchange derivative contract traded on a recognized stock exchange to buy or sell one currency against another on a specified future date,
ZENITH
at a price specified on the date of contract, but does not include a forward contract. Currency Futures market means the market in which currency futures are traded. Currency futures were first created at the Chicago Mercantile Exchange (CME) in 1972. In India, NSE was the first stock exchange, permitted by the SEBI, to set up its separate currency derivatives segment. Standardized currency futures trading started on 28 th August, 2008 in NSE with the following features: a. Only USD-INR contracts were allowed to be traded. b. The size of each contract shall be USD 1000. c. The contracts shall be quoted and settled in Indian Rupees. d. The maturity of the contracts shall not exceed 12 months. e. The settlement price shall be the Reserve Banks Reference Rate on the last trading day. f. Only Indian residents shall be eligible for the contracts. Similarly, the BSE and MCX started trading the currency futures from 1 st and 7th October, 2008 respectively. The major objective of using derivatives is hedging the risk (Anand & Kaushik, 2004). One of the major benefits by the start of this trading was to the investors that earlier only those companies, who were exposed to currency risk, were allowed to hedge their risk in the currency forwards but the introduction of the currency futures allowed all investors to trade in currencies. However, a successful year of trading lead the RBI a nd SEBI allow the currency futures in three new pairs, viz; Yen-INR, Pound-INR and Euro-INR, thus allowing the investors more relevant contracts for hedging. II. OBJECTIVES AND METHODOLOGY
..Peter L. Bernstien (Against the Gods) The futures market holds a great importance in the economy and, therefore, it becomes imperative that we analyse this important market and seek answers to a few basic questions. The main theme of the study is to assess the progress of the currency futures in India with a compact view over the volatility of the currency futures. In order to study the growth of the currency futures, the number of contracts traded and open interest at NSE and MCX have been inclusively compared. A correlation between the two was calculated and the result depicted that they have a significant relationship with a correlation cofficient of 0.83 in case of NSE. A plot of that correlation is shown in Figure 1.
19
It has been said in the past that derivatives are k ind of a side show, where the main event takes place in the money and capital markets. One could attend the side show without taking part in the main event and vice- versa. With respect to derivative and money/capital markets, that is simply not true todey. Derivatives are so widely used that even if one has no intension of using them, it is important to understand how they are used by others and what effects, positive and negative; they could have on money and capital markets.
ZENITH
Attempt has also been made to check whether the daily returns of the NSE and MCX on currency futures are normally distributed and the data have been used for the KolmogorovSmirnov Test to test the hypothesis that the returns are normally distributed. KolmogorovSmirnov Test is a non-parametric test and it is used to determine whether the distribution is homogeneous. With the measure of skewness and kurtosis it has been found that the returns are normally distributed and, thus, the null hypothesis is accepted. The hypothesis tested in the study is as follows: H0 : The returns of the currency futures are normally distributed. H1 : The returns of the currency futures are not normally distributed. FIGURE 1: PLOTTED GRAPH OF CORRELATION BETWEEN OPEN INTEREST AND CONTRACTS TRADED AT NSE
2,720,000 2,560,000 2,400,000 2,240,000 2,080,000 1,920,000 1,760,000 1,600,000 1,440,000 1,280,000 1,120,000 960,000 800,000 640,000 480,000 320,000 160,000 0 80,000 160,000 240,000 320,000 Open Interest at NSE 400,000 480,000 560,000 640,000
Total Contracts at NSE
III.
QUANTITATIVE ANALYSIS
The growth of the currency futures in India has been assessed by measuring the growth in two variables which are open interest and contracts traded. A correlation between the two was calculated and the result depicted that they have a significant relationship with a correlation cofficient of 0.83 in case of NSE.
ZENITH
TABLE 2: CORRELATION BETWEEN OPEN INTEREST AND CONTRACTS TRADED IN NSE Linear Correlation Number of points = 320 Correlation coefficient (r) = 0.8324 95% confidence interval: 0.7953 to 0.8632 Coefficient of determination (r squared) = 0.6928 Test: Is r significantly different than zero? The two-tailed P value is < 0.0001, considered extremely significant. The growth of the open interest and contracts traded are explained below: I. OPEN INTEREST
Open interest is the total number of outstanding contracts that are held by the market partricipants at the end of the day. It is also considered as the number of futures contracts that have not yet been exercised, expired or fulfiled by delivery. It is often used to confirm the trends and trends reversals for futures markets. It measures the flow of money into the futures market. A sellor and a buyer forms one contract and hence in order to determine the total open interest in the market we need to know iether the total of buyers or the sellors and not the sum of both.the open interest position that is reported each day represents the increase or decrease in the number of contracts for that day. An increasing open interest means that the new money is flowing in the marketplace and the present trend will continue. If the open interest is declining it implies that the market is liquidating and the prevailing price trend is coming to an end. The leveling off of open interest following a sustained price advance is often an early warning of the end to an uptrending or bull market. The interpretations which can made on the basis of the open interest may be shown with the help of the following table:
Price Rising Rising Falling Falling
Open Interest Rising Falling Rising Falling
Inte rpretation Market is Strong Market is weakening Market is Weak Market is Strengthening
ZENITH
Figure 2 shows the daily movement in the open interest of currency futures in both NSE and MCX. It depicts that the open interest in both NSE and MCX have been increasing with a steady speed since the currency futures are been traded. The open interest in the NSE was 406200 on 31st Dec. 2009 as compared to 16332 on 28th Aug. 2008 and that on MCX it was 425451 on 31 st Dec. 2009 as compared to 17331 on 7th Oct. 2008. It can be seen that in terms of the open interest, the growth of the MCX is more as compared to the NSE.
FIGURE 2 The trend as depicted by figure 1 it is found that the growth of open interest in both NSE and MCX was down during March 2009 to August 2009 which is the indicator that it was affected by the global recession experienced by the Indian economy. Figure 3, which shows the open interest at the end of each month, also depicts that there was a fall in the open interest during the period of January-July 2009. Hence, it can be said that this slackening in trade was due to the global recession. However, the market has recovered itself and a good growth is being experienced.
FIGURE 3
22
ZENITH
II.
CONTRACTS TRADED
The number of contracts traded on a stock exchange shows the total volume of contracts traded. An increase in the number of contracts traded on an stock exchange expresses the growth of trade in that particular stock exchange for a particular currency future. The number contracts traded in the NSE increased to 1444150 contracts on 31st Dec. 2009 from 65798 contracts on 28th Aug. 2008, and from 59952 contracts on 7th Oct. 2008 to 1556411 contracts on 31st Dec. 2009 in the MCX. Figure 4 clearly depicts the growing trend in the daily volumes traded in both NSE and MCX. It can also be noticed over here that the number of contracts traded in MCX have been more than that traded in the NSE.
FIGURE 4 III. MONTHLY TURNOVER
The monthly turnover of both the stock exchanges (NSE and MCX) have also experienced an upward trend in the year 2009 with a total of Rs. 48395 crore in Jan. 2009 and Rs. 319195 crore in Nov. 2009. Figure 5 depicts the clear picture of the currently moving trend in both the stock exchanges. This too says that the currency futures trading at MCX is growing faster than that at NSE.
FIGURE 5
23
ZENITH
IV.
NORMALITY IN THE DAILY CHANGES IN VALUE OF RUPEE
The distribution of the changes in the value of Rupee is not symmetric as the skewness is not zero in any case. Presence of positive skewness in Dec. 2008, Feb. 2009, Mar. 2009, Apr. 2009, June 2009, July 2009, Aug. 2009, Sept. 2009, Nov. 2009 and Dec. 2009 means that the distribution has a right tail and the negative skewness in rest of the months means that the distribution has a left tail. In case of kurtosis, it can be concluded that the distribution was normal only during May 2009 and during the rest of the period it was not normally distributed. A detailed statistic is given in the Table 1. TABLE 1: DESCRIPTIVE STATISTICS OF DAILY CHANGES IN THE VALUE OF RUPEE (MONTH-WISE) Period Sept. 08 Oct. 08 Nov. 08 Dec. 08 Jan. 09 Feb. 09 Mar. 09 Apr. 09 May. 09 Jun. 09 Jul. 09 Aug. 09 Sept. 09 Oct. 09 Nov. 09 Dec. 09 No. of Obs. 20 15 17 20 19 16 18 15 19 21 22 19 18 17 19 20 Mean 0.1575 0.1433 0.0518 -0.082 0.0153 0.105 -0.0444 -0.0053 -0.1258 0.042 0.0032 0.0532 -0.0383 -0.0394 -0.0295 0.0115 S.D. 0.3774 0.4404 0.6189 0.5413 0.2841 0.2712 0.3574 0.3327 0.4296 0.2734 0.2793 0.2055 0.185 0.3477 0.2227 0.1108 Min -0.92 -0.58 -1.44 -1.1 -0.52 -0.21 -0.63 -0.62 -1.38 -0.38 -0.56 -0.33 -0.39 -0.56 -0.41 -0.2 Max 0.69 0.73 1.22 1.1 0.43 0.69 0.54 0.53 0.49 0.53 0.71 0.41 0.33 0.4 0.54 0.23 Skewness -1.28 -0.2846 -0.3942 0.4118 -0.2313 1.0553 0.008 0.0068 -1.2914 0.0373 0.464 0.0656 0.2875 -0.1591 0.4711 0.0388 Kurtosis 2.32 -1.18 1.04 0.24 -1.15 0.14 -0.17 -0.67 3.04 -0.82 0.91 -0.37 -0.38 -1.71 1.15 -0.06
Contrary to the statistical results based on skewness and kurtosis, the Kolmogorov-Smirnov test says that the distribution is normal in every case. The detailed results are given in the Table 2.
ZENITH
TABLE 2: ONE-SAMPLE KOLMOGOROV-SMIRNOV TEST Dec. Nov. Oct. Sept. Aug. 09 09 09 09 09 N Normal Mean Parametersa,
,b
Jul. 09 22
Jun. May Apr.0 Mar. Feb. 09 09 9 09 09 21 19 15 18 16
Jan. Dec. Nov. Oct. Sept. 09 08 08 08 08 19 20 17 15 20
20 .0115
19
17
18
19
- .0532 .0032 .0419 - -.0053 - .1050 .0153 - .0518 .1433 .1575 .0295 .0394 .0383 .1258 .0444 .0820
Std. .1108 .2227 .3477 .1849 .2054 .2792 .2733 .4296 .33273 .3574 .2712 .2840 .5412 .6189 .4404 .3774 Deviatio 0 0 3 7 8 9 6 4 1 4 8 9 1 2 1 n Most Absolute .111 Extreme Differences Positive .111 .133 .133 .184 .186 .159 .186 .108 .108 .112 .112 .133 .133 .176 .087 .112 .112 .106 .106 .213 .213 .133 .133 .176 .132 .176 .122 .142 .104 .163 .093
Negative -.089 -.130 -.184 -.121 -.076 -.071 -.130 -.176 -.094 -.088 -.123 -.121 -.072 -.132 -.142 -.163
Kolmogorov-Smirnov .494 Z Asymp. Sig. (2tailed) .967
.578
.758 .790
.472
.527
.608
.768
.436
.451
.853
.582
.789 .544
.552
.730
.892
.613 .561
.979
.944
.854
.597
.991
.987
.461
.888
.562 .929
.921
.661
a. Test distribution is Normal. b. Calculated from data
ZENITH
CONCLUSIONS AND SUGGESTIONS The Indian currency futures market has experienced an impressive growth since its introduction. The upward trend of the volumes and open interest for currency futures in both NSE and MCX explains the whole story in detail. The growth was only the reason for the introduction of three other currency futures in January this year. In the coming future it is expected that the market participants will find some more currency futures introduced into the market. Currently on 26 th March, 2010 the SEBI allowed the United Stock Exchange of India to launch currency futures. It became the fourth currency future exchange after NSE, BSE a nd MCX. The two exchanges (NSE and MCX) are currently clocking an average daily turnover of over Rs 20,000 crore in currency products while it was just Rs 2,400 crore in January last year. It can be thus concluded that the currency futures market will get more success in the coming future and the economy and the risk hedgers will definitely be benefited from this trade. The correlation test also explained that the relationship between the open interest and traded volumes is very much significant and that the change in the value of currency is normally distributed thus illustrating that the risk is minimum in the currency futures contracts. The risk involved is comparatively low in this case and currency futures has proved to be a good tool for hedging the risk involved in the currency of a country (currency risk). It is hoped that the currency futures market will develop faster and it will be a good choice for all the market participants in the near future and it will find its way in the Indian economy. REFERENCES [1] Choudhari, N. (2009). Global Recession and its impact on Indian financial market. Retrieved from www.aima- ind.org/.../Nidhi_Choudhari_24080982820095705178.pdf [2] Guru, A. (2009). Indian derivative markets: Some policy issues. Retrieved from SSRN: http://ssrn.com/abstract=1428685 [3] Guru, A. (2009). Forex derivative markets in India: Developments thus far and road ahead. Retrieved from SSRN: http://ssrn.com/abstract=1420615 [4] Naik, G. & Jain, S. K. (2002). Indian agricultural commodity futures market: A performance survey. Economic and Political Weekly. Vol. 37 (30). pp 3161-3173
[5] Patil, R. H. (2003).Exchange traded interest rate derivatives. Economic and Political Weekly.Money, Banking and Finance. Vol. 38 (8). pp 755-760 [6] Pavaskar, M. G.(1970).Futurs trading and price variations.Economic and Political Weekly. Vol. 5 (9). pp 425-428 [7] Report of the RBI-SEBI Standing Technical Committee on Exchange Traded Currency Futures (2008)
ZENITH
ADAPTING THE SERVQUAL SCALE TO HOSPITAL SERVICES: AN EMPIRICAL INVESTIGATION OF PATIENTS PERCEPTIONS OF SERVICE QUALITY
DR. MAMTA BRAHMBHATT*; DR. NARAYAN BASER**; PROF. NISARG JOSHI***
*Associate Professor, National Institute of Cooperative Management, Shri Jairambhai Patel Institute of Business Management and Computer Applications (SJPI- NICM) Gandhinagar, Gujarat. Post Graduate Center of Gujarat Technological University-MBA, Nr. Indroda Circle, Gandhinagar-382007. Gujarat, India. **Associate Professor, National Institute of Cooperative Management, Shri Jairambhai Patel Institute of Business Management and Computer Applications (SJPI- NICM) Gandhinagar, Gujarat. Post Graduate Center of Gujarat Technological University-MBA, Nr. Indroda Circle, Gandhinagar-382007. Gujarat, India. ***Assistant Professor, National Institute of Cooperative Management, Shri Jairambhai Patel Institute of Business Management and Computer Applications (SJPI- NICM) Gandhinagar, Gujarat. Post Graduate Center of Gujarat Technological University-MBA, Nr. Indroda Circle, Gandhinagar-382007. Gujarat, India.
ABSTRACT The customers perception is your reality. - Kate Zabriskie This paper attempts to explore the concept of service quality in a health care setting. Based on Parasuraman et al.s Modified SERVQUAL variables, the authors tried to identify the effects of each variable to satisfaction. Data were collected through field research among 246 patients and the data were analyzed using SPSS and Excel. The paper finds that service quality in health care is very complex as compared to other services. The results revealed that the customers' perceptions did not exceed their expectations, as they were dissatisfied with the level of healthcare services rendered by both public and private sector hospitals. The paper adds a new perspective towards understanding how the concept of service quality is adopted in a hospital sector. The authors wish that this study identifies areas of dissatisfaction that can be quickly remedied and ensures improvement in the areas of satisfaction with ongoing notice and importance. KEYWORDS: Customer expectation, Customer perception, Hospital, Service Quality. ______________________________________________________________________________ 1. INTRODUCTION There is a growing consensus within the NHS of the significance of obtaining feedback from patients in order to improve the quality of health care; consequently, many patient satisfaction surveys are now undertaken by health care sector. Knowledge about the patients' perception
27
ZENITH
towards health care quality is one of the most important steps towards introducing reforms in the health care sector. Against a background of growing consumerism, satisfying patients has become a key task for all healthcare activities. Satisfaction in service provision is increasingly being used as a measure of health system performance. Customer satisfaction's importance is well-documented in the marketing literature and is speedily gaining extensive recognition in the healthcare industry. Many hospitals apply modern marketing ideas to serve customer markets in a more efficient and effective way. An important strategic variable in this respect is service quality. This paper attempts to explore the concept of service quality in a health care setting. 2. LITERATURE REVIEW Service quality has become an important research topic in view of its significant relationship to costs (Crosby, 1979), profitability (Rust and Zahorik, 1993), customer satisfaction (Boulding et al., 1993), customer retention (Reichheld and Sasser, 1990), service guarantees (Kandampuly and Butler, 2001), and financial performance (Buttle, 1996). Curry and Stark (2000) studied the use of SERVQUAL across nursing homes in the UK, which provided a useful benchmarking tool. Wan Edura Wan Rashid, Hj. Kamaruzaman Jusoff,1 (2009) attempted to explore the concept of service quality in a health care setting. This paper probes the definition of service quality from technical and functional aspects for a better understanding on how consumers evaluate the quality of health care. It adopts the conceptual model of service quality frequently used by the most researchers in the health care sector. At the end the researcher concluded that service quality in health care is very complex as compared to other services because this sector highly involves risk. Daniel Butler, Sharon L. Oswald, Douglas E. Turner2 (1996) investigated the effects of demographic factors on users and observers of perceived hospital quality and noted that previous research suggests the components of perceived service quality are industry specific, and that calls have been made for academics to integrate their theory into practice. At the end the researcher found that perceived quality is industry specific, users and observers differ in their perceptions of hospital quality and demographic factors do make a difference in perceived hospital quality. Ioannis E. Chaniotakis, Constantine Lymperopoulos 3(2009) aimed to study the effect of service quality (SQ) dimensions on satisfaction and word of mouth (WOM) for maternities in Greece. Based on Parasuraman et al.'s SERVQUAL variables, the authors tried to identify the effects of each variable to satisfaction and WOM. From survey result the author found that in addition to satisfaction, the only service quality dimension that directly affects WOM, is empathy. In addition, empathy affects responsiveness, assurance and tangibles which in turn have only an indirect effect to WOM through satisfaction. Ritu
Wan Edura Wan Rashid, Hj. Kamaruzaman Jusoff, (2009) "Service quality in health care setting", International Journal of Health Care Quality Assurance, Vol. 22 Iss: 5, pp.471 482 2 Daniel Butler, Sharon L. Oswald, Douglas E. Turner, (1996) "The effects of demographics on determinants of perceived health-care service quality: The case of users and observers", Journal of Management in Medicine, Vol. 10 Iss: 5, pp.8 20 3 Ioannis E. Chaniotakis, Constantine Lymperopoulos, (2009) "Service quality effect on satisfaction and word of mouth in the health care industry", Managing Service Quality, Vol. 19 Iss: 2, pp.229 242
ZENITH
Narang 4(2011) intended to measure the perception of patients towards quality of services in public health care centres in rural India. A 23-item scale that tested well for reliability and construct validity was employed for the study. Mixed sampling technique was employed to select the sample. The researchers found from the survey result that items, availability of adequate medical equipments and availability of doctors for women are negatively rated. Education, gender and income were found to be significantly associated with user perception. Abdul Majeed Alhashem, Habib Alquraini, Rafiqul I. Chowdhury 5 (2011) aimed to identify factors affecting patient's satisfaction at primary health care clinics. The questionnaires were distributed in primary healthcare clinics that represent all heath care regions in Kuwait. From the survey result researchers found that the majority (87 percent) of the patients responded that the time for communication between physician and patient was not enough. Seventy-nine-percent of the surveyed patients said they would go to the emergency room of the hospital in future if needed instead of going to the primary care clinic. Regarding the quality of the communication relationship between physician and patients most of the patients responded negatively. Norazah Mohd Suki, Jennifer Chiam Chwee Lian, Norbayah Mohd Suki 6(2011) aimed to investigate whether patients' perceptions exceed expectations when seeking treatment in private healthcare settings in the Klang Valley Region of Malaysia. A survey was conducted among 191 patients in the Klang Valley Region of Malaysia to measure service quality of the private healthcare setting in Malaysia using SERVQUAL 5 dimensions model. The results revealed that the customers' perceptions did not exceed their expectations, as they were dissatisfied with the level of healthcare services rendered by private healthcare settings in that they felt that the waiting time of more than an hour to receive the service was excessive and, when there was a problem, the healthcare provider did not provide a response fast enough. Raman Sharma, Meenakshi Sharma, R.K. Sharma7 (2011) aimed to address the issues of patients satisfaction in health care sector. A cross sectional study was conducted to assess the patient satisfaction level visiting the hospital with the objectives to know the behavior and clinical care by the clinicians and para-medical staff and in terms of amenities available. A pre-designed and pre-tested structured questionnaire was given to the respondents after the patients had undergone consultation with the doctor. From the survey result, researchers found that 40.0 per cent were of the view that services were costlier than their affordability.
Ritu Narang, (2011) "Determining quality of public health care services in rural India", Clinical Governance: An International Journal, Vol. 16 Iss: 1, pp.35 49 5 Abdul Majeed Alhashem, Habib Alquraini, Rafiqul I. Chowdhury, (2011) "Factors influencing patient satisfaction in primary healthcare clinics in Kuwait", International Journal of Health Care Quality Assurance, Vol. 24 Iss: 3, pp.249 262 6 Norazah Mohd Suki, Jennifer Chiam Chwee Lian, Norbayah Mohd Suki, (2011) "Do patients' perceptions exceed their expectations in private healthcare settings?", International Journal of Health Care Quality Assurance, Vol. 24 Iss: 1, pp.42 56 7 Raman Sharma, Meenakshi Sharma, R.K. Sharma, (2011) "The patient satisfaction study in a multispecialty tertiary level hospital, PGIMER, Chandigarh, India", Leadership in Health Services, Vol. 24 Iss: 1, pp.64 73
29
ZENITH
3. RESEARCH OBJECTIVE The aim of this research is to comparatively examine and measure of service quality of public and private sector hospitals of Ahmedabad and Gandhinagar region of Gujarat state and to offer suggestion based on results of the study. 4. RESEARCH HYPOTHESIS 1. Both public and private hospitals do not meet patients' expectations. 2. There is no difference between public and private hospitals concerning their service quality 3. Private hospitals are not more successful than public hospitals in providing health care services for patients. 5. RESEARCH INSTRUMENT The five dimensions of SERVQUAL as proposed by Parasuraman et al. (1988), Othman and Owen (2001, 2002) and Jabnoun and Al-Tamimi (2003) were adapted and modified in this study. SERVQUAL has emerged as perhaps the most popular standardized questionnaire to measure service quality. The instrument poses a set of 22 structured and paired questions designed to assess customers expectations of service provision and the customers perceptions of what was actually delivered. A five-point Likert-type scale is used in this study, anchored by strongly disagree to strongly agree. Content validity (wording and meaning) was checked carefully by experts. A pre-test was then conducted with a group of patients, and minor changes to the scales were made accordingly to ensure that the questions were not repetitive. The researchers have used the 41 structured and paired questions to measure E and P for service quality of Hospitals. PHYSICAL ASPECTS The first dimension physical aspects encompasses the appearance of the physical facilities (1-14) and the convenience offered to the customer by the layout of the physical facilities (1516). The literature suggests that appearance is important to customers (e.g., Baker, Dhruv and Parasuraman, 1994). It also suggests that customers value the convenience offered during the treatment that physical aspects such as layout offer (Gutman and Alden, 1985; Hummel and Savitt, 1988; Mazursky and Jacoby, 1985; Oliver, 1981). RELIABILITY The second proposed dimension is reliability. It has two sub-dimensions and other variations. Patients view reliability as a combination of doing it right and availability of all the information regarding treatment. So, the sub-dimensions of reliability are promises (statements 17 to 19 in the scale) and information availability (statements 20 to 24 in the scale). ENCOUNTERS The third proposed dimension is Encounters. It has two sub-dimensions responsiveness
30 www.zenithresearch.org.in
ZENITH
(statements 25 to 26 in the scale) and empathy (statements 27 to 33 in the scale). These subdimensions are very closely related and capture how the customer is treated by the employee. PROCESS The fourth proposed dimension is process (statements 34 to 38 in the scale). Process is critical for the success of any medical service. This dimension does not have any sub-dimension. POLICY The fifth proposed dimension policy (statements 39 to 41 in the scale) captures aspects of service quality that are directly influenced by hospital policy. For example, when customers evaluate a hospital on the basis of convenient hours, it is viewed as whether the hospitals policy is responsive to customers needs. This dimension does not have any sub-dimension.
31
ZENITH
FIGURE 1: HOSPITAL SERVICE QUALITY MEASUREMENT MODEL

TANGIBLES (I1-I14) PHYSICAL ASPECTS
Sub-D1
HOSQUAL MODEL
D1
DESIGN (I15-I16)
Sub-D2
RELIABILITY (I17-I24)
Outcome
D2
RESPONSIVENESS (I25-I26)
Sub-D3
ENCOUNTERS SATISFACTION/
D3
DISSATISFACTION DISSATISFACTION PROCESS (I34-I38)

D4
EMPATHY (I27-I33)
Sub-D4
POLICY (I39-I41)
D5
The researchers have used following mentioned 41 structured and paired questions to measure E and P for service quality of Hospitals PHYSICAL ASPECTS 1. It is convenient to reach to this Hospital.
32
Based on the above dimensions, the proposed measurement tool may be suitable for measuring the service quality of hospitals, gathering benchmark data regarding current levels of service quality, and conducting periodic checks to measure service improvement. The instrument could also serve as a diagnostic tool to determine service areas that are weak and that need attention. However, in spite of its wide applicability and rigorous development, the use of the instrument should be properly tested under different contexts in order to determine its validity and reliability.
ZENITH
2. The waiting rooms, clinical and diagnostic test rooms, pre-operative and post-operative (or patient/resident ward) rooms, intensive care units, wards, bathrooms and toilets were adequate, comfortable and clean. 3. The beds, pillows and mattresses were comfortable and clean. 4. The wards are well furnished, decorated, well ventilated and clean all the time. 5. Employees of excellent hospitals will have neat appearing. 6. This hospital has visually appealing Materials associated with the service (promotional brochures, service tracking documents, invoices etc). 7. Wards, beds, operation theatres, intensive/post-operative care units and resident rooms are adequately available for patients in this hospital. 8. Ambulance services are made available to patients with minimal costs in this `hospital. 9. Diagnostic facilities like CT scans, MRI scans, X-rays and ultrasound; telemedicine, patient information and billing, operation theatres, labs, etc. are adequately and effectively available. 10. The waiting rooms, clinical and diagnostic test rooms, pre-operative and post-operative (or patient/resident ward) rooms, intensive care units, wards, bathrooms and toilets were adequate, comfortable and clean. 11. Amenities such as continuous electricity and water supply, housekeeping and sanitation facilities, comfortable conditions such as temperature, ventilation, noise and odour are available. 12. Availability of required drugs in the pharmacy 13. Availability of the desired blood group in the blood bank in the hospital. 14. The meals are offers food which is suitable to the patients
15. The ergonomics (layout) of this hospital is conducive for physically challenged, elderly & emergency patients. 16. This hospital provides for proper safety and comfort measures (e.g: handrails in aisles, rooms and bathrooms, ramps suitably designed for wheelchairs and stretchers, elevators and spacious corridors). RELIABILITY 17. This hospital will insist on error free records.
ZENITH
18. This hospital performs the service right the first time. 19. Patients feel safe in getting treated by the doctors of this hospital. 20. This hospital provides all the required information and instructions regarding admission, treatment, and discharge clearly to patients and attendants. 21. The patient's attendants are kept informed about the patient's condition. 22. The allergy or reaction to drugs is taken care of in this hospital. 23. Employees of this hospital tell patients exactly when services will be performed. 24. Patients feel safe in getting treated by the doctors of this hospital. ENCOUNTER: RESPONSIVENESS 25. Employees in this hospital are never too busy to respond to customers requests. 26. When patient has a problem, this hospital will show a sincere interest in solving them. ENCOUNTER: EMPATHY 27. Employees in this hospital are curious to know & solve my problems. 28. Employees in this hospital are not rude in conveying the rules of the hospital (i.e. asking attendants of patients to maintain peace). 29. Employees in this hospital understand my requirement and gives individualised attention. 30. This hospital has their patient's best interests at heart. 31. This hospital gives patients individual attention. 32. Employees of this hospital have knowledge to answer patients' questions. 33. Medical staff of this hospital is consistently courteous with people. PROCESS 34. The hospital provides for an inquiry-cum- complaint counter at a prominent place. 35. Extent to which the time spent waiting for diagnostic tests and treatment, at the pharmacy, scan centers, blood banks and laboratories was reasonable. 36. Frequency in delays or cancellation of scheduled surgeries due to reasons such as nonavailability of operation theatres or surgeons, or lack of preparation of patients for surgery.
ZENITH
37. A proper system of appointment is well-established. 38. Overall process (e.g. Admission, stay and discharge; procurement of drugs and hospital equipments; allocation of operation theatres and beds) are kept short and simple in this hospital. POLICY 39. The hospital provides for significant loyalty rewards through membership cards. 40. This hospital has consulting hours convenient to all their patients. 41. Over all, I am satisfied with the service quality of this hospital. 6. METHODOLOGY This is an analytical study based on the primary data collected through scientifically developed questionnaire. The questionnaire has been personally administered on sample size of 246, chosen on a convenient basis from the two cities of Gujarat state. A literature review was undertaken to identify what parameters to consider in research. The data was collected through questionnaire consisting of 3 parts. The first two parts consist of the SERVQUAL items (Parasuraman et al., 1985), which measure service quality. In Part I, there were 41 statements measuring the expected service quality from excellent hospitals. In Part II, the same items were measuring the service quality perceptions of public/private hospitals in Ahmedabad and Gandhinagar region. Here, respondents were asked to evaluate the statements with regard to the hospital(s). All of the statements in Part I and Part II were measured on a five point "Agree-Disagree" Likert scale. The last part of the questionnaire consisted of demographic questions. A questionnaire was constructed and piloted on 57 patients.Care was taken to minimize the possibility of wrong interpretation and biased views. For the analysis of data statistical methods are applied with the aid of SPSS (Statistical Package for Social Science) software, version 16.0 and excel. Sample size was determined using following formula.
n = 245.8624 246 7. SAMPLE The sample was drawn form the people living in Ahmedabad and Gandhinagar area who were above the age of eighteen. Family members who had benefited from the services of public and private hospitals within a two-year period were asked to complete a self-administered questionnaire. In order to collect quantitative data for the study, a total of 246 questionnaires were printed and distributed to respondents. There are3 public and 5 private hospitals that
35
Here Z = 1.96, p = 0.20, q = 0.80, d = 0.05,
ZENITH
include medium -scale clinics in which surgery is carried out were selected for survey. They are Ahmedabd Civil Hospital, Gandhinagar Civil Hospital, V.S. Hospital, , Sanjivani Hospital, Shrey Hospital, Samved Hospital, Nidhi Hospital , Medi Link Hospital. 8. CHARACTERISTICS OF SAMPLE The following table shows the demographic profile of surveyed respondents. TABLE: 1 CHARACTERISTICS OF SAMPLE Variables Category 18-23 24-29 30-35 Age 35-40 40+ Total 10,000-20,000 20,001-30,000 Monthly 30,001-40,000 Income 40,000+ Total Student Professional Businessman Occupation Housewife Govt. employee Others 17 32 28 74 246 33 109 27
Frequency 46 63 49 41 47 246 58 73 41
ZENITH
Total Undergraduate Education Level Graduate Postgraduate Total Male Gender Female Total
246 8 78 160 246 183 63 246
9. DATA ANALYSIS AND INTERPRETATIONS Randomly 246 respondents, who have recently benefited from hospital services in Ahmedabad and Gandhinagar regions, were selected to answer a modified version of the SERVQUAL instrument. Results of a sample of 246 patients from 8 hospitals were analyzed thru SPSS and Excel. For all 41 statements of expectation and perception each, weighted arithmetic mean was calculated, and gap score was determined by deducting perception values from expectation values. Dimensions wise Mean Score of Perception and Expectation of Public and Private Hospitals was determined and comparative analysis was prepared keeping in mind the gap score of each dimensions. TABLE: 2 STATEMENTS WISE MEAN SCORE OF PERCEPTION AND EXPECTATION OF PUBLIC AND PRIVATE HOSPITALS Public Hospitals Dimension PA1 PA2 PA3 PA4 PA5 E 4.68 4.75 4.70 3.89 3.69 P 2.77 2.34 2.63 2.87 2.53 G 1.91 2.41 2.07 1.02 1.16 E 3.74 3.37 3.38 3.27 3.52 Private Hospitals P 4.58 4.37 3.97 3.01 3.29 G -0.84 -1.00 -0.59 0.26 0.23
ZENITH
PA6 PA7 PA8 PA9 PA10 PA11 PA12 PA13 PA14 PA15 PA16 AVG. R17 R18 R19 R20 R21 R22 R23 R24 AVG. Res25 Res26 AVG.
4.43 4.42 4.64 3.98 3.77 4.44 4.54 4.65 4.32 3.32 3.57 4.30 3.62 3.84 4.95 4.77 4.63 4.82 4.86 3.82 4.41 3.91 3.78 3.85
2.58 1.89 2.10 1.91 1.74 2.45 2.76 2.59 2.22 2.98 2.64 2.44 2.98 2.63 1.98 2.03 1.32 1.48 2.42 3.13 2.25 3.43 3.51 3.47
1.85 2.53 2.54 2.07 2.03 1.99 1.78 2.06 2.10 0.34 0.93 1.86 0.64 1.21 2.97 2.74 3.31 3.34 2.44 0.69 2.17 0.48 0.27 0.38
3.17 3.29 3.37 3.88 3.62 2.22 3.32 2.76 3.59 3.58 3.18 3.33 4.24 4.81 4.92 4.75 4.69 4.86 4.91 3.95 4.64 4.87 4.74 4.81
2.43 1.47 1.99 1.62 1.57 2.55 2.35 2.56 2.33 4.22 3.89 2.89 4.01 4.53 1.12 1.34 1.63 1.39 1.37 3.27 2.33 3.44 3.42 3.43
0.74 1.82 1.38 2.26 2.05 -0.33 0.97 0.20 1.26 -0.64 -0.71 0.44 0.23 0.28 3.80 3.41 3.06 3.47
3.54 0.68 2.31 1.43 1.32 1.38
ZENITH
E27 E28 E29 E30 E31 E32 E33 AVG. Pro34 Pro35 Pro36 Pro37 Pro38 AVG. policy39 policy40 Policy41 AVG.
3.89 3.33 3.56 4.39 4.05 4.61 4.03 3.98 4.15 4.17 4.43 4.65 4.23 4.33 4.45 4.98 4.01 4.48
3.46 3.21 3.48 1.22 2.52 1.62 2.43 2.56 2.98 2.43 2.58 2.01 2.98 2.60 4.28 4.69 3.90 4.29
0.43 0.12 0.08 3.17 1.53 2.99 1.60 1.42 1.17 1.74 1.85 2.64 1.25 1.73 0.17 0.29 0.11 0.19
3.71 3.38 3.52 4.07 4.49 4.98 3.03 3.88 3.14 3.13 3.67 3.89 3.45 3.46 3.34 4.65 4.83 4.61
3.22 3.14 3.29 4.04 2.98 4.79 2.98 3.49 3.01 2.45 2.58 2.65 2.98 2.73 4.13 4.53 4.71 4.79
0.49 0.24 0.23 0.03 1.51 0.19 0.05 0.39 0.13 0.68 1.09 1.24 0.47 0.72 -0.79 0.12 0.12 -0.18
ZENITH
TABLE: 3 DIMENSIONS WISE SCORE OF PERCEPTION AND EXPECTATION OF PUBLIC AND PRIVATE HOSPITALS Dimensions E Physical Aspects Reliability Responsiveness Empathy Encounter Process Policy 4.30 4.41 3.85 3.98 7.83 4.33 4.48 2.44 2.25 3.47 2.56 6.03 2.60 4.29 1.86 2.17 0.38 1.42 1.80 1.73 0.19 3.33 4.64 4.81 3.88 8.69 3.46 4.61 2.89 2.33 3.43 3.49 6.92 2.73 4.79 0.44 2.31 1.38 0.39 1.77 0.72 -0.18 Public Hospitals P G E Private Hospitals P G
TABLE: 4 DIMENSIONS WISE COMPARATIVE ANALYSIS OF PUBLIC AND PRIVATE HOSPITALS Public Dimensions Hospital -GAP Physical Aspects Reliability Encounter Process Policy 1.86 2.17 1.80 1.73 0.19 Private Best Hospital Performer -Gap
0.44 2.31 1.77 0.72 -0.18
Private Hospital Public Hospital Private Hospital Private Hospital Private Hospital
ZENITH
10. MAJOR FINDINGS The mean expectation scores were high when compared to the perception scores - ranging from 3.34 to 0.08 for the public hospitals and from 3.80 to -1 for the private hospitals. The lowest public hospital expectation score was obtained from question 15(This hospital provides for proper safety and comfort measures (e.g: handrails in aisles, rooms and bathrooms, ramps suitably designed for wheelchairs and stretchers, elevators and spacious corridors). and highest from question 40.( This hospital has consulting hours convenient to all their patients) The lowest public hospital Perception score was obtained from question 40(This hospital has consulting hours convenient to all their patients) and highest from question30 (This hospital has their patient's best interests at heart). The lowest private hospital expectation score was obtained from question 11 (Amenities such as continuous electricity and water supply, housekeeping and sanitation facilities, comfortable conditions such as temperature, ventilation, noise and odour are available) and the highest private hospital expectation score was obtained from question32. (Employees of this hospital have knowledge to answer patients' questions.) The lowest private hospital perception score was obtained from question 19(Patients feel safe in getting treated by the doctors of this hospital) and the highest private hospital perception score was obtained from question32 (Employees of this hospital have knowledge to answer patients' questions.) Out of five dimensions Private hospitals perform better than public hospital in 4 dimensions namely Physical Aspects, Encounter, Process and Policy, while public sector hospitals perform better than private sector only in one dimension namely Reliability. Overall private sector is performing better in Encounter dimension, but specific Encounter-Responsiveness public sector has lowest score. 11. LIMITATIONS AND FUTURE RESEARCH DIRECTIONS The findings of this study are limited to the two cities Gujarat State. It should be replicated in other part of countries especially with all major cities. Second, for the researchers convenience, the study questionnaire included both expectation and perception questions. In future, the expectation and perception sections should be separated, although this may create difficulties contacting respondents just before their service and just after the service encounter. Future studies should also investigate the effects of service quality dimensions on the overall satisfaction, recommending behavior and loyalty. Replication studies using large diversified samples elsewhere would be useful in order to corroborate our study findings. 12. CONCLUSION AND MANAGERIAL IMPLICATIONS This study set out to expand understanding of how Consumers evaluate service quality in the context of a developing economy, an environment that differs significantly from the European and American context. The current research reinforces the fact that service quality is a complex and multidimensional construct. Our findings have important implications for private hospital and public hospital owners, managers, government officials, academics and other related parties in the hospital services. Hospital administrations need to gather systematic feedback from their patients and to establish visible and transparent complaint procedures so that patients' complaints can be addressed effectively and efficiently. Most customers are reluctant (Ekiz, 2004) to make their needs and expectations explicit, including their complaints, although the opportunity to do so is clearly provided in order to promote healing environment.
ZENITH
13. REFERNCES 1. Abdul Majeed et.al (2011) "Factors influencing patient satisfaction in primary healthcare clinics in Kuwait", International Journal of Health Care Quality Assurance, Vol. 24 Iss: 3, pp.249 262 2. Daniel Butler et.al (1996) "The effects of demographics on determinants of perceived health-care service quality: The case of users and observers", Journal of Management in Medicine, Vol. 10 Iss: 5, pp.8 20 3. Ioannis E. et.al (2009) "Service quality effect on satisfaction and word of mouth in the health care industry", Managing Service Quality, Vol. 19 Iss: 2, pp.229 242 4. Norazah Mohd et.al (2011) "Do patients' perceptions exceed their expectations in private healthcare settings?", International Journal of Health Care Quality Assurance, Vol. 24 Iss: 1, pp.42 56 5. Raman Sharma, et.al (2011) "The patient satisfaction study in a multispecialty tertiary level hospital, PGIMER, Chandigarh, India", Leadership in Health Services, Vol. 24 Iss: 1, pp.64 73 6. Ritu Narang (2011) "Determining quality of public health care services in rural India", Clinical Governance: An International Journal, Vol. 16 Iss: 1, pp.35 49 7. Rust et.al. (1996), "The satisfaction and retention of frontline employees: a customer satisfaction approach", International Journal of Service Industry Management, Vol. 7 No. 5, pp. 62-80. 8. Sohail, M.S. (2003), "Service quality in hospitals: more favorable than you might think", Managing Service Quality, Vol. 13 No. 3, pp. 197-206. 9. Uzun, O. (2001), "Inpatient satisfaction with nursing care at a university hospital in Turkey", Journal of Nursing Care Quality, Vol. 16 No. 1, pp. 24-33. 10. Valdivia, M.T.R. and Crowe, T.J. (1997), "Achieving hospital operating objectives in the light of inpatient preferences", International Journal of Health Care Quality Assurance, Vol. 10 No. 5, pp. 208-12. 11. Wan Edura Wan Rashid, Hj. Kamaruzaman Jusoff, (2009) "Service quality in health care setting", International Journal of Health Care Quality Assurance, Vol. 22 Iss: 5, pp.471 482
42
ZENITH
STUDY OF TRADE IN UNDER-GRADUATE BUSINESS EDUCATION BETWEEN INDIA AND OMAN

DR. SHRIRANG RAMCHANDRA KANDALGAONKAR*
*Deputy Director, Symbiosis International Universitys, Symbiosis Center of Management and Human Resource Development (SCMHRD), Symbiosis Infotech Campus, Plot No. 15, Rajiv Gandhi Infotech Park, MIDC Hinjewadi, Pune - 411057, Maharashtra , India.
ABSTRACT Oman, the Gateway of Arab countries, is strategically located and naturally endowed. It has made robust economic development in last few years. The Gulf Cooperation Council (GCC), 1981 was formed by six Arab countries including Oman. Economic progress through multilateral trade liberalization is accepted everywhere. Oman became 139th member of WTO in November, 2000. With WTO, education is treated as a marketable commodity and Business of Education has been an accepted terminology. Opening of new millennium has brought a tremendous curiosity and desire for change. Higher education is an important service sector that shall play a vital role in future in the development of Oman. Particularly in Business Education, there are many opportunities for mutual benefits for Oman and India. Economic review including Omanization policy, present Education System has been studied; Opinions of stakeholders justify the need for International partnership in promoting Business Education. Leading academic institutions from India can encash this golden opportunity. Present study is an effort in this direction. KEYWORDS: Business of Education: Cross-border sale of educational services, Expatriates: Foreigners of a nation, Omanization: Policy giving preference to Omani nationals, Privatization: Encouragement to private sector in the economic development.
_____________________________________________________________________________________
INTRODUCTION Economic progress through multilateral trade liberalization has been the order of the day in the present international scenario. After the establishment of the World Trade Organization (WTO), a number of developed as well as underdeveloped countries have now accepted the membership of WTO and the policy decisions of WTO are binding on the same. Now after a decade of formation of WTO, the regionalism has been gaining rise. The formation of Regional Trade Blocks like ASEAN, NAFTA, SAARC, GCC and EU has started gaining regional economic power with similar social, natural and political conditions. The winds of Globalization have opened gates and windows of national boundaries and are allowed to flow freely for mutual economic benefits. Oman is a member of both WTO and the Gulf Cooperation Council (GCC). Oman, a strategically situated Gulf Country, with a vast coastal line is rightly looked at as the Gateway of GCC. India on the other hand is known as the Gateway of Asian sub-continent. Besides its long political and social history and cultural heritage, its strategic situation and
43
ZENITH
proactive participation in the WTO meets confers the leadership of Asian nations. India is rightly treated as the political and economic hub of Asia. Oman and India are celebrating the Golden Year (50th Year) of official diplomatic ties during this year. Higher Education is the means of Manpower Development and Oman looks up for the same. It is often said that the twenty first century is Asias century. Indian economy has the natural and geographic advantage over other Asian nations. Its strategic location surrounded by the Great Arabic Ocean, the Indian Ocean and the Bay of Bengal has assured successful openings of international trade through sea. As a founder member of SAARC, India is looked upon as Economic leader for strategic regional planning. Even as a member of WTO India is expected to play a key-role and lead the less developed economies in the forthcoming WTO meets for favorable international trade conditions. Regional integration is one of the important variants of the free trade doctrine. The Regional economic integration is to be exhibited through free trade area, customs union, common market and economic union. The free trade practices shall abolish all trade restrictions among members/ partners, customs union expects adoption of uniform commercial policies, the common market allows free movement of labor and capital within the member countries of common market and the economic union expects uniform tariff policy of member-nations towards outsiders. The Trade related Intellectual Property Rights (TRIPs) and the Trade Related Investment measures (TRIMs) are becoming buzzwords of international trade. The next round of Ministerial Conferences of WTO meet is quite important in this connection. Further to the Regional Trade Blocks, Trans Regional Trade Blocks among the nations with similar economic situation and with identical political ideology needs to be developed. Oman as leader of the GCC members and India as leader of the Asian countries can join hands in strategic development for mutual help. OMAN: GATEWAY OF GCC Oman is one of the prominent nations of the Arab countries, strategically located and naturally endowed. Surrounded by high seas with around 1700 kms of coastal line, the economy of Oman today shows a lot of favorable economic indicators for rapid economic progress. The overall rise in the GDP, strong per capita income level, stable political leadership resulting into stable economic decisions, rising favorable Balance of payment situation with exports earnings being greater than import delusions, well-defined infrastructure facilities like- network of paved roads, decent international and inland airports and seaports are some of the main indicators of economic progress. In his recent Annual Report of the Central Bank of Oman of 2004, Dr. Ali Mohammed Moosa, Minister of Health and the Dy. Chairman CBO has admitted that the macroeconomic environment of Oman in 2004 was characterized by impressive economic growth, low inflation, financial stability and steady progress of diversification of the economy of Oman. The industrial zones established at Rusayl, Sohar, Raysut, Nizwa and Buraimi show the diversification from Oil Sector to Non-Oil Sector industries in Oman. While acknowledging the contribution made by the expatriates like- Khimji Group, the Tata Group, L and T, Naranjee Hirjee and Co. and many others, the Oman economy has adopted the policy of Omanization. This will definitely give boost up for employment assurance to Omani youth and also create selfemployment avenues to a large extent.
44
ZENITH
Oman has accepted the WTO membership since November, 2000. It is the 139th member of the WTO. Recently, its negotiations for Free Trade Agreement with US are on and areas like Liberalization of Trade in Agriculture and Industrial products, financial and telecommunication services, e-commerce, customs procedure and IPR are being covered under it. The Gulf Cooperation Council (GCC) was formed at Abu Dhabi in 1981 by six Arab countries- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The Council aims at free movement of goods and services also with capital and labor within these member countries. The GCC also has agreed to establish common external tariffs to achieve a Customs Union. They also foresee to establish a longer common market by 2007. Oman economy being fairly stable economy of last four decades with the mature leadership of His Majesty Sultan Qaboos Bin Said, Sultan of Oman, is expected to provide leadership to the whole of GCC member countries for further economic development. The field of Higher Education in general and Commerce Education in particular is experiencing a paradigm shift. The output of commerce colleges i.e. young commerce graduates should be employable in industries and business Commerce Education is an applied branch of knowledge. It is generally introduced at the higher education level. We see many examples like Stock Exchanges, Chambers of Commerce, etc. in the day today walk of life. They are quite vibrant and ever changing organs of the society World of Business is an applied Laboratory for commerce students and teachers. Commerce colleges should now become a databank of industries Education, as a service sector shall be playing a very vital role in the future. With the establishment of the World Trade Organization, the field of Education is taken up as one of the services in the jurisdiction of Service Sectors of GATS. There is an ever-increasing need of adaptation of education with the changing industrial scenario. In modern times, Business Education is replacing the very terminology of Commerce Education. Opening of new millennium has brought a tremendous amount of curiosity and desire for change in every walk of life. The computer age and digital technology has made radical revolution everywhere. The field of education, particularly, higher education is not an exception to this. Education as a service sector shall be playing a very vital role in the future. With the establishment of the World Trade Organization, the field of education is treated as a marketable commodity and Business of Education has been a common terminology. The concept of education has now changed from syllabus oriented degree education to continuous education. INTERNATIONALIZATION OF EDUCATION: The Educational services envisaged by GATS have been laid down in Article 1.2 of GATS negotiations in different modes of Trade in Education as follows: a. Cross Border Supply through distance education, online courses and educational material b. Consumption Abroad through Foreign Students c. Commercial Presence through establishing institutions / Universities Abroad d. Movement of Natural Persons through Exchange Programs of Teachers
ZENITH
Maharashtra State is known as one of the progressive States of our nation. Education is one of the traditions of Maharashtra. Its industrial development is hand in hand with the social progress. However, looking at the future, it will be apt to review the correlation of Business education with the world of industries. It is also be necessary to take stock of success stories of Industry education tie-ups. Such events could be role models for other commerce colleges to follow. PROBLEM TO BE INVESTIGATED In view of the process of Globalization, the role of Middle East countries in business partnership is quite vital. Oman is treated as the Gate Way of Gulf. Gulf nations in general and Oman in particular, is treated as a sample for considering the industry and business education tie-ups. Gulf countries also have a potential for international tie-ups in future. It is necessary to tap such a potential. In view of this, particularly the faculty of Business Education has to establish strong ties with the world of business. The present study is an effort in this direction. OBJECTIVES Following are the broad objectives of undertaking this Research Project: a. b. c. d. To understand the establishment, structure and working of the national economy of Oman. To understand the role of Gulf countries in general and Oman in particular in the context of globalization and WTO regime. To review the establishment, structure and specially the working of the educational system in Oman. To appreciate the success stories of the leading educational Institutions in Oman. A comparative study of conditions in Colleges in Maharashtra will lead to develop new ideas for mutual benefits. To explore the possibilities of establishing academic linkages with leading Commerce Colleges.
e.
HYPOTHESIS OF THE RESEARCH PROJECT On the basis of the need for reviewing the education system in Oman particularly the Business Education, the following Hypothesis has been framed for this Research project. HYPOTHESIS In view of the opening of the Indian economy and the paradigm shift particularly in the field of higher education, there is a rising trend of Business Education in Oman. There is a definite scope
ZENITH
for the educational institutions in India to establish linkages in Oman for the under graduate Business Education. RESREACH METHODOLOGY The nature of this Research Project is outbound, observation of field works and by conducting Surveys. In view of this, the following Research Design will be adopted: a. b. c. d. e. f. g. Collection of information and historical review of Sultanate of Oman in general and the Educational System in Oman in particular. Collection of information about the role of Gulf countries in general and Oman in particular in the context of globalization and WTO Regime. Collection of information and historical review of leading Commerce Colleges, Trade Associations and Chambers of Commerce in Oman. Analysis of the working of Schooling system, collegiate education in general and Commerce Colleges in particular. To judge the needs of Higher Education in Commerce in Oman, especially in order to establish and develop linkages with Universities and Colleges in Maharashtra. Advantage of the University of Pune for establishing linkages with Omani institutions and the Indian Schools in Oman. To analyze and acknowledge the novel schemes of interface, linkages, etc. to become pathway in future for mutual benefits of both world of industries and academia.
TOOLS USED Secondary Data was collected with the help of latest multimedia techniques, references of sites, portals, etc. along with the other published material like Annual reports, Development plans of Oman, Government publications National Day presentations, etc. Primary Data was collected through Questionnaire specifically drafted for various interest groups, through interviews of office bearers in the field of education in Oman. Data so collected has be compiled and analyzed and interpreted for drawing specific conclusions. These conclusions have been correlated with the Hypothesis to test and prove the same. Visits on sites of leading Government Departments, Commerce Colleges, Indian Schools, Chambers of Commerce and Trade Associations in Oman have given a first-hand feel and participation in the proceedings of their activities. RECENT ECONOMIC TRENDS IN OMAN The 36th National Day of Oman was celebrated on 18th November, 2006 when the stock of the situations and achievements of the Sultanate was taken up. The mature and wise leadership of
47
ZENITH
His Majesty Sultan Qaboos Bin said in building up modern Oman with all types of developments continued further more. Ahead, the economic development plans have been concentrated on mainly the following three aspects: Economic Diversification, Privatization and Omanization. Throughout the previous years of renaissance, the nation has witnessed trade and economic development and founded diversified bases to the national economy. Strong financial and banking system has been established to connect with the external world through trade agreements and economic cooperation. ECONOMIC DIVERSIFICATION In order to decide the future vision of the Omani Economy, a Vision Conference 2020 was held in June, 1995. It emphasized on the importance of providing suitable climate to economic diversification in order to avoid the overdependence on a single resource Oil for maximizing the national income. It is therefore necessary that, the nation should focus its attention on the other sectors. The economy should consider its distinct geographical location and develop these sectors. These sectors include: agriculture, fisheries tourism, minerals, telecommunication and even Higher Education. In his speech, on the occasion of the 28th National Day, the HM had called for the diversification of income sources. Since then, the Sultanate adopted clear and specific policies to attain the economic diversification. These policies have been spread through industries and services sector like tourism. A number of incentives and facilities have been provided to encourage foreign and local investments to reach to the desired objectives. Slowly the contribution of these sectors in the GDP is increasing. During the fifth (1996-2000) and the Sixth ( 2001-2005) Five Year Development Plan, the attention of the country in this regard was evident and began to appear its positive results. The growth in the contribution to the GDP was varying and some of them are facing some challenges due to several reasons especially in the field of agriculture and fisheries. As a result of the same, the national economy achieved an excellent level of diversity and growth during the previous years. During the year 2005, the national economy witnessed a notable growth and the primary estimates indicate the increase in GDP with an average of 24% to reach RO 11817.4 million. This increase was caused by the improvement in the performance of ail sector due to the increase of the oil prices and resulting in raising additional value of the oil sector , crude oil and natural gas to 49 % of GDP in the year 2005. This was occurred despite the reduced oil production in the Sultanate from 258.4 million barrels in the year 2004 to 282.6 million barrels in the year 2005.
ZENITH
INFRASTUCTURE IN OMAN Roads: Network of paved roads-10930 kms, Network of unpaved roads-25009 kms International Airports: Seebs International Airport , Salalah Airport Domestic Airports: Muscat Airport, Salalah Airport Sea ports: Port Sultan Qaboos,Salalah Port,Qalhat Port,Khasab Port Source: Oman Chamber Publication, 2005 This hike created positive effects on other economic sectors depended by the country for diversifying its economy. Non oil industries recorded an increase in the additional value of converting industries that reached 23.5 % in the year 2005. This sector had witnessed considerable developments in attracting local and foreign investments and in setting up petroleum and gas based projects with high capital in the industrial estates at Sohar Industrial Port, in Sur, of Sharqiya region and Dhofar governorate. A lot of factories officially inaugurated and began its actual production like Oman Fertilizer Company Plant or Indo-Oman Fertilizer Plant in Sur. The Seventh Five Year Plan (2006-2010) aims at achieving investments in gas dependent, converting industries sector to reach to RO 2.8 billion in Sohar and other Industrial Estates by attracting big investments in this field. The addition value for the Services Sector was formed 38.5 % of Sultanates GDP and the growth of which was recorded as 7 % in the year 2005. This growth owes to the good results in the wholesale and retail sales (transport and communication) that made a total percentage of 42 % total additional value of services sector in the year 2005. The Tourism Sector also contributed in strengthening the Services Sectors share in the GDP and witnessed special attention of government during the sixth five year plan (2001-2005). Tourism indicator points to the GDP increase from RO 54 million of the year 2000 to RO 83.2 million in the year 2005 achieving 9% annual increase during 2000-2005. This Sector has overcome the growth targets of 6.1 % in the Sixth Five Year Plan with big margin. The contribution of this sector to GDP was between 7% and 8% during the Plan period. The reason of decrease in the contribution percentage is that the national account of this sector includes only hotels and restaurants excluding related areas like tourism guidance, travel agencies, aviation companies, rent a car , diving clubs recreational centres and other sectors connected directly with the tourism sector like craft industry. In addition to this, the contribution of the sector also depends upon the growth averages of GDP which mostly depends on the increase and decrease in the oil prices. Seventh Five Year Plan moving forward to achieve a growth average not less than 7 % per annum. Likewise an increase in tourism nights at same average to reach to 11 million nights by the end of 2010 compared to the existing 7 million nights. This will require increase in the hotel rooms to 16,000 rooms by 2010 against the existing 8,000 rooms. There are Special issues about
49
ZENITH
Oman economy as: Boom for non-oil sector, Recognition of importance of Higher Education, Need for training and development, Need for local base of Higher Education, Diplomatic relationship with Asian countries like India. On the background of the above mentioned discussion, the Sultanate of Oman has set the following main objectives for rapid economic progress: PRIVATIZATION Recognizing the importance of participating private sector as a strategic partner in designing and executing economic developmental policies of the country, the government makes all its efforts to upgrade this sector to boost its competition efficiency to contribute effectively to the developmental processes. A group of steps were taken by the government for realizing partnership with the private sector such as strengthening of conversation channels implemented with mutual cooperation in pace with the administration and financial capabilities of private sector administrational barricades were removed to enter private capital to various activities, laws were developed to guarantee free competition, equal opportunities and increase in public awareness on the strategy of private sector development. Since the eighties of last century, the Sultanate adopted Privatization as the key alternative to widen the national economic bases of the country. The fourth five year development plan (19911995) had prepared a number of policies and procedures aiming to support the private sector, the market mechanism and the privatization projects. The country accepted a number of fundamental principles to guarantee the realization of set objectives of privatization. In this Private Sector has to bear the responsibility of financing, managing and functioning of the projects according to the technical specifications determined by the government authorities, promote foreign participation in these projects to benefit from the foreign capital as well technical and management expertise in accordance with the Oman Investment Laws, allot excellent incentives and tax facilities to the privatized projects in addition to the betterment of employee status at these projects. The general objective of privatization include the expansion of production bases, provide opportunities to private sector companies, create suitable climate of competition , employment resources efficiency, reduce financial and administrative burden of Sultanates general budget, develop capital market, increase the employment opportunities and encourage the foreign investments. The Sultanate concentrated on privatizing public services of the state after transferring the utilities and functions to commercial companies. The Sultanate already has privatized the electricity and communication sectors and formed two independent monitoring authorities to supervise the privatization process of these active sectors. Sanitary sector also has been privatized. Additionally, the Sultanate has sold its share at Oman Mills, Oman Cement and Al Maha Petroleum. It also has established some basic structure projects in cooperation with the private sector starting from Monah Electricity Project in the year 1994. There are a number of Investment advantages in Oman: Strategic location, (marine route between Arebic Gulf and Indian Ocean) , Domestic political stability, Tourist potential ( Sea
ZENITH
beach, Vast deserts, Forts and mountains), Exportable natural resources (Oil, Gas, Minerals, etc.),Free markets and Privatization policy, Investment promotion and protection agreements with many countries, Membership of WTO, Manpower Development through Education and Training. RECENT ECONOMIC TRENDS IN OMAN Global Oil Prices settling new peaks at $ 80 / barrel, Robust Economic Growth of Oman in 2007, Sustained diversification Programs , Far sighted policy initiatives, Enhanced Health care and Education Amenities, Oman is topping in Gulf by Global Peace index(Economic Intelligence Unit), Social Sector Development: 6, 24,767 students in 1,240 schools. Source: Oman, A Nation on the move 1970-2007 TRAINING AND OMANIZATION The source of comprehensive development of the Sultanate means the fulfillment of the aspirations of the citizens in Oman. His majesty Sultan Qaboos bin said emphasized on several occasions that the omani men are the base, aim and producer of development. Human Development is, in fact, our demand and responsibility. The members of this country should have good opportunity in various fields more than that had in the previous years, says HM. Based on the firm directions of HM the Sultan, to improve the quality of Omani workforce, to build an advanced country, the Sultanate has been paying detail attention towards the developing of efficiencies of Omani men to make them capable to participate in the journey of comprehensive development. With this aim, the country began to execute the national programs in recent years to train, quality and employ Omanis under the topic OMANIZATION. This program targeted to achieve a good level of employing national workforce, to encourage self employment initiatives and a number of programs to achieve the targets of this field. As per the Royal directives, the first, second and the third national seminars were organized in the year 2001, 2003 and 2005 respectively with the aim of achieving the important role of private sector institutions appointing national manpower, to direct the national jobseekers to the available job opportunities and to encourage the omani youth to earn the technical professional and craft skills to meet with the requirements of the markets. These seminars also aimed at promoting individual initiatives, self employment projects, direct towards independent business setting up specific mechanism to organize employment market in order to achieve fulfill the demand of the national economy for efficient and skilled workforce. The seminars received overwhelming support from both private and public sector in executing the periodical programs to complete the Omanization process of the big group of economic sectors. The private sector showed good responsibility in executing the Omanization Programs hand in hand with the government to overcome the specified percentage of a number of jobs and professions. This was hailed by His Majesty the Sultan and the Sanad Program was accorded by the HM during the first seminar of October, 2001 aiming to support self employment initiatives of Omani youth. The seminars created real partnership between private and public sector which led to the formation of joint sub-committees for training and omanization in a number of economic sectors.
51
ZENITH
The committees produced good results in employing national manpower and the number of omani employees in private sector increased by the end of October, 2006 to 44,000 out of which 6596 were women. During the Seventh Plan (2006-2010), the Omani youth will be given opportunities of education and training to increase their knowledge and skills to respond to the needs of economy to make them capable to react with the modern production technology. These aims will be realized through a number of projects which will be executed during the plan period including the expansion of training centres and buildings, improvement of workshops, utilities and training equipments, adding latest technologies to training and development programs. FUTURE DIRECTIONS Sultanate of Oman is moving forward to construct its national efficiency by preparing well studied development program aiming at achieving comprehensive and constant development for the welfare of Oman. The future directions of economys development will be as follows: Work for improving standard of life., Improve status of education in general and Higher Education in particular, Accord top priority to the employability of Omani youth, Efficiency of Sultanates administrative system, Environment care, Preserve national traditions, Special attention towards fisheries, tourism, export oriented industries, etc, Promote local and foreign investment in Private Sector, Development of Financial Establishments for growth. 50 YEARS OF OMAN INDIA DIPLOMATIC TIES The year 2005 has witnessed the celebration of the Golden Jubilee of the Diplomatic ties between Sultanate of Oman and the Republic of India It was started way back in 1955, when Indian Government opened the Consulate of India in Muscat. These celebrations crown human as well as historic relations between the two countries that goes back to thousands of years. To commemorate this occasion, a lot many functions and programs were held in both the nations. Oman is geographically situated in a typical location consisting of mountains, sands and sea. In view of the difficulties in crossing the mountains and sands, sea transport was the easiest way for Omanis to connect with the rest of the world. India was the nearest destination for Omani adventurers to sail in the high seas. Such adventures date back to as many as 4,500 years in the history. References of Indus Valley Civilization can be traced back with Omani civilizations. Arab traders including Omanis had entered the western coast of India through places likeDwarka in Gujarat, and Calicut in Malabar. Historically, the Sultanate of Oman is famous for exporting dates, copper and Arabian horses to India. On the other hand, India exported fabrics, spices and wood useful for buildings famous fleet of ships to Oman. Indias Naval Relationship with the Sultanate of Oman is recorded since the 17th century. Later in the 18th century, Tipu Sultan, the Ruler of Mysore in South India, made special efforts for enlarging commercial relations with the Sultanate of Oman. Special agents were appointed at both Mangalore and Muscat to look after it. Many Indian families had migrated since more than 300 years to the Sultanate from Sind Region and the State of Gujarat and have settled in Sultanate till date. Similarly, the immigrated Omanis
52
ZENITH
to India have shelled at Salalah in the places like Hyderabad, Andhra Pradesh. Similarly, in the Sultanate, Al Batina Coast called Khour Al Hind i.e. Bay of India and Hilat Al Hind i.e. District of India have been settled. The exchange of culture and traditions is so mixed between the Sultanate and India that, the ladies garments, wooden products and patterns of doors and windows are seen identical in some parts of both the countries. There is long tradition of Omanis coming to India for their education. Sultan Taimur bin Faisal went to India in 1932 and spent most of his life here till mid sixties. H.H. Sayyid Fahr bin Taimur has studied at the prestigious college Mayo College in Rajasthan. In 1953, a Treaty was signed between India and Oman for Friendship, Commerce and Navigation. As a result, the Indian Consulate was opened in Muscat in 1955. This was the beginning of the diplomatic relations between the two nations. When His Majesty Sultan Qaboos bin Said assumed the throne in 1970, the Sultanate entered into a new era of the history. A policy of modernization internally and an openness to the outside world was initiated by the majesty. The Sultanate opened its Embassy in New Delhi in 1972 and the Omani Consulate in Mumbai in 1976. There had been visits of the External Affairs Ministers of both the nations then after between 1973 and 1980. EMBASSY OF INDIA IN MUSCAT, OMAN The Socio Economic and Political relations between Oman and India have been created since 1973-74. In 1985, Prime Minister Mr. Rajiv Gandhi was the first Indian Prime Minister to visit Oman. Later on Mr. Narsinha Rao in 1993, President Dr. Shankar Dayal Sharma in 1997 and Mr. Atal Bihari Vajpeyee in 1998 paid visit to the various parts of Oman. In turn, a number of Omani dignitaries also have paid several visits to India. As a result, several treaties and Agreements have been signed for mutual cooperation in the promotion of Trade, commerce and other social exchanges. It is well-known fact that there is a large force of Indians who are working in Oman since last several years. Many Indian companies and firms indifferent fields such as energy, services, construction, oil and gas have been working in the various parts of Sultanate. From the Oman side, there is rising amount of investment in India in various sectors like refineries, tourism, pharmaceutical, and furniture. The trend of Omani youth including Royal family members, coming to India for Higher Education is on ever rise during last three decades. There is a long List of important agreements between Oman and India:Treaty of Friendship, Navigation and Commerce, 13th May, 1953, AIR service Agreement signed,1973, M o U relating to deputation of medical personnel to the Oman Ministry of Defence, 12th December, 1983, Cultural and Educational Cooperation Agreement, 3rd August, 1991, M o U for laying a Gas Pipeline from Oman to India, 13th March, 1993, Trade, Economic and Tech. Co-operation through MFN status15th June, 1993, M o U for Air Services, 15th November, 1993, Cooperation between Oman Chamber of Commerce and Indian Chambers 1994, Joint Business Council between OCCI and FICCI / ASSOCHAM April, 1995, Agreement for Cultural and Educational Programs, April, 1997, OCCI and CII Agreement, February, 2002. BUSINESS HOUSES FROM INDIA Oman is an old partner in neighborhood with India. Besides Indias diplomatic relations with the Sultanate of Oman, there are many leading business families from India, which have migrated to Oman. Indias business relations with Oman date back to thousands of years. A large number of Persons of Indian Origin (PIOs) have been granted Omani nationality by the Sultanate of Oman.
53
ZENITH
Today, it is estimated that, there are around 3, 50,000 Indians who are staying in Oman, called expatriate community. They are coming from different parts of India and include skilled as well as semi skilled personnel. There are technocrats as well as doctors, bankers, finance experts, management experts, etc. occupying eminent positions in both in Government as well as Private Sector. Their contribution in the fields like Commerce, health care, education, construction and communication etc. is widely acknowledged. A number of business families are also recipients of high awards of the Sultanate of Oman. Oman has a distinguished position among the Arab countries as a moderate society in treating foreign nationals irrespective of his or her religion. Almost 80 % of the Indians in Oman are from South India. As many as 14 Indian Schools have been established in the Sultanate, out of which 10 are situated in Muscat area. They follow CBSE pattern of studies equal to India and hence the schooling and examinations are at par with other schools in India. Several joint venture projects have already been completed and implemented with the help of Indians and Indian Companies. A large number of Indian Companies have their set up even in Oman. There is a famous Indian Social Club in Oman where several Indians come together and celebrate religious and social functions together. Today, they are not only highly respected in the Sultanate, but they have been making great contribution in social life in Oman. The seeds of strong bond of relations are woven precisely through such business houses in Oman. This very base ensures for the potential of establishing academic relationships further more in Oman; especially for the business education in Oman through Indian Universities and Colleges. EDUCATION SYSTEM IN OMAN Economic development of any nation largely depends upon the academic advancement in that nation. Every nation has its physical, socio-political background for this purpose. However, in view of Globalization, particularly the important role assumed by the Gulf countries in general and Oman in particular, it is important to understand the Educational System in Oman. In this Chapter, we have to understand the same. Education in Oman is provided free of charge up to the end of secondary education, though attendance is not mandatory at any level. In 1970 there were only three formal schools with 900 students in the whole country. Omans national educational program expanded rapidly during the 1970s and the 1980s. In 20062007 about 560,000 students attended 1053 public schools. The number of students in private schools is about 20,000. There are also extensive programmes to combat adult illiteracy. Sultan Qaboos University, the only national university near Muscat, was founded in 1986 and in 2006 it had 13,500 students. The 2006 Human Development Report found adult literacy rate to be 81.4% in adults (older than 15) up from 54.7% in 1990. For the same period youth (15-24) Literacy Rate increased from 85.6 to 97.3%. Public expenditure on education was reported to be 4.6% of GDP and 26.1% of total government spending.
54
ZENITH
Broadly speaking Education System in Oman can be classified into following areas: Pre School Education, Basic Education, Secondary Education, Higher Education, External links in Education through Govt, Universities, Public Colleges, Private Colleges, etc. RECENT INITIATIVES The Sultanate of Oman has recognised the importance of education in general and Higher Education in particular. It has been actively encouraging the participation of the different sectors in Higher Education to enhance the development of Human resources in the Sultanate of Oman in order to enable the workforce to take up employment in varied sectors. As per Royal Decree 74 / 2001, issued on 27th June, 2001, an Accreditation Board was established to be responsible for the Accreditation, Evaluation and Quality Assurance of all the Higher Education Institutions in the Sultanate of Oman. It has published a Guide to draw attention of the leading Institutions of Higher Education, Educationists spread worldwide and the knowledgeable leaders since 2006-07 to make investment in Oman through Higher Education centers. The Ministry of Higher Education in Oman has provided state of the art information of all such world famous educational Universities and institutions. Details such as their complete address in Oman, Medium of Instruction, Intake Capacity per Course Eligibility Conditions, fees and duration of courses, etc have been collected and published together. Though these Universities and Institutions look like competing with each other, in the market economy which is now opened due to globalization forces has to accept the challenges and the survival of the fittest offering the best and up to date knowledge is sure in the future. INDIAN SCHOOLS IN OMAN It is heartening that there is a good amount of network of Indian-Schools imparting basic and secondary education at par with Indian Standards in the whole of the Gulf in general and in the Sultanate of Oman in particular. COUNCIL OF CBSC AFFILIATED SCHOOLS IN OMAN Indian Education System has been well respected in the entire Gulf Region including Oman. So far as the Higher Education after Schooling is concerned there is a well-set system of Indian Schools under the leadership of the Council of CBSE Affiliated Schools. Particularly in Oman, There is a set up of as many as ten such Schools following the CBSE Pattern. They impart education for the Pre Primary, Primary, Secondary as well as Higher Secondary level. Many of them have Commerce as a branch of Higher Education too. The Researcher had an opportunity to visit and understand the educational system of the leading Indian Schools in Oman. He also has delivered lectures on Career Opportunities for Commerce Students after Std. II. There are a number of Indian Schools in Oman. They are - Indian School Ruwi, Muscat Indian School, Sohar , Indian School, Nizwa, Indian School, Sur, Indian School, Ibra, Indian School, Ibri, Indian School Salalah , Indian School, Al Muladha, Indian School, Al Ghubra, Indian School, Al Wadi Kabir.
55
ZENITH
HIGHER EDUCATION IN OMAN The Omani higher education system is relatively young as the first public university in Oman; the Sultan Qaboos University was founded in 1986. Prior to the establishment of SQU, the government sent some students to pursue higher education studies in neighbouring Arab countries like UAE, Kuwait, Jordan and Egypt. Also some students were awarded scholarships to study in the UK and USA. Currently, the Ministry of Higher Education operates the SQU, Rustaq Education College for preparing teachers and five specialist colleges in Ibri, Nizwa, Salalah, Sohar and Sur (until recently all five used to be Education Colleges). As the number of students finishing secondary school went up each year (44,000 are expected to finish in 2008), SQU and other public colleges became unable to cope with demand as places were limited.. Competition for acceptance in public higher teaching was (and still) very fierce. Since private colleges were very limited in the mid nineties, more and more parents sent their kids overseas to study in countries like UAE, Jordan, and Egypt. The government became aware of the trend and decided to encourage the private sector to form universities and colleges in the country. The first private college was established in 1994. Since this date Oman has seen quite a lot of new foundations. Most of the colleges focus on business administration and computer sciences. They are usually affiliated with European, Australian, or American institutions. The language of instruction is mainly English. As part of the Oman initiative, applications for 2006/2007 higher education (public and private) places have been merged under one unified online system (Higher Education Admissions Centre). Each higher education institute publishes the minimum entry requirement for each of its degrees and the student selects his or her choices in order of preference. When the Ministry of Education publishes secondary school results in mid July, these results are fed automatically into the system and offers are made in early August. Prior to the new system, the students had to submit their papers to the different institutes by themselves after the publication of results. The process was very inconvenient for the students and the admission departments as there was very little time and students had to travel a lot. SQU and other private universities offer both Bachelor and Masters Degrees but not in all subjects. Starting from September 2008, SQU will introduce Ph.D. studies in four of its colleges (Agriculture and Marine Sciences, Medicine, Engineering and Natural Sciences). A Bachelor degree takes about five years as the first is spent studying English, the second studying relevant science subject and the last three years are dictated to core degree units. A medicine degree takes seven years. The public university is normally visited by Omani only. Expatriates go - as a general rule - to private universities or study abroad. Dhofar University is famous for welcoming international students. At the moment, colleges teach mostly in the undergraduate area. A few have started to offer Master degrees. At the colleges, the students receive their first vocational graduation. The first year ends normally with a Higher National certificate (HNC)". The second year concludes with the Higher National Diploma (HND)". the third year will lead to an academic grade of a Bachelor.
56
ZENITH
In the year 2003, Omani Ministry of Higher Education approved the merger of five private run colleges in order to form the Muscat University. However, the plan to merge Fire Safety Engineering College, Majan College, Modern College of Business & Science, Middle East College of Information Technology and Mazoon College for Management and Applied Sciences failed (source: Oman Observer 18.7.2005). Currently, there is some talk that the plan to form Muscat University may be revived. There are a number of Government Ministries related to Education in Oman like Ministry of Education, Ministry of Higher Education, Higher Education Admissions centre, Cultural Attachi Office London and Oman Accreditation Council. UNIVERSITIES IN OMAN Higher Education in Oman is led by the Universities having mainly Departments within the campus. However, there are a number of affiliated Colleges also associated with these Universities. These Universities are well-spread in the various parts of the Sultanate of Oman. Public Colleges in Oman are also well-known. The Omani Government has taken initiatives for establishing institutions under Government ownership for the development of Higher Education in Oman. These institutions are mainly in the technical education. Though small in number, these institutions have made their own contribution in the development of educated man power for the Sultanate of Oman. There are Private Colleges in Oman. In the recent past i.e. after 1970s, the Sultanate of Oman has realized the importance of Higher education through Private participation. At present, there are a number of Private Colleges working in different parts of Oman. BRIEF ACCOUNT OF OMAN INDIA ECONOMIC TIES The history of Oman-India relationship runs back to ages in past. Ever since Tipu Sultan, the Ruler of Mysore State of India, who sent a Diplomatic mission to Oman, throughout the Mughal Empire, when Omani traders had solid business relationships in India, till recent century, when many leading business families from Gujarat and Rajastan States have migrated to places likeMuscat, Sur and Salalah in Oman. There were regular shipments from Old Muscat harbor to the port of Bombay, Calicut, Surat and other places in Gujarat. The consignments were mainly of the necessities of life, industrial products and even war weapons. The trade relations of Oman with India also are seen from a number of examples of business houses which even have migrated generations before from India to Oman. They have not only made successfully their fortune but, also have proved strong bonds of international relationships. Moreover, there are number of Persons of Indian Origin (PIO) who are occupying important positions in both the Private and Public Sector establishments in Oman. Indians are over-powering the other expatriates in many Omani organizations. Mr. Yousuf Bin Alawi Bin Abdullah, Foreign Minister of Oman, describes the Oman India relations as robust, durable and mutually fruitful. While acknowledging the Oman-India trade ties in the modern times, he has called for more cooperation to elevate ties to a higher level. The formal diplomatic relations between Oman and India can be observed from the establishment of Embassy of Oman in New Delhi in 1972, Oman Consulate in Bombay since 1976, Embassy of India in Muscat since 1973 with Consulate of India at Muscat, Oman; frequent visits of high level dignitaries and VIPs from both the countries and the Agreements entered into. Particularly, during the last decade, Oman and India have signed a number of Agreements. They
57
ZENITH
are mainly relating to Trade, Investment, Cultural and Educational Cooperation, AIR services, etc. The latest setting up of the Oman India Fertilizer Project will be the biggest among all until today. VISION FOR THE FUTURE The economy of Oman, under the visionary leadership of the His Majesty Sultan Qaboos Bin Said, Sultan of Oman has been devising the Vision 2020 to achieve strategic transformation in Oman. It is focusing mainly on less and less dependence on Oil revenues on the GDP of Oman. Trained manpower of Omani Youth is also an item on the agenda of the Oman Government. It is expected that, this training will be imparted through improved Public education, University education and Vocational Training Programs. The vision also expects greater role of the Private Sector through Privatization Policy of the Government. The tax Reforms and Investment related policies of Oman will be liberated further, to attract maximum domestic as well as foreign investments. His Excellency, Dr. Abdul Kalam, Ex-President of India, is the visionary Scientist of international repute. He looks at 2020, when India will become super-power. The scientific advancement, the industrial culture and the second largest number of youth population of India by 2020, shall be the strength points for the nation. During the last decade, the nation has not only achieved heights of economic progress but also has established its firm position in the international markets. The policy of Globalization and the process of liberalization adopted since 1991 proved to make a benchmark in the international scenario. Today, the Indian economy has developed all time high reserves of foreign Exchange deposits with IMF.
Both the nations Oman and India having long tradition of excellent international relationship can and should look forward for long lasting partnership for mutual benefits. In the area of Education, India has a great potential of exports of Educational services in different forms under GATS like- CROSS BOARDER SUPPLY (through Distance Education mode), CONSUMPTION ABROAD(Omani Students sent to Indian Universities and Colleges),COMMERCIAL PRESENCE (through establishing branches of Indian Universities in Oman ) and MOVEMENT OF NATURAL PERSONS (through Exchange Programs of Teachers and Trainers from India. The areas of such partnership may be of various ways. Signing of MOUs with Educational Institutions of National and International repute in India. Promotion of Trade and Commerce through signing MOUs between Govt. Departments, Chambers of Commerce and other bodies. Attracting Foreign Direct Investments of Persons of Indian Origin in Omani Business Colleges Promotion of Exchange programs of experts like Business magnets, Scientists and Educationists. Conducting Surveys for judging market potential for products and services for mutual benefits.
ZENITH
SWOT ANALYSIS OF INDIAN EDUCATION IN OMAN STRENGTHS: Strong Economic Indices of Oman, Steady political set up, Oman India Relations, Increasing number of student population, Indian Education System is respected, welcome to Indian Universities. WEAKNESSES: Rising Inflationary trends in Oman, Soaring Consumer Prices and property Rents, competition with other Foreign Universities, lack of permanent set up of Faculty and procedural delays on the part of Ministries. OPPORTUNITIES: Steady and stable establishment of Branches for Higher Education in Oman, Possibilities of Expansion in Oman and also in other parts of Gulf, Sure source of Forex, Exchange of Teachers and students. THREATS: Cost of Educational fees, in comparison with others, Rising Cost of Living and Housing, Delays in decision-making leading to loss of chance. In the post WTO era of Bilateral Trade Agreements, a number of challenges in the field of International trade and Strategic Relationships are foreseen. The GCC is a political, economic, social and regional organization between Arab States of Gulf, created to meet the challenges imposed by surrounding circumstances. The GCC member countries have somewhat similar political systems based on Islamic beliefs, joint destiny and common economic objectives. Oman has made all round economic progress during the last four decades. Oman being one of the leading member-countries of GCC has to step out for integrated economic relations with the other nations. There are number of avenues of joint ventures, Trade ties and establishing MOUs with Educational Institutions of International repute from India. TO SUMMERISE: Oman is one of the leading nations with strategic location in the Gulf Region on the world map. Education being one of the driving agents for rapid economic developments plays a significant role. The Education System in Oman is well spread but so far as Higher Education is concerned, it has to keep pace with the World expectations at large. The importance of Education, particularly the Higher Education has been rightly understood by the leaders of the Sultanate and today, a good amount of planning is as being made in this direction in Oman. Considering the extent of participation of expats in Oman, the role of Indian Schools up to Higher Secondary level of education, there is very good foundation for establishing academic relationships in Oman. Particularly, the Business Education is the need of the hour in the era of Globalization. FINDINGS AND SUGGESTIONS Education as a service sector shall be playing a very vital role in the future. With the establishment of the World Trade Organization, the field of education is treated as a marketable commodity and Business of Education has been a common terminology. Commerce Education being applied branch of knowledge has a lot to do in the context of Globalization and WTO Regime. This Research Project has made a detail study of the National Economy of Oman
59
ZENITH
in general and has made a stocktaking of the development of the Sultanate of Oman. The Education System in Oman in general and Higher Education in Commerce in particular has been observed. The success stories and efforts made by leading Commerce Colleges and other institutions in Oman is taken into account. A detail study of the situations and expectations of students and parents at present studying in Standard X and Standard XII Commerce in Oman is quite useful to understand their demands and the pressing need for an Indian set up in Oman for Business Education. It has also suggested the path-way for the future course of action for establishing academic linkages in Oman. A model set up of such an academic institution or a branch of the University is therefore essential. The researcher has developed a business model of setting up an educational institution or a branch of the University for imparting Higher Education in Business Studies like BBA or BBM (IB) of the University of Pune at a place like Muscat of Oman. PROOF OF THE HYPOTHESIS The entire Research Project on Study of Trade in Under Graduate Business Education between India and Gulf Cooperation Council with special reference to Oman was indeed a satisfying academic Project. The researcher has collected related data both Primary data with a number of personal visits and interviews and Secondary data with reference to the published statistics on Oman Economy in general and Higher Education System in Oman in particular. Having analyzed the entire data and material, the Researcher comes to the conclusion that, there is a definite scope for the Indian educational institutions to successfully launch an academic project by setting up a branch or a centre or a Oman Campus of the University in the near future. Thus, the Researcher is of the firm opinion that the Hypothesis assumed for this research Project stands proved. EPILOGUE Globalization has come to stay with us. The different parts of the World have become trading partners to each other. The Business of Education has become buzz word among the four different modes in the Trade after GATS negotiations. Oman, the Gate way of Gulf has been the deserving and proper market for the Trade in Business Education with India. The author of this Research Project finds lots of openings of Business of Education especially in the Business Education field with Oman. The present Study reviews the steps of progress of the economy of Oman, status of education system in general and Higher education in Business Studies in particular and throws light on the possible efforts to develop a model in this direction. Oman being one of the upcoming nations with strategic location in Gulf aspires for all round economic development. Stable political set up in Oman has made it possible to systematically design the plans for economic development over last three decades. The future economic plans are based on the three main objectives Economic Diversification, Privatisation and Omanisation. Manpower development through systematic training program and importance to Higher Education are the keys to achieve the targets in the near future. Today, Oman India ties stand on a solid ground of a long history of trust, respect and mutual benefits. Oman considers India as the best friend as a neighbouring nation. India values consistency in foreign trade
60
ZENITH
partnership with Oman. Foreign Minister of Oman, Mr. Yousuf bin Alawi bin Abdullah called Oman India trade ties are robust durable and mutually fruitful in the future. Commerce Education being applied branch of knowledge has a lot to do in the context of Globalization and WTO Regime. This Research Project is a stocktaking of the education system in Oman, understanding the success stories and efforts made by leading Commerce Colleges and other institutions in Oman It will also suggest the path-way for the future course of action for establishing academic linkages in Oman. SELECT BIBLIOGRAPHY 50 Years of Oman India Strategic ties: Oman Embassy Publication, 2005. Oman in Focus: May, 2005. Oman : Years of Achievements , Ministry of Information, Sultanate of Oman Yearly Industrial Statistical Book, 2007. Al- Markaq GCC Study, May, 2001 Oman Nation on the Move 1970-2007. Gulf News: Story of Success: Special Issue Sept. 2008. Central bank of Oman Annual Report, 2004. Oman Economic Review , December, 2007 The Guide to the Industrial Estate: Sultanate of Oman: 2005.
61
ZENITH
ROLE OF EMOTIONAL INTELLIGENCE ON THE PERFORMANCE OF EMPLOYEE WORKING IN SERVICE SECTOR

DR. IRA BAPNA*; GITANJALI SHRIVASTAVA**; EKTA CHITNIS**
*Professor & Director in Charge, Sapient Institute of Management Studies, Indore (MP) India. **Associate Professor, Sapient Institute of Management Studies, Indore (MP) India. ***Assistant Professor, Sapient Institute of Management Studies, Indore (MP) India.
ABSTRACT It is important for the employees working in service industries to have high level or morale with emotional intelligence. The study is based on the emotional intelligence and has adopted with analytical methodology by measuring the performance level with respect to various factors. To reveal the importance of the Emotional Intelligence (EI) construct in organizational studies, this study focuses on the role of Emotional Intelligence on employees performance among service sector employees. Data was collected from service sector employees by using questionnaires. The paper revealed six factors of Emotional Intelligence contributing in the role of Employee Performance. The factors are Self- Assessment, Self- Monitoring, Actuation and Inspiration, Empathy, Integrity and Social Relationship. The study concluded that the improvement in emotional intelligence would increase the performance and effectiveness of the employees. KEYWORDS: Emotional intelligence, Employees Performance, Service sector.
INTRODUCTION Emotional Intelligence can broadly be defined as the ability to perceive emotion, integrate emotion to facilitate thought, understand emotions, and to regulate emotions to promote personal growth (Mayer and Salovey, 1997). Emotional Intelligence is increasingly relevant to organizational development and developing people, because the Emotional Quotient principles provide a new way to understand and assess people's behaviors, management styles, attitudes, interpersonal skills, and potential. Emotional Intelligence is an important consideration in human resources planning, performance of employee job profiling, recruitment interviewing and selection, management development, customer relations and customer service, and more. Emotional Intelligence links strongly with concepts of love and spirituality: bringing compassion and humanity to work, and also to 'Multiple Intelligence' theory which illustrates and measures the range of capabilities people possess, and the fact that everybody has a value.
62
ZENITH
EMOTIONAL INTELLIGENCE (E.I.) FRAMEWORK
Source: http://psycnet.apa.org/journals/amp/63/6/images/amp_63_6_503_fig4a.gif Emotional Intelligence is knowing what ones feelings are and using that knowledge to make good decisions. The five basic components of Emotional Intelligence chalked out (Goleman, 1998): Self-Awareness
Adeptness in Relationships
Components of Emotional Intelligence
Self-Regulation
Empathy
Motivation
63
ZENITH
SELF-AWARENESS: The person recognizes his/her emotions and is able to handle them more appropriately and judiciously. This also makes the person aware of ones own positive attributes, strengths, negative aspects and weaknesses. SELF-REGULATION: When a person becomes aware of one self, he/she can handle and regulate his/her feelings in a better and appropriate manner. The person becomes more responsible and develops positive attributes of novelty, flexibility, integrity and honesty. MOTIVATION: Better level of EI makes a person positive and better equipped to handle failures and shortcomings for then he/she instead of blaming others or wallowing in self pity tries to overcome the situation in a positive manner. Optimism is engendered as are the qualities of excellence, perseverance, determination and cooperation. EMPATHY: Self awareness leads to an awareness and understanding of others that leads to more fruitful relationships. Group qualities are fostered and aids in the overall development of the individual as well as the group or institution. ADEPTNESS IN RELATIONSHIPS: Making and maintaining relationships require a sound level of EI. Self awareness and empathy aid the individual to understand oneself and others better, and thus work towards an amicable and complementary decision thereby avoiding conflict and confrontation. Managerial ability, team work, leadership quality are garnered as a result by forming and maintaining relationships. LITERATURE REVIEW The three broad dimensions of intelligence were referred to social intelligence, a concept which has some parallels with Emotional Intelligence. Social intelligence is defined as the capability to understand and manage men, women, boys and girls for interaction and establishment of human relations (Thorndike, 1920). It was suggested social intelligence involves a combination of interpersonal and intrapersonal intelligence. Intra personal intelligence concerns dealing with the self and symbolizing complex and highly differentiated sets of feelings within the self. Interpersonal intelligence relates to ones ability to deal with others and to notice and make distinctions among other individuals and, in particular, among their moods, temperaments, motivations and intentions. Emotional Intelligence combines an individuals intrapersonal and interpersonal intelligence (Gardner, 1993). It was conceptualized that Emotional Intelligence it as a quality possessed by every normal person, and proposed a quantitatively based spectrum of individual differences in which people are ranked along an emotional scale (Goleman,1995). Emotional Intelligence has become increasingly acknowledged as a suitable construct for the measurement of emotions (Cherniss, 2000). The contribution of Emotional Intelligence to organizational psychology draws upon the notion that it taps into a substantial portion of the variance in job performance that is not adequately explained by traditional intelligence (Goldstein et al., 2002). It has been claimed that Emotional Intelligence affects a variety of work behaviors, such as employee commitment (Carmel, 2003), job satisfaction (Bar-On, 1997), teamwork (Mayer et al., 1997; Sj berg, 2001)
64
ZENITH
and leadership (Ruderman et al., 2001). The efficiency of EI in predicting the outcome criteria depends on the type of job. It is particularly effective in contexts where emotions are prevalent and emotional labor is in high demand, such as the job of customer service representative (Ashkanasy et al., 2005). Emotional intelligence is thus defined as, the ability to perceive emotion, integrate emotion to facilitate thought, understand emotions, and to regulate emotions to promote personal growth (Mayer et al., 1997). The potential impact of emotional intelligence on performance is immense and this collective belief has spearheaded multifaceted research which has discovered significant relationships between emotional intelligence and performance in numerous areas of concern (Miller, 2011). Performance refers to as the results or impact of activities of an individual over a given period of time. Managing employees performance is necessary for achieving goals that an organization has for itself. Assessing an employees competency and measuring his productivity is essential in the overall plan of the organization. Pacing itself production-wise is important and that cannot be done if the employees potential and his ability to perform are not measured. Employees' performance is directly related to organizational productivity and its success (Shahzad et al., 2010). Better performance of each employee creates immense outcomes which mainly include congruence among employees, quality production and commitment at work place. Employees performance is mainly managed by using formal processes that is supervisor rating, management by objectives, 360 appraisals, and peers evaluation etc. to ensure that employees have been contributing towards their own and companys development. In view of efficient performance relationship between feedback from supervisor, task identity and significance is very crucial (Morrison, 1993). It was found that supervisory association development positively influenced job performance (Ashford et al., 1996). For attaining outstanding performance emotional competence which is a learned capability based on emotional intelligence is equally important (Goleman, 1998). This shows that apart from having technical skills and abilities employees need to have strong interpersonal and intrapersonal competences to become a star performer. Self awareness recognizes the importance of ones own feelings and how it affects ones performance. Self-awareness is the key to realizing one's own strengths and weaknesses. SelfAwareness was the hallmark of superior performance (Boyatzis, 1982). Individuals with accurate Self-Awareness are aware of their competences which mainly include self confidence, self assessment and emotion handling.
Self Regulation helps in self governing by managing ones own values, impulses, resources and disciplines. Its an ongoing process which directly affects the performance of employees. While facing job stress strong sense of control over ones own beliefs promote to manage anger and depression at work place (Rahim et al., 2002) which acts as a strong tool for better performance. Social awareness means that one should know what is socially acceptable from him/her in society and how he/she should act in that manner (Shahzad et al., 2010). A socially aware person puts him/her self in others position and then proceeds for certain appropriate action. Manager of product development teams use the ability to read others needs to enhance innovation (Spencer et al., 1993) which eventually gives superior performance.
ZENITH
Empathy is an essential tool to measure social awareness (Goleman, 1998). To avoid performance deficits empathy competence allows us to handle increasingly diverse work force (Steele, 1997). Empathy is particular important today as a component of leadership for at least three reasons: increasing use of the talents, rapid growth of globalization; and the growing need to retain talent (Goleman, 1998). Relationship management inculcates set of competences which include essential social skill, analyzing and influencing others and inducing desirable responses in others. Effective relationship management helps in developing others which is a hallmark of superior manager; among sales managers as it characterize those at the higher level (Spencer et al., 1993). The ability to sense others reactions and fine tune responses and be persuasive is a significant characteristic of star performer. OBJECTIVES OF STUDY The objectives of the research were: 1. To study the importance of emotional intelligence in the service sector. 2. To study the role of emotional intelligence on the performance of employee. RESEARCH METHODOLOGY DATA COLLECTION A structured questionnaire was used to collect data whereby it was served as primary data to answer the research questions and objectives planning to find out the factors that plays a vital role about Emotional Intelligence towards employee performance. The survey questionnaire consists of thirty three characteristics each of which contains question pertaining to different parts of the study. Each statements were assessed on Five-point Likert Scale (Strongly Disagree, Disagree, Uncertain, Agree, Strongly Disagree) SAMPLE SIZE There were total 100 respondents.
SAMPLING TECHNIQUE A convenience sampling method is used to collect data mainly from the service sector employees. Participants were chosen to collect data from the major part of the Indore city. TOOLS USED The statements were subjected to factor analysis (principal components with varimax rotation through SPSS to find out the number of factors contributing in role of Emotional Intelligence towards performance of employee.
ZENITH
ANALYSIS Computed Cronbach Alpha Value is .960 showing data reliability. KMO Bartlett Value is .874 i.e., accepted for factor analysis. Factor analysis was performed to identify the key dimensions affecting role of Emotional Intelligence on performance of employees in service sector. Thirty- Three items were reduced to six factor, which explained 72.89 % of the overall variance indicating that the variance of original values was well captured by these six factors. The six factors and their components have been highlighted in table of Rotated Component Matrix. FACTOR 1 SELF ASSESSMENT (6.048) comprises of the variables- assessment of the situation (.614), mixing unnecessary emotions with issues at hand (.499), ability stand up for the beliefs (.608), see the brighter side of my situation (.587), self belief (.637), commitments and promise (.661), emotions should be managed (0.53), organized and careful in my work (.718), awareness of ones weaknesses (.453), self-development even when job does not demand it (.741). Since all these variables are related to awareness and the ability to recognize and understand emotions, drives and effect on others. FACTOR 2 SELF MONITORING (4.383) comprises of the variable- ability to make intelligent decision using a healthy balance of emotion and reason (0.481), concentrate on the task at hand in spite of disturbances (0.53), handle conflict around me (0.571), ability to stay composed in both good and bad situations (0.711), ability to stay focused under pressure (0.590), ability to handle multiple demands (0.791), ability to identify and separate emotions (0.709). Since all these factors are related with the ability to control disruptive moods and propensity to judgment- to think before acting. FACTOR 3 ACTUATION AND INSPIRATION (4.048) has components- inspiration for subordinate (0.744), ability to encourage people to take initiative (0.671), do not depend on others encouragement to do work well (0.730), pursue goals beyond what is required and expected of me (0.647), believe that happiness is an attitude (0.604). These components are related to penchant to pursue goals with energy and enthusiasm. FACTOR 4 EMPATHY (3.171) includes components- attention to the worries and concerns of others (0.668), listen to someone without the urge to say something (0.891), see the other person's point of view (0.792), comfortable and open to novel ideas and new information (0.82). The factors are related to ability to understand emotional make up of people. FACTOR 5 INTEGRITY (2.359) contains variables- clear priorities (0.701), ability to maintain the standards of honesty and integrity (0.512), ability to confront unethical action by others (0.714), persistentance in pursuing goals despite obstacles and setbacks (0.436). FACTOR 6 SOCIAL RELATIONSHIP (1.081) comprises of the variables- friendly and outgoing (0.622), rapport and maintained personal relationships with subordinates (0.459). The factors are related to handle networks and build rapport.
67
ZENITH
DISCUSSION Emotional Intelligence should be a major criterion when it comes to promotion, performance and hiring of individuals (Goleman, 1998). Therefore EI should be given high priority when it comes to hiring and development of employees in Service Sector. Social awareness and Relationship management is concerned, it creates direct impact on employees performance which on the flip side supports the important. Self-awareness helps managers to take decisions and see gaps in their management skills, which endorse skills development (Grover, 2003). Empathy is an essential tool to measure social awareness (Goleman, 1998). To avoid performance deficits empathy competence allows us to handle increasingly diverse work force (Steele, 1997). The process of motivation, negotiation and communication involves helping others and to control their emotions, resolve their disagreements and be motivated (emotional mentoring). To help others to manage their emotions, it is crucial to, keep ones own emotional perspective, knowing how to relaxed an out-of control person, be a supportive listener and help with goal planning and implementation. Basic on component of emotional intelligence is to understand and handled others emotions (Goleman, 1998). CONCLUSION This paper explored various factors like ability to understand emotional make up of people, clear priorities, ability to confront ethical and unethical actions, ability to stay focused under pressure, ability to handle multiple demands, ability to identify and separate emotions awareness of ones weaknesses, self-development in order to better understand lateral relationship of emotional intelligence and job performance of employees. Self Assessment has been revealed as the primary factor in the study is the ability of recognizing the importance of ones own feelings and how it affects ones performance. Self-assessment is the key to realizing one's own strengths and weaknesses. Individuals with accurate Self-Assessment are aware of their competences which mainly include self confidence, self awareness and emotion handling. Accordingly, they seek out feedback and learn from their mistakes, and know where they need to improve and when to work with others who have complementary strengths. Self Monitoring is identified as second factor contributing to the importance of Emotional Intelligence in improving performance of employees. This dimension indicates control of feelings and impulses, so that employees are reasonable and are able to create environment of trust and fairness. Actuation and Inspiration is disclosed as third factor contributing to role of Emotional Intelligence and performance of employee. It is the driving force by which employees achieve their goals. Actuation and Inspiration is responsible for encouraging self and others, managing the stress, decision making, and helps employees to lead and motivate others more successfully. Empathy appeared to be fourth factor in the study, is the capacity to recognize and, to some extent, share feelings (such as sadness or happiness) that are being experienced by another employee. It is the key cornerstone in genuine human relationships. Empathy is the state of social awareness. An Emotionally sensitive employee is aware about the emotions and concerns of others. At work place interaction with other people is critical which requires the competency of empathy for better performance. A socially aware person puts him/her self in others position and then proceeds for certain appropriate action. Integrity emerges as fifth factor that influences Emotional Intelligence and includes ability to maintain the standards of honesty and integrity, ability to confront unethical action by others, persistentance in pursuing goals despite obstacles and setbacks. Social
68
ZENITH
Relationship comes out to be seventh factor in the study and concerns with the personal ability to manage relationships with others. Social Relationship is culmination of other dimensions of Emotional Intelligence. Employee tends to be very effective at managing relationships when they can understand and control their own emotions and empathize with the feeling of others. Self-Assessment, Self- Monitoring, Actuation and Inspiration, Social Relationship and Integrity are essential tools that the individual needs to greatly succeed at higher levels of understanding. Emotional Intelligence helps the managers in participation in decision making, thereby improving productivity and performance of employee. REFERENCES 1. Ashkanasy, N.M. and Daus, C.S. (2005). Rumors of the death of emotional intelligence in organizational behavior are vastly exaggerated. J. Organ. Behav., 26, 441-452. 2. Ashford, S.J. and Black, S.J. (1996). Proactivity during organizational entry: The role of desire for control. J. Appl. Psychol., 81,199214. 3. Carmel , A. ( 2003 ). The relationship between emotional intelligence and work attitudes, behaviour and outcomes: An examination among senior managers. Journal of Management Psychology,18 (8),788 813 4. Cherniss, C. (2000).Emotional intelligence: What it is and why it matters . Paper presented at the Annual Meeting of the Society for Industrial and Organizational Psychology, New Orleans, LA. 5. Goleman, D. (1998). What makes a leader.Harvard Business Review, 76 (6), 93-102. 6. Goldstein, H.W., Zedeck, S. and Goldstein, I.L. (2002). G: Is this your final answer. Human Performance, 15 (1/2), 123 142 . 7. Khurram Shahzad, Muhammad Sarmad, Muhammad Abbas and Muhammad Amanullah Khan (2011). Impact of Emotional Intelligence (EI) on employees performance in telecom sector of Pakistan. African Journal of Business Management , 5 (4), 1225-1231.
8. Rahim, M.A., Psenicka, C., Polychroniou, P. and Zhao, J. (2002). A model of emotional intelligence and conflict management strategies: A study in seven countries. Int. J. Organ. Anal., 10(4), 302-326. 9. Salovey, P. and Mayer, J.D. (1990). Emotional Intelligence Imagination Cognition and Personality, Journal of Personality Assessment , 9, 185-211. 10. Shahzad, K., Rehman, K.U. and Abbas, M. (2010). HR Practices and Leadership Styles as Predictors of Employee Attitude and Behavior: Evidence from Pakistan. Eur. J. Soc. Sci., 14(3), 417-426.
ZENITH
11. Sj berg, L. (2001). Emotional intelligence: A psychometric analysis. European Psychologist, 6 (2), 79 95. 12. Thorndike, R.L. (1936). Factor analysis of social and abstract intelligence. Journal of Educational Psychology, 27, 231-233. ANNEXURE TABLE 1 RELIABILITY STATISTICS Cronbach's Alpha .960 N of Items 35
TABLE 2 KMO AND BARTLETT'S TEST Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square df Sig. .874 3015.401 595 .000
TABLE 3 FACTOR SUMMARY Factor 1 Self Assessment 1 I am able to assess the situation and then behave. 2 I do not mix unnecessary emotions with issues at hand . 3 I can stand up for my beliefs. 4 I can see the brighter side of my situation. 5 I believe in my self. 6 I am able to meet commitments and keep promises. Factor Load 0.614 0.499 0.608 0.587 0.637 0.661
ZENITH
7 I am organized and careful in my work. 8 I think that emotions should be managed. 9 I am aware of my weaknesses. 10 I feel that I must develop myself even when my job does not demand it. Total Factor Load Factor 2 Self Monitoring I am able to make intelligent decision using a healthy balance of emotion and 1 reason. 2 I can concentrate on the task at hand inspite of disturbances. 3 I can handle conflict around me. 4 I am able to stay composed in both good and bad situations. 5 I am able to stay focused under pressure. 6 I am able to handle multiple demands. 7 I am able to identify and separate my emotions. Total Factor Load Factor 3 Actuation and Inspiration 1 I can encourage other to work even when things are not favourable. 2 People tell me that I am an inspiration for them. 3 I am able to encourage people to take initiative. 4 I do not depend on others encouragement to do my work well. 5 I pursue goals beyond what is required and expected of me. 6 I believe that happiness is an attitude. Total Factor Load Factor 4 Empathy
0.718 0.53 0.453 0.741 6.048
0.481 0.53 0.571 0.711 0.59 0.791 0.709 4.383
0.653 0.744 0.671 0.73 0.647 0.604 4.048

ZENITH
1 I pay attention to the worries and concerns of others. 2 I can listen to someone without the urge to say something. 3 I try to see the other person's point of view. 4 I am comfortable and open to novel ideas and new information. Total Factor Load Factor 5 Integrity 1 I have my priorities clear. 2 I am able to maintain the standards of honesty and integrity. 3 I am able to confront unethical acion by others. 4 I am persistent in pursuing goals despite obstacles and setbacks. total Factor Load Factor 6 Social Relationship 1 I am perceived as friendly and outgoing. 2 I have built rapport and maintained personal relationships with subordinates. Total Factor Load
0.668 0.891 0.792 0.82 3.171
0.701 0.512 0.714 0.436 2.359
0.622 0.459 1.081
72
ZENITH
AN EXPLORATORY STUDY OF GLASS CEILING IN INDIAN EDUCATION SECTOR

MS ANITA SHARMA*; PROF. SUSHAMA SHARMA**; DR NEERAJ KAUSHIK***
*Research Scholar, Department of Education, Kurukshera University, Kurukshera, Haryana. **Professor, Department of Education, Kurukshera University, Kurukshera, Haryana. ***Associate Professor, The Technological Institute of Textile & Sciences, Bhiwani, Haryana.
ABSTRACT It is often emphasized that with the countrys first citizen, the chief of the ruling political party and three powerful chief ministers as women, India has successfully broken the barrier of Glass ceiling. However looking at Indias 113th rank out of 157 countries in terms of Gender Development Index (May 2010), it seems India has to go a long way to realize the dream of gender equality. While on one hand India has examples of Chanda Kochhar, Shikha Sharma, Naina Lal Kidwai and Kalpana Morparia who made it to the top in their fields; on other hand theres volumes of literature depicting Glass Ceiling in one form or another. The present study is an attempt to investigate the presence of Glass Ceiling in Indian education sector. Two hundred & thirty four faculty members from forty-two Colleges of Education (spread across six districts of Haryana) were taken. One way ANOVA was used to ascertain whether the faculty members differ in their opinions regarding Glass Ceiling. It was observed that respondents differ significantly on the basis of their gender, despite the fact that there are government rules & regulations for Gender Equality. In actual practice, the rules are violated. KEYWORDS: Glass Ceiling, Education sector, Colleges of Education, Haryana. ______________________________________________________________________________ INTRODUCTION The glass ceiling is a term that symbolizes a number of barriers that prevent qualified individuals from advancing higher in their organizations. Although many women hold management positions, few have made the breakthrough to top-level positions. The estimate was suggested that only one to five percent of the top executive officials are women [1]. Hymowitz & Schelhardt (1986) used the term of the glass ceiling first used in the Wall Street Journal special report on corporate women [2]. They asserted that access to the top for women was blocked by corporate traditions & prejudice. Since then this term denotes an artificial and transparent barrier that kept women from rising above a certain level in corporations [3]. Simon (1995) opined that the term glass ceiling generally implies that women are confronted by a single layer of glass/barrier to their career progression. In reality there are many layers and those too at different stages of career progression [4]. It is propounded in the relevant literature that underrepresentation of women in various organizations is attributed to different constraints. These
73
ZENITH
include, among others, the type of employing sector, vertical segregation, gender and corporate strategy (Wilson, 2002; Davidson and Cooper, 1992; Morgan and Knight, 1991; OLeary and Ickovics, 1992) [5-8]. Though in India it is often argued that with the countrys first citizen and the chief of the ruling political party [9], women have successfully broken the Glass ceiling. This claim seems justified with news headlines viz. The country's second largest commercial lending institution, ICICI Bank, is headed by a woman, Chanda Kochhar; so is the case with the third largest in the private sector, Axis Bank, which has Shikha Sharma on the top seat and One of the largest foreign banks in the country, HSBC, and the Indian arm of the global financial powerhouse JP Morgan are also headed by women, with Naina Lal Kidwai and Kalpana Morparia respectively overseeing their operations [10]. But exceptions cant make history. In terms of Gender Development Index, still Indias 113th rank out of 157 countries demands immediate and necessary action for gender equality. The present study is an attempt to measure the presence of Glass ceiling in Indian education system particularly in the Colleges of Education in the state of Haryana. REVIEW OF LITERATURE Koshal & Gupta (1998) conducted a survey Women Managers in India: Challenges and opportunities to find out to what degree the glass ceiling exists in the largest democracy of the world and how women manager functions? The study also intends to analyze what kind of cultural barriers are existing for women in India that prevent them from advancing to corporate leadership positions? The results of study revealed that more than 40 percent men and women believe that there are significant barriers to womens advancement in their organizations and organizations do not encourage women enough to assume leadership position. There appears to be inequity in pay in corporate India, fifty seven percent women think that they need to work harder than men to prove their competence. Male stereotyping exclusion of women from informal communication network, commitment to family responsibilities, lack of business experience, and not being in the pipeline long enough are some of the barriers to womens advancement [11]. A survey(1995) found that among fortune 500 companies, only 90 had women as their chief executive officers , About 65 percent of American found believe that women are discriminated against in getting such well paying positions- a phenomenon called the glass ceiling in which a woman rises only so far in management and no further [12]. Eggins (1997) in her book Women as leaders and Managers in Higher Education mentioned that women who serve as leaders of the academic institutions confront all the issues that women executives face in any large and complex business organizations. They also confront unique issues, one of which is to educate & accept new generation to a broader understanding of womens roles in organization that have a very traditional and masculine cultural ethos. However, women academics have yet to achieve these positions of management in order to challenge the status quo [13]. Veale & Gold (1998) conducted a research in Metropolitan District Council situated in Yorkshire, UK also confirmed that glass ceiling did exist within the council and this hindered women progress on top positions [14]. Van Vianen & Fischer (2002) concludes that both men and women at the management level reported stronger preferences for masculine culture. Moreover they found that women were found to be less ambitious than men, and even ambitious women perceived work home conflict as an important barrier to career advancement
74
ZENITH
[15]. Jeavons & Sevastos (2002) found that glass ceiling prevents women in the organizations. They also stated that even levels of promotions did exist in men and women. The data showed that the women are employed by the organization at a level that was much lower than their qualifications or lower than men doing the same job [16]. Peter (2003) argues that women themselves fail to understand the shift in focus while moving from the middle to senior and top management functions. While occupying the top positions, they are still performing less strategic and lower paying tasks. Women enter a professional system with lack of job-clarity and limited information on formal tasks and functions, that also becomes growth barrier for them [17]. Mathur et.al. (2006) indicated that the glass ceiling considered a myth by many is real and is nurtured by the organisational culture, policies and strategies besides womens own inadequacies. Only the most decentralized organisations, characterized by a culture that supports womens top positions, will help in breaking down the glass ceiling, alongwith womens own efforts to grow, develop and empower themselves through academic and career development [18]. Lyness and Heilman (2006) found in the study conducted with 448 upper level employees that women were less likely to be promoted than males, and if they were promoted they had stronger performance ratings than males [19]. However there are studies mentioning the other side of Glass ceiling. Budhwar, Saini & Bhatnagar (2005) noticed that the rise in literacy levels and better position of women due to economic and social development has been becoming much better. Women are playing a significant role in the expansion of the Indian software industry, where they constitute 45% of the high-tech workforce. Similar trends can be noticed in education sector and BPO (business process outsourcing) industry where women are employed to sizeable number. More than 60% of the employees in Pepsi and ICICI are women which are sufficient to pave the way for other sectors. [20]. OBJECTIVES OF THE STUDY 1. The main objective of the present study is to determine whether Glass ceiling prevails in Education sector in India. 2. To determine whether people has same opinion regarding glass ceiling on the basis of their demographics (Gender, Age & Type of Institution). RESEARCH DESIGN LOCALE OF THE STUDY In the present study, the faculty members working in Government, Aided and Self financing B.Ed. colleges of Education from six districts of Haryana state are taken. The six districts are Rohtak, Sonipat, Bhiwani, Jhajjar, Faridabad and Gurgaon. The population for the present study comprised of 207 colleges. The population was divided into six stratas using stratified sampling method in the first stage. In the second stage, systematic sampling has been used and finally 42 colleges of Education have selected as sample of the study.
ZENITH
DISTRIBUTION OF SAMPLE (FACULTY OF COLLEGES OF EDUCATION) Variable Type of Colleges Qualification Categories Government/ Aided colleges Self Financing Colleges M.Ed only M.Ed and M.Phil M.Ed and PhD/ NET Male Female Frequency 9 33 93 32 109 62 172
Sex
The number of Government and aided colleges affiliated to M. D. University is much lesser than the self-financing colleges, the reason being the policy of NCTE for upgradation of women status through education, so more self-financing colleges are situated in remote and rural areas. As the population in colleges is dominated by female faculty members so the sample is comprised of same proportion i.e. number of female faculty members is much greater than their counterparts. SURVEY INSTRUMENT Well-structured questionnaire was developed for conducting the study. Questionnaire had two sections. First section contained questions regarding demographic profile of respondents while second section contained a list of 15 statements pertaining to various facets of Glass ceiling. The attributes and statements were collected from literature review. Respondents have to choose one parameter of each statement depending on whether respondents feel that statement Strongly Agree (score 1), Neutral (score 3) or Strongly Disagree (score 5). Thus lower mean score implies that respondents favour that particular statement. The questionnaire was pre-tested on sample of 20 respondents and was found suitable. FINDINGS & DISCUSSION The respondents were asked to rate every statement on five point scale ranging from Strongly Agree (rated as 1) to Strongly Disagree (rated as 5). Then the mean score of Glass Ceiling (Average of all statements) was calculated. One way ANOVA was used to check whether mean scores of Glass Ceiling was significantly different on the basis of demographic variables viz. gender, age & type of institution of the respondents. In the following tables mean scores of all categories are given, alongwith the F-value and p-value (Sig. value) DECISION RULE: Significance value less than 0.05 indicate that there is a significant difference between the various categories of a variable as regard that particular statement. 1) EFFECT OF GENDER ON GLASS CEILING The various statements of Glass Ceiling were subjected to One way ANOVA on the basis of independent variable Gender. Out of fifteen statements, five statements were found to be significantly different on the basis of gender. Women respondents affirmed that they struck at
76
ZENITH
their positions, theyre over- represented at lower positions, theres biasness against them. All respondents male and female denied that women are under represented in teaching area, theres difference in their salaries or they should choose only traditional areas of profession. Likewise both agreed on statements viz. women having same qualifications have to compete more, cultural expectations do affect their role in society, they are denied top leadership. However, women respondents asserted that they are generally not promoted to the top, they are over represented at lower level only, and considering women as better teacher only is stereotype. Men respondents differed significantly on these issues TABLE -1 ONE WAY ANOVA: EFFECT OF GENDER ON VARIOUS STATEMENTS
Male 5.1. Women are under-represented in the areas of teaching, professional employment. 5.2. Women are generally hired when applying for entry level teaching positions. 5.3. Women who are turned down for administrative positions, are equally or more competent 5.4. Women usually reach teaching positions then get stuck there. 5.5. Women who chose traditional occupational roles like teachers, doctors. 5.6. The concept that women make better teachers, is an example of a gender stereotype 5.7. Women do not receive the same salaries as men that perform the same jobs. 5.8. Women are not easily promoted from lower positions into top administrative 5.9. The percentage of women promoted to top management from entry-level and clerical level is lower than men at top management 5.10. Women are usually over-represented in low-level teaching jobs. 5.11. Women with higher education up to a Bachelors Degree and above still have a difficult time 5.12. Women are usually denied highest positions due to the limited leadership 5.13. Cultural expectations can affect women's roles in society. 5.14. The under-representation of women in administrative positions is due to the lack of planning 5.15. Women are still being placed into stereotypes that downgrade their abilities 3.90 2.13 3.24 3.16 3.94 2.27 3.55 2.34 Female 3.81 2.13 2.90 2.61 3.84 1.87 3.53 1.98 F .247 .001 2.96 8.50 .287 4.75 .011 4.13 Sig. .620 .979 .087 .004 .592 .030 .915 .043
2.08
2.49
4.63
.032
2.50 2.19 2.42 2.82 2.35 2.87
2.09 2.05 2.22 3.13 2.27 2.80
4.63 .613 1.03 1.81 .174 .089
.032 .435 .312 .180 .677 .766
77
ZENITH
2) EFFECT OF TYPE OF INSTITUTION GLASS CEILING The various statements of Glass ceiling were subjected to One way ANOVA on the basis of independent variable Type of institution. Two statements were found to be significantly different on the basis of type of institution. Respondents from self financing colleges highlighted that women employees generally dont get the same salary as that of their counterparts. Though respondents from all colleges admitted that women are not easily promoted to top level positions but respondents from aided colleges agreed more on this statement. Table -2 One way ANOVA: Effect of Type of Institutions on various statements
Govern ment 5.1. Women are under-represented in the areas of teaching, professional employment. 5.2. Women are generally hired when applying for entry of teaching positions. level employment. 5.3. Women who are turned down for administrative entry positions, are equally or more competent positions. 5.4. Women usually reach teaching positions then get administrative stuck there. competent 5.5. Women who chose traditional occupational roles get teachers, doctors. like there. 5.6. The concept that women make better teachers, is an roles example of a gender stereotype. doctors. 5.7. Women do not receive the same salaries as men an perform the same jobs. that stereotype. 5.8. Women are not easily promoted from lower men positions into top administrative jobs. 5.9. The percentage of women promoted to top lower management from entry-level and clerical level is lower administrative than men at top management. top Women are usually over-represented in low-level 5.10. lower teaching jobs. 5.11. Women management. with higher education up to a Bachelors level and above still have a tough time Degree jobs. 5.12. Women are usually denied highest positions due Bachelors leadership to the limited time 5.13. Cultural expectations can affect women's roles in due society. leadership 5.14. The under-representation of women in in administrative positions is due to the lack of planning . 5.15. Women are still being placed into stereotypes that in downgrade their abilities. planning 3.79 2.21 9 2.95 1 2.74 5 3.84 4 2.00 4 4.58 0 2.58 8 2.68 8 2.37 8 1.89 7 1.89 9 2.74 9 3.00 4 3.26 0 6 Self Financing 3.83 2.11 3 3.06 1 2.79 6 3.90 9 2.02 0 3.15 2 2.13 5 2.36 3 2.15 6 2.06 5 2.22 6 3.15 2 2.23 5 2.89 3 9
Aided 3.88 2.19 8 2.72 9 2.63 2 3.74 3 1.77 4 4.63 7 1.63 3 2.33 3 2.33 3 2.28 3 2.65 8 2.79 5 2.21 9 2.35 1 5
F .048 .113 8 1.06 3 .272 6 .317 2 .696 7 45.4 6 5.11 4 .585 1 .490 5 .801 0 2.58 1 1.33 8 2.65 3 2.97 5 7
Sig. .953 .893 3 .349 3 .762 9 .729 2 .499 9 .000 9 .007 0 .558 7 .614 8 .450 4 .078 0 .266 8 .073 6 .053 3 3
78
ZENITH
Respondents from all colleges admitted that women are usually over represented in low-level positions, theyve to compete more even when have same qualifications, they got stuck at their positions, the percentage of women promoted to top level management is lower than their male counterparts. On an average, it was found that despite the all claims of government, differentiation does exist in colleges of education. However, the same is less in government colleges but reasonable high in aided and self financing colleges. 3) EFFECT OF AGE ON GLASS CEILING The various statements of Glass Ceiling were subjected to One way ANOVA on the basis of independent variable Type of institution. Only two statements were found to be significantly different on the basis of qualifications.
79
ZENITH
TABLE -3 ONE WAY ANOVA: EFFECT OF QUALIFICATIONS ON VARIOUS STATEMENTS

M.Ed Only 5.1. Women are under-represented in the areas of teaching, professional employment. 5.2. Women are generally hired when applying for entry level teaching positions. 5.3. Women who are turned down for administrative positions, are equally or more competent 5.4. Women usually reach teaching pos itions then get stuck there. 5.5. Women who chose traditional occupational roles like teachers, doctors, and 5.6. The concept that women make better teachers, is an example of a gender stereotype. 5.7. Women do not receive the same salaries as men that perform the same jobs. 5.8. Women are not easily promoted from lower positions into top administrative 5.9. The percentage of women promoted to top management from entry-level and clerical level is lower than men at top management 5.10. Women are usually over-represented in low-level teaching jobs. 5.11. Women with higher education up to a Bachelors Degree and above still have a tough time 5.12. Women are usually denied highest positions due to the limited leadership 5.13. Cultural expectations can affect women's roles in society. 5.14. The under-representation of women in administrative positions is due to the lack of planning. 5.15. Women are still being placed into stereotypes that downgrade their abilities . 3.79 2.14 2.92 2.62 3.78 1.93 3.50 2.01 M.Ed & M. Phil 4.03 1.94 3.00 3.72 4.00 2.31 3.53 2.16 M.Ed, PhD & NET 3.82 2.19 3.05 2.58 3.92 1.91 3.57 2.13
F .488 .535 .220 11.141 .571 1.322 .089 .317
Sig. .615 .587 .803 .000 .565 .269 .915 .728
2.28 2.02 1.92 2.23 3.09 2.28 2.64
2.56 2.50 2.00 2.28 2.69 2.34 3.16
2.43 2.30 2.31 2.31 3.12 2.28 2.91
.683 2.247 2.830 .101 1.010 .026 1.605
.506 .108 .061 .904 .366 .974 .203
80
ZENITH
Though the people disagree with these two statements, however they differed in their intensity level. While respondents from the age groups 21-30 were almost disagree on both statements. CONCLUSION The main objective of the present study was to cogitate whether there exists Glass ceiling in Indian education sector. Data from two hundred and thirty four respondents (from forty two colleges of six districts) were collected. The mean score of all statements was taken as Average Glass ceiling score. This score was subjected to One way ANOVA with three independent variable namely gender, type of institution and the age. Respondents differed most on the basis of gender. In majority of statements respondents from all types of colleges, from all qualifications and from both sexes affirmed that there exist differentiation in terms of employment. Salary in government and self financing colleges are at par in both sexes but in self financing institutes, discrimination prevails. Glass ceiling does exist which erects the barriers refraining women reaching top positions. The reasons may be many, intentional and unintentional. Intentionally they are made to struggle more, compete more even when they have same qualifications. They are hired for the entry level positions and under represented in administrative works. Unintentionally many times women are kept away in order to he lp them. The reasons for not assigning any administrative tasks to them may actually be to reduce their burden or giving them more time for their family. But this prevents them from learning these tasks. One must be properly groomed for the top positions a nd it was observed that women employees lack tremendously in getting mentors. We cant deny the reasons on the part of women too. As given by Van Vianen & Fischer (2002) women tacitly agrees to these discrimination and glass ceiling and in turn become less ambitious. Societal norms make women always a secondary earner. Except few cases having a career is not must for them, as against their male counterparts. Hence they also develop a casual approach regarding their career. Though the government is doing a lot for the upliftment of the women, but like majority of cases in India, here too implementation of these policies need vigilance. REFERENCES [1] Adair, C. K. (1994) Cracking the Glass Ceiling: factors influencing Womens attainment of senior executive positions Dissertation thesis, Colorado State University, Colorado.
[2] Hymowitz, C. and Schellhardt, T.D. (1986) The glass ceiling: Why women cant seem to break the invisible barrier that block them from the top jobs The Wall Street Journal, March 24 [3] Jackson, J.C. (2001) Women middle managers perception of the glass ceiling Women in Management Review, Vol 16, No. 1, pp 30-41 [4] Simon, j. (1996) The double-glazed glass celing in Australian libraries, Librarian Career Development, Vol 4, No.4, pp4-14 [5] Wilson, F.M. (2002), Management and the professions: how cracked is that glass ceiling?, Public Money & Management, January/March, available at: http://wall.oise.utoronto.ca
ZENITH
[6] Davidson, M.J. and Cooper, C. (1992), Shattering the Glass Ceiling: The Women Manager, Paul Chapman, London. [7] Morgan, G. and Knight, D. (1991), Gendering jobs: corporate strategy, managerial control and dynamics of job segregation, Work, Employment & Society, Vol. 5 No. 2, pp. 181-200. [8] OLeary, V.E. and Ickovics, J.R. (1992), Cracking the glass ceiling: overcoming isolation and alienation, in Sekran, U. and Leong, F.T.L. (Eds), Women Power: Managing in Times of Demographic Turbulence, Sage, London. [9] Malhotra, S. (2010) The equality illusion Financial Express, Mar 07 http://www.financialexpress.com/news/the-equality- illusion/587681/0 Available at
[10] IANS (2011), In India, women bankers have broken glass ceiling Available at http://www.siliconindia.com/shownews/In_India_women_bankers_have_broken_glass_ceilingnid-80035.html [11] Koshal, M., Gupta, A. K. and Koshal, R., (1998) Women in Management: a Malaysian perspective Women in Management Review, Vol. 13 No. 1, pp 11-18. [12] http://www.faqs.org/health/topics/8/Gender-roles.html [13] Eggins, H (1997), Women as leaders and Managers in Higher Education, SRHE and Open University Press, Buckingham. [14] Veale, C. & Gold, J. (1998) Smashing into the glass ceiling for women managers Journal of Management Development, Vol. 17 Issue 1, pp.17-26. [15] Van Vianen, A.E.M. & Fisher, A. H. (2002) Illuminating the glass ceiling: The role of organisational culture preferences Journal of Occupational & Organizational Psychology, Vol 75 No. 3 pp 315-337. [16] Jeavons & Sevastos (2002) Glass Ceiling Effect or Sticky Floors? A Matched Cohort Study of Career Progression. [17] Peter, H.(2003), Risk, Rescue and righteousness: How Women Prevent Themselves from Breaking Through the glass ceiling, Hagberg Consulting Group. [18] Helm, B.M. (2006), Women and the glass ceiling in South African banks: an illusion or reality? Women in Management Review, Vol. 21, Issue 4, pp.311-326. [19] Lyness, K. S. and Heilman, M. E. (2006) When fit is fundamental: Perfor mance evaluations and promotions of upper level female and male managers Journal of Applied Psychology, 91(4) pp777-785 [20] Budhwar,P., Saini, D., and Bhatnagar, J. (2005) Women in Management in the New Economic Environment: The case of India Asia Pacific Business Review Vol.11, No 2
82
ZENITH
CONSUMER PREFERENCES TOWARDS SERVICE INDUSTRY: A FACTORIAL STUDY OF HEALTHCARE INDUSTRY

DR. SIDDHARTH VERMA*; UTKAL KHANDELWAL*
*Assistant Professor, Department of Business Management, Hindustan Institute of Management studies Farah, Mathura-281122 (U.P.) India. **Assistant Professor, Department of Management, GLA University, Farah, Mathura-281122 (U.P.) India.
ABSTRACT There must be increasing emphasis on consumer satisfaction in hospitals and various healthcare service providers. In terms of selecting hospitals and other health care providers consumer give preference which depends on multiple factors. This study constitutes to find out these factors which are based on various service attributes. The result of this study provide base to the health care service provider to inculcate these factors to get competitive advantage. _______________________________________________________________________ INTRODUCTION The study of consumer preference constitutes an interesting issue in marketing. It has been evident that satisfaction and dissatisfaction judgment play a vital role in brand loyalty. India is one of the fastest growing economies with second largest population in the world. So, its a greater opportunity for every industry in India to exploit this opportunity. The Indian healthcare industry is seen to be growing at a rapid pace and has experienced phenomenal growth of 12% per annum in the last 4 years and is expected to become a US$280 billion industry by 2020. Large population, increasing purchasing power and raising health consciousness are all factors that are driving this growth. Health awareness has lead to increase in consumer preferences in selecting healthcare services on the basis of various factors such as qualification of doctors, cleanliness, infrastructure, payment mode, promptness of service, multispecialty etc. Consumer preferences are the subjective tastes, as measured by utility of various bundles of goods. They permit the consumer to rank these bundles of goods according to the levels of utility they give the consumer. The individual consumer has their own set of preferences and determination of these is based upon culture, education, and individual tastes, among a plethora of other factors. In todays competitive healthcare industry, administrators and marketers must have to identify these factors and how these factors influence customer choice decision. This paper attempts to find out various attributes which customer gives preferences in terms of healthcare and their degree of involvement.
83
ZENITH
LITERATURE REVIEW There are so many researchers who focus towards the building of consumer preferences and their attitude formation and the factors which are responsible for the same. Attitude means a learned predisposition to respond to an object in a consistently favorable or unfavorable way. It significantly plays an important role in consumer behavior. Attitudes cannot be observed directly, they are mental positions that marketers must try to infer through research measures (Wilkie, 1994). There is very little published research over the patient satisfaction and the attributes of their satisfaction. However, some of them are: Berwick (1996) identifies the use of patient satisfaction surveys to improve consumer responsiveness in public hospitals has several objectives. The same tensions that arise with other quality measurestypified by the belief in measurement for improvement not measurement to pass judgment- also occur with measures of patient satisfaction. In the public sector, quality measure function as a direct measure of accountability, as well as providing information to hospitals about areas for improvement Draper M, Cohen P and Buchan H (2001) explained that patient satisfaction surveys provide information that can inform policy and service development. Repeat survey can enables policy makers to access the effectiveness of policies and programs and whether these are adapting to changing patient needs. At the hospital level, focused internal feedback or benchmarking with similar hospitals can prompt action to improve service. Meredith and Wood (1995) describe patient satisfaction as emergent and fluid. From a consumer perspective, patient satisfaction surveys have been described as a particularly passive form of establishing consumer views as part of a Ministerial Review of Birthing Services. Fraj, Martinez(2007) focused on environmental and natural attitudes as predictor of ecological behavior of consumer. A three-dimensional approach to this variable has been developed by the researchers. It explains the factors as emotional, cognitive and co- native components. In his study, random sample survey of 573 individuals was used to verify the conceptual model and framework. This model was assessed firstly by principal factor analysis and then by structural equation modeling. Finding of this study showed that environmental attitudes have an important influence on ecological behavior.
Brown S, Lumley J (1993) discovered that significant issue associated with satisfaction with labour were access to information during labour, the relationships with caregivers, the extent of involvement in decision making, and the extent of intervention in labour. Not having an active say in labour was the issue that generated the greatest likelihood of dissatisfaction with the birthing experience. OBJECTIVES OF THE STUDY 1. To develop and standardize a measure for evaluating consumer preference for selection of health care services
ZENITH
2. To identify the underlying factors for selection of health care provider 3. To open new vistas for further researchers. RESEARCH METHODOLOGY THE STUDY The study was exploratory in nature with survey method being used to complete the study SAMPLING DESIGN POPULATION : Population included Households of Agra region SAMPLING ELEMENT: Individual respondent were the sampling element SAMPLING TECHNIQUE: Purposive sampling technique was used to select the sample SAMPLE SIZE: Sample size was 150 respondents TOOLS FOR DATA COLLECTION Self designed questionnaire was used for identification of underlying factors responsible for consumer preference regarding selection of a health care provider. Data was collected on a likert type of scale, where 1 stands for minimum agreement and 7 stands for maximum agreement. TOOLS FOR DATA ANALYSIS Item to total correlation was applied to check the internal consistency of the questionnaire. The measure was standardized through computation of reliability and validity. Factor analysis was applied to identify the underlying factors responsible for consumer preference regarding selection of health care provider. ANALYSIS OF CONSISTENCY Firstly consistency of all the factors in the questionnaire was computed by applying item to the total correlation. Under this correlation of every item with total is measured and the computed value is compared with the standard value (i.e. 0.194 ) if the computed value is found less than standard value then whole statement is dropped and will we termed as inconsistent if the computed value is found more than the standard value then statement is termed as consistent. If the item of total correlation was above the standard value for all, the factor affecting the consumer preferences are found to be consistent.
ZENITH
TABLE 1: TABLE OF TOTAL CORRELATION Items Availability of payment options Location Staff Courtesy Staff Responsiveness Cleanliness Infrastructure Past Experience Wait for admission Empathy Promptness of Service Convenience at discharge time Accessibility Willingness to listen to problem Correlation coefficient 0.430325 0.589364 0.688541 0.635955 0.560191 0.56627 0.676363 0.543714 0.691771 0.647983 0.642004 0.663159 0.596512 Consistency Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Accepted/drop Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted
RELIABILITY MEASURE Reliability test was carried out using SPSS software and the reliability test measure are given below Cronbachs Alpha N of Items 0.859 13
It is considered that reliability value more than 0.7 is good and it can be seen that in all the reliability value is quite high then the standard value, so all the items in the questionnaire are highly reliable.
86
ZENITH
ANALYSIS OF VALIDITY The face validity method was applied to the questionnaire and it was found to be satisfactory. FACTOR ANALYSIS In order to find out the factor affecting analysis was applied using SPSS software. This analysis considered 29 items and all of them were accepted. Principle component analysis using varimax rotation in SPSS had resulted in five factors. The factors converged in 15 iterations. Factor analysis is calculated by using SPSS software. Firstly data of the items are coded in the SPSS software. Then correlation between these items is calculated then total variance is calculated which gives the value of variance and cumulative. The total variance is explained in three ways i.e. first is the eigen value, second is the extraction sum of loadings and the last is rotational sum of square loadings. DESCRIPTION OF FACTORS The raw scores of 13 items were subjected to factor analysis to identify the underlying factors for selection of health care provider. 1. Employee Competence It has emerged as the most important determinant for selecting health care services with total 4.920 and variance of 37.850%. It includes Staff Courtesy (0.720), Staff Responsiveness (0.701), Promptness of Service (0.701), Willingness to listen to problem (0.662), Empathy (0.577), Accessibility (0.521), Past experience (0.470). 2. Timeliness -This is the second most important determinant for selecting health care services with total 1.322 and variance of 1.168%. It includes Wait for admission (0.901), Convenience at discharge time (0.620). 3. Environment Convenience -This is another important determinant for selecting health care services with total 1.080 and variance of 8.305%. It includes Cleanliness (0.819), Infrastructure (0.812). 4. Customer Research- It is the last determinant for selecting health care services with the total 1.001 and variance of 7.701%. The items for this factor with their loadings are Availability of payment options (0.837), Location (0.628).
87
ZENITH
TABLE 2: TABLE OF FACTOR ANALYSIS Factor name Eigen value Variable convergence Total 1.Employee 4.920 Competence and Past experience % of Variance 37.850 3. Staff Courtesy Value 0.720 Loading
4. Staff Responsiveness 10. Promptness of Service
0.701 0.701
13. Willingness to listen to 0.662 problem 9. Empathy 12. Accessibility 7. Past experience 2. Timeliness 1.322 1.168 8. Wait for admission 0.577 0.521 0.470 0.901
11 Convenience at discharge 0.620 time 3. Environment 1.080 convenience 4.Customer Ease 1.001 8.305 5 Cleanliness 6 Infrastructure 7.701 1 Availability options 2 Location of 0.819 0.812 payment 0.837 0.628
SUGGESTIONS Health Care provider must focus towards their employee competence in terms of courtesy, responsiveness, promptness, empathy, accessibility and past experience. There must be prominent attention on the delivery of services from Health Care providers.
88
ZENITH
Environment convenience should be good in order to provide cleanliness and better infrastructure. Health Care provider must put attention in terms of customer ease. CONCLUSION In the present scenario, where the people become more aware towards their health and medical services, identification of the consumer (patient) preference has become a crucial element. This study shows the various factors which are responsible for affecting the choice of the consumer regarding health care services. REFERENCES Berwick D M, A primer on leading the improvement of systems, Brit Med J 1996; 312: 619-622. Brown S, Lumley J, Satisfaction with care in labour and birth: a survey of 790 Australian women, Birth 1994; 21: 4-13. Draper M, Cohen P and Buchan H, Seeking Consumer Views: what use are results of hospital patient satisfaction survey, Indian Journal of quality in Healthcare 2001; Vol 13, No 6: pp463468. Fraj.E, Martinez.E, (January 2007), Ecological consumer behavior: An Emperical Analysis international Journal of Consumer studies, Vol 31, Issue 1, (pp. 26-33) Meredith P, Wood C, The development of Royal college of Surgeon of Engla nds patient satisfaction audit service, J Qual Clin pract 1995; 15: 67-74. Wilkie, W.L. (1994), Consumer Behavior, 3rd ed., John Wiley & Sons, New York, NY.
89
ZENITH
PANCHAYATS AND RURAL ELECTRIFICATION: A CASE STUDY OF WEST BENGAL

DR. NIRANJAN MANDAL*
*Reader, Department of Commerce, Dr. B.N. Dutta Smriti Mahavidyalaya, Hatgobindapur, Burdwan-713407, India.
ABSTRACT Rural Electrification constitutes a basic infrastructure for accelerating socio-economic development in rural West Bengal. It is increasingly felt that rural households must have access to electricity so as to achieve their better living conditions and to get a sizeable level of employment in the rural sector. It may be pointed out that there is a positive correlation between the use of electricity and improvement of Human Development parameters like health, education etc. In this paper an attempt has been made to assess whether Gram Panchayats in West Bengal play a formidable role in rural electrification for providing better living conditions as well as for generating employment opportunities for the rural masses so as to achieve the target of rural transformation and alleviation of rural poverty. This research study highlights the strengths and weaknesses of the panchayats for the purpose as well as some remedial measures that have to be undertaken by the local panchayats for its better development and maintenance. KEYWORDS : Panchayats, Infrastructure Development, Rural Electrification, Rural India, West Bengal. ___________________________________________________________________________ INTRODUCTION If we should have electricity in every village home, I should not mind villages plying their implements and tools with the help of electricity. But then the village communities or the state would own power houses just as they have their grazing pastures. But where there is no electricity what are the idle hands to do? -- Gandhiji Lack of permanent and affordable energy is one of the many factors limiting the people living in rural and inaccessible areas in achieving a dignified life with food and livelihood security. It is the most effective source for achieving rural transformation and for alleviating rural poverty. It has become one of the basic human needs. It is increasingly felt that every rural household must have access to electricity. Rural electrification not only provides better living conditions but it can also generate employment opportunities for the rural entrepreneurs. There exists a positive correlation between use of electricity and improvement of human development parameters like health, education etc. Obviously, the provision of electricity to an unelectrified area offers the potential to develop a wholly integrated approach to community development, bringing in issues of environment and resource management, safe water supply, better equipped hospitals and schools, access to information and communication etc. But even after sixty years of Indias independence about 1,00,000 villages are yet to be electrified and about 100 million households in the country
90
ZENITH
still depend on kerosene lamp or other crude devices to light their homes every evening. Those who have electricity at their households level face constant blackouts and uncertainties of a steady energy supply from their supply origin. Erratic voltage levels and unreliable power supply are major problems due to inadequacy of production and ageing transmission system leading to power cuts. To this direction, it is needless to mention that without providing energy access to the most disadvantaged and remote communities, integrated growth and development of the country as a whole would become elusive. OBJECTIVES The main objective of this research study is to assess whether Gram Panchayats in West Bengal play a formidable role in rural electrification for providing better living conditions as well as for generating employment opportunities for the rural masses so as to achieve the target of rural transformation and alleviation of rural poverty. METHODOLOGY Relevant data have been collected from secondary sources of information. Annual Administrative Reports, Panchayats and Rural Development Department, Government. of West Bengal, Reports from the Centre for Monitoring Indian Economy (CMIE), National Human Development Reports (NHDR), Statistical Handbooks of the Bureau of Applied Economics & Statistics, Government of West Bengal, etc. have been used as secondary data for assessing the role of panchayats on Rural Electrification and its impact on rural economy. Different journals, periodicals, conference proceedings etc. have also been consulted to supplement the data. Some important statistical tools, like ratios, charts and diagrams, trend analysis, rank correlation etc; have also been used in the way of analyzing the data collected from the above mentioned sources. VILLAGE ELECTRIFICATION: ITS DEFINITIONS According to definition of village electrification adopted in October, 1997, village will be deemed to be electrified if the electricity is used in the inhabited locality, within the revenue boundary of the village, for any purpose whatsoever. 1 This definition was restrictive and did not meet the aspiration of rural people. There was a demand for more broad based definition of village electrification and accordingly the new definition was notified in February, 2004 which came into force from the year 2004-05. According to the new and broad based definition of village electrification adopted in February, 2004, a village would be declared as electrified if (i) basic infrastructure like distribution transformer and distribution lines are provided in the habited locality as well as Dalit Basti / hamlet where it exist; (ii) Electricity is provided to public places like schools, Panchayat office, Health centers etc. and (iii) The number of households electrified should be at least 10% of the total number of households in the village. 2
Quoted by J.D. Rajpal in Electrify ing Rural India: Rajiv Gandhi Grameen Vidyutikaran Yo jana, Kuru kshetra, October 2006, p-56. 2 Ibid, p -56.
91
ZENITH
CENTRALLY SPONSORED SCHEMES RELATING TO RURAL ELECTRICITY The rural electrification programme has been included as a component of Pradhan Mantri Gramodaya Yojana (PMGY) and is being encouraged to pool resources from other schemes under Minimum Need Programme (MNP) and Rural Infrastructure Development Fund (RIDF) to meet objective of 100% electrification. A new scheme called Accelerated Rural Electrification Programme (AREP) has been launched. The participation of Decentralized Power Producers, PRIs, rural Cooperatives, NGOs, etc. will be encouraged. The Ministry of Power is pushing the concept of Rural Electricity Supply Companies (RESCOs) involving the private sector players by leasing out solar panel based light systems to households. The development and implementation of various rural infrastructure projects help to create values for the rural society. Similarly, involvement of public as well as private sectors, NGOs, etc. require the technical and managerial experts of engineering consultancy in rural areas. It was estimated that the total capacity addition during the Tenth Plan will be only 34,000 mega watt against a target of 41,110 mega watt. The privatization of power sector in various States has not gained desired results in raising efficiency in generation, distribution and transmission of electricity. Keeping in view the power accessibility situation, the Government of India has aimed at supplying electricity to 1,25,000 villages, which are not yet electrified under the Bharat Nirman programme (launched in 2005), within four years of time in Phase I (2005-06 to 2008-09) and another three years of time in Phase II (2009-10 to 2011-12). It has also envisaged offering electricity connection to as many as 2.3 crore households. For the attainment of National Common Minimum Programme (NCMP) goal of providing access to electricity to all households by 2009, Government of India, in April, 2005 launched a new scheme viz. Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) scheme for Rural Electricity Infrastructure & Household Electrification (REIHE). The scheme aims at electrification of about 1,00,000 villagers and providing access to electricity to 7.8 crore rural households including 2.34 crore BPL households by 2009. The Government has estimated an outlay of Rs. 16000 crore under RGGVY for the attainment of the goal of the programme. For this purpose it is decided that States must make adequate arrangements for supply of electricity and there should be no discrimination in the hours of supply between rural and urban households. The scheme would be implemented through the Rural Electrification Corporation (REC). Under the scheme, projects could be financed with capital subsidy for provision of Rural Electricity Distribution Backbone (REDB), creation of Village Electrification Infrastructure (VEI) and Rural Household Electrification of BPL households. REDB and VEI would also cater to the requirement of agriculture and other activities. This would facilitate overall rural development, employment generation and poverty alleviation. PANCHAYATS IN RURAL DEVELOPMENT PLANS (ELECTRIFICATION): THE PROCESS INVOLVED Let us discuss the role of Panchayati Raj Institutions (PRIs) in the implementation of different schemes for providing access to electricity in rural areas. Article 243G of the
92
ZENITH
Eleventh Schedule of the 73rd Constitutional Amendment Act, 1992 contains the powers, authority and responsibilities of Panchayats. The Eleventh Schedule of the Constitution, which relates to the Panchayats, contains 29 items for consideration in developmental plans. Panchayats will have such powers to prepare plans and implement the same for economic development and social justice as may be entrusted to them. Besides 243G, Article 343ZD of the Indian Constitution states that the District Planning Committee (DPC) shall prepare draft development plan for the district as a whole after integrating rural and urban plans prepared by the panchayats and the Municipalities. It shall also look into the matters of common interest between the Panchayats and Municipalitis. The plan formation should emerge from the Gram Sabha (GS) for onward consideration of Gram Panchayats. The plan so prepared by all Gram Panchayats is to be assembled and edited in respective Panchayat Samitis and then it will be sent to the concerned Zilla Parishad. Finally, it will be forwarded to DPC for onward transmission to the State Government. This is the procedure through which participation of all tiers of Panchayati Raj System can be operationalised for effective implementation of the programme under consideration. The rural electrification schemes in West Bengal are implemented by the Zilla Parishads (the third-tier of PR-system)/Siliguri Mahakuma Parishad and District Council for Darjeeling hill area, through officers of the line departments with the association of Panchayat and Rural Development Department getting support through loans (90% of required fund) from NABARD and like other institutions, and pooling resources from centrally sponsored schemes such as PMGY, AREP, RGGVY etc. Gram Panchayats (Firsttiers) and Panchayat Samitis (second tiers) are responsible for preparing development plans for their respective areas and for monitoring the activities of the schemes in this direction. RURAL ELECTRIFICATIONPARAMETERS TAKEN FOR ASSESSMENT The success of the State in rural electrification can be assessed by means of i) ii) the proportion of villages electrified across the districts as well as the States relative position as compared to other major States in India and all India average. the level of per capita consumption of electricity across districts in the State and state-wise per capita consumption of electricity in India to identify the relative position of West Bengal.
IMPLEMENTATION OF RURAL ELECTRIFICATIONA CASE STUDY OF WEST BENGAL

According to National Human Development Report (NHDR), 2004, access to electricity is a basic input in the present day development. With the continuous spreading of electricity to the inhabited mouzas, it becomes possible to extend electrification to almost all villages of West Bengal. Table-1 below shows the percentage (or proportion) of villages in districts of West Bengal under electrification.
ZENITH
TABLE-1 VILLAGES ELECTRIFIED IN DISTRICTS OF WEST BENGAL (AS ON 31ST MARCH EACH YEAR) (FIGURES IN PERCENTAGE) District Burdwan Birbhum Bankura Midnapore Howrah Hooghly (N) 24 Pgs (S) 24 Pgs Kolkata Nadia Murshidabad Uttar 76.4 Dinajpur Dakshin -Dinajpur Malda Jalpaiguri Darjeeling Cooch behar Purulia West Bengal 97.2 98.6 78.7 98.1 54.7 72.8 97.3 98.8 82.9 98.2 62.7 77.21 97.3 98.8 82.9 98.2 62.9 77.3 97.3 98.8 83.2 98.2 62.9 77.6 97.3 98.8 84.5 98.2 63.8 78.0 97.3 99.7 86.9 98.4 64.2 78.1 97.8 100.0 87.1 98.4 66.4 80.5 98.1 100.0 89.0 98.6 70.9 82.7 98.2 99.9 89.5 98.6 72.4 83.6
1991 95.9 99.1 56.9 43.5 100.0 98.3 92.4 80.1 -100.0 91.8
1997 97.8 99.1 66.8 51.7 100.0 100.0 94.0 82.0 -100.0 93.4 82.4
1998 97.8 99.1 66.9 52.1 100.0 100.0 94.1 82.0 -100.0 93.4 82.4
1999 98.1 99.1 67.7 53.2 100.0 100.0 95.5 84.3 -100.0 93.4 82.4
2000 98.1 99.1 67.7 53.2 100.0 100.0 95.5 84.3 -100.0 93.5 82.5
2001 95.7 99.3 69.3 53.2 100.0 100.0 94.1 85.3 -100.0 93.5 82.7
2002 95.9 99.9 71.8 58.5 100.0 100.0 96.1 90.4 -100.0 93.8 83.3
2003 96.5 99.9 75.4 62.8 100.0 100.0 96.7 92.9 -100.0 95 84.9
2004 96.7 99.9 77.1 65.3 100.0 100.0 96.8 93.4 -100.0 95.4 86.6
74.6
74.8
74.8
74.9
75.0
76.7
78.8
79.9
ZENITH
Source: Statistical Handbook, Bureau of Applied Economics and Statistics, 2004, Government of West Bengal.[(N) 24 Pgs means North 24 Paraganas (S) 24 Pgs means South 24 Paraganas Till March, 2004, it became possible to extend electricity to 90-100% of villages in 11 districts out of 17 districts (excluding Kolkata) of West Bengal and to 83.6% of villages of the State as a whole. It is also noticed, from the table that out of thethen 17 districts (excluding Kolkata) in the State only three districts, viz. Bankura Midnapore (undivided) and Purulia, were below the State average at all time points. This indicates that the performance of almost all districts in West Bengal, in terms of the percentage coverage of villages electrified has been significantly high over the period under consideration. This matter can also be clarified by the graphical representation as under (Figure-A): FIGURE-A PERCENTAGE OF VILLAGES ELECTRIFIED IN WEST BENGAL (AS ON 31ST MARCH IN EACH YEAR)
86
Percentage of villages electrified in West Bengal
82
80
77.21
78
76
74 1997 1998 1999 2000 Year 2001 2002 2003 2004
77.3
77.6
78
78.1
80.5
82.7
84
83.6
The relative position of West Bengal among the fourteen major States in India can also be considered for the purpose of our analysis. Table-2 shows the proportion of villages electrified in fourteen major States in India.
95
ZENITH
TABLE2 VILLAGE ELECTRIFIED IN FOURTEEN MAJOR STATES IN INDIA (AS ON 31ST MARCH) (FIGURES IN PERCENTAGE) States Andhra Pradesh Bihar Gujrat Haryana Karnataka Kerala Madhya Pradesh Maharastra Orrisa Punjab Rajastan Tamil Nadu Uttar Pradesh West Bengal All India 94.2 100.0 71.2 100.0 85.6 100.0 75.8 76.6 86.0 1995 100 70.7 100.0 100.0 100.0 1999 100 70.9 100.0 100.0 98.6 100.0 95.4 100.0 73.3 100.0 92.2 100.0 78.6 77.6 86.0 2000 100.0 70.9 100.0 100.0 98.6 100.0 95.6 100.0 74.9 100.0 93.6 100.0 79.0 78.0 86.3 2001 100.0 71.0 100.0 100.0 98.0 100.0 95.6 100.0 75.0 100.0 94.8 100.0 79.4 78.1 86.5 2002 100.0 71.0 100.0 100.0 98.9 100.0 95.8 100.0 75.0 100.0 96.3 100.0 79.5 80.5 86.7 2003 100.0 71.2 100.0 100.0 98.9 100.0 97.3 100.0 79.4 100.0 97.4 100.0 56.9* 82.7 83.8 2004 100.0 71.3 100.0 100.0 98.9 100.0 97.4 100.0 79.5 100.0 98.3 100.0 57.1* 83.6 84.3
Source: Statistical Handbooks, Bureau of Applied Economics and Statistics, 2004, Government of West Bengal. *As per definition of village electrification notified by Government of India in 1997, there has been a downward revision from earlier figures for village electrification. As a result, the percentage had declined. From Table-2 above it is seen that there is a considerable variation in the proportion of villages electrified across the States. Out of fourteen major States in the country eight States viz. Andhra Pradesh, Gujrat, Haryana, Karnataka, Kerala, Maharastra, Punjab and
ZENITH
Tamil Nadu have 100% achievement in terms of the proportion of village electrification. Out of fourteen States in India only four States viz. Uttar Pradesh, Bihar, Orissa and West Bengal are below the all India average at all time points. The relative position of West Bengal as compared to all India average over the period can be depicted in Figure B(1) FIGUREB(1) PROPORTION OF VILLAGES ELECTRIFIED IN WEST BENGAL AS COMPARED TO ALL INDIA AVERAGE
100
80.5 86.7
86.3
86.5
90
76.6
77.6
80
Percentage
70 60 50 40 30
78
78.1
82.7 83.8
83.6 84.3
86
86
W.B. India
20
10 0 1995 1999 2000 2001 2002 2003 2004
0 0
Year
The time series data relating to the proportion of villages electrified in West Bengal has compared to all India is shown in Figure-B(2) from which it is found the trend of progress in this matter over time. From Figure-B(2) it is observed that the proportion of villages electrified in case of West Bengal is slightly lower than that of India as a whole. There is an increasing trend of the proportion of villages electrified in West Bengal over time but in case of India increasing trend is found upto the year 2002 then there is a decreasing trend from 2002-2003 and then increasing.
97
ZENITH
FIGURE-B(2) TREND OF THE PROPORTION OF VILLAGES ELECTRIFIED IN WEST BENGAL AS COMPARED TO ALL INDIA AVERAGE
88
Percentage point
86 84 82 80
West Bengal India
78 76
74
72 70 1995 1999 2000 2001 2002 2003 2004
Year
PER CAPITA CONSUMPTION OF ELECTRICITYAN EFFECTIVE MEASURE TO ASSESS RURAL ELECTRIFICATION: THE WEST BENGAL SCENARIO Per capita consumption of electricity indicates the access and use of electricity as power by the people of an area. It is calculated by dividing the total electricity consumption in Kilowatt by the estimated population figures. A relatively high per capita consumption of electricity, along with many other factors, enables the State to ensure higher development. Data relating to per capita consumption of electricity in eighteen districts of West Bengal can be presented by Table-3
ZENITH
TABLE3 PER-CAPITA CONSUMPTION OF ELECTRICITY IN DISTRICTS OF WEST BENGAL 1995-96 District Per capita consumpti on 84.88 52.88 20.78 57.39 46.08 35.94 76.13 23.30 1040.27 1996-97 Per capita Ran consumpti k on 3 7 16 5 8 10 4 12 1 93.54 55.56 37.55 61.38 55.49 41.26 82.02 27.42 1063.58 Ran k 1997-98 Per capita consumpti on 96.65 82.41 47.63 95.38 55.28 43.02 122.57 30.00 1108.81 Ran k 1998-99 Per capita consumpti on 105.06 81.07 51.72 115.70 60.53 46.67 125.13 28.71 1116.02 Ran k 1999-2000 Per capita consumpti on 108.35 81.84 55.43 119.10 58.99 50.48 147.67 30.54 1082.17 2000-2001 Ran k Tota l of Ran ks Rank (Lowe st to highes t) 4 7 11 5 8 10 2 13 1
Per capita Ran consumpti k on 5 6 10 4 8 11 2 15 1 116.01 74.16 63.00 122.47 56.25 62.12 157.62 30.91 1127.81
Burdwan Birbhum Bankura Midnapor e Howrah Hooghly (N) 24 Pgs (S) 24 Pgs Kolkata
3 7 11 6 8 10 4 13 1
4 6 10 5 9 11 3 13 1
5 6 10 4 8 11 3 14 1
5 6 8 4 11 9 2 15 1
25 38 65 28 52 62 18 82 6
ZENITH
Nadia Murshidab ad Uttar Dinajpur Dakshin Dinajpur Malda Jalpaiguri Darjeeling Cooch Behar Purulia West Bengal
91.70 53.87
2 6
95.77 63.47
2 5
71.79 140.90
7 2
66.37 140.40
7 2
80.38 142.98
7 3
67.46 149.76
7 3
32 21
6 3
22.16
13
23.48
17
16.64
17
19.03
16
22.55
17
22.00
17
97
17
17.72 37.50 26.58 0.07 22.15 22.07 109.55
17 9 11 18 14 15 --
25.55 47.50 26.21 0.07 24.72 27.90 115.81
15 9 14 18 16 12 --
27.63 59.04 35.81 0.05 26.59 19.15 133.00
14 8 12 18 15 16 --
30.78 58.63 40.67 0.06 28.07 18.89 136.67
13 9 12 18 15 17 --
32.95 58.44 41.72 0.07 27.92 48.85 139.79
14 9 13 18 16 12 --
26.93 58.74 45.25 0.09 31.92 36.23 143.97
16 10 12 18 14 13 --
89 54 74 108 90 85
15 9 12 18 16
14
Source: District Statistical Handbooks, 2004 (latest) published by Bureau of Applied Economics & Statistics Government of West Bengal. (N) 24 Pgs North 24 Paraganas (S) 24 Pgs South 24 Paraganas
ZENITH
From Table-3 it is seen that there is a significant variation in per capita consumption of electricity across the districts of West Bengal. It is also seen that there is a very low level of per capita consumption of electricity throughout the State. In Darjeeling district, it is found to be the lowest (less than 1) while it is highest in Kolkata (greater than 1000) because of its fully urbanized nature. Out of erstwhile 18 districts, four districts viz. North 24 Paraganas, Burdwan, Midnapore (undivided) and Nadia, all from South Bengal, occupy respectively the second, fourth, fifth and sixth overall positions in terms of per capita consumption of electricity. Out of six districts of North Bengal only one district, Murshidabad occupies the second best overall position amongst 18 districts of West Bengal in terms of per capita consumption of electricity. In this respect, all districts (except Kolkata) are below the State average. It is worthwhile to mention here that there is a slow but steady increasing trend of per capita consumption of electricity over the years which is shown in Figure-C(1) & C(2). FIGUREC(1) & C(2) TREND OF PER CAPITA CONSUMPTION OF ELECTRICITY IN WEST BENGAL
160
Per capita consumption 133
140
109.55
120 100 80 60 40
20
115.81
136.67
1999-2000
139.79
Year
C(1): BAR DIAGRAM
C(2): TREND CURVE
Though per capita consumption of electricity in West Bengal is slowly improving as envisaged in Figure C(1) & C(2), it is still far behind the per capita consumption of electricity in India as a whole. For the sake of comparison, the data relating to per capita consumption of electricity across the States are presented in Table-4 for showing the relative position of West Bengal amongst the 15 major States of India.
2000-2001
1995-96
1997-98
1996-97
1998-99
143.97
ZENITH
TABLE4 PER-CAPITA CONSUMPTION OF ELECTRICITY IN FIFTEEN MAJOR STATES IN INDIA 1992-93 States Per capita consumpti on 312 97 117 538 507 303 200 281 Ran k 1993-94 Per capita consumpti on 345 95 126 587 491 328 215 311 Ran k 1994-95 Per capita consumpti on 374 98 134 608 467 364 237 335 Ran k 1995-96 Per capita consumpti on 368 98 138 671 503 363 249 367 Ran k 1996-97 Per capita consumpti on 346 104 138 694 504 340 241 367 Ran k 1998-99 Per capita consumpti on 404 123 152 724 503 349 305 398 Ran k Tota l of Ran ks Rank (Lowe st to highes t) 6 15 14 2 4 7 11 8
Andhra Pradesh Assam Bihar Gujrat Haryana Karnatak a Kerala Madhya Pradesh
6 15 14 2 3 7 11 9
6 15 14 2 3 7 11 9
6 15 14 2 4 7 11 8
7 15 14 2 4 9 11 8
7 15 14 2 4 8 11 6
6 15 14 2 4 8 11 7
38 90 84 12 22 46 66 47
ZENITH
Maharast ra Orissa Punjab Rajastan Tamil Nadu Uttar Pradesh West Bengal All India
439 297 684 246 369
4 8 1 10 5
459 313 703 256 386
4 8 1 10 5
500 333 759 270 430
3 9 1 10 5
545 370 760 297 459
3 6 1 10 5
556 309 792 301 468
3 9 1 10 5
594 313 861 329 498
3 10 1 9 5
20 50 6 59 30
3 9 1 10 5
179
12
186
12
204
12
207
12
197
12
196
13
73
12
158 283
13 --
171 299
13 --
175 320
13 --
186 336
13 --
194 334
13 --
211 360
12 --
77 --
13 -www.zenithresearch.org.in 103
Source: National Human Development Report, 2004 and CSO 1998-99
ZENITH
Table-6.11 shows wide variations in per capita electric consumption. The time series data on it shows an increasing tendency in all the States. The State like Punjab, Gujrat, Haryana, Maharastra and Tamil Nadu having high per capita income have high per capita electric consumption. The position of West Bengal in this direction is relatively bad and West Bengal occupies 12th rank among the fifteen major States of India. The relative position of West Bengal in terms of per capita consumption of electricity as compared to all India average over the period under consideration can be shown in FigureD(1) & D(2) below: FigureD(1) & D(2) Per-Capita Consumption of Electricity of West Bengal as Compared to All India Average
Per Capita Consumption
400 350
300
250 200 150
W.B. India
100
50 0
1992-93 1993-94 1994-95 1995-96 1996-97 1998-99
Year
D(1): BAR DIAGRAM FINDINGS Main findings of this study are : i)
D(2): TREND CURVE
The attainment of the State of West Bengal in terms of rural e lectrification, a key component of infrastructure development, is not as good as it is expected under the decentralized governance in the form of PRIs. There is a significant lag between targets setup and results achieved in respect of different variables under consideration. The proportion of villages electrify in case of West Bengal is slightly lower than that of India as a whole but an increasing trend of the proportion of villages electrified is prominent in the State over time. There is a considerable variation in per capita consumption of electricity across the district of West Bengal and this per capita consumption is tuned with a very low level throughout the state. It is also observed that there is slow but steady increasing trend of per capita consumption of electricity over the years.
ii) iii)
iv)
ZENITH
CONCLUDING REMARKS From the analysis so far it may be concluded that the progress of rural electrification is moving at a slow pace in the state as a whole. It is also observed from our previous findings and analysis that there is a significant lag between targets set up and results achieved in respect of different variables under consideration. To narrow down this lag there is an urgent need to accelerate the benefits of rural electrification programmes along with other development oriented programmes already in operation in rural areas like programmes for alleviating poverty, generating gainful employment, ensuring social securities, enhancing standard of health, hygiene, sanitation and education. The State Governme nt should give much attention and effort to implement low-cost micro-power projects in the backward regions utilizing the local resources. There should be an efficient mechanism by which the responsible authorities can make a complete list of unelectrified villages, BPL households and also can produce data relating to distances of unelectrified villages from the nearest grid line. A proper administrative framework combined with devoted political will is required for the proper as well as effective maintenance programme and to launch the new projects and programmes to curb down the existing problem which might act a powerful weapon to control the giant problems of rural unemployment and poverty as well. BIBLIOGRAPHY 1. Government of India (1992); Eighth Five Year Plan Document Vol- I & II, Planning Commission. Karmakar K.G. (2006), Rural Infrastructure Development Fund : A New Deal to Rural India, Kurukshetra, October, pp 68-72. Pal M (2002); Basic Minimum Services: Evolution processes and practices, Kurukshetra, October p. 12-15 Pal M (1999); Capital Formation and Employment Generation in Rural India, Mittal Publication, New Delhi. Rubab S and Kandpal TC (1999); Decentralized Power Generation in Rural India, International Journal of Ambient Energy Vol 20 No. 4 pp 184-192. NRECA (2002); Economic and Social Impact Evaluation study of the Bangladesh Rural Electrification programme, Dhaka : NRECA International Ltd. Pp. 1-49. Chakraborty S and Chakraborty S (2002); Rural Electrification Programme with Solar Energy in Remote Region a Case Study in an Island, Energy Policy, Vol. 30 No. 1 pp. 33-42.
2.
3.
4.
6.
7.
105
5.
ZENITH
8.
Rajpal JD (2006); Electrifying Rural India: Rajiv Gandhi Grammen Vidyutikaran Yojana, Kurukshetra, October pp. 56-59. Government of West Bengal (2004); Statistical Handbooks Bureau of Applied Economics and Statistics. Government of India (2004); National Human Development Report. Government of West Bengal (2004-05); Annual Administrative Report, Panchayats and Rural Development Department.
9.
10. 11.
106
ZENITH
FOREIGN DIRECT INVESTMENT IN THE INDIAN TELECOMMUNICATION SECTOR AN OVERVIEW

G.PREETHA*
*Ph.D Research Scholar, Department of Commerce, Periyar University, Salem-636011, India.
ABSTRACT Foreign Direct Investment is a profiler for the economic develop ment of the country. Inadequacy of foreign direct investment retained many countries as poor country. Encouraging FDI in the form of technology, direct currency loan, consultancies have put the poor state of economy in the path of development. There is sufficient evidence to prove this. This yet another attempt how far FDI put the Indian telecom sector on the way of growth path of the ladder. This paper will examine the current status of foreign direct investment (FDI) in the Indian telecommunication sector and the issues facing foreign companies seeking to invest in the Indian telecommunications sector. The telecommunications sector is growing at a speed of 45% during the recent years. This rapid growth is possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sectors. The paper concludes with a brief econometric examination of the factors influencing the level of FDI, how Go-Green entered in FDI, Telecom and IT in the Indian telecommunication sector. KEYWORDS: FDI, Telecommunication sector. _____________________________________________________________________ INTRODUCTION Indian telecom industry is growing at a great pace & India is expected to become a manufacturing hub for telecom equipment. Indian telecom equipment manufacturing sector is set to become one of the largest sectors globally by 2010. Due to rising demand for a wide range of telecom equipment, particularly in the area of mobile telecommunications, has provided excellent opportunities to domestic and foreign investors in the manufacturing sector. FDI AND ECONOMIC DEVELOPMENT
FDI is considered to be the life blood and an important vehicle for economic development as far as the developing nations are concerned. The importa nt effect of FDI is its contribution to the growth of the economy. FDI has an important impact on countrys trade balance, increasing labor standards and skills, transfer of technology and innovative ideas, skills and the general business climate. FDI also provides opportunity for technological transfer and up gradation, access to global managerial skills and practices, optimal utilization of human capabilities and natural resources, making industry internationally competitive, opening up export markets, access to international quality goods and services and augmenting employment opportunities.
ZENITH
THE ROLE OF FOREIGN DIRECT INVESTMENT The role of Foreign Direct Investment in an economy goes beyond simply easing financial constraints. FDI inflows are associated with multiple benefits such as technology transfer, market access and organisational skills. Consequently, there is an increasing and intense competition between countries to maximize the quantity of FDI inflows. Any successful policy for attracting FDI has to keep this competitive scenario in mind. THE BENEFITS OF FDI INFLOWS CAN BE BROADLY IDENTIFIED AS Bridging the financial gap between the quantum of funds needed to sustain a level of growth and the domestic availability of funds. Technology transfer coupled with knowledge diffusion that leads to improvement in productivity.
108
ZENITH
SECTORS ATTRACTING HIGHEST FDI EQUITY INFLOWS: AMOUNT RUPEES IN CRORES (US$ IN MILLION) Amount Rupees in crores (US$ in million) Ranks 1. 2. 3. 2008-09 (AprilMarch) 2009-10 (AprilMarch) 2010-11 ( AprilSeptember) Cumulative Inflows (April 00 September 10) 114,736 (25,668) 46,285 (10,406) 45,509 (9,988) 40,326 (8,996) 37,216 (8,385) (5,356) 21,647 (4,776) 17,611 (4,039) 13,908 (3,191) 12,049 (2,664) % age to total Inflows (In terms of US$) 21 % 9% 8%
Sector
12,621 13,586 (2,801) (2,844) 5. CONSTRUCTION ACTIVITIES 8,792 13,516 (including roads & highways) (2,028) (2,862) 6. POWER 4,382 6,908 (985) (1,437) 7. AUTOMOBILE INDUSTRY 5,212 5,754 (1,152) (1,208) 8. METALLURGICAL INDUSTRIES 4,157 1,935 (961) (407) 9. PETROLEUM & NATURAL GAS 1,931 1,328 (412) (272) 10. CHEMICALS 3,427 1,707 (other than fertilizers) (749) (362) Note: Cumulative Sector- wise FDI equity inflows (from April 2000 to September 2010) - Annex-B.
4.
SERVICES SECTOR (financial & non-financial) COMPUTER SOFTWARE & HARDWARE TELECOMMUNICATIONS (radio paging, cellular mobile, basic telephone services) HOUSING & REAL ESTATE
28,516 (6,138) 7,329 (1,677) 11,727 (2,558)
20,776 (4,353) 4,351 (919) 12,338 (2,554)
9,506 (2,067) 2,438 (534) 4,803 (1,057) 2,957 (640) 1,523 (332) 3,357 24,276 (729) 825 (180) 4,170 (909) 2,403 (525) 774 (168)
7% 7% 4% 4% 3% 3% 2%
ZENITH
STATUS OF TELECOM SECTOR The Indian Telecommunications network with 621 million connections (as on March 2010) is the third largest in the world. The sector is growing at a speed of 45% during the recent years. This rapid growth is possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sectors. The rapid strides in the telecom sector have been facilitated by liberal policies of the Government that provides easy market access for telecom equipment and a fair regulatory framework for offering telecom services to the Indian consumers at affordable prices. Presently, all the telecom services have been opened for private participation. TELECOM SECTOR: GROWTH & DEVELOPMENT India is the 2nd largest Telecom Market in the World. So there is Plenty of Career Opportunities for young generation. MIT School of Telecom Management Pune, is a Institute which provides world- class telecom business leaders to cope up with the changing scenario in the corporate world. As there is huge growth in teleco m in India, We need telecom managers and we must rise to this challenge. As Telecommunications technology continues to grow and change. This technical knowledge should be gained by education. This course will provide you with technical training on various technologies used to provide voice and data communication networks as well as providing you with training in the management and accounting skills needed by a manager. The other sectors which registered growth in highest FDI inflow during April March 2009 were automobile sector (70 %), housing & real estate (28.55 %), computer software & hardware (18.94 %), construction activities including road & highways (16.35 %) and power (1.86 %). Analysis shows, there were three sectors which registered fall in FDI inflows during the fiscal 2008-09 including services, metallurgical and petroleum & natural gas sectors. FORECAST WORLDWIDE TELECOM STATISTICS AT A GLANCE 2010TELECOM STATISTIC FORECASTS Population 6.9 billion Fixed lines Mobile subscribers Mobile text messages sent Inte rnet users Fixed broadband subscribers 1.4 billion 5.1 billion 4.2 trillion 1.6 billion 580 million
ZENITH
(Source: BuddeComm forecasts, 2010) OPPORTUNITIES The Indian telecom market is expected to grow three fold by 2012 & market size over US $ 8 billion. Moreover the government has set a target of 20 million broadband connections by 2010. The National Telecom Policy 1999 targets tele-density at 15 per cent by 2010. This will entail an investment of US $ 40- 50 billion over the next 6-8 years. There is an immense opportunity for DTH in the Indian market which is almost 10 times compared to the developed countries like the US and Europe. For every channel there is a scope for broadcasting it in at least ten different languages. So every channe l multiplied by ten that is the kind of scope for DTH in the country. Indias media players have all the ingredients to develop a successful DTH industry. So currently there is a lot of pent-up demand in the Indian market for DTH. It is expected that by the year 2010 there will be over 500 million subscribers in the Indian telecom market. Cellular subscriber base is projected to grow at a CAGR (Compounded Annual Growth Rate) of 48 per cent & expected to reach 88 million in 2012. Over 150% growth in telecom services is projected in 5 years. India will require large investments in network infrastructure & India expected to be fasted growing telecom market in the world. Since the project expected to reach 30-40% per year 250 subscribers by 20092010.Total estimate of investment opportunity of USS 22 billion expected over the next five years. Investment opportunity of $22 billion across many areas: Telecom Devices and Software for Internet Broadband and Direct To Home Services Gateway exchange Set top box Modem Mobile handsets and consumer premise equipments Gaming devices EPABX Telecom Software Telecom Services for voice and data via a range of technologies. With the rapid growth of the telecom network, there are further opportunities to expand the telecom infrastructure and research and development. TARGETS SET BY THE GOVERNMENT 1. NETWORK EXPANSION 800 million connections by the year 2012.
ZENITH
2. RURAL TELEPHONY 200 million rural subscribers by 2012 Reduce urban-rural digital divide from present 25:1 to 5:1 by 2010.
3. BROADBAND 20 million Broadband connections by 2010 Broadband with minimum speed of 1 mbps. Broadband coverage for all secondary & higher secondary schools and public health care centres by the end of year 2010. Broadband coverage for all Grampanchayats by the year 2010 Broadband on demand is every village by 2012
4. MANUFACTURING Making India a hub for telecom manufacturing by facilitating more and more telecom specific SEZs. Quadrupling production in 2010. Achieving exports of 10 billion during 11th Five year plan. 5. RESEARCH & DEVELOPMENT Pre-eminence of India as a technology solution provider. Comprehensive security infrastructure for telecom network. Tested infrastructure for enabling interoperability in Next Generation Network.
6. INTERNATIONAL BANDWIDTH
Facilitating availability of adequate international bandwidth at competitive prices to drive ITES sector at faster growth.
GOING GREEN - TELECOM Telecom companies incorporate heavy costs on energy consumption. Besides being expensive, the resources used tax the environment heavily. In the wake of these facts, the ETIG Knowledge Forum in association with Global Group has attempted to articulate the road map to green telecom in India. Constantly evolving professional grade energy management products are leading the revolution and R&D has helped bring costs down. For instance, in the past, to deploy 2G, 3G, 4G technology, one would need separate base-
ZENITH
stations. But today, a single base-station puts all the technology in one place such that one needs to simply change the radio configuration. Companies are on a continuous look-out for alternatives like solar panels and other types of sources of energy and their combinations to achieve cost-effectiveness. Private GSM cellular operator Vodafone Essarhas launched its 3G service in Uttar Pradesh (East) circle, which is one of the largest telecom circles in the country with around 60 million subscribers. More than 5 lakh customers have upgraded to Bharti Aritel's highspeed data or 3G services, from voice-based 2G services, within a month after India's largest mobile operator launched this facility in Bangalore. The company is talking to other operators to offer 3G services in the rest of the 22 circles where Airtel did not have permits. Competitors like Reliance Communications, Vodafone Essar, Tata DoCoMo and Aircel have launched 3G in areas where they hold respective permits. No mobile operator has 3G permits in all 22 circles of the country. TELECOM AND IT The vision of telecommunications in 2020 is a vision of information society built on an edifice where IT and telecommunications merge. Rapid technological convergence has already implied a symbiotic overlap between the development strategies of IT and telecommunications. Part of todays IT is telecom writ large, it flourishes on the telecomnetwork and in turn permits modern day telecommunications to use sophisticated ITsoftware. Hardware is a common platform for both IT and telecom. There is a legacy vision derived from export-success of Indias software that has given rise to optimism regarding Indias growing pre-eminence in global IT canvas. Such a vision builds on a much larger vision of all round development of IT that per vades wide cross-section of Indian economy and society. Deeper analysis shows that there is need for a comprehensive IT development strategy to ensure Indias durable presence in the global software market. As discussion in the subsequent paragraphs will s how, enclave type development of software with exclusive focus on export can not bring about desired benefits if such a strategy ignores the linkages between export and the domestic market. Vision 2020, therefore, is a much larger vision. The development of human resources through IT education, training and skill development is fundamental to the whole process. Two important indicators of IT penetration in Indian market are Internet use and availability of Personal Computers (PCs). There has been significant expansion in both during the last decade POLICY RECOMMENDATIONS The forecasts made on the expectation that the government will fix the impediments that are responsible for the current low of levels of FDI. The remainder of this section focuses on ideas as to what India can do to ensure that actual match, if not better, the medium term forecasts. The forecast methodology used is based on EIU assessments but the forecast model used is not disclosed. It is however most likely a model based on current trends. By way of comparison, China is expected to receive over $95 billion of FDI inflows by 2012 and this is expected to account for 6.7% of total world FDI inflows.
113
ZENITH
FORECAST OF FDI IN INDIA 2008 2009 2010 2011 2012
25 Inward direct investment (US$ billion)
35
40
50
60
1.8 Inward direct investment (% of GDP)
2.1
2.2
2.3
5 Inward direct investment (% of gross fixed investment) -15.0 Outward direct investment (US$ billion)
5.7
5.4
5.7
5.7
-20.0
25.0
-30.0
-35.0
10.0 Net foreign direct investment (US$ billion)
15.0
15.0
20.0
25.0
116.2 151.2 Stock of foreign direct investment (US$ billion)
191.2 241.2
301.2
103 Stock of foreign direct investment per head (US$)
133
166
206
254
8.3 Stock of foreign direct investment (% of GDP)
8.9
9.7
10.6
11.4
ZENITH
Memorandum ite ms 2.07 Share of world inward direct investment flows (%) 2.81 3.09 3.69 4.24
Share of world inward direct investment stock (%)
0.83
1.16
1.36
1.57
Source: Economist Intelligence Unit (EIU) CONCLUSION Indian telecom is worlds fastest growing telecom expected grow three fold by 2012.Tremendous strides in this industry have been facilitated by the supportive and liberal policies of the Government. Especially the Telecom Policy of 1994 which opened the doors of the sector for private players. Rising demand for a wide range of telecom equipment has provided excellent opportunities for investors in the manufacturing sector. Provision of telecom services to the rural areas in India has been recognized as another thrust area by Government .which also helps for the enormous opportunities in this sector. Therefore telecom sector in India is one of the fastest growing sectors in the country and has been zooming up the growth curve at a feverish pace in the past few years. And even the Indian Wireless Market is booming which has plenty of room for growth. Thus the foreign direct investment is very effective in the development of any country. Indian economy is now firmly developed as one of the worlds foremost destinations for FDI. Telecommunication is playing an important role in the inflow of FDI than the other sectors. As above data shows that the FDI in Telecommunication in India without a doubt continues to be one of the most dynamic and fastest growing major telecommunication markets in the world. REFERENCE 1. 2.
Foreign Direct Investment and Economic Activity in India, Indian Dua, P. and A.I. Rasheed (1998). Attracting Foreign Direct Investment (FDI) to India Ramkishen S. Rajana, Sunil Rongalab and Ramya Ghoshc April 2008 The New Consolidated Foreign Direct Investment Policy 2011: Whether Will Prove a Game Changer in Boosting Investor Confidence? Article for Blog Post Writing Competition 2011 by Vaibhav Chaudhary and Deeksha Chaudhary
3.
ZENITH
4. 5. 6. 7. 8. 9. 10. 11.
Foreign Direct Investment in India: A Critical Analysis of FDI from 1991-2005 by Kulwindar Singh www.mightylaws.in/ www.trikal.org/ http://planningcommission.nic.in/ http://www.cci.in/pdf/surveys_reports/ http://www.prointelecto.com/mortgage-credit/list-of- government-companies- intelecom-sector-2011-india/ http://www.indiainbusiness.nic.in/industry-infrastructure/infrastructure/ http://www.ashurst.com002F
116
ZENITH
CONSUMER AWARENESS AT THE BOTTOM OF THE PYRAMID: A STUDY WITH REFERENCE TO THE BANKING INDUSTRY IN INDIA
DR.SURESH CHANDRA BIHARI*
*Professor (Banking & Finance), IBS, Hyderabad, India.
ABSTRACT The financial sector in India has of late evolved in multifarious dimensions affecting the lives of the various strata of the society. With more focus on inclusive growth in the sector, the need for financial literacy was never highlighted so much in the past as it is now. RBI; the regulator of the banking sector in the country, has spearheaded the financial literacy campaign which has also been taken up by other players, particularly the banks. In this connection the study aims to map the present practices adopted by various banks in the area of spreading financial literacy, as part of inclusive growth, particularly of those in the lower income group. In the process, the gaps from desired practices (as per the directives of Reserve Bank of India) as well as gaps prevailing in global standards and practices are measured leading to the possible steps that can be taken to bridge the gap.
INTRODUCTION India is a highly diverse country on basis of demographics consisting of people from highly diverse social and economic profile. As such, the banking needs of these various customers vary to a great extent. Hence, there is a need for banks and other agencies to extend financial education to the masses. Only then they would appreciate the fact that financial inclusion is a continuous process. Efforts to extend literacy to make the common man enabled by being aware of the evolving functional, legal and technical issues cannot be a one-time effort. Financial education primarily relates to personal financial education to enable individuals to take effective actions to improve overall well-being and avoid distress in matters that are financial; and also an inherent motive of customer protection. The RBI therefore intends to advance the cause of financial education in the country as part of an overall strategy. Currently, a process of credit counseling is being encouraged to help all borrowers, particularly those in distress, to overcome current financial problems and gain access to the structured financial system. Financial education can make a difference not only in the quality of life that individuals can afford, but also the integrity and quality of service providers. Financially educated consumers, in turn, can benefit the economy by encouraging genuine competition, forcing the service providers to innovate and improve their levels of efficiency. THEORETICAL SUPPORT Financial literacy programs have proliferated in the past several years, partly in response to increasing complexity in the financial services environment. Other factors leading to the growth in programs include low levels of financial literacy, low savings rates, growing
117
ZENITH
bankruptcy rates and debt levels, and increased responsibility among individuals for making decisions that will affect their economic futures (Parrish and Servon 2006). Researchers have found positive results in cases where financial education is offered in the workplace in conjunction with the employees making decisions about participation in a retirement savings plan (Bayer, Bernheim, and Scholz 1996; Bernheim and Garrett 1996; Loibl and Hira 2004). However, Hilgert and Hogarth (2003) state that the greatest challenges for policymakers, consumer educators, and practitioners in providing financial education is, motivating individuals to execute it. Policy recommendations focus on school or the workplace as primary intervention points (Koide, Murrell, and Seidman 2007), but these recommendations have limited relevance to low and moderate income adults, many of whom do not work or whose jobs do not entitle them to retirement savings. The impact of financial education, while mixed, points to a positive relationship between financial education and financial behaviors and other financial outcomes (Hilgert and Hogarth 2003; Lyons et al. 2006). At the same time, there is a general lack of understanding and knowledge among financial professionals and educators about how to measure program impact (Lyons et al. 2006). Although research on the format, quality, and content of financial education also ranges, financial education experts recommend that the education be active rather than passive. People tend to learn better when they believe that the material is relevant to their lives and when they are able to practice what they learn (Parrish and Servon 2006). The manner in which material is delivered is also important. Traditional approaches to financial education may do a poor job of connecting with individuals and low- income individuals in particular (Ciccotello and Elger 2004). Shirer and Tobe (2004) found that traditional budgeting classes did not do a good job of retaining participants, and therefore piloted a model curriculum incorporating stages of change theory which they found to be effective for motivating people with few financial resources to pursue a healthy financial lifestyle. FINANCIAL EDUCATION Financial education can broadly be defined as the capacity to have familiarity with and understanding of financial market products, especially rewards and risks in order to make informed choices. Viewed from this standpoint, financia l education primarily relates to personal financial education to enable individuals to take effective actions to improve overall well-being and avoid distress in matters that are financial. Financial education assumes importance in this changed financial e nvironment. In considering means to improve the financial status of families, financial education can play a critical role by equipping consumers with the knowledge required to choose from a myriad of financial products and providers. It can make a differe nce not only in the quality of life that individuals can afford, but also the integrity and quality of service providers. Financially educated consumers, in turn, can benefit the economy by encouraging genuine competition, forcing the service providers to innovate and improve their levels of efficiency. The delivery mechanisms for imparting financial education can be manifold. However, the content and delivery of financial education should correspond to the needs of specific subgroups of consumers i.e. the young or elderly, less or better educated, well- or illinformed. Presentations, lectures, conferences, symposia, training courses and seminars can be actively utilized for this purpose. Second, publications in diverse forms, including books, brochures,
118
ZENITH
magazines, booklets/pamphlets, direct mail documents, can also be useful in this regard. Third, leveraging information technology through concerted media campaigns using all possible avenues of mass communication can be expected to impart greater efficacy to the process. Other methods include advisory services from institutions, including the fast growing telecommunication services. The focus of any discussion on financial education is primarily on the individual, who usually has limited resources and skills to appreciate the complexities of financial dealings with financial intermediaries on matters relating to personal finance on a day-to-day basis. The process of economic reforms, which includes deregulation and marketisation, should have educating and empowering the common person to participate in the financial marketplace with knowledge and confidence, as a critical component of public policy. NEED FOR FINANCIAL EDUCATION The need for financial education is felt in the developed and the developing countr ies alike. In the developed countries, the increasing number and complexity of financial products, the continuing shift in responsibility for providing social security from governments and financial institutions to individuals, and the growing importance of individual retirement planning make it imperative that financial education be provided to all. In developing countries, the increasing participation of a growing number of consumers in newly developing financial markets necessitates the provision of fina ncial education if these markets are to expand and operate efficiently. In addition, the substantial growth of international transactions during the last decade, resulting from new technologies and the growing international mobility of individuals, makes the improvement in financial education, increasingly, an international concern. From a regulatory perspective, financial education empowers the common person and thus reduces the burden of protecting the common person from the elements of market failure, attributable to, de facto, information asymmetries. For example, the emphasis on market discipline, as one of the three pillars of banking regulation, especially under Basel II, is best served by participation of financially literate bank customers in the financial marketplace. Financial education can make a difference not only in the quality of life that individuals can afford, but also the integrity and quality of markets. It can provide individuals with basic tools for budgeting, help them to acquire the discipline to save and thus, ensure that they can enjoy a dignified life after retirement. Financially educated consumers, in turn, can benefit the economy by encouraging genuine competition, forcing the service providers to innovate and improve their levels of efficiency. GLOBAL PRACTICES In the context of the developed economies it is an established fact by now that while the young do not save enough and do not fully understand the need for investments for future, many of the elderly tend to feel the pinch of poverty. In this background, priority needs to be accorded to financial education. For example, in the UK, the Financial Services Authority has launched the biggest ever campaign to improve the financial skills of the population and imparting education to enable a better appreciation of the risks and rewards inherent in financial instruments.
ZENITH
The US Treasury established its Office of Financial Education in 2002. The Office works to promote access to the financial education tools that can help all US c itizens make wiser choices in all areas of personal financial management, with a special emphasis on saving, credit management, home ownership and retirement planning. The Financial Literacy and Education Commission (FLEC), established by the Congress in 2003 through the passage of the Financial Literacy and Education Improvement Act, was created with the purpose of improving the financial literacy and education of persons in the United States through development of a national strategy to promote financial literacy and education. The Federal Reserve, along with numerous other federal government agencies, is a member of this commission, which is supported by the Office of Financial Education. The Federal Reserve Systems recently redesigned financial educatio n website, FederalReserveEducation.org, is dovetailed to increase the use of Federal Reserve educational materials and promote financial education in the classroom. The website has material intended for the general public, as well as materials specifically geared toward teachers and high school and college students. It provides easy access to free educational materials, a resource search engine for teachers, and games for various ages and knowledge levels. The other regional Feds also have various interactive online programmes on their website designed to generate awareness about better financial management and assessment of one's own financial position. In Australia, the Government established a National Consumer and Financial Literacy Taskforce in 2002, which recommended the institution of the Financial Literacy Foundation in 2005. Working closely with states and territories, the Foundation has produced a National Curriculum Framework for Financial Literacy to provide benchmarks for teaching the school children the importance of managing their money. In Malaysia, the Financial Sector Master Plan, launched in 2001, includes a 10- year consumer education program. This agenda includes infrastructure and institutional capacity development in the areas of financial education, advisory services, distress management and rehabilitation. For this purpose, the Bank Negara Malaysia in partnership with the financial industry and other government agencies, has introduced the Financial Mediation Bureau, Deposit Insurance Scheme, Basic Banking Services Framework as well as created a new class of licensed Financial Advisers. Savings and education programs are also being promoted in schools. A one-stop centre has recently been established within the central bank for the public to obtain information about financial services in Malaysia and to provide face-to- face customer service on general enquiries and complaints. These initiatives have been reinforced by high levels of transparency and disclosure. In collaboration with the government agencies, Monetary Authority of Singapore launched a national financial education programme (Money SENSE) to enhance financial literacy and self-reliance of consumers. The programme covers three tiers of financial literacy: basic money management covers skills in budgeting and saving as also tips on responsible use of credit (tier I); equipping citizens with the skills and knowledge to plan for their long-term financial needs (tier II); and imparting knowledge about different investment products and skills for investing (tier III). Above all, the OECD has been taking a pro-active initiative in generating awareness about financial education. It has recently released a major international study on financial education titled 'Improving Financial Literacy' encompassing practical guidelines on good practices in
ZENITH
financial education and awareness. These guidelines, in the form of a non-binding recommendation, are designed to help countries devise and implement effective financial education programmes, drawing from the best practices in this area in OECD countries. They promote the role of all the main stakeholders in financial education: governments, financial institutions, employers, trade unions and consumer groups. In addition, they also draw a clear distinction between public information provided by the government and regulatory authorities, and that supplied by the financial analysts. It is also important to devise ways to ascertain whether financial education has achieved its objective, such as generating increased consumer awareness or a changed behaviour, a point I will return to a little later. The balance of evidence, however, suggests that such programmes tend to be effective. For instance, in the United States, it has been observed that workers increase their participation in retirement savings plans funded by employee and employer contributions when the latter offers financial education programmes, whether in the form of brochures or seminars. Consumers who attend one-on-one counseling sessions on their personal finances have fewer delinquencies. INDIAN REALITIES Prior to the initiation of financial sector reforms in the early 1990s, the Indian financial system essentially catered to the needs of planned development. Customers had little choice in financial instruments. The segmented and underdeveloped financial markets meant that their exposure to risk was also limited. In such a situation, customers could employ their basic skills to invest in simple financial products with assured returns, unconcerned about their risks. The relevance of financial education was, at best, limited. Pursuant to the process of globalisation, the economic and financial landscape in India is undergoing a significant transformation. In the process, the economy has become more diversified with new sources of growth. In tandem with these changes, we have seen the modernisation of the financial sector that has also become increasingly more diversified to meet the new requirements of the economy. The financial sector has also increasingly leveraged on advances in technology which has significantly changed the way financial business is being conducted. As market advances continue to expand the range of financial products and services, consumers are being faced with increasingly multifaceted choices and options in the management of their personal finances and exposure to a gamut of risks. In this complex financial landscape, it becomes important for consumers to have improved access to information.
Significant changes have also occurred in the social sphere. While on the one hand, costs of education have increased substantially, the longevity levels have also risen, on the other. Taken together, this implies that the elderly are now required to achieve a constant rebalancing of their consumption and investment portfolios. The increased life expectancy has also compelled employers to move away from ad hoc funded superannuation schemes to defined contribution schemes. At the same time, the advances in information technology have lowered the costs of information acquisition and processing as also of searching a job. This, in turn, has significantly raised job mobility with attendant implications for family size and expenditure patterns. Financial education assumes importance in this changed financial environment. In considering means to improve the financial status of families, financial education can play a
ZENITH
critical role by equipping consumers with the knowledge required to choose from a myriad of financial products and providers. In addition, financial education can help provide individuals with the knowledge necessary to create household budgets, initiate savings plans, manage debt, and make strategic investment decisions for their retirement or for their children's education. Being educated financially also enables individuals to better appreciate the possible contingencies and save for a rainy day, in an appropriate manner. It can empower consumers to become better shoppers, allowing them to procure goods and services at lower cost. This process, in turn, raises consumers' real purchasing power and multiplies the opportunities for them to consume, save, or invest. Having these basic financial planning skills can help families to meet their near-term obligations and maximise their longer-term financial well-being. Financial education is also an integral component of customer protection. Despite concerted efforts, the current state of transparency coupled with the difficulty of consumers in identifying and understanding the fine print from the large volume of convoluted information, leads to an information asymmetry between the financial intermediary and the customer. For example, customers are often penalised for minor violations in repayments, although they have limited redressal mechanisms to rectify deficiencies in service by banks, rendering the banker-customer relationship one of unequals. In this relationship, it is the principal, that is, the depositor, who is actually far less powerful than the agent, that is, the bank. The representations received in regard to levying of unreasonably high service or user charges and enhancement of user charges without proper and prior intimation, and the growing number of customer complaints against the banks, also testify to this fact. In this cont ext, financial education may help to prevent vulnerable consumers from falling prey to financially disquieting credit arrangements. There are however, issues that would need to be addressed upfront in the Indian context. First, the regional profile in our country is diversified, with people across different regions being typically conversant in their vernacular languages. Second, there exists a wide divergence in literacy levels across States. Thus, for instance, in several States and union territories, the literacy rates in 2001 were well above the national average of 65.4 per cent; in contrast, there were also regions where literacy levels have remained perennially low. Third, the dependency ratio varies markedly across states. Fourth, within a State, there are marked differences between rural and urban areas. Fifth, there is also a perceptible variation in the penetration of banking across regions. Taken together, these unique conditions in our country create a role for the public policy to devise enabling mechanisms to improve the levels of financial education, reckoning the regional differences. To the extent the common person is better able to understand and appreciate the need for financial education the task of the financial regulators is greatly simplified, lowering the overall costs of regulation. POSSIBLE APPROACHES It is an imperative of increasing globalisation that the difference in the pace of growth of the financial sector and financial education be minimized. There are several ways to go about this process. For purposes of illustration, these can be classified as institutional mechanisms, delivery mechanisms and de-centralization of efforts.
122
ZENITH
INSTITUTIONAL MECHANISMS As regards the institutional mechanism, there is near consensus on the fact that any attempt at expanding the outreach of financial education needs to start at the grass-roots. Present day school pass-outs need to be a lot more financially literate than their parents were, if they are to manage their personal finances successfully through life. In addition, universities and business schools have an important role in training financial specialists able to provide the public with high quality advice on financial matters. Yet another channel for imparting financial education could be the workplace where it can reach most of the working adults. It would, therefore, be a potent mechanism for providing information about a number of financial services such as retirement schemes and insurance. The role of financial institutions in providing financial education, not only to the clients but also to their own staff, needs to be better defined and further promoted. More information is needed at both international and national levels on good programmes and practices and on the ways to promote access to financial services by harnessing the role of non- government organizations (NGOs). International organisations are well-positioned to coordinate international surveys and studies on the various aspects of financial education, to evaluate the comparative efficiency of various financial education programmes, and to develop guidelines and good practices for policymakers for implementation. International agencies can also provide a forum where countries can compare and discuss strategies to educate consumers about financial issues. Several governments and central banks, either directly or indirectly, are actively involved in the provision of financial education about consumer credit, investment, and other financial issues, often as part of a public policy campaign to improve the protection of individual borrowers and investors, for instance, as part of the ongoing pension reform efforts. Exchange of experiences amongst central banks would thus be productive. DELIVERY MECHANISMS The delivery mechanisms for imparting financial education can be manifold. However, the content and delivery of financial education should correspond to the needs of specific subgroups of consumers that is, the young or elderly, less or better educated, well- or illinformed. Presentations, lectures, conferences, symposia, training courses and seminars can be actively utilized for this purpose. Second, publications in diverse forms, including books, brochures, booklets/pamphlets, direct mail documents, can also be useful in this regard. magazines,
Third, leveraging information technology through concerted media campaigns using all possible avenues of mass communication can be expected to impart greater efficacy to the process. Other methods include advisory services from institutions, including the fast growing telecommunication services. Not only the supply of financial education, but also the demand is very important. Most delivery channels are good for those who are already interested in particular topics. An important challenge is to create demand for financial information and education.
ZENITH
DECENTRALIZATION OF EFFORTS Given the unique conditions in our country, any attempt at expanding the outreach of financial education should take cognisance of the role of regional differences in language, workforce and penetration of finance. Thus, banks with strong presence across different regions could explore the possibility of introducing a local- language based web-site providing details of facilities for customers. Second, in recent times, the explosion of the internet has altered the relationship between financial organisations and its clientele. Organisations can examine ways to better communicate with both the prospective and existing clients by enriching the information content of their website on the lines of those practiced in the mature markets. Third, credit counseling can be a potent tool for financial entities to expand the reach of financial education. Fourth, it might be of interest for reputed organisations like the National Council of Applied Economic Research (NCAER) to conduct surveys at periodic intervals to ascertain the degree of consumer awareness about financial products and services. The findings emanating from such studies could be shared with financial entities to enable them to address the gaps in their service delivery and promote informed decisionmaking. Finally, several bodies, such as the Financial Planning Standards Board of India (FPSBI), a professional standards setting body constituted with public-private enterprise, are reportedly making proactive efforts to uniformly regulate personal financial planning practitioners. Much more of such efforts will be required to guide the development and promotion of standards for financial planning professionals to benefit and protect the public in the country. RBI GUIDELINES Reserve Bank of India has asked both the private as well as public sector banks to set up more Financial Literacy and Credit Counseling Centers (FLCC) in every district and has suggested the lead banks to hold a public meeting every quarter in each district to address grievances of the bank customers. RBIs high level committee headed by deputy governor Usha Thorat, made this recommendation in its report based on the feedback that barring a few, most of the operational centers were not performing the intended role. On the other hand, they were promoting the banks products, providing investment advice etc. The guidelines were issued to the banks in February 2009 to follow the model scheme for managing the FLCCs. The committee also suggested drawing a roadmap to provide banking services at least once a week to each village having population over 2000 by 2011. ROLE OF THE RBI The RBI, on its part, wishes to advance the cause of financial education in our country as part of an overall strategy. The strategy pursued in this regard can be elucidated as follows. Concerted efforts are underway to expand the reach of formal finance in view of recent emphasis on financial inclusion. This needs to be buttressed with financial education to generate greater customer awareness and understanding of financial products and services. Concurrently, a process of credit counselling is being encouraged to help all borrowers, but particularly those in distress to overcome current financ ial problems and gain access to the
124
ZENITH
structured financial system. The Banking Codes and Standards Board of India (BCSBI) has also been instituted which is expected to ensure that the banks formulate and adhere to their own comprehensive code of conduct for minimum standards of banking services, which individual customers can legitimately expect. And finally, a Banking Ombudsman Scheme has been instituted for redressal of grievances against deficient banking services, covering all the States and Union Territories. The RBI has also been exploring the possibility of instituting a Depositor Protection Fund (DPF). The Fund can be utilised towards generating greater awareness for the common man on issues relating to financial education and counselling. This could b e complemented with providing greater role to our Regional Offices to promote financial education in their respective jurisdictions. CONCLUSION The international co-operation of the kind which OECD and PFRDA have embarked upon is a welcome development. For a developing nation like India, the endeavor of Financial Literacy is a huge step forward. Steps should be taken to promote the cause in order to make the whole process profitable; both for the financial institutions as well as customers. REFERENCES Bayer, P. J., B. D. Bernheim, and J. K. Scholz (1996) The Effects of Financial Education in the Workplace: Evidence from a Survey of Employers, Working Paper No. 5655. Cambridge, MA: National Bureau of Economic Research. Bernheim, B. D. and D. M. Garrett (1996) The Determinants and Consequences ofFinancial Education in the Workplace: Evidence from a Survey of Households Working Paper No. 5667. Cambridge, MA: National Bureau of Economic Research. Ciccotello, J. D. and John F. Elger (2004) A Strategic Management Approach to Personal Financial Planning. Greenwood Village, CO: National Endowment for Financial Education. Fox, Jonathan, Bartholomae, Suzanne, and Jinkook Lee (2005) Building the Case for Financial Education Journal of Consumer Affairs, 39 (1): 195214. Hilgert, Marianne A. and Jeanne M. Hogarth (2003) Household Financial Management: The Connection Between Knowledge and Behavior Federal Reserve Bulletin, 90 (July): 09322. Koide, Melissa, Karen Murrell, and Ellen Seidman (2007 ) Public Policy Ideas to Improve Financial Education and Help Consumers Make Wise Financial Decisions Washington, DC: New America Foundation. Loibl, Cazilia and Tahira K. Hira (2005) Impact of Self-Directed Financial Learning on Financial and Career Satisfaction of White-Collar Employees Financial Counseling and Planning 16 (1): 1121.
125
ZENITH
Lyons, Angela C., Lance Palmer, Koralalage S. U. Jayaratne, and Erik Scherpf (2006) Are We Making the Grade? A National Overview of Financial Education and Program Evaluation Journal of Consumer Affairs, 40 (2): 208235. National Endowment for Financial Education (2004) Motivating Americans to DevelopConstructive Financial Behaviors. Greenwood Village, CO: National Endowment for Financial Education. Parrish, Leslie and Lisa Servon (2006) Policy Options to Improve Financial Education: Equipping Families for Their Financial Futures. Issue Brief, New America Foundation, Asset Building Program.
126
ZENITH
CORPORATE SOCIAL AND ENVIRONMENTAL REPORTING AND DISCLOSURES:THE INDIAN BANKING EXPERIENCE
RAKHI SINGH*; DR. DEEPAK TANDON**
*Associate Professor in Economics , IILM Institute for Higher Education, Gurgaon. ** Professor , Lal Bahadur Shastri Institute of Management, Sector 11, Dwarka,New Delhi.
ABSTRACT The present paper is an attempt to comment and reflect on the current practices of CSR reporting and disclosures. The objective is to highlight the evolution of practices of such reporting together with the achievements and shortcomings. The rationale and justification for such a paper is that in the Indian context no research evidence is available which documents the main drivers, constraints and likely or actual outcomes of CSR reporting. The paper clarifies the main strands of debate that not much work is available on CSR reporting, however, after the introduction of GRI Guidelines in the last one decade or so, many companies have started bringing out sustainability reporting in standardized format for the benefit of the stakeholders; this is just a beginning since the GRI Reporting Guidelines are being subscribed on a voluntary basis. The paper analyzes the current practices across diverse patterns of ownership and structures to draw out the salient d ifferences in reporting and disclosures and offers a few suggestions in the Indian Banking sector . Also the paper raises certain pertinent issues on the intended outcomes of such reporting and the future direction of non- financial reporting. The paper in place of conclusions identifies gray areas for future research in the Indian Banking context. For this paper we have relied on secondary source of information. KEYWORDS: SR-Sustainability Report, Social Environmental aspects, Instruments, Practices, Determinants, Issue, (GRI)-Global Reporting Initiative, JEL Classification: M 40, 41. ___________________________________________________________________________ I. INTRODUCTION The agenda for sustainability has been evolved since 1990s as the world began to be confronted with newer types of problems and the dialogue between North and South became very intense. Most countries governments and the multilateral institutions/ organizations have of late placed this agenda as an important public policy issue. The concept first arose in the Stockholm Conference on Human Environment (1972) which led to the establishment of the United Nations Environment programme (UNEP). In 1987 the UN established the World Commission on Environment and Development which prepared a report Our Common Future. The Commission defined sustainable development as development that meets the needs of the present without compromising the ability of the future generations to meet their own needs. In 1992 the Rio declaration on Environment and Development incorporated several important principles of sustainability. In 1997 John Elkington provided the concept of Triple
127
ZENITH
Bottom - Line (TBL) explaining further the dimensions of sustainability. In 1999, the Global Reporting Initiative (GRI) issued Sustainability Reporting Guidelines. The notion of social and environmental disclosure has been explained by certain theories such as legitimacy theory. Ownership structure and size of firm influence the amount of such disclosures (Cormier and Gordon 2001). Earlier the need for social information was highlighted by Belkaoui (1976), Anderson and Frankel (1980), Epstein and Freedman (1994), Preston (1978), Chan and Milane (1999), Murry, Power and Gray (2006), Gray et al (1995), and Marcus J Milane (2001). Watts and Zimmerman (1978, 1986 and 1990) provided insights into positive accounting theory or political costs perspective. Theoretical insights into social and environmental reporting and disclosure practices are also provided by Deegan (2002), Deegan et al (2002), Gray, Kouhy and Lavers (1995), Makus and Dennis (2002), Milane and Chan (1999). (II)MULTILATERAL ENVIRONMENT AGREEMENTS The Multilateral Environmental Agreements have played an important role in clarifying the issues in the global debate on the linkages between the environment and trade. More than 200 such agreements have come into effect already in the world. The main agreements with significant environment component are: CITES 1975; Montreal protocol 1987; BASEL Convention 1992; Convention on biological diversity 1993; FCCC 1994; PIC 1998; and Cartangena protocol on Bio-safety. These agreements include process and production methods; environments standards and competitiveness; eco- labeling and environment management systems certification programmes; agriculture subsidies; intellectual property rights, TRIPS and the Convention on biodiversity; investment; government procurement; and MES and WTO, among others. Aside from the institutional issues the aspects of environment protection are also covered in the regional trade agreements. 1 (III)ENVIRONMENTAL GOODS AND SERVICES (EG & S) The OECD countries have eliminated trade barriers in trade in EG & S and encouraged more trade flows from the developing countries. Even the WTO members prefer products such as bicycles and biodegradable materials. The OECD classified EG & S into four categories: pollution management; cleaner technologies and products; resource management; and environmentally preferable products. In Doha Round of negotiations member countries agreed on the need to reduce and eliminate tariffs and non-tariff barriers on EG & S (2001). (IV)INDIA In India TERI is engaged in research and advocacy for environmental protection. CRISIL, a rating agency has assisted ABN AMRO BANK to select firms for the first ever Sustainable Development Mutual Fund in India. So far of a total of 2600 firms reports registered with the GRI, only 13 reports are from India.
Environ ment and Trade: A Handbook UNEP and the IISD 2000
128
ZENITH
The Center for Science and Environment India has commenced a Green Rating Project for such industries as cement, automobile etc. There are specific public polices and firm level programmes required in the future in India to popularize sustainability measures. Indian industries need to adopt measures to establish positive links between the environmental and economic performance. Companies with a proper track record of CSR have started introducing sustainability reports in India. In India a newer legislation called the Right to information Act 2005 is passed by the Parliament which makes it obligatory on the part of institutions to disclose information as and when demanded. Therefore, legal framework development may augment in the future the rights of the shareholders and primary/secondary stakeholders in minimizing the adverse effects of information asymmetry. (V)GPPI REPORT According to a study of the Global Public Policy Initiative 2006 there has been a marked improvement in the form, and level of non- financial reporting. 2 However, growth in the non- financial reporting practices remains concentrated in the OECD countries. Companies in these countries can commit more resources for developing sophisticated mechanisms and processes. The increase in reporting is confined mostly to the large MNCs (Fortune 500), but in the merging context both in the developing and developed world such practices need to be adopted by a large number of different types of companies. In Europe CSR reporting was done in Germany, the Netherlands and France. In France and Netherlands, CSER is now made mandatory. Compared to the US reports European reports focused on employees and internal stakeholders and less on community and environmental aspects. According to the KPMG Surveys the figure improved from 13% in 1993 to 42% in 2002 and a beginning was made towards sustainability reporting. In Japan during 2002-05 there has been substantive progress in sustainability reporting. (VI)DRIVERS OF NON-FINANCIAL REPORTING The main drivers of non-financial reporting are: strategically managing reputation and brand, reacting to NGO pressures, motivating staff, responding to pressures from financial industry, philanthropy, and realizing cost effectiveness. However, there is a mixed evidence of NGO activity in this regard. Also it is uncertain if cost effectiveness is an important driver for non- financial reporting. Moreover, the impact of financial markets on the incidence of non- financial reporting is overestimated according to the study.
Markus Palenberg, Wolfgong Reinicke, and Jan Mart in Witte: trends in non-financial reporting: paper prepared for the IM EP, Div ision of technology, Industry and Economics (DTIE). www.gppi.net
129
ZENITH
While the recent growth in socially responsible investment is encouraging, the CSR community may overestimate this trend. It is also possible that the government pressures may serve as an important driver but overtime it may taper off. While the private sector is opposed to government intervention, the NGOs want to push the government to offer a mandatory framework for mainstreaming non- financial reporting. However, the approaches to mandatory regulation differ across the countries since the legal and regulatory frameworks are different. National laws in most countries are not designed to publish non- financial reports. USA has no specific law but there may be sector specific laws such as the laws for the extractive industries. The EUs Transparency Directive is a regulatory development. (2005) France is the only country to make non- financial reporting mandatory for the publicly listed companies; however, no penalties are imposed for non-compliance. The second wave of nonfinancial reporting is expected to happen in the emerging and transition economies, especially among the large companies who will access international capital and financial markets. (VII)INTERNATIONAL INSTRUMENTS A whole range of sustainability related codes have been developed such as; UN Global compact; The Global Sullivan Principles; OECD Guidelines for Multinational Enterprises; Caux Roundtables Principles for business; The CERES Principles; ICC Charter of Sustainable Development; The UN Declaration of human Rights; Social Accountability 8000; Ethical Trading Initiatives Base Code; ICC international Codes of Marketing and Advertising Practice, The UN Convention against Corruption. The AS8001-2003 Fraud and Corruption Control Standard; OECD principles of Corporate Governance; The UK Combined Code; Sarbans-Oxley Act; among others. Sustainability reports are prepared by companies based on the Global Reporting initiative Guidelines (GRI 1997). GRI offers a generally accepted set of criteria for sustainability reporting. By 2006 more than 1000 companies from 60 countries had registered with the GRI. Corporations are also now obtaining external assurance statements since some aspects of sustainability reporting are verifiable. 3 (VIII)FACTORS INFLUENCING CSER Research on industry characteristics has focused on environmental reporting. Corporate size is an important influence on corporate reporting practices. Also the stage of the life cycle of the company, especially maturity stage may be an important determinant of corporate reporting practices. Views on whether there is any positive link between disclosures and profitability are divided. In the general context we may emphasize political, economic, legal and institutional factors of a nation which may influence reporting practices. The cultural context and ethical values of a society are important influence on the reporting system by corporations. The presence or absence of public policy instruments is yet another influence on the reporting practices. As
3
Brain Ballou Dan l Heitger, Charles E Landes The Future of Corporate Sustainability Reporting Journal of Accountancy December 2006202 6 ABI/INFORM global p 65
130
ZENITH
for the internal context the factors which influence reporting practices are: leadership and corporate governance practices. 4 DETERMINANTS
company
In countries where the legal enforcement is relatively weaker there will be issues of inadequate reporting and disclosure practices. Also it depends upon the particular legal system adopted by a nation or state, for instance, North America adopted the common law system whereas some countries in Europe preferred civil law while others in the continental Europe adopted code law or case law (France, Germany and Scandinavian countries). The second group of determinants is the issues of financial market in terms of whether companies take the debt or stock market route for investments. In such a case companies will need to adopt specific reporting practices and the quantum of disclosures will be relatively higher than those firms which do not access the financial markets. Further many countries have adopted privatization policy, liberalization of foreign investment and listing in foreign stock exchanges implying a greater need for compliance with the existing international standards of financial and non- financial disclosures. The third determinant of disclosures is product market issues: companies may be concerned that disclosures may affect their relative competitive positions. The greater the investment in technology and higher the scale of production, the better the prospects of sustained profitability and therefore, greater will be the expectations of the market for detailed CSER. There are two groups of companies: one that uses internationally accepted codes on CSR to define the content of their CSER or seek help of consultant to make monitoring more realists, and the other group is those who outsource their part to consultants. . 5 COSTS AND BENEFITS OF CSER COSTS Direct costs are the ones incurred on preparing personnel for reporting and disclosures as per the internationally prescribed format. Such costs include financial outlay and allocation, training and development, recruitment and selection of personnel for sustainability divisions, documentation and preparatory information framework, compilation of internal documents, physical monitoring and verification of internal information, costs of compliance with the specific regulations, and all other costs associated with overall internal and external coordination. The indirect costs are those associated with internal transfers of personnel for CSR and sustainability activities, and allocation of other organizational resources, among others. Indirect costs are also the implicit costs involved in internal and external organization communication with the key stakeholders; the process costs.
Carol A Adams 2002 Internal organizational factors influencing corporate social and ethical reporting: beyond current theorizing Accounting, Auditing, and Accountability Journal vol. 15 No. 2 pp 223-250 5 UNCTA D 2006: Disclosure of the Impact of Corporations on Society: Current Trends and Issues Trade and Development Board UNCTAD 2003, pp 3-22
131
ZENITH
BENEFITS The main benefits of CSER are: Encouraging voluntary reporting and disclosures practices Transparency and accountability Adoption of internationally compatible reporting framework Capacity building of personnel for sustainability practices Better and improved compliance of the legal and regulatory framework Higher levels of awareness among the internal stakeholders Improved corporate communication practices of companies Better brand equity, corporate image and greater degree of market acceptance Demonstration of social leadership and creation of social capital MEASUREMENT OF THE IMPACT OF CSER MEASURING IMPACT ON INTERNAL STAKEHOLDERS One aspect of measurement is the level of awareness, interest, knowledge, and information system that develops within an organization; this is measurable over time; because the personnel are specifically assigned the task of preparing such reports. Further quantification is possible depending upon the purpose of CSER; if the purpose is only providing information to all the stakeholders regardless of their background and requirement then there are issues in evaluation. Moreover, if a company has not involved stakeholders at the agenda formulation and implementation stages then the company is not equipped to measure the actual impact on stakeholders, Also who benefits and how from CSER is unknown for the reason that there are diverse range of stakeholders and far too dispersed to whom the CSER can reach; hence, there is an issue of outreach; companies claiming extensive outreach in rural and backward areas are at a loss to explain how their CSER can reach these stakeholders and in what format. Such dissemination requires innovative strategies for instance; some corporations have local language websites dedicated to educate stakeholders since information technology has reached the rural areas. MEASURING IMPACT ON EXTERNAL STAKEHOLDERS If the only purpose of CSER is to comply with regulatory requirements then there is no need to measure the impact because it is a matter of sheer technical and legal requirements which are met by the corporations. If the purpose is to inform the shareholders, major customers, government and international business partners that a company is voluntarily subscribing to the GRI3 Guidelines on sustainability reporting then the purpose is purely commercial and that of impression management. Since other competitors in business have introduced sustainability reports and the budgets are significant reporting is inevitable. Also some
132
ZENITH
corporations anticipate reactions from the civil society and may bring out a report with a limited objective of preempting the regulators and civil society. In such a case there is no need for measurement because the intentions of CSER is publicly known or established. All such issues arise since in absolute terms the current practice of CSER in emerging markets like India are supply driven and not demand driven; it is a situation where the shareholders like institutional shareholders who can demand CSER are also not demanding from the corporations where they have significant financial stakes. Therefore, measurement should highlight both the demand and supply side. One of the issues in determining the impact on the key stakeholders is the discretion available to the management in not reporting incidents and events which may generate adverse reaction from the key stakeholders, especially shareholders, suppliers and customers. Only in the case of environmental reporting where regulator requires information on safety at work place, such information is provided. CAPACITY BUILDING FOR CSER Presently the process of capacity building for preparing CSER is somewhat limited. One reason is that most companies whether public or private have initiated such reports only in the last decade or so. Second reason is that any company, especially public sector company has relatively stronger practices of environmental management systems and as such the reports are having a greater weightage on environment as compared to social sector. Third important reason is that companies do not have special staff or core expertise in preparing such reports and even in many cases carrying out CSR activity itself. In view of the above limitation some companies both in the private and public sector have recently sponsored their staff to CII-ITC center for sustainability. While this is very positive development, the requirements in the industry are growing and therefore the CSR staff or sustainability personal has to be trained in house by industry, for which they may collaborate with consultancy firm and/or with academicians. II. OBJECTIVES OF THE STUDY (a) To study the key Challenges in the Indian Context through critical analysis (b) To analyse why the Indian service companies like Banks are practisising CSER as per GRI3 guidelines. ( c) To study the areas of sustainability indicators in comparison with GRI G3 reported by the Indian Banks in Bank Nifty . III. RESEARCH METHODOLOGY Seconadry data from NSE Bank Nifty consisting of 13 Banks has been taken . Content analysis has been done with a signal or the inclination in sustainability reporting in a systematic manner rather than getting records accurate on any issues. Therefore emphasize in this study was placed to explore the quantity of sustainability indicators of sample banks rather than its actual quality . Consistent with our research questions, we commenced on the GRI G3 along with FSS guidelines applicable fo r financial institutions/ Banks to determine the areas, the extent of disclosures on the different areas in the annual reports. Structured
133
ZENITH
analysis on five general categories of environmental and social performance including (a) environment (b) labour practices and decent works (c) human rights (d) product responsibility and (e) society was done IV.ANALYSIS DONE TABLE A ON THE BASIS OF DISCLOSURES CONTENT ANALYSIS WAS DONE General areas of disclosure Percentage of Percentage of Disclosing Banks n=13 disclosing companies
Environmental Labour Practices and HR related issues Product responsibility Human Rights Society
82% 90% 27% 0% 100% NSE BANK Nifty Banks annual reports 2009-10,2010-11 TABLE B
On the basis of Sustainability disclosure specific for financial service sector (FSS) among sample banks GRI-FSS Indicators Percentage of disclosing banks (n=12) FS1. Policies with specific environmental and social components applied to business lines- 0 FS2. Procedures for assessing and screening environmental and social risks in business lines 8.33 FS3.Processes for monitoring clients implementation of a nd compliance with environmental and social requirements included in agreements or transactions. 0 FS4.Process(es) for improving staff competency to implement the environmental and social policies and procedures as applied to business lines. 8.33 FS5.Interactions with clients/investees/business partners regarding environmental and social risks and opportunities. 0 FS6.Percentage of the portfolio for business lines by specific region, size
134
ZENITH
(e.g. micro/SME/large) and by sector. 100 ** We may give Factors FS upto n depending on GRI guidelines V. CONCLUSIONS The following observations in regard to the current Indian scenario may be noted: Most Banks have not yet integrated social and environmental activities of their operations. No Bank addressed Human Rights . The Banks gave highest weightage to HR related work. Very often there is an evidence of enviro nmental sensitive industries focusing their reports on technical and legal compliance matters. Very few Indian Banks have defined monitoring mechanism and information systems which provided data for CSER reporting. Further Banks subscribing to the international standards/codes/instruments have subscribed to GRI guidelines for reporting. Banks who are listed in foreign stock exchanges and those with significant FDI component in India have started CSER practices. The present practice of CSER by Indian companies is in conformance to the established principles of Triple Bottom Line concepts and practices. Institutional shareholders in India have conventionally played a passive role. They have not used debt contracts with the borrowers as means of corporate go vernance process. Since they have inside information of companies, unlike the retail shareholders, they are in a better position to identify questions and challenges in CSR and CSER practices. Stake holding class is too dispersed and heterogeneous to have any significant bargaining power vis-a-vis government and large corporations and unless the stakeholders have urgency, legitimacy and power, large companies are unlikely to address their requirements.This will have a direct impact on the Banking Sector 6 VII. RECOMMENDATIONS (I)FUTURE DIRECTIONS In the Indian context both the leading private and public sector companies with an established track record of CSR and sustainability have started including CSER disclosures on a voluntary basis. Mostly such companies have also been subscribing to international codes and standards such as the UN Global Compact, GRI, SA8000, AA1000, and several others on a voluntary basis. Further corporations listed on foreign stock exchanges and those with significant foreign collaboration have to adopt financial and non- financial reporting and
6
Mitchell R.K., Agle B R, Wood D J, 1997 Toward a theory of stakeholder identification and salience; Defining the principle of who and what really counts, Academy of Management Review, 22(4) 853 -886
135
ZENITH
disclosure practices which are international compatible. Since most established corporations in India have significant global presence, they are required to prepare CSER report. The other reasons for introduction of CSER are greater consumer awareness, civil society activism, globalisation, greater evidence of competition, better corporate communication and stakeholder engagement, among others. Moreover a greater degree of integration of financial and non-financial reporting and disclosure practice is now possible with the introduction of International Financial Reporting Standards. Also with the advent of ISO 26000 focus on issues like Human Rights is aligned with the need and scope for improved governance policy and content. In the recent past the Ministry of Corporate Affairs GOI and the Ministry of Heavy Industry and Public Enterprise have issued the Guidelines for Corporate Governance and Corporate Social Responsibility separately; while these guidelines initially applied to the listed companies as is presumed by many, they are applicable for the unlisted companies as well if they are to really contribute to developing a positive culture of corporate governance and social respectability in India. In India a lot of capacity building process and content will be required for the financial and management accountants and auditors if the objective of realignment of financial and non- financial reporting is to be addressed adequately. The Government of India through respective Central Ministries has invested significantly in hundreds of schemes and programmes for the social sector and they are presently grappling with the issue of social audit. There is a considerable scope for identifying a cadre o f social and environmental auditors, not only for the government schemes but also for the CSR and sustainability activities of the central public enterprises and the large private companies. REFERENCES Anderson, J. C., & Frankle, A. W. (1980). Voluntary Social Reporting: An Iso-Beta Portfolio Analysis. The Accounting Review, 55(3), 467. Belkaoui, A. (1980). The Impact of Socio-Economic Accounting Statements on the Investment Decision: An Empirical Study. Accounting, Organizations and Society, 5(3), 263. Chn, C. C. and Milne, Markus, J. . (1999). Investor reactions to corporate environmental saints and sinners: An experimental analysis. Deegan, C. (2002). The legitimising effect of social and environmental disclosures -- a theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282.
Deegan, C., Rankin, M., & Tobin, J. (2002). An examination of the corporate social and environmental disclosures of BHP from 1983-1997: A test of legitimacy theory. Accounting, Auditing & Accountability Journal, 15(3), 312. Epstein, M. J., & Freedman, M. (1994). Social Disclosure and the Individual Investor: Accounting, Auditing & Accountability Journal, 7(4), 3. Gray. R, Kouhy. R. and Lavers. S. (1995), Corporate Social and Environmental Reporting: A Review of the Literature and a Longitudinal Study of UK Disclosure, Accounting, Auditing and Accountability, Vol. 8, No 2, pp.47-77.
ZENITH
Markus, J. M., & Dennis, M. P. (2002). Securing organizational legitimacy: An experimental decision case examining the impact of environmental disclosures. Accounting, Auditing & Accountability Journal, 15(3), 372. Milne, M., J. , & Chan, C. C. . (1999). Narrative corporate social disclosures: How much of a difference do they make to investment decisionmaking? The British Accounting Review, 31(4), 439. Murray, A., Sinclair, D., Power, D., & Gray, R. (2006). Do financial markets care about social and environmental disclosure? Further evidence and exploration from the UK. Accounting, Auditing & Accountability Journal, 19(2), 228 Ness, K.E., & Mirza, A.M., (1991), Corporate Social Disclosure: A Note on a Test of Agency Theory, British Accounting Review, Vol. 23, No. 3, pp. 211-217. Patten, D. M. (1991). Exposure, legitimacy, and social disclosure. Journal of Accounting and Public Policy, 10(4), 297-308. Patten, D. M. (1992). Intra-Industry Environmental Disclosures in Response to the Alaskan Oil Spill: A Note on Legitimacy Theory. Accounting, Organizations and Society, 17(5), 471. Patten, D. M. (1995). Variability in social disclosure: a legitimacy-based analysis. Advances in Public Interest Accounting, 6, 273-285. Watts. R.L. & Zimmerman. J.L., (1978), Towards a Positive Theory of the Determination of Accounting Standards, The Accounting Review, Vol. 53, No 1, pp. 112-134. Watts. R.L. & Zimmerman. J.L., (1979), The Demand for and Supply of Accounting Theories: The Market for Excuses, The Accounting Review, Vol. 54, No 2, pp. 273-305. Watts. R.L. & Zimmerman. J.L., (1986), Positive Accounting Theory, Prentice-Hall, London. Watts. R.L. & Zimmerman. J.L., (1990), Positive Accounting Theory: A Ten Year Perspective, The Accounting Review, Vol. 65, No 1, pp. 131-156.
137
ZENITH
SOCIO-ECONOMIC DETERMINANTS OF INTER-DISTRICT MIGRATION IN BOTSWANA, 2001: A TENTATIVE ANALYSIS

M.K. SUKUMARAN NAIR*
*Department of Economics, University of Botswana.
ABSTRACT There has been considerable inter-regional migration in Botswana for a long time now. According to the 2001 Census, there was a great deal of variation in inter-district migration in Botswana ranging from 0.52 percent to 20 percent. A significant chunk of migration was to selected destinations. Rural to rural, town to rural and rural to town migration has also been quite high, but without much inter category variation. Among the migrants 49 percent were women and among women 45 percent were pregnant at the time of migration. A simple regression model has been employed to find out the most important factors that explain interdistrict migration. The selection of the model was based on theoretical considerations as well as availability of data. Educational facilities, degree of industrialization and job opportunities were found to be significant explanatory factors. Another explanatory factor though with lower explanatory power has been the availability of health facilities. ___________________________________________________________________________ INTRODUCTION For millennia humans have been willing to travel large distances in search of a better life for themselves and their descendants, often incurring a great material and psychological costs (Poot et al, 2008). Inter regional and international migration has been a subject of great interest for economists and demographers. People move from one place to another either for a short period or for a long time to come. These movements are motivated by a number of factors. Some of the movements are for better economic opportunities while some are due to cultural, social, environmental and political reasons. Generally the movement of population is in search of a better environment in the destination than in the origin. But sometimes one finds counterstream migration from origins which assure a better quality of life to destinations that represent a lower quality of life. The present study proposes to make an analysis of inter-district migration in Botswana, a land locked country situated in Southern Africa, based on the 2001 Census data. After a brief over view of the literature in the area of migration modeling, we proceed to a discussion of the pattern of migration in Botswana. It will be followed by the formulation and estimation of a simple linear regression model that seeks to explain the economic determinants of interdistrict migration in Botswana. The final part of the paper will be a discussion of the estimates and their implications. OVERVIEW OF LITERATURE The spatial pattern of population movements is a complex phenomeno n. There could be a wide variety of motivational factors accounting for such movements. Data are generally scarce on the motivational factors that underpin the movements and this constrains modeling
138
ZENITH
efforts (Stillwell, 2008). Only very few countries like Norway have tried to link explanatory factors into their population projects (Stambol, 1991). Greenwood (1997), Cushing and Poot (2004) and Stillwell (2008) give an excellent review of the recent modeling exercises by different scholars. Economic demographers talk about two different approaches to migration modeling: micro and macro approaches (Stillwell and Congdon, 1991). The micro models are essentially discrete choice models involving a choice as to stay in one place or move. This type of models is conceptually linked to utility maximization models. In other words, in micro models the destination choice is based on individuals characteristics as well as the attributes of the destinations. Macro models, on the other hand, deal with aggregate flows of population to destinations with distinctive macroeconomic characteristics such as job availability, low inflation etc. There are both push and pull factors explaining migration patterns (Lee, 1966). Labour market, housing, environment al factors etc. o ften appear as the explanatory variables in the macro models. Mathematical and statistical gravity models that link population movements with regional characteristics and distances have been tested at different levels of sophistication (Wilson, 1970; Stillwell, 1978; Fotheringham, 1983, Congdon, 1991; Flowerdew, 1991, Bohara and Kreig, 1996, and Fotheringham et al., 2001). Champion et al.(2002) and Rees et al. (2004) constructed a series of models taking into account as much as 139 potential determinants of outmigration and 69 potential determinants of destination choices. Taking its cue from the above models and recognising the constraints on data availability, the present study seeks to develop a simple macro linear model to explain inter-district migration in Botswana. PATTERN OF INTER-DISTRICT MIGRATION The pattern of migration usually found historically all over the world has been from rural to urban areas. Table 1 show that the in migration in Botswana is mainly to a few centres. A few cities and towns account for nearly 50% of the in migration. But what is surprising is that there is as much or more outmigration from these major cities. Take the case of Gaborone alone. Out migration (20.02% of the total outmigration) is more than in migration (17.01%). TABLE1: INTER-DISTRICT IN AND OUT MIGRATION IN BOTSWANA, 2001 Districts Inmigration Districts Outmigration (%) (%) 20.02 17.01 Central Serowe/Palapye Central Mahalapye Central Bobonong Central Boteti Inmigration Outmigration (%) (%) 8.12 7.03
Gaborone
Francistown
7.47
7.03
5.60
5.00
Lobatse
3.45
2.80
3.04
3.20
Selebi-Phikwe
4.61
4.51
1.63
2.27
ZENITH
Orapa Jwaneng Sowa Town KanyeMoshupa Barolong Ngwaketse West SOUTH EAST Kweneng East Kweneng West Kgatleng Total
0.94 1.79 0.52 5.88 2.31 0.84 2.97 6.81 1.87 2.86
1.34 1.92 0.50 5.20 2.35 0.77 4.61 9.31 1.77 3.70
Central Tutume NORTH EAST
5.99 2.94
5.83 3.01 3.51 1.95 1.25 0.34 1.28 0.05 1.14 1.33 100.00
Ngamiland East 3.81 Ngamiland West Chobe Ngamiland Delta Ghansi CKGR Kgalagadi South Kgalahgadi North 1.90 1.01 0.09 1.41 0.04 1.14 0.94 100.00
Source: Estimated from Table V111.1, p.243-44, 2001 Population and Housing Census, National Statistical Table Report. Moreover, as Table 2 shows the ranks of the percentages of in migrants and out migrants from district to district are more or less the same. This indicates that there is no specific destination that makes the population stay. TABLE 2: DISTRICT-WISE RANK OF % OF IN MIGRANTS AND OUT MIGRANTS, BOTSWANA, 2001 Districts Rank of Rank of Districts the % of the % of out In migrants migrants 1 1 Central Serowe/Palapye Central Mahalapye Rank of the Rank of the % of out % of In migrants migrants 2 3
Gaborone
Francistown
140
ZENITH
Lobatse
10
14
Central Bobonong Central Boteti Central Tutume NORTH EAST
11
12
Selebi-Phikwe Orapa Jwaneng Sowa Town KanyeMoshupa Barolong Ngwaketse West SOUTH EAST Kweneng East Kweneng West Kgatleng
8 24 18 26 6 15 25 12 4 17 14
9 20 16 26 6 15 25 8 2 12 10
19 5 13
16 5 13 11 17 23 27 22 28 21 23
Ngamiland East 9 Ngamiland West Chobe Ngamiland Delta Ghansi CKGR Kgalagadi South Kgalahgadi North 16 22 27 20 28 21` 23
Source: Estimated from Table V111.1, p3.243-44, 2001 Population and Housing Census, National Statistical Table Re11port.7 Table 3 sheds more light on this. It presents data of migrants by the highest level of education and training completed. There is as much rural to town as town to rural migration. What is more, rural to rural migration is also as much or more than rural to town migration. This is really baffling. Several theories have been advanced to explain the rural- urban migration pattern. One of the most important of these is the Harris Todaro model (1970) which explains that the rural urban migration in developing countries is due to the wage gap that exists between these two sectors. As we do not have data on rural urban wage rates, we are not in a position to ascertain the validity of the Michael-Todaro model for Botswana. Some scholars (Das Gupta, 1987; Banerjee and Newman, 1997) have tried to explain the urban to rural migration in terms of the theory of social capital. The argument is that the rural sector may be relatively attractive in its ability to provide social support, insurance, emergency credit, and use of common property that the urban sector might fail to deliver (Ray, 1998). As we do not have adequate data on these aspects of social capital in Botswana, we are not in a position to offer any credible explanation on the Botswana situation in these terms.
ZENITH
TABLE 3: PATTERNS OF RURAL-URBAN MIGRATION IN BOTSWANA, 2001 Origin-Destination No. of Migrants Two years No. of Migrants Two years and Over by the Highest and Over by the Highest School Level Completed Level of Training Completed 6967 24945 21085 23133 2725 8307 5357 6772
Town to Town Town to Rural Rural to Town Rural to Rural
Source: 2001 Population and Housing Census, National Statistical Table Report, Tables V111.7 to V111.14, pp.258-72 When we look at the gender of migrants, we see that 49.53% of them are fema les. What is more interesting is that of the female migrants, 45.43% are pregnant women. No direct data are available on this. We, however, estimated this from the category unborn from the Census data. . For a substantial number of out migrants, the origin is shown as unborn. These unborn were obviously in the womb of their mothers when out migration took place. If each of such unknown people is assumed to represent a pregnant woman, we can conclude that the number of the unborn is more or less equal to the number of pregnant women. Thus we arrived at the estimate of the number of pregnant women migrants. METHODOLOGY The study seeks to determine the causes of inter district migration in Botswana. These could be economic, social, cultural, climatic, and environmental and a variety of other factors. But mainly due to data constraints we propose to consider only the economic variables in the present study. We take into account only such economic factors as economic conditions, labour market conditions, health facilities, transportation facilities, education facilities, and the degree of industrialization. But appropriate district-wise data relating to these factors are not readily available. Hence we have used proxies for some of these. We formulated a simple linear egression model as follows: Yi = a + b1 X1i +b2 X2i +b3 X3i +b4 X4i+b5 X5i +ei Where Yi = the number of in migrants; X1i = the length of roads in kilometers which represent transportation facilities; X2i = No. of operating enterprises which represents the degree of industrialization. X3 i = No. of students enrolled in primary and secondary levels representing education facilities; X4i = the proportion of economically active population in paid seasonal and nonseasonal work;
ZENITH
X5i = No. of health facilities such as clinics and hospitals; and ei = the random error term. The data were obtained from the following publications: 1. 2001 Population and Housing Census, National Statistical Table Report , Government of Botswana, 2. Health Statistics Reports, C.S.O. Government of Botswana; 3. Education statistics, C.S.O. Government of Botswana; 4. Transport and Communication statistics, C.S.O. Government of Botswana; and 5. Enterprises and Establishments Register Digest, C.S.O. Government of Botswana. We had to reclassify some of the data, particularly those relating to health facilities, length of roads, number of students enrolled and number of operating enterprises so as to match with the Census classification of districts. Moreover, we had to club some of the d istricts so that we have matching data for all variables. DISCUSSION OF EMPIRICAL RESULTS Though the study is based on a small sample size, the adjusted R2 of the regression estimate is very high, 0.986. As is shown in Table 4, except road length, all other explanatory variables were found to be significant at 5% level. As the Variance Inflation Factors are low, no multicollinearity is found among the explanatory variables. Education facilities, the degree of industrialization and job opportunities have been found to be the key determinants of interdistrict in migration in Botswana. The health facilities also were found to be significant, but it has only a low explanatory power. The reason why road length is not a significant factor could be that the variable does not adequately capture transport facilities. TABLE 4: ESTIMATION RESULTS DEPENDANT VARIABLE: NO. OF IN MIGRANTS Independent Variables Constant Road length No. of Enterprises Student Enrollment Proportion of Paid Workers Standardised Coefficients -0.5191.409 0.006 0.500 0.589 0.267 t-statistic -4.392 0.140 9.779 10.053 5.089 1.841 2.702 3.548 2.844 Variance Factor Inflation
ZENITH
Health Facilities R-Squared Adjusted R-Squared F-statistic
0.118 0.990 0.986 204.905
2.452
2.393
CONCLUSION The present study has a number of limitations such as lack of adequate data on many a relevant variable and insufficient sample size. In spite of these, it has brought out some interesting findings. Firstly, a significant chunk of migration in Botswana is to a few selected destinations. Secondly, there is as much in migration as out migration between the origins and destinations. In other words, migration is not a one way traffic to only a few destinations. Thirdly, the pattern of migration does not fo llow a single trajectory from rural to urban. On the contrary, there is considerable town to town, town to rural and rural to rural migration flows which question the popular notion of rural to urban migration. . Among the motivating factors, transport facilities were not found to be significant at ll. Educational facilities, the degree of industrialization and job opportunities were the most significant explanatory factors for in migration. Most of these findings are tentative and needs to be further verified using more detailed data. The rural to rural, town to rural and rural to town migration flows are almost the same and therefore, there is a need for further research in this area that will have important implications for development policy formulation in Botswana. REFERENCES Banerjee, A.V. and A. Newman (1998), Information, the Dual Economy and Development, The Review of Economic Studies, 65(4), 631-653 Bohara,A.K. and R.G. Kreig (1996), A Zero- inflated Poisson Model of Migration Frequency, International Regional Science Review, 19 (3), 211-222. Champion, A.G., G. Bramley, A.S. Fotheringham, J. Macgill and P.H. Res (2002), A Migration Modelling System to Support Government Decision- making in Sitwell, J. and S. Geertman (eds), Planning Support Systems in Practice, Berlin: Springer Verlag, 257-278.
Congdon, P. (1991), An Application of General Linear Modelling to Migration in London and the South East, in Stillwell, J. and P. Congdom (eds), Migration Models: Macro and Micro Perspectives, London: Belhaven Press,113-136. Cushing, B. and J. Poot (2004), Crossing Boundaries and Borders: Regional Science advances in Migration Modelling, Papers in Regional Science, 83 (1), 317-338. Das Gupta, M. (1987), Informal Security Mechanisms and Population Retention in Rural India, Economic Development and Cultural Change, 36, 101-120.
ZENITH
Flowerdew, R. (1991), Poisson Regression Modelling of Migration, in Stillwell, J and P. Congdon (eds) op cit. Fotheringham, A.S. (1983), A New Set of Spatial Interaction Models: The Theory of Competing Destinations, Environment and Planning A, 15, 15-36. Fotheringham, A.S., T. Nakaya, K. Yano, S. Openshaw and Y. Ishikawa (2001), Hierarchical Destination Choice and Spatial Interaction Modelling : A Simulation Experiment , Environment and Planning A, 33, 901-920.A Greenwood, M.J. (1997), Internal Migration in Developed Countries, in Rosenzweig, M.R., and O. Stark (eds), Handbook of Population and Family Economics, Volume IB, Amsterdam: Elsevier, 647-720. Harris, J. and M. Todaro (1970), Migration, Unemployment and Development: A TwoSector Analysis, American Economic Review, 40, 126-142. Lee, E. (1966), Theory of Migration in Hause, P. H. and O.D. Duncan (eds), The Study of Population, Chicago: University of Chicago Press, 282-297. Poot, J, B. Waldorf and van Wissen (2008), Migration in a Globalised World: A New Paradigm, in Poot, J, B. Waldorf and van Wissen (eds), Migration and Human Capital, UK and USA: Edward Elgar, 3-28. Ray, D. (1998), Development Economics, Princeton: Princeton University Press. Reees, P.H., A.S. Fotheringham and A.G. Champion (2004), Modelling Migration for Policy Analysis, in Stillwell. J and G. Clarke (eds), Applied GIS and Spatial Analysis, Chichester: Wiley, 259296. Stambol, L (1991), Migration Projection in Norway: a Regional Demographic-economic Model in Stillwell, J. and P. Congdom (eds), op cit, 287-308. Stillwell, J (2008), Inter-regional Migration Modelling: A Review, in Poot, Jacques, Brigitte Waldorf and Leo van Wissen (eds), op cit, 29-48. Stillwell, J (1978), Interzonal Migration: Some Historical Tests of Spatial Interaction Models, Environment and Planning A, 10, 1187-1200. Stillwell, J and P. Congdon (eds)(1991), Migration Models: Macro and Micro Approaches, London: Belhaven Press. Wilson, A.G. (1970), Entropy in Urban and Regional Modelling, London: Pion.
145
ZENITH
CREDIT RISK ASSESSMENT SYSTEM IN BANKING SECTOR

DR. S. SUDALAIMUTHU*; RAMASAM Y PL**
*Reader, Department of Banking Technology, Pondicherry University, Pondicherry. **MBA Banking Technology, Department of Banking Technology, Pondicherry University, Pondicherry.
ABSTRACT This article highlights the credit risk assessment software in banking sector to compute the capital requirements to overcome the credit risk. The main objective of this system is to develop software to assess the credit risk and to compute the capital requirements to overcome the credit risk. Object Oriented Analysis and Design (OOAD) methodology is used for developing the software. Domain analysis is used to identify the basic controls, boundary and entity need to make the system. The data manipulator helps in manipulating the data in an efficient and significant manner. The scalability and reusability of the system is high and hence any changes in the future can be easily done. The system has been designed in UML and developed using object oriented technology. KEYWORDS: Credit risk Assessment, Object Oriented Analysis and Design (OOAD), Graphic User Interface (GUI), Domain Analysis and Data Manipulator. ______________________________________________________________________________ INTRODUCTION Credit risk is defined as exposures to loss relating to a change in the credit worthiness of a borrower/counterparty which may impact the borrowers/counterparty's ability to fulfill its obligations under a contractual agreement. Changes in credit worthiness can be due to changes in the counterparty's credit rating or a default. In a banks portfolio, losses shoot from outright default due to inability or unwillingness of a customer or counterparty to meet commitments in relation to lending, trading, settlement and other financial transactions. Alternatively, losses result from reduction in portfolio value arising from actual or perceived deterioration in credit quality even when default has not taken place. STANDARDIZED APPROACH FOR CREDIT RISK The standardized approach is an approach used to assess the credit risk. The risk weighted assets are to determined by segregating the various assets as prescribed by RBI and the corresponding risk weights are to be applied linking with the internal and external ratings of the advances and with the accepted credit risk mitigate like security or deposit if any given by the customer.
146
ZENITH
COMPUTATION OF CAPITAL FOR CREDIT RISK Exposures (fund based and non fund based) are to be categorized as per asset class. Non fund based exposures have to be first converted to credit equivalent by multiplying them by specified credit conversion factor. The exposures have to be assigned rating by recognized external credit rating agencies. Based on rating and asset class, risk we ight has to be applied to the net exposure value to arrive at risk weighted assets. Risk weighted assets multiplied by the minimum capital adequacy ratio will give the capital required under credit risk. NEED FOR THE AUTOMATED SYSTEM OF CREDIT RISK ASSESSM ENT Since it is mandatory, all banks in India should assess their credit risk and should compute the capital requirements to overcome it every three months. The banks are manually collecting the data from credit department and segregating it manually. Gone are the days of usage of ledger for storing the details of the advances. Almost all the banking activities are done by a computerized system. So software that will automatically assess the credit risk and computes the capital requirement to overcome it is needed. OBJECTIVE To develop a software to assess the credit risk and to compute the capital requirements to overcome the credit risk. To study the credit risk assessment and its standardized approach followed by the banks. To design a new automated system to assess the credit risk. To generate a systemized report for both fund based and non fund based exposures. METHODOLOGY Object Oriented Analysis and Design(OOAD) method is used for developing the software. The drag and drop approach is employed as it easy to adapt any modifications in the future. Scalability is also the key feature of OOAD and it is the major factor for any software in banking since it should be made compatible and linked with the existing software. It also facilitates reusability and maintainability. Object-oriented analysis (OOA) applies object- modeling techniques to analyze the functional requirements for a system. OOA focuses on what the system does Object-oriented analysis (OOA) looks at the problem domain, with the aim of produc ing a conceptual model of the information that exists in the area being analyzed. Analysis models do not consider any implementation constraints that might exist, such as concurrency, distribution, persistence, or how the system is to be built. The result of object-oriented analysis is a description of what the system is functionally required to do, in the form of a conceptual model. That will typically be presented as a set of use cases, one or more UML class diagrams, and a number of interaction
ZENITH
diagrams. The purpose of object oriented analysis is to develop a model that describes computer software as it works to satisfy a set of customer defined requirements. Object Oriented analysis process consist of the following steps Identifying actors Use-case Analysis o Activity diagram o Use case diagram Domain Analysis o Sequence /Collaboration diagram o Domain class diagram IMPLEMENTATION The implementation stage is one of the crucial stages in evaluation of the software product. Much importance is given to it and additional care is exercised for installation in the organization. The plan of the implementation aims at overcoming the flaws of the earlier system. The word implementation means changing old system to new system that is adapting new features. Each successive version can incorporate the capabilities of previous version and provides additional processing function. System implementation specifies the functional and performance test that must be performed and standards to be applied to the source code, internal documentation and external documentation such as the design specification, the test plan, the users manual, the principles of operation, and the installation and maintenance procedures. The desired functions and modules of the project are specified. SOFTWARE JUSTIFICATION A Software Justification is a complete description of the behavior of the system to be developed. It includes functional requirements that describe all the interactions the users will have with the software. In addition to functional req uirements, it also contains nonfunctional (or supplementary) requirements. Non- functional requirements are requirements which impose constraints on the design or implementation. The main purpose of the Credit risk assessment software is to assess the credit risk and to compute the capital requirements to overcome the credit risk. It also helps the bankers to achieve the IIIrd pillar of BASEL II norms(market discipline), that is reporting the credit risk of the bank to all . It will report the fund based, non fund based exposures, credit risk and capital requirements separately and the software has the utility to save it as pdf file and also the print option to maintain the hard copy record.
148
ZENITH
OVERVIEW In brief, the Software Justification document for the system covers the following two sections GENERAL DESCRIPTION This section describes the general functionality desired in common terms. SPECIFIC DESCRIPTION This section describes about both the functional and non-functional requirements of the system, the functional requirements specification from functionalities point of view. The nonfunctional requirements performance, etc. are dealt in detail corresponding sub sections. IDENTIFYING ACTORS Following actors are identified Employee The employee is the one who need to assess the credit risk and capital requirements to overcome it. Database The database contains the various tables used to assess the credit risk of the bank. USE CASES ANALYSIS ACTIVITY DIAGRAM An activity diagram is a variation of state chart diagram in which the states are activities representing the performance of operations and the transitions are triggered by the completion of the operations. An activity diagram is used to model an entire process. It provides a view of flows and explains about the operations involved among several classes. It gives a detailed view about where the process begins and how the process ends and what are the various verifications that should be made.
149
ZENITH
FIG 1.1 CREDIT RISK ASSESSMENT
150
ZENITH
The activity diagram for credit risk assessment describes the overall activities that can be performed by the employee of the bank. The figure 1.1 depicts the following steps 1. The employee has to clear the database and should fetch the data 2. Then the customer id is to be matched in the customer data and credit data. 3. With the exposure type the corresponding credit conversion factor is to be matched and multiplied so as to bring the fund based and non fund based exposures to a normalized same scale. 4. With the asset type and rating the corresponding risk weights for all the advances are found. 5. The amount covered by the security should be detected from the balance. 6. If the security value is greater than the exposure then the risk weighted asset is null else the difference will be the risk weighted asset for the individual advance. 7. The difference value should be detected with the guaranteed value and same like security value should be followed. 8. The risk weighted assets should be classified with asset type and e xposure type and the selected report should be segregated and should be generated.
FIG: 1.2 USE CASE DIAGRAM

151
ZENITH
USE CASE DIAGRAM A use case analysis is the most common technique used to identify the requirements of a system (normally associated with software/process design) and the information used to both define processes used and classes (which are a collection of actors and processes) which will be used both in the use case diagram and the overall use case in the development or redesign of a software system or program. The use case analysis is the foundation upon which the system will be built. FETCHING DATA ACTORS: Employee, Database. PURPOSE: To compute the risk weighted assets. FLOW OF OPERATION: The employee fetches the new data from the database and the data is fetched from various tables of the database PRECONDITION: May clear the existing data POSTCONDITION: After fetching data the employee can see the risk weighted assets of all the individual advances. RISK WEIGHTED ASSETS ACTORS: Employee, Database. PURPOSE: To view the sum of risk weighted assets for all the asset type and exposure type. FLOW OF OPERATION: Select the type of report that is to be generated PRECONDITION: The employee should first fetch the data, then only he can select this option. POSTCONDITION: After selecting one, the employee will get the desired report. FUND BASED EXPOSURE On selecting this the system will check for all the fund based asset types and calculate the sum for all individual asset type from all individual risk weighted assets that was calculated by fetch data operation
ZENITH
NON FUND BASED EXPOSURES On selecting this system will check for all the three types of non fund based exposure types and the sum of nine sub groups of each type and generate the report with sub total and grand total. CREDIT RISK & CAPITAL COMPUTATION On selecting this system will compute the credit risk and capital requirements to overcome it and will generate a report. DOMAIN ANALYSIS SEQUENCE DIAGRAM The sequence diagram depicts how the sequences of operations happen in the system. It also explains the process initiated by the user and what is the impact done by the activity of the user. It also helps in finding what are the possibilities that can happen in the system.
FIG 1.3 SEQUENCE DIAGRAM
153
ZENITH
The following is the sequences adopted by the system. 1. The employee has to command to clear the database and in response the existing records are cleared leaving the field as the same. 2. The system will acknowledge the execution of the employees command. 3. The employee should then prompt the system to fetch data. 4. The system will fetch data from the entire table and compute the risk weighted assets for all the individual advances and store in the database and is retrieved back. 5. The risk weighted assets are displayed to the employee. 6. Then the employee should select the type of report generated. 7. The system will generate the report from database and it will be displayed. DOMAIN CLASS DIAGRAM Domain analysis is the analysis which should be useful to identify the basic control, boundary and entity need to make the system. The visual representations of conceptual classes or real situation objects in a domain are figured out in fig 1.4. Following domain classes have been identified for the Credit Risk Assessment. GRAPHICAL USER INTERFACE (GUI) A graphical user interface (GUI) is a type of user interface item that allows people to interact with programs in more ways than typing such as computers. A GUI offers graphical icons, and visual indicators, as opposed to text-based interfaces, typed command labels or text navigation to fully represent the information and actions available to a user. The actions are usually performed through direct manipulation of the graphical elements. Here the GUI components consist of Input screen, and report. DATA STORE
This class is a pool of many classes as their attributes flow into this. The main classes that flow into this are customer, account, exposure, asset, security, guarantee. A)CUSTOMER The customer details will be stored in the database. It includes a unique id for every customer. The type of the customer like retail of corporate and the credit rating both short term and long term of the customer by CRISIL, CARE, ICRA, FITCH will also be saved in the database. The industry type like infrastructure, commercial real estate etc will also be stored in the customer table of the database.
ZENITH
B) ACCOUNT The account class consists of account id, the customer id of the customer, balance or advance amount, undrawn commitments, date of loan etc. The account id is unique for all the advances of the bank. The customer id is unique only for the customers but the account id is unique for each credit of the customer. All the data should be stored in the database. C) EXPOSURE The exposure may be fund based like jewel loan, car loan, personal loan, employees salary advance, housing loan or non fund based like financial guarantee, performance guarantee and letter of credit etc. The type of the exposure and the respective credit conversion factor will be stored in the database. D) ASSET All the advances are assets to banks. And the advances that does not earn are called as Non Performing Assets and the advances to state government and central government are called riskless assets. Similarly depending upon to whom the advances are given the asset can be classified as thirty six asset types and a inner subgroup of the credit rating that each company attained. These data should also be stored in the database. E) SECURITY For certain advances the customer may given a security like cash deposit, gold, collateral etc. After performing all the haircuts the value of the security should be stored in the database. It is not the actual value but the realizable value of the security should be stored in the database. F) GUARANTEE ECGC is a corporation that may extend guarantee to some companies. In case of the default the sum assured will be paid by the ECGC. So in such a case the guaranteed amount should also be stored in the database. DATA MANIPULATOR
The data manipulator helps in manipulating the data in an efficient and significant manner. The manipulator plays a significant role in connecting both the above group of classes i.e.it manipulates with the data that is displayed on the GUI and directs it to the data store pool after the completion of the validation process. The groups of classes that flow into the data manipulator are RWA computation, Report, Capital computation. A) RWA COMPUTATION The risk weighted assets for all the advances will be calculated by this class. The risk weights and credit conversion factor value will be checked from the above classes and finally the
ZENITH
risk weighted assets will be determined in the RWA computation. It is also stored in the database for future references. B) REPORT Depending on the selection of the fund based and non fund based, the calc ulation will be performed at the back end with the risk weighted computed above. It will calculate the sum of risk weighted assets for all the thirty six asset types and sort itself to the exposure type to which it falls. C) CAPITAL COMPUTATION The capital computation is the class which computes the credit risk and the capital required to overcome it. This calculation is also performed from the data computed by the RWA computation class.
FIG 1.4 DOMAIN MODEL DIAGRAM FOR CREDIT RISK ASSESSMENT SYSTEM
156
ZENITH
OBJECT ORIENTED DESIGN The aim of Object Oriented Design is to design classes which are identified during the analysis phase according to the user interface. During this phase it can identify and define additional objects and classes that support implementation of the Online Banking Information System. In the Object Oriented Design, the designs are broadly classified into three divisions namely: Architectural Design Package Diagram Detailed Design ARCHITECTURAL DESIGN Architecture design is the high level design in which we can identify the overall architecture and control passing in Credit Risk Assessment. It will be used by the Bankers in Banking Institutions in order to analyze the performance and utilization of online banking system.
User Interface
Application Middleware
Database
FIG: 1.5ARCHITECTURAL DIAGRAM ARCHITECTURAL DIAGRAM OF RWA COMPUTATION MODULE This architectural diagram for administrator module deals with the operations performed by the employee. Using unique id like customer id the rating of the customer is matched with the account id of all the advances acquired by the customer. Then the rating matched and formed in the new table should be matched with the rating table so as to find the risk weights of various assets and then the secured and guaranteed amount should be judged and thus the individual risk weights should be found and stored in the database and should be displayed for all the account ids. The credit conversion factor are matched and stored to the table formed to compute the RWA.
ZENITH
FIG 1.6 ARCHITECTURE DIAGRAM FOR RWA COMPUTATION MODULE PACKAGE DIAGRAM A Package diagram in the Unified Modeling Language depicts the dependencies between the packages that make up a model. Package diagrams can use packages containing use cases to illustrate the functionality of an Online Banking Information System. Package diagrams can use packages that represent the different layers of a Credit Risk Assessment System to illustrate the layered architecture of a software system. PACKAGE DIAGRAM FOR ACCESS MODULE This package deal about the access to the system which can be done at the initial stage once the fetch data is clicked by the employee. It will merge the customer data and account data and now the credit rating of all the account will be framed in a single table.
ZENITH
FIG 1.7 PACKAGE DIAGRAM FOR ACCESS MODULE PACKAGE DIAGRAM FOR ANALYSE MODULEs These package deals about the processes done and stored in the table of the database and calculation of the risk weighted assets with the information of the customers. The exposure type table will be checked to find the credit conversion factor value for all the exposures. Then asset type will be matched with the risk weights by credit rating and the risk weights are multiplied to the exposures. The value of the security is then detected from the found exposure and the unsecured value is thus determined. The value of the guarantee is detected from the unsecured exposure and checked if the guarantor is ECGC and in such a case a proportion of it should be added to the risk weighted assets.
FIG 1.8 PACKAGE DIAGRAM FOR ANALYZE MODULE

159
ZENITH
PACKAGE DIAGRAM FOR PROCESS MODULE These package deals about the information are used for preparing the Report of the bank; with all these details available in the database the admin can produce the Report for the bank. This helps in measuring the performance of the bank.
FIG 1.9 PACKAGE DIAGRAM FOR PROCESS MODULE DETAILED DESIGN DETAILED CLASS DIAGRAM FOR RWA COMPUTATION MODULE: This class diagram represents the detailed classes of the RWA computation module as shown below. The RWA computation class uses the account class and customer class to gather the data with the credit rating. Then process the information about the customers. Thus it computes the risk weighted assets for all the individual accounts stored in the database.
160
ZENITH
FIG: 1.10 CLASS DIAGRAM FOR RISK WEIGHTED ASSETS COMPUTATION DETAILED CLASS DIAGRAM FOR CAPITAL COMPUTATION MODULE This class diagram represents the detailed classes for the report module. With the informations the employee can produce the fund based, non fund based and capital requirements to overcome the credit risk report for the bank which helps in measuring the performance of the bank.
FIG 1.11 CLASS DIAGRAM FOR CAPITAL COMPUTATION

161
ZENITH
MODULES OF THE PROJECT COMPUTATION OF RISK WEIGHTED ASSETS Using unique id like customer id the rating of the customer is matched with the account id of all the advances acquired by the customer. Thus the matched infor mation from both the table will be stored in the new table. Then the non fund based exposure type should be matched with credit conversion factor which will be stored in the different table. And also there is no factor for fund based exposure. So as to justify the working of single logic for both fund based and non fund based exposure the multiplying factor should be considered as one for fund based and respective for non fund based exposures. Then the rating matched and formed in the new table should be matched with the rating table so as to find the risk weights of various assets and then the secured and guaranteed amount should be judged and thus the individual risk weights should be computed and stored in the database and should be displayed for all the account ids. CAPITAL COMPUTATION MODULE For this the user should again click the button so as to segregate all the risk weighted assets to all possible exposure types that are predefined. There should be two options separately for generating the report for fund based and non fund based exposures. When credit risk is clicked, the system should automatically compute the sum of both the fund based and non fund based exposures thus finding the credit risk and will perform the calculations for finding the capita l computation to overcome the credit risk. The user can use the save and print option to save the report as pdf file and filing the hard copies in records respectively. Therefore the system will helps in achieving the third pillar of basel ii norms. The system can generate individual report for fund based, non fund based and capital computation. The screen shots of the outputs have been documented below.
162
ZENITH
FIG 1.12 OUTPUT FOR FUND BASED EXPOSURES

163
ZENITH
Fund based exposures is the actual advances given by the bank. Depending upon the risk weights, sum of exposure of all the individual asset type will be computed.
FIG 1.13 OUTPUT FOR NON FUND BASED EXPOSURE

164
ZENITH
The financial guaranteed exposures, performance guaranteed exposures and letter of credit are the non fund based exposures. The sum of risk weighted assets of all the asset types are reported in non fund based exposures output.
FIG 1.14 OUTPUT FOR CREDIT RISK ASSESSMENT & CAPITAL COMPUTATION The total credit risk of the bank and the capital requirement to overcome will be computed and it is reported. CONCLUSION The project Credit Assessment System acts as a software based credit risk information generating system to banks. This ensures a one click system that will help to assess the credit risk for the whole organizations credit risk. The scalability and reusability of the system is high and hence any changes in the future can be easily done. The system has been designed in UML and
165
ZENITH
developed using object oriented technology. This has made the work of foreseeable enhancements simple. This system has been developed only for credit risk computation. On addition of simple modules both operational risk and marker risk assessment can also be achieved. And thus finally it can be implemented as a Basel II software and by adding tools like ribbon bar, the software can be featured to impart graphs and charts by the user depending upon his requirements. BIBLIOGRAPHY 1. Eric A. Smith, Valor Whisler, and Hank Marquis: Visual Basic 6 Bible ,(Paperback Aug 17, 1998) 2. Paul Litwin, Ken Getz, and Mike Gunderloy Access 2002 Desktop Developer's Handbook(Paperback - Sep 10, 2001) 3. Credit Risk Management published by IIBF 4. New Capital Adequacy Framework document released by RBI 5. Michel Crouhy, Robert Mark,Risk Management 6. Elizebeth Mays, Credit Risk Management in banking industry WEBSITES www.rbi.org.in www.bis.org APPENDIX-A TABLE DESIGN 1.CUSTOMER TABLE
S.N O. 1 2 3 4
COLUMN NAME CUSTOMER ID CUSTOMERNAME INDUSTRY TYPE CREDIT RATING
D ATA TYPE Text Text Text Text
DATA SIZE 20 50 20 50
DESCRIPTION Customer id Customer Name Industry Rating
ZENITH
2.CREDIT TABLE S.NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 COLUMN NAME CUSTOMER ID ACCOUNT ID EXPOSURE TYPE ASSET TYPE BALANCE LIMIT AMT_COVER_SECURITY DATA TYPE Text Text Text Text DATA SIZE 20 20 20 50 DESCRIPTION Customer id Account id Fund Based & Non Fund Based Asset type Amount to be paid to bank Amount to be paid to customer Secured amount Guaranteed amount Branch code Loan Date Repaying last date Whether payment restructured by the bank Checking whether the advance has fallen to NPA Amount that the bank should pay in the future to the customer
Number 50 Number 50 Number 50
AMT_COVER_GUARANTEE Number 50 BIC START DATE END DATE WHETHER RESTRUCTURED WHETHER NPA Number 20 Date Date 20 20
Boolean 2 Boolean 2
14
UNDRAWN EXPOSURE
Number 50
167
ZENITH
3.FINAL CALCULATION TABLE S.N O. 1 2 3 4 5 COLUMN NAME EXPOSURE TYPE ASSET TYPE NET EXPOSURE EXPOSURE DETAILS BANK DETAILS D ATA TYPE Text Text Number Text Text DATA SIZE 20 50 50 50 50 DESCRIPTION Fund Based & Non Fund Based Asset type Risk Weighted Assets for all assets List of all the fund based and non fund based exposures List of all types of assets
4.CREDIT CONVERSION FACTOR TABLE S.N O. 1 2 COLUMN NAME EXPOSURE TYPE CCF D ATA TYPE Text FLOAT DATA SIZE 20 8 DESCRIPTION Fund Based & Non Fund Based CCF value for all the exposures
5.RISK WEIGHTS TABLE S.N O. 1 2 COLUMN NAME CREDIT RATING RISK WEIGHTS D ATA TYPE Text Float DATA SIZE 50 8 Rating Risk weight for various ratings and asset types
DESCRIPTION
ZENITH
6.MAIN ACCOUNT DETAILS S.N O. 1 2 COLUMN NAME ASSET TYPE BANK DETAILS D ATA TYPE Text Text DATA SIZE 50 80 Asset type Details for all asset type values DESCRIPTION
7.FINAL RWA TABLE S.NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 COLUMN NAME ACCOUNT ID EXPOSURE TYPE ASSET TYPE BALANCE AMT_COVER_SECURITY DATA TYPE Text Text Text DATA SIZE 20 20 50 DESCRIPTION Account id Fund Based & Non Fund Based Asset type Amount to be paid to bank Secured amount Guaranteed amount Rating Risk weight for various ratings and asset types CCF value for all the exposures Total Assets Detecting the security value Detecting the guarantee value Risk Weighted Assets.
Number 50 Number 50
AMT_COVER_GUARANTEE Number 50 CREDIT RATING RISK WEIGHTS CCF EXPOSURE UNSECURED EXPOSURE UNGRANTEEEXPOSRUE RWA Text Float Float Double Double Double Double 50 8 8 50 50 50 50
ZENITH
TABLE DESIGN FIG A1 TABLE DESIGN
170
ZENITH
APPENDIX-B SCREEN SHOTS
FIG B1 INPUT DESIGN
FIG B2 ACK MESSAGE BOX
FIG B3 ALERT MESSAGE BOX
171
ZENITH
FIG B7 MAIN MENU
172
ZENITH
FIG B8 SUBMENU
FIG B9 MODULE I
173
ZENITH
FIG B10 MODULE II
174
ZENITH
ANALYSIS OF INVESTORS PERCEPTIONS TOWARDS MUTUAL FUND SCHEMES (WITH REFERENCE TO AWARENESS AND ADOPTION OF PERSONAL AND FAMILY CONSIDERATIONS)
DR.K.LAKSHMANA RAO*
*Research Scholar, Department of Commerce & Management Studies, Andhra University, Visakhapatnam.
ABSTRACT The behavioral finance has been recognized as an important area in the study of recent finance literature. It implicit objective is to discover and remedy the deviation from the rational decision making in the investment process. The purpose of this study is to examine the role of various social-economic factors affectively the investment decision of the investors. The results an obtained from a survey and has been analyzed by the chi-squire test. The result shows that, socio- economic factors are significantly influence the investment behaviour of the investors. KEYWORDS: Mutual fund, awareness, adoption, schemes, investors and investment. _____________________________________________________________________ INTRODUCTION Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these invest ments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. MUTUAL FUND OPERATION The simplest mutual funds definition is that they are an investment group set up by professional investors and headed by an investment manager. Individuals are then able to invest small amounts of money into the fund for making a reasonable profit. There are an incredibly large number of mutual funds. While some mutual funds aim to produce short term, high yield profits, others look for the long term profit. But, large segment of people are scared to invest in the capital market. Some personal and family factors are pulling them in deciding different type of investments. Age, Gender and marital status are some of the socio demographic factors that share the investors decision and preference in making investments. Many studies have shown that age interact with financial information and issues differently. The surveyed literature indicates that younger have different attitudes towards financial decisions than elder ones. The majority of the published research studies examining the relationship between age and risk tolerance have found that risk tolerance decreases with age.
175
ZENITH
The elder is more likely to have low level of risk tolerance; it implies that with age increasing investors have a decreasing preference for investment on risky assets. Next to age and income, Gender is the third most powerful determinant of investment decisions. Gender has also been found to be an important differentiating factor in the classification of risk tolerance as females have consistently been shown to have a lower preference for risk than males. Marital status has also been presumed to impact on financial risk tolerance; however, the precise nature of the relationship is not clear from revie wed literature. In the forthcoming sections attempts have been made to study the association between these Personal and family factors and their investment decisions. REVIEW OF LITERATURE Rajarajan (2000)1 has attempted to identify predictors of individual investors' expected rate of return by investigating relationship of demographic variables such as age, income, occupation, employment status and stage in life cycle with investment behavior of an individual in the paper titled, "Predictors of Expected Rate of Return by Individual Investors". The study was conducted by administering questionnaire to a sample size of 405 investors. The investigation was made across 12 variables. Multiple regression analysis was used by the researcher to examine the relationship between expected rate of return on investments by individual investors and their demographics. Some investment related characteristics (including risk bearing capacity of investor) were also studied. The study found that factors like investment size, portfolio choice, and risk bearing capacity are positively related to rate of returns. The variable locus of control was inversely related to rate of return. The paper concluded that the rate of return was not strongly related to any socio economic variable except age. The author has empirically proved the significant relationship between expected rate of return on investments and demographic variables. SEBI-NCAER survey (2000)2 was carried out to estimate the number of households, the population of individual investors, their economic and demographic profile, portfolio size, and investment preference for equity as well as other savings instruments. Data was collected from three lakhs geographically dispersed rural and urban households. Findings of the surve y are: the investors' choice of investment instruments matched the risk perceived by them. Bank Deposit was the most preferred investment avenue across all income class; 43% of the non- investor households (estimated around 60 million households) apparently lack awareness about stock markets; and: a relative comparison shows that the higher income group has a greater share of investments in mutual funds compared with low income groups, suggesting that mutual funds have not truly become investment vehicle for small investors'. Nevertheless, the study predicts that in the next two years (i.e., 2000 hence) the investment of households in mutual funds is likely to increase. Crosnan and Gneezy (2004)3 in the research work titled "Gender Differences by Preferences" have done an exhaustive review of various studies on gender differences over a period of time. The authors have highlighted the differences in perception on the basis of gender. The paper explains that there is vast difference as to how men or women perce ive the areas of risk taking, social behavior and competition behavior. The paper establishes that women take less risk than men. According to the authors the various factors that might be responsible for such a difference in preference may be age, marital status, number of children and culture. The paper further discusses that gender difference by preference is reduced when the outcome is unsure as in the case of lottery as the perceptions are made on a subjective idea of outcome.
176
ZENITH
Similarly the paper establishes the lack of difference in perception when a population consisting of managers and professionals was studied. The study disclosed that there is no significant difference in the way men or women. Managers think of performance, risk and other fund characteristics. The authors concluded the study by stating that women are risk averse than men as far as investment decision involving risk was concerned. The research article by Giessen and Ruenzi (2009)4 titled Sex Matters: Gender Differences in the Mutual Fund Industry", 74 investigates gender differences between female and male US mutual fund managers. The research is carried along three broad dimensions of: risk taking, investment styles, and trading activity. The primary data is gathered from the CRSP Survivor Bias Free Mutual Fund Database. The data for analysis is only of actively managed equity funds that invest more than 50% of their assets in stocks and excludes bond, money market and index funds. Performance measures of the study are obtained by us ing various statistical tools like regressions, significance testing, Fames regression models etc. The findings of the study are that 1. Female fund managers are moderately more risk averse than male fund managers: 2. Female fund managers follow significantly less extreme investment styles as compared to male fund managers: 3. Female managers investment styles are more stable over a period of time: 4. Male managers trade more than female managers. The authors conclude by elucidating that a fund investor may prefer female manager to manage the fund. Many researchers are studied different dimensions of investors socio-economic profiles of investment to mutual fund schemes. They are found out some important factors influences their risk perception, investment decisions and savings patron of investors investment. Above the literature, there are taken factors are age, gander, marital status, income and educational qualifications. In my research point of view I had taken family and personal considerations of individual investors to awareness and adoption of different mutual fund schemes. OBJECTIVES AND METHODOLOGY The present study is undertaken with the following specific objectives. To assess the investors Awareness of the Mutual Fund schemes and To study the investors Adoption of the Mutual Fund schemes.
The present study attempts to evaluate the investors awareness and adoption towards the mutual fund schemes. For the purpose, individual mutual funds investors have been selected. The individual investors perception has been confined to the Visakhapatnam, Vizianagaram and East Godavari districts in Andhra Pradesh only. This study is based on only primary data sources. For the studying the perception of investors has been administered of structured questionnaire of the respondents. 350 respondents have been selected for this study, for Visakhapatnam, Vizianagaram and East Godavari districts only. From the total population of the investors of different MF schemes, different segments are taken in to consideration.
ZENITH
The data collected form primary source is subjected to statistical treatments. Simple statistical tools like Percentages, Cross-tabulation, and Chi-square Tests have been used. The chi-square test has been adopted to examine the association between the personal and family factors with the awareness and adoption of the MF schemes. TABLE NO.1. PERSONAL AND FAMILY PROFILES OF SAMPLE RESPONDENTS AGE Below 20 years 21-30 years 31-40 years 41-50 years 51-60 years Above 60 years Total SEX Male Female Total RESIDENCE Rural Urban Semi- Urban Total Size of Family Membe rs 1-2 3-4 5-6 7 and Above 40 197 93 20 11.4 56.3 26.6 5.7 35 263 52 350 10.0 75.1 14.9 100
Respondents 7 45 140 109 31 18 350
% 2.0 12.9 40.0 31.1 8.9 5.1 100
298 52 350
85.1 14.9 100
ZENITH
Total Earning Membe rs 1 2 3 4 Above Total Marital Status Married Unmarried Total Source: survey
350
100
160 104 55 31 350
45.7 29.7 15.7 8.9 100
219 131 350
62.57 37.43 100
Majority of the respondents is from 31 to 50 years age, which represents 71.10 per cent as can be seen from Table no 1. Only 7.10 per cent constitute from both below 20 years and above 60 years. 85.1 per cent constitutes male, who are exercising their preferences in investing.75.1 per cent are from urban and remaining 24.9 per cent is from semiurban and rural areas. A major sample size constituting married individuals may indicate that married respondents are aware of the need of savings and investments as it would provide a better future for themselves and their children. Hence they may look out for alternative investment avenues like mutual funds. In addition to the above analysis an attempt has also been made to study the relationship between level of awareness and adoption of the Mutual Fund schemes with different personal and family factors. In the present highly competitive and volatile market scenario, it is a difficult task to assess success and failure of any financial service or product. In the last four decades there have been phenomenal changes in the capital market operations. Many new products and services have been introduced to the financial services industry. A good number of investors have opted for different types of investment vehicles. The government of India with regular amendments and new legislative measures has tried to organize the industry more and more by giving invitation to new investors. One of the most remarkable observations today is that the leading financial institutions like UTI, other public sector banks a nd private sector banks have been many folds with different MF products with attractive features to invite good number of investors into the industry. As per the experience, it is observed that the investors have adopted the scheme of those organizations, which have a good track record of keeping their promises. Now, the question of the hour is that whether or not the Personal and family factors of the investors have any impact on consumption habit of the mutual funds or not.
179
ZENITH
RELATIONSHIP BETWEEN AGE AND MUTUAL FUND SCHEMES AWARENESS AND ADOPTION Amongst different Personal and family factors, age has been found as one of the important and influential variable in influencing purchasing behavior of the customers. Particularly in case of tangible products this relationship has been tested. But, here, in this study the attempt is made to find out whether or not any relation between the age and awareness and adoption of different mutual fund schemes exists by the investors. The impact of investors age on their awareness and adoption of different schemes have been evaluated and the observations have been presented in the Table No. 2 and 3.
180
ZENITH
TABLE: 2. STATEMENT OF ASSOCIATION BETWEEN AGE AND MF SCHEMES AWARENESS Schemes Ages below 20 21-30 31-40 41-50 51-60 Above -60 Total ChiSquare DF p-value Equity Fund yes 5 23 % 1.43 no % 2 0.57 6.29 Balanced Fund yes 4 31 % 1.14 no % 3 0.86 4.00 ELSS yes 6 % 1.71 no % 1 6 0.29 1.71 Debt Fund Yes % 5 1.43 no % 2 0.57 8 2.29 MMMF yes 3 % 0.86 no 4 10 % 1.14 2.86
6.57 22 9
8.86 14
39 11.14
37 10.57
35 10.00 81 23.14 58 16.57 13 7 3.71 2.00
131 37.43
2.57 126 36.00 14 6.57 0.57 2.00 82 23.43 27 23 13 6.57 3.71 8 5
4.00 121 34.57 19 7.71 2.29 1.43 78 22.29 31 26 10 7.43 2.86 5 8
5.43 124 35.43 16 4.57 8.86 1.43 2.29 89 25.43 20 5.71 19 8 5.43 12 3.43 2.29 10 2.86
59 16.86 51 14.57 18 11 5.14 3.14
86 24.57 23 29 11 8.29 3.14 2 7
285 81.43 65 18.57 279 79.71 71 20.29 280 80.00 70 20.00 282 80.57 68 19.4 197 56.29 153 43.71
50.29772511 5 0.0001
16.77219509 5 0.005
16.91873707 5 0.0047
28.77863819 5 0.0001
14.1045316 5 0.015
ZENITH
TABLE: 3. STATEMENT OF ASSOCIATION BETWEEN AGE AND MF SCHEMES ADOPTION Scheme s Ages below 20 21- 30 31-40 41-50 51-60 Above60 Total ChiSquare DF p-value Equity Fund Ye s 4 37 71 43 23 7 185 % 1.14 10.5 7 20.2 9 12.2 9 6.57 2.00 52.8 6 no 3 8 69 66 8 11 16 5 % 0.86 2.29 19.7 1 18.8 6 2.29 3.14 47.1 4 Balanced Fund yes 5 19 39 31 18 8 12 0 % 1.43 5.43 11.1 4 8.86 5.14 2.29 34.2 9 no 2 26 10 1 78 13 10 23 0 % 0.57 7.43 28.8 6 22.2 9 3.71 2.86 65.7 1 ELSS yes 4 37 74 40 25 7 18 7 % 1.14 10.5 7 21.1 4 11.4 3 7.14 2.00 53.4 3 no 3 8 66 69 5 11 16 2 % 0.86 2.29 18.8 6 19.7 1 1.43 3.14 Debt Fund Ye s 2 41 67 59 21 5 % 0.57 11.7 1 19.1 4 16.8 6 6.00 1.43 55.7 1 no 5 4 73 50 10 13 15 5 % 1.43 1.14 20.8 6 14.2 9 2.86 3.71 MMMF Ye s 1 26 65 47 22 8 % 0.29 7.43 18.5 7 13.4 3 6.29 2.29 48.2 9 no 6 19 75 62 9 10 18 1 % 1.71 5.43 21.4 3 17.7 1 2.57 2.86 51.7 1
46.2 195 9
44.2 169 9
18.3695 5 0.0025
30.81826 5 0.0001
39.43695 5 0.0001
36.06663 5 0.0001
12.71618 5 0.0262
ZENITH
It is observed from Table No.2 and 3 that the respondents between 31 to 40 years of age have highest awareness and adoption of different mutual fund schemes. Next to this segment other two segments of the respondents are 41 to 50 years and 51 to 60 years those have good awareness and have adopted schemes accordingly. Equity fund Schemes are aware by 37.43 per cent respondents in the 31 to 40 years age group, and at the same time when the adoption rate is compared, it is observed that in the same age group (31-40 years), 20.29 percent respondents have purchased this scheme. Above 61 years and 20 years below of age have both low awareness and adoption of Equity fund Schemes. It is observed that the respondents in the 31-40 years age group have highest awareness of all the schemes mentioned in the Table No.2, which average 33.31 percent. There are negligible differences in their awareness of the different schemes. More or less the 31-40 years age group investors have tried to acquire more information about all those schemes. Next to this age group are in 41-50 years age group with approximately awareness counting 22.45 percent and in 51-60 years with 6.28 percent respectively. But in above 61 years age and below 20 years age, the respondents awareness are comparatively very less, and accordingly also their investments are comparatively much less. Again when the respondents adoption rates are examined, it is observed that this is the same 31-40 years age group respondents has highest adoption percentage, with approximately for all these schemes, is 18.05 percent, followed by 41-50 years Age with 12.57 percent and 21-30 years with 9.14 percent. As the P-values of the all mutual fund schemes are less than 0.05( level of significance) , so I conclude that there is an associa tion between age group of awareness and adoption of all mutual fund scheme. RELATIONSHIP BETWEEN RESIDENTIAL STATUS AND MUTUAL FUND SCHEMES AWARENESS AND ADOPTION The concept of mutual fund has come with the objective of mobilizing resources from small as well as medium investors, who are otherwise not going for investing in corporate securities. How small may be the quantum of investment, but one can buy mutual fund products. But, it is experienced that the people who are residing in urban area are getting more exposure to different savings product, even though the marketers are trying to reach with both urban and rural people. To examine the trend of awareness and adoption of the mutual fund schemes indifferent residential status, an analysis is attempted here and the observations have been presented in the Table No. 4 and 5.
183
ZENITH
TABLE: 4 STATEMENT OF ASSOCIATION BETWEEN RESIDENTIAL STATUS AND MF SCHEMES AWARENESS Equity Fund yes 25 21 8 42 28 5 % 7.14 62.2 9 12.0 0 81.4 3 n o 1 0 4 5 1 0 6 5 % 2.86 12.8 6 2.86 18.5 7 Balanced Fund yes 23 22 9 27 27 9 % 6.57 65.4 3 7.71 79.7 1 n o 1 2 3 4 2 5 7 1 % 3.43 9.71 7.14 20.2 9 ELSS yes 28 20 6 42 27 6 % 8.00 58.8 6 12.0 0 78.8 6 n o 7 5 7 1 0 7 4 % 2.00 16.2 9 2.86 21.1 4 Debt Fund yes 6 23 0 34 27 0 % 1.71 65.7 1 9.71 77.1 4 n o 2 9 3 3 1 8 8 0 % 8.29 9.43 5.14 22.8 6 MMMF yes 25 14 6 36 20 7 % 7.14 41.7 1 10.2 9 59.1 4 no 10 11 7 16 14 3 % 2.86 33.4 3 4.57 40.8 6
7 Rural Urban SemiUrban Total ChiSquare DF p-value
2 0.2592
2 0.0001
2 0.9113
2 0.0001
2 0.0547
184
2.700693
37.88414
0.185782
91.38903
5.810008
ZENITH
TABLE: 5 STATEMENT OF ASSOCIATION BETWEEN RESIDENTIAL STATUS AND MF SCHEMES ADOPTION Equity Fund yes 8 18 5 14 20 7 % 2.29 52.8 6 4.00 59.1 4 no 27 78 38 14 3 % 7.71 22.2 9 10.8 6 40.8 6 Balanced Fund yes % 20 13 6 28 18 4 5.71 38.8 6 8.00 52.5 7 no 15 12 7 24 16 6 % 4.29 36.2 9 6.86 47.4 3 ELSS yes % 15 13 6 25 17 6 4.29 38.8 6 7.14 50.2 9 no 20 12 7 27 17 4 % 5.71 36.2 9 7.71 49.7 1 Debt Fund yes 16 15 6 29 20 1 % 4.57 44.5 7 8.29 57.4 3 no 19 10 7 23 14 9 % 5.43 30.5 7 6.57 42.5 7 MMMF Ye s 17 12 9 23 16 9 % 4.86 36.8 6 6.57 48.2 9 no 18 13 4 29 18 1 % 5.14 38.2 9 8.29 51.7 1
Schemes Rural Urban SemiUrban Total ChiSquare DF p-value
55.06176 2 0.0001
0.405321 2 0.8166
1.087801 2 0.5805
2.406125 2 0.3003
0.404984 2 0.8167
ZENITH
No doubt about the fact that the urban people ha ve up-to-date and modern living standard due to their exposure to the new products and services. The marketers of the products and services start their marketing activities from the urban segment. In my observation from Table No. 4 and 5, it is observed that the Urban People have greater awareness and adoption of the scheme. From the rate of awareness and adoption of different schemes it is a question mark about the understanding of the features of different schemes by the investors. They have more or less same level of awareness (52 to75.42 per cent) and adoption (43.43 to 56.86 per cent) for different types of the schemes. As the P-values of the balanced fund and debt fund schemes are less than 0.05( level of significance) , so I conclude that there is an association between respondents residential status and awareness of balanced fund and debt fund schemes, and one more interesting observation is equity fund , ELSS and MMMF schemes are greater than level of significance, so there is no assoc iation between respondents residential status and awareness of equity, ELSS and MMMF schemes . In the adoption point of view, as the p- value of the equity fund schemes is less than level of significance, so I conclude that there is an association between respondents residential status and adoption of the equity fund scheme., one more important observation is remaining all mutual fund schemes are greater than level of significance, so there is no association between residential status and adoption of the balanced fund, ELSS, debt fund and MMMF schemes. RELATIONSHIP BETWEEN RESPONDENTS NUMBER OF FAMILY MEMBERS AND MUTUAL FUND SCHEMES AWARENESS AND ADOPTION It is usually believed that the savings behaviour of the people is influenced by available surplus income at the disposal. Whereas, there is a corresponding effect on the quantum of expenditure with the increase in number of family members. So obviously uses of savings instrument will have reciprocal effect. Here an attempt is made to evaluate the impact of number of family members in the awareness and adoption of the schemes. The observations have been presented in the TableNo.6 and 7.
186
ZENITH
TABLE: 6. STATEMENT OF ASSOCIATION BETWEEN NUMBER OF FAMILY MEMBERS AND MF SCHEMES AWARENESS Schemes Family Members 1 3 5 _ 2 _ 4 _ 6 Equity Fund ye s 36 17 6 68 18 29 8 % 10.2 9 50.2 9 19.4 3 5.14 85.1 4 n o 4 2 1 2 5 2 5 2 % 1.14 6.00 7.14 0.57 14.86 Balanced Fund Ye s 35 14 5 62 17 25 9 % 10.0 0 41.4 3 17.7 1 4.86 74.0 0 n o 5 5 2 3 1 3 9 1 % 1.43 14.86 8.86 0.86 26.00 ELSS Ye s 34 15 7 54 16 26 1 % 9.71 44.8 6 15.4 3 4.57 74.5 7 n o 6 4 0 3 9 4 8 9 % 1.71 11.43 11.14 1.14 25.43 Debt Fund yes % 35 13 4 43 17 22 9 10.0 0 38.2 9 12.2 9 4.86 65.4 3 no 5 63 50 3 12 1 % 1.43 18.00 14.29 0.86 34.57 MMMF yes 31 11 7 29 17 19 4 % 8.86 33.4 3 8.29 4.86 55.4 3 no 9 80 64 3 15 6 % 2.57 22.86 18.29 0.86 44.57
7 Above Total ChiSquare DF p-value
14.49268 3 0.0023
7.662275 3 0.0535
18.6961 3 0.0003
27.73039 3 0.0001
38.3476 3 0.0001
ZENITH
TABLE: 7. STATEMENT OF ASSOCIATION BETWEEN NUMBER OF FAMILY MEMBERS AND MF SCHEMES ADOPTION Schemes Equity Fund Family Member s 1 2 3 4 5 6 7 Above Total ChiSquare DF p-value _ 23 _ 56 _ 43 12 13 4 6.57 16.0 0 12.2 9 3.43 38.2 9 17 14 1 50 8 21 6 4.86 40.29 14.29 2.29 61.71 31 57 34 11 13 3 8.86 16.2 9 9.71 3.14 38.0 0 9 14 0 59 9 21 7 2.57 40.00 16.86 2.57 62.00 28 48 23 9 10 8 8.00 13.7 1 6.57 2.57 30.8 6 12 14 9 70 11 24 2 3.43 42.57 20.00 3.14 69.14 16 4.57 10.2 36 9 16 4.57 6 1.71 24 16 1 77 14 27 6 6.86 46.00 22.00 4.00 78.86 19 39 19 5 82 5.43 11.1 4 5.43 1.43 23.4 3 21 15 8 74 15 26 8 6.00 45.14 21.14 4.29 76.57
Balanced Fund Ye s
ELSS Ye s
Debt Fund ye s
MMMF ye s
ye s
no
No %
no
no
no
21.1 74 4
20.83416 3 0.0001
35.89768 3 0.0001
36.12704 3 0.0001
11.30986 3 0.0102
14.86156 3 0.0019
ZENITH
It is observed from the Table No. 6 that the families containing 3-4 family members have greater awareness of mutual fund schemes, followed by the families containing 5-6 numbers. Likewise, as it is seen in Table 7, also, it is also found that there two families have higher adoption of different categories of schemes. But, when scheme-wise awareness and adoption rates with number of family members are compared, it is observed that there are no significant differences in awareness and adoption of the schemes. This trend reveals that the marketing strategy adopted by the firms have not brought clearly in differentiating amongst the schemes. As the P- values of the equity fund, ELSS, debt fund and MMMF schemes are less than 0.05( level of significance ), so I conclude that there is an association between respondent family members and awareness of the equity fund, ELSS, debt fund and MMMF schemes , and one more interesting observation is balanced fund scheme is greater than level of significance, so there is no association between respondents family members and awareness of balanced fund scheme. And in the adoption point of view, as the p-values of all the mutual fund schemes are less than level of significance, so I conclude that there is an association between respondents family members and adoption of the all mutual fund schemes. RELATIONSHIP BETWEEN NUMBER OF FAMILY EARNING MEMBERS AND MUTUAL FUND SCHEMES AWARENESS AND ADOPTION Generally, it is observed that with increase in earning members in the family, the quantum of income is multiplied and accordingly the standard of living of the concerned family is improved. At the same time they prefer and adopt new products and services. An attempt is made here to evaluate such increased income over the awareness and adoption of the schemes. The observations have been presented in the table No. 8 and 9. It is observed that with increase in earning family members, there is neither increase in awareness or adoption of the schemes. Rather it is noticed that there is reverse trend in both awareness and adoption of the schemes.
189
ZENITH
TABLE: 8. STATEMENT OF ASSOCIATION BETWEEN NUMBERS OF EARNINGS FAMILY MEMBERS &MF SCHEMES AWARENESS Schemes Earning Members 1 2 3 4 Above Total ChiSquare DF p-value Equity Fund ye s 15 5 10 0 31 24 31 0 % 44.2 9 28.5 7 8.86 6.86 88.5 7 n o 5 4 2 4 7 4 0 % 1.43 1.14 6.86 2.00 11.43 Balanced Fund yes % 15 7 95 28 16 29 6 44.8 6 27.1 4 8.00 4.57 84.5 7 n o 3 9 2 7 1 5 5 4 % 0.86 2.57 7.71 4.29 15.43 ELSS Ye s 14 2 10 0 28 19 28 9 % 40.5 7 28.5 7 8.00 5.43 82.5 7 no % Debt Fund yes % 14 1 99 20 9 26 9 40.2 9 28.2 9 5.71 2.57 76.8 6 no % MMMF yes % 14 4 90 24 13 27 1 41.1 4 25.7 1 6.86 3.71 77.4 3 no %
18 5.14 4 1.14
19 5.43 5 1.43
16 4.57 14 4.00 31 8.86 18 5.14 79 22.57

27 7.71 12 3.43 61 17.43
35 10.00 22 6.29 81 23.14
76.97781 3 0.0001
99.75563 3 0.0001
65.64597 3 0.0001
121.6429 3 0.0001
77.68915 3 0.0001
ZENITH
TABLE: 9. STATEMENT OF ASSOCIATION BETWEEN NUMBERS OF EARNINGS FAMILY MEMBERS &MF SCHEMES ADOPTION schemes Earning Members 1 2 3 4 Above Total Chi-Square DF p-value Equity Fund Ye s 11 5 69 15 9 20 8 % 32.8 6 19.7 1 4.29 2.57 59.4 3 no 45 35 40 22 14 2 % 12.8 6 10.0 0 11.4 3 6.29 40.5 7 Ye s 93 52 14 9 16 8 Balanced Fund % 26.5 7 14.8 6 4.00 2.57 48.0 0 no % 19.1 4 14.8 6 11.7 1 6.29 52.0 0 Ye s 84 15 21 9 12 9 % 24.0 0 4.29 6.00 2.57 36.8 6 ELSS no % 21.7 1 25.4 3 9.71 6.29 63.1 4 Ye s 78 61 13 7 15 9 Debt Fund % 22.2 9 17.4 3 3.71 2.00 45.4 3 no % 23.4 3 12.2 9 12.0 0 6.86 54.5 7 Ye s 88 49 18 6 16 1 MMMF % 25.1 4 14.0 0 5.14 1.71 46.0 0 no % 20.5 7 15.7 1 10.5 7 7.14 54.0 0
67 52 41 22 18 2
76 89 34 22 22 1
82 43 42 24 19 1
72 55 37 25 18 9
47.81 3 0.0001
22.40701 3 0.0001
40.17089 3 0.0001
25.11308 3 0.0001
18.03035 3 0.0004
191
ZENITH
In case of most of the schemes, awareness level is around 40 percent, whereas the adoption percentage is less than to the awareness level. As the P-values of all mutual fund schemes are less than 0.05 (level of significance), so it can be concluded that there are an association between respondent family members earnings and awareness and adoption of all mutual fund schemes. SUGGESTIONS Based on the investigation through the survey, the following suggestions are made for the policy makers, mutual fund asset management companies and the investing public: 1. Majority of the investing respondents were found to be in the age group of 31 to 50 years. Investment schemes tailored to the senior citizens need to be developed by mutual funds. 2. People belonging to the age group more than 60 years were found to be less aware of different investment schemes. Mutual funds cannot afford ignoring the increasing number of aged Indian society and hence measures to increase the awareness of these senior citizens about different investment schemes need to be designed and implemented. 3. It was found from the study that urban people were more aware of the benefits and costs of different investment schemes than the rural. As more than 80 percent of the Indian society resides in rural areas, it is strongly recommended to increase the awareness of the rural population about the existing investment schemes. CONCLUSION In my concluding words, I have the opinion that the three leading categories of agencies involved i.e., (i) the Regulatory authorizes like SEBI, IRDA; (ii) AMFI and (iii) MF Asset Management Companies have to conduct educational and orientation programmes in collaboration with yet other three kinds of leading organizations i.e., (i) Universities, (ii) Institutes and (iii) Stock Exchanges, on various aspects of MF Schemes, so that the investors will enhance their knowledge for making more prudent investment decisions. Further studies may be undertaken to unfold various other aspects like Performance and Challenges of Mutual Funds. Such studies will provide guidance to the Investors on the changes and challenges faced by the Mutual Funds. This kind of integrated effort will produce a lot of value addition to the Wealth of the Nation. REFERENCES 1. Rajarajan, V., 2000. Predictors of Expected Rate of Return by Individual, Investors. The Indian Journal of Commerce, Vol.53 (4), 65:70, Oct-Dec. 2. NCAER, 2000.Survey of Investors, Securities Exchange: Board of India, New Delhi. 3. Crosnan, R., and U.Oneezy, 2004.Gender Differences by Preferences. Retrieved from http://www.hks.harvard.edu/ wappp /research/ rachelcrosonandurigneez.pdf. 4. Giessen and Ruezi (2009) Sex Matters: gender Differences in the Mutual Fund Industry.
192
ZENITH
IN-SERVICE PRIMARY TEACHERS ATTITUDE TOWARDS INCLUSION: SURVEY RESULTS FROM DISTRICT KURUKSHETRA (HARYANA)
ASTHA*; SHARMA SUSHMA**; BHARGAV SMRITI***
*Research Scholar,
Kurukshetra University, Kurukshetra.

**Professor in Education Kurukshetra University, Kurukshetra. ***Professor in Education Kurukshetra University, Kurukshetra.
ABSTRACT The present study investigated the attitudes of in-service primary school teachers towards Inclusion in District Kurukshetra (Haryana). There has been a strong national movement to mainstream all the children in regular education systems while implementation of inclusion in school system, there are many challenges. To implement the inclusionary program there have been professionals with both opposing and supportive op inion. One of the strongest and main factor for inclusion is teachers attitude. The findings of the present study indicated that teacher had positive attitude towards inclusion for children with special needs along with their general counter parts. This kind of attitude about inclusion may help practitioners in the effective implementing and successful inclusion at lower level that enhance all students (particularly children of special needs) academic and other performance. KEYWORDS: Inclusive Education, Teachers, Children with special needs, Attitude. ______________________________________________________________________________ INTRODUCTION Disability is a part of human life and children with special needs (CWSN) can be found in every society, culture and community throughout the world. They have the right to respect and support to ensure their active participation (AinsCow, 1993). There has been a very strong national movement to mainstream all the children in regular schooling. Although, there ha ve been professionals with both opposing and supportive opinions. Inclusion is not only a placement of CWSN with their non-disabled peer group but it provides a quality education and sharing of responsibility of teacher educators and professionals in providing appropriate program to CWSN. Recent researches indicated that the success of inclusion program is usually dependent on teachers attitude (Coon et al.1999; Saland, 2005). Supports of inclusion have identified many benefits and found inclusive programs to be superior in the academic impact on CWSN when compared to segregated settings (Jobe et al., 1996; Malian & Love, 1998; Mastropieri and Scruggs, 2000 and Saland, 2005). There are also various reasons for failure of inclusion, viz, inadequate training of general education teachers (Bruneare-Balderrana, 1997; Mastropieri &
192
ZENITH
Scruggs, 2000; Saland, 2005) ; inadequate personal support for general education teachers (Saland, 2005); negative impact on teachers time to work with mixed students (Mastropieri & Scruggs, 2000; Saland, 2005); uncertainty of the social & academic benefits for CWSN (Taylor et al., 1997; Saland, 2005) and insufficient administrative support (ONeil, 1995; BruneareBalderrana, 1997; Saland, 2005). Various educational research and findings, ethical issues and legislative actions are in the forefront for providing strong support in implementation of inclusion and the essential message of inclusion is to end stigmatizing and exclusion of students who are in need of special support services. All students should simply be included by right, in the opportunities and responsibility of schooling (Fergusion, 1995, McLeskey et al., 2001). Although, the implementation of various types of support services in an effective and efficient manners remains a very tough and challenging task. Teachers attitude towards inclusion is one of the most important factors in determining the success of the program. Therefore, for better understanding and implementation of inclusion, we need to know the attitudes of the teachers towards inclusion (Ali et al., 2006; Elhoweris and Alsheikh, 2006; Haider, 2008; Fakolade et al. 2009). LITERATURE REVIEW Over the past decade a considerable amount of research has been conducted and many written policies was framed to change the views and philosophies of how the children with special needs are to be educated. Many organizations world wide have taken the lead in playing a pivotal role in promoting inclusive education as part of human rights agenda that advocates the increase in participation of all learners in regular schools (Brandon, 2006). The UNs Standard Rules on the equal opportunities for disabled children (1993) and the UNESCO Salamanca Declaration and Framework for Action (1994) are two initiatives that ha ve encouraged govt. to adopt policies that will increase the participation of all the children in regular schools that meet the needs & respect of all children with special needs. A large number of studies have been conducted on inclusive education and attitudes of the persons who are responsible for implementing inclusive policies and found that the attitude of teachers is one of the major role in the successful implementation of the inclusive education (Avarmiclis & Norwich, 2002; Ali et al, 2006; Nayak, 2008 and Olufemi et al, 2009). The study conducted by Weiner (2003) on the attitude of teachers towards inclusion & identified that teachers attitude is the 1st and 2nd most important condition necessary for the successful inclusion. The role of teachers attitude in failure & success of inclusive education is also evident in the findings of most of the researchers (Avarmiclis & Norwich, 2002; Saland, 2005 and Haider, 2008). In India for the education of children with special needs a number of laws has been framed and in this direction 93 rd Amendment to the constitution of India (now renumbered 86th ), passed by the Indian Lok Sabha (Lower House) on Nov. 28, 2001 moves it mandatory for the Government to provide free and compulsory education to all c hildren of the age group of 6-14 years with its preamble clarifying that all includes children with disabilities as well. Recently Govt. of India also took a greater step and passed a Right to Education (RTE Act, 2010) which is none the fundamental right to the child (6-14 years) to get free and compulsory education up to elementary level.
193
ZENITH
A review of the related literature revealed a little is known about the attitude of teachers in Haryana towards the inclusion of students with special needs. The increasingly diverse characteristics of students of children to be educated in Haryana are causing government officials, parents; teacher educators etc. to examine the benefits of educating are children in a heterogeneous environment. Regardless of gender, caste, colour, creed, social status as well as disability, it becomes clear to many that the needs of all children must be met and their differences must be welcomed, respect and nurtured in heterogeneous environment. The attitude of teachers towards inclusion of children with special need into regular school is vital in determining the success of the govt. efforts in implementing policies. METHOD The descriptive survey method was used to collect the data from the field. The sample was composed of 108 Primary teachers who worked in regular schools in District were selected randomly from the regular education teachers. Scale of teachers attitude towards inclusive education developed and standardized by Sharma and Desai (2002) was used to collect the data from various regular schools. The scale has 20 items consisting of statements regarding children with special needs in the classroom. RESULTS AND DISCUSSION The opinion about inclusion between male and female teachers found a miserable difference. Male teachers were found more positive than female teachers and the results were significantly differs at 0.05 levels. The result of ANOVA pertaining main and interactive effects of gender and qualifications on attitude towards inclusive education indicate that the F-ratio for main effect of gender equals to 29.04, df = 1/102, it is significant at 0.001 level of significance. It means males and females differ markedly with regards to their attitude towards inclusive education. The mean scores of male and females are 82.77 and 70.22 respectively. It clearly indicates that males have more favourable attitude than females towards inclusive education. The effect of qualification the total sample was divided into three groups in accordance with educational qualification, i.e. 10+2, B.A., M.A. The F- ratio for this effect was found to be 8.37 (df = 2/102), which is significant beyond 0.01-probability level. It suggests that the subjects of different educational level differ with regards to their attitude. It is clear from mean scores that 10+2 teachers have most favourable attitude towards inclusive education (mean 82.37) followed by undergraduate 75.19, M.A. being lowest (67.72). These results clearly suggest that attitude towards inclusive education decreases with increase in educational qualification of the teacher. Interestingly, the interactive effect of gender and qualifications has also been found to affect attitude significantly, the F ratio of interaction between gender and qualification equal to 4.80 (df = 2/102), which is significant beyond 0.01 probability level. Interaction of means suggest that the pattern of effect of qualification on attitude towards inclusive education differs across gender. Among females attitude decreases with (unfavourable) education, whereas among males it is most favourable in middle category of educational qualification i.e. Undergraduates as compared to 10+2 and Postgraduates.
194
ZENITH
The teachers having professional training/qualification have very high positive attitude as compared to the teachers not having this type of qualification. The mean values for the professionals being 82.4 as compared to non-professional 69.4, which is highly significant at p< 0.001probability. Teachers working in the rural Kurukshetra (Haryana) (82.75 12.5) had very positive attitudes toward inclusion to teachers working in urban area (67.52 10.66), t (6.84), p= 0.01. Although inclusive education has been implemented in Haryana but it is not working properly. In the present study many teachers have experience with the inclusion of students with special needs and most of the in-service teachers working in the government schools supported that students with special needs should be admitted to inclusive classroom. The study showed a great willingness among the teachers to include with certain type of disabilities such as orthopedically disabled as compared to the students with severe mental retardation. They are happily ready to accommodate student having mild and moderate mental retardation and partially visually impaired too. The severity of the disability also seemed to have an influence on the acceptance levels. CONCLUSION The present study investigated the opinions of the in-service primary school teachers working in District Kurukshetra (Haryana), who are working in the inclusive set up in regular schools. Due to the restrictions of the instrument and data the results must be interpreted with very vigilantly. Teachers attitude of the philosophy and policy of inclusion are significant predictors of the degree to which they carry out inclusive practices. Although, this study was carried out to study the attitude of in-service teachers towards inclusion but pre-service years are also very critical time period for the change of the attitude and modification of the attitude of future teachers. Therefore, pre-service and in-service teachers education program must focus on promoting positive teachers attitude towards inclusive education and many strategies can be used in teachers education and teachers training programs to improve pre-service as well as inservice teachers attitude towards inclusion of children with special needs. Majority of the teachers who participated in the present study feels a need for changes in the schools and curriculum to meet the needs of students with disabilities and they highlighted the importance of increased knowledge and proficiency that could make powerful them as working professionals. ACKNOWLEDGMENTS Authors would like to thank the teachers who participated in the rese arch study and honestly complete the questionnaire. The scholarship given to Astha, Research Scholar by the Government of Haryana is highly acknowledged. REFERENCES CITED Ainscow, M. (1993) Teacher Education as a strategy for developing inclusive schools of, in R. Slee, (ed.) Is there a desk with my name in it? Politics of Integration. London: Palmer.
ZENITH
Ali, M.M., Mustapha, R. and Jelas, Z. M. (2006). An empirical study on teachers perceptions towards inclusive education in Malaysia. International Journal of special Education, Vol. 21 (3). Avramidis, E. & Norwich, B. (2002). Teachers attitudes towards integration/inclusion: A review of the literature. European Journal of Special Needs Education, 17(2), 129-147. Brandon, D.P. (2006). Botswanas family and consumer sciences teachers attitude towards the inclusion of students with physical disabilities. Journal of Family and Consumer Sciences Education, 24(1): 37-49. Bruneau-Balderrama, O. (1997). Inclusion: Making it work for teachers, too. The Clearing House, 70(6), 328-330. Cook, B. G., Semmel, M. I., & Gerber, M. M. (1999). Attitudes of principals and special education teachers toward the inclusion of students with mild disabilities. Remedial and Special Education, 20(4), 199-256. Cook, B. G., Tankersley, M., Cook, L. & Landrum, T. (2000). Teachers attitudes toward their included students with disabilities. Exceptional Children, 67, (1): 115-135. Elhoweris, H and Alsheikh, N (2006). Teachers attitudes toward inclusion. International journal of special education. 21(1): 115-118. Fakolade, O.A.; Adeniyi, S.O and Tella, A. (2009). Attitude of teachers towards the inclusion of special needs children in general education classroom: the case of teachers in some selected schools in Nigeria, International Electronic Journal of Elementary Education, 1(3): 155-169. Ferguson, D.L. (1995). The real challenge of inclusion: confessions of a Rabid Inclusionist. Phi Delta Kappan, 281-287. Haider, S.I. (2008). Pakistani teachers attitudes towards Inclusion of students with special educational needs. Pak J Med Sci., 24(4): 632-636. Jobe, D.; J. O. Rust; and J. Brissie. (1996). Teacher attitudes toward inclusion of students with disabilities into regular classrooms. Education 117 (1): 148-54.
Malian, I.M. and Love, L. (1998). Leaving high school: An ongoing transition study. Teaching Exceptional Children, 30(3): 4-10. Mastropieri, M. A. and Scruggs, T. E. (2000). The inclusive classroom: Strategies for effective instruction. New Jersey: Merrill. McLeskey, J., Waldron, N. L., So, T. H., Swanson, K., & Loveland, T. (2001). Perspectives of teachers toward inclusive school programs. Teacher education and special education, 24(2), 108115.
ZENITH
Nayak, J. (2008). Attitude of parents and teachers towards inclusive education. EDUTRACKS, Vol. 7 (6), pp.18-20. O'Neil, J. (1994). Can inclusion work? A conversation with Jim Kauffman and Maria SaponShevin. Educational Leadership, 52(4), 7-11. Salend, J. S. (2005). Creating inclusive classrooms: Effective and reflective practices for all students 54th ed.). New Jersey: Pearson-Merrill Prentice Hall. Sharma, U. & Desai, I. (2002). Measuring concerns about integrated education in India. The Asia-Pacific Journal on Disabilities, 5(1), 2-14. Taylor, R.L., Richards, S.B., Goldstein, P.A., & Schilit, J. (1997). Teacher perceptions of inclusive settings. Teaching Exceptional Children, 29(3): 50-54. UNESCO. (1994). The Salamanca World Conference on special needs education: Access and quality. Paris: UNESCO. www. un.org/esa/socdev/enable/dissre01.htm United Nations. (1993). The standard rules on the equalization of opportunities for equalization of opportunities for persons with disabilities. www. un.org/esa/socdev/enable/ dissre01.htm Weiner, H.M. (2003). Effective inclusion: Professional development in the context of the classroom. Teaching Exceptional Children, 35, p. 12-18.
197
ZENITH
EDUCATION AND WOMEN EMPOWERMENT IN INDIA

M. SUGUNA*
*Ph.D Research Scholar, Department Of Commerce, Periyar University, Salem -636011, Tamilnadu.
ABSTRACT Women education in India has also been a major preoccupation of both the government and civil society as educated women can play a very important role in the development of the country. Education is milestone of women empowerment because it enables them to responds to the challenges, to confront their traditional role and change their life. So that we cant neglect the importance of education in reference to women empowerment India is poised to becoming superpower, a developed country by 2020. The growth of womens education in rural areas is very slow. This obviously means that still large womenfolk o f our country are illiterate, the weak, backward and exploited. Education of women in the education of women is the most powerful tool of change of position in society. Education also brings a reduction in inequalities and functions as a means of improving their status within the family. KEYWORDS: Education, Female Literacy Rate, Women Empowerment. ______________________________________________________________________________ INTRODUCTION If you educate a man you educate an individual, however, if you educate a woman you educate a whole family. Women empowered means mother India empowered. PT. JAWAHARLAL NEHRU Women constitute almost half of the population in the world. But the hegemonic masculine ideology made them suffer a lot as they were denied equal opportunities in different parts of the world. The rise of feminist ideas has, however, led to the tremendous improvement of women's condition through out the world in recent times. Access to education has been one of the most pressing demands of theses women's rights movements. Women education in India has also been a major preoccupation of both the government and civil society as educated women can play a very important role in the development of the country. India is poised to emerge as one of the most developed nations by 2020, more literate, knowledgeable and economically at the forefront. No doubt, women will play a vital role in contributing to the country's development. Women power is crucial to the economic growth of any country. In India this is yet to meet the requirements despite reforms. Little has been achieved in the area of women empowerment, but for this to happen, this sector must experience a chain of reforms. Though India could well become one of the largest economies in the wo rld, it is being hindered due to a lack of women's participation.
198
ZENITH
HISTORY OF WOMEN EDUCATION IN INDIA Although in the Vedic period women had access to education in India, they had gradually lost this right. However, in the British period there was revival of interest in women's education in India. During this period, various socio religious movements led by eminent persons like Raja Ram Mohan Roy, Iswar Chandra Vidyasagar emphasized on women's education in India. Mahatma Jyotiba Phule, Periyar and Baba Saheb Ambedkar were leaders of the lower castes in India who took various initiatives to make education available to the women of India. However women's education got a fillip after the country got independence in 1947 and the government has taken various measures to provide education to all Indian women. As a result women's literacy rate has grown over the three decades and the growth of female literacy has in fact been higher than that of male literacy rate. While in 1971 only 22% of Indian women were literate, by the end of 2001 54.16% female were literate. The growth of female literacy rate is 14.87% as compared to 11.72 % of that of male literacy rate. IMPORTANCE OF WOMEN EDUCATION IN INDIA Women education in India plays a very important role in the overall development of the country. It not only helps in the development of half of the human resources, but in improving the quality of life at home and outside. Educated women not only tend to promote education of their girl children, but also can provide better guidance to all their children. Moreover educated women can also help in the reduction of infant mortality rate and growth of the population. Obstacles: Gender discrimination still persists in India and lot more needs to be done in the field of women's education in India. The gap in the male-female literacy rate is just a simple indicator. While the male literary rate is more than 75% according to the 2001 Census, the female literacy rate is just 54.16%. WOMEN EMPOWERMENT THROUGH EDUCATION Women Empowerment is a global issue and discussion on women political right are at the fore front of many formal and informal campaigns worldwide. The concept of women empowerment was introduced at the international women conference at NAROIBI in 1985. Education is milestone of women empowerment because it enables them to responds to the challenges, to confront their traditional role and change their life. So that we cant neglect the importance of education in reference to women empowerment India is poised to becoming superpower, a developed country by 2020. The year 2020 is fast approaching; it is just 13 year away. This can became reality only when the women of this nation became empowerment. India presently account for the largest number no of illiterates in the world. Literacy rate in India have risen sharply from 18.3% in 1951 to 64.8% in 2001 in which enrolment of women in education have also risen sharply 7% to 54.16%. Despite the importance of women education unfortunately only 39% of women are literate among 64% of the man. Within the framework of a democratic polity, our laws, development policies, plan and programmes have aimed at womens advancement in difference spheres. From the fifth five year plan (1974 78) onwards has been a marked shift in the approach to womens issues from welfare to development. In recent years, the empowerment of women has been recognized as the central issue in
199
ZENITH
determining the status of women. The National Commission of Women was set up by an Act of Parliament in 1990 to safeguard the right and legal entitlements of women. The 73 rd and 74th Amendments (1993) to the constitution of India have provided for reservation of seats in the local bodies of panchayats and Municipalities for women, laying a strong foundation for t heir participation in decision making at the local level. WOMENS EDUCATION PROSPECTS AND CHALLENGS In spite of the forceful intervention by a bastion of female privilege, feminist critics, constitutional guarantees, protecting laws and sincere efforts by the state governments and central government through various schemes and programmes over the last 62 years and above all, the United Nations enormous pressure with regard to the uplift of the plight of women in terms education is still in the state of an enigma in India for several reasons. The 2001 Census report indicates that literacy among women as only 54 percent it is virtually disheartening to observe that the literacy rate of women India is even much lower to national average i.e. 65.38 .The growth of womens education in rural areas is very slow. This obviously means that still large womenfolk of our country are illiterate, the weak, backward and exploited. Moreover education is also not available to all equally. Gender inequality is reinforced in education which is proved by the fact that the literacy rate for the women is only 54% against 76% of men as per 2001 Census. TABLE -1 LITERACY RATE IN INDIA Year 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 Persons 5.3 5.9 7.2 9.5 16.1 16.7 24.0 29.5 36.2 52.1 65.38 Males 9.8 10.6 12.2 15.6 24.9 24.9 34.4 39.5 46.9 63.9 76.0 Females 0.7 1.1 1.8 2.9 7.3
7.3 13.0 18.7 24.8 39.2 54.0
ZENITH
2011
74.04
82.14
65.46
Source: Census of India (2011) According to the Table-1 the pre-Independence time literacy rate for women had a very poor spurt in comparison to literacy rate of men. This is witnessed from the fact that literacy rate of women has risen from 0.7 % to 7.3 % where as the literacy rate of men has risen from 9.8 % to 24.9 % during these four decades. During the post- independence period literacy rates have shown a substantial increase in general. However the literacy rate of male has almost tripled over the period e.g. 25% in 1951 and 76 % in 2001.Surprisingly the female literacy rate has increased at a faster pace than the male literacy during the decade 1981 -2001. The growth is almost 6 times e.g. 7.9 % in 1951 and 54 % in 2001. From this analyze one can infer that still the female literacy rate (only half of the female population are literates) is wadding behind male literacy rate (three fourth of the male population are literates).The rate of school drop outs is also found to be comparatively higher in case of women. This higher rate of illiteracy of women is undoubtedly attributing for women dependence on men and to play a subordinate role. The lack of education is the root cause for womens exploitation and negligence. Only literacy can help women to understand the Indians constitutional and legislative provisions that are made to strengthen them. Thus promoting education among women is of great important in empowering them to accomplish their goals in par with men in different spheres of life.
EDUCATIONAL EQUALITY Another area in which womens equality has shown a major improve ment as a result of adult literacy programs is the area of enrolment of boys and girls in schools. As a result of higher participation of women in literacy campaigns, the gender gap in literacy levels is gradually getting reduced. Even more significant is the fact that disparity in enrolment of boys and girls in neo- literate households is much lowered compared to the non- literate householders.
201
ZENITH
TABLE -2 STATE-WISE PERCENTAGE OF FEMALE LITERACY IN THE COUNTRY AS PER 2011 CENSUS Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Name of the State Andhra Pradesh Arunachal Pradesh Assam Bihar Chattisgarh Delhi Goa Gujarat Haryana Himachal Pradesh Jammu and Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Female Literacy 59.7% 59.6% 67.3% 53.3% 60.6% 80.9% 81.8% 70.7% 66.8% 76.6% 58.0% 56.2% 68.1% 92.0% 60.0% 75.5% 73.2% 73.8% 89.4% 76.7%
ZENITH
21 22 23 24 25 26 27 28 29
Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh Uttarakhand West Bengal
64.4% 71.3% 52.7% 76.4% 73.9% 83.1% 59.3% 70.7% 71.2%
Union Te rritories 1 2 3 4 5 6 Andaman & Nicobar Islands Chandigarh Dadra & Nagar Haveli Daman & Diu Lakshadweep Pondicherry All India Source: Census of India - 2011
81.8% 81.4% 65.9% 79.6% 88.2% 81.2% 65.46%
According to the table -2 the state wise female literacy rate had an average of 65.46% in all India basis in 2011 census the high literacy rate is 92.0% in Kerala and least literacy rate is 52.7% in Rajasthan in 2011 census while comparing literacy rate of female 11% increased in 2011 census is increased from 54.16% to 65.46%. Womens are growing well in the last 10 years. Government of India has been taken various steps and p lans especially for women in every movement.
ZENITH
CONCLUSION According to the Country Report of the Government of India, Empowerment means moving from a weak position to execute a power. Education of women in the education of women is the most powerful tool of change of position in society. Education also brings a reduction in inequalities and functions as a means of improving their status within the family. To encourage the education of women at all levels and for dilution of gender bias in provid ing knowledge and education, established schools, colleges and universities even exclusively for women in the state. To bring more girls, especially from marginalized families of BPL, in mainstream education, the government is providing a package of concessions in the form of providing free books, uniform, boarding and lodging, clothing for the hostilities midday meals, scholarships, free circles and so on. REFERENCE 1. S.P.Agarval(2001),Womens Education in India(1995-98)Present Status, Perspective, Plan, Statistical Indicators with Global View,Vol III Concept Publications Co, New Delhi.
2. Government of India, Census of India 2001 3. A Search for Aggregate-Level Effects of Education on Fertility, Using Data from Zimbabwe ystein Kravdal 2000 Max-Planck-Gesellschaft ISSN 1435-9871 http://www.demographic-research.org/Volumes/Vol3/3 4. N.L.Gupta(2003)Womens Education Through Ages,Concept Publications Co,New Delhi.
5. R.K.Rao(2001) Women and Education, Kalpaz Publications, Delhi.
ZENITH
A STUDY OF DATA MINING ACTIVITIES FOR MARKET RESEARCH

MR. HEMANT KUMAR*; DR. SARMISTHA SARMA**
*Assistant Professor, Department of Information Technology (IT), Institute of Innovation in Technology and Management, Institutional Area, Janakpuri, New Delhi 110058. **Assistant Professor, Department of Management, Institute of Innovation in Technology and Management, Institutional Area, Janakpuri, New Delhi 110058.
ABSTRACT Data mining, the extraction of hidden predictive information from large databas es, is a powerful new technology with great potential to help companies focus on the most important information in their data warehouses. Data mining (also known as Knowledge Discovery in Databases-KDD) has been defined as The nontrivial extraction of imp licit, previously unknown, and potentially useful information from data. Data mining is an artificial intelligence powered tool that can discover useful information within a database that can then be used to improve actions. Data mining is simply filtering through large amounts of raw data for useful information that gives businesses a competitive edge. This paper discusses a few data mining process, categorization, techniques, data mining in marketing, limitations and its future scope. KEYWORDS: Data mining, Knowledge Discovery Database (KDD), Artificial Intelligence (AI), Artificial Neural networks. ______________________________________________________________________________ 1.0 INTRODUCTION A large amount of information is collected normally in business, government departments and research & development organizations. They are typically stored in large information warehouses or bases which can range in size equivalent to terabytes, i.e., more than 1,000,000.000,000 bytes of data. Within these masses of data lies hidden information of strategic importance. But when there are so many trees, how do you draw meaningful conclusions about the forest? An attempt has been made to answer this question through Data mining. Data mining helps in finding relevant knowledge and pulling out important information that can allow us to make strategic decisions. Data mining, also known as Knowledge Discovery in Databases, can be technically defined as the automated mining of hidden information from large databases for predictive analysis. Data mining is based on mathematical algorithm and analytical skills to drive the desired results from the huge database collection. The current state-of- the-art analysis of databases is done by high-tech analysts (typically statisticians) using sophisticated tools (e.g. SPSS, SAS, S-Plus) etc. In essence these analysts are manual data miners. In contrast, data mining software technology promises to automate the analysis, allowing business users to develop a more accurate and sophisticated understanding of their data. In recent years, business intelligence systems have played pivotal roles in helping
205
ZENITH
organizations to fine tune business goals such as improving customer retention, market penetration, profitability and efficiency. In most cases, these insights are driven by analyses of historical data. Data mining contribution in marketing is stupendous as it provides them with useful and accurate trends about their customers purchasing behavior. Based on these trends, marketers can direct their marketing attentions to their customers with more precision. Not only can a software company advertise about a new software to consumers who have a lot of software purchasing history with its help, data mining may also help marketers in predicting which products their customers may be interested in buying. Through this prediction, marketers can surprise their customers and make the customers shopping experience becomes a pleasant one. Data mining does not replace traditional statistical techniques. Rather, it is an extension of statistical methods that is in part the result of a major change in the statistics community. The development of most statistical techniques was, until recently, based on elegant theory and analytical methods that worked quite well on the modest amounts of data being analyzed. The increased power of computers and their lower cost, coupled with the need to analyze enormous data sets with millions of rows, have allowed the development of new techniques based on a brute force exploration of possible solutions. Data mining takes advantage of advances in the fields of artificial intelligence (AI) and statistics. It is the application of AI and statistical techniques to solve common business problems in a way that makes these techniques available to the skilled knowledge worker as well as the trained statistics professional. Both disciplines have been working on problems of pattern recognition and classification. 2.0 PROCESS OF DATA MINING The process of data mining is divided into following steps which are as follows: a) Selection b) Initial Exploration (i.e. data Preparation) Data Cleaning Inconsistent data Missing Values Noisy data
Data Integration Data Reduction c) Model building or Pattern identification with validation/verification d) Deployment 3.0 CATEGORIZATION OF DATA MINING METHODS The goal of data mining is to produce new knowledge that the user can act upon. It does this by building a model of the real world based on data collected from a variety of sources which may include corporate transactions, customer histories and demographic information, process control data, and relevant external databases. The result of the model building is a description of patterns
ZENITH
and relationships in the data that can be confidently used for prediction. The ultimate goal of data mining is prediction. The technique that is used in data mining is called modeling. Modeling is simply the act of building a model on one condition where one knows the ans wers and then applying it to another condition that one does not know.
FIGURE 1: CATEGORIZATION OF DATA METHODS 4.0 DATA MINING IN MARKETING In the recent decades, the development of information and communications technologies injects new vitality for enterprise marketing. For example, barcode technology and the emergence of online stores greatly enhance the efficiency of the enterprise because of which company managers are beginning to face the enormous data. However, the data and business profits are not directly proportional. Unfortunately, the human brain cant handle so much data. In the meanwhile, data mining technology becomes very mature in theory. The technology-oriented applications for enterprise decision makers with a new perspective to look a t market. Those advanced technologies let enterprises obtain a lot of resources from different channels, and use those effective tools to translate data into unlimited opportunities. 5.0 APPLICATION OF DATA MINING IN MARKETING Data mining technology in the marketing is a relatively universal application. Such applications are referred to a Boundary Science, because it sets a variety of scientific theories in all. First, two basic disciplines: Information Technology and Marketing. Another very important basis is Statistics. In addition, it relates to the psychology and sociology as well. The charm of this area is just about the wide scope of disciplines study. Generally speaking, through the collection,
207
ZENITH
processing and disposal of the large amount of information involving consumer behavior, identify the interest of specific consumer groups or individual, consumption habits, consumer preferences and demand, moreover infer corresponding consumption group and the next group or individual consumption behavior, then based on them sale produces to the identification consumer groups for a specific content-oriented marketing. This is the basic idea. As automation is popular in all the industry operation processes, enterprises have a lot of operational data. The data are not collected for the purpose of analysis, but come from commercial operation. Analysis of these data does not aim at studying it, but for giving business decision- maker the real valued information, in order to get profits. Commercial information comes from the market through various channels. For example, purchasing process by credit card, we can collect the customers consumption data, such as time, place, interesting goods or services interested, willing price and the level of reception capacity; when buying a brand of cosmetics or filling in a member form can collect customer purchase trends and frequency. In addition, enterprises can also buy a variety of customer information from other consulting firms. It should be emphasized data mining is application-oriented. There are several typical applications in banking, insurance, traffic-system, retail and such kind of commercial field. Generally speaking, the problems that can be solved by data mining technologies include: analysis of market, such as Database Marketing, Customer Segmentation & classification, Profile Analysis and Cross-selling. And they are also used for Churn Analysis, Credit Scoring and Fraud Detection. The figure below shows us the relation between application and data mining techniques.
RELATION BETWEEN APPLICATION AND DATA MINING TECHNIQUES

208
ZENITH
The basic process of data mining in marketing is as follows:
PRINCIPLE OF DATA MINING APPLICATION IN MARKETING A. PREPARE PRIMITIVE DATA It includes individual character information (such as age, ge nder, hobby, background, profession, address, postcode, and income), the previous purchase experience, and the relationship within customers. The preprocessing of primitive data is very important for selecting potential customers. B. ESTABLISH A CERTAIN MODEL This model may utilize plenty of traditional data mining technologies and many technologies from other related subjects. However, the problem which those technologies should solve is seeking for the best or acceptable market plan, within limited data source, limited time, and limited expense. The three limits are the fundamentality of modeling algorithm. C. ANALYZE THE MODEL AND USE THE RESULT FOR DECISION MAKING PURPOSE At last, according to the model, utilize testing data to get each pattern or parameter. Ultimately, use this model to select customers and decide marketing plan. Today, businesses are having a huge collection of data, that is available in a variety of formats. This includes: operational data, sales reports, customer data, inventory lists, forecast data, etc. In
209
ZENITH
order to effectively manage and grow the business, all of the data gathered requires effective management and analysis. Data Mining allows a business to collect data from a variety of sources, analyze the data using software, load the information into a database, store the information, and provide analyzed data in a useful format such as a report, table, or graph. As it relates to business analysis and business forecasting, the information analyzed is classified to determine important patterns and relationships. The idea is to identify relationships, patterns, and correlations from a broad number of different angles from a large database. These kinds of software and techniques allow a business easy access to a much simpler process which makes it more lucrative. Data mining works allows a company to use the information to maintain competitiveness in a highly competitive business world. For instance, a company may be collecting a large volume of data from various regions of the country on consumers buying behavior. The software can compile the mined data, categorize it, and analyze it, to reveal a host of useful information that a marketer can use for marketing strategies. The outcome of the process should be an effective business analysis that allows a company to fully understand the information in order to make accurate business decisions that contributes to the success of the business. An example of a very effective use of data mining is acquiring a large amount of retail chain store data and analyzing it for market research. Data mining software allows for statistical analysis, data processing, and categorization, which all helps achieve accurate results. It is mostly used by businesses with a strong emphasis on consumer information such as shopping habits, financial analysis, marketing assessments...etc. It allows a business to determine key factors such as demographics, product positioning, competition, pricing, customer satisfaction, sales, and business expenditures. The result is the business is able to streamline its operations, develop effective marketing plans, and generate more sales. The overall impact is an increase in revenue and increased profitability. For retailers, this process allows them the use of sales transactions to develop targeted marketing campaigns based on their customers shopping habits. Today, mining applications and software are available on all system sizes and platforms. For instance, the more information that has to be gathered and processed, the bigger the database. As well, the type of software a business will use depends on how complicated the data mining project. The more multifaceted the queries and the more queries performed, the more powerful system will be needed. 6.0 LIMITATIONS OF DATA MINING Data Mining systems depend on database to supply the raw data for input. The raises problems because databases tend are dynamic, incomplete, noise and large. Besides the other problems arise as a result of the adequacy and relevance of the information stored. A. LIMITED INFORMATION: A database is often designed note for data mining now a days, databases are of different types and stores data with complex and diverse data types. It is very difficult to expect a data mining system. To efficiently and effectively obtain excellent mining information on all kinds of data and sources required specialized mining algorithms and techniques.
ZENITH
B. SECURITY AND SOCIETY: Security is an important problem associated with any data collection used for decision making. Organizations co llect a large amount of personal data for customers profiling and to know the last user behavior. Such a collection of data has a large amount of sensitive personal information of individuals and organizations. Such collections of confidential personal information is illegal. Thus data mining techniques provides new implicit knowledge about groups or individuals which can break privacy policies if illegally disclosed. In this way unauthorized access to personal information will threaten security if used with control. C. NOISE AND MISSING VALUES: The data mining algorithms that we assumes that the stored data is always noise free and in most cases, it is a forceful assumption. Most data sets contain exceptions invalid or incomplete information which complicates the data analyses process. Presence of noisy data reduces the accuracy of data mining results. Hence cleaning of data and its transformation becomes necessary which is a time consuming process. D. UNCERTAINITY: Here uncertainty means the severity of the error and the degree of noise in the data because data precision is an important point in a discovery system. E. SIZE, UPDATES AND IRRELEVANT FIELDS: Databases are found to be large and dynamic in the sense that their contents are always changing because information is added, modified or removed. This produces a problem in applying data mining because how it can be assured that rules are up to date and consistent with the current information. Morever the learning system has to be time sensitive because some data va lues vary over time and the discovery system is affected by the timeliness of the data. 7.0 CONCLUSION Data Mining is a logical process that can help in the best possible utilization of available resources. It can be a help in the decision making process of organization with respect to marketing and its various aspects along with decisions on supply chain management, logistic management. A sound knowledge of statistical packages and the various statistical techniques is a must. However the industrial experts in general and the academicians are concerned about the implication of data mining on the privacy of the data.
8.0 REFERENCES 1. Robert Groth, Data Mining: A hands-On Approach for Business Professionals. 2. Margaret H. Dunham, Data Mining-Introductory and Advanced Topics. 3. Kurt Thearling, An Introduction to Data Mining. 4. Asuncion Mochon, David Quintana, Yago Saez and Pedro Isasi W. Frawley and G. Piatetsky-Shapiro and C. Matheus, Soft Computing techniques applied to finance.
ZENITH
5. Kurt Thearling, From Data mining to database marketing. 6. Rajanish Dass, Indian Institute of Management Ahmedabad, Data mining in banking and finance. 7. AI magazine, Fall 1992, Knowledge Discovery in Databases: An Overview. 8. Alex Berson, Stephen Smith, and Kurt Thearling, Data Mining Techniques.
212
ZENITH
AN ANALYSIS OF KHADI AND VILLAGE INDUSTRY SECTOR IN J & K

DR. DARAKHSHAN ANJUM*
*Assistant Professor, School of Management Studies, Baba Ghulam Shah Badshah University, Rajouri 185131, Jammu and Kashmir, India.
ABSTRACT
Khadi and Village Industries play an important role in the Indian economy in creating income and employment opportunities in the rural, semiurban and urban areas. These industries generate production at low capital cost, promote use of local material, utilize local skills and prevent the migration of labour force to urban centres. An analysis of Khadi and Village Industrial sector in Jammu and Kashmir traces the performance of Khadi and Village Industry Board under Rural Employment Generation Programme (REGP) / PMEGP since 1997-98 and turnover of khadi and village industry Board since 2001-02. It also makes year wise analysis of turnover of KVI Board in the last eight years. It presents a comprehensive picture on the performance of the sector. KEYWORDS: Employment, Generation, Industry, Jammu and Kashmir, Khadi, Village. ______________________________________________________________________________ INTRODUCTION Khadi is a handspun and woven material made from cotton, silk and woolen yarn. It is a mixture of any two or all such yarns. Started with the spinning on Takli, 2-Spindle new model Charkha, 4-Spindle, 8-Spindle, 10-Spindle and 12-Spindle new model charkas have been introduced in spinning of khadi yarn. Under the guidance of Mahatma Gandhi, the Father of the Indian Nation the provisional activities of khadi was started in 1922, when khadi was the symbol of Fight for Freedom. The khadi programme was thus closely linked with the struggle for freedom. Village industries otherwise called cottage industries provide immediate large-scale employment and offer a method of ensuring a more equitable distribution of national income and facilitate an effective mobilization of capital resources and skill (Venkatasamy, 1999). According to KVIC, any industry located in a rural area (Dahiya, 2004) village or town with a population of 20,000 and below and per capita investment of Rs. 50,000 in plants and machinery is classified as a village industry. At present the KVIC has approved about 115 industrial units as village industries. KHADI AND VILLAGE INDUSTRIES IN JAMMU AND KASHMIR The Jammu and Kashmir Khadi and Village Industries Board established in the year 1962 is playing a vital role in generating employment for rural poor, unemployed youth and down-trodden artisans of the state by providing financial and technical assistance for setting up
213
ZENITH
of micro and small industrial production units under various schemes which come under the purview of All India Khadi and Village Industries Commission, Government of India. OBJECTIVES OF THE STUD Y The focus of the study is on the following objectives: i) ii) iii) To review the financial assistance pattern uner PMEGRP in J& K. To review the performance of Khadi Village Industry Board under REGP/PMEGP in J&K. To study the turnover of Khadi Village Industry Board (REGP) in J&K.
METHODOLOGY ADOPTED Significant part of the study depends on secondary sources. But information has also been obtained from primary sources which include interviews, comments, observations, opinion, notes, etc. of the persons concerned with the Khadi and Village Industry in Jammu and Kashmir. The primary information was also gathered through discussion with persons in KVIC, District Industries centre (DIC), DSEO, ACD Office. Materials for the present study were collected from the published records available in the library of Baba Ghulam Shah Badshah University, Rajouri (J&K), DSEO, District Industries Centre, Rajouri, various Economic survey, magazines, journals, annual reports and periodicals, have also been gone through to derive informa tion pertaining to the present study. LIMITATIONS OF THE STUDY Nothing is perfect so is this study. The present study suffers from certain limitations. The study is based on the information from secondary source which reduce the degree of reliability. However, attempt has been made to collect maximum information from the official record of Khadi and Village Industry in general and J&K in particular on the various aspects of the study. Most of the departments neither publish the information nor do they allow the outsiders an access to their records, internal workings etc. on the pretext of maintaining secrecy. This restricts the data availability. It was difficult to collect all the necessary data from grass-root level. OBJECTIVE OF KHADI AND VILLAGE INDUSTR Y The main objective of the khadi and village industries is to create employment opportunities by promoting various khadi and village activities and to impart training to the rural artisans about modern technology. The board had taken up multifarious activities, which will enhance the potential under village industries and target the social categories including SC, ST and Exserviceman and reach the unreached area for coverage of remote and far-flung areas of the State. KHADI AND VILLAGE INDUSTRIES BOARD PROGRAMMES The Khadi and Village Industries Board (KVIB) provide financial assistance to individuals, registered institutions and co-operatives. The Board has established two Rural Industries Consultancies Service (RICS) centers, one each at Srinagar and Ja mmu, which have been fully
ZENITH
equipped with modern facilities and fully computerized for preparation of projects, have liaison links with Banks and other agencies for guidance and support to implement projects, assistance in providing knowledge on procurement of raw- material, machinery, installation, quality control for acceptability and reliability, attractive packaging and design for better marketing and marketing support for sustainability of the unit. The Board has also initiated training under Bee keeping at district/tehsil level so that more people are trained for setting up of Bee keeping units which will on one hand promote production of Honey and on the other hand generate employment. The Board is also imparting Entrepreneur Development Training to 1st generation entrepreneurs so that the projects are implemented successfully. Besides, training under various crafts is also being imparted to women beneficiaries for skill development to encourage them for setting up their own units. The KVIB under the old direct funding pattern of the Consortium Bank Credit Scheme has financed a total of 28384 individual units, 1214 Cooperative Societies and 4 khadi institutions since inception. This has resulted in the creation of direct / indirect / full time / part time employment opportunities to 72227 persons. The annual production of the said units touched Rs. 104.80 crore. The Board financed 9949 units till the end of March, 2008 generating employment for 113333 persons on full time / part time basis under the scheme. Once the bank sanctions the case for assistance, the board releases 25% of total project cost as margin money in favour of the beneficiary, 30% in case of women / reserved categories, in the form of fixed deposit receipt for a period of two years in favor of loanee. PRIME MINISTER EMPLOYMENT GENERATION PROGRAMME (PMEGP) In the year 2008-09, the Prime Minister of India has launched new scheme Prime Minister Employment Generation Programme (PMEGP) by merging the two schemes viz. Prime Minister Rozgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) on 15.08.2008. Under PMEGP, the Board has sanctioned 1544 units providing employment for 9966 persons during the year 2008-09. During the year 2009-10, 566 units were sanctioned genetating employment to 3688 persons up to Nov. 2009. The guidelines of the PMEGP circulated in October 2008 are as follows :
215
ZENITH
TABLE NO. 1 FINANCIAL ASSISTANCE PATTERN UNDER PMEGP IN J & K Categories of Beneficiaries under PMEGP Area (Location of Project /Unit) General Category Special (including SC/ST/OBC/Minorities/Women, Exservicemen, PH, NER and Border areas etc. 10% 05% Beneficiarys Contribution (of Project Cost) Rate of Subsidy (of Project Cost) Urban 15% 25% Rural 25% 35%
Source:Govt.of J&K, Economic Survey 2009-10, Directorate of Economic & Statistics, J&K,p 222. 1. 2. 3. The maximum cost of the project / unit admissible under manufacturing sector is Rs. 25 lakh. The maximum cost of the project / unit admissib le under business / service sector is Rs. 10 lakh. The balance amount of the total project cost will be provided by Banks as term loan.
The Khadi and Village Industries Board has been recognized as best at the National Level. During the year 2009-10, an amount of Rs.72.20 lakhs is proposed outlay out of which Rs. 15 lacs has been utilized up to Oct., 2009. For the year 2010-11, the proposed outlay is Rs. 81.70 lacks. PERFORMANCE OF KHADI VILLAGE INDUSTRY BOARD UNDER REGP /PMEGP IN J&K Prominent activities under KVIBs Rural Employment Programme are Cane and Bamboo, Pottery, Textiles, Hosiery, Fiber, Fruit and Vegetable preservation, Bee keeping, Gur and Khandsari, Stone and Lime etc. The performance of Khadi and Village Industry Board under Employment Generation Programme / Prime Minister Employment Generation Programme (REGP/PMEGP) in the State of Jammu and Kashmir are as follows :
216
ZENITH
TABLE NO. 2 PERFORMANCE OF KVIB UNDER REGP/PMEGP IN J&K (RS. IN LACKS) Margin Money Released (Rs.) Employment Generated
Year
No. of Units Financed
Bank Loan (Rs.)
(A)Rural Employment Generation Programme (REGP) 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Total 270 654 500 775 899 1384 1694 2999 9949 462.53 1000.13 657.64 1187.73 1845.34 2769.49 3647.76 6081.39 18699.91 142.63 309.61 203.76 363.16 547.66 803.42 1052.95 1735.54 5484.26 1396 3365 2523 5343 9843 18034 22929 43865 113333
(B) Prime Minister Employment Generation Programme (PMEGP) 2008-09 2009-10 ending 11/09 1544 566 1085.78 532.22 9966 3688
The employment generation by the KVIB is significant. Major proportion of the labor force of the Jammu and Kashmir is employed in this sector. The employment in KVI rose from 1369 lacks persons in 2000-01 to 9966 lacks persons in 2008-09.
217
Source : Directorate of Economic & Statistics, Economic survey 2009-10, J & K, p 222.
ZENITH
TURNOVER OF KHADI AND VILLAGE INDUSTRY BOARD (REGP) The production and sales of Khadi Village Industry Board under the Rural Employment Generation Programme in the State of Jammu and Kashmir during 2002-2009 are as follows : TABLE NO.3 TURNOVER OF KVIB (REGP) IN JAMMU AND KASHMIR (RS. IN LACKS) Year Production Rural employment Generation Programme 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 1965.26 2145.12 4038.78 6976.28 10602.03 18464.83 28169.69 28201.51 2604.17 2888.20 3899.2 7573.20 11579.21 22107.57 33233.44 33265.25 Sales
Source:Economic survey 2009-10, Directorate of Economic & Statistics, J&K, p 222 The overall performance of Khadi Village Industry sector in Jammu and Kashmir has been encouraging in terms of production, sales, and employment during the last eight years from2001-02 to 2008-09. The volume of production of Khadi Village Industry sector in Jammu and Kashmir during the period between 2001-02 and 2008-09 has increased substantially. CONCLUSION The Jammu and Kashmir Khadi and Village Industries Board is playing a vital role in generating employment for rural poor, unemployed youth and down-trodden artisans of the state by providing financial and technical assistance for setting up of micro and small industrial production units. The growth rates of KVI sector in terms of production, employment and productivity is significant. The entire KVI sector recorded the highest growth rate over the years. The development of KVI sector has acquired even more relevance today on account of : (i) growing population pressure in rural areas; (ii) rapid expansion of the lobour force especially among the marginal farmers and landless agriculture labors; (iii) inadequate opportunities for non-agricultural work; (iv) limitation of the organized sector in absorbing the labour force; (v)
ZENITH
need and the capacity for creating employment opportunities near the place of residence so as to avoid migration from rural to urban areas. It is for these reasons the governments support is considered essential for the continuous progress of the KVI sector. Finally, the study concludes with the observation that Khadi and Village Industry is playing a pivotal role in J&Ks economic development. Thus KVI is the best way to fight the evil of unemployment and to stop the migration of labour from rural to urban areas. REFERENCES 1. Arjun Ray Chandhuri [2004]: Khadi Industry to the Rescue as Rural Land Productivity Dips, Economic Times. 2. Dahiya, K.S., [2004] : Artisans the focus of KVIC Schemes, Gramodaya Kshitjit. 3. Entrepreneurship Hisrich, R.D & Peters,. P.M., [2007]: Entrepreneurship, 6th Edition, Tata Megraw-Hill Publishing Co. Ltd, New Delhi. 4. Nanda, H. [2009]: Fundamentals of Entrepreneurship PHI Learning Private limited, New Delhi-110001. 5. Arora, Renu: Fundamentals of Entrepreneurship and Small Business, Kalyani Publishers. 6. Desai, Vasant: Dynamics of Entrepreneurial Development and Management, Himalayan Publishing House, Mumbai. 7. Tandon B.C.: Environment and Entrepreneur; Chugh Publications, Allahabad. 8. Siner A David: Entrepreneurial Megabuks; John Wiley and Sons, New York. 9. Srivantave S.B.; A Practical Guide to Industrial Entrepreneurs; Sultan Chand and sons, NewDelhi 10. Prasanna Chandra: Project Preparation Appraisal, Implementation, Tata McGraw hill, NewDelhi. 11. Holt: Entrepreneurship- New Venture Creation, Prentice Hall of India. JOURNAL, MAGAZINES, PERIODICAL AND REPORTS GOI, Census of India 2001, Final Population Total Urban Agglomerations and Towns, Jayant Kumar Banthia, of the Indian Administrative Service, Registrar General & Census Commissioner. GOI, Economic Survey 2009-10, Directorate of Economics & Statistics, J&K. GOI, Census of India 2001, Jammu & Kashmir, Administrative Atlas, office of the Registrar General , India. GOI, Census of India, Map Profile 2001 India States and Union Territories, Office of the Registrar General, India.
ZENITH
Statistical Handbook 2008-09, Govt. of J&K, Planning; Development Department Directorate of Economics Statistics, Rajouri. Annual Plan 2007-08, Govt. of Jammu and Kashmir Planning & Development Department Rajouri. Draft Annual Plan, 2006-07 to 2009-2010, Govt. of Jammu and Kashmir Planning Development Department, Rajouri. Village Amenity Directory 2008-2009, Govt. of Jammu and Kashmir, District Rajouri. Prime Minister Employment generation programme; Jammu & Kashmir Khandi, Village Industries Board, old secretarial Srinagar. District At A Glance 2008-2009, Govt. of Jammu and Kashmir, DSEO, Rajouri. Jammu and Kashmir up to date latter news vol 1 No. 11, August 2010. Published by Ministry of Home Affairs, Government of India. Economic Review of District Rajouri 2008-09, Planing & Development department Directorate of economics & Statistics, Government of Jammu & Kashmir. Development Journal Janib- i- Manzil Directorate of Economics and Statistics Planing & Development Department Jammu and Kashmir. Statistial News Letter, Statistics Day Special, Directorate of Economics & Statistics Jammu and Kashmir. LIST OF TABLE 1. Table No. 1 : Financial Assistance Pattern under PMEGP in J & K. 2. Table No. 2 : Performance of KVIB under REGP / PMEGP in J & K. 3. Table No. 3 : Turnover of KVIB (REGP) in Jammu and Kashmir.
220
ZENITH
GLOBALIZATION AND ECOLOGICAL STRESS

DR. ASHISH MATHUR*; NEELAM KALLA**
*Associate Professor, Department of Management Studies, Lachoo Memorial College of Science & Technology, Jodhpur. **Assistant Professor, Department of Management Studies, Lachoo Memorial College of Science & Technology, Jodhpur.
ABSTRACT The immense desire of human being is to seek joy and pleasure, but this joy should be un ending, unlimited and should intensify every moment; and human being visualizes to explore every possibility of attaining this joy in this wide spread material world. He plans to achieve it by producing and accumulating the means of prosperity and riches and for this he effectively exerts and deploys his energy, experience and efficiency in accelerating the capitalist exploitation of natural resources. His endeavor for such exploitation does not remain confined to local horizons but are beyond any boundaries. Today the growth of every sector- trade, business, industries, and cultivation, production or whole economy is based upon transnational transactions. Over the past few decades governments and people have been preoccupied with economic interdependence- the coupling of local and national economies into a global system. But the world has now moved beyond economic interdependence to ecological interdependence. But yet while the earths ecology and worlds economy have become increasingly intermeshed, they remain separate in our institutions and in the minds of our policy makers. The result has been a wide range of both domestic and international policies that have begun to seriously degrade and deplete the earths natural capital- including its rivers, lakes, oceans; its soils and forests; its flora and fauna; and its ozone shield. No doubt, globalization enabled man, wherever he lives, to reach across the world farther, faster, deeper and cheaper than ever before but in turn it is significantly altering many of our planets life support systems and material cycles including the atmospheric system and carbon, nitrogen, sulpher; biologic and hydrologic cycles etc. and invariably leads to destroy living environment and creates ecological crisis. And with this most importantly our human resources have to bear its cost as the environment has a direct and proportionate relationship with the performance of people working under its shadow. If the environment in which someone is operating is healthy, supportive and full of positive forces, off course the operations of that firm or individual will also be in the same direction but in opposite circumstances working efficiency of the human resources lowers down and they are converted into highly demoralized and inefficient employees and members of society. They play their roles, discharge their responsibilities but deep inside they are bundles of negative energy and dissatisfaction, which is directly reflected, in their social behavior.
ZENITH
Thus the globalization is transforming the face of our natural and human resources. Yet the questions arise over the nature of this transformation. Is globalization a force of progress and environmental solutions? Or is it a cause of our numerous crises? The objective of my paper is to explore these questions by examining the arguments around contentious issues at the core of economic globalization and the environment: economic growth, production, and consumption; trade; and transnational investment. It begins with a glance at the general view held by supporters of globalization and in next section it also considers the point of view about how globalization affects the ecological environment and in turn the effectiveness and efficiency of our human resources. Simultaneously we test these arguments by bringing out the real picture with the support of facts and figures. KEYWORDS: Globalization, Ecology, Environment. ______________________________________________________________________________ 1. INTRODUCTION Indian economy has grown steadily over the last decade or so to become the 18 th largest economy in the world (as in Total GDP). Over the years it has become one of the fastest growing economies in the world. Now the Indian government is highly focused on bringing changes to the economy and promotes high economic growth. In lieu of the prospective world market and overseas investors the government has laid down numerous policies, which promote investment and provide incentives for foreign and local investors. But we also need to concentrate upon the consequences of globalization not only economic but also the ecological impacts. Further first we will have look upon the sanguine view of globalization and then what are dark sides causing ecological trauma. 1.1 GLOBALIZATION: THE OPTIMISM The alluring picture of globalization and ecology is produced by the supporters of globalization with substantial arguments. Some of the strongest reasons to support globalization are: 1.2 INCREASED PRODUCTIVITY: A BASE FOR SURVIVAL The supporters of globalization serve the increased productivity as the strongest reason to favor globalization. For this they present the population data which are increasing continuously as we can see in following details: The population of earth at the time of Christ was 300 million. It rose up to 600 million by 1700 AD. It was one billion in early 1800s and 2 billion by the end of 1920s. 1 The explosion of population bomb has risen over to 6 billion today. About 2, 60,000 people are born every day and it will reach up to 9 billion by 2050, as it is very clear from the given figure:
Globalizat ion and Environment, Peter Dauvergne www.politics.ubc.ca,visited on 12.11.2008
222
ZENITH
Now the supporters of globalization say that it is just because of the new global technologies- the output of integrated efforts of our scientists from all over the world that we could be able to manage food for everybody. This argument of this camp becomes clearer in following lines: Thanks to the green revolution of 1960s where scientists and farmers worked together to produce fast growth high yield crops which can be cultivated anywhere in the world with irrigation, fertilities pesticides. As a result there is a plenty of food today. And it is far cheaper global food prices have fallen two-thirds in real terms since 1957. People starve at present because of inefficient distribution and incompetent governments, not because of insufficient global food supplies. Today, health conditions in virtually every city in the North are vastly superior. One of the greatest feats has been the increase in food production. In the middle of the last century close to half of the people in the South were starving. By 1970 it was less than onethird; today it is less than one-fifth (WFS 1996: 1; Lomborg 2001: 61) 1.3 GLOBAL LIFE EXPECTANCY The most revealing statistic of all is global life expectancy: in 1900 it was a mere thirty years; in 1950 it was forty-six years; today it is over sixty-six years. (Lomborg 2001: 5051, 61; World Bank 2002d).
Granted, such progress has demanded inevitable change, including some global environmental changes. But, optimists stress, science and human ingenuity have time and again shown the capacity to respond with even more progress. 1.4 ECONOMIC GROWTH The optimists see globalization as a process that fosters economic growth and raises per capita incomes, both essential to generate the funds and political will for global environmental management. Optimists see other environmental benefits from globalization as well.
ZENITH
1.5 TRADE COOPERATION AND EROSION OF POVERTY Some people see the net effect of globalization in terms of rising figures of national per capita income, which in turn generates the funds, technology and political will to implement sustainable development. This growth produces more food, better medical facilities and it distributes the economic growth and profits all across the world 1.6 GLOBAL INTEGRATION AND COOPERATION And last but not least argument which emerges in favor of globalization is that it is promoting global integration and cooperation as well as common environmental norms and standards, which are enhancing the capacity of a system of sovereign states to manage problems like ozone depletion and climate change. It is pushing states to liberalize trade and foreign investment, promote specialization, and eliminate subsidies, which in the past have contributed to market failures and sub-optimal economic and environmental outcomes. It is enhancing the capacity of developing states for environmental management through the transfer of technologies, knowledge, and development assistance. After going through these arguments a reader starts shifting his mind from an anti globalization stand to take a stand in favor of globalization b ut if this is the real picture than what about the claims of anti globalization camp? 2. GLOBALIZATION: THE REAL PICTURE The anti Globalization Camp proclaims that the holy river of Ganga is prone to die. The Gomukha has stepped back by thirty five meters. If this process of melting and land sliding continues the Ganga will dry up in some coming decades. The great series of Himalayas are thrilling due to repeated strokes of earthquakes and the self disciplined oceans are producing waves like Tsunami which are brutally submerging the coastal culture. Fast melting ice layers of poles has transformed the shape and size of oceans. The intensive use of chemical fertilizers has destroyed the potential fertility of farms. The acid rains are killing forests and half of the world forest has already gone. Everyday another thirty species go extinct.
And as the author has already stressed upon the interdependence of environment and human resources, directly or indirectly in some or other way this ecological stress and conditions do affect the efficiency and effectiveness of our human resources the key players of this world. And to understand the intensity of this effect we will discuss every impact of globalization in light of following three basic conditions, which need to be fulfilled (and which are being destroyed by globalization) to get best performance from any person. A healthy physical environment and working conditions-when a person is working in best of his health conditions it multiplies the inner urge to perform better and with maximum efficiency
ZENITH
The policies and guidelines set by existing leaders work as benchmark for them-basically this is a general human tendency to follow successful people and everyone set that performance as a benchmark and tries to achieve these same targets by adopting the same practices. The level of performance depends upon kind of motivation and reward- if we look at researches then the results show that psychological and non monetary rewards can serve as stronger motivation then financial rewards and monetary targets. So in the saga of globalization how our ecological and environmental systems are getting affected, to understand that we have to ponder upon these points: 2.1 THE OZONE DEPLETING The most dangerous effect of globalization is upon our life guard layer of ozone has been noticed in last few years which are an irrecoverable loss that is very clear from the given data: The extensive use of harsh chemicals like chloro-floro carbon is depleting the Ozone layer. The scientist found hole in ozone in 1985 and today the thickness of Ozone is 45 5 of its thickness in 1980s over Antarctica. This gives birth to 1.5 million cases of melanoma cancer and 130 million cases of eye cataracts .the following figure shows the rising level of chloro- floro carbon still being emitted into our environment:2
Source: Alternative fluorocarbons Environmental Acceptability Study, available at http://www.afeas.org

2
Globalization and Environment, Peter Dauvergne, taken fro m website www.politics.ubc.ca , visited on 12.11.2008
225
ZENITH
So even a layman who knows that ozone layer is a life guard for us can understand the adverse effects of its depleting upon the lives of mankind. We have noticed that this way one of the basic conditions for human being to work is being destroyed. The human resources suffering with serious health problems like eye cataracts and skin cancers can neve r work with their maximum output and thus contribute ultimately in organizational inefficiency which can never achieve its targets successfully. 2.2 CHANGING CLIMATE CONDITIONS A fast changing climate condition is one of the most complicated problems coming out of globalization.
GLOBAL CO2 EMMISSIONS FROM FOSSIL FUEL BURNING CEMENT MANUFACTURE AND GAS FLARING Source: Marland, Boden, and Andres 2001 The global Surface temperature has been raised by 0.3 to 0.6 degree Celsius over last 100 years. The 1990 was the warmest decade and 1998 was the warmest year. 3 Various studies depict a rise of 1.4 to 5.8 degree Celsius by 200. This climate change is prone to melt the polar ice causing in turn rising of ocean level by 88 centimeters which will displace million in coastal countries. Then what will happen to human population of these areas? Who will provide bread and butter to these people? Who will rehabilitate them? Even if we make it possible to rehabilitate and give a good job as a source of livelihood but can we make it possible for them to achieve those heights what they would have been able to get otherwise? Can we also rehabilitate the stability confidence and satisfaction? This is a big question that when we globalize foe achievement of targets of some organization at the same time we demolish somebody elses career.
Resource:www.unep.org, visited on 12.12.2008
226
ZENITH
2.3 INCREASING ECONOMIC AND ECOLOGICAL INTERDEPENDENCY OF WORLDS GLOBAL CITIES The worlds global city-regions are increasingly interdependent economically and ecologically. Interdependence among the world's cities and national economies has deepened dramatically over the past thirty years. There are many reasons for this and the move towards greater interdependence is tension laden. The tension stems in part from friction between the call for free international trade on the one hand, and the practice of protectionism at national and regional levels on the other. The growth and decline of cities in todays increasingly global economy is driven by the interplay of global and local dynamics that involve firms, labor, capital and communities. The process has been described as creative destruction. While much attention has focused on the economics of global integration, less attention has been devoted to understanding, or dealing with, the impacts of urban-ecological interdependencies. Citys have an ecological footprint, that is, a hinterland upon which the citys survival depends. Cities of affluent societies have comparatively large ecological footprints and a staggering throughput of natural resources. Most of us are only dimly aware of the enormity of these flows and their environmental impacts. And so are we unaware of these environmental disasters on the future of humane. So basically when we grow economically in short term, we harm our long term working efficiency which ultimately will again put us on the same situation of economic crisis. Again here comes the importance of leader , when todays successful organizations and nations are just working for their own benefits then what the example our future leaders will be getting? They will also learn the same thing that is working for the fulfillment of their own interest even if it destroys our environment in long run. So the profit maximization will be the only criteria to run any business and nothing g else. So in long run the self-centered people and employees will be giving it is really a big question to be solved by the supporters of globalization. 2.4 THE COSTS AND BENEFITS OF GLOBALIZATION ARE UNEVENLY DISTRIBUTED ACROSS AND WITHIN THE WORLD'S CITY-REGIONS While there is much talk about how globalization makes the world a smaller and more integrated place, it is a highly uneven process. Uneven development is especially evident in the human settlements of fast growing city-regions of developing countries. Mexico City is a good example. Closer to home, transborder city-regions along the U.S.-Mexico border are dramatic examples where significant wealth is juxtaposed to poverty. In the San Diego-Tijuana city-region, the city of San Diego has a population approximately the same size as the city of Tijuana. Yet, Tijuana has a municipal budget one- fourteenth of San Diegos -- about $100 million versus approximately $1.4 billion (San Diego Dialog 2000). This has made it difficult to develop region-serving infrastructure in the San Diego-Tijuana area. This naturally leads to dissatisfaction and demoralization of human resources and serves as a great reason being the erosion of manpower efficiency. Migration and uneven distribution of organization efficiency is actually a result of unevenly distributes benefits of globalization.
227
ZENITH
2.5 TRADITIONAL PLANNING AND POLICY APPROACHES BECOME MORE COMPLICATED DUE TO GLOBAL URBANIZATION AND UNEVEN DEVELOPMENT City-regions are diverse, often conflicting, aggregations of cities, suburbs, and their environments that need to be organized as integrated systems composed of communicating networks of infrastructures. Yet globalization, uneven development and low-density urban sprawl have combined in ways that make trad itional planning and policy approaches problematic. In the developing countries of Asia, Africa, and Latin America, an estimated 600 million urban dwellers live in "life and health threatening environments because of unsafe and insufficient water, poor quality and often overcrowded shelters, inadequate provision for sanitation, garbage and drainage, unsafe housing sites and a lack of health care" (Mitlan and Bicknel, 1992:3). In developed as well as developing countries, additional concerns include problems with the structure of livelihood opportunities, land use, habitat destruction, pollution and the loss of biodiversity. Urban planning is an interdisciplinary profession that must grapple with these conditions and contradictions. Cities in a Globalizing World , a recent HABITAT report, documents four dynamic trends in city-region governance over the past decade: (1) devolution of power and resources away from centralized governments toward local governments, (2) rising level of citizen participation in policymaking, (3) emergence of new forms of multi- level governance (collaborative arrangements joining public, private, and civil society institutions in urban problem solving), and (4) policy and decisionmaking structures that are more process-driven and territorially based (attuned to regional blocs and area-based interests) (Habitat 2001:59-62). This improper and shortsighted planning leads to inefficient working of any organization. How can a n organization talk of organization commitment and tar get orie nted performance from any employee when the planning itself is not effective to achieve organizational mission and fulfill the vision. 3. HUMAN COSTS OF GLOBALIZATION This can be best understood by the incident of 100 farmers of Andhra Pradesh committing suicide. More than 100 cotton farmers have committed suicide in Andhra Pradesh (A.P.). Farmers' suicides are however not only restricted to Andhra Pradesh. Across the country farmers are taking the desperate step of ending their life because of the new pressures building up on them as a result of globalization and spread of capital intensive agriculture. The promise of huge profits linked with clever strategies evolved by the seeds and chemical industries include the lure of huge profits and easy credit for purchase of costly inputs. However the reality of globalization is different from the corporate propaganda and from the promises of trade liberalization and agriculture offered by the World Bank, the WTO and experts and economists sitting in our various ministries.
228
ZENITH
The Andhra Pradesh tragedy highlights these high social and ecological costs of the globalization of non-sustainable agriculture which are not restricted to the cotton growing areas of this state but have been experienced in all commercially grown and chemically farmed crop in all regions. The epidemic of farmers' suicide is the real barometer of the stress under which Indian Agriculture and Indian farmers have been put by globalization of Agriculture. Indebtedness and crop failure are the main reasons that the farmers are committed suicide to the length and breathe of rural India. Indebtedness and crop failure are also inevitable outcomes of the corporate model of industrial agriculture being introduced in India through globalization. Agriculture dr iven by MNC's is capital intensive and creates heavy debt for purchase of costly internal inputs such as seeds and agri-chemicals. It is also ecologically vulnerable since it is based on monoculture of introduced varieties and on non-sustainable practices of chemically intensive farming 4 So if this is the cost we have to pay for the so called development from globalization that we have to sacrifice our potential human resources but still we are not bothered about the death of poor farmers than what impact this incident will leave on other key players of our economy; that are our farmers ? Will they be able to work with same confidence? Will they be expecting some reward for their contribution? Basically we are lost between the talks of economic growth and per capita income; but using these jargons we shouldnt forget its devastating effect. When we globalize and talk of specialization we recommend growing one crop regularly and continuously to raise the income and output but doe we think that in long run how much harm it will do to the productivity of the soil? After 10 or 15 years what will happen to the farmers when the earth will increase its ecological vulnerability for the pests and enter into non ending cycle of monoculture and pesticides. 4. NATURAL COSTS OF GLOBALIZATION: AN ESTIMATE The services of ecological systems and the natural capital stocks that produce them are critical to the functioning of the Earths life-support system. They contribute to human welfare, both directly and indirectly, and therefore represent part of the total economic value of the planet. The current economic value of 17 ecosystem services for 16 biomes has been estimated, based on published studies and a few original calculations. For the entire biosphere, the value (most of which is outside the market) is estimated to be in the range of US$1654 trillion (1012) per year, with an average of US$33 trillion per year. Because of the nature of the uncertainties, this must be considered a minimum estimate. Global gross national product total is around US$18 trillion per year. Costanza, et al. (1997) argues that "The services of ecological systems and the natural capital stocks that produce them are critical to the functioning of the Earth's life-support system." (p. 253). Explain what they mean by this, and cite some of the evidence they provide. According to Costanza, et al.'s calculations, how does the value of the world's global gross national product
The Seeds of Suicide , Dr Vandana Shiva and Afsar H Jafri
229
ZENITH
compare to the value of the ecosystem services they examined? Be able to define t hese key terms: natural capital, ecosystem services. 5 Estimates of various Ecosystem Services Ecosystem services Value (trillion $US) 17.1 3.0 2.3 2.3 1.8 1.4 1.1 0.8 0.8 0.7 0.4 1.6 33.3
Soil formation Recreation Nutrient cycling Water regulation and supply Climate regulation (temperature and precipitation) Habitat Flood and storm protection Food and raw materials production Genetic resources Atmospheric gas balance Pollination All other services Total value of ecosystem services
Urban World System, taken fro m website www.ecosystemvaluation.org/index.ht ml , visited on 1.12.2008
ZENITH
Source: Adapted from R. Costanza et al., "The Value of the World's Ecosystem Services and Natural Capital," Nature, Vol. 387 (1997), p. 256, Table 2. So if we look at these data we can rate ourselves better that how selfish and shortsighted the man has become. To just avail some short-term profits we endanger the whole planet. Let us pause and think over it for a second and we will know that where does it all lead actually? 5. THE TRUTH OF GLOBALIZATION: COOPERATION OR SERVING SELF INTERESTS The political economy doesnt keep real concern with unequal pattern of consumption, ecological distress. The powerful economies transfer the ecological shadows on weaker economies. For example the USA costs a large ecological shadow on South America. Japan costs ecological shadows over Thailand, Cambodia, and Laos. It is also apparent that the strong economic countries of north hemisphere exploit the natural resources of weak economic countries south hemisphere. These powerful economies are the back bones of large global institutions and organizations and in turn destroy the historic patterns of mutual trust co operation and exchange of knowledge. These practices are based upon self interests and shortsightedness with an objective of just maximizing the short term organization profits. Basically when we consider he reason of existence of multinational globalize firms same as small firms these firms also work for the sake of profit maximization and nothing else. To achieve heir monitory goals they can run across the whole world as they have already done in past also but now they give it a more sophisticated term called Globalization and prove it right by the talks of overall development or integrated approach but by these false presentation of facts the reality never changes and if we look at data that how much it has caused panic for our environment and off course human resources(as environment has a direct impact upon our human resources) we will understand the truth behind these air castles. 6. MIDDLE OF THE ROAD SOLUTION Then where lays the solution of this problem? No doubt the expected results of globalization for the good of humanity or economic growth can only be achieved through a proper execution.
If the execution is not proper, it will inevitably lead to ecological stress and e nvironmental disasters. So my view differs from both the camps as I stand for a harmonization between these two ideologies. First thing which must be very clear is that the globalization can be a force of progress and a solution to many economic problems if enforced properly. So the hosts of the reforms must first ensure better ecological and environmental laws and develop better technologies to deal with environmental problems. The process of globalization should be even and equal across the globe otherwise we already can notice the rich in Europe and America are unquestionably benefited far more than poor of Asia and Africa. If it goes on this way, the societies of undermined countries will resist and reverse the globalization.
ZENITH
Secondly it should be uniformly approved doctrine of globalization that channels of globalization should ensure maximum socio economic growth with minimum ecological damage. Thirdly as we can see, the political economy doesnt keep real concern with unequal pattern of consumption, ecological distress. These economies work more for achieving their own goals and whenever vested interests come to creep in the unevenness, inequality, injustice, imbalance, noncooperation, exploitation and oppression starts to play important role in the goal of globalization and that in turn creates ecological stress too. So no one should favor globalization with vested interest then only we can bring about a balanced, even, equal, justified and trustworthy globalization and develop a healthy planet to live in. To develop powerful dedicated committed and fully devoted human resources who are working above all their vested interest for effective achievement of the organizational goals, first they need some exemplary work as a benchmark to follow. As we look back to history, people always follow winners and leaders, so we need to set ourselves some guidelines and principle of equality, justice and working for mother earth and our society. In this way only we can become an inspiration for coming generations. Our mission can be clearer if we understand these words of Mahatma Gandhi: The environment and resources which we have inherited is not our property, we are not owners but we are mere trustees to take care of what we have got and it is our prime responsib ility to transfer theses resources to our next generation in its best condition. 7. REFERENCES 1) Anderson, K. (1992). Agricultural trade liberalization and the environment: A global perspective, The World Economy 15(1): 153-71, January. 2) Grossman, G.M. and A.B. Krueger (1993). "Environmental impacts of a North American Free Trade Agreement." In P. Garber (ed.) The US-Mexico Free Trade Agreement. MIT Press: Cambridge, MA, 13-56. 3) Henriques, I. and P. Sadorsky (1996). "The determinants of an environmentally respo nsive firm: An empirical approach," Journal of Environmental Economics and Management, 30: 381-95. 4) Smith, K. and J.A. Espinosa (1996). "Environmental and trade policies: Some methodological lessons" Environment and Development Economics: 19-40. 5) Strutt, A. and K. Anderson, (1998). "Will trade liberalization harm the environment? The case of Indonesia to 2020." Seminar Paper 98-04 Center for International Economic Studies, University of Adelaide, May. 6) Zarsky, L. (1991). Trade-Environment Linkages and Ecologically Sustainable Development, Report to Department of Arts, Sports, Environment, Tourism and Territories, Environmental Strategy Branch, Australia, October.
ZENITH
7) Abrahamson, Eric & Lori Rosenkopf. 1993. Institutional and Competitive Bandwagons: Using Mathematical Modeling as a Tool to Explain Innovation Diffusion. Academy of Management Review, 18: 487-517. 8) Arora, Seema & Timothy Cason. 1995. An Experiment in Voluntary Environmental Regulation: Participation in EPS's 33/50 Program. Journal of Environmental Economics and Management, 28: 271-286. 9) Bansal, Pratima & Kendall Roth. 2000. Why Companies Go Green: A Model of Ecological Responsiveness. Academy of Management Journal, 43(4): 717-737. 10) Beers, Cees van & Jeroen C.J.M. van den Bergh. 1997. An Empirical Multi-country Analysis of the Impact of Environmental Regulations on Foreign Trade Flows. Kyklos, 50: 29-46. 11) Belsley, David, Edwin Kuh, & Roy E. Welsch. 1980. Regression Diagnostics. New York: John Wiley & Sons, Inc. 12) Boldero, Jeniffer. 1995. The Prediction of Household Recycling of Newspapers: The Role of Attitudes, Intentions, and Situational Factors. Journal of Applied Social Psychology, 25: 440-462. 13) Campbell, Donald T. & Fiske, Donald W. 1959. Convergent and Divergent Discriminant Validation by the Multitrait-multimethod Matrix. Psychological Bulletin, 56: 81-105. 14) Christmann, Petra. 1998. Environmental Strategies of Multinational Chemical Companies: Global Integration or National Responsiveness? CIBER Working Paper 98-16. The Anderson School at UCLA. 15) Corbett, Charles & David A. Kirsch. 2000. ISO 14000: An Agnostics Report from the Frontline. ISO 9000+ISO14000 News, 9(2). 16) Dasgupta, Susmita, Hemamala Hettige, & David Wheeler. 2000. What Improves Environmental Performance? Evidence from Mexican Industry. Journal of Environmental Economics and Management, 39: 39-66. 17) Dasgupta, Susmita, Mainul Huq & David Wheeler. 1997. Bending the Rules: Discretionary Pollution Control in China. Policy Research Working Paper #1761, World Bank, Washington, D.C. 18) Delmas, Magali. 2000. Barriers and Incentives to the Adoption of ISO 14001 by Firms in the United States. Duke Environmental Law and Policy Forum, 11(1): 1-38. 19) DiMaggio, Paul J. & Walter W. Powell. 1983. The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organization Fields. American Sociological Review, 48: 147-160.
ZENITH
20) Drezner, Daniel. 2000. Bottom Feeders. Foreign Policy, 122(1): 64-73. 21) Dowell, Glen, Stuart Hart & Bernhard Yeung. 2000. Do Corporate Environmental Standards Create or Destroy Market Value? Management Science, 8: 1059-1074. 22) Dunning, John H. 1993. Multinational Enterprise and the Global Economy. Reading, MA: Addison-Wesley. 23) Epstein, Marc & Marie-Josse Roy. 2000. Strategic Evaluation of Environmental Projects in SMEs. Environmental Quality Management, 9(3): 37-47. 24) Ferrantino, Michael. 1997. International Trade, Environmental Quality and Public Policy. World Economy, 20(1): 43-72. 25) Gulati, Ranjay, Nitin Nohria & Akbar Zaheer. 2000. Strategic Networks. Strategic Management Journal, 21(3): 203-215. 26) Hartman, Raymond S., Mainul Huq & David Wheeler. 1997. Why Paper Mills Clean Up: Determinants of Pollution Abatement in four Asian Countries. Policy Research Working Paper #1710, World Bank, Washington, D.C. 27) Hettige, Hemamala; Mainul Huq, Sheoli Pargal & David Wheeler. 1996. Determinants of Pollution Abatement in Developing Countries: Evidence from South and Southeast Asia. World Development. 24(12): 1891-1904. 28) Hoffman, Andrew. 1999. Institutional Evolution and Change: Environmentalism and the U.S. Chemical Industry. Academy of Management Journal, 42(4): 351-371. 29) ISO World. 1999. The Number of ISO 14001/EMAS Registrations in the World. Available at: http://www.ecology.or.jp/isoworld/english/analy14k.htm 30) Jaffe, Adam, Steven Peterson, Paul Portney & Robert Stavins. 1995. Environmental Regulation and Competitiveness of U.S. Manufacturing. Journal of Economic Literature, 33(1): 132-163. 31) Kalt, Joseph P. 1988. The Impact of Domestic Environmental Regulatory Policies on U.S. International Competitiveness. In Michael Spence and Heather Hazard, editors, International Competitiveness. Cambridge, MA: Ballinger: 221-262. 32) King, Andrew & Michael Lenox. 2000. Industry Self-regulation Without Sanctions: The Chemical Industry's Responsible Care Program. Academy of Management Journal, 43(4): 698-716. 33) Kostova, Tatiana & Srilata Zaheer. 1999.Organizational Legitimacy Under Conditions of Complexity: The Case of the Multinational Enterprise. Academy of Management Review, 24(1): 64-81.
234
ZENITH
34) Kraatz, Matthew S. 1998. Learning by Association? Interorganizational Networks and Adaptation to Environmental Change. Academy of Management Journal, 41(6): 621-643. 35) Leonard, H. Jeffrey. 1988. Pollution and the Struggle for a World Product: Multinational Corporations, Environment, and the Struggle for International Comparative Advantage. Cambridge: Cambridge University Press. 36) Leonard, H. Jeffrey & Christopher C. Duerkson. 1980. Environmental Regulations and the Location of Industry: An International Perspective. Columbia Journal of World Business, 15(2): 54-68. 37) Low, Patrick & Alexander Yeats. 1992. Do Dirty Industries Migrate? In P. Low, editor, International Trade and the Environment. Washington, DC: The World Bank. 38) Marcus, Alfred. 1988. Implementing Externally Induced Innovations: A Comparison o f Rule-bound and Autonomous Approaches. Academy of Management Journal, 31(2): 235256. 39) Montabon, Frank, Steven A. Melnyk, Robert Sroufe & Roger J. Calantone. 2000. ISO 14000: Assessing its Perceived Impact on Corporate Performance. Journal of Supply Chain Management, 36(2): 4-16. 40) Nehrt, Chad. 1998. Maintainability of First Mover Advantages When Environmental Regulations Differ Between Countries. Academy of Management Review, 23(1): 77-97. 41) Oliver, Christine. 1997. Sustainable Competitive Advantage: Combining Institutional and Resource-based Views. Strategic Management Journal, 18(9): 697-713. 42) Porter, Michael & Claas van der Linde. 1995. Green and Competitive: Ending the Stalemate. Harvard Business Review, 73(5): 120-151. 43) Prakash, Aseem. 1999. A New-institutionalist Perspective on ISO 14000 and Responsible Care. Business Strategy and the Environment, 8(6): 322-336. 44) Qu, Geping, 1991, Environmental Management in China. Beijing: UNEP and China Environmental Science Press. 45) Rappaport, Ann & Margaret F. Flaherty. 1992. Corporate Responses to Environmental Challenges: Initiatives by Multinational Management. New York: Quorum Books. 46) Roht-Arriaza, Naomi. 1997. Environmental Management Systems and Environmental Protection: Can ISO 14001 be Useful Within the Context of APEC? Journal of Environment and Development, 6(3): 292-316. 47) Rondinelli, Dennis & Michael Berry. 2000. Environmental Citizenship in Multinational Corporations: Social Responsibility and Sustainable Development. European Management Journal, 18(1): 70-84.
ZENITH
48) Rondinelli, Dennis & Gyula Vastag. 1996. International Environmental Standards and Corporate Policies: An Integrative Framework. California Management Review, 39(1): 106122. 49) Rugman, Alan, John Kirton & Julie Soloway. 1999. Environmental Regulations and Corporate Strategy: A NAFTA Perspective, Oxford, UK: Oxford University Press. 50) Rugman, Alan & Alain Verbeke. 1998. Corporate Strategy and International Environmental Policy. Journal of International Business Studies, 29(4): 819-833. 51) Salancik, Gerald R., & Jeffrey Pfeffer. 1977. An Examination of Need-satisfaction Models of Job Attitudes. Administrative Science Quarterly, 22: 427-456. 52) Tobey, James. 1990. The Impact of Domestic Environmental Policies on the Pattern of World Trade: An Empirical Test. Kyklos, 43(2): 191-209. 53) UNCTAD (United Nations Conference on Trade and Development). 1993. Environmental Management in Transnational Corporations: Report on the Benchmark Corporate Environmental Survey. Environment Series No. 4, United Nations, New York. 54) Uzumeri, Mustafa. 1997. ISO 9000 and Other Metastandards: Principles for Management Practice? Academy of Management Executive. 11(1): 21-36. 55) Walter, Ingo 1982. Environmentally Induced Industrial Relocation to Developing Countries. In: S.J. Rubin and T.R. Graham, editors, Environment and Trade. Allanheld: Osmun Publishers. 56) Walton, Steve & Robert Handfield. 1998. The Green Supply Chain: Integrating Supplier into Environmental Management. Journal of Supply Chain Management, 34(2): 2-11. 57) Wang, Hua. 2000. Pollution Charge, Community Pressure, and Abatement Cost: An Analysis of Chinese Industry. Policy Research Working Paper #2337, World Bank, Washington, D.C. 58) Wang, Hua & Ming Chen. 1999. How the Chinese System of Charges and Subsidies Effects Pollution Control Efforts by Chinas Top Industrial Polluters. Policy Research Working Paper #2198, World Bank, Washington, D.C. 59) Wang, Hua & David Wheeler. 1996. Pricing Industrial Pollution in China: An Econometric Analysis of the Levy System, Policy Research Working Paper #1644, World Bank, Washington, D.C. 60) Wilson, Robert. 1998. The Developing World Looks to ISO 14000 for Help. Pollution Engineering, 30(2): 37-38.
61) WTO.
2000. Special Study on Trade and the http://www.wto.org/english/tratop_e/envir_e/envir_e.htm
Environment,
accessed
at:
236
ZENITH
SEGMENT REPORTING (IFRS-14 AND AS-17); A STUDY OF COMMERCIAL BANKS IN KENYA AND INDIA
DR. MARTIN ONSIRO RONALD*; DR. RICHARD NYANGOSI**; LUMUMBA MARTIN***
*Lecturer, Department of Business & Management, Kampala International University, P.O Box 9790, Dares Salaam- Tanzania. **Senior Lecturer, School of Postgraduate Studies & Research Kampala International University, P.O Box 9790 Dar es Salaam- Tanzania. ***Lecturer and Ag Dean, Faculty of Commerce, Kisii University College, P.O Box 408, Kisii Kenya.
ABSTRACT Segment reporting requires companies especially those which are multi-product and multilocation to disclose their segment-wise operations in their annual reports as well as in their quarterly reports. The present study therefore is based on identification of annual reports of 26 Indian commercial banks as well as 25 Kenyan commercial banks and shows that segment reporting practices of these units have taken a new turn after the implementation of the standards (IAS-14/Indian AS-17 respectively). There is no difference between the disclosure practices of Indian commercial banks and Kenyan commercial banks though they are adopting different accounting standards. There is a need for convergence to IFRS so that global understanding in the banking sector world over may develop. KEYWORDS: Commercial banks, IFRS, Segment reporting, Indian AS. ______________________________________________________________________________ 1. INTRODUCTION Segment reporting is applicable to a diversified enterprise. A diversified company may be defined as a company which has diversified operations i.e. activity or operations in different industries and/or foreign operations and sales where those activities or operations are significant in terms of sales, revenue or losses generated or assets employed. Under segment reporting, companies/banks especially those which are multi-product and multilocation are required to disclose their segment-wise operations in their annual reports as well as in their quarterly reports. As per IAS-14, this standard should be applied by enterprises whose equity or debt securities are publicly traded and by enterprises that are in the process of issuing equity or debt securities in public securities markets. Those entities whose securities are not publicly traded but choose to disclose segmental information voluntarily in financial statements that comply with the IFRS, should comply fully with the requirements of IAS. This standard should be applied in complete sets of published financial statements that comply with International Accounting Standards (IAS). In India this standard comes to effect in respect of accounting periods commencing on or
237
ZENITH
after 1.4.2001 and is mandatory in nature from that date in respect of: Enterprises whose equity or debt securities are listed on a recognized stock exchange in India and enterprises that are in the process of issuing equity or debt securities that will be listed on a recognized stock exchange in India as evidenced by the Board of Directors resolution in this regard. Also, all other commercial industrial and business reporting enterprises, whose turnover for the accounting period exceeds Rs. 50 crores. SEGMENT INFORMATION TO BE PRESENTED The objective of this statement is to establish principles for reporting financial information by segment information about the different types of products and services an enterprise produces and the different geographical areas in which it operates. Such segment information helps users of financial statements; (i) (ii) (iii) better understand the enterprises past performance better asses the enterprises risks and returns and make more informed judgments about the enterprise as a whole
Therefore presentation of segment information as an integral part of financial statements becomes more essential to provide useful information for economic decisions. SEGMENT REPORTING UNDER IAS-14 AND AS-17 TABLE 1 SHOWING COMPARISON OF IAS-14 AND AS-17 POSITION AS PER IAS-14 1. IAS-14 prescribes treatment of revenue, expenses, P/L, assets and liabilities in relation to associates & joint ventures in consolidated financial statement. 2. IAS-14 encourages reporting of vertically integrated activities as separate segments but does not mandate the disclosure. 3. IAS-14 provides that a business segment can be treated as reportable segment only if, inter alia, majority of its revenue is earned from sales to external customers POSITION AS PER INDIAN AS-17 1. AS-17 is silent on the respect of treatment in the consolidated financial statements.
3. AS-17 does not contain any such stipulation
238
2. AS-17 does not make any distinction between vertically integrated segment and other segments
ZENITH
4. Under IAS-14, if a reportable segment ceases to meet threshold requirements, than also it remains reportable for one year if the management judges the segment to be of continuing significance. 5. Incase of change in identification of segments, IAS-14 requires restatement of prior period segment information. Incase it is not practicable; IAS-14 requires disclosure of data for both the old and new bases of segmentation.
4. Under AS-17, this is mandatory irrespective of judgment of management.
5. AS-17 requires only disclosure of the nature of the change and the financial effect of the change, if reasonably determinable.
2. LITERATURE REVIEW The idea of segment reporting came up in the early 1970s. In 1974 the Financial Accounting Standards Board (FASB) of USA issued SFAS 14; Financial reporting for segment of a business enterprise which was strongly encouraged by the financial analyst community. It was after this that the International Accounting Standards Committee (IASC) issued IAS-14; Reporting financial information by segment in 1981. Later it was revised in 1998 and became effective for periods beginning on or after July 1.1998. Several countries aro und the globe due to convergence to IFRS have made the segment reporting mandatory. In India AS-17; Segment reporting was issued in 2001 whereby it applies to listed enterprises as well as unlisted enterprises with an annual turnover exceeding Rs. 50 crore s. Few studies have been conducted regarding segment reporting. The United Nations Conference on Trade and Development (UNCTD) (2006) on reviewing the practical implementation issues of IFRS in Kenya found out that many companies, both listed and non-listed which presented segmental information failed to comply fully with the requirements of IAS-14.
Prakash (2006) studied segment reporting a survey of 36 of foreign banks operating in India. The study observed that segment reporting practices of these units have taken a new turn after the implementation of AS-17. Although the attempts made by the foreign banks are highly applicable, yet more efforts are required to make segment reporting more meaningful and purposeful since thre is a significant difference in the segment reporting disclosure practices in the banking units Shukla (2005) studied the segment reporting practices of 49 Indian companies as per AS17 under different categories such as banks, chemicals, pharmaceuticals, textile, software etc. The findings of the study showed that almost all the units have disclosed by 72% of the units. An interesting finding was observed that only one unit of the sample company has disclosed details about the inter-segment transfer of goods.
ZENITH
Schiff et.al (2006) in their study Segment reporting transparency-caveat emptor: financial analysts M&A managers and others offer some of the key points which include making accounting policies, in all accounting process, special disclosures for change in segment accounting policies and presenting a reconciliation between information reported for segments and consolidated information. Jack and Largay (2005) in their study concluded that despite more segment data being reported, the potential of the new management approach to bene fit users significantly is compromised by uneven compliance among reporting companies. Complicity of external auditors in compliance shortcoming should concern all stakeholders in the financial reporting process. NEED AND RESEARCH GAP OF THE STUDY The foregoing review of literature reveals that some studies have been conducted to analyze the various aspects of corporate segment reporting practices in India. Hardly any comparative study has been carried out to explore the research on segment reporting a stud y of commercial banks in Kenya and India. This study has been taken because the two countries i.e. Kenya and India adopt different accounting standards. In this case, Kenya has adopted International Accounting Standards (IAS) issued by International Accounting Standards Board (IASB) while India has adopted Indian Accounting Standards (AS) issued by Institute of charted Accountants of India (ICAI). Hence the need to carry out this study was felt. OBJECTIVES OF THE STUDY i) ii) iii) iv) To examine the adoption of IAS-14 by commercial banks operating in Kenya and AS-17 by commercial banks operating in India Study and compare the items of disclosure for primary segment Study and compare the items of disclosure for secondary segment. To examine whether the companies are disclosing the items required by the segment reporting.
3. DATABASE AND METHODOLOGY STUDY DESIGN AND DATA COLLECTION For the fulfillment of the above objectives, the annual reports for the year ending 2008 2009 of 25 Kenyan commercial banks and 26 commercial banks operating in India were selected. The period of study and sample of study was selected on convenience basis in order to fulfill the objectives of this study. Twelve (12) indicators were selected, eight (8) for primary and four (4) for secondary segment on the basis of disclosure requirement by IAS-14. The indicators for primary and secondary segment are;
ZENITH
X1= Primary reporting; business segment X2= Segment revenue X3= Segment results X4= Carrying amount of segment assets X5= Total amount of segment liabilities X6= Cost incurred during the period to acquire segment assets X7= Expense segment results for depreciation and amortization X8= Non-cash expense X9= Secondary reporting; geographical segment X10= Revenue from external X11= Segment assets by geographical location X12= Segment liabilities. HYPOTHESIS The basic assumption in this study is that, since accounting standards have gone global, all the banks working in the globe should have same segment disclosure practices. The hypotheses of the study include: H0 =There is no significant difference in segment disclosure practices among Kenyan and Indian commercial banks. H1 = There is significant difference in the segment reporting disclosure practices among Kenyan and Indian commercial banks.
4. DATA ANALYSIS AND RESULTS This part presents major observations which have been identified from the financial statements of commercial banks operating in India and Kenya as far as segment reporting is concern. 4.1 AN ANALYSIS OF PRIMARY SEGMENT It is observed from the financial statements of the 26 commercial banks operating in India that 23(88.46%) banks have given segment information in the annual reports. These sample units have reported that they have segmented their business into more than one segment. The 2(7.70%) sample units which have not disclosed description segment reporting have different reasons. For example; First Leasing Company of India Limited states that The banks operations comprise of
ZENITH
only one segment, no separate reportable segment under As-17 segment issued by the Institute of Chartered Accountant of India. In case of commercial banks operating in Kenya, its been observed that 24 (96%)out of 25 units have given segment information in the annual reports. TABLE 2 INDICATORS DISCLOSED FOR PRIMARY S EGMENT BY THE SAMPLE UNITS S.N. Indicators India No of companies 23 23 23 23 23 6 4 0 % 88.46 88.46 88.46 88.46 88.46 23.08 15.38 0 Kenya Number of companies 24 23 21 24 24 13 13 0 % 96.00 92.00 84.00 96.00 96.00 52.00 53.00 0
1. 2. 3. 4. 5. 6. 7. 8.
Business segment Segment revenue Segment results Segment assets Segment liabilities Cost incurred to acquire segment asset. Expense segment results for depreciation. Non-cash expense
Source: computed from the published financial records of sample units These units have also reported that they have segmented their business into more than one segment except one unit (i.e. Bank of Africa) which has not disclosed any information regarding segment reporting, and even the reason for not having such disclosure of segment information is not mentioned in its financial statement. Its observed that all the banking units showing segment reporting have chosen business segment as their primary segment.
Its clear that 88.46% of Indian sample units have disclosed about their segment revenue, segment results, segment assets and segment liabilities. Cost incurred to acquire segment assets was reported by 6(23.08%) units while an expense segment result for depreciation was disclosed by 4(15.38%) units. However no company disclosed about non-cash expense. In the case of Kenyan sample units 24(96%) disclosed their business segment, segment assets and segment liabilities. 23(92%) disclosed about segment results while 13(52%) disclosed about expense segment results for depreciation and cost incurred to acquire segment assets respectively. No unit reported about non-cash expense.The overall picture of disclosure of segment reporting practices of commercial banks operating in India and Kenya shows that; there are 26 Indian commercial banks covered for the study and 25 Kenyan commercial banks. In case of
ZENITH
Indian units, ICICI Bank is rated higher in the study followed by Standard Chartered bank, HSBC bank, Citi bank, Allahabad bank and Indian Overseas bank for their segment reporting disclosure. In case of Kenyan units, CFC bank Ltd and Standard Chartered bank are rated highest in the study followed by Credit bank as well as Barclays bank of Kenya, Commercial bank of Kenya and National bank of Kenya Ltd for their segment reporting disclosure. 4.2 ANALYSIS OF SECONDARY SEGMENT It is observed from the 26 Indian commercial banks that only 11(42.31%) banks have reported that they have secondary segment i.e. geographical segment. The eleven (11) units have disclosed regarding revenue as well as segment assets, while 10(38.46%) units have disclosed regarding segment assets. 2(7.00%) of the units have reported regarding segment liabilities under geographical segment. In the case of Kenyan commercial banks under study, out of the total 25 units under study, only 12(48%) have reported secondary reporting i.e. geographical segment, where as twelve (12) units have disclosed regarding segment assets. Only 4(10%) units disclosed regarding segment liabilities under geographical segment. In both cases most of the units did not disclose geographical segment due to following reasons as mentioned in their annual reports. 4.3 TESTING OF HYPOTHESIS TABLE 3 CHI-SQUARE RESULTS Primary Segment Kenyan Commercial Banks Indian Commercial Banks Secondary Segment
24
23
21
23
23
13
12
11
13
11
24
24
24
24
24
Chi value p value
0 1 NS
0.354 0.55 NS
2 0.15 NS
0.354 0.354 4.15 0.55 NS 0.55 NS
7.71
NA 0.764
2.05
1.38
4.34
0.04 0.005 NA 0.382 0.151 0.238 0.03 S S NA NS NS NS S
Source; calculated values of chi square from annexure I and II. The null hypothesis of the study is that there is no significant difference in segment disclosure practices among Kenyan and Indian commercial banks. This is tested by a non-parametric test (chi square). Table 3 shows the calculated values of as well as the P values at 5% level of
ZENITH
significance. Table 3 reveals that there is no significant difference that has been found in variables measured under study. It is respectfully submitted that there is enough statistical evidence to accept the null hypothesis. 5. MAJOR FINDINGS AND CONCLUSION After the implementation of IAS-14 and Indian AS-17, segment reporting practices of commercial banks working in India as well as Kenya have increasingly taken a new turn, and are responding to the requirements of the standard. This has been revealed by the disclosure of 26 Indian units and 25 Kenyan units. Its been found that majority i.e. 88.46% and 96% (Indian units and Kenyan units respectively) have disclosed about their business segment. Other indicators like segment revenue, segment results, segment assets, segment liabilities etc. have been disclosed by the sample units. It has also been revealed that in both countries, the first five indicators of primary reporting i.e. have greater compliance with the standard than the last three indicators of primary reporting. An effort has been made by these units regarding segment reporting. Yet again more effort is required to make segment reporting more meaningful and purposeful, as there are significant differences in the segment disclosure requirement between IAS-14 and Indian AS-17. Convergence of IFRS which is taking place world over will be of great importance of this problem as India is fully converging to IFRS by 2011. REFERENCES Prakash N. (2006) segment reporting (AS-17); A survey of foreign banks working in India Indian journal of accounting Vol. xxxvii (i) December 2006. Gopta, N. D. (2005) Indian accounting standards IFRS, US GAAP comparison Le xisNexis Butter worths (A division of Reed Elsevier India pvt ltd) 2005 pp. 726-753. Ghosh, T. P. (2000), Accounting standards and corporate Accounting practices with special emphasis on international accounting standards Taxmann publishers, pp.802-04 Jack. N. Paul James A. Largay, Harvard business review, July 15 2005.
Schiff, Jonathan B. Schiff Allen I (2006) management accounting quarterly journal September 22. 2006 The United Nations Conference on Trade and Development (UNCTD) on reviewing the practical implementation issues of IFRS in Kenya, 2006
ZENITH
ANNEXURE I INDIAN COMMERCIAL BANKS S.No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18 Name of Bank IDBI Bank Standard Bank HSBC Citi Bank ICICI Bank Allahabad Bank Andra Bank Punjab National Bank Canara Bank City Bank Corporation Bank Dena Bank Development Bank ltd x1 Chartered credit x2 X X x3 X X x4 X X x5 X X x6 X X X X X X X X X X X X X x7 X X X X X X X X X X X X X X X X X X X x8 X X X X X X X X X X X X X X X x9 X X X X X X X X X X X X x10 X X X X X X X X X X X X x11 X X X X X X X X X X X X x12 X X X X X X X X X X X X X X X X X X
Export import Bank of X India First leasing company X of India Global trust bank ltd Bank of India Indian overseas bank
ZENITH
19. 20.
Induslnd bank ltd
X X
X X
X X
X X
X X
X X
National bank for agriculture and rural development Syndicate bank UCO bank Union bank of India United bank of India
21. 22. 23. 24. 25. 26.
X X X X X
X X X X X
X X X X X X
X X X X
X X X X
X X X X X
X X X X X X
Abu Dhabi commercial bank China trust commercial bank
ANNEXURE II KENYAN COMMERCIAL BANKS S.No Name of Bank 1. 2. 3. 4. 5. 6. 7. 8. ABC Bank Bank of Africa Bank on Baroda Barclays Kenya Bank x1 X of x2 X X x3 X X X x4 X X x5 x6 X X X X X X X X x7 X X X X X x8 X X X X X X X X x9 x10 X X X X X X X X X X x11 X X X X X x12 X X X X X X X
CFC Bank ltd
Cooperative Bank of Kenya ltd Diamond Trust Bank of Kenya ltd Equity Bank ltd
ZENITH
9. 10. 11. 12. 13. 14. 15 16. 17. 18. 19. 20 21. 22 23. 24. 25
Housing Finance Company ltd Kenya Bank commercial of
X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X
X X X X X X X X X
X X X X X X X
X X X X X X X X
X X X X X X X X X X X X X
National Bank Kenya ltd
National Industrial Credit Bank ltd Standard Bank Chartered
Delphis Bank
Trans National Bank ltd Bank of India Dubai bank ltd Kenya Imperial bank ltd Family bank Fina bank Giro commercial bank
Development bank of Kenya Oriental bank of Kenya ECO bank Credit bank
ZENITH
EMOTIONAL INTELLIGENCE AND ITS EEFETCS ON JOB PERFORMANCE: A COMPARATIVE STUDY ON LIFE INSURANCE SALES PROFESSIONALS
NIDHI YADAV*
*Lecturer, GIDC Rajju Shroff Rofel Institute of Management Studies, Vapi, Gujarat, India.
ABSTRACT We are born with EI, which can never consider as a gift. It can be developed by our self. Many organizations are recognizing the importance of EI at their workplace as well as in job performance. Emotional Intelligence is the ability to understand ones emotions and inspire, influence and understand other peoples emotions. The more you are aware, the more you control your actions and no difference in job performance. At workplace you have to deal with social teams, friends, high profile people, leaders, a boss and more. The bes t way to be effective in taking quick and effective decisions is to use our emotions. In this article an attempt has been made to discuss the effects of EI on job performance, especially of Life Insurance sales professionals. A sample of 100 sales professionals from five different life Insurance companies in Vapi region was selected. Out of them 82 had responded. The result revealed that except Self Management, all the rest factors contribute to EI. KEYWORDS: Emotional intelligence (EI), Job performance, Life Insurance, Sales Professionals, Work Place. ______________________________________________________________________________ INTRODUCTION Maya is 60 years old. She still gets around pretty well and is able to handle her house hold matters including related purchasing. Unfortunately, Maya is a little hard to understand because her voice is harsh and raspy. One day, Maya went to the departmental store to get some snacks. She asked the sales boy to show her some variety of snacks. The sales boy spoke loudly to Maya assuming that she was unable to hear. Then Maya spoke loudly to him and said she wanted to buy some snacks. By the time, every one in the store, including rest sales boys/ girls, watchmen was watching and listening. Both were very frustrated and embarrassed after long arguments. The next sales boy behind Maya went to the store manager and silently explained the whole matter. The manager joined immediately and peacefully takes care of her problem. In a few minutes Maya was smiling and explaining what she wanted from that sales boy. The sales boy shown some variety of snacks to her and tactfully apologized. Hence, once everyone started using emotional intelligence, business become normal. EI has been defined by many authors. Some of the revolutio nary definitions are as follow:
248
ZENITH
Hein (2007) defines Emotional Intelligence is the innate potential to feel, use, communicate, recognize, remember, describe, identify, learn from, manage, understand, and explain emotions. It is important to use emotional intelligence because it will help us to be flexible in changing situations. It involves self awareness, empathy and self restraint. In the workplace, this ability can enhance interpersonal communication and people skills. According to Mayer and Salovey (1990) Emotional Intelligence is the ability to monitor ones own and others feelings and emotions, to discriminate among them and to use this information to guide ones thinking and actions. Freedman (1998) defines Emotional Intelligence is a way of recognizing, understanding and choosing how we think, feel and act. It helps us to improve our understanding. M Dileep Kumar (2006) defines EI is a set of competencies, which direct and control ones feeling towards work and performance at work. The set of competencies is ability of an individual being to control and manage his or her mood and impulses, which contribute to best of situational outcomes. According to K.sekarin his Presentation Transcript- Emotional Intelligence For Managers (2007) Emotional Intelligence doesn't mean being soft it means being intelligent about emotions a different way of being smart. Emotional intelligence is your ability to acquire and apply knowledge from your emotions and the emotions of others in order to be more successful and lead a more fulfilling life. Bosses and leaders, in particular, need high EQ because they represent the organization to the public, they interact with the highest number of people within and outside the organization and they set the tone for employee morale, says Goleman. Wayne Leon Payne( Student at an alternative liberal arts college, USA) was the first who wrote on EI in 1985. Then the two professors of American University John Mayer and Peter Salovey wrote on EI titled as Emotional Intelligence and found that some people are better than others to identify their own feelings as well others and solving problems involving emotional issues. Now a personality who is most commonly associated with the term EI Daniel Goleman had been started working on an article on EI and also started his research work for his book based on EI in 1992 and then published it in 1995 titled again Emotional Intelligence Since there have been many work done by many authors about EI. This article focuses to provide the impact of five factors of EI on Job Performance of especially Sales Professionals. 1. EMOTIONAL INTELLIGENCE: THE ELEMENTS EI scale constitutes five dimensions or elements- Self awareness, Self management, Motivation, Empathy and Social skills, which affects an individuals behavior/performance. SELF AWARENESS- examining how your emotions affect your performance; using your values to guide decisionmaking; self-assessment - looking at your strengths and weaknesses and learning from your experiences; and being self-confident and certain about your capabilities, values and goals. Self awareness in job performance is required for emotional awareness, accurate self assessment and self confidence.
ZENITH
SELF MANAGEMENT- controlling your temper; controlling your stress by being more positive and action-centered; retaining composure and the ability to think clearly under pressure; handling impulses well; and nurturing trustworthiness and self-restraint. Controlling ones internal position, managing limited resources, Trustworthiness, etc. which is important for conscientiousness. MOTIVATION- enjoying challenge and stimulation; seeking out achievement; commitment; ability to take the initiative; optimism; and being guided by personal preferences in choosing goals. This element is important in job performance for commitment, initiatives and confidence. EMPATHY - the ability to see other people's points of view; behaving openly and honestly; avoiding the tendency to stereotype others; and being culturally aware. Our intuition about others needs and concern. this element is essential in job performance for understanding each other, support and progress of people etc SOCIAL SKILLS- the use of influencing skills such as persuasion; good communication with others, including employees; listening skills; negotiation; co-operation; dispute resolution; ability to inspire and lead others; capacity to initiate and manage change; and ability to deal with others' emotions - particularly group emotions. Ability to act in response to others as it is essential in the job performance for communication, leadership, resolution for variance, mutual understanding, teamwork etc. 2. REVIEW OF LITERATURE: Gardner (1983) and Hendrie Weisinger (2005) proposed that there are four basic elements of o ur emotional intelligence: The ability to accurately perceive, appraise and express emotion, The ability to access or generate feelings on demand when they facilitate understanding of your self or another person, The ability to understand emotions and the knowledge that derives from them, and, The ability to regulate emotions to promote emotional and intellectual growth. In an organization employees tend to suppress their emotions as method of emotional management. This is what their parents, teachers and societies have taught them. When Children become angry, their parents say, Dont lose your temper so easily. When they get excited, elders chastise them, Dont get carried away. If a boy weeps, his parents remind him, Men dont shed tears. When an employee develops the habit of suppressing emotions this way, he/she holds back feelings so that they do not reach the points of eruption. This may eventually become a source of abnormal behavior and psychological problems. Due to increase in the number of such instances, the top management has become conscious that employees need to learn different ways of managing their emotions and expressing themselves. (Dalip Singh, 2001) When we want to manage our money, we want a financial planner. Of course we need a cosmetologist to manage our hair, and a gardener to manage our yard. These are a few examples of what some people are willing to do in order to manage their lives and improve the flow. How do we manage our emotions? By feeling them, that's how. Abrams (1997) Managing your emotions Feeling does not mean dramatizing, it simply means feeling. By doing so, you'll
250
ZENITH
develop a more positive and inviting attitude, stay healthier and happier, and improve every one of your relationships, including the most important, the one with yourself Methew (2010) defines in an article The Buzz About Emotional Intelligence shown five elements of emotional intelligence given by a psychologist and a science journalist, Goleman (1998) who developed a framework to explain emotional intelligence in terms of five elements, he described as self-awareness, self- regulation, motivation, empathy and social skills. Each of these elements has distinctive characteristics, Goleman believes that emotional intelligence can be developed over a period of time and he developed an Emotional Competence Inventory (ECI Employment Cost in association with the Hay Group, to use in assessing and developing EQ competencies at work. The ECI reduces the original five components of emotional intelligence to four: Self awareness, Self management, A critical article by Charles Woodruffe in 2001 reviewed Goleman's version of EI, and suggested that: Goleman contradicts himself in claiming that emotional intelligence is inherent and biologically based, yet is a skill that can be learned and developed. Peter Salovey from Yale University & John D Mayer from University of New Hampshire has described in their article Emotional Intelligence in 1990, Baywood Publishing Co, Inc The emotionally intelligent personattends to emotion in the path toward growth. Emotional intelligence involves self-regulation appreciative of the fact that temporarily hurt feelings or emotional restraint is often necessary in the service of a greater objective In the short-term it may not be pleasant or rewarding for that person to go through the sacrifices or emotional challenges, but the end result of successfully helping another may transmute the negative aspects of the experience into positive ones, or at least transmute the experience as a whole into one of value and personal meaning. Emotionally intelligent individuals realize that there is a bigger picture at work, that dwarfs the limited perspective that we all too easily confine ourselves by. People who have developed skills related to emotional intelligence understand and express their own emotions, recognize emotions in others, regulate affect, and use moods and emotions to motivate adaptive behaviors. Is this just another definition of a healthy, self- actualized individual? (Salovey & Mayer 200)
The beauty of working with our emotions is that we naturally reap the benefits of getting to know ourselves more intimately. When we have a clearer sense of who we are and who we are becoming, we can make wiser choices in life by strengthening our response ability to everything that happens to us. Self discovery is a lifelong process, and it can serve us for our entire lives. Self discovery is the basis for self care, and self care is the foundation for long lasting satisfaction and happiness in life, which are intricately linked to mental, emotional, and physical health.
ZENITH
3. METHOD 3.1 RESERCH DESIGN
The study is descriptive in nature. The major emphasis in this study was on find how emotional intelligence affects the job performance and how each elements of EI contributes in a Job performance approach. 3.2 RESERCH INSTRUMENT The inventory was developed keeping 5 parameters of EI related to job performance. A pilot study was conducted to understand its relevance in the Life Insurance Professionals job performance. 3.3 SAMPLE PLANNING Sample unit Life Insurance Industry Sampling Method purposive sampling Sample size 82 Sales Professional 4. DATA COLLECTION AND PARTICIPANTS A sample of 82 Sales Professionals employed in five different Life Insurance companies participated in this study. The selection of the companies was random and as per the convenience of the author and his good relationship with those organizations. This was important, as cooperation of the company played a major role in ensuring the accuracy of data, which was collected within the available time frame. The existing Sales Professionals were selected for completing the scales regarding their own performance as they were expected to be most major supply of in receipt of the data. All the Sales Professionals were experienced and had at least minimum one year of experience in this field. The level of experience was expected to have an impact upon the way in which the questionnaire was designed.
The focus of the sample was five different Life Insurance Companies because of high pressure reading the sales targets which was likely affect self awareness and self management in the sales Professionals as the results. They were in the age group ranging from 22-40 years. Data was collected from five different organizations Sales Professionals using structured questionnaires, which was divided into six parts. Each survey comprising a set of 10 -15 questions, was administered to the Sales Professionals to evaluate their Self Awareness, Self Management, Motivation, Empathy and Social Skills.
ZENITH
For the purpose of this study, a copy of the questionnaire was given to 100 Sales Professionals in Vapi Region. The survey was confidential. No names or any identity were recorded. 82 were responded from the total respondents. 4.1 DEPENDENT VARIABLE JOB PERFROMANCE The companys evaluation is based on the Sales Professionals job performance, which is related to their current performance. Data were collected by using quantitative scale of measurement and personal interview was also taken for data collection. 4.2 INDEPENDENT VARIABLE EMOTIONAL INTELLIGENCE To evaluate the emotional intelligence of Sales Professionals with respect to their job performance, questionnaire was designed and used. EI scale constitutes five dimensions or elements which affects an individuals behavior/performancesSelf awareness. Self management Motivation Empathy Social skills. It consists of 72 questions which will measure EI with respect to all five dimensions, how an individuals performance can be affected by one of the dimensions. 5. RESEARCH OBJECTIVE To find out the effects of Emotional Intelligence on Job Performance. The relationship of variables of emotional Intelligence with job performance. 6. RESEARCH HYPOTHESIS: HYPOTHESIS 1: There is a significant relationship between EI elements and overall job performance of Sales Professionals HYPOTHESIS 2: There is a significant relationship between EI groups among the group and within the group.
ZENITH
7. DATA ANALYSIS To evaluate the relationship between EI and job performance, T-test, ANOVA and Correlation performed by the author. 8. RESULTS Reliability Statistics: Cronbach Alpha test TABLE 1
Cronbach's Alpha .817
Cronbach's Alpha Standardized Items .842
Based
on N of Items 72
The above Table indicates the 84% validity of 82 responded so that we can say the instrument used for evaluating EI with reference to job performance holds high reliability. The covariance matrix is calculated and used in the analysis. TABLE 2 SUMMARY ITEM STATISTICS Maximum / Minimum 2.102
Mean Item Means 3.741
Minimum Maximum Range 2.146 4.512 2.366
Variance .242
N Items 72
of
Table 2 shows the value of mean, which is minimum and maximum. It shows that the Mean= 3.741 which exist in between the scale (i.e. 1-5). It means that the self-awareness of the Sales Professionals is almost towards the Neutral and Agree part. This is a positive sign. It means the ratio of their self awareness is good regarding their own EI. Minimum Mean= 2.146 is towards the Disagree part and it might be possible that due to this value the result of SM is different in ANOVA i.e. .033 and SA, M, SS & E have correlation i.e. .000 or close to it, Hence the Hypothesis 1 -
254
ZENITH
There is significant relationship between EI elements and overall job performance of Sales Professionals is proved. Further, Maximum Mean=4.512 is towards the Agree and Strongly Agree part, which shows highly awareness in sales professionals regarding their EI. .Variance in between the set of 10 questions on self awareness is only .242 .Which is a positive sign (Indicates that the questionnaire is accurate). TABLE 3 ANOVA THERE IS SIGNIFICANT RELATIONSHIP BETWEEN EI GROUPS AMONG THE GROUP AND WITHIN THE GROUP. Parameters SA Between Groups Within Groups SM Between Groups Within Groups M Between Groups Within Groups E Between Groups Within Groups SS Between Groups Within Groups *p-0.001 df 17 64 17 64 17 64 17 64 17 64 Mean Square .306 .110 .089 .046 .157 .049 .107 .032 .263 .101
F 2.798
Sig. .002
1.914
.033
3.229
.000
3.318
.000
2.605
.003
Table 3 shows the ANOVA results of performance with the EI factors i.e. Self awareness, self management, Motivation, Empathy and social skills within the groups and among the groups. This test was carried out to determine which factor has makes greater and least impact on overall performance and result indicates that except Self management P- .003 rest all have greater impact and remains the same across the samples. The study investigated co rrelations between emotional intelligence and job performance Thus:
ZENITH
There is significant relationship between EI groups among the group and within the group. Thus hypotheses 1 and 2 are supported each other as the factors which are contributing to these hypotheses have significant effect on overall job performance. TABLE 4 CORRELATIONS TEST TABLE INDICATING CORRELATIONS BETWEEN EI AND JOB PERFORMANCE THERE IS A SIGNIFICANT RELATIONSHIP BETWEEN EI ELEMENTS AND OVERALL JOB PERFORMANCE OF SALES PROFESSIONALS SA SA Pearson Correlation Sig. tailed) N SM Pearson Correlation Sig. tailed) N M Pearson Correlation Sig. tailed) N E Pearson Correlation (2(2(21 . 82 .319(**) .003 82 .114 .310 82 .309(**) 1 . 82 .259(*) .019 82 .374(**) 1 . 82 .464(**) 1
SM
SMo
SS
Overall
ZENITH
Sig. tailed) N SS
(2-
.005 82 .450(**) .000 82 .027 .807 82
.001 82 .373(**) .001 82 .401(**) .000 82
.000 82 .169 .129 82 .523(**) .000 82
. 82 .387(**) .000 82 .465(**) .000 82 1 . 82 .227(*) .040 82 1 . 82
Pearson Correlation Sig. tailed) N (2-
Overall
Pearson Correlation Sig. tailed) N (2-
** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed). Table 4 shows the correlation between EI and overall performance score. There is positive correlation among EI elements (Self Management, Motivation and Empathy) with one another. P - .001 r- .523, P- .001 r- .465, P- .001 r- .401 respectively. As per the analysis two EI elements Self Awareness and Empathy are the feeble factors in an Individuals performance of an Insurance Company, P- .807 r- .027 and P- .040 r- .227 respectively, which directly affecting the overall performance of an Individual. 9. DISCUSSION
This study examined empirically the relationship between emotional intelligence and performance in Indian perspective. The objectives of the study are 1. 2. There is a significant relationship between EI elements and overall satisfaction of Sales Professionals. There is significant relationship between EI groups among the group and within the group.
ZENITH
The study shows P - .001 r- .523,moreover Self Management has seen as a factor which has high correlation and subsequently showing deviation in within and between the groups. EI has a predictive effect on job performance harmonize with the findings of the previous researchers ( Goleman, 1997). Goleman research shows that EI is nothing but knowing what your feelings are, and being able to handle those feelings without having them swamp you and being able to motivate yourself to get jobs done. It is very necessary for a sales professional to have EI, to monitor his emotional expressions and the awareness of emotions which are acceptable at workplace. So, it is very important to grab every opportunity to promote EI at the workplace to boost up the productivity of an individual and team. According to Golman ( 1998) and Bar on and Parkker ( 2000) EI is an important part of the individuals ability to influence the performance of the organization. Every individual is capable to achieve his personal and professional targets and he has to manage others mood and their emotions therefore EI might improve the performance of an individual in the workplace. A finding further shows that the Self management which is shown in table 4 has the capacity to manage the performance of sales professional. The reason being it creates a climate of trust, openness and fairness and in such an open climate the negativity of an individuals performance automatically get down and high productivity comes up and it contribute to overall job performance. EI is significantly linked up with the professionals performance and it may have some valuable implications for their subordinates. If a professional evaluates the level of EI, he might be able to recognize the area in which he is lacking and improve it. Further, with EI, a person can understand him self and others which helps him to improve his performance. As above tables shows that SM has a good impact on sales professionals, can improve their performance and commitments as well as companys performance. The developed EI, The greater performance. 10. CONCLUSION This study has shown some empirical analysis and the relationship between the EI and job performance. According to the study a sales professional must understands the importance of EI to become better performer or target achiever. It is very much clear that people with high EI are better performer than the lesser ones. For instance, to good performer, a salesman requires the empathic skills to know the customers mood and good management to present the product on right time. Company should take a step ahead to look up Self awareness and empathy as shown in table 4 so that an Individual can perform in a better way. Work may become more enjoyable with the right emotional skills and have good control on some emotions at workplace to be a better performer. Now, the challenge is to manage the professional life with high EI. REFERENCES BOOKS & JOURNALS Abrams A.D.A.,1997 , Managing your Emotions, Body Mind Spirit Magazine, [Online] Available at:<http://www.saskworld.com/bodymindspirit/edition16/01_article_alexandra.htm>(Retrieved on 02/07/10)
258
ZENITH
Biswas & Dutta, N.B & S.D., 2010, Emotional Intelligence in the workplace, HRM review, VolX Issue-X pp. 59-64 Daniel Golman ( 1998) , Goleman's framework of emotional intelligence[Online] Available at;<http://www.thefreelibrary.com/Daniel+Goleman+%3A+Emotional+Intelligence.a085608627> (Retrieved on 17/02/11) Daniel Goleman (1998) Emotional Intelligence[Online] Available at;<http://www.thefreelibrary.com/Daniel+Goleman+%3A+Emotional+Intelligence.a085608627 >( Retrieved on 17/02/11) Dileep Kumar M,. (2006), Emotional Intelligence for Better Work place Emotions[Online] Available at :< http://www.indianmba.com/Faculty_Column/FC344/fc344.html> (Retrieved on 28/06/10 Goleman, D.G.,1998, Working with Emotional Intelligence, New York, with Bantam Books, Golman (1990), Emotional Intelligence,[Online]Available at:<http://www.thefreelibrary.com/Daniel+Goleman+:+Emotional+Intelligence-a085608627> (Retrieved on 12/07/10) Hein, 2007,the Innate Potential Model of Emotional Intelligence,[Online]Available at :< http://eqi.org/eidefs.htm>(Retrieved on 12/03/2010, Retrieved on 17/02/11) John D. Mayer and Peter Salovey,1990,What is Emotional Intelligence?,[Online] Available at;<http://psychology.about.com/b/2009/02/23/emotional- intelligence-psychology-definition-ofthe-week.htm> (Retrieved on 01/06/10) Joshi, J.J.,2010, Emotional Intelligence and Performance Improvement, Emotional Intelligence , Vol X, issue- X, pp. 38-42 HRM Review,
Mayer Salovey( 2007) The Innate Potential Model of Emotional Intelligence [Online] Available at;<http://eqi.org/eidefs.htm> (Retrieved on 09/04/2010) Mishra and Mohapatra, P.M. & A.M.,2010, Relevance of Emotional Intelligence for effective job performance: An Empirical Study, Vikalp- The journal for Decision Makers, Vol 35 No.1 pp. 53-61
259
(2007), Emotional Intelligence, [Online PPT] Available at :< http://www.google.co.in/url?sa=t&source=web&cd=3&sqi=2&ved=0CDEQFjAC&url=http%3A %2F%2Fwww.indiastudychannel.com%2Fattachments%2FResources%2F87480-22120EMOTIONAL%2520INTELLIGENCE.ppt&rct=j&q=Emotional%20Intelligence%20doesn%27t %20mean%20being%20soft%20%E2%80%93%20it%20means%20being%20intelligent%20abo ut%20emotions%20%E2%80%93&ei=UrtcTeLOA8a3cOuRuIAK&usg=AFQjCNGZrm3JRhR KvlbH5kMoLMR1Xsk6dg&sig2=fBTqI96uklhG4oShPwQNNA&cad=rja>( Retrieved on 17/02/11
ZENITH
Pramila Methew(2010), The Buzz About Emotional Intelligence[Online] Available at:< (http://www.articlealley.com/article_1427513_15.html (Retrieved on 17/02/11 Salovey & Mayer (1990), Emotional Intelligence [Online] Avaialable http://mindfulconstruct.com/2009/03/31/salovey- mayer-on-emotional- intelligence1990/>(Retrieved on 22/07/10) at :<
Salovey & Mayer (1990), Emotional Intelligence [Online] Available :<http://mindfulconstruct.com/2009/03/31/salovey- mayer-on-emotional- intelligence-1990/ ( Retrieved on 17/02/11) Singh D.S.,2001, Emotional Intelligence At Work, New Delhi, with Response Books, Weisinger, H.W.,2005,Emotional Intelligence at Work, New Delhi, with Jossey-Bass,
at
260
ZENITH
CORPORATE SOCIAL RESPONSIBILITY: AN ANALYSIS IN SMES AT FARIDABAD REGION

SANDEEP GUPTA*; DR. PARUL KHANNA**
*Research Scholar, Singhania University, Rajasthan. **Associate Professor & Dean R&D, Institute of Management & Technology, Faridabad. ABSTRACT
Corporate Social Responsibility is one of the important aspects of civilized society in which every individual is continuously receiving different experiences from the society. These experiences have great influence in developing a character of an Individual. It is a responsibility of us to give back to the society, which has given us such a priceless treasure throughout our life. Every industry, no matter how big or small it is, has the larger role to play in this, as industry is a group of people working for some common cause. We all know that Small & Medium Enterprises sector is contributing almost 50% of nations GDP. This sector is also responsible to create jobs, which are more than 50% of total employment requirement of our country. This means there is large number of individuals whose livelihood is solely dependent on SMEs. ______________________________________________________________________________ INTRODUCTION WHAT IS CSR The words corporate, social, and responsibility suggests that, CSR covers the responsibilities that companies or corporations have towards the societies within which they are based and operate. From a practical perspective, CSR involves a business identifying its stakeholder groups and incorporating their needs and values within the strategic and day to-day decisionmaking process (University of Miami, 2007, p. 1).
A brief description of CSR is as shown in the following figure:
ZENITH
Corporate Social Responsibility is all about setting Policies, Ob jectives and Targets for excellence in three key areas:
Health & Safety
Environment
Social Community
Improving employee and supervisor safety through Train ing, Best Practice and Team Leadership
Addressing Emissions, Energy Efficiency, Climate Change, Biodiversity, Product Lifecycle & Innovation
Actively engaging with Emp loyees, Neighbors, Legislators, Regulators & NGOs
Then monitoring and verify ing performance and setting targets for continuous improvements.
Finally, CSR Reporting to all Stakeholders
FIGURE 1.1: BRIEF OVERVIEW OF CORPORATE SOCIAL RESPONSIBILITY? (CSR)
262
ZENITH
DEFINITIONS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) Authors (date) McGuire (1963) Davis (1973) Definitions The idea of social responsibility supposes that the corporation has not only economic and legal obligations, but also certain responsibilities to society which extend beyond these obligations. The firms consideration of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firmto accomplish social benefits along with the traditional econo mic gains which the firm seeks. CSR implies bringing corporate behavior upto a level where it is congruent with the prevailing social norms, values and expectations. CSR is the managerial obligation to take action to protect and to improve both the welfare of society as a whole and the interest of organizations. Corporate social responsiveness is the capacity of a corporation to respond to social pressure, the literal act of responding; or of achie ving a generally responsive posture to society. The social responsibility of business encompasses the economic, legal, ethical and discretionary expectations that society has of organizations at a give point in time. Corporate Social Performance is a business organisations configuration of principles of social responsibility, processes of social responsiveness, and policies, programs and observable outcomes as they relate to the firms societal relationships. Societal review of CSR= companys status and activities with respect to its perceived societal obligations. Corporate citizenship is concerned with the relationship between companies and society-both the local community which surrounds a business, and whose members interact with its employees, and the wider and increasingly worldwide community which touches every business through its products, its supply chain, its dealer network, its advertising and so on. Good corporate citizenship can be defined as understanding and managing a companys wider influences on society for the benefit of the company and the society as a whole.
Sethi (1875) Davis and Blomstrom (1975) Frederick (1978) Carol (1979)
Wood (1991)
Brown and Dacin (1997) McIntosh et al. (1998)
Marsden and Andriof (1998) quoted in Andriof
ZENITH
Marsden (2000)
Warhurst (2001)
A strategy of CSR is defined as the internationalization by the company of the social and environmental effects of its operations through proactive pollution prevention and social impact assessment so that harm is anticipated and avoided and benefits optimized () Contribute in ways that go beyond traditional responsibilities to shareholders, employees and the law, and that internalize indirect socio-economic and biogeophysical effects as well as direct impacts.
SMALL MEDIUM ENTERPRISES DEFINITION OF SMEs SMEs are defined in different ways in different parts of the world. Some define them in terms of assets, while others use employment, shareholder funds or sales as criteria. Some others use a combination of revenue and employment as a hybrid criterion. The definition of SME has bee n a contentious issue in India. In fact, the term, the term SSI (Small Scale Industry) is more commonly used to refer to SMEs. In recent years, the Government of India has sought to provide greater clarity in this sector by specifying a clear definition. In 2005, the definition of a Small enterprise was expanded to include a two category classificationa. Enterprises engaged in production/Manufacturing of goods for any industry b. Enterprises engaged in rendering/providing of services Enterprises in the manufacturing sector are defined in terms of investment in plant and Machinery (excluding land & buildings) and further classified into:Micro Enterprises Small Enterprises Medium Enterprises Investment up to Rs. 2.5 million Investment between Rs. 2.5million & Rs. 50 millio n Investment between Rs. 50 million & Rs. 100 million
ZENITH
SERVICE ENTERPRISES: defined in terms of their investment in equipment (excluding land & buildings) and further classified into: Micro Enterprises Small Enterprises Medium Enterprises Investment up to Rs. 1 million Investment above Rs. 1 million & up to Rs. 20 million Investment above Rs. 20 million & but below Rs. 50 million
RESEARCH METHODOLOGY RESEARCH OBJECTIVES The objective of the survey was to gather an extensive understanding on the following questions: RQ1. What does CSR mean and what drives the SMEs to engage in CSR activities in the Faridabad region? RQ2. What benefits do they hope to draw from CSR engagement? RQ3.What is the various types and scale of CSR activities that SMEs involve in, both individually as well as collectively? RQ4.What are the main factors that determine the type and scale of their CSR involvement? RESEARCH PURPOSE The thesis aims to identify the existence and extent of CSR initiatives and activities in the Micro, Small and Medium enterprises in Faridabad 1 . The main purpose is Descriptive with little consideration to exploratory study as well. RESEARCH APPROACH
Since this research tries to gain a deeper understanding of the Corporate social Responsibility and it questions about the reasons behind the seemingly low level of participation of Micro, Small and Medium Enterprises in the CSR movement a qualitative approach is being used. However, the data has been analysed through the bar diagrams, pie c harts etc. RESEARCH STRATEGY The research strategies adopted in this research work, for finding out answers of what questions are Survey and archival analysis. Therefore, a survey will be conducted for getting the results. Archival analysis is also used for both cross checking and for getting the survey results.
1
Town near Delh i, Cap ital of India.
ZENITH
DATA COLLECTION METHODOLOGY In our research on Corporate Social responsibility (CSR) in Faridabad Micro, Small and Medium enterprises (SMEs) carried out within the framework, contributes to the k nowledge of the actual state of affairs in the SME sector of Faridabad, regarding the CSR activities and foster understanding of developments taking place in this regard. QUESTIONNAIRE FORMAT The questionnaire was developed to obtain maximum amount of quantitative as well as qualitative information on Corporate Social Responsibility (CSR) activity. Questions focused not only on the enterprises exclusive activity, but also on joint efforts between enterprises within the cluster. Following were the eight main sections that were covered: I. II. III. IV. V. VI. VII. VIII. Basic SME Information SMEs CSR baseline (perceptions about CSR) Individual Internal CSR Individual External CSR CSR Initiatives-Financial loss Individual CSR motivators/Non Motivators Collective CSR and Impact Miscellaneous
SOFTWARE TOOLS USED FOR PROCESSING AND ANALYSIS The questionnaire was designed and created in the application MS Word. The application MS Excel was selected as a software tool for analysis and following synthesis of data and information and for creation of tables and charts used in the thesis.
BASIS OF THE RESEARCH The research was based on a random sample of Micro, Small and Medium enterprises in Faridabad with respect to proportionate representation of micro, small and medium- sized companies in the overall sample. The overall research consisted of the following main stages: 1. PREPARATION OF THE QUESTIONNAIRE TEMPLATE: taking into consideration similar surveys, professional literature and the researchers and the supervisors personal and professional experience and wit, the questionnaire draft containing a complete set of relevant questions was prepared in easy to distribute MS Word format.
ZENITH
2. PREPARATION OF THE SAMPLE: The office of Joint Director DIC Faridabad was used as a main source of information for the preparation of the sample. A total of 71 enterprises were selected on a random basis with only respect to proportionate representation of Micro, Small and Medium-sized enterprises in the overall sample. The companies registered with the Jt. Director DIC (Industrial) Office Faridabad were only selected. A brief description of these 71 Micro, Small and Medium Enterprises is as follows: 1.1 NUMBER OF THE SURVEYED SME AND THEIR DIVISION ACCORDING TO INVESTMENTS In total 71 Micro, Small and Medium enterprises actively participated in the survey. The distribution according to the size of the enterprise is shown in the Table 1.1: Size of the enterprise Micro Small Medium Total No. of surveyed enterprise 13 27 31 71 Relative Value 18% 38% 44% 100%
Table 1.1: Absolute and relative number of surveyed companies in the analysed sample, sorted by investments made by the enterprises. The above table shows that in terms of number of companies, SMEs are dominated by medium sized enterprises (44%). Small enterprises make upto 38% of the enterprise population and Micro enterprises account for the rest of the total 71 surveyed enterprises i.e., 18%. FINDINGS The thesis aims to achieve the two major research objectives: The first and foremost research objective is sought to describe basic Facts about surveyed Micro, Small and Medium enterprises in terms of Number, Hierarchical Level of Respondents, Line of Business, Total Investments made and the total Turnover. In a nutshell the demographic structure can be tabulated as under:
267
ZENITH
Demographic Number
Explanation Of the 71 respondents who completed the demographic section, it was found that the majority were Medium Enterprises (n = 31; 44%).
Hierarchical Level With regards to the respondents level of hierarchy, it was found that the of respondent majority of the respondents were Managers (n=34; 48%). Year of Establishme nt Line of Business As far as the year of establishment is concerned, it was revealed that the majority of the surveyed enterprises were established during the year 1981-1995 (n=28; 39%). The majority of the surveyed enterprises are engaged in the manufacturing of Auto Components (n=27; 38%). With regards to total investment done it was found that majority: Micro Enterprises invested a sum of Rs. 21 25 Lakhs(n=8; 62%) Total investment Small Enterprises invested a sum of Rs. 01-05 Crores (n=13; 48%) Medium Enterprises invested a sum of Rs. 8.6 - 10 Crores (n=16; 52%) With regards to total turnover it was found that majority: Micro Enterprises incurred a sum of Rs. 50 Lakhs - 2 Crores (n=8; 62%) Total Turnover Small Enterprises incurred a sum of Rs. 1-10 Crores (n=14; 52%) Medium Enterprises incurred a sum of Rs. >50 Crores (n=16; 52%)
TABLE 1.2: DEMOGRAPHIC STRUCTURE OF SURVEYED RESPONDENTS. The second Research objective is focused to analyze the details about the various questions asked in the questionnaire regarding the analysis of Corporate Social Responsibility programmes undertaken in the Micro, Small & Medium enterprises. It also seeks to analyse the relationship between the respondents opinions with reference to level, extent and nature of activities/initiatives undertaken by the Micro, Small & Medium enterprises in the Faridabad region.
268
ZENITH
Statements Meaning of Social Responsibility to: Micro Enterprises Small Enterprises Micro Enterprises The strategy for implementing social responsibility in SME can be put into action in: Micro Small Medium The main driver(s) CSR initiatives Influence (compulsion or inspiration) of any outside external agency to implement the CSR initiatives Arguments used by external agency for implementation of CSR in SME Most prevalent Individual Inte rnal CSR activities undertaken by SMEs The main Individual External CSR activities undertaken by SMEs: During the period of financial loss, response of SME regarding CSR initiatives Individual CSR activities undertaken by SMEs during the period of financial losses Outside factors influencing the motivating levels to engage in internal & external CSR Reasons for Non-implementation in Micro & Small ente rprises :
Test Result
Care of Labour Care of Labour Responsible governence
Internally Internally Externally Enterprise Owner No involvement To have contracts and agreements Labour Welfare Charity-Welfare Yes
Charities
Labour Welfare/ Religious Sensitivities
Lack of
ZENITH
Internal CSR External CSR activities
Resources Not important for business growth
Medium Enterprises Internal CSR
Diversion from business activity
External CSR activities Willingness to collaborate with other institutions for CSR implementation (Collective): Criteria to select institutions for implementing collective CSR initiatives Core reasons stating Importance of outside institutions implementing CSR activities Reasons for not-associating with external agency for CSR initiatives Preferring type (Individual or collective) CSR for
Nobody is doing anything why should we? Religious Institutions & NGOs Trust
Indispensible
Want only money Individual
TABLE 1.3: FINDINGS OBSERVATIONS The research survey revealed the following observations with regard to the objectives kept in mind: I. MEANING OF THE TERM CORPORATE SOCIAL RESPONSIBILITY (CSR) When we interviewed for a specific definition of CSR, the 71 surveyed Micro, S mall and Medium enterprises identified taking care of the labour as the most predominant answer, which was followed closely by the Useful guideline for responsible governance; another popular definition was Better goodwill helping to strengthen contacts.
ZENITH
In all the 71 SMEs surveyed, the number of SMEs that viewed CSR as a requirement for working with global brands was very minimal. By the term taking care of labour, most small firms referred to making timely wage payment, providing workers with interest free loans, awarding bonus and sometimes just providing basic minimum wages. For the micro units, however, the term would also implies provision of workers with tea and snacks in addition to paying timely wages and personal loans. While the definition of CSR varies greatly across countries and enterprises, we can also notice that the interviewed SMEs rarely expressed that implementation of CSR was imposed by immediate and remote business environment. Therefore, since these actions are voluntary we continue to look at the motivating factors that entice their implementation. II. MAIN DRIVERS OF CSR The primacy of entrepreneurs personal values over business gains driving the Corporate Social responsibility priorities, especially the external ones, is being emphasized by the motivation to drive any CSR which is perceived as a moral obligation of an individual towards its employees or community often represented by charities. Only in case of internal Corporate Social responsibility the employees have played a driving role. To the most part it is the entrepreneur who decides on the type and scope of activity, whose values are nurtured by religious faith. Certain external actions have been encouraged by business organisations such as Rotary or the Lions Club. The driving force remains in the hands of the entrepreneur, despite the variety of influences, who selects and determines the implementation of Corporate Social responsibility (CSR). III. INVOLVEMENT OF OUTSIDE EXTERNAL AGENCY AND ARGUMENTS FOR IT The survey brought forth that there was no involvement of any outside external agency which motivated the SMEs to involve in Corporate Social responsibility (CSR) initiatives.
However, certain external pressures in ways to have larger contract volume and long agreement duration; followed by the lucrative incentives to get Funding for technology upgrade motivated/influenced the entrepreneurs to get involved in CSR initiatives. IV. TYPES OF CSR INITIATIVES AND THEIR PREFERENCES Based on our demarcation of Corporate Social responsibility (CSR) we will be outlining three categories of activities. SME actions conducted within the enterprise, referred to Internal CSR, as well as actions benefiting the outside environment, referred to here as External CSR. Finally we distinguish activities conducted jointly with either other firms or with the support of various organisation which will be outlined under Collective CSR.
ZENITH
1) INTERNAL Inward looking CSR activities aim to strengthen the organisation mainly for the benefit of its labour force and the working environment. Across all Micro, Small and Medium enterprises the categories and the resources spent on each differ slightly and are influenced by the industrial sector as well as the size of firm, which often implies its position in the products value chain. To the most part these activities ride more on the informal relationships between the employer and the labour than any policies or systems. Broadly outlined internal CSR activities focusing on labour welfare, includes fair and timely payment to workers, bonus and gifts and monetary aids for family events, financial saving schemes and interest free loans, provision of food and accommodation to residential employees, and last but not least uniforms and protective gear. Particularly in terms of labour welfare, medium sized enterprises, often represented by Auto Component Manufacturers, provides such facilities as job contract in local language; fixed working hours, display all policies in visible area to all, job security guarantees, leave encashment, and respect of gender related issues. In terms of contributions to health care, extends to provide free medical help, subsidised private health insurance, maternity benefits, healthy work environment, protective gear and accessibility to first aid kits, health club membership; as well as substance abuse counselling and training on health related issues. In some cases these services have been extended to employees children and next of kin, hence despite their internal focus they equally impact the outside community. Expenditures in respect to the environment such as cleaner production and recycling are nominal particularly across the Faridabad SMEs, are noteworthy. Employee education, constitutes minor portion of total CSR spending, and includes training and upgrading worker skill- level, in terms of their technical and business skills. Transparency, focusing improvements of record keeping, communication with employees, is only visible in four MSMEs. 2) EXTERNAL
accounting and
financial
Outward looking CSR focus on activities directed towards the benefit of the community at large in which the enterprise operates. Dominated by charity donations, which are strongly influenced by religious sentiment, the contributions take on various forms. Entrepreneurs are the key drivers and thus want to express their larger responsibility towards the community where these entrepreneurs act as a common/known figure and therefore cannot deny/refuse help from the community. Charity donations lead and include contributions to religious organisations, hospitals and various homes for children and disabled. Interestingly medium sized enterprises prefer money and inkind donation and micro enterprises opt for non- monetary contributions in form of food, blankets or time.
ZENITH
In terms of health, enterprises subsidise access to health services, organised blood drives, donated medical aids and equipment to hospitals and clinics. Some Micro, Small and Medium enterprises have also established hospital trusts and even SME- level health plans. Occasionally benefits may extend beyond the close community, particularly during health camps organised in neighboring villages. As far as the environment issue is concerned the SMEs in Faridabad region are to some extent responsive towards the protection and safeguarding of the community environment. They do participate and promote campaigns such as Say No to Plastics which also has got legal support and restriction. Contribution towards education is not apparent in each enterprise. Just to a few these funds flow to skills development institutions or for construction of schools and cultural centres. Frequently enterprise leader establish NGOs to run schools and training institutions, which not only benefit the sector but also the community. While community welfare is limited to a few SMEs. V. PROTRACTING CSR ACTIVITY: FINANCIAL LOSSES Many Corporate Social Responsibility (CSR) activities are closely linked to the economic performance of the enterprise. When questioned if they would continue CSR spending despite their enterprise incurring a loss, they practically unanimously express a strong yes. Reason being, that many entrepreneurs expressed sense of obligation towards their employees and community, and through their contributions attempt to compensate for external failures. Yet to what extend will the intensity of contributions, even to charities, withstands a test of time is unclear, since it was not tested in the survey. However we have the evidence that contributions type and their scale will dually change, and vary from enterprise to enterprise even within one SME category. Firms affirmed that they predominately continue their religious contributions even when their businesses run in loss. Significant number of entrepreneurs confirmed having done so in the past. Some form of the Corporate Social Responsibility (CSR) activities work despite a loss situation, because of their commitments to orphanages, educational assistance and religious sponsored activities. The Micro Small and Medium enterprises said that they are savvy business people and can compensate their income from another source, and therefore claimed that their giving will not be affected, since their personal values, religious faith and social behaviour will remain unchanged. Few other entrepreneurs indicated that they would conduct CSR activities and contribute financially regardless of the financial situation of the company, with the justification, that there are always people who are less fortunate who need assistance. Entrepreneurs elaborated that they will continue their contribution mainly to charities, development of the social environment,
273
ZENITH
and improvement of employee relations. Still these answers remain mainly hypothetical since enterprises did not face financial decline in the last three years. VI. INDIVIDUAL CSR MOTIVATOR TO ENGAGE IN INTERNAL & EXTERNAL ACTIVITY
The Micro Small & Medium Enterprises developed their own approach, and prove that CSR agenda acts as a motivator internally and externally due to the religious sensitivities of the Entrepreneurs and due to the care towards the labour welfare. VII. INDIVIDUAL CSR NON-MOTIVATORS
Internally the Micro and Small enterprises highlighted that due to Lack of Resources- financial, manpower and other such resources, they couldnt indulge too much in the CSR initiatives. However, the Medium enterprises which are not insufficient with regard to the resources, it is due to the fact that too much involvement in CSR issues leads to diversion from the main activity. As far as the external factors are related few SMEs believe that the CSR issues are not important for business growth. Yet others were of the opinion that Nobody else is doing, why should we? VIII. RETURN ON INVESTMENT OF CSR ACTIVITY Internal CSR seeks to improve business performance or to lock- in orders with international buyers. External charity driven CSR activities seeks emotional returns. Across all Micro Small & Medium Enterprises entrepreneurs rarely associated CSR activities as investments that seek direct business returns, yet when analysed further, they were clearly apparent. Internal CSR spending focuses on labour welfare, with which the entrepreneurs seeks a better relationship and increased loyalty. The return from such investment is in form of greater sense of duty, improved work quality as well as increased labour retentions in some Micro Small & Medium Enterprises. External CSR due to the high charity contributions across many of the Micro Small & Medium Enterprises seeks predominantly personal emotional return of having done good. Only few entrepreneurs consciously seek to positions themselves as community leaders or strengthen the positioning of their company or brand. To the most part CSR activities are implemented discreetly, we call them silent, particularly when the entrepreneur does not seek directly relatable business benefit in return. IX. COLLECTIVE We consider activities conducted jointly with either cluster firms or support organisation as collective. Nevertheless in most Micro Small & Medium Enterprises some collaboration efforts were evident and wherever available the information is provided below.
274
ZENITH
SMEs are involved in collective CSR activities, and contribute towards their own caste through welfare organisations that assist in girl marriages, education and health care. Similarly in association with NGOs, social and charitable clubs such as Rotary and Lions Club contribute they organise health drives in the nearby villages or tree plantation initiatives. Household units, following the pattern, prefer to associate with religious organizations, to who they also contribute most of their charitable donations, Medium size units appear to be most active in collective CSR activities, contributing in terms of volume mostly towards their own caste. Contribution towards the Charitable Trusts and Hospitals, took the majority of their monetary contributions. However, the type of collective activities performed by the MSMEs at various levels depends on their financial strength. Micro enterprises, to the most part financial weak, centre the ir activities mainly on their nearby community, relatives and their religious faith. On the other hand small and medium level enterprise, despite a small percentage contributions of their turnover, in monetary volume afford more collective CSR activities, and focus on giving back to society, religious sentiments, occasionally seeking positive opinion in doing good or even fame. X. PREFERENCE IN BEHAVIOUR Socially responsible behaviour, through the eyes of an entrepreneur is intrinsically inward looking, where most expenditure are directed towards the labour welfare. External CSR implemented individually, as discussed above focuses on charity donations. Clearly the environment in which the enterprises operate, prevalence of potential partners and existing trust between enterprises, influence the collective CSR agenda as we elaborate in each cluster. During the survey enterprises were asked to list their partner preferences, who they would consider collaborating with on any future CSR activities, the following results emerged. SMEs showed some appreciation towards the services rendered by the NGOs , few other manufacturing units were largely contributing towards religious organizations. Preference for local government was minimal. Many entrepreneurs were found to be members in social clubs i.e. Lions and Rotary, and even if they personally didnt have time to actively involved in these, while their family members, usually wives, would. XI. REASONS FOR THE SELECTION OF OUTSIDE AGENCY Cooperation between enterprises and local social institutions is conditioned on the existence of trust, therefore in the surveyed Micro Small & Medium Enterprises where successful collective initiatives were launched, trust was present. Some surveys indicated that trust builds on successful precedent cases, and cannot be enforced from the outside. However when initiating collective actions, entrepreneurs endorsement is required from the very beginning, so that
ZENITH
successful outcome can be guaranteed. Trust was only incontestable with religious organisation, validating the preference for such organisations as the ideal development partner in 4 out of 7 Micro Small & Medium Enterprises. On the other hand lack of trust was often used an argument not to partner or engage with any external organisation. XII. ENTERPRISES ECONOMIC SIZE AND CSR ACTIVITY
Across most Micro Small & Medium Enterprises the CSR contributions are utilised pronominally on enterprise internal activities. Without differentiating between what types of activities undertaken we can observe that the financial spending on CSR increases with the size of the enterprise. However average spending in terms percentage of turnover or investments, shows a reverse trend, since it is highest with the micro enterprises. Financial Contribution: Majority of the surveyed Micro enterprises self-reported that their contribution varies from 0.02% - 0.04%; Small enterprises 0.03% - 0.05% and as reported by Medium enterprises 0.03%-0.05% depending on the investments and financial gains of the current year. In-kind Contribution: The surveyed Micro, Small and Medium enterprises revealed that in terms of in-kind contribution a share of their earnings is spent on distribution of blankets, clothes to the poor, food items etc. However, all the contributions done depend purely on the investments and financial gains of the current year. Time Contributions: The Micro, Small and Medium enterprises stated that due to prior engagements and due to meeting schedules, their contribution with regard to time spent on CSR activities limits to two hours per week to two hours per month CONCLUSION Through analysis and research, this thesis brings forth the following insights: There was no homogeneous definition of the term Enterprise Social Responsibility, given by the respondents. Majority distinguishes taking care of the labour as an enterprise internal action and externally infer as involving in community welfare;
Implementation of CSR activities is to the most part driven by the personal values of the entrepreneur; Across all interviewed Micro, Small and Medium Enterprises, Internal CSR activities are discernible by some preferences, such as labour welfare, health care as well as Environment. However, Training and Development and Transparency were least preferred; Across all interviewed SMEs, External CSR activities are dominated by charity donations, and significantly behind health, and environment in the Community in uniform distribution followed by education as well as creation of social environment, which is not that emphasized;
ZENITH
SMEs will continue their CSR activities, despite any negative changes in their company performance. Essentially SMEs will not abandon their CSR agenda, but will change scope, scale and form of implementation; The Micro Small & Medium Enterprises developed their own approach, and prove that CSR agenda acts as a motivator internally and externally due to the religious sensitivities of the Entrepreneurs and due to the care towards the labour welfare; The Micro Small & Medium Enterprises stated that due to lack of resources and due to the diversion from main activity they do not get too involved in the CSR initiatives; Collective CSR activities were initiated by the financially stronger enterprises in the SME, and cooperated with the NGO/Local Charity institutions in their implementation; Interviewed Micro Small & Medium Enterprises SMEs focus predominantly on individual and internal CSR activities where they also contribute most of their resources. For numerous reasons collective CSR is rare, and in selecting partners SMEs predominantly choose religious originations; Level of trust facilitates the implementation of external and collective CSR activities. Trust alone does not guarantee effective implementation of set activities or directly translate into mutual benefits; Absolute monetary contribution towards CSR tends to increase with the size of the enterprise. However as percentage of turnover/investments, the larger the enterprise the smaller its contribution towards CSR, essentially pegged below 1% of turnover. REFERENCES Adkins, S. (1999), Cause Related Marketing-Who cares Wins, Butterworth-Heinemann, Oxford, page 9-10, 48-49. Andriof and McIntosch (2001), Perspectives on corporate citizenship, Greenleaf Publishing.
Arora, B. (2004): India and Corporate Social Responsibility: An Explorative Review, Nottingham: International Centre for Corporate Social Responsibility, University Business School. Arora, B. / R. Puranik (2004): A Review of Corporate Social Responsibility in India, in: Development: Journal of the Society for International Development, 47 (3), 93100. Carroll, A. B. (1979). A Three-Dimensional Model of Corporate Performance. Academy of Management Review, 4[4], p. 497-505. Carroll, A. B. (1983). Corporate social responsibility: Will industry respond to cut-backs in social program funding? Vital Speeches of the Day, 49, p. 604-608.
ZENITH
Carroll, A. B. (1991). The Pyramid of Corporate Social Responsibility: Towards the Moral Management of Organizational Stakeholders. Business Horizons, 34, (4), 39-48. Carroll, A. B. (2004). Managing ethically with global stakeholders: A present and future challenge. Academy of Management Executive, 18, (2), 114-120. Valor, C. (2005). Corporate Social Responsibility and Corporate Citizenship: Towards Corporate Accountability. Business & Society Review, 110, (2), 191-212. Vives, A. 2006: Social and Environmental Responsibility in Small and Medium Enterprises in Latin America. Journal of Corporate Citizenship, Spring, pp. 39-50. Vyakarnam, S. Bailey, A. Myers, A. Burett, D. 1997: Towards an Understanding of Ethical Behaviur in Small Firms. Journal of Business Ethics, 16, pp. 125-136. William B. Werther, JR & David Chandler, 2006, Strategic corporate social responsibility shareholders in a global environment, Sage Publications, Inc.
278
ZENITH
SLOW LEARNERS: THEIR PSYCHOLOGY AND EDUCATIONAL PROGRAMMES

MS. SANGEETA CHAUHAN*
*Assistant Professor, Department of Education, S.S.V.V., Varanasi-221002.
ABSTRACT Human resource development should be at the focus of any educator for a developing country like India which has abundant human resources. In the Indian system of educational, it is observed that the human resources-teachers and learners are underdeveloped and perform less than their capabilities. The learners and underdeveloped in the sense that they are not achieving in tune with their capabilities. Even some of the most efficient teachers are not adequately equipped to identify and guide the backward students like slow learners to reach their optimum levels. As a result, the institutions in tune are not able to send their products into society as fully developed learners. To ensure this we need special educational programmes for backward children like slow learners. Those who are slow to know suppose that slowness is the essence of knowledge Friedrich Nietzsche ______________________________________________________________________________ INTRODUCTION CONCEPT OF SLOW LEARNERS The experience of educators confirms that there are many children who are so backward in basic subjects that they need special help. These pupils have limited scope for achievement. They have intelligence quotients between 76 and 89 and they constitute about 8 percent of the total school population. These students do not stand out as very different from their classmates expect that they are always slow on the uptake and are often teased by the other students because of their slowness. They are quite well built physically but rather clumsy and uncoordinated in movement. They are no trouble in school. Although much of the work is too difficult for them, they are patient and cooperative. Some of them are much more limited in their environmental, emotional, which impede their school progress and personal development. They need special help in the form of special class in ordinary school. Most of the slow learners struggle along in ordinary classes failing to have the special attention which they need. Their ability to deal with abstract and symbolic materials, (i.e. language, number and concepts) is very limited and their reasoning in practical situation is inferior to that of average students. These pupils differ slightly from normal students in learning ability. They are also unable to deal with relatively complex games and school assignments. They need much external
279
ZENITH
stimulation and encouragement to do simple type of work. These students who are known to be slow to catch on are called slow learners. Burt (1937) has rightly pointed out that the term backward or slow learners is reserved for those children who are unable to cope with the work normally expected of their age group. In teaching backward children, the mental age is often taken as a guide to the levels of attainment to be expected of pupils. Thus, if a childs mental age is 10 years, we assume that his attainment age should also be at the 10 year level. On the contrary, if his attainment age falls below his mental age he is considered a slow learner. Jenson (1980) states that students with IQ 80 to 90 who are traditionally labelled dull normal are generally slower to catch on to whatever is being taught if it involves symbolic, abstract or conceptual subject matter. In the early grades in school, they most often have problems in reading and arithmetic and are labelled slow learners. But it is really not that they learn so slowly as that they lag behind in developmental readiness to grasp the concepts that are within easy reach of the majority of their age mates. So they may be called rather slow developers than slow learners. The handicaps of those children who are blind, deaf, or physically handicapped are readily apparent to the observer but the handicaps of the slow learners are not always so obvious. Their handicap is related to their power of thinking and ability to learn. They are therefore not so able as most children to meet the normal demands of education and life in modern society. Many of them will be absorbed into the life of the community as adults and will contribute usefully without drawing undue attention to them. The period at which their limitations are so obvious is that of the school years. In the school certain skills such as verbal intelligence, the capacity for abstract and conceptual thinking are valued. Education reflects the requirements of a calculation in its members and comparisons of attainments in these are most obvious at school. Slow learners lag behind in developing these skills at early grade itself and they find it very difficult to cope with their class mates. These students have learning difficulties which tend to increase if the teaching is not suitably graded to their slower rate of progress, and modified to achieve the most effective ways of learning. Hence there is a greater need for special educational measures for the slow learners to ensure maximum progress they are capable of in the traditional three Rs and no less important, in other developments such as practical, personal and social which are very valuable in adult life. We have to give them special attention on humanitarian grounds so that they can overcome the unhappiness and personal inadequacy that are the concomitants of severe educational and social failures. Other utilitarian reasons also justify the need for special attention to slow learners in the school. First, the country needs the fullest development of its human resources, not only in those capable of development of higher skills but also in those capable of routine tasks which are equally essential for the maintenance of the social organisation. Secondary, the cost of metal ill health and delinquency which can result from educational failure may well be greater in the long run than the cost of developing adequate means of special educational treatment in childhood. The experience of schools confirms that there are many children who are so backward in basic subjects that they need special help. The backward children can be classified into three broad categories. The first category consists of those students who are very backward because of retarded mental developments which are often accompanied by additional handicaps, such as physical deficiencies, ill-health, and limited verbal experiences at home and emotional
280
ZENITH
disturbances. Their educational problems are so acute that they need special educational treatment outside the ordinary school. The second category consists of under achievers whose ability is not quite so limited but who nevertheless have more difficulty in learning than average children. Absence from school, unfortunate personal circumstances, or inadequate environmental conditions further limitations their progress. Failure to recognize and provide for their problem is one of the main contributory causes of their backwardness. The third category consists of the slow learners who have very limited cognitive ability. The causes of their failure range from specific perceptual difficulties to emotional maladjustments. These students needs some form of special or remedial teaching to make a marked progress. According to Kirk (1962) the slow learners, average and gifted students can be classified according to their rate of learning. He also strictly refused to equate slow learners with mentally retarded because the former is capable of achieving a reasonable degree of academic success even though at a slower rate than average student. A an adult, a slow learner usually becomes self supporting, independent and socially adjusted, but in the early stage, he adapts himself to regular classroom programmes which fit in with his slower learning ability. These slow learners are markedly different from under achievers and learning disabled. TYPES OF SLOW LEARNERS There are mainly two types of slow learners:1- THE CHILDREN REQUIRING SEPARATION OR SEGREGATED SET-UP These children are found to suffer from some or the other severe forms of ;earning retardation and educational backwardness on account of their limited abilities like- retarded mental development coupled with some of other socio-psychological deficiencies. They require more attention and provisions for their schooling and education, more often in the shape of special schools or special classes. 2- THE CHILDREN SERVED IN INTEGRATED GENERAL SET-UP The nature and degree of the severity of learning retardation and academic backwardness in these children is less severe and thus, these handled properly in the integrated general set-up of our existing schools. Their backwardness is generally two types- general and specific. The child suffering from general backwardness is weak in all the subjects of the school curriculum. The child suffering fro specific backwardness, on the other hand, lags behind in one or two specific subjects only, while in others his progress may be satisfied or even extraordinary.
281
ZENITH
TYPES OF SLOW LEARNERS
Children who require separation or segregated set-up
children served in integrated general set-up
Children having general Backwardness CHARACTERISTICS OF SLOW LEARNERS
Children having specific Backwardness
Taking the aforesaid factors into consideration, characteristics of slow learners can be systematically listed out. A) LIMITED COGNITIVE CAPACITY B) Schonell (1942) defines general intelligence as an inborn, all-round mental power which is but slightly altered in degree by environmental influence although its realisation and direction are determined by experience. Intelligence is viewed not merely as an unfolding or maturing of this innate potentiality but also as something that grows and develops in the course of the childs active experience of his environment. This is what the slow learners lack. Due to limited cognitive capacity, slow learners fail to cope with learning situations and to reason abstractly. Rational thinking becomes practically impossible for them. C) POOR MEMORY Memory is a complex process and is not fully understood, although some researchers have established theories that seem to explain the various observable facets of memory. Flavell (1977) and Flavell and Wellmen (1977) define memory as a serious of cognitive processes, including recognition and recall, knowledge, cognitive strategies and met memory. Each of these processes has an influence on learning. Atkinson and Shiffrin (1968) consider memory from the view point of a flow through model. In the flow-through model, information is stored in sensory register for a brief time before it is transferred to short-term memory and long-term memory. But the slow learners have a poor memory power. D) DISTRACTION AND LACK OF CONCENTRATION Research works of Curtis, K. and Shaver, J.P. (1980) reveal that the attention span of the slow learners is relatively short. Also, they lack concentration. They can not concentrate on the instruction of the teacher which is mostly verbal exposition for more than thirty minutes at a stretch. They need short and frequent lessons for better perceptions. Modular approach or personalised system of instruction can cater to the needs of slow learners. Media application in
282
ZENITH
the instructional process can draw and sustain their attention for a little longer time and promote concentration also. To overcome distractibility and to promote concentration, multimedia instructional strategy will be very suitable for slow learners. Research studies (Soundraraja Rao and Rajaguru, 1995) reveal that when the learning materials are presented through concrete situations, the slow learners attention and concentration do not differ to concentrate on enjoyable and successful work for a considerable time. The degree to which the work is suited to the slow learners capacity, and engages interest and activity is important. The slow learners physical condition and his expectations of success or failure are also influential. In addition, the ability to concentrate seems to be, to some extent, a product of experience and training. Creative and practical activities seem to promote the development of good attention and of work habits. E) INABILITY TO EXPRESS IDEAS Tansley and Guilford (1962) state that schools give considerable though to the ways of achieving good standards in reading and writing, but important as reading and writing are, it must not be forgotten that they are only subsidiary skills in language. Childrens ability to express themselves orally and to comprehend what is said to them is more important. This is where the slow learners are lacking. Slow learners have difficulty in finding and combining words, their immaturity and emotional reluctance being one of the chief reasons for their backwardness in expression. They often have resource to gestures or to action rather than words. To express ideas one, must be good at communication which involves listening as well as talking. But, slow learners are poor at remembering messages and listening to instructions. As a result, they are unable to express ideas with clarity. EDUCATIONAL PROGRAMMES FOR SLOW LEARNERS Psychologists and educationists have recommended various educational programmes to surmount the problem of slow learners in the mainstream. Most of the measures are within the purview of the teachers. Effectiveness of certain measures has already been established by the researchers. A clear perception of the educational programmes meant for slow learners will enable the teacher to combat slow learning in an effective manner. The following are the remedial measures which constitute the educational programmes for slow learners. 1- MOTIVATION The word motivation is used to describe a drive, need or desire to do something. Motivation can be applied to behaviour in a wide variety of situations. One use of the concept of motivation is to describe a general tendency to strive towards certain types of goals. Success of a teacher largely depends on how effectively he motivates the students to learn. Experience has shown us that learning failure is very often largely due to poor motivation. Children taught by a teacher using motives in a sensible, individualised way will always learn more quickly and better, even if the method used is faulty. Slow learners usually evince an attitude of avoidance resulting from previous experience of failure or dislike of a subject. They often glance at words rather than scrutinize them carefully, with the result that their errors in recall are the result of guessing from slight clues such as initial letters or superficial similarities. When the teacher succeeds in motivating the students, his instructions will be effective and the educational objectives can be
ZENITH
achieved. The teacher should be worry not to discourage the slow learners who usually feel frustrated. The teacher should let them understand that they are not the ignored students and they are as dear to him as others are. When the teacher evinces this type of positive attitude, all his motivational techniques will work out successfully. Moreover, motivation not only instigates the behaviour of slow learner but also reinforces the ongoing behaviour. Motivation makes the slow learners desirous of learning to apply him to the task. 2- INDIVIDUAL ATTENTION Individual attention refers to the attention given by the teacher to a particular student. Of all students it is the slow learners who need individual attention fro the teachers. The individual differences of the children should be properly recognised and the individuality of the child must be respected. The teacher should take positive effort to ascertain the specific disability of the slow learners and accordingly he should devise his remedial instructional strategy which should cater to the needs of each slow learner. It is very necessary that the handling teachers should be very kind and sympathetic towards slow learners. Some incentives may be provided to those teachers who may be entrusted with the task of instructing the slow learners in the way the government gives incentives for those teachers who take special coaching classes or the SC/ST students. If this remedial measure is enforced, better individual attention can be given to the slow learners in the special classes which will ultimately, promote better human resource development. 3- RESTORATION AND DEVELOPMENT OF SELF-CONFIDENCE Slow learners are the backward children who have, even before admission to the school, experienced years of failure and frustration as a result of which their self-esteem is seriously undermined. Constant lack of academic success, rejection by other children, faulty instruction and mismanagement by parents lead to emotional disturbance, feelings of inadequacy and personality and conduct disorders. These slow learners ultimately find themselves in a vicious circle. The interplay between the causes and symptoms becomes more and more complicated and difficult to disentangle. The breaking of this vicious becomes one of the most important objectives of remedial treatment. This cannot be broken unless the school establishes a special educational programme for the slow learners. The teacher should take all possible effort and make usr of all possible opportunities to restore and develop self-confidence in slow learners which will ultimately goad them into manifesting better attainment. 4- ELASTIC CURRICULUM Pratt (1980) identifies two basic assumptions that underlie all curricula: 1- that knowledge should be pursued for its own sake 2- that curricula should be designed to meet the immediate and long term needs of students. The knowledge centred curriculum focuses on the content of subject areas, whereas the needs centred curriculum assumes that human needs serve as the foundation for curriculum. The teachers should not lay much stress on abstract and theoretical study because the slow learners can not understand the abstract concepts very easily. Whenever there are abstract concepts the teacher should try to establish possible relationship or point out
284
ZENITH
possible associations so that the slow learners can have a grasp of the abstract concepts. When there is concrete presentation of instructional content, the slow learners are able to understand in a better way and it enhances their learning capacity and learning rate to a considerable extent. 5- REMEDIAL INSTRUCTION Rastogi (1978) and Narayana rao (1987) have suggested that the remedial teaching classes or special classes should be conducted systematically based on laid down guidelines. 1- The instructional content must be very carefully graded keeping in mind the capacity, requirement, educational and experience levels of the students. 2- Short frequent lessons should be introduced instead of long lessons every week. 3- The slow learners are able to grasp concrete ideas rather than abstract ideas. Therefore there must be ample use of audio visual aids in the instructional process which can provide unique experience to the slow learners in the presentation of the content. 4- The teacher should be aware of that fact that a friendly approach in remedial teaching is highly conducive. 5- To generate interest social skills and confidence in slow learners, stress may be laid on effective use of art, music and drama. 6- The teachers dealing with the slow learners should give due importance to practice, drill and review which all facilitate the comprehension and retention of slow learners. 7- With a view to ensure optimum human resource development special remedial classes should be arranged for slow learners. 6- HEALTHY ENVIRONMENT The school environment should be healthy and reasonably free for slow learners. Many a time poor environmental factors contribute a lot towards the slowness. Poor environmental factors should be adequately tackled or removed at the earliest so that congenial atmosphere can created for the effective learning of slow learners 7- PERIODICAL MEDICAL CHECK-UP Physical anomalies sometimes serve as vital contributory factors for slow learning. Poor health and other malfunctions also have adverse effect on the learning of slow learners. If a particular anomaly is detected and correctly diagnosed, then a slow learner can become a normal learner after remedial treatment. In absence of periodical medical check-up, there will be no opportunity for the teacher to diagnose the cause of slow learning and to ensure the possible medical remedy.
ZENITH
8- SPECIAL METHODS OF TEACHING The research evidences reveal that the following special methods will be very effective for slow learners:a- Audio and visual instructions b- Mastery learning strategy with extra corrective instruction c- Modular instruction d- Computer assisted instruction
A) AUDIO AND VIDEO INSTRUCTION

Slow learners need extra time for remedial and enrichment activities. In the audio instruction the experts service not ordinarily available in the school is made available. They can listen to the audio instruction based on their subject units in the evening hours. Hey can take them home and make use of according to their convenience. Also they can listen to relevant educational radio programme which also has positive effect on the slow learners learning. The video instruction provides unique experience to the slow learners in the presentation of instructional content. It penetrates more deeply into human character with an immediate excitement than any other single medium.
B) MASTERY LEARNING STRATEGY

Mastery learning is a system of instruction that emphasises the achievement of instructional objectives by all students by allowing learning time to vary. The basic idea behind mastery learning is to make sure that all or almost all the students have learned a particular skill to a preestablished level of mastery before moving on to the next skill. Once the slow learners have the experience of mastery learning and attain a pre-determined mastery level, the learning will build on learning leading them to a remarkable success or achievement.
C) MODULAR INSTRUCTION
Module is a self contained auto instructional package dealing with a single conceptual unit or subject matter. Instruction through modules has been found very effective for all levels of students and it is found more effective with regard to low achievers and slow learners. It may be used individually or in small learning groups. It accommodates instruction to individual differences. The learning materials presented in the module for each objective, the project work and the practicum incorporated in the learning module enable the slow learners to surmount the problem of abstract thinking and to understand the possible association which will, ultimately tell upon their retention. Modular instruction takes care of concrete presentation of subject matter by incorporating necessary diagrams, sketches, pictures, worksheets, examples etc. with the learning
ZENITH
material at appropriate places. Thus, in many ways, the modular instruction proves to be suitable for slow learners.
D) COMPUTER ASSISTED INSTRUCTION

Computer assisted instruction is a kind of individualised instruction administered by a computer and its roots has in programmed instruction and in the behavioural theories of learning. CAI programmes stress drill and practice exercise, others teach students facts and concepts. It gives instant knowledge of results and provides immediate feed back which are very essential for slow learners to ameliorate their learning process. In this method every student can learn at his own rate. Students will have no pinch of inhibition when they learn through CAI. The feeling that they are not preyed upon by the supervisors and the free and relaxed readiness to learn themselves at their own rtes, give the slow learners an impetus to learn and to manifest their best. Hence, the methods are only means to achieve our pre-established behavioural objectives. 9- LEARNING CONTRACTS AND PEER TUTORING A) LEARNING CONTRACTS A learning contact is an agreement between the teacher and the student to study and share information about a specific topic. It helps the classroom teacher organise the instructional programme for some exceptional students. Dunn and Dunn (1974) describe the contracting process they suggest that the contract include a list of media or resources and activities the students will use, as well as any methods the students will use to report what has been learned. Finally they suggest that the contract indicate how the students performance will be evaluated and, if appropriate, what the schedule will be for completing the project. B) PEER TUTORING Long ago educators realised that students could help one another learn. When one student teaches another, this is called peer tutoring. There are two types of pee tutoring: cross age tutoring where the tutor is several years older than student being taught, and same- age peer tutoring where one student tutors a classmate. When implementing peer tutoring, it is important that the rules for tutors be quite explicit; that is tutors show or tell their students what to do then watch as the students perform, they repeat the demonstration or instruction if the student makes an error, and then praise the student when the response is correct. Hence teacher monitoring of the tutors is an integral part of the system. It is not time consuming but it is extremely important. Thus, peer tutoring does seem to be an effective way to provide appropriate levels of instruction to students (Slavin, R.E. 1986). This makes it more relevant to slow learners who are in dire need of additional instructional time. CONCLUSION Slow learners or educationally backward children needs special attention and care for being duly helped in getting rid of their subnormality in terms of rate of learning and educational achievement. Neglecting or overlooking them may pose a serious problem for their progress and
287
ZENITH
welfare besides proving a nuisance to the society. For taking measures, for their treatment and education, beginning should be made through regular medical check-up and necessary treatment and redressing their maladjustment problems at home and school. As far as possible, they should be taught along with their other non-disabled peers. However, in the most severe cases of retardation or backwardness, we can opt special schools as the placement option. The remedial steps and treatment measures for the backward children should therefore be mostly arranged in the schools by adopting the measures like. 1- Provision of special curriculum, methods of teaching and special teachers. 2- Special coaching and proper individual attention.3-Checking truancy and non- attendance. 4- Provision of co-curricular activities, rich experiences and diversified causes.5- maintenance of progress record. 6- Rendering guidance services. 7Controlling negative environmental factors and 8- taking the help of experienced educational psychologist. REFERENCES Atkinson, R.C. and Shiffrin, R.M. (1968). Human Memory: Proposed System and its Component Processes. In K. Spence and Spence (Eds). The Psychology of Learning and Motivation, Vol. 2, Academic Press, New York. Pp. 38-107. Burt, C. 1937). The Backward Child. London: University of London Press.p. 45-90. Curtis, K. and Shaver, J.P. (1980). Slow Learners and the Study of Contemporary Problems, Social Education, 44 (4), pp. 302-38. April. Dunn, R. and Dunn,K. (1974). Practical Approaches to Individualising Instruction. Parker West Nyack, New York. Pp. 45-78. Flavell, J.H. and Wellman, H.M. (1977). Cognitive Development. Englewood Cliffs, Prentice Hall , New Jersey. pp.45-67. Jenson,A.R. (1980). Bias in Mental Testing, Methuen and Co. Ltd, London. Pp. 56-89. Kirk, S.A. (1962). Educating Exceptional Children. Houghton, Mifflin, Boston. Pp. 23-89. Pratt, D. (1980). Curriculum Design and Development. Harcourt Brace Jovanovich. New York. Pp. 78-105. Rastogi, K.G. and Narayana Rao, S. (1987). Educational Psychology. Wiley Eastern Limited, New Delhi. 34-89. Reddy and Ramar (2006). Slow Learners their Psychology and Instruction. Discovery Publishing House. New Delhi. Pp. 1-114. Slavin, R.(1986). Educational Psychology Theory into Practice, Pentice Hall of India Ltd. New Delhi. 56-190.
ZENITH
Soundararaja Rao and Rajaguru (1995). Effectiveness of Video Assisted Instruction on Achievement of Slow Learners. Journal of Educational Research and Extension. Vol. 32(2), oct. Tansley,A.E. and Guilford, R. (1962).The Education of Slow Learning Children. Routledge and Kagan Paul Ltd. London. Pp. 45-190.
289
ZENITH
AN EMPIRICAL STUDY OF LIFE INSURANCE PRODUCT AND SERVICES IN RURAL AREAS

HARNAM SINGH*, DR MADHURIMA LALL**
*Project Fellow, UGC Major Research Project in Department of Applied Economics, University of Lucknow, Lucknow. Uttar Pradesh, India. **Associate Professor in Applied Economics, Faculty of Commerce, University of Lucknow, Lucknow, Uttar Pradesh, India.
ABSTRACT Life Insurance is one of the fastest growing and emerging markets in India. Insurance penetration in the country is low mainly in rural area. The Insurance Industry has a significance contribution in socio-economic development. A majority of the underprivileged & rural poor society is still not insured and untouched by the benefits of Life Insurance. There is a tremendous scope for developing insurance business in the rural areas where human life and income generating rural assets need more protection. IRDA has acknowledged various reforms and initiatives for the welfare of rural people i.e. Micro- insurance especially designed to provide life insurance benefit to rural and economically backward class of the society. Present study is based on primary data which is collected through paper questionnaire. Randomly selected Respondents (Life Insurance Policyholders) based on Uttar Pradesh and evaluative research methodology carried out in this paper. Aim of the present study is to examine the opportunities for insurers in the rural market and what would be new strategies to tap the highly underinsured rural area. Its also an attempt to understand consumer behavior in the insurance sector and identify challenges faced by insurance companies and how to overcome with those challenges. KEYWORDS: Life Insurance, Insurance Policy, Customer preference, Customer Satisfaction. ______________________________________________________________________________ INTRODUCTION Insurance Companies are focusing on customer satisfaction through increased customer choice and lower premiums, while ensuring the financial security of the insurance market. Insurance companies are targeting upon the customers by giving them a basket of returns with a mission to make them delight and satisfied. The Insurance sector has obviously started growing at a rapid place after the sector was opened up. The credit for enlarging the market should however goes to the private sector as they came up with an aggressive market strategy to establish their presence. The public sector has in its turn, redrawn its priorities, revamped their marketing strategy, and together the public and private sectors have enlarged the market. India, with its huge middle class households, has exhibited potential for the insurance industry. This has made international players to look at the Indian market. Moreover, saturation of markets in many developed economies has made the Indian market all the more attractive for global insurance majors.
ZENITH
REVIEW OF LITERATURE There are various studies related to Insurance Sector in India and abroad. It was found that the numerous numbers of literatures is available on insurance industry and its various aspects. Few relevant reviews are putting here in the context, they are as follows: Randhey and Ahuja (1999), Says that need for private sector entry has been justified on the basis of enhancing the efficiency of operations, achieving a greater density and penetration of life insurance in the country, and for grater mobilization of long-term savings for long gestation infrastructure projects. Rao Tripti, D. (2000) stated that Privatization of insurance industry is based on the view that competition would enhance efficiency through increased resource utilization. It would spill over as benefits to the consumers in terms of reduction in premium costs with proper pricing policy and wider choice. Liberalization may also increase the scope of operation of insurance business from limited area to untapped areas like health, crop and unemployment. Raju Satya R. (2004), Found that the insurance agents, development officers employees, executives at different levels should work together to achieve the objectives and mission and also to face the present and future competition as a challenge. The insurance product and services should be designed and offered as per the customer requirements. Palande et al (2007) found that the Insurance industry is going to witness sea changes in its marketing strategies. The existing and the new insurers will devise different strategies to retain and enhance their market share. It would be done by various methods by bringing in new practices, settings new service standards and creating new benchmarks. Selvakumar& Priyan (2010) found that insurance companies are increasingly taping the semiurban and rural areas to take across the message of protection of life through insurance cover. Higher level of protection implies that customers are more conscious of the need for risk mitigation, grater security, and about the future of their dependents. Insurance sector has been evolving and improving its underwriting and risk management abilities. The research review identifies the links between insurance, financial sector performance and growth in substantial details, helping define the insurance economic growth relationship and supporting the policy conclusions of this report. IMPORTANCE OF THE STUDY The development of insurance industry has been spurred by product innovation, vibrant distribution channels coupled with targeted publicity and promotional campaign by the insurers. Innovations have come not only in the form of benefits attached to the products, but also in the delivery mechanism through various marketing tie-ups both within the realm of financial services and outside. All these efforts have brought life insurance closer to the customer as made it more relevant. The insurance companies are increasingly tapping the semi-urban and rural
291
ZENITH
areas to take across the message of protection of life through insurance cover. The Industry has a significance contribution in socio-economic development of the nation. PURPOSE OF STUDY 1. To analyze the awareness about insurance policies and purpose of investment in insurance companies 2. To study the age group, background and family size of existing customers of insurance companies. 3. To study which type of insurance policy preferred by the customers and influencing factors for choose insurance companies. 4. To study convenient source for getting insurance policy for common people. 5. To examine the satisfaction about insurance premium policy and opportunities for insurers in the rural market. TOOLS & TECHNIQUES A well structured questionnaire and in-depth interview method was used to collect primary data for the analysis purpose. A survey is carried out on randomly selected 104 respondents (Life Insurance Policyholders) who based in Uttar Pradesh. The researcher depends on primary data for the purpose of analysis and Interpretation. Data are presented in the form of tables and diagrams for easy understanding. RESULTS AND DISCUSSION OF LIFE INSURANCE PRODUCTS AND SERVICES The level of penetration tends to rise as income increases, particularly in life insurance. Discussion and results about life insurance and services based on the respondents view are: AGE GROUP At the time of determination of Insurance premium age factor play very crucial role for the insurance companies as well as customers. If age group low then insurance companies charges low premium and if it high then charged higher premium because mortality rate increases according to age. Table 1 shows age groups of the respondents
292
ZENITH
TABLE 1: AGE GROUP (N=104) Age 23-25 26-28 30-33 36-38 44-62 Mean Median SD Source: Surveyed Data. Above table 1 depicts the age group divided into four categories 24-25, 26-28, 30-33, 3638, 44-62. The no. of respondent falling in each category is 28,24,20,16 and 16 respectively. The mean value is 20.8, median value is 20 and Standard deviation of frequencies is 5.215. The data shows that the maximum no. of respondents are falling in first two age group which is 23to 28 (No. of Respondents 52). The Insurance is a matter of security of life, whether senior people in served data is less than younger people that is why the more respondents are falling in first two age groups. It shows figure 1. 20.8 20 5.215361924 No. of Respondents 28 24 20 16 16
293
ZENITH
FIGURE: 1 AGE GROUPS (IN YEARS)
Source: Surveyed Data. BACKGROUND OF RESPONDENTS Insurance is a subject matter of Sale and not to purchase. It cannot be divided by insurance companies according to background but in this study we found respondents have urban and rural both background. TABLE 2 BACKGROUND (N=104) Background Urban Rural Mean Median SD Source: Surveyed Data. The background of surveyed data is divided in urban and rural both. It shows wide phenomena of Indian Insurance Industry. Rural respondents eager to take insurance policy if, there are provided 52 52 11.3137085 No. of Respondents 44 60
ZENITH
according to their need. The data shows the maximum number of respondent that is 60, have a rural background and 44 respondents have urban background. The mean value of surveyed data is 52. Median value is also 52 and standard deviation of frequencies is 11.313. Awareness about insurance plays a very crucial role in its marketing. Weather the urban people in surveyed data is less than rural people that is why the more respondents are falls in rural backgrounds. It shows figure 2. FIGURE: 2 BACKGROUNDS OF RESPONDENTS
Source: Surveyed Data. FAMILY SIZE Insurance is family protection device. Insurance cover should be appropriate according to family size. If dependents on earning member are more then insurance cover should be more and for fewer dependents it should be according to need. Table 3show the surveyed data of family size. TABLE 3 FAMILY SIZE (N=104) Family size 01 to o3 04 to 05 06 to 07 08 to 10 No. of Respondents 28 44 24 16
ZENITH
Mean Median SD Source: Surveyed Data.
28 26 11.77568
The family size in surveyed data is divided into four categories 1to 3, 4 to 5, 6 to 7 and 8 to 10. The no of respondent falling in each category is 28, 44, 24 and 16 respectively. The mean value is 28, median value is 26 and standard deviation of frequencies is 11.775. The data shows that the maximum number of respondents falling in first two family size category which is 1 to 5(no of respondents 72). Whether the large family size in surveyed data is less than small family size that is why the more respondents are falling in first two family sizes. It shows figure 3. FIGURE: 3 FAMILY SIZES
Source: Surveyed Data. PURPOSE OF INVESTMENT Investment in Insurance policy fulfilled so many purposes at a time. It may be financial compensation, family safety, tax rebate, risk cover and returns. In surveyed data purpose of investments in insurance company shows table 4.
296
ZENITH
TABLE 4 INVESTMENT PURPOSE (N=104) Purpose Tax Rebate Financial Compensation Family Safety Risk Cover Maximum Return Other Mean Median SD Source: Surveyed Data. The purpose of investing in surveyed data is divided in five categories tax rebate, financial compensation, family safety, risk cover and maximum return. The number of respondent falling in each category is 48, 4, 12, 56 and12 respectively. The mean value is 22, median value is 12 and standard deviation of frequencies is 23.832. The data shows that the maximum number of respondent are falling in first and fourth categories that is tax rebate and risk cover purpose (no of respondents 48 and 56). Financial compensation and family safety is a basic things for insurance purpose, whether the financial compensation , family safety and returns in surveyed data is less than tax rebate and risk cover purpose thats is why the more respondents are falling in first and fourth purpose groups. Its shown in the following figure.
No. of Respondents 48 4 12 56 12 0 22 12 23.83275058
ZENITH
FIGURE: 4 PURPOSE OF INVESTMENT
Source: Surveyed Data. TYPES OF INSURANCE POLICY HAVING BY CUSTOMERS Everyone gets insurance policy/products according to their needs. Whose evolved in hazardous job the prefer term insurance and who having aim for a time period letter prefer endowment plans. Unit linked insurance plans fulfilling all purposes but it having more cost compare to traditional plans. In surveyed data shown about plans who having by the respondents. TABLE 5 TYPES OF INSURANCE POLICY HAVE (N=104) Types of Policy Term Insurance Endowment plan ULIP Other Mean Median SD Source: Surveyed Data.
298
No. of Respondents 48 48
28 8 33 38 19.14854216
ZENITH
The types of insurance policy having by the respondents in surveyed data is dividing in to four categories term insurance, endowment plan ,ULIP and other. The number of respondent falling in each category is 48, 48, 28 and 8 respectively. The mean value is 33, median is 38 and standard deviation of frequencies of respondents is 19.148. The data shows that the maximum numbers of respondents are falling in first two categories which are term insurance and endowment plan (number of respondents 96). Unit Linked insurance and other insurance plans are play a very crucial role in this globalised era, whether the ULIP and other plans in surveyed data having by the respondents is less than traditional plans that is why the more respondents falling in first two purposes. REASON FOR PREFERRING INSURANCE COMPANY Selection of a particular items varied person to person .Insurance company is not an exception of it. When anyone going to chose an insurance company for its policy or products he analyze all the factors related to it, then he overcome on the final decision. Insurance is a long term investment for the security and safety of his beloved family so he takes decisions very carefully. In surveyed data provided some factors to the respondents for selecting insurance company. Following table shows the various factors preference which is necessary for getting final selection. TABLE 6 REASON FOR PREFERRING INSURANCE COMPANY
Fina l Factors Brand Name No. of Branches Location Quality of service Behavior of Insurance Agent Administration Charges Value Added Service Rank -1 224 0 32 384 0 32 0 Rank -2 84 84 28 140 56 56 140 Rank -3 96 24 72 96 48 48 120 Rank -4 60 0 40 60 100 80 80 Rank5 64 16 64 32 80 64 64 Rank -6 12 36 36 0 84 108 24 Rank -7 24 32 64 0 24 16 48 Rank -8 4 56 16 0 VI 8 V 8 0 Ran k III VIII VII
ZENITH
Provided By Insurance Company Quality of Insurance Policy/Product
IV
II 160 140 120 100 32 12 0 12
Source: Surveyed Data. The factors for preferring insurance company divided in to eight major factors Brand name, number of branches, location, quality of service, behavior of insurance agent, administration charges, value added service provided by insurance company and quality of insurance policy/product. Data shows preferred rank by all respondents on every factor. Data shows that quality of service gets total 712 points and hold 1st Rank and quality of Insurance Policy/ Product securing 2nd position with 576 points. Brand name gets 3rd Ranked with 568 points. CONVENIENT SOURCE FOR GETTING INSURANCE In this globalised and competitive scenario getting insurance policies is not a difficult task for any. Anyone who willing to pay premium can take insurance policy by various authority who involved in insurance business as like banks, insurance agents, financial institutions and some websites also providing these facilities. In below table shows most convenient source for getting insurance policy chosen by respondents. TABLE 7 CONVENIENT SOURCE FOR GETTING INSURANCE (N=104) Source Insurance Agent Bank Brokers Direct Insurance Co. Mean Median SD Source: Surveyed Data.
300
No. of Respondents 76 20 4 12 22.4 16 30.93218389

ZENITH
The convenient source for getting insurance in surveyed data is divided into four categories insurance agent, bank, brokers and direct insurance company. The number of respondent falling in each category is 76, 20, 4 and 12 respectively. The mean value is 22.4, median is 16 and standard deviation of the frequencies is 30.932. The table shows that the maximum no. of respondents falling in first source category which is Insurance agent (no. of respondents 76). It is a traditional source of getting insurance policy. Whether the last three categories sources in surveyed data is less than the first insurance agent source. It shows the personnel relationship of people and insurance agents is stronger than other sources that is why the more respondent are falling in first Insurance agent categories. It can be seen in following figures. FIGURE: 5 CONVENIENT SOURCE FOR GETTING INSURANCE POLICY
Source: Surveyed Data. PREMIUM POLICY SATISFACTIONS Premium of insurance policy which is cost of risk transfer should be appropriate according to risk. According involvement of hazardous element premium increased or decreased. In the surveyed data respondents gave opinion about the satisfaction with the premium policy of the insurance company. It shows table 8.
301
ZENITH
TABLE: 8 PREMIUM POLICY SATISFACTIONS (N=104) Opinion Yes No Mean Median SD Source: Surveyed Data. The premium policy satisfaction in surveyed data divided in to two categories first one is yes and second one is no. the no of respondent falls in yes category 88 and no category is 16. The mean& median value is 52 and standard deviation of frequency is 50.911. The table shows that the maximum 88 respondents is falling in Yes satisfied category and only 16 respondents falling in no unsatisfying categories. According to data IRDA should be giving instruction for Insurance companies improving premium of insurance policy by decreasing its cast that why 16 respondents falling in last un satisfying category. It can be seen in the below figure also. FIGURE: 6 POLICY PREMIUM SATISFACTIONS 52 52 50.91168825 No. of Respondents 88 16
Source: Surveyed Data.

302
ZENITH
Above figure 6 depicts large number of customers satisfied with the premium policies and services of insurance companies. A very few respondents are not satisfied with the premium policies of the companies because Unit linked Insurance Policies (ULIP) evolved after the privatization of market and ULIP has more cost as administration charges and other hidden costs. CONCLUSION During the study and analysis of data, following conclusions have been found based on the study objectives. They are: 1. It was found that in post-liberalized-era, government service men of 26-45 age group population are more aware of buying insurance policy for several purposes. 2. Mostly urban educated graduates or post graduate people purchase maximum risk cover plans by insurance companies, as compared to others degree holders. Less number of the Intermediates passed respondents is under insurance covers because they are not able to get suitable products. 3. The 4-6 family size is having maximum insurance policies as compared to other family sizes in the study area. 4. Medium income group population, who belongs to Rs. 100,000-300,000 income range buying more insurance products as compared to other income groups in the study area. 5. Although Insurance companies are fulfilling so many purposes of investments & savings at a time, but maximum respondents buy insurance policies for tax rebate and family safety. 6. In the case of other than insurance products customers preferred brand name and location but in Insurance industry customer is preferring Quality of insurance product and Services. The insurance advisers behavior is also a major factor for influencing customers. 7. During the study it was found, although there are so many insurance distribution channels have grown like banks, financial institutions, corporate agents etc. but even then insurance agents are dominating in case of selling and distribution of insurance products. 8. Large number of customers satisfied with the premium policies and services of insurance companies. It shows brighter future for the customers as well as insurance industry in India. 9. This globalised economy affected the Indians values and family system. So that more nuclear families believed on insurance sector for covering their risk and future plans. RECOMMENDATIONS 1. The key challenges for insurance companies to provide insurance plans to low income
ZENITH
households by minimizing transaction costs. 2. Micro insurance products should be developed for under privileged people & for rural areas population products designed according to their needs and income. 3. Insurance plans should be more feasible and the endowment plan should be easily access to the customers and also try to reduce the mortality charges because average age has been increased. 4. Insurance company should call to the customer and define the policy benefits. If anyone not satisfied with the policy terms and conditions it should be minimum one month time period to surrender their policy. 5. Insurance companies should recruit qualitative insurance agents so that they will provide after sale service because it has been seen that insurance agents are only bothered for new. The insurers should work toward development of alternate distribution channels for insurance policies. 6. Its enhancing to village area there are number of groups which should be covered by the insurance company. 7. Government should more focus on rural areas awareness about insurance products. 8. More transparency should be schemes and while making final payments to nominee. 9. Insurance policy should be more transparent, reduce the administration charges & minimize hidden cost as much as possible. 10. Insurance company should be provide quality products, better services, clarity in terms, discloser of hidden charges if any and minimum guarantee of the invested funds. REFERENCES Randhey Ajit and Ahuja Rajeev (1999),Life Insurance in India: Emerging Issues Economic& political weekly pg. 203-212, January 16-23 vol.34.
Rao, Tripti D.(2000), Privatization and foreign participation in (Life) Insurance Sector, Economic& Political Weekly, pp 1107-1119, (March 25-31,2000), vol.35(13). Palande, P.S & Shah R.S. and Lunawat, M.L.(2007), Insurance in India changing policies and emerging opportunities, Response Books, Sage publications ltd.pp299-447(3). Raju Satya R., Human Side of Insurance Sector GITAM Excel Series New Deal in Insurance, pg 73-88. Selvkumar M. & Priyan Vimal J. (2010), Indian Life Insurance Industry: Prospect for Private Sector, The Journal ,Vol. XXXIV (1) pg 52-57
ZENITH
Rao Gangadhar M, Shivaramakrishna K & Sheela P (2004) New Deal in Insurance, GITAMExcel Series, Excel Books Private Limited. Narayan H. (2008), Indian Insurance-A Profile, Jaico Publishing House, New Delhi. Outlook Money Books the laymans guide to Life Insurance(2008), Outlook publishing Pvt. Ltd. pp. 14-16(1) Rao, C.S. (2007), The Regulatory Challenges Ahead Journal of Insurance Chronicle, Vol.VII, issue-X, Oct.2007. Kumar Jagendra (2007), Insurance Sector: Opportunities and Challenges, Insurance Sector Reforms in India: Challenges and opportunities, Karshak Art Printers, Hyderabad. Pp.127.
305
ZENITH
A STUDY ON ROLE OF IT ENABLED SERVICES IN TECHNICAL EDUCATIONAL INSTITUTIONS IN HARYANA AND PUNJAB REGION
SUMITI SEHGAL*; KAPIL KUMAR**
*Assistant Professor, SD College of Management, Israna, Panipat, Haryana,India. **Assistant Professor, SD College of Management, Israna, Panipat, Haryana,India.
ABSTRACT Opportunities are arising as communication, computer and TV technologies combine. There are many potential advantages of the use of IT in education. IT will replace some lectures, laboratories and tutorials where it provides resources for learning which are more effective, richer, and available for extended hours, and open to a wider range of students. Students will have greater control over timing and pace, and there will be more likelihood of resources suiting the style and stage of each students learning. Teachers can expect to gain time for more individual attention to students. Both students and their teachers need to be trained in IT, and its use for learning. Organizations and governments need to learn how to make wise investments in IT for education and training. A decision maker in education often needs to move a course in at least one of three directions: better quality, cheaper provision (lower cost), or quicker delivery (less time). Our paper discusses the prospects, scope and challenges while using IT in education industry through a case study of selected institutions of Haryana and Punjab. KEYWORDS: Education and Training, Information Technology, Opportunities, Organizational Infrastructure, Quality, resources. ______________________________________________________________________________ I. INTRODUCTION Information Technology has played a vital role in the development of the industry and society as a whole. Education Industry has been on the boom since past few years. However, during the last two years, there has been a decrease in the number of students who joined for professional courses. This made us to explore the reasons thereof. We found that use of IT services in education is one of the major factors. The objective of the paper is to explore the role of Information Technology in Education Industry. In fact, IT is so powerful; it can be used at all levels of education and training, from primary to higher education and in the workplace. In certain situations IT can probably be more effective than any other media.
306
ZENITH
II. METHODOLOGY The best way is to go to the grass root level. We have used questionnaire with some closed ended and some open ended questions. Stratified samples of various students and teachers of various institutions in Haryana and Punjab were collected to understand the role of IT in this industry. The data collection has been done in primary form by the investigators. The size of the sample is 150. III. RESULTS AND ANALYSIS Various responses to the questions were statistically studied and then analysed. Some of the important findings were as follows: As expected, almost everyone believes that IT can be used in Education. More than 82% of the institutions are using the Information Technology for education. Most of the services are used in information presentation, internet and WWW, network information, application software, email, CCTV, Online Library, Conferences, Data management, inventory control etc.
FIG. 1. %AGE OF RESPONDENTS AWARE OF IT-ENABLED SERVICES

307
ZENITH
FIG. 2. %AGE OF IT-ENABLED INSTITUTIONS
FIG. 3. TYPES OF IT-ENABLED SERVICES IN INSTITUTIONS

308
ZENITH
It is the students who frequently use the Internet and IT enabled services to learn new things, solving problems, tutorials, aid to learning and otherwise. As per the survey, the students treat IT and internet as their guide/tutor.
FIG. 4. IT PERCEIVED AS (IN %AGE OF RESPONDENTS) The teachers also use the Internet enabled services for aid in teaching, preparing reports, notes, examinations and other activities. It has been observed that students working in an interactive environment have clear in finding answers to their questions regarding the material being covered in classes. In fact, teachers using IT are more up to date in knowledge, sharing their information through electronic media
309
ZENITH
FIG. 5. %AGE OF TEACHERS USING IT AND INTERNET However, it has been observed that teachers are reluctant in adopting technology giving excuses like: Cost-cutting to balance the budget is our main priority, we must do whatever attracts the most new students, computers will never be more effective than lectures, ignore impress quality assessors. This may be attributed to the fact that to use IT in education requires a wide range of skills, which are either difficult to possess in single or require a good, motivated group of people. Such person(s) are generally rare in Education industry. Even the management of the Educational Institutions has been affected in various ways, namely, managing, controlling, training, payroll management, staffing/recruiting and other tasks.
FIG. 6. USAGE OF IT AND ITES BY MANAGEMENTS IN INSTITUTIONS

310
ZENITH
In fact we have analysed that IT has been used in some of the areas as shown in fig. 7. The most widely usage has been in conduction of Database management of students, making presentations, learning. Apart from this the areas are desktop publishing, Inventory control, conference management, CCTVs, Email servers etc. People believe that IT is the best way of getting information, helps in proper management of the resources, improves skills and saves time in various operations carried out from time to time.
FIG. 7. MOST USED AREAS OF IT IN EDUCATION AS REPORTED BY RESPONDENTS 76% of the respondents agree that IT helps in Distance Education by resource availability over the Internet, online documents filling, payment of fee, time saving, access to roll numbers and online tests/assignments too.
FIG. 8. AREAS OF USAGE IN DISTANCE EDUCATION

311
ZENITH
IT helps in all the services by saving a large amount of time, better management of resources. Still, out of the respondents, it is clear that we have to orient students and teachers to use IT in education as 5.3% of the respondents (students and teachers) do not use IT for educational purposes and 9.3% do not know how to use IT. See fig. 9
FIG. 9. AREAS OF USAGE IN DISTANCE EDUCATION Although the Government is trying to set up IT enabled society by introduction of the Unique Identification Number to citizen of India by the next 4 years and promoting e-commerce, elearning is yet to reach at its best. Recently IGNOU became the first Indian University to provide Distance Learning through their website. Haryana became the first State to implement Off-campus Online Counseling. Still, other educational institutions are yet to utilize IT at its full. Government has a major role in promotion of IT in education. Government has the responsibility to make the country educated, provide avenues to the poor/weaker section of the society, providing better services, formulation of guidelines/laws that promote IT in educational institutions and providing information too.
FIG. 9. ROLE OF GOVERNMENT IN IMPLEMENTATION OF IT IN EDUCATION

312
ZENITH
IV. CONCLUSIONS In a country like India, providing IT enabled education is a dream as the resources like Internet and computers in various parts of the country is not possible. Also teachers which are interested and capable of using IT in education and training are a few in numbers. However, IT is being used in distance education, training, management as it is always time saving and saves infrastructure too. REFERENCES [1] [2] [3] Improving Indias Education System through Information Technology, by IBM India Ltd. Education in 21st Century, by Matthijs Roumen, Netherlands, roumen.com/en/ Information Technology: A Road to the Future? by Keith Geiger, President, Robert F. Chase, Vice-President, Marilyn Monahan, Secretary-Treasurer, Don Cameron, Executive Director National Education Association of United States Robert Kozma and Jerome Johnston. The Computer Revolution Comes to the Classroom. Change (January-February, 1991).
[4]
313
ZENITH
FLOURISH OR PERISH: CHANGE MANAGEMENT STRATEGY FOR EFFECTIVE ORGANIZATIONS

DR. AKHILESH CHANDRA PANDEY*
*Department of Business Management, H.N.B. Garhwal University, Srinagar, Garhwal, Uttarakhand, India.
ABSTRACT For sustaining in the present competitive world, it is mandatory to respond to the fast changing environment. There are some controllable and some uncontrollable factors. The controllable factors can be easily handled by the managers but it requires total change in the mindset of the organizational people to make them realize that there is need to make some changes or modifications in the process and people of the organizations to make the effective organization. Organizational change is a complex process. It is much more complex than normal human behavior .Therefore, there can not be one specific method tohandle the change process. A change technique that works in one organization may not work or even fail in another. The rapid pace of change taking place in the social, political,technological and economic environment is creating marked impact on organizations as well as individuals. The objective of this paper is to give an idea about the change management and how the leadership in any organization can play a vital role to manage this change in any organization. It also suggests a strategy that a change manager should adopt to overcome the resistance to change. KEYWORDS: Unit of competitive advantage (UCA), Diffusion, Refreezing, Force-Multiplier. ______________________________________________________________________________ INTRODUCTION What is change? In common parlance it means to become different or begin to have a different form. Change can also be termed as dissatisfaction with old and belief in new. Successful leadership plays a crucial role in planning and managing change in the organization. An effective leader has been always a force multiplier. The personality of the leader, the style of leadership, skill to be visionary leader as the capacity of the leader to influence others to determine the extent to which and change would be successfully introduced and stabilized in an organization. The leader can act to reduce the factors, which are opposing change, or to act increase pressure for change. The leaders should visualize the new situation which involves people in the change process shows concerns for the continuous process of improvement, helps the people to learn new skills and roles and manage the transition. Actually it is believed that only 12 percent of effective leadership knowledge is dealing appropriately with people. A change leader should therefore built his team as a cohesive group and develop every individual in the team to give his successful implementation of change.
314
ZENITH
CONCEPTUAL FRAMEWORK OF ORGANIZATIONAL CHANGE Successful change requires unfreezing the status quo, movement of a new state, and refreezing the new change to make it permanent. This change model implies that the mere introduction of change does not ensure either the elimination of the pre change condition or permanence of the change. Unfreezing refers to the change effort to overcome the pressure of both individual resistance and group conformity. Unfreezing, therefore, requires a loosing of emotional as well as intellectual forces. The process requires the recognition of the driving forces or the need for change, and increases those driving forces. It requires that the restraining forces to change be reduced.
Org
Unfreezing / Breaking the Inertia
Movement
R
Or Diffusion of change
Once unfreezing has been accomplished, the individual gets ready for a new behavior and a change. Moving involves changing the organizational components. This phase is characterized by ambiguity and tentativeness and is to be carefully guided by the leader. After unfreezing, refreezing starts to diffuse the changes in the organizations work system. Refreezing refers to the stabilization of the change intervention but balancing the driving restraining forces. It involves the establishment of a new prospective compatible with a visualized perspective & leading to the new desirable behavior. This is the period in which the individual or group begins to enjoy the rewards for the new behavior, either extrinsically or intrinsically. In order to continuously reinforce the newly acquired behavior, the organization needs to maintain the organizational feet among the various that are supportive of such behavior. Organizations cannot provide a fit continually that are supportive of such behavior. Organizations can not provide a fit continually for a changed behavior, because internal and external factors. Organizational change therefore is dynamic and continuous one. STRATEGIES TO MANAGE THE CHANGE Resistance to change is a natural human response. With the relentless change that is occurring in the organization, knowing the causes of resistance as well as the strategies to cope with the resistance is one of the essential skills of a Change manager. Resistance and change go together. It is virtually impossible to have significant change without resistance. Unfortunately, resistance is usually viewed as bad and as something that is to be overcome. Resistance plays a positive role too, by bringing attention to some neglected aspects. An important strategy in dealing effectively with resistance is to understand its intensity. There could be three level of resistance. Level one is the resistance to change itself. People simply oppose, question, or are confused by the change. Level 2- resistance is always deeper and it indicates that there are other forces at work.This level of resistance appears in a number of
315
ZENITH
ways. Level 3- represents the deepest, most entrenched level of resistance the problems are big and may seen overwhelming. SOURCES OF RESISTANCE 1) INERTIA OF THE EMPLOYEES As change produces this comfort, it is resisted. The solution to the problem is to introduce the change and help people experience new conditions. 2) FEAR OF UNKNOWN CONSEQUENCES The fear that the proposed change is likely to lead to some other changes with unpredictable consequence might result in resistance phasing out the change could help overcome the resistance. 3) FEAR OF INADEQUATE RESOURCES Whenever the change requires additional resources in the form of new skills, additional man power, or budget, resistance is likely to be greater. Genuine need for the resources need to be supported by the top management for overcoming resistance. 4) PERCEIVED PERIPHERALITY OF CHANGE Implementation of change can be affective if the introduced change is seen as critical and useful, which can be achieved by the participation of the concern people in the diagnosis of the issues or problems. 5) PERCEPTION OF IMPOSITION When people see the change as being imposed they tend to resist it. The resistance can be over come by involving in the introduction of change at several stages. 6) ATTITUDE OF TOP MANAGEMENT The managers are the role models. If their attitude shows indifference, people also tend to resist change. The best way to overcome resistance is by the commitment of the leader and by his active support for change management. 7) VESTED INTEREST OF GROUPS The vested interest of people causes resistance to change. The trade unions may resist the changes to get their acceptability among the employees for the New or innovative in the organization. Sometimes the restructuring of the organization may lead to such changes. Once people experience the change, they often enjoy it and may see its positive aspects.
316
ZENITH
8) FEAR OF OBSOLESCENCE People in the organization resist change, as they fear that may become obsolete as they lack skills, which are required for coping with the change. Organizations should provide opportunities to those people in the development of required skills, which could help to overcome resistance. 9) FEAR OF LOSS OF POWER Any change would result in some rules in the system to loose power. This feeling of loss of power could need to resistance to change in the organization to overcome this resistance, there is a need to redefine and redesign the roles of the people. 10) Fear of Overload If the change is perceived to increase the work load of the people in the organization, they take to resist the change. There is need to bring in more of role clarity to overcome the resistance. Various tactics have been suggested to deal with the resistance. These include education and communication participation, facilitation and support, negotiation, manipulation and coercion. In order to appropriately deal with resistance, it is necessary to understand the causes of resistance strategy that may help to reduce the resisting forces in order to sustain the change over a long time. DISCUSSION A generation has grown up since the scientists and novelist C.P.Snow wrote that until this century, social changes so slow that it would pass unnoticed in one persons life time. That is no longer so. The rate of changes has increased so much that our imagination cant keep up. The most critical elements of leadership are the introduction and management of change. Many leaders have little or no training in the process of managing change. Most organizations rise or fall based on how well they manage the introduction of change and the control of uninvited changes in their environment. Leaders fully understand the change process to move their organizations successfully, through the turmoil of todays economic environment, into the future. Many organizations faced with a lack of, or diminishing resources, find that this exerts increasing pressure on their leadership to proactively respond to planned and unplanned changes. A primary determinate of the future success of an organization is senior managements ability to assimilate change, then formulate and articulate a clear vision, accompanied by implementation of succinct goals and objectives. In addition to facing and faster changes, leaders are often confronted with to many new choices. Their skills for handling more and faster changes dont necessarily serve them well when dealing with unprecedented changes. There is lack of training or knowledge. The great majority of leader comes to rely on instinct and experience, rather than a full understanding of the change process. Some out of fear of change
317
ZENITH
resist the inevitable transformation of their organization at risk when facing unanticipated as well as planned change. Garfield argued in his book, Peak Performers: the peak performers in our study do not perceive change as something to resist, or even first understand fully. They see it, rather as a source of opportunity which can guide. The key difference here is between people being change managers or change resisters. To manage the change, it is the most important requirement on the part of manager that he should be a perpetual learner. The myths, realities and culture with reference to organizational needs to be acknowledged and should be managed properly towards a new set of priorities and values. The change manager should address and reduce the fear of change that naturally exists in the work group of organization. STRATEGY From observations of the change processes in a number of organizations, lessons in positive change management have immerged. To be a change manager, not a change resistor, successful leaders commits to being perpetual learners. They learn the ways of their organizations and continued t explore new ideas.
Avoid Manipulating the Workgroup Reward New Behavior Early Team Spirit
Integrity
Build Trust
Change Leader www.zenithresearch.org.in 318

Change the perception
Perpetual Learner
Action vs. Words
Democratic Decision making
ZENITH
DEMOCRATIC DECISION MAKING Ownership of the change is instrumental to a successful change process. It is required that the ideas are generated by the leader, should construct a process that allow the group members to take and make the ideas their own. CHANGE THE PERCEPTION Asking people to make significant behavioral changes is the most frightening request one can make of them. Stress leveling organizations and people are directly linked to the level of experienced. Underestimating their response and potential resistance is the most consistent mistake made by leaders when introducing change. ACTIONS VS. WORDS People trust their leaders actions not their words. If words and actions are consistent, then a managers credibility will be high. The staff will take their cues from the behaviors of senior staff members, despite all declarations of intent. Senior managers must follow up on the change process. Most employees quickly burn out on changes that are announced on a regular basis, but are not consistently reinforced over a period of time. One well researched change process that is properly implemented with employee support is worth more than numerous new programs poorly prepared and presented in the same time period. The fanfare and energy that upper management puts into new project quickly becomes the burnt of derision and doubled faced behaviors by employees wanting to signal that they are on board with the new set of ideas, but privacy complain about the latest waste of energy. BUILD TRUST If the doors to change are not open, then interventions must concentrate on teambuilding, trustbuilding and open/honest communications prior to the introduction of change. If the senior manager can lower the work groups gear levels, he/she can open the doors to change. If the doors to change are open, or even partially open, then the strategy should concentrate on methodologies that will keep them open. Authentic participation in the change process with many opportunities to raise issues of concern will help to keep a group open to the possibility change. WORK WITH THE GROUP A senior management has to wok with the natural ingredients at hand, which requires careful study of the history of the group, and gives clues to members behavior. What has formed them in the past? A clear understanding of what drives the group must be achieved, before a leader introduces new elements into the mix. Ignorance of or purposely ignoring the natural order of a group may dooms change strategy to failure.
ZENITH
AVOID MANIPULATING THE WORKGROUP The worst change strategy is for a leader to pretend to listen to the group and consider their concerns, having already described what is appropriate in advance. This type of approach will backfire, because people will quickly perceive that they are being manipulated and concluded that the process is dishonest. REWARD NEW BEHAVIORS EARLY A senior manager cant wait for examples of completely changed behavior to surface before rewarding the new behavior. Managers spend much more energy catching employees doing something wrong, than recognizing what employees do right! Reinforce any significant movement in the right direction. INTEGRITY The most important critical change process is a leaders personal integrity: Does the workgroup have good reasons to trust the leaders? Do the leaders actions and words match? Is he/she sensitive to work group needs? Does he/she treat group members as he/she would like to be treated? Does the leader communicate with the work group in an open & honest manner? Senior management must fully understand how change works in order to lead their organizations successfully into the future. The introduction & management of change are two of the most critical elements of leadership for the future. Many leaders, lacking knowledge or training full back upon instinct and past experience. Some oppose inevitable changes required by their organizations and become change resistors instead of change manager. In addition to facing more and faster changes, leaders are often confronted with too many new choices. The successful change manager is one who is committed to being a perpetual learner. Myths realities and historical cultures need to be acknowledged and managed toward a new set of priorities and values. They built trust and confidence rather than attempting to manipulate the work group. Change managers are willing to compromise and lead the consensus decision making process towards a culture that rewards new behaviors. The work group is allowed to make ownership of change make it their own rather than ownership remaining with the initiator. Todays workforce trust its leaders actions more than its trust their words which places new behavioral demands on the leaders to act in parallel with their pronouncements. Change managers follow-up and reinforce required changes, rewarding new behaviors early in the process, thus shaping future behaviors. Leadership integrity is one of the important variables in successful completion of the process.
320
ZENITH
Adopting new practices force the people to concentrate more to devote more energy to performing their work. They can not longer rely on their habits and must be more attentive to everything they do, which induces added fatigue. It is not surprising, therefore, that absenteeism often increases during this period. Also, people need more time to perform. Their work and result some of them become overworked and overall productivity suffers. This drop in productivity, often linked with a drop in quality, is unfortunately normal and predictable. As this phenomenon is experienced by several people at the same time, it gives rise to as wave of discontent where many complain that they are overwhelmed with work and becoming ever too tired to perform it. To counter these risks, the organization should introduce methodical management and supervision arrangements, including exceptional measures, which will serve to reduce sources of confusion and anxiety. CONCLUSION To cope with the constantly changing environment of the organizations, the leader has to play a very prominent role in coping/managing response in the ever- changing environment. For any organization to remain effective, merely reacting to any change is not enough. Rather, the organizations have to continuously anticipate and respond to change. The need of the hour is to develop the organizations to the level where they can continuously learn, anticipate change and improve. REFERENCES 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) Bennis, Organization Development: Its nature, Origins and Prospects, P.15 Mc Shane, Steven L & Glinow MAV: Organizational Behaviour, TMH, New Delhi. Devis K. and Newstorm JW: Human Behaviour at Work: Organizational Behaviour, 7th Ed, McGraw Hill, 1985, New York. Priya,A. and Pandey A.C.(2007), Leadership:AForce organizational Change Management, Bizcraft,Vol 1(1), 41-48 multiplier in
Harris A.Thmos, Im OK-youre OK,Pan Books,London,1977 Carter, W. 1996. Managing organizational change Participant Guide. Kogan Page, N. Delhi, 67pp.
Maurer,R.1996. Working with resistance to change. The support for Pfeiffer, J, W. Pfeiffer & co, San Diego, USA, 161-174 Robbins, S. P. (1990). Organization al behavior. PHI Pvt. Ltd. New Delhi, 599pp. RussellJones, N.(1997).The Managing Change Pocketbook.Rupa & Co.,N.Delhi, 105 Garfield, Charles, Peak Performers The new heroes of American Business. Wendell L. French and Cecil H. Bell, Jr.(2001), Organizational Development, Sixth Ed. Pearson Education, Inc.
ZENITH
A CASE STUDY ANALYSIS ON BSLI DREAM ENDOWMENT PLAN

S.SARAVANAKUMAR*; B.L.SAIRAM SUBRAMANIAM**; G.PERIYASAMI***; G.BABY SAKILA****
*Research Scholar & Associate Professor, Department of Management Studies, JKK Nattraja College of Engineering & Technology, Komarapalayam, Namakkal - 638183, Tamilnadu, India. **Research Scholar and Assistant Professor, Department of Management Studies, SSM College of Engineering, Komarapalayam, Namakkal - 638183, Tamilnadu, India. ***Assistant Professor, Department of Commerce, SSM Arts and Science College, Komarapalayam, Namakkal - 638183, Tamilnadu, India. ****Assistant Professor, Department of Management Studies, Excel Business School, Komarapalayam, Namakkal - 637303, Tamilnadu, India.
ABSTRACT BSLI Dream Endowment Plan is a unit linked insurance plan (ULIP) that gives the benefit the of life insurance protection and comprise the features investment. The premium invested in unit linked insurance plan is subdivided into units and invested in the funds selected by the policyholder; such part is called as Net Asset Value (NAV). The fund value under this policy varies according to the market movement of the portfolio. After deducting the allocation charges and all other contingency costs from the premium, the remaining portion gets invested in the units. Unit is the component in a fund; a fund consists of many companies usually called as portfolio. Hence the return from this unit linked insurance plan depends upon the portfolio performance in the market. Abundant benefits are associated with this policy but the important consideration is the risk in the investment portfolio is generally borne by the policyholder. ULIPs are designed with lot of innovative ideas and different from the traditional insurance plans. It provides flexibility in the life protection, investment and savings, adjustable life cover, fund options, transparency in charges, options to take additional cover against death due to accident or disability and liquidity through partial withdrawals etc. it is not possible in traditional package plans. KEYWORDS: Unit Linked Insurance Plan, Rider Options, Free-Look Period, Policy Loans, Policy Discontinuance, Legal Implications, Policy benefits. ______________________________________________________________________________ 1. INTRODUCTION There is anextensive range of investment opportunities available for the investing community, varied from financial assets to physical assets. Both the asset class has its own features. Among the two investment outlets, insurance is an inevitable tool, and no financial product can rival against insurance. Before the year 2001, insurance was sold in the form of term, endowment,
ZENITH
whole-life, and money-back policies by the monopoly insurer LIC. After the entry of private players in 2001 and growth of equity prices captured the attention of all investors to insurance segment. Traditional plans do not offer the return in the line of equity market. In order to satisfy existing customers and to capture more prospects, the life insurers introduced some plans with innovative features to strengthen and maximize premium income. Such kind of innovative ideas comes in the form of Unit Linked Insurance Plan. The private sector life insurance companies added extra fuels in this arena. A unit-linked insurance plan is a multi-featured product that combines the benefit of insurance, risk sharing and investment. The investment in a unit linked insurance plan works like a mutual fund and does not come with guaranteed returns, unlike money back, whole-life or endowment policies. Hence a unit linked insurance plan combines the features of investment and life protection. The premium of the customer can fetch life insurance cover and a part of it gets invested in specific investment funds of the customers choice in the form of units.A Unit is the component of the fund and its performance is depends upon the performance of capital market.Under this plan, the policyholders have the choice of investing their premiums in a single premium / regular or limited premium mode and in addition to that monthly, quarterly, half-yearly and annually payment method is extended to regular and limited premium payments. The premium alteration is also allowed in the tenure of the premium payment period. For example, the customers of this plan are allowed to park their excess money in this scheme. Conversely, if any policyholder faced liquidity problem, it is allowed to pay lower premium. Shifting of the funds from one fund to another funds or fund options. 2. OBJECTIVES OF THE STUDY This case study is carried out with the following objectives. 1. To know how ULIPs differs from traditional savings plans. 2. To study the basic features of the BSLI Dream Endowment Plan. 3. To identify the basic requirements needed to purchase BSLI Dream Endowment Plan. 4. To analyze the policy benefits and all other relevant factors associated with the policy. 3. ULIPS VS. TRADITIONAL PLANS Unit linked insurance plan and traditional plans work very differently. While the risk is borne by the insurer in case of a traditional plan, but in case of unit linked insurance plan it is borne by the customer. The traditional plan mixes insurance and investment and assures the customer a certain sum at the end of given period. It includes sum assured and vested bonus. If the customer does not survive the policy term, the policyholder family gets the sum assured plus bonuses. Traditional plans are best for those with low financial discipline. They can consider including endowment plans in their insurance portfolio. For such investors, many private sector insurers have innovations that have worked on features, bonus payments structuring and riders. In an endowment plan, the big change has been in the structuring of bonus payments. Reversionary bonus is accumulated until the death or maturity of the life insured and paid whichever takes place first. The non-reversionary bonus if the policyholder is allowed to encash
ZENITH
it. Premiums in excess of the risk cover are invested as per the choice of the policyholder and go to a common fund and are then invested as decided by the insurer unlike in a unit linked insurance plan, where the return or the yield depends on the movement of the market and the risk is to be borne by the policyholder. The premium paid by the policyholder, net of premium allocation charge is invested in fund(s) chosen and units are allocated depending on the price of units for the fund(s). The fund value is the total value of units that the policyholders hold in the fund(s). 3.1. ULIP AND ITS MULTI-FACE Now the unit linked insurance plan satisfies the needs of all segments, child, adult and senior citizens. It serves as child plan, protection plan, savings plan, protection against loan, pension plan, etc., to the investing community. The unit linked policy gives varied benefits to the life insured and it includes, life protection, investment and savings, flexibility, adjustable life cover, fund options, transparency in charges, options to take rider cover against death due to accident or disability or critical illness, liquidity in the form of partial withdrawals, switching etc. While considering the long term, unit linked insurance plan gives higher return than the traditional package. However, the unit linked plan customers to bear in mind that higher return come with greater risks. 4. BIRLA SUN LIFE INSURANCE COMPANY LIMITED BSLI is a joint venture between the Aditya Birla Group, a well-known Indian conglomerate and Sun Life Financial Inc, one of the leading international financial services organization from Canada. With an experience of over a decade, BSLI has contributed significantly to the growth and development of the Indian life insurance industry and currently is one of the leading life insurance companies in the country. Enjoying trust of its over 2 Million customers, BSLI is known for innovations. BSLI offers a complete range of offerings comprising of protection solutions, children's future solutions, wealth with protection, health and wellness as well as retirement solutions and has an extensive distribution reach over 500 cities through its network of over 600 branches, close to 1,40,000 empanelled advisors and over 700 partnerships with Corporate Agents and Banks. This is well supported by the sound financials that the Company has. The AUM of Birla Sun Life Insurance is close to Rs. 16,000 crs and it has a robust capital base of over Rs. 2,450crs as on March 31, 2010. It offers wide array of insurance products ranging from traditional plans, savings plans, protection plans, annuity plans, investment plans to the different segments like children, adult and aged persons. 4.1 ADITYA BIRLA FINANCIAL SERVICES GROUP ABFSG has a significant presence across various verticals, including life insurance, insurance broking, mutual funds, private equity, security based lending, factoring, insurance advisory services, retail broking and distribution of third party products. The seven companies representing Aditya Birla Financial Services Group are Birla Sun Life Insurance Company Ltd., Birla Sun Life Asset Management Company Ltd., Aditya Birla Capital Advisors Ltd., Aditya Birla Money Ltd., Aditya Birla Money Mart Ltd., Aditya Birla Finance Ltd and Birla Insurance Advisory & Broking Services Ltd.
324
ZENITH
The ABFSG is committed to being a leader and role model in a broad based and integrated financial services business. Its 7 lines of businesses, with over 5.5 million customers manages assets worth USD 18 billion approximately and prides itself for having a talent pool of over 16,000 committed employees. ABFSG has its wings spread across more than 500 cities in India through 1600 branches and over 2,00,000 channel partners. This allows ABFSG to offer its customers virtually anything other than a savings or current account. With over a billion dollar revenue, ABFSG is a significant non-bank player and one of the few players who have a top 5 position in both life insurance and mutual funds. ABFSG is a part of Aditya Birla Nuvo Ltd. (ABNL), a USD 3 billion conglomerate having leadership position across its manufacturing as well as services sector businesses. ABNL is a part of the Aditya Birla Group, a USD 29 billion Indian business house operating in 25 countries across the globe. 4.2 SUN-LIFE FINANCIAL INC Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2010, the Sun Life Financial group of companies had total assets under management of $435 billion. 5. BSLI DREAM ENDOWMENT PLAN BSLI offers a new plan Dream Endowment Plan (DEP) - with multiple features and highly suitable for all caters of people residing in the nation. This plan is a non-participating unit-linked life insurance plan. All unit-linked life insurance plans are different from traditional insurance plans and are subject to different risk factors. The name of this plan and that of the investment fund do not in any way indicate the quality of the plan or future returns.In this plan, the investment risk in the investment fund is borne by the policyholder. Investment funds are subject to investment risks and unit prices may go up or down reflecting the marketvalue of the underlying assets. Past performance is no guarantee for the future performance. 5.1 BSLI DEP -AT A GLANCE
The following are the basic requirements for purchase of the policy.
ZENITH
TABLE: 1 SNAPSHOT OF THE PLAN Policy Term Guaranteed Savings Date (GSD) Entry Age 10, 15, 20, 25 and 30 years Same as policy term 1 year to 65 years, subject to minimum age of 18 on GSD Minimum Rs. 12,000 p.a. if paid annually Minimum Rs. 15,000 p.a. if paid semi-annually Basic Premium Minimum Rs. 20,000 p.a. if paid quarterly Minimum Rs. 24,000 p.a. if paid monthly Short Pay - 5 years Short Pay - 10 years Pay Term Short Pay - 15 years Short Pay - 20 years To Guaranteed Savings Date Minimum Rs. 50,000 Enhanced Sum Assured Entry Age 18 to 65 years, subject to maximum age of 75 on GSD For entry age up to 50 For entry age up to 55 For entry age up to 60 For entry age up to 65 For entry age up to 65
Source: BSLI Dream Endowment Plan 5.2 CHOICES TO THE POLICYHOLDER BSLI Dream Endowment Plan offers many choices to the policyholder in the selection of the plans. These are: GUARANTEED SAVINGS DATE - The date, on which the policy matures, it is the policy anniversary on which the Guaranteed Savings Fund is guaranteed to equal the Guaranteed Savings Amount. Policyholdersoptions are 10th, 15th, 20th, 25th or 30th policy anniversary. BASIC PREMIUM - The premium amount the policyholder commits to pay every year during the pay term. The Basic Sum Assured and Guaranteed Savings Amount will be determined based on the premium amount committed by the policyholder.Guaranteed Savings Amount is automatically determined based on the above choices and the entry age and gender of the life insured. Please ask financial advisor for the Guaranteed Savings Amount applicable to life to be
326
ZENITH
insured. Basic Sum Assured is the minimum death benefit payable on the death of the life insured. The Basic Sum Assured is automatically determined as Basic Premium multiplied by: The higher of 10 or the number of years to maturity divided by 2, for entry ages below 45; or The higher of 7 or the number of years to maturity divided by 4, for entry ages 45 and above. Based on insurance needs, policyholders can increase the amount of protection by opting for Enhanced Sum Assured at inception. Enhanced Sum Assured will be paid in addition to the Basic Sum Assured under the Death Benefit prior to the Guaranteed Savings Date. Policyholder can choose any amount of Enhanced Sum Assured, subject to a minimum of Rs. 50,000. Company will calculate the Enhanced SA Premium payable by the policyholder and this premium will be added to the Basic Premium. The Basic Premium (net of investment guarantee charge and premium allocation charge) and the Enhanced SA Premium will be used to purchase units in the investment fund Enhancer. The units purchased in the investment fund is the monetary amount allocated to the investment fund divided by its then prevailing unit price. PAY TERM - The Basic Premium is due every policy year prior to the Guaranteed Savings Date. BSLI also offers short pay options of 5-Pay, 10-Pay, 15-Pay or 20-Pay for life insured convenience. PAY MODE - The policyholders can pay in monthly, quarterly, semi-annual or annual installments. For monthly installments, two payments are required upfront at entry. It is better to ask financial advisor for details about the range of convenient payment methods we offer. FUND VALUE It represents the total value of investments to date and is the balance of all units allocated to the investment fund Enhancer multiplied by its then prevailing unit price. Guaranteed Savings Fund is the accumulation at 3% per annum of all Basic Premiums (net of investment guarantee charge and premium allocation charge) and Enhanced SA Premiums paid till date less policy charges deducted monthly less any partial withdrawals from the Fund Value. 5.3 BENEFITS TO THE POLICYHOLDER GUARANTEED ADDITIONS - in the form of additional units will be added to policy on:10th policy anniversary and on every 5th policy anniversary thereafter. Guaranteed Addition is 2.50% of the Basic Premiums paid in the last 60 months 11th policy anniversary and every policy anniversary thereafter. Guaranteed Addition is 0.25% of the average Fund Value in the last 12 months. DEATH BENEFIT - in the unfortunate event of the death of the life insured prior tomaturity, company will pay to the nominee Basic Sum Assured; plus Fund Value; plus Enhanced Sum Assured, if any
327
ZENITH
Death benefit shall never be less than 105% of total premiums paid to date (excluding any applicable rider premium and/or underwriting extras) less any previous partial withdrawals. SURRENDER BENEFIT - in case of emergencies, policyholder can surrender their policy to the company after the completion of five policy years and receive the Fund Value at that time. MATURITY BENEFIT Policyholderwill receive higher of the Fund Value or Guaranteed Savings Fund at maturity. PARTIAL WITHDRAWALS Policyholders are allowed to make unlimited partial withdrawals any time after (a) five complete policy years or (b) life insured attaining the age of 18, whichever is later. The minimum amount of partial withdrawal is Rs. 5,000. There is no maximum limit, but policyholders are required to maintain a minimum Fund Value of Rs. 25,000. 5.4 ENHANCER SPECIALITY OF THE FUND OBJECTIVE - To grow capital through enhanced returns over a medium to long-term period through investments in equity and debt instruments, thereby providing a good balance between risk and return. It is suitable for individuals seeking, higher returns with a balanced equity-debt exposure. STRATEGY -To earn capital appreciation by maintaining a diversified equity portfolio and seek to earn regular returns on the fixed income portfolio by active management resulting in wealth creation for policy owners. The risk profile of the investment fund is medium and the asset allocation will be: 0-40% in Money Market & Cash; 65-80% in Debt Instruments; and 20-35% in Equities and Equity Related Securities Money Market Instruments are debt instruments of less than one year maturity. It includes mutual funds, collateralized borrowing & lending obligation, certificate of deposits, commercial papers etc. Investment in Money Market Instrument supports for better liquidity management. 5.5 LEGAL IMPLICATIONS POLICY DISCONTINUANCE - Throughout the Policy Term, policy owner are given a grace period of 30-days (15-days in case premium is paid on a monthly basis) to pay the due premium. If the company does not receive full premium by the end of the grace period, the company shall send a reminder notice within 15 days to revive the policy by paying due and unpaid premium or to choose to withdraw from the policy completely.If policyholder failed to pay due and unpaid premiums within 30 days as stipulated in our notice shall be deemed to have chosen the option to completely withdraw from the policy. Till this period, policy as well as all insurance
328
ZENITH
cover and charges will continue.During the first five policy years - should policyholder completely withdraw from the policy, the insurance cover will cease and policy fund value net of any discontinuance charge will be transferred to the Discontinued Policy Fund. The Discontinued Policy Fund will be credited with a minimum interest rate of 3.5% p.a. and the proceeds from this will be payable to policyholder on the date corresponding to fifth policy anniversary or the date the life insured dies, if sooner. The charge is as follows: TABLE: 2 POLICY DISCONTINUANCE CHARGE Policy Discontinued In Policy Year 1 In Policy Year 2 In Policy Year 3 In Policy Year 4 In Policy Year 5 For AP less than Rs.25,000 Lower of 20% of AP, 20% of FV, Rs. 3,000 Lower of 15% of AP, 15% of FV, Rs. 2,000 Lower of 10% of AP, 10% of FV, Rs. 1,500 Lower of 5% of AP, 5% of FV, Rs. 1,000 Nil For AP of Rs.25,000 or more Lower of 6% of AP, 6% of FV, Rs. 6,000 Lower of 4% of AP, 4% of FV, Rs. 5,000 Lower of 3% of AP, 3% of FV, Rs. 4,000 Lower of 2% of AP, 2% of FV, Rs. 2,000 Nil
Source: BSLI Dream Endowment Plan [AP Annual Premium, FV Fund Value] After five completed policy years, if thepolicyholder completely withdrawsamount from the policy, the insurance cover will cease and policy fund value shall be paid immediately to the policyholder. POLICY LOANS - Policyholder can avail of a loan on the policy purchased. The minimum loan amount is Rs. 5,000 and the maximum loan amount is 40% of the fund value net of any discontinuance charges. The interest charge on such loans will be fixed by the company from time to time. Any proceeds payable upon policy termination due to death, surrender or maturity shall be reduced by any outstanding policy loan at that time. RIDER OPTIONS - Rider is a condition that is added on a basic policy providing an additional benefit, with lowest cost. For example, if accidental death rider selected, the sum assured would be double at the event of death of the life insured. Riders can be with regard to additional payments on disability or sickness, or waiver of future premiums, partly or fully, under certain conditions.Policyholder can further customize their plan by adding the following riders offered by the company.
329
ZENITH
BSLI Accidental Death and Disability Rider BSLI Critical Illness Rider BSLI Surgical Care Rider BSLI Hospital Care Rider BSLI Waiver of Premium Rider For further details, please refer to detailed brochure on riders or consult financialadvisor or refer to our website. CURRENT TAX BENEFITS - As per extant tax laws this plan offers tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. Under Section 80C, premiums paid up to Rs. 1,00,000 are allowed as a deduction from total taxable income each year. Under Section 10 (10D), the benefits received from this plan are exempt from tax,subject to mentioned exclusions. FREE-LOOK PERIOD - Policyholder will have the right to return their policy to the company within 15 days from the date of receipt of the policy. BSLI will pay the fund value plus all charges levied till date (excluding the fund management charge) once BSLI receive written notice of cancellation (along with reasons thereof) together with the original policy documents. Depending oncurrent administration rules, BSLI may reduce the amount of the refund by expenditures incurred in issuing policy and as permitted by the IRDA in accordance to IRDA (Protection of Policyholders Interest) Regulations, 2002. UNIT PRICE - On each business day and for each investment fund, BSLI determine the unit price by dividing the net asset value (NAV) of the investment fund at the valuation time by the number of units in existence for the investment fund in question. It is available website of the company as well as leading newspapers in the country. The NAV is determined based on whether purchasing/appropriation price or selling/expropriation price assets in order to meet the daily transactions of unitallocation or redemption associated with the investment fund. When appropriation (expropriation) price is applied, the NAV of the investment fund is the market value of investments held by the fund; plus (less) the expenses incurred in purchasing (selling) assets; plus the value of current assets; plus any accrued income net of fund management charges; less the value of any current liabilities or provisions. This NAV divided by the number of units existing on the valuation date, before units are allocated (redeemed), gives the amount of money we put in to (take out of) the investment fund per unit allocated (redeemed).
330
ZENITH
PROVISIONS TO SUICIDE - BSLI will refund higher of the fund value or premiums paid to date in the event the life insured dies by suicide, whether medically sane or insane, within one year after the issue. PROVISIONS IN SECTION 45 OF THE INSURANCE ACT, 1938 - No policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected be called in question by an insurer on the ground that statement made in the proposal or in any report of a medical officer, or referee, or friend of the life insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder and that the policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the application. 5.6 POLICY CHARGES There are different types of fees and charges are deducted on each and every policy. However, it may be noted that insurers have the right to revise fees and charges over a period of time. INVESTMENT GUARANTEE CHARGE - An investment guarantee charge of 2% is levied on the Basic Premium when received. PREMIUM ALLOCATION CHARGE - A premium allocation charge is levied on the Basic Premium when received: 7.50% of the Basic Premium received in the first policy year. 6.50% of the Basic Premium received in the second policy year. 5.00% of the Basic Premium received from the third year onwards.
FUND MANAGEMENT CHARGE - The daily unit price of the investment fund is adjusted to reflect the fund management charge of 1.25% p.a. We may change this charge at any time in the future subject toIRDA approval. POLICY ADMINISTRATION CHARGE - The policy administration charge is Rs. 20 per month for the first five policy years. It shall increase to Rs. 25 per month in the sixth year and inflate at 5% p.a. thereafter. Thischarge is levied monthly by cancelling units from the investment fund at that time.
ZENITH
MORTALITY CHARGE - Mortality charge is deducted every month for providing insurance cover. It is charged by canceling units from the investment fund at that time. The charge for theBasic Sum Assured will depend on the gender and attained age of the life insured. TABLE: 3CHARGES PER 1000 OF BASIC SUM ASSURED Attained age Male Female Age 25 1.546 1.502 Age 35 1.753 1.605 Age 45 3.040 2.505 Age 55 7.064 5.494 Age 65 16.267 13.197
Source: BSLI Dream Endowment Plan The charge for the Enhanced Sum Assured will depend on the Guaranteed SavingsDate, gender and entry age of the life insured. TABLE: 4CHARGES PER 1000 OF ENHANCED SUM ASSURED Male Guaranteed Savings Date Entry Age 25 Entry Age 35 Entry Age 45 Entry Age 55 10 Yrs 1.380 1.884 3.941 15 Yrs 1.434 2.093 4.502 20 Yrs 1.516 2.321 5.040 25 Yrs 1.551 2.473 5.875 30 Yrs 1.585 2.981 7.227 10 Yrs 1.345 1.619 3.042 7.341 15 Yrs 1.377 1.765 3.498 8.255 Female 20 Yrs 1.440 1.933 3.911 9.308 25 Yrs 1.459 2.025 4.487 30 Yrs 1.482 2.334 5.487 -
9.504 10.808 12.946
Source: BSLI Dream Endowment Plan MISCELLANEOUS CHARGES - BSLI currently charge Rs. 50 per request for partial withdrawal. BSLI however reserve the right to charge up to Rs. 500 per request in the future. Present charge is Rs. 100 per policy revival. The company may increase this charge in the future subject to a maximum of Rs. 1,000 per revival. Any increase in the miscellaneous charges will be subject to IRDA approval. SERVICE TAX - Service Tax and other levies, as applicable, will be extra and levied as per the extant tax laws. IRDA APPROVAL AS TO INCREASE IN CHARGE - Only when specified and within stated limits, the companymay increase a particular charge at any time in the future. BSLI, however, need to get prior approval from the IRDA before such charge increase is effective.
332
ZENITH
Otherwise, all other charges in this policy are guaranteed to never increase during the tenure of the policy. 5.7 RISK FACTORS AND DISCLAIMERS This policy is underwritten by Birla Sun Life Insurance Company Limited. This is a nonparticipating unit linked life insurance plan. Birla Sun Life Insurance BSLI Dream Endowment Plan - Enhancer - are only the names of the Company, Policy and Investment Fund respectively and do not in any way indicate the quality of the policy, investment fund or their future prospects or returns. The charges are guaranteed throughout the term of the policy unless specifically mentioned and subject to IRDA approval. The value of the investment fund reflects the value of the underlying investments. These investments are subject to market risks and change in fundamentals affecting the investment portfolio. The premium paid in unit linked life insurance policies are subject to investment risk associated with capital markets and the unit price of the units may go up or down based on the performance of investment fund and factors influencing the capital market and the policyholder is responsible for their own decisions. There is no guarantee or assurance of returns above the guaranteed returns from the investment funds. BSLI reserves the right to recover levies such as the service tax levied by the authorities on insurance transactions. If there be any additional levies, they too will be recovered from the policy. This brochure contains the salient features of the plan. For further details please refer to the policy contract. Tax benefits are subject to changes in the tax laws. Insurance is the subject matter of solicitation. For more details and clarification call BSLI Insurance Advisor or visit the company website. 6. CONCLUSION BSLI Dream Endowment plan is an ULIP product that combines life insurance protection and investment. Here the premiums of the policyholder not only provide life insurance cover, but a major part gets invested in specific investment funds Enhancer - chosen by the policy owner.The purpose of purchasing life insurance is to replace an income that is lost when the income earner dies. Every investment have some benefits, some investments like bank deposits, provident funds offer fixed rate of return without any risk. Many investments like mutual funds, equity shares, and derivatives of stock, currency and commodity, venture capital funds, real estate properties give high return but the risk profile also very high. But among the various investment alternatives, none of the asset can compensate for the unfortunate demise of the investor. Life insurance ensures life protection in the form of sum assured to the diseased persons nominee along with the fund value. If the policyholder survives until the maturity, the maturity proceeds are definitely high.They are more flexible than other financial and real assets and also ensures maximum transparent. It is the cost effective plan and suitable savings for generating wealth to the low income caters. It is optimum and advisable to include unit linked insurance plan in the investment portfolio.
333
ZENITH
REFERENCE [1] Balachandran S. (2006), IC 33 - Life Insurance, Insurance Institute of India, 11th Edition. [2] Bharathan D. (1999). Perception of policyholders in buying Policy, Journal of Insurance Studies, Vol.3, pp.22-29. [3] Mike William (1987). Psychology of Policy purchasers as to New Policy, Journal Industrial Psychology, Vol.16, pp.14-28. [4] Sivaprakash R. (2008), Conference,Yercaud. Multi-Role of ULIP in Life Insurance, RLIC
[5] Smith R. (2001). Life Insurance and Life Awareness, Journal of Insurance Review, Vol. 11,, pp.68-79. [6] Sunil Dhawan, (2008), Best ULIPS, Outlook Money. [7] www.birlasunlife.com
334
ZENITH
PRIVATE LABELS IN INDIAN RETAIL INDUSTRY

HARIPRAKASH*
*Assistant Professor, MBA Department, Srinivas Institute of Management, Valachil, Mangalore.
ABSTRACT There are radical changes taking place in the Indian retail Industry. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organized retail infrastructure are the factors contributing for such changes. One of the new things seen in the Indian retail Industry is the growth of Private Brands in the organized retail. This paper discusses about the Private Brands in Indian Retail Industry. It mainly focuses on the importance of private labels to a retailer, some of the well known private brands in Indian retail Industry, the growth potential of private brands, and performance of private brands with some examples. KEYWORDS: Private Brands, Indian Retail, Organized retail, Private Labels. ______________________________________________________________________________ INTRODUCTION Retailing in India is gradually inching its way toward becoming the next boom industry. Retail industry in India is expected to rise 25% yearly being driven by strong income growth, changing lifestyles, and favorable demographic patterns. Organized retail is on the threshold of a boom in India. But as companies line up to grab a bigger and bigger slice of the retail pie, another battle is likely to change the face of the industry, the one between the manufacturer brands and the retail chains private label brands, which are far from being just cheap generics. Private labels, or store brands, are those owned and sold by retailers in their stores typically at a lower price because of minimal marketing and advertising expenses. Worldwide experience shows that as retailers become more powerful, they have increasingly focused on their own brands at the expense of manufacturer brands.
IMPORTANCE OF PRIVATE LABELS TO RETAILERS What works for private labels, according to retailers, is that consumers trust a retailer brand to sell quality products. People buy goods from a chosen grocer, from whom they buy loose biscuits, rice, cooking oil and other staples because of the assurance of right price and quality. The success of private labels finds its roots in this practice. The product retains its price attractiveness, Private labels tend to be 5 to 20 per cent cheaper than established brands. Since retailers are able to cut out middlemen, they pass on the cost benefit to consumers. Retailers also get the upside. They not only make more profits by selling private labels than the brands (margins are 60 per cent more than what they get from FMCG companies), these labels
ZENITH
help differentiate themselves from their rivals. And in the long run, they can use the private labels to attract customers. Private labels started with retailers wanting to offer cheaper substitutes. This was for two reasons. One, having a private label meant that retailers could negotiate a better margin from the manufacturer. And the other, when they had private labels it was a differentiating factor. While every shop sold a Coca-Cola and Pepsi, a private label meant that the store now had something that other stores did not. It is also observed that some of the retailers tend to create higher quality products. They no longer say buy us because we are cheap, instead today; they are saying buy us because we are the best. By offering high quality products, many private labels have started charging more than regular manufacturers. Today, retailers have realised that by having top quality private labels they can differentiate themselves from other stores and be a destination store. For instance, Tesco in Europe has a range called the Tesco Finest line. It does have a Tesco Value line, which is cheaper, but the Finest line only sells premium products at premium prices. Tescos Finest chocolate, for instance, sells at 50 per cent premium over, say, Cadburys. Similarly, its yogurt sells at more than 50 per cent premium over Danone and other yogurts. Retailers are now doing everything it takes to create premium brands. They advertise on television, take up brand-building exercises, and most importantly, they focus on developing a better product than the existing manufacturers brands. The same is expected to happen in India as Indian organized retailing matures over a period of time. And this is expected to happen faster than other developing countries. The major advantage coming with a private label to retailer is that is the factor of differentiation that a retailer can have with private labels. But in order to create such differentiation the retailer should be successful in positioning the private label against the national brand in such a way that a private label should be considered as equivalent or better than the national brand. So reaping the benefit of such differentiation is a long term strategy for a retailer, as creating a private label as equivalent or better than the national player is a long term process and involves a lot of commitment in terms of time and efforts from the retailer. PRIVATE LABELS IN INDIAN RETAIL
In India organized retailers like Bharti Retail, Adhitya Birla Group, Shoppers Stop, Megamarts, Niligiris, Pantaloon Retail India Limited and Godrej are some the important retailers who have come out with private labels BHARTI RETAIL: Bharti Retail, Walmarts joint venture partner in India, have bought eight private label in total including Great Value line of food (flour, dry fruits, spices, cereal, and tea) , George Apparel. The Private Label lines are going into the Cash & Carry format (BestPrice Modern Wholesale) and discount convenience (Easyday). Equate, a brand for pharmacy and health and beauty items, has been introduced only in the handwash category as of now in Easyday stores. Other Wal-Mart private labels introduced in India include Home Trends (home furnishing), Mainstays (plastic containers, kitchen accessories), Kid Connection (toys, clothing),
ZENITH
Faded Glory (footwear) and Athletic Works (athletic shoes, equipment). Astitva, a line for Indian ethnicwear. ADITHYA BIRLA GROUP: More retail out lets from Adithya Birla Group offers Feasters brand (fruit squash, biscuits, fruit syrup, Instant Fruit Mix Powder, Noodles). More Brands (various grocers). 110 Per Cent (toilet cleaners, detergents, soaps,) and Paradise Room and Air Fresheners, AU79 (Deodorant) and Fresh-O-Dent toothpastes and toothbrushes. SHOPPERS STOP: Shoppers stop offers Kashish, Haute Curry, Vettorio Fratini and Elliza Donatein private labels in its products offerings. Life' T-shirts for men , while 'Stop' as ladies western wear. VISHAL MEGAMART: Vishal Megamart's offers salt and toothbrush under its `Vneed' brand. PANTALOON RETAIL INDIA LIMITED: Pantaloon Retail India Limited, offers "Fresh n Pure, Cleanmate, Tasty Treat, Caremate, Sach brands in food and FMCG. DJ&C, Kinghthood, John Miller brands in mens apparel. Tasty Treat in food segment. In the baby diapers segment Care Mate. In the Electronic Bazaar offers refrigerators, washing machines, air conditioners, fans, toasters, kitchen mixies in the brand name KORYO. From the above data it is very clear that the number of private labels from Pantaloon Retail India Ltd is comparatively more than the other retailers, this is because Pantaloon Retail India Limited is expanding its business and growing faster compared to other organized retailers in India. At present the organized retail in India is about 3 to 4% only, the rest is unorganized retail i.e the kiran stores, organised retailing is growing faster than ever, hence in the coming years Retail consumers can see more private labels in the retail stores and have more options in their selection. We can see the competition becoming intense between private labels and national brands and competition among the private labels from different retailers in the coming years. GROWTH POTENTIAL OF PRIVATE LABELS Experts in the industry say private label brands, which occupy less than 5 per cent of the market in India now, are likely to corner 50 per cent of the market as the retail space opens up and matures. At present Bharti Retail gets 15-20% of sales from private labels and hopes to raise it to 30% in future. For Shoppers Stop, private labels, on average, account for about Rs 200 crore in revenues Almost all modern retailers, including the Future group, Reliance Retail and the Aditya Birla group, are increasingly relying on private label to boost their sales and margins. Future group has been working towards growing their private labels so that some of them can even be leased or sold to other retailers. Examples in the developed countries show that Private labels can have strong brand loyalty as stronger or more stronger than national brands. For example, Aldi in Germany as the nations number one brand. In a recent study, its brand name in terms of consumer trust was ranked ahead of even DaimlerChrysler. Again, Tesco is among the top 10 brands in the UK. Similarly, French retailer Carrefour is one of the 10 most recognised and trusted brands in France. Private labels account for 40 per cent of Wal-Mart sales ($126 billion or Rs 5,16,600 crore), 50 per cent for
337
ZENITH
Tesco ($36 billion or Rs 1,47,600) and are eating into a larger chunk of the organised retail sale in developed markets. In Germany, for instance, private label has shot up from 12 per cent of sales to 34 per cent. This has, in effect, changed the balance of power between brand manufacturers and retailers, giving the latter a decided advantage when negotiating terms with the brand manufacturers. Private labels have evolved from cheap and nasty substitutes to the real thing. Indeed, copycat private labels still remain a strong strategy for retailers. However, the copycat no longer depends on the price advantage to fight the branded product; it has improved on quality and offers a value proposition to the consumer. Observing the growth of organized retail in India, there is enormous potential for the growth of private labels in India. Indian organized is witnessing heavy investments from well know business establishments in India like TATAs, Reliance, ITC, Godrej, Birla Group. At the same time foreign retail majors like Walmart, Tesco, Carreforre, are also entering/ have entered the retail sector observing its immense potential. All these players have their private labels in the Indian retail. PERFORMANCE OF PRIVATE LABELS In food and beverages, for instance, Aditya Birla Retail's Feasters Noodles Family pack contributes 40 per cent of the revenues from the category. Kitchen's Promise pickles are outselling Mother's Recipe, and sales of Feaster's Instant Drink Powders are more than double those of Tang sales. In homecare, the brand 110 Per Cent toilet cleaners have achieved 20 per cent of the category sales and Paradise Room and Air Fresheners contribute to 38 per cent of the category sales. Even personal care products are doing well. AU79 Male Deodorant has already gathered market share of 6.5 per cent within three months of launch. And Fresh-O-Dent toothbrushes contribute to 15 per cent of the category sales. Thomas Varghese, CEO, Aditya Birla Retail, says, "Our brands have performed very well against the FMCG brands across a range of food and non-food categories." Aditya Birla's private labels cover seven brands and over 290 products and variants. The same can be said for Spencer's and Future Group. Mohit Kampani, vice-president, merchandising, food & FMCG, Spencer's Retail, said, "Our private labels have double-digit market share in food (10-20 per cent) and beverages (8-10 per cent), home care (10 per cent) and personal care (10 per cent)." Spencer's sells private labels under the Spencer's Smart Choice name. It is targeting 20 per cent market share across the categories in the next three years. Devendra Chawla, head (private labels) food and FMCG, Pantaloon Retail India Limited, said: "Fresh n Pure, Cleanmate, Tasty Treat, Caremate, Sachn each case we have 15 to 40 per cent market share in the categories in which we operate. We hope to have 25 to 30 per cent share for our private labels in respective categories." Anand Ramanathan, manager, business performance services, KPMG, noted that some of the major food and grocery retailers' average 20 to 30 per cent private label penetration, peaking at around 50 per cent. Processed food and homecare products are witnessing more heat from private labels because consumers are more open to brand switches in these categories, while personal care is a little tough to crack. Naimish Dave, director, OC&C Strategy Consultants, noted, "Currently, the contribution of private labels for some players has even touched 40 per cent-plus, from 10 to 12 per cent."
ZENITH
Future Group has already tasted the success with its Tasty Treat brand which is just behind Frito Lay in the potato chips segment. In the baby diapers segment Care Mate commands a whopping 41% of in-store sales leaving Huggies behind. Future group's highly successful brand John Miller has been spun off into a separate entity to compete Peter England from Madura and John Players from the ITC Group. Similar is the experience at RPG Spencers Retail. Samar Sheikhawat VP of Marketing said We have seen our Smart Choice cookies, diapers and agarbattis sell more than market leaders across the store chain. Besides, the lower pricing with quality being on a par, the down trading customer has prompted these higher sales. Godrej Appliances which introduced EON range of White Goods Home Appliances to be sold through its sister company Godrej Lifespace after tasting the success in EON premium brand of Air Conditioners, Microwaves Refrigerators and Washing Machines has begun a market research to introduce Dish Washers. Godrej Appliances has said it will grow 30% yearly for the next 3 years. FACTORS TO BE CONSIDERED WHILE GOING FOR PRIVATE LABELS Private labels wont work by just keeping the products cheap. Retailers must look at developing good quality and value-added products. Also, they must make sure that they dont over exercise the private label option. If they fall into the trap of using too many private labels, they will end up losing customers. It has been seen that when retail chains rely heavily on private labels, customers feel they lack choices. Many retailers have suffered due to this; Sainsbury is a classic example. The UK-based retail chain was a mainline traditional retail chain, but when it used too many private labels, customers did not find regular brands at its stores, and as a result, sales dropped. By this it can be understood that a retailer need to be careful when he is coming with more number of private labels in his stores. Customers expect more choices; they need private labels along with various national players in a product category. Even if the private labels are doing good sales as compared to national brands, the retailers need to focus on national brands in order to retain the customers for long run. CONCLUSION Private labels have come a long way over the last three decades. They started with retailers wanting to offer cheaper substitutes. Retailing in India is still very primitive. At the moment, private labels are less than 5 per cent of the retail business and still have a long way to go. But Indian retail is extremely attractive for investors and it offers a proposition that cant be seen anywhere else in the world. Only in China and India can retail chains have as many stores as they have in the US. Private labels will have a huge role to play in this. As much as 50 per cent of Indian retail will be occupied by private labels. The question is not whether this will happen, but when? If the government opens up retail, we would see it happen within the next 10 or 15 years. At 50 per cent, they begin to saturate. If they try to occupy more than this, then consumers feel that there arent enough choices. In countries such as Switzerland and the UK, private labels
ZENITH
have reached this limit and these markets have saturated. But they will continue grow in the other countries till they reach the same level. And this will happen very soon in India, too. Observing the trend in the growth of private labels, the private labels are going to give tough competition to the national brands if and only if the retailer commits to the quality of the private label and adds value to the product. The customers need to find a difference in buying a private label than buying a national brand. Instead if the retailer focuses on short term benefits and tries to attract only by the price difference of the private label then the brand will not survive for long run against a well established national brand. REFERENCE Hansen, T. (2003), "Intertype competition: specialty food stores competing with supermarkets", Journal of Retailing and Consumer Services, Vol. 10 No. 1, pp. 35-49. Hirschman, E.C. (1981), "Retail research and theory", in Enis, B.M. and Roering, K.J. (Eds), Review of Marketing, American Marketing Association, Chicago, IL, pp. 120-33 Laxmi Prabha.G. (2007), The prospects and problems of Indian Retailing, Indian Journal of Marketing,Vol. XXXVII, No.10, pp WEBSITES http://economictimes.indiatimes.com/articleshow/4988075.cms, Accessed on 24th December 2010 http://www.india-reports.com/retail-weekly.aspx, Accessed on 24th December 2010 http://business.rediff.com/special/2009/aug/26/private-labels-dent-established-fmcg-brandshares.htm, Accessed on 24th December 2010 http://www.indiaretailbiz.com, Accessed on 24th December 2010
340
ZENITH
PERFORMANCE AND LINKAGES OF RUBBER WOOD INDUSTRY IN KERALA

DR. OOMMEN ZACHARIAH*
*Associate Professor in Economics, ST. Thomas College, Kozhenchery, Kerala, India.
ABSTRACT Rubber wood industry is a sunrise industry as far as Kerala is concerned. The performance of this industry is a great relief in the midst of poor industrial development of the state. Though the scope for value addition of rubber wood industry is high, it has not been fully exploited. The present study is an attempt to analyse the performance and linkages of the industry based on the primary data that was collected through a systematic sample survey on the Perumbavoor plywood industry (30 units) and a census survey of SPRWP units in Kerala. The study found that the SPRWP sector has high value addition ranging from 233 per cent to 2033 per cent, whereas in primary processing it is below 172 per cent of the domestic value of the product. Unlike natural rubber; rubber wood industry has high linkages in the state as 85 per cent of the units are located within the state. Among the sub sectors of SPRWP, the EGP furniture generates high employment and creates strong linkage and hence a proper policy to encourage this high value adding sector can foster the industrial development of the state economy. KEYWORDS: 1. SPRWP- Secondary Processed Rubber Wood Products, 2.EGP- Edge Glued Panel (Finger jointed Boards), 3. RSKD-Rough Sawn Kiln Dried, S4S- Surface Four Sides planed. ______________________________________________________________________________ INTRODUCTION The wood industry plays a dynamic role in the world in terms of production, demand and export. There has been continuous increase in the production of wood in the world, particularly for industrial purposes. The depletion of forest wealth has been causing great concern among the planners for a long time. Substitutes to wood have their limits as far as the practical applications are concerned. In this context the importance of rubber wood is to be seen as a reasonable and renewable alternative raw material for wood based industries. India is the fourth largest Natural Rubber (NR) producing country in the world and 92 per cent of it is produced in Kerala. Out of the total 10.29 lakh holdings,98.4 per cent are small holdings with an average area of 0.5 hectares. Therefore rubber cultivation is the main livelihood of 10.121 lakh small holders in the state. In the decision making process of land utilization, not only the price of rubber but also the price of rubber wood has an important role as it is to be replanted every 25 years. The annual availability of around four million m3 of rubber wood utilized in value added production can generate more income and employment in Kerala. But the changes that took place in rubber wood industry are largely invisible and it is to be explored .The present study is an attempt to
341
ZENITH
explore and analyse the performance and linkages of the industry in Kerala context. The study is presented in six sections. The first section discusses the survey of literature on Rubber Wood. Section two discusses the investigative questions. Section three discusses the methodology .Section four deals with the performance of the secondary processing sector in comparison with the plywood. Section five makes an analysis of the linkages of the industry and the last section gives the conclusion. 1.0 LITERATURE REVIEW Ipe et al. (1987) revealed the uses of rubber wood in Kerala and Haridasan (1985-86) by visiting 273 units in Kerala and Tamil Nadu revealed the district-wise classification of rubber wood consumption. Sekhar (1989) covers in detail the different aspects of rubber wood like mechanical properties, treatment and seasoning methods and different products of rubber wood. It was for the first time in India that scientists and industrialists met in a common forum at the National Seminar on Rubber Wood held at Kottayam (1989) to discuss the importance of rubber wood. Zachariah (1992) made a study about the economics of rubber wood industry in Kerala. It was the first of its kind on the economics of SPRWP sector by surveying all the 11 treated rubber wood units in Kerala in 1991.Viswanathan et al. (1998) conducted a field survey in 1995-96 covering Kerala, Karnataka and Tamil Nadu to document the performance of the processing units. Accordingly, information was collected from 42 SPRWP units. The limitation of the study is that it has not estimated the gross output, the value addition, profitability, and the role of various actors in the sector and the extent of export. George and Joseph (2002) narrated the production and utilization of rubber wood in India and estimated the current and potential value addition in Indian rubber wood sector. The study has shown that 88 per cent is utilized in low value added products. Viswanathan and George (2004) made a study about 21 SPRWP units and collected data for 1997-2001 and this is the first estimate by RRII about the gross value of output and exports of the secondary processing sector. The study however, does not show the detailed estimates of costs, probably due to the non availability of information. Ramanathan et al. (2004) analysed the existing scenario, problems and future trends in the wood industry of Kerala. George,( 2005) analysed the linkages of rubber. But his analysis does not cover the linkages of rubber wood. The studies reviewed so far have made clear that no concrete conclusions can be drawn about all variables like profit, value addition, linkages etc. However, it can be deduced from these studies that the industry has moderate profit, medium capacity utilization, low value addition, apart from the problems like inward oriented marketing, high price of raw materials, technological difficulties, lack of diversification and upgrading etc 2.0 INVESTIGATIVE QUESTIONS
The increased use of rubber wood for industrial purposes has resulted in the rise in the price of rubber wood. But an important problem located in this context is that a major part of the
ZENITH
increase in price of rubber wood is shared by middlemen. Another major problem of the industry is the skewness in the consumption of rubber wood in the manufacture of low value added products. Certain other pertinent issues emerged are the inward oriented market for finished products with less exports, absence of diversification, less acceptability of finished products, absence of a statutory authority to monitor and implement quality control etc. In this context it is essential to find out the answer for the following questions. a. What is the performance of the industrial units in the secondary processing sector (SPRWP) in comparison with plywood industry in the primary processing sector ?. b. What is the extent of the linkages- both backward and forward? 3.0 METHODOLOGY The research is both exploratory and analytical. The study depended on both primary and secondary data. For secondary source, data available in journals, books and publications were used. Rubber wood industry in Kerala is broadly classified into two-primary processing sector and secondary processing sector. Census survey method was used for collecting data from all the working units (31) in the Secondary Processing Rubber Wood Products (SPRWP) sector in Kerala. The units in Secondary Processing of rubber wood products were classified into four categories: i. manufacturing RSKD(Rough Sawn Kiln Dried) and S4S(Surface Four sides Planed) ii. manufacturing RSKD and S4S and other value added products like furniture iii manufacturing EGP(Edge Glued Panel or Finger jointed boards) iv manufacturing EGP and other value added products like furniture using EGP. An attempt was made to compare the performance of SPRWP units with plywood industry in the primary processing sector. Primary data for plywood was collected through a systematic sample survey (30 units) from Perumbavoor in Ernakulam district in Kerala since it has the highest concentration of plywood units using rubber wood as core veneer. 4.0 .PERFORMANCE OF THE INDUSTRY- SPRWP AND PLYWOOD The performance was analysed in terms of scale of operation, fixed capital, working capital, employment, output, net value added, profit etc. and is compared with plywood industry. Rubber wood industry, particularly SPRWP, in Kerala is increasingly modernized in terms of ownership of firms as majority is limited companies (61.29%). As against this, majority of the plywood units (90%) are either proprietary or partnership firms. In terms of scale of operation, all the plywood units are operating on a small scale while 29 per cent SPRWP units are operating on a large scale. The rubber wood industry has been operating for a sufficiently long period as the average operating life is nine years.
ZENITH
The element of diversification is seen with great intensity in SPRWP than in plywood industry. The SPRWP sector has witnessed large scale ancillarisation and cross entry than in plywood. As a result of the increasing modernization in the SPRWP, it is found that the amount of capital employed in the sector is higher than that in the plywood sector. a)The per unit fixed capital is estimated as Rs 425 lakh in SPRWP, and Rs 67.2 lakh in the plywood sector. (35.8 lakh in all India wood factory sector, Rs 412 lakh in all India factory sector) It is inferred that the low level of fixed capital is one reason for the increase in the number of plywood units in Kerala and the high profitability in the plywood sector. The fixed capital employed per worker is Rs 0.83 lakh in the plywood sector and Rs 4.36 lakh in SPRWP.(2.16 lakh in all India wood sector), The average working capital of a SPRWP unit is Rs 79.8 lakh and that of a plywood unit is Rs 25 lakh. But the ratio between working capital and fixed capital in the plywood sector is worked out to be 0.35 while in SPRWP it is only 0.18. In RSKD furniture the ratio is only 0.12. Many units attributed this factor to the low capacity utilization and low profitability. Both SPRWP sector and plywood sector are operating on a higher scale when compared to allIndia factory sector, all-India wood sector and all-India SSI sector. In terms of output (gross) per unit, output per employee, and employment per unit, SPRWP is performing slightly better than plywood industry. The trend in output of SPRWP is given in figure 1. FIGURE 1. TREND IN OUTPUT OF SPRWP UNITS (RS. LAKH)
10000 9000 8000 7000

Rs. lakh
9114 8548 7773 6214
6000 5000 4000 3000 2000 1000 0 2001-02 2002-03 2003-04 2004-05 2005-06 3875
Source: Survey Data The output in 2005-06 is increased by 6.62 per cent compared to the output in 2004-05. The increase in output is 135.2 per cent in 2005-06 when compared with 2001-02, and the annual average growth rate of the same period is worked out to be 33.8 per cent. The increase in output
344
ZENITH
during this period at constant prices is 133 per cent and the average annual growth rate is 33.3 per cent. While the average output of a plywood unit is Rs. 269 lakh, it is Rs. 294 lakh in SPRWP. The output per unit is 9.29 per cent higher in SPRWP when compared to plywood. (all India wood sector Rs123 lakh, all India factory Rs137 lakh,all India SSI sR3.52 lakh) An important point to be noted is that both SPRWP and plywood have high employment potential as the employment per unit in the plywood sector is 81, and in SPRWP sector it is 98.(All India SSI-2.4,all India wood sector,16.57,all India factory sector 61).Therefore it is inferred that all efforts are to be taken by the state government for the promotion of this industry. The labour share in plywood is worked out to be 8.49 per cent and in SPRWP it is 11.36 per cent. The same value in all-India wood sector is only 4.5 per cent and in all-India factory sector is 3.85 per cent (ASI, 2004-05). It was already pointed out that the productivity of capital in plywood sector is higher compared to SPRWP and national averages. But it is largely explained by working capital than fixed capital.(Table-1) TABLE 1 RELATIONSHIP BETWEEN OUTPUT AND CAPITAL Variables Plywood r Fixed Capital and Output 0.57 R2 0.33 SPRWP R 0.74 R2 0.54
Working Capital and Output Source : Survey Data
0.91
0.83
0.95
0.90
Though SPRWP units perform well when compared to plywood units in terms of gross output and net value added, their performance is weak in terms of profit. The profitability index of plywood is 9.85 per cent but it is negative (-5.3 per cent) for SPRWP units. Another interesting point noted is the wide variation in profitability within each sub-sector in the SPRWP, which
345
It is inferred that the net value addition in SPRWP sector is higher than that of plywood. The average net value added by SPRWP unit (Rs. 143 lakh with cv 202.8%) is 57 per cent higher than that of a Plywood unit (Rs. 91 lakh), whereas average output is higher only by 9.25 per cent. Among the various sub-sectors EGP furniture has the highest net value addition (Rs. 388 lakh) per unit in the SPRWP sector. This is higher than the NVA in all India factory sector (190lakh) and in all India wood sector 12.77lakh). The net value added per worker is Rs. 1.46 lakh in SPRWP and it is Rs. 1.12 lakh in plywood.
ZENITH
varies between minus 26 (-26) to 30 per cent. The least profitable sub-sector is found to be EGP furniture units due to the huge losses incurred by two units. Excluding these two units the profitability of the other EGP furniture units is 3.58 per cent. The average capacity utilization in the SPRWP sector is only 60 per cent while it is 88.14 per cent in the plywood sector. One positive aspect of capacity utilization in SPRWP sector is that there is 20 per cent increase in capacity utilization compared to 2001.Therefore it is inferred that the low capacity utilization is one reason for the low productivity of capital and low profitability in the SPRWP sector compared to the plywood sector. The high interest payment of SPRWP units is one of the factors responsible for the net losses of the sector .The average loan of a plywood unit is Rs. 26.16 lakh, while it is Rs. 310.6 lakh in the SPRWP sector. There is difference between plywood and SPRWP units in terms of export. The percentage of exporting units in the plywood sector are 16.67 while the same in SPRWP is 35.48..Though there is 135per cent increase in output of SPRWP in 2005-06 compared to 2001-02, and 90.1 per cent growth in export, the share of export in output declined from 22 per cent in 2001-02 to 11.49 per cent in 2005-06. Thus it becomes imperative that in order to strengthen this sector export possibilities need to be explored further. The analysis of the rubber wood value chain reveals that the SPRWP has high value addition ranging from 233 per cent to 2033 per cent, whereas in primary processing it is below 172 per cent of the domestic value of the product. The extent of value addition in foreign price is 257 per cent more for door in the Middle East. But for furniture components to Europe and the USA the additional value addition is more than 1000 per cent due to the additional cost involved in transporting, assembling, designing etc. It can be concluded that the potential of SPRWP, particularly EGP sub sector is very high provided they are able to make the value chain more efficient by properly linking it with distribution and marketing channels. 5. 0 Linkages The rubber wood industry is linked to the wood industry, other industries and to the rest of the economy. Backward linkage is based on the sources of inputs purchased by the manufacturing units. Unlike natural rubber; rubber wood industry has high linkages in the state as 85 per cent of the SPRWP units are located within the state. .The region-wise backward linkages to rubber wood are very high because plywood sector uses 100 per cent of rubber wood, and SPRWP units use 97 per cent of rubber wood which is procured from the state itself. (Table 2)
346
ZENITH
TABLE 2.REGIONAL LINKAGE TO RUBBER WOOD AND CHEMICALS (%) OF SPRWP Within the State Sectors RW RSKD EGP EGP Furniture RSKD Furniture SPRWP Plywood Source: Survey Data. ( RW-Rubber Wood) In plywood sector 93 per cent of the units purchased the machinery from domestic market while majority of SPRWP units (60%) purchased from both domestic and foreign markets. The technological linkages of SPRWP are very high compared to plywood as evident from the investment in plant and machinery (plywood Rs. 1124 lakh, and SPRWP Rs. 8300 lakh).Backward linkage with traders is 90 per cent in SPRWP sector and in plywood 96 per cent The SPRWP sector has backward linkage with other rubber wood processing units as around 30 percent of rubber wood is bought as sawn sizes from other saw mills in the state. In plywood sector, 23 per cent of rubber wood is bought in veneer form from other veneer units in the state. The forward linkages of the industry is given in table 3
Outside the State RW 01 02 03 03 2.41 00 Chemicals 70.00 79.01 64.98 67.92 68.16 10.02
Chemicals 30 29.99 35.02 32.08 31.84 89.98
99 98 97 97 97.59 100
ZENITH
TABLE 3 FORWARD LINKAGES OF SPRWP AND PLYWOOD (%) Sub sectors Construction S RSKD EGP EGP FURNITURE RSKD FURNITURE PLYWOOD 4.61 6.7 7.2 OS 18.2 26.9 8.8 Other industries S 42.31 2.98 0.79 OS 11.76 2.74 .97 Trader S 0 10.86 32.0 OS 0 43.29 39.14 23.12 6.63 11.04 100 100 100 Export Total
3.2
8.9
0.67
1.2
8.35
47.3
30.38
100
2.8
3.76
1.55
1.94
20.65
51.82
17.48
100
Source: Survey Data; S= within the state, OS= outside state The table 3 makes it clear that 77 per cent of RSKD goes to construction sector and other industries for further processing and production. Nearly 34 per cent of the EGP output goes to the construction sector and another six per cent goes to other industries directly. More than 71 per cent of EGP furniture goes to traders. Fifty four percent of EGP is sold to traders who retail it either to final consumers or to other producing sectors.. In short, to a large extent RSKD and EGP are linked to the productive sectors. The regionwise forward linkage is given in table 4. TABLE 4 REGION WISE FORWARD LINKAGE OF SPRWP AND PLYWOOD(%) Sub Sectors RSKD EGP EGP FURNITURE RSKD FIRNITURE Inside State 46.92 20.56 40.01 12.22 Outside State 29.97 72.81 48.95 57.4 Export 23.11 6.63 11.04 30.38 Total 100 100 100 100
ZENITH
PLYWOOD Source: Survey Data
25.00
57.52
17.48
100
It can be observed from table 4 that RSKD has the highest linkage within the state as 47 per cent of the output is sold here. EGP furniture stands second with 40 per cent, and plywood stands third in regional linkage with 25 per cent. Seventy three percent of EGP, 57.45 per cent of EGP furniture, and 57.52 per cent of plywood are sold outside the state. The other evidences showing the forward production linkages of the sector are:1) the significant increase in number of furniture making units in Kerala during recent years 2) the setting up of retail shops/ showrooms/franchise centres throughout India and abroad ,3)wide use of EGP board and S4S in the building and construction, flooring, interior designing, toys, textiles, tools manufacturing units etc. From the above analysis it can be concluded that all the units have high linkages .Among the sub sectors, RSKD and EGP have the highest linkages to productive sectors and to local regions . Units in the middle of the process have the highest total linkage. 6. CONCLUSION The high potential of the industry is evident from the list of entrepreneurs (more than 10000) who are waiting to obtain No Objection Certificate from the state government for starting new factories for producing plywood in Kerala. The very high per unit employment in plywood and EGP furniture sector can generate not only additional employment but also additional income. The high demand for rubber wood from plywood and SPRWP units has increased the value addition of rubber wood up to 2000 per cent and has strengthened the linkages. Considering the present rate of expansion in the area under rubber cultivation in Kerala, it may exceed coconut in the near future and there will be an increasing availability of rubber wood. The potential increase in the supply of rubber wood and the research in developing innovative seeds with both high latex and quality stem content ,and also with innovative chemical treatment of rubber wood, Kerala could become a destination for both latex and rubber wood products market. A proper marketing strategy to popularize the innovative EGP products and a supportive government policy will help to realize the full potential of rubber wood industry in Kerala.. BIBLIOGRAPHY 1. Central Statistical Organisation (2001-2005), Annual Survey of Industries 2. Directorate of Industries, Kerala (2003-04), State Level Report on 3rd All India SSI Survey Report.
349
ZENITH
3. George, Tharian K. and Tom, Joseph (2002), Rubber Wood Production and Utilization in India, in Gnanaharan,R et al.(eds.), Rubber Wood Processing and utilization in India ,Ganesh Publications, Pvt.Ltd , Bangalore. 4. Government of Kerala, (2001-07), Economic Review, State Planning Board, Thiruvananthapuram 5. Haridasan,V.(1987), A Bulletin,Vol.20,No.4. Study of Rubber Wood Market, Rubber Board
6. Ipe,Viju et al.(1987), Rubber Wood Consuming Units in Kerala-Technical facilities and Problems, Proceedings of Rubber Planters Conference, Kottayam. 7. Ramanathan,N. et al.(2004), Sector Report on Wood Industry in Kerala, Report published by KSIDC, Ernakulam 8. Rubber Board(2006), Indian Rubber Statistics,Kottayam 9. Sekhar,A.C.(1989), Rubber Wood Production and Utilization ,RRII, Kottayam. 10. Viswanathan, P.K. and Tharian, George K. (2004), An Evaluation of the Rubber Wood Processing Industry in India, Rubber, February. 11 Zachariah, Oommen (1992), Economics of Rubber Wood Industry in Kerala, M.Phil thesis, submitted to Cochin University of Science and Technology, Kerala (Unpublished).
350
ZENITH
FACULTY RETENTION: A CHALLENGE FOR BUSINESS SCHOOLS.

RACHIT GUPTA*; HEMANT CHAUHAN**; PALKI SETIA***
*Assistant Professor in Management, SVS Group of Institutions, Mawana, Meerut, Uttarpradesh, India. **Assistant Professor in Management, Phonics Group of Institutions, Roorkee, Uttarakhand, India. ***Assistant Professor in Management, Takshila Institute of Management, Greater Noida, Uttarpradesh, India.
ABSTRACT Many fold expansion in institutional capacity in higher education has enhanced enrolment ratio from less than 1% in 1950 to about 10% in 2007 (Jyotsnarani 2007). Further the phenomenal growth of Indian industry over last two decades has also resulted in increasing demand for efficient business managers from business schools. To this fact everyone would agree that Teachers create managers through their excellence and until and unless the business schools could not think of motivating, managing and retaining talents so how can faculties think of doing innovations, research and creativity in terms of quality under excellence. The quality and achievements of academic complements determine the quality of management education programs, management research, and the perception of schools in academic as well as business environments (Duderstadt, 2001; AACSB, 2002; Lorange, 2003). Presently, the biggest challenge faced by technical educational institutions in India is the acute shortage of qualified and competent faculties (Times News Network, 2006). Retaining talents is not the choice of employers but is also the need of time as management education is already at risk running with talent crisis. Therefore the study has made an attempt to present faculty retention as a major HR issue in business schools. The methodology adopted for the study is review of research papers and books. KEYWORDS: Faculty Retention, Teachers excellence, Business Schools. ______________________________________________________________________________ INTRODUCTION At present India is striving to compete in a globalized economy in areas that require highly trained professionals, and thus the quality of higher education has become increasingly important. Experience which the students will derive from higher education is, to a large extent, dependent on the performance of faculty, both as teachers and researchers. The faculty has a major role in student learning. Extant literature underpins the importance of faculty for quality in higher education (Ewell 1991, Cornesky 1991, Chen et al 2006). Research on academic quality in higher education is by and large focused on students as customers, their satisfaction or dissatisfaction with various programs for which Chen et al (2006) have adapted Importance Satisfaction model (I-S model) in higher education illustrating quality improvement in terms of satisfaction. Adding to this Tribus (1995) has also developed an early model of customer supplier for higher education (cited in Raouf 2004). It has been argued that if the quality of the
ZENITH
service is to be determined then the beneficiaries have to be clearly defined in terms of their needs and expectations (Raouf 2004). The model conceptualizes faculty as customer in the education industry, and states that, similar to the concept of internal and external customers in business, there are also internal and external customers in education. An institution with talented faculties can develop a reputation for being great place to work, with great learning environment where quality in education is expected. An institution in higher education therefore needs to be able to develop and deploy faculty who can articulate the passion and vision of institution and satisfaction of students. Faculty members as internal customers satisfy the working environment of universities (Chen et al 2006). This implies that in order to enhance faculty performance certain aspects and functions of their job have to be prioritized. The issues related to faculty are sufficiently significant for an analysis to be appropriate, to understand the 'whole picture' and suggest possibilities and strategies to sustain quality and leadership in institution of higher education. SIGNIFICANCE OF THE STUDY As per United Nations statistics, Indias population is estimated to 1.5 billion by 2030, making it the worlds most populous country. And if at we look in context to Human resources aspects, it would be needless to say that the optimal utilization of human resources for global positioning and growth would be high in the world. To this fact no one can deny that Human resources operate technology and equipments not the machines getting instructed on their own. Growth of human resources in every context is a major factor for the continuous growth of a country. And the meaning of term GROWTHcan only be clarified if the person is literate and focused on his/her career prospects undergoing varied area related courses and training sessions to become actually PROFESSIONAL and ASSET to an organization. Be it any sector, shaping tomorrows talent has to take place on the basis of education. Without a proper degree one may not land a job after an academic career of two decades. And what would you say education sector generating motivation through teachers excellence and transforming a raw material (student) into finished product (Manager) is itself not able to motivate and attract teachers to retain. How would you feel teacher taking session on career development in the class is herself/himself has always a doubt on his/her GROWTH AND OPPORTUNITUES working with the current organization because they are always under the sense of job insecurity and higher risk of failing to achieve promotion .These all negativities thus leads to unwanted employee turnover because organizations (educational institutes) at some time become only business centric neglecting people centric leadership. And that is why out of the thousands of graduates who qualify every year, how many opt for teaching? It could be around 14-17%, comprising those with a chosen aim or without an alternative choice of employment. Reason can be , teaching as a profession was never given the place it deserved in our country. This resulted in most of the teachers performing their role in a mere routine fashion and therefore resulting sitting at a same designation for last five years. Very few put passion and commitment as essential ingredients into their job, which are vital for turning out quality output in terms of students. One reason that glaringly can come out for this state of affairs is the lack of attention towards HR-related issues of teachers at all levels say from KG to PG. A number of findings and observations especially regarding management institutes are pointers to the fact that the education cosmos is sitting on a veritable landmine that of talent crisis. Institutes at large are facing an acute dearth of academic
352
ZENITH
talent; this is a malaise, which can snowball into a pandemic if remedial action is not taken instantly. OBJECTIVE OF THE STUDY The study has made an attempt to Focus on Faculty Retention as a major HR issue in education sector with special reference to business schools. Reflect the scenario of Management education at risk due to talent crisis and unwanted employee turnover in business schools. Emphasize Faculty as a human resource plays a vital role in the development of student as well as workplace. Show the relationship between teaching excellence and faculty motivation. Highlight the factor that leads to faculty attrition and the tools that should be taken into account for faculty retention on the basis of literature review. FUTURE SCOPE OF THE STUDY The study can help in designing strategies so as to manage and retain talents for an organization. RESEARCH METHODOLOGY The method of exploratory research is adopted for the study to know detailed information on Faculty retention. SOURCES OF DATA All information is collected through secondary data. Data available on websites, magazines and research papers referred. BUSINESS SCHOOLS AT RISK The three pillars of any higher education institution are: quality of faculty, infrastructure facilities and learning environment. With the increasing demand-supply gap, organizations are facing immense war for talent. Like business and industry, education field too is discovering the need for talent so as to meet the new quality standards demanded by the society and is also facing leadership crisis. As is also published by AACSB in august 2002 a status report on management education with the alarming title Management education at risk. This report, presented as the follow up to the landmark Porter and McKibbin report of 1988, paints a picture of the business school environment, identifies its main driving forces, and draws some grim conclusions. The report identified five main issues regarding the general context of management education and the changes that are taking place in this context, namely the demand for
ZENITH
management education, the supply of management education, globalization, technology and resource scarcity. Additionally it pays attention to issues concerning doctoral education, the relevance of business curricula, and the convergence of degree and non degree education. As the MBA program became more attractive during the 1980s and 1990s, fewer candidates applied to doctoral programs, preferring instead to go for an MBA degree. And those who had completed their MBA program found it more attractive to re-enter the job market rather than apply for a doctoral program. Furthermore, upon graduation, close to 40 percent of PhD graduates opted for a career in industry, where compensation packages are often higher and the risk of failing to achieve promotion is lower. In other words, as the demand for highly qualified faculty went up the supply went down, producing an upward pressure on compensation packages for newly hired and existing faculty, particularly those with a strong record. Central in the report is the observation that the marketplace of management education is becoming ever more heterogeneous, giving way to novel marketing strategies and new competitors. In such an environment, attracting and retaining faculty are activities of crucial importance to the longer term well being of the business schools. This claim is supported by the outcomes of the research by Stumpf et al. (2002) on academic change and leadership. This research shows that deans of 273 US business schools found the imminent shortage of doctoral faculty to be the most important challenge that was facing their business schools in the near future. Disconcertingly, some of the most disturbing observations in this AACSB report exactly relate to recruitment and retention of faculty by business schools. The number of recently earned doctorates in business is rather low compared to the social sciences and the humanities and only 62 percent plans to pursue a career in education (Business Week, 2004).Within the next few years, the shortage of business doctorates is expected to be 1,142 rapidly climbing to a shortage of 2,419 in 2013(AACSB, 2003).Together with the observations that (1) doctoral enrollments are not expected to increase in the near future, (2) foreseeable faculty retirements, and (3) increasing student enrollment on undergraduate levels in particular, it is clear that business schools will be faced with even enlarging faculty shortages in the coming years(AACSB,2002) As the AACSB sums it up, this faculty shortage may be leading to a decline in research productivity and intellectual vibrancy of existing faculty. DEFINING TEACHING EXCELLENCE There is no one definition of teaching excellence. It varies depending on a host of variables, such as who is defining it, the learners (e.g., students vs. colleagues), subject matter, methods used, and many other factors. Although the notion of scholarship of teaching was first proposed by Boyer (1990), the work of Kreber (2000) in developing these ideas into a model is a useful starting point. The requirement of visible output (journal articles, creative work) in the scholarship of teaching is helpful. Peer review and student feedback are now commonplace and have potential as indicators of excellence. Kreber (2000) develops a model of the scholarship of teaching by characterizing staff as adult learners engaged in content, process and premise reflection1 on their teaching. The model shows how different combinations of components of learning instrumental, communicative and emancipator can be applied to: instructional knowledge; curricular knowledge and pedagogical knowledge. Nicholls (2004) summarizes how Krebers work suggests that the scholarship of teaching: can be found in refereed articles and papers; is practiced by excellent teachers; is associated with the knowledge of the expert teacher and focuses on teachers experience-based knowledge. It is also significant that the debate on
354
ZENITH
teaching excellence takes place almost exclusively in educational journals and conferences, which is perhaps why it does not enter the consciousness of mainstream academics, even if they are excellent teachers. Whatever conception of teaching excellence is used it has to have clarity and alignment with what constitutes reality for academic staff. When focusing on the higher education of students, however, there are common characteristics found in the literature about good teachers: (A) POSITIVE STUDENT-FACULTY CONTACT Interacts with students gets to know them, in and out of the classroom helps students learn outside of class, is accessible in and out of class promotes cooperation among students gives prompt feedback. (B) EFFECTIVE ACTIVE LEARNING Encourages students to be self-directed, independent, lifelong learner engages students in disciplinary thinking encourages higher-order thinking. (C) ACHIEVABLE, YET HIGH EXPECTATIONS Acknowledges student expectations and what students can expect from the teacher creates a safe yet challenging learning environment emphasizes time on task. (D) RESPECTS DIVERSE TALENTS AND WAYS OF LEARNING Demonstrates respect for students and their individuality/differences is fair and flexible. (E) EFFECTIVE COMMUNICATION SKILLS Demonstrates passion, enthusiasm, charisma offers something substantive to say and knows how to say it raises provocative and significant questions instead of just providing answers commands student attention and maintains it inspires/motivates students is compassionate and caring. (F) COMMITMENT TO TEACHING WELL Engages in activities to continue to develop teaching skills invites and accepts feedback to improve tries new techniques to promote learning. This list is meant to represent a variety of criteria for determining teaching excellence. RELATIONSHIP EXCELLENCE BETWEEN FACULTY MOTIVATION AND TEACHING
In the words of Robbins, 2000 motivation is the willingness to exert a persistent and high level of effort toward organizational goals, conditioned by the efforts ability to satisfy some individual need . Motivation is considered to be a soul achievement of human resources management practices as almost all the human resource practices has fundamental aim which includes job involvement and job satisfaction of an employee and acquiring high level of work
355
ZENITH
motivation (Jerris, 1999). Robbins et al (2005) said that employees motivation is the willingness to exert high level of inspiration to reach organizational goals, conditioned by the efforts ability to satisfy some individual need. This definition clearly states that motivation is the willingness of employees to perform excellent work efficiently and this willingness only comes when they perceive that their effort would result in their need satisfaction. Although money is influential factor at every stage but at the same time it is not necessary that money alone can increase motivation of every worker there are intangibles (for instance empowerment, Recognition and feedback) that are primary motivators for the workers inspiration to perform effectively (Fuhrmann, 2006). Identical to every organization, teachers motivation in higher education institutions is one of the imperative and inevitable objectives of institution management. Teachers at higher education level play an important role in institutions success and its good will among students and academia. Again motivation is significant contributor in teachers performance in delivering knowledge and grooming their students as the global citizens and master of their specialized field. Porter et al (1973) stressed that teachers motivation is important for several different reasons. It is important for teachers self satisfaction and accomplishments, and for the reason that motivated teachers more probably work for educational reforms and progressive legislation particularly at higher education level and finally it is the motivated teacher who assures the completion of reforms that are originated at the educational policy making level. They further emphasized that teachers job satisfaction and motivation is associated with decreased number of Institutional absenteeism and turnover. TEACHERS CREATE MANAGERS It is generally acknowledged that mission-critical constituents for universities and business schools are alike. The quality and achievements of academic complements determine the quality of management education programs, management research, and the perception of schools in academic as well as business environments (Duderstadt, 2001; AACSB, 2002; Lorange, 2003).Characteristics and performance of faculty members, like the number of PhDs on a schools faculty, international profile of faculty, and research output by faculty, play weighty role in modern business school rankings[3].The AACSB emphasizes the unique value of business school faculty: Although other types of business education may deliver effective business teaching , none can serve as a business knowledge creator, steeped in the scientific method, as can business schools. This role is critical for business school faculty as a professional differentiator that protects market value. Even more important ,the scholarship role of business faculty is an essential and irreplaceable function because societies and markets turn to business schools for knowledge advances that reflect academic tradition of theory and method (AACSB,p.13).Next to their academic importance ,Duderstadt claims that faculty also has an important role in the governance of academic institutions. However, its ability to become directly involved in the detailed management of the institution has long disappeared as issues have become more complex and the time scale of the decision process has shortened (Duderstatd, 2001:30-31).Peter Lorange, dean of IMD, one of the worlds leading business schools, places faculty commitment to academic value creation at the pith of the development and realization of business school strategies. He argues that faculty spearheads program development constitutes a key vehicle for innovation and that most strategic decision setting in an academic institution (Lorange, 2003:207-8).Treasuring and acquiring such valuable resources obviously are major tasks for any academic institution in general and are becoming increasingly
356
ZENITH
challenging for business schools in particular. Reasons for this can be found in characteristics of and development in the institutional context of business schools in general and their competitive environment in particular. In this environment, forces are at work that makes it difficult for business schools to attract and retain faculty. LITERATURE REVIEW Teacher attrition has been a topic in the Education literature for many years. It has been claimed that teacher attrition is a major problem in our schools and that between 20% and 50% of beginning teachers decide to leave the profession in the first three to five years (Ewing, 2001; Ewing & Smith, 2002). Teaching is usually considered a vocation, one involving a long term career path. Manuel (2003, p. 142) states that teaching isnt usually a drop in, drop out or revolving door type profession. Huberman as early as 1989 established that those who leave the profession usually do so in the first five years of entering the profession. For beginning teachers, how they survive the first year, if they do, can be a significant factor in decisions about remaining in or leaving the profession (Lang, 1999). For example, a 2003 Victorian Department of Education and Training Report reported that in the United States, a third of teachers leave the profession within three years and almost half within five years. In Britain, a 2003 survey by the University of Buckingham found that 30 per cent of British teachers who left teaching that year had been in the profession for less than five years (Hogan, 2007). The problem of faculty turnover has afflicted all disciplines, particularly in the last ten to twenty years. The market for Ph.D.s outside academia has grown along with the dispersion of knowledge-based activity throughout the economy (Bowen and Schuster, 1986). Those with advanced degrees have proven their employability in a variety of fields. Considering that professors are paid roughly 25 to 30% less than similarly educated professionals, there is cause to worry that an increasing number of faculty will leave for the private sector (Bell, 2001).The benchmark study of faculty mobility was conducted by Caplow and McGee and published in 1958 as The Academic Marketplace. Thirty years later, Burke replicated their study, producing The New Academic Marketplace in 1988. Burke found that the market for professors had become radically different over those three decades. Beginning teachers are leaving their jobs at an alarming rate that harms both the school, especially urban ones, and student performance (Ingersoll & Smith, 2003; Howard, 2003). Remaining employees are often forced to shoulder increased workloads without a rise in pay. Heightened turnover often has a demoralizing effect on those who remain, as well as a negative effect on prospective employees. More concretely, high turnover is associated with low job satisfaction, poor productivity, and high stress among employees (Olsen, 1993). Nienhuis (1994) describes faculty as mobile, loyal to the discipline rather than the institution. .Considering the indications of an upward swing in both components, it is safe to assume that faculty turnover is causing greater problems for many administrators. Faculty who leave voluntarily tend to be characterized by a high achievement orientation (Barnhart, 1995) Bowen and Schusters American Professors: A National Resource Imperiled, combining several studies, reports a 4% annual rate of attrition in early 1980s. Their definition of attrition, distinct from turnover, indicates the number of faculty who leave academia each year for reasons other than retirement. Since this figure does not include those faculty who departed for other postsecondary institutions, the rate of turnover as defined here must have been higher than the 4% attrition rate. Based on their studies, Bowen and Schuster predicted that attrition (not turnover) might average 4% per year into the late 1990s and might even reach 6% by 2000. They added that if faculty
357
ZENITH
positions become less economically attractive compared to positions in private industry, the rate of attrition could rise substantially. Though faculty salaries do lag considerably behind those of industry, a fairly large supply of PhDs in most fields has made faculty positions highly prized, thus potentially reducing turnover. Chairpersons wishing to retain faculty are aware that they cannot simply throw money at dissatisfied employees. Salary does not always provide adequate recognition or ensure contentment (Nienhuis, 1994). One study found that higher compensation levels increased the retention of assistant and associate professors, but had no effect on retaining full professors (Gill et al., 1992). The same study reported that six of the top seven reasons for departing were intangible benefits such as research opportunities. Naturally, faculty compare not only their salaries to those in other professions, but to other professors, in- and outside of their institutions. Universities and college administrators must be keenly aware of the salary and benefits packages offered by comparable institutions, but they must also watch out for disparities between and especially within their own departments. Serious morale and collegiality problems are posed when salary ranges are wide, and especially if junior faculty is paid higher than senior faculty. One study found that 27% of universities had used this particular tactic in an effort to recruit rising stars (Gill et al., 1992). In general, some research suggests that perceived equity of pay may be a more important determinant of commitment and satisfaction than basic level of pay (Mowday et al., 1982). Administrators should watch for this issue of fairness and not the simple economic bottom line. There are also non-salary incentives that can help recruit and retain faculty without raising salaries. One is to speed up the tenure clock. The promise of lifetime job security is certainly alluring, and can compensate for lower pay. In addition to early promotion, institutions can offer more generous research allowances, more frequent leaves of absence, and reduced teaching loads (Bowen & Sosa, 1989). While each of these tactics has economic consequences, a careful combination of incentives and salary can end up saving money and retaining more faculties. Also, empirically, programs of communication intervention can improve job satisfaction, which directly supports the link between communication and job satisfaction. The crux of the teaching profession lies in communication, and communication is a significant and integral component of teacher job satisfaction (Miller et al., 1988), but one major gap is the paucity of research directly dealing with how communication variables affect teacher job satisfaction. Teacher job satisfaction is often cited and rendered important in both research on teacher attrition and teacher retention (Roach, 1991; Voke, 2002; Stockard & Lehman, 2004). First, some researchers and scholars tried to understand the high teacher turnover rate among beginning teachers by investigating the reasons and causes behind both teacher retention and teacher attrition (Connolly, 2000; Ingersoll, 2003; Ingersoll & Smith, 2003; Howard, 2003; Inman & Marlow, 2004; Heller, 2004; Stockard & Lehman, 2004). Moreover, teacher job satisfaction is frequently associated with burnout, work quality and professionality. Some scholars have focused exclusively on burnout in the teaching profession (Ebeling, 1983; Starnaman & Miller, 1992; Evan, 1999; Ven Der Doef & Maes, 2002). Researchers try conducting model tests and examine hypotheses of communication, burnout, organizational stressors and outcomes, and they discover that role stressors, workloads, work assessments, and professionality influence teachers perceptions and attitudes towards their job satisfaction. There are many other ways institutions can actively seek to retain more faculty members. One is to address quality of life issues more thoroughly, which could mean providing assistance with housing or sponsoring faculty clubs. Collegiality is an often-overlooked part of the turnover equation, although majorities of the faculty who leave voluntarily cite personal factors such as
358
ZENITH
relationships with colleagues as reasons for their departure (Johnsrud & Heck, 1994). Other strategies that have met with success include spousal hire programs, formalized training programs for department chairs, formal mentoring programs for all probationary faculties, and explicitly written guidelines for tenure (Harigan, 1999).An oft-missing component of graduate education is preparation for the day-to-day life of the professor. That is, graduate students learn to be scholars, with little attention given to the other tasks a professor must complete. Increased attention to this matter in graduate training, along with orientation programs for new faculty, should make professors expectations for their careers more realistic, and reduce their interest in changing jobs. High levels of stress characterize the early years of academic appointment, but through the efforts of colleagues and superiors, they can be reduced. Deans, chairs, and senior faculty need to perceive support of new faculty as an investment in the success of the individual, the department, and the institution (Olsen, 1993). DATA ANALYSIS AND INTERPRETATION On the basis of above mentioned literature it is clarified that teacher plays a vital role in processing raw product into a finished good that the corporate demands. Quality teaching is the only technique that makes it possible to transfer knowledge and understanding from teacher to a student that helps the student in decision making after scanning the circumstances and environment. Teachers excellence is not only essential in molding and refining the behavioral traits of student but also the characteristics and performance of faculty members, like the number of PhDs on a schools faculty, international profile of faculty, and research output by faculty, plays weighty role in modern business school rankings. Therefore, it is clear that a profile of faculty is not only beneficial for individuals development but also indirectly enhances the goodwill and maintain standards to an institution like, benchmarks we have IMD , IIM, MDI, XLRI; etc. But the fact that cannot also be denied that even business schools like IIMS is also facing the heat of talent crisis and unwanted employee turnover. The most ambitious organizations unable to succeed due to their inability to retain the right employees (Stovel and Bontis, 2002) .The unwanted departure of a faculty member disrupt research and teaching programs, and leave students without an advisor familiar with their work (Ehrenberg et al., 1991). Therefore, it is of utmost importance that educational institutes should design and pursue policies/mechanisms so as to compete well in market place to attract and retain for them the best faculty talent. Future business school affluence hence depends on a principal area of attention within the human resources management function. For deans/directors of business schools it is paramount to develop effective retention based on an understanding of the factors that are relevant with respect to faculty retention strategies. This situation demands that management should identify the reason/s for this frequent change of employment by employees. Once this reason/s has been identified, management can then device retention strategies that will help in keeping essential employees for a rather longer tenure. It is therefore imperative for management to reduce, to the minimum, the frequency at which employees, particularly those that are crucial to its operations leave.
359
ZENITH
FINDINGS ON THE BASIS OF LITERATURE FACULTY CRISIS Recruiting top faculty is a major challenge for both newer schools and established institutions. Even though the demand for business education has been growing steadily over the last decade, the production of PhD-trained faculty has not risen to satisfy that demand. On the contrary, it has been declining, making it increasingly difficult for business schools to increase their faculty to meet the demand for business programs [1]. Presently, the biggest challenge faced by technical educational institutions in India is the acute shortage of qualified and competent faculties (Times News Network, 2006). The genesis of this lies in rapid mushrooming of technical institutions on account of surging demand of technically trained manpower by fast growing industrial sector of Indian economy; and abysmally low number of PhDs /Fellows in technical disciplines from premier institutions opting for the teaching careers on account of possibility of higher incomes from the non-academic career options (Rosenfield & Jones, 1988). Further the problem of faculty shortage has been accentuated due to the entry of foreign universities in the India post to enactment of provisions of GATS Agreement to education sector in India in April 2005. This has resulted in a scenario where technical institutions in India are vying with each other to attract & retain for them the best available faculty talent. While most higher education institutions, especially professional institutes and colleges are able to develop the needed skills in students for success in the working world, experience shows that the management of upcoming technical and management institutions has failed to be just and fair in the treatment of their faculties. SUGGESTIONS After undergoing the above mentioned literature the study suggests these plans of action for the quality management education organized with talents and teachers excellence. Business schools must think of retaining faculties and should come up with the strategies in order to manage talents then only business schools can think of running quality management education at a global level. Varied kinds of incentives must be given to the faculty members so to stimulate and motivate them for research and innovations.
CONCLUSION The study concludes that an individual puts its best and present creativity then only if he/she is in peace of mind and therefore leads to organizational development. How would you feel teacher giving session on job satisfaction is himself/herself not satisfied with the job .And, under such dilemma of leaving the job or to stay with? How can a teacher think of doing research, experiments, and innovations under teachers excellence? Teacher job satisfaction is often cited and rendered important in both research on teacher attrition and teacher retention (Roach, 1991; Voke, 2002; Stockard & Lehman, 2004). Hence it is required to manage talents and make them feel belonging and valuable towards institution. Lynn (2002) supported the idea that educational leaders should provide professional learning and growth opportunities in order to motivate
ZENITH
teachers and to enhance their performance so that business schools can strategically manufacture the quality products in this competitive era of today and teacher could excel in their expertise areas. REFERENCES AACSB (2002). Management education at risk. Report of the Management Education Taskforce.August.AACSB. AACSB (2003).Sustaining scholarship in business schools.Report of the Doctoral Faculty commission.September.AACSB Barnhart, B.T., & Bechhofer, S. (1995). New Faculty Departure at Five Institutions.Presented at the Annual Meeting of the American Educational Research Association. San Francisco, CA. April 18-22, 1995. Bell, L. (2001). Uncertain Times: The Annual Report on the Economic Status of the Profession 2000-2001.Washington ,DC: Association of University Professors Bowen, H.R.& Schuster, J.H. (1986). American Professors:A National Resource Imperiled. New York,NY: Oxford University Press. Boyer, E. L. (1990).Scholarship reconsidered: priorities of the professoriate.Princeton, NJ, The Carnegie Foundation for the Advancement of Teaching. Burke, D.L. (1988).The New Academic Marketplace. New York, NY: Greenwood Press. Caplow, T., & McGee, R.J. (1958).The Academic Marketplace. New Brunswick, NJ: Transaction Publishers. Chen, S. H., Yang, C. C., Shiau, J.Y. & Wang H. H. (2006)."The Development of an Employee Satisfaction Model for Higher Education".The TQM Magazine, 18(5): 484-500. Connolly, R. A. (2000). Why do good teachers leave the profession? What can be done to retain them? Momentum, 31, 55-57.
Cornesky, R.(1991).Implementing Total Quality Management in Higher Education. Magnar Publications and Madison, WI. Duderstadt, J. (2001).Fire, ready, aim! University decision making during an era of rapid change. Paris, Economica, 26-51. Ehrenberg, R., Kasper, H., & Rees, D. (1991). Faculty Turnover at American Colleges and Universities: Analyses of AAUP Data. Economics of Education Review, 10.2, 99-110. Evans, L. (Eds.). (1999). tripartite teachers and stratified schools: An essay review of teacher morale, job satisfaction and motivation. Teaching and Teacher Education, 15, 325-331.
ZENITH
Fuhrmann, T. D. (2006). Motivating Employees. Advances in Diary Technology, 18, 93-101. Gill, J.I. et al. (1992). Bringing Into Focus the Factors Affecting Faculty Supply and Demand. Boulder, CO: Western Interstate Commission for Higher Education. Heller, D. A. (2004). Teachers wanted: Attracting and retaining good teachers. Alexandria, VA: Assocation for Supervision and Curriculum Development. Harrigan, M.N. (1999). An Analysis of Faculty Turnover at the University of WisconsinMadison. Presented at the 39th Annual AIR Forum. Seattle, WA. May 30-June 2, 1999. June 2-5, 2002 Ingersoll, R. M. (2003). The teacher shortage: Myth or reality? .Education Horizons, 81, 146152. Jerris, A. L. (1999). Human Resource Management for Hospitality. New Jersy, USA,Upper Saddle River: Prentice-Hall, Inc. Johnsrud,L.K.,& Heck,R.H.(1998).Faculty Worklife: Groups.Research in Higher Education, 39.5, 539-555. Establishing Benchmarks Across
Jyotsnarani, K. (2007), "Attainment of Excellence through Higher Education" .Orrisa Review, Feburary- March 2007. Kreber, C. & Cranton, P. A. (2000). Exploring the scholarship of teaching. The Journal of Higher Education, 71(4), 476495. Lorange, P. (2003).A new vision for management education: leadership challenges.Amsterdam, Pergamon Press. Lynn, S. (2002). The winding pathy:understanding the career cycle of teachers. The clearing house , 75, 179-182. Mowday, R., Porter, L., & Steers, R. (1982).Employee-Organization Linkages: The Psychology of Commitment, Absenteeism, and Turnover. New York, NY: Academic Press.
Starnaman, S. M., & Miller, K. I. (1992). A test of a causal model of communication and burnout in the teaching profession. Communication Education, 41 Stockard, J., & Lehman, M. B. (2004). Influences on the satisfaction and retention of 1st-year teachers: The importance of effective school management. Education Administration Quarterly, 40, 742-771. Stovel M, Bontis N. (2002). Voluntary turnover: Knowledge management friend or foe?. J. Intell. Cap. 3(3): 303-322.
ZENITH
Stumpf, S.,M.Najdawi and J.Doh (2002).Drivers of change in business schools. Bized, March/April, 6-7. Van Der Doef, M., & Maes, S. (2002). Teacher-specific quality of work versus general quality of work assessment: A comparison of their validity regarding burnout, (psycho)somatic well-being and job satisfaction. Anxiety, Stress and Coping, 15, 327-344. Voke, H. (2002). Understanding the teacher shortage. ASCD Info Brief, 29, 1-17. NOTES 1. See AACSB International (2003). The report indicates that in the United States, the country with the largest production of doctoral programs in business, the number of business doctorates declined from 1,327 in 1995 to 1,071 in 2000 with the trend expected to continue in the future. By 2015 the US shortage of business PhDs is anticipated to reach 2,500. 2. See AACSB International (2002). 3. In the annual Financial Times ranking, for instance, faculty related measures account for around 25 percent of the total score. Business week has also incorporated a research measure into its ranking. A high school on this measure will enhance overall business school prestige ranking.
363
ZENITH
HURCONOMICS IN BUSINESS ORGANISATION

DR.A.SATHISH KUMAR*; AMOLAK SINGH**
*Professor, Sree Chaitanya Institute of Management & Computer Sciences, Karimnagar. **Assistant Professor, Sree Chaitanya PG College, Karimnagar.
ABSTRACT The effective performance of an organization depends not just on the available resources, but its quality outcomes and competence as required by the organization from time to time. The difference between two organizations largely depends on the level of human resources. Organisations which are dynamic, growth oriented and fast changing should develop their human resources. Employees must initiate, take risks, experiment, and innovate in the path of organization mission and vision in making things happen. People become better aware of the skills required for job performance and the expectations which management have set for them. People will become more committed due to clarity of expected individual outputs. Hurconomics gives the concrete idea about total human resources investment by the company and in return how much expecte4d and observed output from the employee to company in economic terms and this contribution to profits. Hurconomics outcomes provide the ground rules to build an organization excelling in people, processes, products and profits. The work focused on human resources and its economics as hurconomics which touches the time and cost of employees in an organization and its effect on productivity and profitability. KEYWORDS: Hurconomics, R-COT, O-COT, Human Investment, Human Productivity, Employee ROI. ______________________________________________________________________________ INTRODUCTION Nowadays business demands organization performance and output in financial and economic terms to get success and sustainability. Human resource managers scrutinize and compare the investment made on every employee and their returns to the company. Human being is inevitable resource. The recent past witnessed the growing importance of human resource is widely accepted world wide irrespective of size and type of the industry. Firms started developing human skills as they identified the human potential is unmatchable and inimitable by any other resource. These skill development activities require lot of direct and indirect investments in several ways. Large percentage of total investment is made as human capital. Human capital is one component of a companys overall competitiveness. As we know every investment has returns on it, similarly entrepreneurs are also expecting Return on Investment from employees by comparing the invested amount as human capital with returns they get from employee performance and output.
364
ZENITH
Employees have two important characteristics: innate abilities and skills that they can accumulate in school or on the job. To the extent that employees have skills that are innate, the key issue is to sort them into the appropriate firms and jobs. To the extent that they can learn and improve their productivity, the key issue is to invest in them. Recruiting employees, investing in their skills so that they can advance, and managing employee turnover. HURCONOMICS-BACKDROP: Before industrial revolution human being was sold and purchased, owners purchase human being to fulfill their needs and comforts. After industrial revolution there was a strong need of skilled labour. Employers treated their employees as machine and tried to maximum utilize efforts of employees. But in the recent past entire world identified and accepted human being as a productive resource and its eminent and innate qualities. Human resource management started to maximize the utilization of human resource and started large investments in human resource developments to sort the skills appropriately. These investments surprised the management when human capital has captured good portion of total investment. These figures made the management scrutinize human resource with total investment and output in monetary terms. Commercialism has overtaken human touch. Everything is now measured in monetary terms. Relationships, loyalty, trust, openness, commitment etc., are increasingly being replaced by profits, professionalism, flexibility, strategy, speed, return on investment etc. There are tow sides of this change. The positive side is we are doing many more things than before, moving with greater speed, learning new things, becoming more innovative and risk taking, networking more, expanding and creating new employment opportunities and bringing out the best in us. On the negative side we are becoming over commercial, subjecting ourselves to more stress, losing human touch and values, caring less for each other and perhaps less at peace with ourselves than before. For the last ten years as observed change in human resource development is to retain the employee values and goals. The primary focus of human resource development is people in the firm and their competence, commitment and culture building. If company focused on keeping them happy, talented, motivated and competent the business will achieve its goals. Human resource manager was focused on the human resource development process and not worry much about the outcome. Now the times have changed and the human resource development has to change. The change is in terms of change in focus. The human resource development has to change his/her focus from People to Business. The last decade has seen the rise of strategic human resource management where people are treated as a strategic resource and human resource managers have become business partners or strategic partners. In the next decade people is going to become synonymous with business. There is no business without people. Human resource professionals are going to become business partners or business makers. People are tools and instruments. Understand how everyone can contribute. Firms are paying to human resource and its contributions. Unless it has seen human resource is a major contributor and it is contributing human resource in future. Unlike the past the time to discover whether you are contributing or not is not too long.
365
ZENITH
These are some of the new rules of the game. Do you want to remain human resource development in your old garments? Or would you be willing to change? Be like the swamiji who is educating masses and reaching millions. No one will go to listen to him for stress management, leadership, managerial effectiveness and he uses these as opportunities to change the thinking of his clients. Earlier they used to be devotees, now he has accountants, cashier, customers, event managers, sponsors, collaborators etc. Here we have to re-establish the good parts of the traditions integrate with it and lead the trend and enable it to benefit from the past. It appreciates the new trend of consumerism, commercialization, capitalism, economicsism, growthism, globalization, technological access and superiority etc. and works for rediscovering people management practices in the changing world. It attempts to use the new language which is being kept covert but underlies all decisions and thought. Human resources manager in his new avatar: business driven human resource management. Hurconomics is a way of looking at various people processes and events in economic and financial terms. It deals with the economics of human resource. It attempts to analyze human resource activities, processes, events, systems, decisions etc. in terms of costs and returns. It also provides metrics or measures of human resource in financial and economics. The terms may include costs, benefits, return on investment (ROI) etc. The unit of measurement proposed to be used largely with Cost of Time. CRITERIA FOR INVESTMENT: Investment decisions depends on the mood of the market. As per the empirical studies, employee productivity, fundamentals, mission and vision of the company, change in the external environment and expectations from the employees performance. These expectations depend on the human resource analyst ability to foresee and forecast. Price paid to an employee at present depends on the past and present working performance and expected flow of returns in future from employee will influence the employee price. An investment on human resource and selection of human resource price also depends on the investors perception, whether the present price of the employee is fair enough, over or under valued. If the price is fair firm will enjoy the cost benefit and wants to continue as earlier. If price is overvalued then firm may or should enhance the roles and responsibilities to take additional benefits from the employee to get cost benefit. And if it is undervalued firm enjoys the more cost benefits. Thus the concept of overvaluation and undervaluation are relative to skills, task completion time and employee himself. What may be overvalued today a little while ago has become undervalued based on mood of the market scenario, value and valuation of employees, inflation in performance and productivity of the employees and fundamentals of the company and its human resource strategic development. Employee investment is risky and there are different types of investments namely, salary, bonus, incentives, fringe benefits and all direct and indirect expenses etc. These risks relating to employees cannot be reduced but can be approximately managed the firm can bear. High paid employees are more risky and incurring losses compare to low paid employees.
366
ZENITH
HUMAN RESOURCE - INVESTMENT PERSPECTIVE: Investment perspective guide the Managerial Strategic decisions regarding Human resource. Human resource management practitioners and management scholars have long advocated that human resource should be viewed from investment perspective. Employees as variable cost of production maintainable advantage usually derives from outstanding depth in selected human skills, logistics capabilities, knowledge bases, or other service strengths that competitor cannot reproduce. Thus with their perspective, there is a need to invest heavily in their human resources. These investment requirements are like: Organizations in many industries should be competitive, must have highly skilled labour, knowledgeable workers and organizational learning that leads to fast response and high-quality products and services. These investments will become more important due to forecasts of shifts in skill needs from manual to cerebral. Contemporary management practices indicate that many leading companies have to recognize the strategic importance of human resource and have adopted an investment perspective toward these resources. Further there is greater awareness of the costs of treating employees as variable costs, which is beginning to change views of human resource practices. The process of linking strategic and operational investments has both an intentional and emergent character. Intentions are implemented and transform over time. The cumulative effect of separate acts of implementation may be immensely powerful. This may even supply a new context for future strategic choices. Strategies often amount to the after the event labeling of such unpredictable sequences of successful operational acts. Human resource can be considered by employer as asset and liability. Human resource management relates to the total set of knowledge, skills and attitudes that firms need to compete. The differing ability of the firm studied to recognize and carry out a human resource management is apparent. In order to prevail these features a contemporary management action is required to reinforce them. These have to coherence of purpose among the investment and return on investment. Human resource management activity has to produce a knowledge base to its employees which complements the strategic investment conditions. Similarly these must be inter organizational activity implied by the proceedings of managing interrelated and emergent changes required at a premium.
HURCONOMICS: This framework will extensively use real cost of time and Opportunity cost of time. Real cost of time at the enterprise level is the combined addition of all employees full time and part time, as well as outsourced etc. One does not go to compute this for each individual. Simply add all the people costs, including the fringe benefits, replacement costs, training costs etc., everything that is spent on people. Some of the possible indices are given below: REVENUE PER HOUR OF EMPLOYEE TIME: This can be obtained b dividing the total revenues generated in the year or total sales by the number of hours of people time. The number of hours of people time should be estimated by multiplying the person years available in the year of all employees.
ZENITH
PROFIT PER HOUR PER EMPLOYEE: This can be obtained by dividing the total profit earned by the company during a year by the total number of person hours available during that year. R-COT is the invested indicator and O-COT is a return Indicator i.e. when calculating ROI on human capital use R-COT as an Index of Investment and O-COT as an index of return or expected return. COST OF TIME (COT) - TVRLS METHOD Step 1: Calculate your cost to company ( All direct costs in terms of salary + perks + indirect costs incurred by the company for getting you, your maintenance, socialization, guidance and development+ investments made or likely to be made to enable you to perform your current role or future likely roles well) let this be figure X (sum of X1+X2+X3). Step 2: Estimate the number of hours your expected to work or your normally work in a year. ( Number of working days is reached after deducting the number of holidays and leaves, you are formally eligible annually) x number of hours per day on an average you are likely to work excluding your travel time to and from work).This may range between 2000 to 2400 hours. Let this figure be T. Step 3: Divide the X by T. This will give you the real cost per hour of your time. Let this be Real Cost of Time (R-COT) per hour = X/T. Step 4: Opportunity Cost Factor (OCF) for the company: Opportunity is cost is the returns you are expected to give to the company as a result of its investments on time. While these vary from job to job and expectations may hike them up, there is a crude way of calculating the same. Take the annual turnover (AT) of the company in financial terms are targeted for the current year. Also find out the annual estimated people costs (APCTC = salaries + perks + all other people costs including welfare costs etc.) Normally divide the annual turnover by the annual estimated people costs per year. You will get a factor opportunity cost factor or OCF= AT/APCTC. Step 5: Your Opportunity cost of time (O-COT) is arrives at by multiplying your R-COT by OCF. If your R-COT is 500 per hour and the OCF is 6, Opportunity cost for the company OCOT = Rs. 3000 or if the OCF is 9 then your O-COT is Rs. 4,500 per hour. The below calculations are of Plant Manager, Divisional Manager(Personnel & Administration) of a steel manufacturing company, Karnataka. Note : 1) Plant Manager ( Sunday Working Day) 2) Divisional Manager: Personnel and Administration (Sunday Holiday)
368
ZENITH
DAYS & HOURS CALCULATIONS FOR PLANT MANAGER Total Working days of the year =365 Current Working Days= Total working days-No.of Formally allotted Leaves :343-18=325. Current working Days per year = 325. Current AVG Working days/Month= 325/12=27.08 days per month Current working hours/month= No.of working days per month* No.of working hours per day: 27.08*9= 243.72 Net Working hours per day = No.of Working Hours per day -Lunch+Other Breaks: 9-1=8 Net Working hours per day =8 Net Working hours/month= Total no.of working days per month *Net Working hours per day Net Working hours/month=27.08*8=216.64 Net Working hours/year=216.64*12=2599.68 DAYS & HOURS CALCULATION (PERSONNEL & ADMINISTRATION) Total Working days of the year =365 Total Working Days= Total working days-No. of Formally allotted Leaves : 343-18=325. Current working days = Total Working Days Sundays: 325-34=291 Current Working days per month = 291/12 = 24.25
FOR
DIVISIONAL
MANAGER
Current working hours per month = 24.25*9=218.25 Net working hours per day= Total allotted working hours-(Lunch + Other breaks) = 9-1 = 8 Net Working hours per month = Total working hours per month*Net working hours: 24.25*8= 194 Net working hours per year = 194*12= 2328 1) PLANT MANAGER Cost To Company: 35000/month 35000*12=4,20,000 rupees
ZENITH
Yearly working Hours 2599.68 X = 4,20,000 T = 2599.68 R COT = X/T R-COT = 4,20,000/2599.68= 161.55 per hour OCF = AT/ APCTC OCF = 4,00,00,000/60,00,000= 6.66 O-COT = R-COT*OCF O-COT = 161.55*6.66=1075.923 per hour O-COT = 1075.923/per hour According to TVRLS methodology, the Plant Manager costs R-COT = 161.55 rupees per hour to company and expected output from plant manager after putting all his/her efforts is O-COT = 1075.923 per hour. These expected returns are based on opportunity cost factor (OCF). Thus with an investment of 4,20,000 rupees in the form of salary the company should get 27,97,055.50 rupees in return as a results of output from plant manager. It means he should return 6.66 times more than he is paid. If few months already spent from a year, then the company should calculate how much returns they received till now and plan to get for remaining returns from 27,97,055.50 (O-COT). 2) DY.MANAGER (PERSONNEL & ADMINISTRATION) Current Cost To Company: = 20,000/month Total yearly working hours = 2328 R COT = X/T: R COT = 103.09 Opportunity Cost Factor (OCF): AT/APCTC = 4,00,00,000/60,00,000 = 6.66 O COT = R COT* OCF: = 103.09*6.66 = 686.5794 According to TVRLS methodology, the Dy.Manager: Personnel & Administration costs R-COT = 103.09 rupees per hour to company and expected output from Dy.Manager: Personnel and Administration after putting all his/her efforts is O-COT = 686.5794 per hour. These expected returns are based on opportunity cost factor (OCF). Thus with an investment of 2,40,000 rupees in the form of salary the company should get 15,98,356.80 rupees in return as a results of output from Dy.Manager: Personnel and Administration. It means he should return 6.66 times more
20,000*12 = 2,40,000
2,40,000/2328
ZENITH
than he is paid. If few months already spent from a year, then the company should calculate the how much returns they received till now and plan to get for remaining returns from 15,98,356.80 (O-COT). KAL KISNE DEKHA HAI: Future is uncertain and nobody can expect what happens tomorrow. I cannot assure that company will get Opportunity Cost of Time (O-COT) rupees in return. The answer lies in Faith but it helps in deciding whether the investment is appropriate or not? It also sets the benchmark for both company and employee. If the employee unable to give the expected returns this method helps to reach the nearest value. CONCLUSION: Human resources are invaluable. It is not possible at least not easy to measure the human resource in terms of price. Because an employee who was undervalued at the beginning of his career, today he may become as a plant manager and deputy Manager of the company and contribute in many ways to bring profits. They have unlimited capacity to contribute expand and they have tremendous capacity to destroy also. Under no circumstances we cannot underestimate them. People in this part of the world are gifted with a lot of resource, their emotions, loyalty, caring nature, achievement drive, hard work, tolerance, ability to sacrifice and many more things. In recent years companies are showing human capital value in their balance sheet. With the shown calculations of this study employer or investor can identify whether the employee price is fair, overvalued or undervalued. Once identifying the undervalues firm can make a strategy how these employees will brought to a fair price and future investment plans on them. Any proportionate improvement in the undervalues performance causes to reduce in losses or increase profits. REFERENCES 1. T.V Rao (2008), Hurconomics (1/e), Oxford and IBH Publishing Services, New Delhi. 2.V.S.P Rao (2009), Human Resource Management (2/e) , Excel Books, New Delhi. 3.Charles R. Greer (2003), Strategic Human Resource Management (2/e), Pearson Education ( Singapore), Delhi.
4.Biswajeet Patanayak (2002), Human Resource Management (3/e) , Prentice Hall India, New Delhi. 5.V.P.Michael (2001), Human Resource Management and Human Relations (5/e), Himalaya publishing House, Mumbai. 6.Andrew Pettigrew and Richard Whipp (2001), Change Management for Competitive Success (1/e), Infinity Books, New Delhi.
ZENITH
PUBLIC BEHAVIOR TOWARDS DIFFERENT MEANS OF COMMUTATION WITH REFERENCE TO DEHRADUN

TADAMARLA.ANUPAMA*; INUMULA KRISHNA MURTHY**; K.DEEPPA***
*Assistant Professor, College of Management and Economic Studies, University of Petroleum and Energy Studies, Bidholi Campus, Dehradun, Uttarakhand, India. **Assistant Professor, College of Management and Economic Studies University of Petroleum and Energy Studies, Bidholi Campus, Dehradun, Uttarakhand, India. ***Lecturer, College of Management and Economic Studies, University of Petroleum and Energy Studies, Bidholi Campus, Dehradun, Uttarakhand, India.
ABSTRACT Nestled in the mountain ranges of the Himalaya, Dehradun is one of the oldest cities of India and is recently declared as the Provisional Capital of newly created Uttaranchal (Now Uttarakhand) State in the month of Nov2000. According to the latest census report, the Dehradun district has a population of 1,282,143.The means of transport used by people of Dehradun to commute are municipal buses, private taxis/auto, two wheelers, four wheelers, and private buses. The purpose of this research is to Study the Public behavior on different means of transportation available in Dehradun for regular commutation. People use different means of transport for their daily commutation in Dehradun. We have identified few of them which are very common and conducted a survey with the residents of Dehradun to know their satisfaction level with existing transport means and factors which are influencing their choice of daily commutation. A well defined questionnaire is used for collecting data for the research. . The study is carried in Dehradun during the year April 2010. This study could be useful to develop better public transport modes and systems, as efficient and reliable urban transport systems are vital for a state to achieve economic development KEYWORDS: Commutation, Public Transportation, Private Transportation, Waiting Time. ______________________________________________________________________________ INTRODUCTION Nestled in the mountain ranges of the Himalaya, Dehradun is one of the oldest cities in India and is recently declared as the Provisional Capital of newly created Uttaranchal (Now Uttarakhand) State in the month of Nov2000. It consists of 6 tehsils, 6 community development blocks, 17 towns and 764 inhabited villages. It also consists of 18 uninhabited villages. According to latest census, the Dehradun district has a population of 1,282,143.The means of transport used by people of Dehradun to commute are municipal buses, private taxis/auto, two wheelers, four wheelers, and private buses. Understanding of commuting mode behavior is crucial for enhancing the effects of transportation demand management policies and improving the utilization of mass transits. For the purpose, this research focused on analyzing the influences
ZENITH
of various factors like availability, cost, frequency, distance to travel, comfort, security etc on commuting. This study could be useful to develop better public transport modes and systems. Efficient and reliable urban transport systems are vital for the Indian cities to achieve economic development. Transport demand in most cities in Indian has increased substantially, due to increase in population, which is a result of both natural increase and migration from rural areas and smaller towns. The increasing rate of urbanization and city size has put the urban transport system under great stress. The existing public transport systems have not been able to keep pace with the rapid and substantial increases in demand. LITERATURE REVIEW Differences in peoples attitude and personality traits lead to their attributing varying importance to environmental considerations, safety, comfort, and convenience, and could be a key to improving the urban transport situation. Grling et al. (1998) found that attitudes towards flexibility, comfort, and environmental issues all influence ones choice of transport. Cuttingedge research now considers transport as a part of everyday life and behavior, and an integrated part of modern culture (Jensen, 1999). Beiro and Cabral (2007) conducted a qualitative study of public-transport users and car users in order to obtain a deeper understanding of travelers attitudes towards transport and to explore perceptions of public transport service quality. Hiscock et al. (2002) conducted in-depth interviews with a sample of car owners and non-car owners in Scotland, to investigate the psycho-social benefits people seem to derive from their cars. They found that cars were seen to provide protection from undesirable people and events, and provided autonomy because car use was seen as being more convenient, reliable and providing access to more destinations than public transport. Cars were also seen to give prestige and other socially desirable attributes such as competence, skill and masculinity. To make public transport more attractive, the authors suggested that policy makers consider how make it provide similar sorts of benefits, targeting the different needs of various population groups. Mobility in the developing world is often characterized by travel demand that far exceeds supply (Darido 2003). Traveler modal choice is generally explained by three basic factors: characteristics of the journey (e.g., length, time of day, and purpose), the socioeconomic characteristics of the traveler, and the transport system (Thamizh Arasan et al. 1996). DATA &METHODOLOGY The study was conducted in Dehradun, Uttarakhand. Random sampling was followed to select the sample of 280 customers. The respondents in the sample were interviewed and the data was collected using a well- structured interview schedule. Simple percentages were worked out to study general characteristics like age, gender, education, usage of different modes of transportation, money spent on transportation, factors that influence to choose the mode of transportation etc. The sample respondents were asked to indicate the satisfaction levels on highly satisfied, satisfied, neutral, dissatisfied and highly dissatisfied. The types of transportation modes that are considered are company bus, own vehicles and private transportation. Target sample size was kept as 280 because all the places of Dehradun were not explored. The study is carried during the years April 2011.
ZENITH
In this study primary data was collected from people from different parts of Dehradun Information was gathered through a structured questionnaire. Data analysis was done with simple percentage charts, classification of data and finding the most influenced factor for choosing the mode of transportation was done through weighted averages .Chi-square test was done in the further analysis. Chi-square test was carried to find the relation between the two sets of variables i.e. parameters considered for choosing the mode of transpor tation, age and their satisfaction levels. Choice of transportation, profession and distance. Chi-square was calculated by finding the difference between the observed and theoretical frequency for each possible outcome, squaring them, dividing each by the theoretical frequency and taking the sum of the results. Basic Computational Equation is given by
THE STUDY For the purpose of the study the entire sample of customers surveyed were categorized into different classes namely with respect to the usage of different modes of transportation for daily commutation like: College/Company Bus, Own vehicles, Private Transportation. The second section of the questionnaire contained questions regarding the socio and demographic details of respondents which are used to interpret the responses on other questions. To study the different perceptions and usage of different modes of transportation for daily commutation are done in, Dehradun during the years period April 2011. To explore the reasons behind Peoples preference in choosing the mode of commutation. Analysis can be drawn by identifying the satisfaction level towards the modes of transportations. To study the impact of distance and professions in choosing the mode of transportation. . TABLE I DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS
Characteristics Age of respondents Less than 18 years 18 24 years 24 30 years
No. of Respondents
10 110 102
ZENITH
30 36 years More than 18 years TOTAL Gender Male Female TOTAL Profession Student Employee Housewife Business TOTAL Income Less than Rs.1 Lakh Rs.1 to 2 Lakhs Rs.2 to 3 Lakhs Rs.3 to 4 Lakhs More than 4 Lakhs TOTAL
22 36 280
206 74 280
120 92 56 12 280
90 52 64 28
46 280
In the following table is a combination of variables like: respondents using a particular mode of transportation like company vehicle, own vehicle and private transport, respondents having their own vehicles, distance travelled daily, time, amount spent on daily commutation, satisfaction levels of respondents on different factors and factors that influence their decision of changing
ZENITH
means of transport like availability, cost safety comfort, cleanliness and waiting time. This analysis also gives the respondents preference for the new modes of transport etc. TABLE II VARIABLES FOR MODES TRANSPORTATION OF THE RESPONDENTS Characteristics Means of Trans portation College/company bus Own vehicle Walk Friends Vehicle Private Transport TOTAL Distance Travelled Daily Less than 5 Km 5-10 Kms 10-15 Kms 15-20 Kms More than 20 Kms TOTAL Time taken to travel Less than 15 Minutes 15-30 Minutes 30-45 Minutes 45-60 Minutes More than 60 Minutes 50 100 56 42 32
No. of Respondents
68 130 10 22 50 280
54 86 54 38 48 280
ZENITH
TOTAL Amount spent on Daily Commutation Less than Rs.250 Rs.250-Rs.500 Rs.500-Rs.750 Rs.750-Rs.1000 More than Rs.1000 TOTAL Respondents willing to change the means of Transportation Yes No TOTAL New Means of Transport College/company bus Own vehicle Walk Friends Vehicle Private Transport TOTAL Factors influencing the change of Trans portation Availability Cost Safety
280
34 52 52 68 74 280
124 156 280
16 90 2 12 4 124 Weighted Ave rages 3.19No of Respondents 3.15 3.09

ZENITH
Comfort Cleanliness Waiting Time Frequency(8 AM to 5 PM) Frequency(other than 8 AM to 5 PM)
2.98 2.97 2.90 3.19 2.33
TABLE 3: FACTORS IN CHOOSING THE MODE OF TRANSPORTATION VS. SATISFACTION LEVELS Satisfaction levels Excellen t Types of service Availability Cost Safety Comfort Cleanliness Waiting Time Frequency(8 AM to 5 PM) Frequency(other than 8 AM to 5 PM) Total 16 12 6 8 14 20 8 20 104 30 48 58 72 60 60 28 60 416 44 82 48 50 62 56 90 100 532 140 122 126 104 102 96 110 70 870 50 16 42 46 42 48 44 30 318 Goo d Moderat e Ba d Wors t No of respondent s 280 280 280 280 280 280 280 280 2240
ZENITH
TABLE 4: CHOICE OF MODE OF TRANSPORTATION VS. DISTANCE Different Modes of Transportation College/ Distance Less than 5 Km 5-10 Kms 10-15 Kms 15-20 Kms More than 20 Kms Total Company Bus 2 24 20 6 16 68 28 44 16 24 18 130 Own Vehicle Friends vehicle/Private Transportation 24 18 18 8 14 82 No of respondents
54 86 54 38 48 280
TABLE 5: SATISFACTION LEVELS VS. AGE Age of the respondents Satisfaction Levels Highly Dissatisfied/ Dissatisfied Neutral Highly Satisfied/ Satisfied Total 120 102 58 280 40 64 24 64 14 40 78
Less than 24 years 16
24 to 30 years 14
More than 30 years 4
No of respondents 34
168
ZENITH
TABLE 6: CHOICE OF MODE OF TRANSPORTATION VS. PROFESSION Profession Student Mode of Transportation College/ Company Bus Own Vehicle Walk/Friends Vehicle/Private Transportation Total 30 46 48 22 52 14 130 82 44 22 Employee Housewife/ Business 2 68 No of respondents
120
92
68
280
A quantitative test was conducted in order to identify if there existed any relation between the factors or parameters considered for choosing a mode of transportation and satisfaction levels. The test results using Chi square analysis suggested that there exists very strong evidence against null hypothesis (parameters considered for choice of transport is independent of satisfaction levels) with the tests results at chi square = 148.28.The result proved that satisfaction levels were dependent on parameters considered for choice of transportation (Table 3). The test results suggested that there existed very strong evidence against null hypothesis (choice of mode of transportation is independent of distance) with the tests results at chi square = 30.8 and with correlation 0.31.The result proved that the choice of mode of transportation was dependent on distance of travel (Table 4). The test results suggested that there existed very less evidence against null hypothesis (satisfaction levels regarding the choice of mode of transportation is independent of age) with the tests results at chi square = 5.72 and with correlation 0.14.The result proved satisfaction levels in choice of mode of transportation is independent of age (Table 5). The test results suggested that there exists strong evidence against null hypothesis (choice of mode of transportation is independent of profession) with the tests results of chi square = 52.09 and with correlation 0.39.The result proved choice of mode of transportation was dependent on profession (Table 6).
380
ZENITH
RESULTS AND DISCUSSION The general characteristics of the respondents like age of the respondents, gender and educational levels were collected to study the consumer profile. Majority of the respondents are male with 74%, 76% were between the age groups 18 to 30, 32% of them having an income group less than one lakh because the respondents are students.. THE TABULATION DEPICTS THAT Of the total number of respondents surveyed (280) maximum (46%) of them use their own vehicles as a mode of transportation, 50% of the respondents travels a distance 5 to 15 kilometers since the distance is less 53% of the respondents takes maximum of 30 minutes as journey time for daily travel. As travel time and distance are less the maximum amount spent on transportation is Rs.750 number of respondents agreed the fact is 49%. These figures were further worked upon, factors influencing for choosing the mode of transportation and satisfaction levels specifically was analyzed through weighted averages that highest rated factors influencing the change are availability and frequency with weighted average as 3.19 next factor is the cost with 3.15, next follows the safety and comfort with 3.09 last co mes the frequency (other time) with a an average of 2.33 In fact, further analysis the chi-square test result shows that parameters considered for choice of transport are dependent on satisfaction levels. Choice of transportation depends on the distance. Satisfaction levels with respect to mode of transport is independent of age groups i.e. no impact or they are uniform and last choice of mode is dependent on profession of the respondents. CONCLUSION Most of the people are using own vehicle for their commutation. Most of the people who are willing to change their choice of transport prefer their own vehicle. Availability is important parameter while choosing means of transport. Own vehicle is the most preferred means of commutation for Housewives. Parameters considered for choice of transport are dependent on satisfaction levels. Choice of transport for commutation is independent of distance. Satisfaction levels regarding choice of transport for commutation of all age groups is uniform. Satisfaction levels regarding choice of transport for commutation of all professions is uniform. Choice of transport for commutation is dependent on profession. The Overall satisfaction levels of people in Dehradun with respect to existing transport facilities are low. People are choosing own vehicle instead of public/private transport mainly due to availability factor. If this continues there will be increase in air and sound pollutions and traffic problems in Dehradun. So, government should take proper steps to improve public/private transport in return it can generate revenue to imrove the economy.
381
ZENITH
REFERENCES 1. Beiro, G. & Cabral, J.A.S. (2007). Understanding attitudes towards public transport and private car: A qualitative study. Transport Policy, 14(6), 478-489. 2. Darido, Georges B. 2003. Regulation of road-based public transportation and strategies for the developing world. Transportation Research Record 1835, TRB 3. Gabriela Beira and J.A. Sarsfield Cabral, Understanding attitudes towards public transport and private car: A qualitative study Faculty of Engineering of the University of Porto, Rua Dr. Roberto Frias, 4250-465 Porto, Portugal 4. Grling, T., Gillholm, R. & Grling, A. (1998). Reintroducing attitude theory in travel behavior researchthe validity of an interactive interview procedure to predict car use. Transportation, 25(2), 129-146. 5. Hiscock, R., Macintyre, S., Kearns, A. & Ellaway, A. (2002). Means of transport and ontological security: Do cars provide psycho-social benefits to their users? Transportation Research Part D: Transport and Environment, 7(2), 119-135. 6. Inga Grdzelishvili and Roger Sathre, Towards more effective urban transport policy: Understanding the travel behavior of Tbilisi residents Cooperation for a Green Future Nutzubidze 72, Tbilisi 0168, Georgia 7. Jensen, M. (1999). Passion and heart in transporta sociological analysis on transport behavior. Transport Policy, 6(1), 19-33. 8. Mintesnot Gebeyehu and Shin-ei Takano, Diagnostic Evaluation of Public Transportation Mode Choice in Addis Ababa Hokkaido University, Sapporo, Japan. 9. National Research Council, Washington DC, pp. 6673. 10. Thamizh Arasan, V., V. R. Rangaraju, and K. V. Krishna Rao. 1996. Trip characteristics of travelers without vehicles. Journal of Transportation Engineering 122,1: 7681
11. Yuko Heath and Robert Gifford, Extending the Theory of Planned Behavior: Predicting the Use of Public Transportation
ZENITH
A STUDY ON FUNDAMENTAL ANALYSIS OF ONGC

SUGANDHARAJ KULKARNI*
*Research Scholar, Assistant Professor, H. N. College of Commerce, Management Wing, Solapur.
ABSTRACT Fundamentals are associated with the economic health of a company. The fundamentals tell you about a company. We can say a company is having healthy fundamentals if it is growing at a nice pace, generating a profit, has limited debts and abundant cash. The analysis of a company's fundamentals involves getting deep into its financials, rather than day-to-day movement in its share price. Equity researchers normally do fundamental analysis in order to calculate the intrinsic value of a company's stock. If a company's stock is trading above the intrinsic value or fair value, then the stock is overvalued. If a company's stock is trading below the intrinsic value, then the stock is undervalued. However, if you watch the stock markets very closely, the share price of most companies never matches the fair value. Often, day traders and investors who would prefer short term investment options invest in those stocks, regardless of the companies' long term growth prospects. However, long term investors generally prefer to invest in companies with robust fundamentals and ignore near-term share price movements. KEYWORDS: analysis, intrinsic value, stock market, share price. ______________________________________________________________________________ INTRODUCTION Fundamentals are associated with the economic health of a company. The fundamentals tell you about a company. We can say a company is having healthy fundamentals if it is growing at a nice pace, generating a profit, has limited debts and abundant cash. The analysis of a company's fundamentals involves getting deep into its financials, rather than day-to-day movement in its share price. Equity researchers normally do fundamental analysis in order to calculate the intrinsic value of a company's stock. If a company's stock is trading above the intrinsic value or fair value, then the stock is overvalued. If a company's stock is trading below the intrinsic value, then the stock is undervalued. However, if you watch the stock markets very closely, the share price of most companies never matches the fair value. Often, day traders and investors who would prefer short term investment options invest in those stocks, regardless of the companies' long term growth prospects. However, long term investors generally prefer to invest in companies with robust fundamentals and ignore near-term share price movements. OBJECTIVES 1. To study the economical factors which directly or indirectly affect on performance of ONGC. 2. To take an overview of industrial and company aspects of the company.
383
ZENITH
RESEARCH METHODOLOGY The present is based on the secondary data sources which includes1. The annual report of ONGC for the year 2009-2010 to interpret the ratios of the company. 2. Books on portfolio management and financial management. SCOPE AND LIMITATIONS OF THE STUDY SCOPE 1) This study gives an overview on ONGC, which help to investors while investing. 2) This study consists of Economic-Industry-Company framework of analysis with the following aspectsa) Economic analysis consists of various variables such as inflation, interest rates, foreign exchange rates, infrastructure, monsoon, economic & political stability. b) Industry analysis consists of Demand, potential market, targeted Industrial growth. c) Company analysis consists of financial statement, analysis of financial statements, Companies prospects, growth, and Management board of company. LIMITATIONS 1.For study only following limited variables has studied such as GDP, inflation rates, exchange rates, foreign exchange reserves, agriculture, industrial, service & allied sectors, currency markets, telecommunication sector & export growth. 2. The study is also limited only to competition, supply of raw materials and key business operations. 3. The study is restricted only to the financial statements and analysis of financial statements. For the purpose of interpretation, key ratios of the ONGC are studied for the period 2009-2010. IMPORTANCE TO STUDY This study provides a logical and systematic approach to estimate future profits. This study helps to know that the companys performance depends not only on its own efforts but also on the industry and economic factors. This study helps an analyst to study the fundamental factors affecting the performance of different industries. Also industry analysis helps to evaluate the relative strength and weaknesses of particular company.
384
ZENITH
The financial statements of ONGC can be used to evaluate the financial performance of the company. Ratio analysis helps investors to determine the strength and weaknesses of the company. It also helps to him to assess whether the financial performance and financial strength are improving or deteriorating. INTRODUCTION TO FUNDAMENTAL ANALYSIS Fundamental analysis is based on the premise that every share has a certain intrinsic value at a period of time. This intrinsic value changes from time to time as a consequence of both internal and external factors. The theory of fundamental analysis submits that one should purchase a share when it is available below its intrinsic value and sell it when it rises above its intrinsic value. When the market value of share is below its intrinsic value it is under valued, whereas if the market value of a share is above its intrinsic value it is over valued. Fundamentalists thus seek to purchase underpriced shares and sell overpriced ones. They believe that although the market price may deviate from the intrinsic value in the short term, in the long term the market price will be equal to the intrinsic value.TRINSIC VALUE AND HOW IS IT DETERMINED STEPS IN FUNDAMENTAL ANALYSIS (EFFICIENT MARKET THEORY) Fundamental analysts often use the efficient market theory in determining the intrinsic price of a share. This theory submits that in an efficient market all investors receive information instantly and that it is understood and analyzed by all the market players and is immediately reflected in the market prices. The market price, therefore, at every point in time represents the latest position at all times. The efficient market theory submits it is not possible to make profits looking at old data or by studying the patterns of previous price changes. It assumes that all foreseeable events have already been built into the current market price. The fundamental analysis is broken into three distinct parts: 1. the economy, 2. the industry within which the Company operates, and 3. The company. The information has to be interpreted and analyzed and the intrinsic value of the share determined. This intrinsic value must, then, be compared against the market value the fundamentalists say, and only then can an investment decision be taken. ECONOMIC ANALYSIS Wise man once said, "No man is an island". No person can work and live in isolation. External forces are constantly influencing an individual's actions and affecting him. Similarly, no industry or company can exist in isolation. It may have splendid managers and a tremendous product. However, its sales and its costs are affected by factors, some of which are beyond its control - the world economy, price inflation, taxes and a host of others. It is important, therefore, to have an appreciation of the politico economic factors that affect an industry and a company.
385
ZENITH
THE POLITICAL EQUATION A stable political environment is necessary for steady, balanced growth. If a country is ruled by a stable government which takes decisions for the long-term development of the country, industry and companies will prosper. There are certain issues which are to be considered on this particular groundForeign Exchange Reserves Inflation (Interest Rates, Taxation, Government Policy, Domestic Savings and its Utilization, The Infrastructure) The Economic CYCLE The four stages of an economic cycle are: Depression Recovery Boom Recession
THE INVESTMENT DECISION Investors should attempt to determine the stage of the economic cycle the country is in. They should invest at the end of a depression when the economy begins to recover. Investors should disinvest either just before or during the boom, or, at the worst, just after the boom. Investment and disinvestments made at these times will earn the investor greater benefits. Joseph Schumpeter once said, Cycles are not, like tonsils, separable things that might be treated by themselves but are, like the beat of the heart, of the essence of organism that displays them. INDUSTRY ANALYSIS The importance of industry analysis is now dawning on the Indian investor as never before. Previously, investors purchased shares of companies without concerning themselves about the industry it operated in. And they could get away with it three decades ago. This was because India was a sellers' market at that time and products produced were certain to be sold, often at a premium. All industries evolve through the following stages: 1. Entrepreneurial, sunrise or nascent stage 3. Stabilization, stagnation or maturity stage COMPANY ANALYSIS At the final stage of fundamental analysis, the investor analyzes the company. This analysis has two thrusts: How has the company performed vis--vis other similar companies and
386
2. Expansion or growth stage 4. Decline or sunset stage
ZENITH
How has the company performed in comparison to earlier years. Jean Paul Getty, one of the most successful stock market operators of all time, said, "Do not buy stock until you know all about it". The different issues regarding a company that should be examined are The Company The Annual Report Ratios Cash flow
ABOUT ONGC (OIL AND NATURAL GAS CORPORATION LIMITED) OIL AND NATURAL GAS CORPORATION LIMITED (ONGC) (Incorporated on 23 June 1993) is a state-owned oil and gas company in India. It is a Fortune Global 500 companies ranked 152nd, and contributes 77% of India's crude oil production and 81% of India's natural gas production. It is the highest profit making corporation in India. It was set up as a commission on 14 August 1956. Indian government holds 74.14% equity stake in this company. ONGC is one of Asia's largest and most active companies involved in exploration and production of oil. It is involved in exploring for and exploiting hydrocarbons in 26 sedimentary basins of India. It produces about 30% of India's crude oil requirement. It owns and operates more than 11,000 kilometers of pipelines in India. The liberalized economic policy, adopted by the Government of India in July 1991, sought to deregulate and de-license the core sectors (including petroleum sector) with partial disinvestments of government equity in Public Sector Undertakings and other measures. As a consequence thereof, ONGC was re-organized as a limited Company under the Company's Act, 1956 in February 1994. In the year 2002-03, after taking over MRPL from the A V Birla Group, ONGC diversified into the downstream sector. ONGC will soon be entering into the retailing business. ONGC has also entered the global field through its subsidiary, ONGC Videsh Ltd. (OVL). ONGC has made major investments in Vietnam, Sakhalin and Sudan and earned its first hydrocarbon revenue from its investment in Vietnam. GLOBAL RANKING ONGC ranks as the Numero Uno Oil & Gas Exploration & Production (E&P) Company in the world, as per Platts 250 Global Energy Companies List for the year 2008 based on assets, revenues, profits and return on invested capital (ROIC). ONGC ranks 20th among the Global publicly-listed Energy companies as per PFC Energy 50 (Jan 2008) ONGC is the only Company from India in the Fortune Magazines list of the Worlds Most Admired Companies 2007.
387
ZENITH
ANALYSIS AND INTERPRETATION ECONOMIC ANALYSIS 1. The economy of India is the eleventh largest economy in the world by nominal GDP. 2. The fourth largest by purchasing power parity (PPP). 3. India had established itself as the world's second-fastest growing major economy. 4. However, the year 2009 saw a significant slowdown in India's GDP growth rate to 6.8% as well as the return of a large projected fiscal deficit of 6.8% of GDP which would be among the highest in the world. 5. The fiscal year 2009-10 began as a difficult one. There was a significant slowdown in the growth rate in the second half of 2008-09, following the financial crisis that began in the industrialized nations in 2007 and spread to the real economy across the world. The growth rate of the gross domestic product (GDP) in 2008-09 was 6.7 per cent, with growth in the last two quarters hovering around 6 per cent. 6. The fiscal year 2009-10 has been a time of inflationary concerns. It was a year of a somewhat unusual inflation. While food inflation soared, inflation in the non-food sector was negligible. The Government was concerned that the upward pressure on prices should not escalate to all sectors. POLITICAL ENVIRONMENT The United Progressive Alliance (UPA) lead by the Indian National Congress (Congress) was re-elected to a second five year term in 2009. The UPA succeeded in gaining a stronger electoral mandate in 2009 and therefore has had to rely less on left leaning coalition partners in contrast to the coalition formed in 2004. FOREIGN EXCHANGE RESERVES Taking into account the valuation effect, Indias foreign exchange reserves recorded a decline of US $ 57.7 billion during 2008-09 to US $ 252.0 billion as at end-March 2009. Valuation loss arising out of depreciation of major currencies against the US dollar, at US$ 37.6 billion, accounted for 65.2 per cent of the total decline in foreign exchange reserves during 2008-09. However, in 2009-10 foreign exchange reserves recorded an increase of US$ 29.3 billion in H1 (April-September 2009) of which US$19.8 billion was on account of valuation gain.
INTEREST RATES
388
ZENITH
DOMESTIC DEPOSIT RATES Deposit rates of SCBs softened during 2009-10. Interest rates offered by PSBs on deposits of maturity of one year to three years declined from the 8.00-9.25 per cent range in March 2009 to 6.00- 7.25 per cent in December 2009, while those on deposits of maturity of above three years came down from the 7.50 9.00 per cent range to the 6.25-7.75 per cent during the same period. The term deposit rates of private-sector banks and foreign banks on deposits of maturity of one year up to three years also declined from the 7.50-10.25 per cent and 2.50- 9.50 per cent range respectively in March 2009 to the 5.25-7.50 per cent and 2.25-7.75 per cent range in December 2009. INFLATION The first half of the financial year 2008-09 was marked by high wholesale price index (WPI)based inflation, primarily due to the rise in global commodity and fuel prices. The subsequent global economic meltdown starting September 2008 reversed the trend and WPI inflation slipped into negative territory during June to August 2009. This was due to the decline in commodity prices globally and the base effect. As regards food inflation, the upswing noticed in the first quarter of 2008-09, continued during 2009-10 due to unfavorable south-west monsoon, the worst since 1972. Though the current specter of double-digit inflation in food articles is ascribable to supply-side constraints, it is necessary to ensure that the monetary policy stance does not lead to pressure. INDUSTRY ANALYSIS INDIAN OIL AND NATURAL GAS SECTOR THE ORIGIN OF THE OIL INDUSTRY in India can be traced back to the last part of the 19th century when petroleum was discovered in Digboi in north-east India. After independence, the industry - which had Burmah Shell, Esso and Caltex as major players - was nationalized. Every activity - exploration, development, production, refining, marketing, distribution - was controlled by the various national oil companies. Since Indias economic liberalization program started, however, the Indian oil and gas sector has gone through some very fundamental changes. FACTS India is currently the fourth largest oil consumer in the Asia-Pacific region after Japan, China and South Korea. Estimated to increase at the rate of 7 % a year, the demand for petroleum products, in absolute terms, is expected to be 155 and 195 million tones respectively for the year 2006-07 and 2011-12. India is endowed with 26 sedimentary basins totaling around 1.72 million sq. km. of which offshore area amounts to 0.38 million sq. km. Most of the basins are under various stages of intensive/extensive exploration. The size of the Indian Oil & Industry is estimated to be US$ 90 Billion. The Oil & Gas sector is also one of the largest contributors to Central and State exchequer amounting to US$13.58 Bn. Apart from enhancing the domestic efforts in the sector Indian Companies are venturing overseas as well to give the country a sense of energy security and strategic positioning. In the upstream segment, we have OVL investing in
ZENITH
Sakhalin, Sudan, Myanmar, Vietnam, Libya, Syria, Iraq and Angola. Reliance has gone into Yemen. In the downstream, IOC has a presence in Sri Lanka and has expressed its interest in distribution in Singapore and Malaysia as well Middle East Markets. BPCL has also bid for retail outlets in Sri Lanka. GAIL is eyeing the Egyptian and UK markets also. DE-REGULATION HISTORY DE-REGULATION OF REFINERIES Year 2000-01 FDI in refining sector raised from 49% to 100% Stand-alone refining companies aligned with existing integrated refining and marketing companies. In the Year 2002-02 ATF pricing decontrol was started. Oil Co-ordination Committee dismantled w.e.f. April 1, 2002. Dues of Oil companies under Oil Pool Accounts settled on provisional basis Majority of products made freely tradable Pricing of all products except LPG and Kerosene decontrolled Pipeline transportation tariff decontrolled w.e.f. April 1, 2002. In the Year 2003-04 Import of Gasoline, HSD and ATF allowed to companies having marketing rights Phased reduction in subsidies for LPG and Kerosene FDI in Marketing, E&P and Pipelines increased to 100% subject to certain approvals Marketing rights granted to private sector entities for marketing of transportation fuels through their own retail network. REGULATORY OVERVIEW GOVERNMENT POLICY Market Determined Pricing Mechanism (MPDM) for most of the products w.e.f. April 1, 2002 except for LPG and Kerosene Refineries de-regulated w.e.f. April 1, 1998. The Oil Industry Pool Accounts dismantled w.e.f. April 1, 2002 Pipeline Transportation tariff decontrolled and based on commercial terms Private sector entities allowed marketing rights for transportation fuels subject to such entities investing Rs. 20 billion. GROUND REALITIES Despite Market Determined Pricing Mechanism (MDPM), prices still determined by Ministry of Oil & Natural Gas Subsidies on LPG and Kerosene shared by downstream companies (IOC, BPCL, HPCL), upstream companies (ONGC, GAIL) and fiscal budget Subsidies on LPG and Kerosene slated to be completely phased out by March 2007 Marketing service obligations for rural and far flung areas for all the players Petroleum Regulatory Board to be set up by the Government
THE OPPORTUNITIES
390
ZENITH
The last 6-8 years have seen a radical restructuring of the Indian oil and gas sector. The recent initiatives enable private oil companies, both foreign and Indian, to explore new oil and natural gas reserves, develop proven reserves, and establish petroleum refineries and pipelines. The Indian Government has earmarked US $ 12.91 Billion for Exploration & production and US $ 7.97 Billion for Downstream sector as per the Tenth Five year plan. As per the India Hydrocarbon Vision 2025, refining would have an investment of $ 50 Billion and the marketing infrastructure would involve and investment of US $ 29.34 Bn. The breakup for the marketing infrastructure is as follows: Product Pipelines: US $ 4.56 Bn. Product tankage and related facilities: US $ 3.47 Bn. Retail outlets: US $ 20.2 Bn. LPG Bottling Plants: US $ 1.08 Bn. THE SIGNIFICANT FACTORS FUELING PRIVATE INVESTMENT IN THE INDIAN OIL AND NATURAL GAS SECTOR ARE An investment is needed over the next 10 to 15 years to meet the projected early 21st century demand. With a view to meeting this growing demand, the new hydrocarbon policy aims at encouraging investment in oil and gas exploration and production. Additional refining capacity of 110 million tones per annum will be required in the near future. With such phenomenal growth in this sector, there is ample scope and opportunity for the transfer of technologies required and exports of capital goods, etc. to India. The technologies required will be for Upgrading, expansion, replacement and new refineries To meet the predominant demand for middle distillates and Also to improve the quality of petroleum products to make them environment friendly and globally competitive. Extensive oil and gas distribution infrastructure such as cross country pipelines, port terminals, tank ages and strategic reserves build up will have to be developed to meet the projected requirements. India is adopting more environmentally benign measures with regard to usage and quality of fuels. Lead phasing out and benzene reduction in gasoline, sulphur reduction and certain improvements of diesel are amongst the prominent measures that are under implementation. Such quality up gradation of fuels will call for adopting latest/state of the art technology requiring huge investments by way of providing reformulated gasoline producing units, hydro-crackers, hydro-theaters, hydro-desulphurisers, etc. POLICY NEW INITIATIVES The Indian petroleum sector has been opened to the private sector, both domestic and foreign for investments through joint ventures and strategic alliances. In exploration and production, Indian oil and natural gas fields have been opened up to the private sector as well as to foreign participation under production sharing contracts. The refining sector has been opened to the joint sector (public-private partnerships) as well as to the private sector for new refineries. Foreign investment is to be permitted up to 100% in exploration.
391
ZENITH
For petro product marketing, 100% FDI is permitted. All petro products taken out of the administered price mechanism from 1st April, 2002. All petroleum products, except MS, HSD, Kerosene, ATF and LPG have been decontrolled Sourcing and import of crude to joint and private sector refineries allowed under actual user licensing policy. The GoI has already tabled the Draft Petroleum and Natural Gas Board Bill in the Parliament, which proposes a Petroleum and Natural Gas regulator to regulate the downstream activities. A common Carrier Pipeline Policy allowing two or more companies to use a single pipeline for the transportation of products is also announced. At least 25% of the product carrying capacities of the pipeline will have to be shared with other interested companies by the parent pipeline laying company. BIBLOGRAPHY BOOK REFERRED 1. M.Y. Khan and P.K.Jain, Financial Management, Himalaya Publication 2. Dr.P.C.Tulcian, Financial Management, S.Chand 3. Preeti Singh, Investment Management, HimalayaPublication 4. V.A.Avdhani, Security Analysis, HimalayaPublication MAGAZINE CAPITAL MARKET NEWSPAPERS BUSINESS LINE THE ECONOMIC TIMES WEB SITES www.nseindia.com
www.icicidirect.com www.moneycontrol.com
ZENITH
E- GOVERNANCE - TQM (WITH SPECIAL REFERENCE TO ANDHRA PRADESH MARKETING FEDERATION HYDERABAD)
MS. ANITA DSOUZA*
*Assistant Professor, Department of Commerce, Badruka College PG center, Kachiguda, Hyderabad, India.
INTRODUCTION Over the past two decades, total quality management (TQM) has become most widely used management acronym and is considered as the buzz word in the management practices. As the standard of living of the customer gets better by the day end, the customer expects superior quality goods and services with the best assurance that the product he purchases is the best of all the products and which performing more than his expectations. As such now the phrase customer is the king has become a reality in a true sense. At the core of E- Government adoption is the idea of creating a government that is closer to the citizens it serves and more open to their participation at all levels. It also consists of internet-driven innovations that improve citizen access to government information, services, and ultimately equitable participation in government. Therefore TQM has increased drastically and has gone to its peak to become a wellestablished field of research due to intense global competition, increasing consumer consciousness of quality, rapid technology transfer, and towards achieving world-class status. OBJECTIVES 1. To study the various policies, techniques, procedures and practices that support implementation of TQM by A.P.MARKFED. 2. To study how TQM approach is followed and implemented in A.P.MARKFED 3. To know the problems affecting the implementation of TQM approach. OVERVIEW OF THE COMPANY
Agriculture is the lifeline of A.Ps economy. The agricultural sector contributes over thirds of the states GDP and provides a livelihood for over 70% of its population. The A.P.MARKFED, Hyderabad, established in 1957, is an apex cooperative organization. It is a federation which comprises of 22 District Cooperative Marketing Societies (DCMS). Its headquarters was set up in Hyderabad on November 30, 1965. Its acting as a link between the producers and the consumer, promoting the sale of agricultural produce of the state. A.P.Markfed is also acting as an agent to the government of India by procuring different remunerative prices of their produce. One federation that had constantly strived to boost agricultural growth has been A.P.Markfed. Strengthening the agricultural sector would mean encouraging the initiatives of farmers community by not only helping him in selling the produce
ZENITH
but also by ensuring the availability of inputs like seeds, pesticides and fertilizers. This type of market intervention is also helping in maintaining the price line for the agriculture produce. Realizing the potential of exports of our agricultural products, the federation has successfully exported its produce to various countries. .AP is poised to become the powerhouse of Indian agriculture by 2020. UNIFORM SPECIFICATION FOR MAIZE The Maize shall be dried and matured grain of Zea mays. It shall have uniform size, shape and color. It shall be in sound merchantable condition and also conforming to quality standards. Maize shall be Sweet, hard, clean and free from moulds, weevils, obnoxious smell and all other impurities except to the extent indicated in the schedule below SCHEDULE OF SPECIFICATION S.NO 1 2 3 4 5 6 7 REFRACTION Foreign matter Other food grains Shrived and immature grain Damaged grains Slightly damaged, discolored and touched grains Weevil grains Moisture MAXIMUM LIMITS (%) 1.0 3.0 4.0 1.5 1.0 1.0 14.0
LITERATURE SURVEY While scanning to the literature on Total quality management, it is observed that authors & researchers have elaborately dealt with the concept, origin, evolution, importance, merit, demerits and future possibilities of TQM approach. TQM is only one of many approaches to getting qualitative work done and accomplishing goals.W. Edwards Deming (1950) who is referred to as the father of quality control. highlights the role of management in the quality improvement effort and the use of statistical control tools in measuring and monitoring quality. Angel R Martinez, Frank Dew Hurst, Barie G. Dale in their Survey on origin and evolution of the term TQM found that it evolved during 1950s. By the time the term TQM came into usage
394
ZENITH
it was mid- eighties and then it became a recognized part of quality related language in late 1980s. Richard T Symons and Raymond A Jacobs of Ashland university in their study on the TQM implementation and analysis of performance improvement have pointed out that the TQM based incentive system supporting TQM implementation is an approach which encourages the continuous improvement. Phillip B. Crosby argued that quality is neither intangible nor immeasurable. Instead it is a strategic imperative that can be used to improve . Quality is defined as "conformance to requirements," not "goodness." Dr. Genichi Taguchi, a Japanese quality expert known for his work in the area of product design. His philosophy was based on the idea that it is easier to design a product that can perform over a wide range of environmental conditions than it is to control the environmental conditions. The American Society of Civil Engineers (ASCE) defines quality assurance (QA) in its publication Quality in the Constructed Project (1990) as "A program covering activities necessary to provide quality in the work to meet the project's requirements. Kanji and Wallace (2000) go on to identify ten TQM practices: top-management commitment, customer focus and satisfaction, quality information and performance measurement, human resource management, employee involvement, teamwork, process management, quality assurance, zero defects, and communication.According to Bayraktar (2008) study, the following critical success factors of TQM were identified: leadership, vision, measurement and evaluation, process control and improvement, program design, quality system improvement, employee involvement, recognition and award, education and training, student focus, and other stake holders focus. There are also Quality Award models such as Malcolm Baldrige National Quality Award (MBNQA, 2005); European Quality Award (EQA, 1994); The Deming Prize (1996); Kanji Business Excellence Model, which provides a useful benchmark framework for industries and help in implementing TQM as well as evaluating their business performance results Therefore it is observed that by using a TQM approach, organizations can increase their capacity to do work, increase the quality of work done and, at the same time, hold staffing levels and budgets at historical levels. RESEARCH METHODOLOGY SAMPLE SIZE A sample size of 50 (employees) is drawn from the organization. SCOPE OF THE STUDY
The study has been undertaken at AP MARKFED, HYD branch using a questionnaire in the following departments where the sample size was 50 and the composition is as follows: Procurement and coordination section, Fertilizers section, Engineering section, Procurement and coordination section, Accounts section and HRD section DATA COLLECTION The study includes both the primary data (structured questionnaire and formal interview) and secondary data which are collected for the study.
ZENITH
DATA ANALYSIS AND INTERPRETATION: Data obtained has been analyzed and interpreted for each questionnaire, percentage method is used. LIMITATIONS OF THE STUDY The study has been conducted by taking a limited sample of 50 which may not give the true picture of population. The study was confined to middle level and junior level management executives excluding top management executives because of their busy schedule. Duration of the study was for period of 3 months which was not sufficient for a detailed study DATA ANALYSIS AND INTERPRETATION TABLE 1 SHOWING TQM AS A CHALLENGING SCENARIO RESPONSE Yes No Neutral Total NO.OF RESPONDENTS 30 10 10 50 PERCENTAGE 60 20 20 100
ANALYSIS The above table indicates that 60%of the employees believe that in a competitive and challenging scenario quality occupies the center stage of all economic activities of the organization. 20% of the employees do not believe that in a competitive and challenging scenario quality occupies the center stage. 20% of the employees are neutral about quality occupying the center stage of all economic activities of the organization.
396
ZENITH
TABLE 2 SHOWING THE ORGANISATIONS FLEXIBLITY IN ADAPTING TO CHANGES ARISING OUT OF QUALITY IMPROVEMENT PROGRAM RESPONSE Yes No Sometimes Total NO.OF RESPONDENTS 25 15 10 50 PERCENTAGE 50 30 20 100
ANALYSIS The above table reveals that 50% of the employees strongly agree that the organization is flexible in adapting changes arising out of quality improvement program. , 30% of the employees do not agree about the organizations flexibility in adopting changes arising out of quality improvement program, 10% of the employees are not sure about the organizations flexibility in adopting changes. TABLE 3 SHOWING EMPLOYEE SOLUTIONS BEING GIVEN IMPORTANCE RESPONSE Yes No Neutral Total NO.OF RESPONDENTS 30 15 5 50 PERCENTAGE 60 30 10 100
ANALYSIS From the above table it is clear that 60% of the employees agree that solutions presented by them are considered for TQM implementation. 30% of the employees feel that solutions presented by them are not taken into consideration for TQM implementation. 10% of the employees are neutral about their solutions being given any importance.
ZENITH
TABLE 4 SHOWING THE ORGANISATION ADOPTING CUSTOMER ORIENTED APPROACH IN ITS ACTIVITIES RESPONSE Yes No May be Total NO.OF RESPONDENTS 28 14 8 50 PERCENTAGE 56 28 16 100
ANALYSIS From the above table it can be inferred that 56% of the employees agree that the organization adopts customer oriented approach and not product oriented approach in all its activities., 28% of the employees do not agree that the organization adopts customer oriented approach and not product oriented approach in all its activities, 16% of the employees are not sure whether the organization adopts customer oriented reproach and not product oriented approach in all its activities. TABLE 5 SHOWING ORGANISATION UNDERTAKING COMPLETE INSPECTION OF GOODS RESPONSE Yes No Neutral Total NO.OFRESPONDENTS 32 12 6 50 PERCENTAGE 65 25 10 100
ANALYSIS It is clear from the table that 65% of the employees agree that the organization undertakes 100% inspection of the goods before delivery, 25% of the employees do not agree that the organization undertakes 100% inspection of the goods before delivery, 10% of the employees are neutral about the organization undertaking 100% inspection of the goods before delivery
ZENITH
TABLE 6 SHOWING ORGANISATION TAKING ISO CERTIFICATION FOR CONTINOUS IMPROVEMENT RESPONSE Yes No Cant say Total NO.OF RESPONDENTS 38 8 4 50 PERCENTAGE 76 16 8 100
ANALYSIS It is inferred from the above table that 76% of the employees agree that the company undertakes initiatives for continuous improvement of the goods produced, 16% of the employees do not agree that the company undertakes initiatives for continuous improvement of the goods produced, 8% of the employees are not sure that the company undertakes initiatives for continuous improvement of the goods produced TABLE 7 SHOWING TQM PRACTICES FOLLOWED IN AP MARKFED RESPONSE Quality circles Statistical quality control NO.OF RESPONDENTS 33 10 PERCENTAGE 66 20
Just in time Any other Total
7 0 50
14
0 100
ANALYSIS The above table reveals that 66% of the employees agree that TQM practice followed by the organization is quality circle. 20% of the employees agree that TQM practice followed by the
ZENITH
organization is just in time, 14 of the employees agree that TQM practice followed by the organization is statistical quality control. TABLE 8 SHOWING SIGNIFICANCE OF CUSTOMER FEEDBACK RESPONSE Yes No Neutral Total NO.OF RESPONDENTS 40 7 3 50 PERCENTAGE 80 14 6 100
ANALYSIS The above table indicates that 80% of the employees agree that customer feedback is obtained the end of every transaction, 14% the employees do not agree that customer feedback is obtained at the end of every transaction. 6% of the employees are neutral about the feedback obtained at the end of every transaction. TABLE 9 SHOWING EMPLOYEES OPINION TOWARDS TQM POLICY LEADING TO A SUPEROIOR PRODUCT RESPONSE Yes No Cant say Total NO.OF RESPONDENTS 44 3 3 50 PERCENTAGE 88 6 6
100
ANALYSIS 88% of the employees feel that superior quality and better product design will lead to the success of TQM, 6% of the employees feel that superior quality and better product design will need to the success of TQM, 6% of the employees feel that superior quality and better product design may or may not lead to the success of TQM.
ZENITH
SUGGESTIONS The organization should widely continue with its customer oriented approach in all its activities. Employees should further be encouraged to obtain customer feedback from all possible sources. 100% inspection of goods should be made universal organizational policy to be followed by all the employees at all the employees. TQM training should be extended to cover more levels and layers of employees and they should be made aware of the award programs instituted for recognizing their efforts in meeting or exceeding quality standards. The organization should actively pursue the issue of ISO certification that will assure the employees and customers of the quality standards followed by it. The organization should focus on specific techniques rather than on the whole system. It should adopt methods that are productive or compatible with its production system and personnel. Techniques that aid TQM like JIT, SQM should be implemented on a wider scale CONCLUSIONS Employees of AP MARKFED are aware of TQM initiatives adopted by the organization. It is flexible enough to adapt quality related changes. The company follows customer oriented approach in its activities. Customers specifications are always met and their feedback is taken at the end of every transaction. Goods are subjected to 100% inspections before the delivery because of which there are no goods returned by the customer. Employees are encouraged to present their work related problems and solutions.
They have a say in quality related decisions. Their suggestions are always considered for implementation. Training programs are organized for imparting TQM related skills to the employees who are meeting the targets. The organizations upgrades itself keeping track of technical innovations While e-government initiatives are increasingly being implemented, they tend to be focused on information provision and the level of interaction between government and citizens through public Web sites is still low.
ZENITH
It is also inferred from the employees that a superior quality and better product design will lead to the success of TQM.
TQM principles are expected to create an organizational environment that fosters
e-government initiatives by encouraging the search for new forms of citizen interaction, promoting the development of new competencies REFERENCES 1. Annual Global Report, available at: http://tnsofres.com/gostudy2002/ 2. Bhatt, G.D. and Emdad, A.F. 2010. An empirical examination of the relationship between IT infrastructures, customer focus, and business advantages. Journal of Systems and Information Technology, Vol.12, 3. Dale H. Besterfield, Carlon Besterfield: TQM, Pearson Educations, 2008. 4. Divya Singhal - Implementing ISO 9001-2000 , PHL , 2008 5. Electronic Journal of e-Government Volume 9 Issue 1 2011 www.ejeg.com 61 Academic Publishing International Ltd 6. Howard S Gilton, Alan J Oppenheim : Quality Management ,TMH , 2008 7. James R. Evans, M. Lindsay: The Management and Control of Quality, Cengage, 2009 8. Kanishka Bedi : Quality Management, Oxford, 2008 9. Khamalah, J. N. and Lingaraj, B. P. 2007. TQM in the service sector: a survey of small business. Total Quality Management,Vol.18 10. Mellor, W. & Parr, V. (2002), Government Online: An International Perspective 11. Pradeep V.Mehta : Introduction To Quality Assurance New Age Publication, 2008 12. Sridhara Bhatt: TQM Text & Cases, Himalaya publications, 2009. 13. Wali, A.A., Deshmukh, S.G. and Gupta, A.D. 2003. Critical success factors of TQM: a select study of Indian organizations. Production, Planning and Control, Vol. 14 14. www.apmarkfed.org
ZENITH
IMPACT OF ISO CERTIFICATION ON TQM PRACTICES IN SMALL AND MEDIUM ENTERPRISES

VIJAYAGIRI BIKSHAPATHI*
*Lecturer in Commerce, SRR Govt. Degree & PG College, Karimnagar,
1. INTRODUCTION Total Quality Management (TQM) has become latest management mantra in globalised and drastically changing business environments. Recently the organisations are considering the TQM as magic cure for improving organizational performance, creating learning organisation, modification of the behaviour of both the employees and the management. Most of past studies have found that TQM has a deep impact on organizational performance be it the large enterprise or the small and medium enterprise (SME). Several researchers have also looked at the concept of Standardisation of Quality (ISO 9000 certification) in relations to the implementation of TQM. This study tries to examine whether ISO certified small and medium enterprises have higher TQM practices as compared to those non ISO certified small and medium enterprises in general in the Hyderabad, India in particular. 2. LITERATURE REVIEW Appreciating the importance of TQM, past studies have verified the issue of ISO 9000 certification in relations to the implementation of TQM. According to Sohail and Teo (2003), some researchers like Bradley (1994) have pointed out the opinion that the ISO 9000 certification is the first step towards the implementation of TQM while some researchers still prefer to maintain focusing on TQM only. They indicated that even though some authors praise the ISO 9000 concept, others view it as a ritualized form of quality management that should not be used in isolation from TQM principles. Briscoe, Fawcett, and Todd (2005) indicated that internalizing the core ISO practices is important in improving performance and ISO 9000 practices must become part of the routine in the organization. It is also proposed by Fenghueih, Ching, and Cleve (1999) that for the maximum benefits of ISO 9000 certification, the efforts undertaken in implementing the standards should be part of a TQM process. Meanwhile, a study by Sun (2000) found that ISO 9000 standards are partially related to the implementation of TQM and the improvement of business performance and therefore it is recommended by the study that ISO 9000 should be incorporated with the philosophy and methods of TQM. In addition, Martinez-Lorente and Martinez Costa (2004) mentioned that despite the beliefs about ISO 9000 as a good first step in the way of implementing TQM, some of the ISO 9000 principles are contradictory once implemented with TQM philosophy. Samuel K Ho (1994) has pointed out 8 characteristics, which are needed in order to implement TQM and
403
ZENITH
ISO 9000 successfully. One of them is TQM is needed in the ISO 9000 system in order to produce quality products and services. This is because even with the ISO 9000 certification in hand, it would not guarantee that the products are of high quality. According to Javier, Antonio, and Mignel (2003), a distinction can be made between the TQM content, elements, processes or practices. It is so-called elements (Waldman, 1994) practices and principles (Dean & Bowen, 1994), values and techniques (Hellsten & Klefsjo, 2000), processes and contents (Reed, Lemak, & Mero, 2000), interventions (Hackman & Wageman, 1995), principles and precepts (Sitkin, Sutcliffe, & Schroeder, 1994), etc. The ISO 9000 series sets out the methods that can be implemented in an organization to ensure customers requirements are fully met (Oakland, 1989). Yahya and Goh (2001) mentioned that ISO 9000 is a management control procedure. It involves a business documenting the processes of design, production, and distribution to ensure that the quality of products and services meets the needs of customers (Quazi, Hong, & Meng, 2002; Pun, Chin, & Lau, 1999). Present study tries to examine impact of ISO certification on TQM practices compared to those of non ISO certified in small and medium enterprises (SMEs). 3.1. OBJECTIVES OF THE STUDY The objectives of the study are; 1. To know the importance of Total Quality Management (TQM) in Small and Medium Enterprises (SMEs) 2. To analyse the differences of TQM practices in between ISO certified and ISO uncertified SMEs 3. To suggest measures to improve the implementation TQM in SMEs 3.2. HYPOTHESIS TO THE STUDY Based on the above objective, the following hypothesis is framed
H0: TQM Practices are not different irrespective of the SMEs whether ISO Certified or not H1. The ISO certification certainly cause significant impact on TQM practices 3.3. DATA SOURCES The study uses both primary and secondary data.
ZENITH
3.3.1. SECONDARY DATA Small and Medium Enterprises or Industries related data has taken from the office of Directorate of Industries, MSME Development Institute Hyderabad, Various Websites, Library resources, Journals, Magazines etc. for supportive and other information. 3.3.2. PRIMARY DATA The primary data has been collected from the respondents of selected small & medium enterprises (SMEs) situated in and around Hyderabad. The survey instrument used here is a questionnaire with multiple choice of answering questions based on Likerts scale. The data collected is majorly qualitative than numerical. The questionnaire consists of total 46 questions divided into 7 constructs, besides 8 questions on profiles of organisation as well as respondents. 3.4. FRAMEWORK OF STUDY Basing on the literature and previous studies a TQM model has been developed to evaluate the practices of TQM in Small and Medium organizations to be surveyed. TQM provides a generic concept for continuous improvement in quality and other performances. Several authors agree that TQM is a philosophy that stresses a systematic, integrated, and consistent perspective involving everyone and everything. However, the definitions of TQM elements vary a lot. For examples, ISO 9000 refers to eight principles of quality management and, the Malcolm Baldrige National Quality Award (MBNQA) shows seven dimensions for a framework of quality management. In this study seven dimensions of TQM are used to evaluate the TQM practices in the SMEs context, namely, Leadership, Quality Culture, Quality System Improvement, Teambuilding, Employees Participation, and Supplier Customer Relations. In fact, the dimensions of the TQM model of this study have much in common with quality management principles of ISO 9000 (ISO, 2000) because most surveyed SME organizations have attained ISO 9000 certificates. It is noted that TQM terminology is not familiar with many SME organizations, so it is used liberally rather than strict terminology in this study. The survey questionnaire developed for this study; have some simplified variables keeping in view of the level of respondent units. The respondent SMEs are unlike the Large Organisations which are not having too technically complex processes like SPC or Process management etc. Thus, the study considered less number of variables than the others did, without compromising the core concept. 3.5. CONSISTENCY AND RELIABILITY TESTING: An internal consistency analysis was performed separately for the items under each of the criteria. The reliability coefficient (Cronbachs alpha) was calculated for each construct and ranged between 0.6796 and 0.9047. The overall coefficient of Alpha value for 46 items of seven constructs together is that Cronbachs Alpha is 0.915322. Thus, each construct individually and the whole questionnaire is a strongly reliable.
405
ZENITH
3.6. SAMPLE More frequently used method by researchers is the rule of thumb because they not often have the information required by the statistical method and because it gives sample size close to those of the statistical method. Rules of thumb are not arbitrary but are based on past experiences with samples which have met the requirements of that statistical method (Neuman, 2000). Thus, with a small chosen population of organizations with ISO certification and also the situation demands for lots of data from each respondent, the sample size of this survey is determined by the rule of thumb. The sampling ratio is about 20% of the population, so the sample size is about 147 is taken but the actual responses received and verified correct are 120. The sampling method chosen is Simple Random Sampling Method, keeping the purpose of the study in view and necessity of having related data on TQM practices of MSMEs. 3.7. SCOPE OF THE STUDY SMEs situated in and around Hyderabad city of which may include manufacturing, engineering, construction, automobile, pharmacy, software, IT and others industrial units. The study has been collected the data from respondents from Feb2008 to June 2009. The sample reflects the facts of these periods only. 3.8. STATISTICAL TOOLS USED The data analyzed with the help of computerised statistical software package SPSS. The study used various statistical tools like percentiles, averages, standard deviation, t-test, chi-square test, Phi-value and Cramers V etc., for its analysis. 4. TOTAL QUALITY MANAGEMENT (TQM) Total Quality Management (TQM) is the integration of all function and processes within the organisation in order to achieve continuous improvement of the quality of goods & services. TQM is essential for todays emerging global markets, but the focus remains on customer satisfaction. The concern for quality from the suppliers is growing rapidly. The term quality covers soft (people) aspects of business where as the terms cost and productivity covers hard notions. Motivating employees, thus certainly result in reduction of cost thereby increase in production. The concept of quality has been integrated in human history for longer time than the cost and productivity as such. The aspects related to TQM are Leadership and Top management commitment, Customer management, Training and education, Team-building, People management and empowerment, Supplier partnership, Quality planning and strategic process management, Rewards and recognition and Effective communication. 5. QUALITY MANAGEMENT STANDARDS (QMS) CERTIFICATION The concept of TQM has evolved from a narrow focus on Statistical Quality Control (SQC) to a broad spectrum of socio-cultural, behavioural and technical issues. Many countries have come up with national Quality Award models to encourage continuous improvement in the processes to
406
ZENITH
achieve business excellence in their companies. Simultaneously emphasis is also laid on the international quality certification so that the companies can become world-class. The most popular quality management standard certification is the ISO:9000 series by the International Organisation for Standardization (ISO). ISO: 9000 SERIES There are three major parts within the ISO: 9000 series against which the quality management system of a company can be developed and assessed. The individual standards are as follows: ISO: 9001 ISO: 9002 ISO: 9003 - Specification for design, development, production, installation and servicing. - Specification for production and installation. - Specification for final inspection and test.
ISO: 9000 is the most comprehensive of the standards, covers the requirements of ISO: 9002 and the controls required to oversee design activities. The appropriate standard to be applied depends upon the activities of the company. The accredited assessment bodies also provide advice to applications on the appropriate standard. The ISO committee constantly reviews these standards and provides a futuristic view. Two revisions have already taken place in these standards. 6. SMALL AND MEDIUM ENTERPRISES (SMEs)- THE SECTOR OVERVIEW There is growing worldwide appreciation of the fact that Small and Medium Enterprises play a catalytic role in the development process of most economies. This position gets reflected in the form of their increasing number and rising proportion in the overall product manufacturing, exports, manpower employment, technical innovations and promotion of entrepreneurial skills. The following Table reflects the contribution of SMEs in some of the developed economies in terms of . SMEs Performance, Investment, Output, Employment, Exports, as well as Criteria for definition. TABLE .1 SMES CONTRIBUTION - GLOBAL Country India U.S.A. Japan Share of total Share of establishments output 95% 98% 99% 40% 61% 52% Share of Employment 45% 53% 72% Share of Criteria exports recognition 35% n.a. 13% Fixed assets Employment Employment for
ZENITH
Taiwan Singapore Korea Malaysia Indonesia
97% 97% 90% 92% 99%
81% 32% 33% 13% 36%
79% 58% 51% 17% 45%
48% 16% 40% 15% 11%
Paid up capital, assets & sales Fixed assets employment Employment Shareholders funds & employment Employment &
Source: DC MSMEs India 6.1. SMEs IN INDIA There are over 6000 products ranging from traditional to high-tech items, which are being manufactured by the MSMEs in India. It is estimated that in terms of value, the sector accounts for about 45 per cent of the manufacturing output and 40 percent of the total exports of the country. The sector is estimated to employ about 4.2 Crore persons in over 1.3 Crore units throughout the country. Further, this sector has consistently registered a higher growth rate than the rest of the industrial sector. 6.2. REIMBURSEMENT SCHEME FOR ISO-9000 CERTIFICATION In order to enhance the competitive strengths of the SME Sector, the Government of India, introduced an incentive scheme for technological up-gradation/ quality improvement and environment management. The scheme provides incentive to undertakings in the Sector for having acquired ISO certification. The Scheme envisages reimbursement of expenses for acquiring ISO9000/14001(or its equivalent) certification, to the extent of 75% of the cost subject to a maximum of Rs. 75,000/- in total. All Micro and Small Scale Enterprises having Entrepreneurs Memorandum (EM) Number are eligible to avail the reimbursement. The units can apply for reimbursement under the Scheme only after obtaining ISO9000/14001/HACCP (or its equivalent) certification. The Scheme is an all India Scheme administered by MSME-DO, Ministry of MSME, Government of India. The Scheme has been decentralised to state level through MSME-DIs w.e.f. 1.4.2007. The Scheme provides one time reimbursement. The amount of subsidy / financial support if already received from the State government/ financial institution shall be adjusted against the entitlement of reimbursement under this Scheme. The Govt. of India has extended the Scheme in the XIth Five Year Plan also. Total 15807 numbers of units have been reimbursed expenses involving an amount of Rs.80.30 crore up to 31st December 2007 since inception of the scheme in 1994. The amount of Rs.7.00 crore were spent in year 2008-09 benefitting 1704 units and an amount of Rs.6.66 crore were spent 2009-10 benefitted 780 units. (Source: www.dcmsme.gov.in).
408
ZENITH
7. RESULTS ANALYSIS AND FINDINGS TQM practices are analysed between the respondent units with the ISO Certification and respondent units without ISO certification. It is specifically done in terms of the seven TQM dimensions; Leadership, Quality Culture, Quality System Improvement, Teambuilding, Employees Participation, and Supplier Customer Relations as mentioned below. It is expected that the comparison may reflect systematic way of doing activities by the ISO Certified organizations and not so with the others. This study also makes a comparison between SME organizations with and without ISO (QMS) certification to determine which activities of total quality management implemented in organizations with certification were better than those without certification. The t-test is used to verify the statistical significance of the differences between the ISO certified and Non-ISO certified organizations for the TQM practices. 7.1. IMPACT OF ISO CERTIFICATION ON LEADERSHIP Leadership is an important factor of total quality management. Leaders are persons who establish the visions and goals of the organization. Their commitment is one of the critical determinants of successfully implementing TQM. Leadership practices promote quality and high performance by creating and maintaining the total involvement of both internal (staff or employees) and external (customers and suppliers) people to achieve the goals of an organization. Therefore, the results of leadership activities in the units with ISO (QMS) certification expected to be higher than that of Non-ISO units. The following table presents the statistics in variable between the two groups. TABLE No:2 IMPACT OF ISO CERTIFICATION ON LEADERSHIP ISO Certified Factor N Group Average Source: Survey Data 90 Mean 4.38 Std. Dev. N 0.88 30 Mean 4.30 Without ISO Certification t-test p-value Std. Dev. (2-tailed) 0.58 .041*
p-values with * mark are Significant at .050 level
These results show that there are statistically significant differences for items such as leadership provides freedom to employees to work and leaders provide required resources and training to employees. The finding (Group Average p-value .041not< .050) suggests that there is sufficient evidence to confirm the leadership activities in the organizations with ISO certification is better than that of without ISO certification.
ZENITH
7.2. IMPACT OF ISO CERTIFICATION ON QUALITY CULTURE Quality Culture is the way imbibing the norms, traditions within the organisation with respect to QMS, total quality management by the people. The Quality Culture is more systemised or more fashioned in the units with ISO (QMS). The Non-ISO units may not have the same. The following table presents the statistics in variable between the two groups. TABLE :3 IMPACT OF ISO CERTIFICATION ON QUALITY CULTURE ISO Certified Factor N Group Average 90 Source: Survey Data Mean 4.32 Std. Dev 0.53 N 30 Mean 4.03 Std. Dev. (2-tailed) 0.80 .028* Without ISO Certification t-test p-value
The results show that there are statistically significant differences for items with * marks. The findings suggest that the evidence is significant (Group Average p-value .028< .050) to confirm the systemisation of Quality Culture in the organizations with ISO certification is better than that of without ISO certification. 7.3. IMPACT OF ISO CERTIFICATION ON QUALITY SYSTEM IMPROVEMENT Quality System Improvement is the way replacing the old system of doing things by new and improved version within the organisation with respect to QMS, total quality management by the people. The Quality System Improvement is more systemised or more scientific in the units with ISO (QMS) than that of Non-ISO units. The following table presents the statistics in variable between the two groups.
410
ZENITH
TABLE .4 IMPACT OF ISO CERTIFICATION ON QUALITY SYSTEM IMPROVEMENT ISO Certified Factor N Group Average Mean Std. Dev N Mean Without ISO Certification Std. Dev. 0.47 t-test p-value (2-tailed) .000*
90
4.55
0.57
30
3.87
Source: Survey Data
The results show that there are statistically significant differences for items with * marks. The findings suggest that the evidence is significant (Group Average p-value .000< .050) to confirm the systemisation of Quality System Improvement in the organizations with ISO certification is better than that of without ISO certification. 7.4. IMPACT OF ISO CERTIFICATION ON TEAM-BUILDING Team-building is the collective way of discharging organisational responsibilities with the same level of mindset within the organisation with respect to QMS, total quality management by the employees. The Team-building is more systemised or more scientific in the units with ISO (QMS) than that of Non-ISO units. The following table presents the statistics in variable between the two groups. TABLE :5. IMPACT OF ISO CERTIFICATION ON TEAM-BUILDING ISO Certified Factor N Group Average Source: Survey Data 90 Mean 4.34 Std. Dev N 0.41 30 Mean 3.67 Std. Dev. (2-tailed) 0.84 .000* Without ISO Certification t-test p-value
The results show that there are statistically significant differences for items with * marks. The findings suggest that the evidence is significant (Group Average p-value .000< .050) to confirm the systemisation of Team-building in the organizations with ISO certification is better than that of without ISO certification.
ZENITH
7.5. IMPACT OF ISO CERTIFICATION ON EMPLOYEES PARTICIPATION The concept of total involvement is the core idea of TQM practices. TQM promotes the wholehearted participation of employees to the organisational duties. The participation of employees is very complex activity that the factors like management style and the working environments do influence. The following table presents the statistics in variable between the two groups. TABLE : 6. IMPACT OF ISO CERTIFICATION ON EMPLOYEES PARTICIPATION ISO Certified Factor N Group Average 90 Source: Survey Data Mean 4.38 Std. Dev 0.39 N 30 Mean 3.98 Std. Dev. (2-tailed) 0.50 .000* Without ISO Certification t-test p-value
The results show that there are statistically significant differences for items with * marks. The findings suggest that the evidence is significant (Group Average p-value .000< .050) to confirm that the Employees Participation in the organizations with ISO certification is better than that of without ISO certification. 7.6. IMPACT OF ISO CERTIFICATION ON RECOGNITION AND REWARDS The participation of employees is very complex activity that the factors like management style and the working environments do influence. TQM promotes the recognition best and dedicated performance; the whole-hearted participation employees etc. are properly rewarded. The following table presents the statistics in variable between the two groups. TABLE: 7 IMPACT OF ISO CERTIFICATION ON RECOGNITION REWARD SYSTEM ISO Certified Factor N Group Average 90 Source: Survey Data Mean 4.18 Std. Dev N 0.56 30 Mean 3.88 Std. Dev. (2-tailed) 0.64 .013* Without ISO Certification t-test p-value
ZENITH
The results show that there are statistically significant differences for items with * marks. The findings suggest that the evidence is significant (Group Average p-value .013< .050) to confirm that the Recognition and Reward System in the organizations with ISO certification is better than that of without ISO certification. 7.7. IMPACT OF ISO CERTIFICATION ON SUPPLIER/CUSTOMER FOCUS The concept of Customer and Supplier Focus is, one of TQM practices, which says the linkage of both the supplier and customer is a must. TQM promotes the whole-hearted Customer and Supplier Focus to the organisational quality objectives. Following table presents the statistics in variable between the two groups. TABLE : 8. IMPACT OF ISO CERTIFICATION ON SUPPLIERS/CUSTOMER FOCUS ISO Certified Factor N Group Average Source: Survey Data 90 Mean 4.63 Std. Dev 0.43 N 30 Mean 4.34 Without ISO Certification Std. Dev. 0.52 t-test p-value (2-tailed) .003*
The results show that there are statistically significant differences for items with * marks. The findings suggest that the evidence is significant (Group Average p-value .003< .050) to confirm that the Customer and Supplier Focus in the organizations with ISO certification is better than that of without ISO certification. 7.8. IMPACT OF ISO CERTIFICATION ON TQM PRACTICES TQM promotes the Holistic approach. It never depends heavily on any one of TQM tools. TQM also called companywide quality management (CWQM) stressing importance of the performance improvement as whole. The following table presents the relevance of various TQM variables in terms of respondents opinions between two groups expressed in different statistical parameters.
413
ZENITH
TABLE: 9 IMPACT OF ISO CERTIFICATION ON TQM Whether ISO Certified Total Yes Strongly Disagree Disagree ALL TQM ATTRIBUTES Undecided Agree Strongly Agree Total Tests Pearson Chi-Square Phi Cramers V Source: Survey Data Value 22.565 .434 .434 Significant at .050 level 8 21 20 21 20 90 Df 4 No 14 4 4 6 2 30 22 25 24 27 22 120 Asymp. Sig. (2-sided) .000 .000 .000
SUMMARY OF RESULTS The results as given in the above paragraphs are summarised below. 6.1. Impact of ISO Certification on Leadership 6.2. Impact of ISO Certification on Quality culture 6.3. Impact of ISO Certification on Quality system improvement Significant, Significant, Significant,
414
The TQM all Constructs collectively analysed between ISO Certified and ISO Not Certified Respondent units to verify any difference on account of TQM practices. The above table shows that there is significant association between two attributes as Pearson Chi-Square tests alpha is .000<.0500. The strength of association between the variables is also generated and which are Phi- Value and Cramers V (.434) found at considerable level. Hence, it is observed that the ISO Certification might have helped the SMEs to perform better. Systematic performance, generated in ISO Certified SMEs, is different from that of ISO uncertified SMEs.
ZENITH
6.4. Impact of ISO Certification on Team-building 6.5. Impact of ISO Certification on Employee participation
Significant, Significant,
6.6. Impact of ISO Certification on Recognition rewarding system Significant, 6.7. Impact of ISO Certification on Supplier customer focus 6.8. Impact of ISO Certification on TQM Practices 7.9. TESTING OF HYPOTHESIS Null Hypothesis (H0) is rejected as all TQM constructs found significant with t-test comparison of means and with Chi-square test. Hence the Alternative Hypothesis is accepted i.e. the ISO (Quality) Certification actually cause significant impact on TQM practices 8. CONCLUSION The results of the study of the impact of ISO certifications on TQM practices in terms of the seven TQM Constructs; Leadership, Quality Culture, Quality System Improvement, Teambuilding, Employees Participation, and Supplier Customer Relations are showing that there is strong relation between the ISO certification and TQM implementation. This study also observes that the total quality management is implemented in organizations with ISO certification were better than those of without ISO certification. Thus the study observes SMEs are doing systematic way of activities due to compliance of ISO guidelines which are certainly helpful for success TQM. 9. SUGGESTIONS The following suggestions are given based on the study to improve efficiency of the SMEs implementing the Total Quality Management as well as effective functioning of SMEs both who are implementing TQM and who are planning to implement TQM. It is suggested that all the SMEs should implement TQM in certain phased manner to get success in the globalised economies. It is suggested that Governmental Co-ordinating agency (i.e. DCMSMEs) should provide the required assistance to implement Total Quality Management in SMEs by providing financial subsidy and guidance. It is suggested to encourage the SMEs to practice TQM and get them registered with certifying bodies like ISO. The Total Quality Management will be effective, have a long lasting life, if the TQM tools are accepted, practiced, integrated and institutionalised as a way of life of employees and of the organisation as the Japanese practice. Significant, Significant.
415
ZENITH
10. REFERENCES 1. Burton, Gummer et al., TQM and Organizational Change and Development Rockfield College Press, Albany, New York, 1999. 2. Cane Sheila, Kaizen strategies for winning through people, Pitman Publications, London, 2000. 3. Drucker, Peter F, Managing for the future: The 1990s and beyond, Tata Mc.GrawHills, New Delhi, 1993, pp 304 & 305. 4. French, Wendell. L., Organization Development 2001 Pearson Education Publishes, New Delhi 2001, Page 91-92. 5. Gopal K Kanji and Mike Asher,100 methods for TQM, Response Books, New Delhi 1996. 6. Gryna Frank M. et al Jurans quality planning and analysis: for enterprise quality Tata Mc. Graw Hill, New Delhi, 5th Ed, 2007. 7. Jaideep Motwani, Sameer Prasad, Jasmine Tata, The evolution of TQM: An empirical analysis using the business process change framework, Journal: The TQM Magazine, Year: Feb 2005 Volume: 17 Issue: 1 Page: 54 - 66 8. Jonas Gomes Da Silva, Ohfuji Tadashi, Nezu Kikuo, Looking through and beyond the TQM horizon: Lessons learned from world-class companies, Journal: The TQM Magazine,Year: Feb 2005 Volume: 17 Issue: 1 Page: 67 84 9. Juan Jos Tar, Components of successful total quality management, Journal: The TQM Magazine, Year: Apr 2005 Volume:17 Issue: 2 Page: 182 - 194 10. Katerina D. Gotzamani, Ypatia D. Theodorakioglou, George D. Tsiotras, A longitudinal study of the ISO 9000 (1994) series' contribution towards TQM in Greek industry The TQM Magazine, Year: 2006 Volume: 18 Issue: 1 Page: 44 - 54
11. Lewis W.G., K.F. Pun, T.R.M. Lalla, An AHP-based study of TQM benefits in ISO 9001 certified SMEs in Trinidad and Tobago, Journal: The TQM Magazine, Year: 2005 Volume: 17 Issue: 6 Page: 558 - 572 12. Lindsay, William, Total Quality and Organisation Development, St.Lucie Press, USA, 1992 13. Newman, Karim & Alan Cowling (1996) Service Quality in Retail Banking. International Journal of Bank Marketing. Vol 14, Issue 6
ZENITH
14. Noorliza Karia, Muhammad Hasmi Abu Hassan Asaari The effects of total quality management practices on employees' work-related attitudes Journal: The TQM Magazine Year: 2006 Volume: 18 Issue: 1 Page: 30 43 15. Nusrah Samat et al, Do ISO Certified SME's have Higher Quality Practices? Empirical Insights from the Northern Region of Malaysia International Journal of Business and Management, Vol. 3, No. 3 16. Pattanayak Biswajeet & Rajnish Kumar Mishra, Organisation Development, Productivity, Vol. No. 43, No. 1, Apr-June 2002, Page 97. 17. Prakash J. Singh, Alan J.R. Smith, Relationship between TQM and innovation: an empirical study, Journal: Journal of Manufacturing Technology Management, Year: Jul 2004 Volume: 15 Issue: 5 Page: 394 401 18. Rajasekhara Swamy, An Empirical Study of Total Quality Management (TQM) Practices in Indian Tyre Industry Unpublished Ph.D. thesis submitted to Faculty of Commerce, University of Mysore, 2007. 19. Rajendra kumar, N. Total Quality Management in the context of HRM thesis(unpublished) submitted to Dept. of Business Management, Osmania University, Nov, 2002 20. Roger Williams, Ton van der Wiele, Jos van Iwaarden, Rolf Visser, TQM: why it will again become a top management issue, International Journal of Quality & Reliability Management, Year: Aug 2004, Volume: 21, Issue: 6, Page: 603 - 611 21. Sadiq Sohail M., Teo Boon Hoong, TQM practices and organizational performances of SMEs in Malaysia: Some empirical observations, Journal: Benchmarking: An International Journal, Year: Feb 2003 Volume: 10 Issue: 1 Page: 37 53. 22. Saffran, Norbet and Ulrike Vogt. (1999) Case study; ISO 9000; Implementation; Quality system; Total Quality Management at Deutsche Bank AG; Management Systems, Inc., Wilmette, IL. Annual Quality Congress, Anaheim, CA, Vol. 53, MAY 1999
23. Samuel K.Ho.,TQM an integrated approach, crest publications, New Delhi, Ed. 1st, 2002, Page 49. 24. Sangeeta, Total Quality Management and Business Performance-A select study of IT industry, Unpublished Ph.D. thesis submitted to Faculty of Commerce, Delhi University, 2003. 25. Shamsuddin Ahmed, Masjuki Hj. Hassan, Zahari Taha, State of implementation of TPM in SMIs: a survey study in Malaysia, Journal: Journal of Quality in Maintenance Engineering, Year: Jun 2004 Volume: 10 Issue: 2 Page: 93 106
ZENITH
26. Usha M, "Quality management in Small Scale Sector, Kanwasa Publications, Hyderabad, 1995, A published M.Phil, Dissertation submitted to Dr.B.R. Ambedkar Open University, and CESS, Hyderabad. 27. Vikaskumar, Dixit Garg & N.P. Mehta, JIT/TQM Quality Techniques in Indian Industries, Productivity, Vol. 42, No. 4, Jan March 2002, Page 589. 28. Zhihai Zhang, Implementation of Total Quality Management- An Empirical Study of Chinese Manufacturing Firms Published Ph.D. thesis submitted to Faculty of Management and Organization of the University of Groningen in the Netherlands in 2000.
418
ZENITH
EFFICIENCY OF STOCK MARKETS - COMPARING THE BEHAVIOR OF STOCK INDICES OF NSE AND NYSE
DR. A. PATRICK*; MRS.R.SUSHAMA**
*Sr. Assistant Professor, Department of Commerce, OU, Hyderabad - 07. **Research Scholar, Department of Business Management, OU and Sr. Assistant Professor, Badruka College PG Centre, Hyderabad - 27.
INTRODUCTION Market efficiency has an influence on the investment strategy of an investor because if market is efficient, selecting the winners will be a waste of time. In an efficient market there will not be any under valued securities offering higher than deserved expected returns, at a given risk. On the other hand if markets are not efficient excess returns can be earned by correctly picking the winners. In this paper, a comparative analysis of stock indices of BSE and NYSE is carried out to test the efficiency level in respective stock markets and the random walk nature of the stock market is tested by using the run test and the autocorrelation function ACF (k). For many years economists, statisticians and teachers of finance have been interested in developing and testing models of stock behavior. One important model that has evolved from this research is the theory of random walks. This theory casts serious doubt on many methods for describing and predicting stock behavior-methods that have considerable popularity outside the academic world. The Random Walk Hypothesis of stock prices is concerned with the question of whether one can predict the future prices based on the past prices. In simple terms this theory states that price changes cannot be predicted from earlier changes in any meaningful manner. Successive price changes in individual securities are independent over time and price changes occur without any significant trend or pattern. Thus past prices in no way can guide us to predict the future behavior. The Efficient Market hypothesis (EMH) assumes that stock prices adjust rapidly to the arrival of new information, and thus, current prices fully reflect all available information. Fama (1970) Formalized the theory, organized the empirical evidence, and divided the EMH into three subHypotheses. The weak-form EMH states that current stock prices fully reflect all historical Market information such as: prices, trading volumes, and any market oriented information. The semi strong-form EMH asserts that prices fully reflect not only the historical information but also all public information including non-market information, such as earning and dividend announcements, economic and political news. Finally the strong-form EMH contends that stock prices reflects all information from historical, public, and private sources, so that no one investor can realize abnormal rate of return. Stock market efficiency is an important concept, both in terms of an understanding of the working of stock markets and in their performance and contribution of the development of a countrys economy. If the stock market is efficient, the prices will represent the intrinsic values of the stocks and in turn, the scarce savings will be
ZENITH
optimally allocated to productive investments in a way that benefits both individual investors and the country economy. The weak form of EMH states that the current prices fully reflect the entire information found in the record of past prices and volumes. In an efficient market at a given instant of time the prices are assumed to reflect all available information. Hence one would expect the current price of security to be good estimate of its intrinsic values. If the adjustment to new information is instantaneous then successive price changes will be independent. BRIEF REVIEW OF LITERATURE Burton G. Malkiel in his article The efficient market hypothesis and its critics has examined the attacks on the efficient market hypothesis and the relationship between predictability and efficiency. He concludes that the stock markets are more efficient and less predictable. He further suspects that the end result will not be an abandonment of the belief of many in the profession that the stock market is remarkably efficient in its utilization of information. Periods such as 1999 where bubbles seem to have existed, at least in certain sectors of the market, are fortunately the exception rather than the rule. More ever, whatever patterns or irrationalities in the pricing of individual stock that have been discovered in a search of historical experience are unlikely to persist and will not provide investors with a method to obtain extraordinary returns. Sharma and Kennedy (1977) compared the behavior of stock indices of the Bombay, London and New York Stock Exchanges during 1963-73 using run test and spectral analysis. Both run tests and spectral analysis confirmed the random movement of stock indices for all the three stock exchanges. They concluded that stock on the BSE obeys a random walk and is equivalent in the markets of advanced industrialized countries. Kulkarni(1978) investigated the weekly RBI stock prices for Bombay, Calcutta, Delhi, Madras and Ahmedabad stock exchanges and monthly indices of six different industries by using spectral method. He concluded that there is a repeated cycle of four weeks for weekly prices and seasonality in monthly prices. This study has thus rejected the hypothesis that stock price changes were random. Yalawar(1988) studied the month end closing prices of 122 stocks listed on the Bombay Stock Exchange during the period 1963-82. He used only the non-parametric tests Spearmans rank correlation test and run test. 21 out of 122 lag 1 correlation coefficients were significant at 5% significance. Iqbal has tested the semi-strong form of efficient market hypothesis by examining the stock price responses to quarterly earnings announcements. The study period he had chosen was from June 2000 to June 2004. In his study he has used non-parametric tests and sign test. The purpose of the study is to ascertain and compare how stock prices respond to earnings on quarterly basis and also for the same quarter of different years. For all the three portfolios under market model with raw returns and market model with log returns stock price behavior around quarterly earnings on an average produced abnormal returns in pre- and post- announcements periods. Further, the abnormal returns were found to persist up to 31 trading days subsequent to to the quarterly
420
ZENITH
earnings announcement day. This clearly indicates that the stock price adjustment to quarterly earnings announcement is delayed and it persists throughout the event window. Hence, the results of this study contradict semi-strong form of efficient market hypothesis. RESEARCH METHODOLOGY SOURCES OF DATA, SAMPLING TECHNIQUE AND SAMPLE SIZE Since the test of weak form of EMH , in general, has come from the random walk literature, so the present study is testing whether successive price changes are independent of each other or not . The present study uses secondary data. The data is collected from Yahoo finance.com and weekly closing values of NIFTY and NYSE Composite are taken from Jan 2007 to October 2011. . SCOPE OF THE STUDY The present study has used the data pertaining to leading stock indices NIFTY and NYSE Composite and analysis is been done using the data of four years (i.e. from Jan 2007 to October 2011). TOOLS OF ANALYSIS In the present study Autocorrelation and Run test is used for testing the efficiency of the stock markets. AUTOCORRELATION ACF(K) Autocorrelation is one of the statistical tools used for measuring the dependence of successive terms in a given time series. Therefore it is used for measuring the dependence of successive share price changes. It is the basic tool used to test the weak form of EMH. The autocorrelation function ACF (k) for the time series Yt and the k-lagged series Yt-k is defined as:
ACF(K)=
-)(yt-k- ) ___________________
Where is the overall mean of the series with n observations.
ZENITH
The standard error of ACF(k) is given by: Se ACF(k) = 1 _____________ n-k Where n is sufficiently large (n 50), the approximate value of the standard error of ACF(k) is given by : Se ACF(k) = 1 _________ (n) To test whether ACF (k) is significantly different from zero, the following distribution of t is used, i.e., t=ACF(k)/Se ACF(k) For both random variable series and series with trends, ACF (k) will be very high and decline as the lag value (k) increases. At the same time the ACF (k) of the first difference series (price changes or returns) are statistically insignificant when the series is a random walk series. A random walk series drifts up and down over time. In some situation it may be difficult to judge whether a trend or drift is occurring. Hence to determine whether a series has significant trend or whether it is a random walk, the t- test is applied on the series of first differences. RUN TEST Run test is a non-parametric test. It depends only on the sign of the price change but not on the magnitude of the price. It does not require the specification of the probability distribution. It depends only on the sign of the price change. It is essentially concerned with the direction of changes in the time series. A Run test may be defined as a sequence of price changes of the same sign preceded and followed by price changes of different sign. In a given time series of stock prices there are three possible types of price changes, namely positive, negative and no change. This gives three types of runs. A positive (negative) run is a sequence of positive (negative) price changes preceded and succeeded by either negative (positive) or zero price change. Similarly, a zero run is sequence of zero price changes preceded and succeeded by either negative or positive price change. Under the hypothesis that the successive price changes are independent and the sample proportion of positive, negative and zero price changes are unbiased estimates of population proportions, the expected number of runs of all the types is computed as follows(by Wallis, Robert(1956)),
422
ZENITH
M= Where M=Expected number of runs ni = Number of price changes of each sign (i=1,2,3) N = Total number of price changes = n1+n2+n3
The standard error of the expected number of runs of all signs may be obtained as:
3i=1 n (3i=1 n2i + N(N+1) m

= [
3 2 3 - 2N i=1 n i N ]
______________________________________________
N3(N-1)
Where N is sufficiently large, the sampling distribution of expected number of runs of all types is approximately normally distributed with mean M and standard deviation m. LIMITATIONS OF THE STUDY 1. The study is limited to stock indices NIFTY-50 and NYSE-Composite only. 2. Only weak form of efficiency is been tested in this study. 3. Data pertaining to years 2007 to 2011 is only included for the study. RESULTS AND DISCUSSION
Autocorrelations of weekly closing values of the two indices NIFTY-50 and NYSE-Composite are summarized in table no.1:
ZENITH
TABLE 1: AUTOCORRELATIONS OF WEEKLY CHANGES IN STOCK INDICES Lag(k) N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Standard error NIFTY-50 246 0.034756 0.034059 0.033194 0.032362 0.031445 0.030597 0.029717 0.028861 0.027942 0.026975 0.026096 0.025283 0.024478 0.02358 0.002268 0.021548 0.020404 0.019218 0.018075 0.016976 0.0638 NYSE Composite 246 0.983253 0.967205 0.948643 0.931451 0.916863 0.899488 0.880963 0.863416 0.84332 0.824961 0.80721 0.790158 0.775369 0.757854 0.739091
0.716925 0.693096 0.66792 0.644086 0.619047 0.0638
ZENITH
Source: Calculated based on secondary data For NIFTY-50, the autocorrelation coefficient for lag 1 is 0.034756, which is very much smaller than twice the standard error(=2*.0638). Thus the autocorrelation doesnt differ significantly from zero. From the table, we can see that out of 20 autocorrelation computed for NIFTY-50 none of them differ significantly from zero. For NYSE-Composite, the autocorrelation coefficient for lag 1 is .983253, which is very much larger than twice the standard error (=2*.0638). Thus the autocorrelation differ significantly from zero. From the above table, we can see that all the 20 autocorrelation computed for NYSEComposite differs significantly. The t-values of the autocorrelations corresponding to the stock indices NIFTY-50 and NYSEComposite are given in the following table: TABLE 2: T-VALUES OF THE AUTOCORRELATIONS CORRESPONDING TO THE STOCK INDICES Lag(k) N 1 2 3 4 5 6 7 8 9 10 11 12 NIFTY-50 246 0.545 0.534 0.52 0.507 0.493 0.479 0.465 0.452 0.438 0.423 0.409 0.396 NYSE Composite 246 15.412 15.1599 14.869 14.599 14.37 14.09 13.81
13.53 13.21 12.93 12.65 12.38
ZENITH
13 14 15 16 17 18 19 20 Standard error
0.384 0.369 0.0355 0.337 0.319 0.301 0.283 0.266 0.0638
12.15 11.88 11.58 11.24 10.86 10.47 10.09 9.7 0.0638
Source: Calculated based on secondary data. The t-values of the autocorrelations corresponding to the stock index NIFTY-50 are lesser than 1.96 (at 5% level of significance). Thus it can be concluded that stock index NIFTY-50 is unbiased random time series and the stock market (NSE) is weakly efficient in pricing its securities. The t-values of the autocorrelations corresponding to the stock index NYSE-Composite are greater than 1.96 (at 5% level of significance). Thus it can be concluded that the stock index NYSE-Composite is biased random time series and the stock market (NYSE) is not weakly efficient in pricing its securities. To verify this, run test is performed. With the help of run test the null hypothesis that the price changes are independent is been tested. The result of the run test is as follows: TABLE 3: RUN ANALYSIS OF WEEKLY CLOSING VALUES OF STOCK INDICES Index NIFTY-50 n 245 n1 138 128 n2 107 117 n3 0 0 R 114 119 m 38.27 104.96 Z -1.34 -1.99
NYSE-Composite 245
Source: Calculated based on secondary data Where n= Total number of observations N1=Ups ; n2= Downs; n3=zeros; N=n1+n2+n3; R= Total number of observed runs;
ZENITH
m = Standard error; Z= Standardised Variable. The results show that NIFTY-50 shows weak form of market efficiency whereas NYSEComposite is unbiased random time series data. The stocks the index NIFTY-50 absorb the price information effectively. But the results regarding NYSE-Composite is different, having Z value of -1.99 which is significant at 5% level. CONCLUSION The assumption that the stock prices are random is basis to the Efficient Market Hypothesis and Capital Asset Pricing Model. The study carried out in this paper has compared the weak form of efficiency of NSE and NYSE and has presented the evidence of efficient form of NSE and inefficient form of NYSE. From autocorrelation analysis and runs test it can be concluded that the series of stock indices of NSE is unbiased random time series whereas stock indices of NYSE is biased random time series. The autocorrelation analysis indicates that the behavior of share prices confirms the applicability of the random walk model in the Indian stock market whereas applicability of the model is not confirmed in NYSE. Thus there are undervalued securities in the NYSE and the investors can always make excess returns by correctly picking them. BIBLIOGRAPHY 1. Anand Pandey, Efficiency of Indian Stock Market, SSRN id 474921, Oct 2003. 2. Burton G. Malkiel, A Random Walk Down Wall Street, book by W. W. Norton & Company. 3. Chandra, Prasanna Investment Analysis and Portfolio Management, second edition, Tata McGrawhill publishing company limited, pp 302 4. Fama, Eugene F., The Behavior of Stock Market Prices, Journal of Business, XXXVIII (January, 1965) p.p. 34-45 5. Graham Smith, Random walks in Middle Eastern stock markets, Applied Financial Economics, Apr 2007.
6. Iqbal, Efficiency of Indian Stock Market: Study of Stock PRICE responses to Earnings Announcements of selected companies listed on BSE , Finance India, Vol. XXIV No.4, December 2010, pp. 1383-1389. 7. www.yahoofinance.com 8. www.nscindia.com 9. www.nyse.com
ZENITH
PERFORMANCE EVALUATION OF OPEN ENDED SCHEMES OF MUTUAL FUNDS

DR. VIKAS KUMAR*
*Guest Faculty, Department of Commerce, Sri Harischandra Post Graduate College, Varanasi.
INTRODUCTION Household savings play an important role in domestic capital formation. Only a small part of the household savings in India is channelized to the capital market. Attracting more household savings to the capital market requires efficient intermediation. Mutual funds have emerged as one of the important class of financial intermediaries which cater to the needs of retail investors. Mutual funds have become an important vehicle for mobilization of savings particularly from the household sector. Mutual funds are one of the most favoured investment routes for the small and medium investors across the world. Ideally, Mutual funds provide opportunities for small investors to participate in the capital market without assuming a very high degree of risk. An important principle of investment in capital market is that do not put all the eggs in one basket i.e. diversification. A small investor is not able to have a diversified portfolio mainly due to paucity of resources. However, a mutual fund pools together the savings of such small investors and invests the same in the capital market and passes the benefits to the investors. Thus, investors can indirectly participate in the capital market by subscribing to the units of mutual funds. Mutual funds employ professional fund managers to manage the investment activities. Therefore, investors also get benefits of professional expertise of these managers. OBJECTIVES OF THE STUDY 1. To examine the funds sensitivity to the market fluctuation in the terms of Beta. 2. To appraise the performance of mutual funds with regard to risk-return adjustment, the model suggested by Sharp, Treynore and Jensen. SIGNIFICANCE OF THE STUDY Evaluating historical performance of mutual funds is important both for investors as well as portfolio managers. It enables an investor to access as to how much return has been generated by the portfolio manager and what risk level has been assumed in generating such returns. Further, an investor can also appraise the comparative performance of different fund managers. Similarly fund managers would also be able to know their performance over time and also vis-avis that of other competitors in the industry. The evaluation also provides a mechanism for identifying strengths and weaknesses of fund managers in the investment process, which helps them to take corrective actions.
428
ZENITH
BENCHMARK INDEX For this study, broad-100 shared base BSE National Index has been used as a proxy for market index this is because BSE National index is comparatively for broad based than BSE Sensex that is constituted of 30 shares only. Hence it would cover the majority percentage of different scheme portfolios and therefore is expected to provide better performance benchmark. RISK FREE RATE Risk free rate of return refers to that minimum return on investment that has no risk of losing the investment over which it is earned. For the present study, it has been marked as 6% (.06) per annum or 0.005 per month. PERIOD OF STUDY The growth oriented schemes, which have been floated by the selected funds during the period Jan. 2000 to Dec. 2009, have been considered for the purpose of the study. Monthly Net Asset Value (NAV) as declared by the relevant mutual funds from the Jan. 1st 2000 of a particular scheme to 31st Dec. 2009 has been used for the purpose. DATA This study examines 20 open-ended schemes being launched by selected five mutual funds namely LIC, HDFC, ICICI, Reliance and Birla Sun Life. These schemes have been selected on the basis of regular data availability during the period of Jan. 2000 to Dec. 2009. Monthly Net Asset Value (NAV) data has been used and the period of the data considered is from the date 1st Jan. 2000 of the scheme or from the date of availability till Dec. 31, 2009. LIMITATIONS OF THE STUDY For the purpose of performance evaluation, those schemes have been selected which are in operation since last 10 years. These schemes relate to five mutual funds namely LIC, HDFC, ICICI, Reliance and Birla Sun Life. Only open ended schemes have been considered for this purpose. Performance evaluation of all the schemes operated by selected mutual funds was not possible because of non availability of sufficient data. Table 5.1 depicts the list of sample scheme selected for study, these schemes relate to five mutual funds namely LIC Mutual Fund, HDFC Mutual Fund, ICICI Mutual Fund, Reliance Mutual Fund and Birla Sun Life Mutual Fund. Only open ended schemes have been considered for this purpose. Out of 20 schemes 13 schemes are equity schemes 4 are debt schemes and remaining 3 are balanced schemes.
429
ZENITH
TABLE 5.1 LIST OF MUTUAL FUNDS SCHEMES STUDIED Name of the Scheme Equity Scheme Birla Sun Life Buy India Fund Birla Sun Life Equity Fund Growth Birla Sun Life India Opportunities Fund Birla Sun Life MNC Fund HDFC Top 200 Growth ICICI Prudential FMCG Growth ICICI Prudential Growth Plan ICICI Prudential Tax Plan Growth LIC Equity Fund Growth LIC Growth Fund Growth LIC Tax Plan Growth Reliance Growth Fund Reliance Vision Growth Debt Scheme Birla Sun Life Income Fund Birla Sun Life Income Plus Growth Birla Sun Life Monthly Income Plus ICICI Prudential Income Fund Growth Balanced Schemes Birla Sun Life 95 Growth 10/02/1995 03/03/1997 21/10/1995 14/07/1999 09/07/1998
Date of Launch
15/01/2000 27/08/1998 27/12/1999 22/04/1994 11/09/1996 31/03/1999 09/07/1998 19/08/1999 15/02/1999 03/02/1999 03/02/1999 08/10/1995 08/10/1995
ZENITH
Birla Sun Life Freedom Fund Growth ICICI Prudential Balance Growth
22/10/1999 03/11/1999
Different scheme launch in different dates therefore, for the purpose performance evaluation the period covers Jan, 2000 to Dec. 2009. The parameters like average return, standard deviation, coefficient of determination, Beta, Sharpe ratio, Treynor ratio, Jensons measures, etc. has been calculated separately for all the schemes. TABLE 5.2 AVERAGE RETURN EARNED BY THE SCHEMES Name of the Scheme Equity Scheme Birla Sun Life Buy India Fund Birla Sun Life Equity Fund Growth Birla Sun Life India Opportunities Fund Birla Sun Life MNC Fund HDFC Top 200 Growth ICICI Prudential FMCG Growth ICICI Prudential Growth Plan ICICI Prudential Tax Plan Growth LIC Equity Fund Growth LIC Growth Fund Growth LIC Tax Plan Growth Reliance Growth Fund Reliance Vision Growth Debt Scheme 0.014665 0.019982 0.010991 0.016069 0.019883 0.014816 0.015230 0.020373 0.011283 0.011397 0.008421 0.024002 0.025032
Return
ZENITH
Birla Sun Life Income Fund Birla Sun Life Income Plus Growth Birla Sun Life Monthly Income Plus ICICI Prudential Income Fund Growth Balanced Schemes Birla Sun Life 95 Growth Birla Sun Life Freedom Fund Growth ICICI Prudential Balance Growth
0.007495 0.007665 0.008938 0.007817
0.015434 0.009223 0.011527
Table 5.2 shows the average return earned by the various schemes. For calculation of average return earned by the schemes Growth in the value for each month over the previous month has been divided by the value of the previous month. Then the average of the full series has been taken. In equity schemes Reliance vision growth 0.025032, Reliance growth fund 0.024002, ICICI prudential tax plan growth 0.20373, Birla Sun Life equity fund Growth 0.019982 and HDFC top 200 Growth 0.019883 are the higher return earners as against BSE 100 return (0.017370), LIC tax plan growth, with 0.008421 has shown the worst performance as against BSE 100 return of 0.017370. It could be seen here that 8 out of 13 the equity schemes has underperform the market. In debt scheme, Birla Sun Life Income Fund 0.007495, Birla Sun Life Income Plus Growth 0.007665, Birla Sun Life Monthly Income Plus 0.008938, ICICI Prudential Income Fund Growth 0.007817. Debts schemes are registered underperform against the BSE 100 index. In Balanced Schemes, Birla Sun Life 95 growth 0.0154, Birla Sun Life freedom fund growth 0.092 and ICICI Prudential balanced growth 0.0115 has underperformed the BSE 100 return 0.017370. Out of the total of 20 schemes studied, 5 schemes showed average return higher than that of BSE 100 average return out of which 5 are equity schemes. Table 5.3 shows the standard deviation of selected schemes. it is the most common expression to measure risk of the fund return. Higher the value of standard deviation of the fund returns, greater will be the total risk carried by the fund. It is observed that the maximum deviation of funds return is shown by ICICI Prudential tax Plan growth 0.101619 followed by Reliance Vision Growth 0.101581, Birla Sun Life India Opportunity Fund 0.101142, Birla Sun Life Equity Fund Growth 0.094323, Birla Sun Life MNC Fund 0.092142. Birla Sun Life Monthly Income plus was least risky scheme with lowest standard deviation 0.017068. Standard Deviation of benchmark BSE 100 index is 0.120745.
432
ZENITH
TABLE 5.3 STANDARD DEVIATION Name of the Scheme Equity Scheme Birla Sun Life Buy India Fund Birla Sun Life Equity Fund Growth Birla Sun Life India Opportunities Fund Birla Sun Life MNC Fund HDFC Top 200 Growth ICICI Prudential FMCG Growth ICICI Prudential Growth Plan ICICI Prudential Tax Plan Growth LIC Equity Fund Growth LIC Growth Fund Growth LIC Tax Plan Growth Reliance Growth Fund Reliance Vision Growth Debt Scheme Birla Sun Life Income Fund Birla Sun Life Income Plus Growth Birla Sun Life Monthly Income Plus ICICI Prudential Income Fund Growth Balanced Schemes Birla Sun Life 95 Growth 0.069698 0.017836 0.018286 0.017068 0.020414
Standard Deviation
0.078953 0.094323 0.101142 0.092142 0.085865 0.072029 0.083047 0.101619 0.090185 0.090832 0.090893 0.090922 0.101581
ZENITH
0.060821 0.062286
All the schemes selected for study less standard deviation then BSE 100 Index. It means all the schemes are less risky than benchmark index, but equity schemes are more risky then balance scheme and Debt schemes because in the case of equity schemes shows higher standard deviation in comparison to balance schemes and debt schemes. Categorizations of Schemes Table 5.3 (a) presents the risk return grid of Mutual Funds. After classification of the sample schemes in to risk return category 15 schemes falls in category 1st i.e. Low Return Low Risk. Out of 15 schemes 8 are equity schemes, 4 are Debt schemes and remaining 3 are balanced schemes. Further five schemes fall in 2nd category i.e. High return and low risk. These five schemes are Reliance growth fund, Reliance Vision Growth, ICICI Prudential tax plan growth, Birla Sun Life Equity Fund Growth and HDFC Top 200 Growth. No schemes fall in 3rd category i.e. High Return and High Risk and 4th category i.e. Low Return and High Risk because all the schemes have lower standard deviation then benchmark BSE 100 index. TABLE 5.3 (A) RISK RETURN GRID OF MUTUAL FUNDS SCHEMES Category 1 LIC Tax Plan Growth Birla Sun Life India Opportunities Fund LIC Equity Fund Growth LIC Growth Fund Growth Birla Sun Life Buy India Fund ICICI Prudential FMCG Growth ICICI Prudential Growth Plan Birla Sun Life MNC Fund Birla Sun Life Income Fund
434
Category 2 Reliance Growth fund Reliance Vision Growth ICICI Prudential tax plan growth
Birla Sun Life Equity Fund Growth HDFC Top 200 Growth
ZENITH
Birla Sun Life Income Plus Growth ICICI Prudential Income Fund Growth Birla Sun Life Freedom Fund Growth ICICI Prudential Balance Growth Birla Sun Life 95 Growth Birla Sun Life Monthly income Plus Category 3 No sample scheme Category 4 No sample scheme
TABLE 5.4 CO-EFFICIENT OF DETERMINATION (R2) Name of the Scheme Equity Scheme Birla Sun Life Buy India Fund Birla Sun Life Equity Fund Growth Birla Sun Life India Opportunities Fund Birla Sun Life MNC Fund HDFC Top 200 Growth ICICI Prudential FMCG Growth ICICI Prudential Growth Plan ICICI Prudential Tax Plan Growth LIC Equity Fund Growth LIC Growth Fund Growth LIC Tax Plan Growth 0.4039 0.4907 0.4147 0.2571 0.4765 0.2885 0.5184 0.4488 0.5092 0.4091 0.4186
R2
ZENITH
Reliance Growth Fund Reliance Vision Growth Debt Scheme Birla Sun Life Income Fund Birla Sun Life Income Plus Growth Birla Sun Life Monthly Income Plus ICICI Prudential Income Fund Growth Balanced Schemes Birla Sun Life 95 Growth Birla Sun Life Freedom Fund Growth ICICI Prudential Balance Growth
0.4365 0.3306
0.0092 0.0148 0.3576 0.0023
0.5140 0.4022 0.4791
Table 5.4 shows that Coefficient of determination (R2), the coefficient measure to extent to which market index has been able to explain the variation in mutual fund. The table 5.4 remains that in the equity schemes the maximum and minimum values of (R2) where found in case of ICICI prudential growth plan (0.5184) and Birla Sun Life MNC fund (0.2571) respectively. The low value of (R2) indicates less diversification of the portfolio. High Value of (R2) in case of ICICI prudential growth plan shows high diversification of the portfolio that can be easily contains the market variability. Thus it could be seem that the schemes like LIC equity fund growth (0.5092), Birla Sun Life Equity fund growth (0.4907), HDFC top 200 growth (0.4765), ICICI prudential tax plan growth (0.4488) and Reliance growth fund (0.4365) have reasonably exploited the diversification strategy for performing their portfolios. However for other schemes the lower value of (R2) indicates that the market does not explain substantial part of variation in the return of a particular scheme. This suggests that the portfolio of the scheme is inadequately diversified in debt scheme. In debt scheme generally a low (R2) value for majority of the scheme that portfolio of is scheme is generally confined to investment in shares of particular type of companies only. For the, in Balanced Schemes a high (R2) value of the schemes show that the portfolio of these schemes is adequately diversified. Table 5.5 presents the systematic risk of 20 schemes. Considered for the purpose of this study in all the scheme have beta less than 1 (i.e. market beta) implying thereby that these schemes tended to hold portfolios that were less risky than the market portfolio. It was observed that highest beta in the case of ICICI prudential tax plan growth 0.589844 followed by Birla Sun Life Equity Fund Growth 0.57253, Birla Sun Life India Opportunity Fund 0.54895, LIC Equity
ZENITH
Fund Growth 0.53301, Reliance Growth Fund 0.52993, and lowest beta in the case of Birla Sun Life income plus growth 0.02204. TABLE 5.5 BETA Name of the Scheme Equity Scheme Birla Sun Life Buy India Fund Birla Sun Life Equity Fund Growth Birla Sun Life India Opportunities Fund Birla Sun Life MNC Fund HDFC Top 200 Growth ICICI Prudential FMCG Growth ICICI Prudential Growth Plan ICICI Prudential Tax Plan Growth LIC Equity Fund Growth LIC Growth Fund Growth LIC Tax Plan Growth Reliance Growth Fund Reliance Vision Growth Debt Scheme Birla Sun Life Income Fund Birla Sun Life Income Plus Growth Birla Sun Life Monthly Income Plus ICICI Prudential Income Fund Growth 0.17482 0.02204 0.09035 0.12054 0.42993 0.57253 0.54895 0.40532 0.49090 0.33660 0.51217 0.58984 0.53301 0.48114 0.49201 0.52993 0.51795
Beta ()
ZENITH
Balanced Schemes Birla Sun Life 95 Growth Birla Sun Life Freedom Fund Growth ICICI Prudential Balance Growth 0.43115 0.32581 0.36749
TABLE 5.6 SHARPE OF THE SCHEMES Name of the Scheme Equity Scheme Birla Sun Life Buy India Fund Birla Sun Life Equity Fund Growth Birla Sun Life India Opportunities Fund Birla Sun Life MNC Fund HDFC Top 200 Growth ICICI Prudential FMCG Growth ICICI Prudential Growth Plan ICICI Prudential Tax Plan Growth LIC Equity Fund Growth LIC Growth Fund Growth LIC Tax Plan Growth Reliance Growth Fund Reliance Vision Growth Debt Scheme Birla Sun Life Income Fund 0.139881 0.122417 0.158833 0.059232 0.120131 0.173323 0.136275 0.123182 0.151283 0.069671 0.070432 0.037636 0.208988 0.197199
Sharpe
ZENITH
Birla Sun Life Income Plus Growth Birla Sun Life Monthly Income Plus ICICI Prudential Income Fund Growth Balanced Schemes Birla Sun Life 95 Growth Birla Sun Life Freedom Fund Growth ICICI Prudential Balance Growth
0.145737 0.230694 0.137973
0.149705 0.069438 0.104787
Table 5.6 depicts value of Sharpes reward to variability ratio. It is an excess return earned over risk free return per unit of risk involved, i.e. per unit of standard deviation. Positive value of the index shows good performance it could be seen that 15 out of 20 schemes have recorded better Sharpe index than the BSE National Index. This indicates 75 percent schemes have outperformed the BSE national index. Five schemes namely LIC Growth Fund Growth 0.070432, LIC Equity Fund Growth 0.069671, Birla Sun Life Freedom Fund Growth 0.069438, Birla Sun Life India Opportunity Fund 0.059232 and LIC Tax Plan Growth 0.037636 are less than BSE 100 national index Sharpe ratio i.e. 0.10245, the top five performers are Birla Sun Life Monthly Income Plus, Reliance growth fund, Reliance Vision Growth, HDFC Top 200 growth, Birla Sun Life Equity Fund Growth. This implies that the funds decision for diversified portfolio in a falling market has proved successful in earning higher excess returns per unit of risk as compared to the market. The Sharpe index is important from small investor point of view who seek diversification through mutual funds, i.e. mutual funds are supposed to protect small investors against vagaries of stock markets and the fund managers of these schemes has done well to protect them. Table 5.7 shows Treynor of the scheme it is the excess return over risk free return per unit of systematic risk i.e. beta. Here, too, all the schemes recorded positive value indicating there by that the schemes provided adequate returns as against the level of risk involved in the investment. Analysis of table 5.7 reveals that all the mutual funds schemes have positive values. In terms of Treynors ratio, the top five performers are ICICI prudential Income Fund Growth 0.23666, ICICI prudential balance Growth 0.177599, Birla Sun Life Income Fund 0.142715, Birla Sun Life Income Plus Growth 0.120927, Birla Sun Life Monthly Income Plus 0.043573 A higher Treynor Index as compared to market indicates that investor who invested in mutual fund to form well diversified portfolio did receive adequate return per unit of systematic risk undertaken.
439
ZENITH
TABLE 5.7 TREYNOR OF THE SCHEMES Name of the Scheme Equity Scheme Birla Sun Life Buy India Fund Birla Sun Life Equity Fund Growth Birla Sun Life India Opportunities Fund Birla Sun Life MNC Fund HDFC Top 200 Growth ICICI Prudential FMCG Growth ICICI Prudential Growth Plan ICICI Prudential Tax Plan Growth LIC Equity Fund Growth LIC Growth Fund Growth LIC Tax Plan Growth Reliance Growth Fund Reliance Vision Growth Debt Scheme Birla Sun Life Income Fund Birla Sun Life Income Plus Growth Birla Sun Life Monthly Income Plus ICICI Prudential Income Fund Growth Balanced Schemes Birla Sun Life 95 Growth 0.024200 0.142715 0.120927 0.043573 0.233666
Treynor
0.022481 0.026167 0.010913 0.027309 0.030317 0.029161 0.019974 0.026063 0.011788 0.013296 0.006953 0.035857 0.038674
ZENITH
0.012962 0.177599
TABLE 5.8 JENSENS MEASURE Name of the Scheme Equity Scheme Birla Sun Life Buy India Fund Birla Sun Life Equity Fund Growth Birla Sun Life India Opportunities Fund Birla Sun Life MNC Fund HDFC Top 200 Growth ICICI Prudential FMCG Growth ICICI Prudential Growth Plan ICICI Prudential Tax Plan Growth LIC Equity Fund Growth LIC Growth Fund Growth LIC Tax Plan Growth Reliance Growth Fund Reliance Vision Growth Debt Scheme Birla Sun Life Income Fund Birla Sun Life Income Plus Growth Birla Sun Life Monthly Income Plus 0.007408 0.007555 0.008485 0.012516 0.017119 0.008246 0.014043 0.017428 0.013133 0.012669 0.017424 0.008618 0.008992 0.005961 0.021352 0.022442
Jensen
ZENITH
ICICI Prudential Income Fund Growth Balanced Schemes Birla Sun Life 95 Growth Birla Sun Life Freedom Fund Growth ICICI Prudential Balance Growth
0.007756
0.013278 0.007594 0.009689
Table 5.8 shows the Jensons Measures. It is the regression of excess return of the scheme with excess return of the market, acting as dependent and independent variables respectively. Higher positive value of alpha posted by the scheme indicates its better performance. The analysis of the table reveals that all the schemes have positive Jensons Measures. Highest Value of Jensons Measure are Reliance Vision Growth 0.02244 followed by Reliance Growth Fund 0.021352, HDFC Top 200 Growth 0.017428, ICICI Prudential tax Plan 0.017424, Birla Sun Life Equity Fund Growth 0.17119. Lowest Jensons measure found again in the case of LIC tax Plan Growth .005961. Higher Positive value of Jensons measures indicates good market timing ability of fund managers as regard investment in securities PERFORMANCE APPRAISAL EQUITY SCHEME i. As far as the equity schemes are concerned, Reliance Vision Growth was at the top with highest average monthly return (2.5032%) followed by Reliance Growth Fund (2.4002%), ICICI Prudential Tax Plan Growth (2.0373%), Birla Sun Life Equity Fund Growth (1.9982%), HDFC Top 200 Growth (1.9883), Birla Sun Life MNC Fund (1.6069%), ICICI Prudential Growth Fund (1.523%), ICICI Prudential FMCG Fund (1.4816%) and Birla Sun Life Buy India Fund (1.4665%). Calculation of total risk as measured by standard deviation shows that ICICI Prudential Tax Plan was the most risky scheme with highest standard deviation (0.101619), followed by Reliance Vision Growth (0.101581), Birla Sun Life India Opportunities Fund (0.101142). ICICI Prudential FMCG Growth was least risky scheme with lowest standard deviation (0.072029). Calculation of systematic risk as measured by beta shows that all the equity schemes found low systematic risk as beta less than 1, ICICI Prudential Tax Plan have highest beta (0.58984) followed by BSL Equity Fund Growth (0.57253), Birla Sun Life India Opportunity Fund (0.54895) LIC Equity Fund Growth (0.53301) and Reliance Growth Fund (0.52993). ICICI Prudential FMCG Growth have lowest beta (0.3366).
ii.
iii.
442
ZENITH
iv.
The coefficient of Determination (R2) measures the extent to which market index has been able to explain the variation in mutual funds. The maximum and minimum value of R2 was found in the case of ICICI Prudential Growth Plan (0.5184) & Birla Sun Life MNC Fund (0.2571). As per Sharpe ratio Reliance Growth Fund (0.208988) maintain 1st Rank followed by Reliance Vision Growth (0.197199), HDFC Top 200 Growth (0.173323), Birla Sun Life Equity Fund Growth (0.158833), ICICI Prudential Tax Plan (0.151283), lowest Sharpe ratio found in the case of LIC Tax Plan Growth (0.037636) As per Treynor Ratio Reliance Vision Fund (0.038674) highest ratio, followed by Reliance Growth Fund (0.035857), HDFC Top 200 Growth (0.030317), ICICI Prudential FMCG Growth (0.029161), and Birla Sun Life MNC Fund (0.027309), lowest Treynor ratio found in the case of LIC Tax Plan Growth (0.006953). As per Jensons alpha Reliance Vision Growth (0.022442) performed well followed by Reliance Growth Fund (0.021352), HDFC Top 200 Growth (0.017428), and ICICI Prudential Tax Plan Growth (0.017424) lowest Jensons alpha found in the case of LIC Tax Plan Growth (0.005961).
v.
vi.
vii.
DEBT SCHEME i. As far as the income schemes are concerned, Birla Sun Life Monthly Income Plus was at the top with highest average monthly return (0.8421%) followed by ICICI Prudential Income Fund (0.7817%), Birla Sun Life Income Plus (0.7665%), Birla Sun Life Income Fund (0.7495%). Calculation of total risk as measured by standard deviation shows that ICICI Prudential Income Fund Growth was the most risky scheme with highest standard deviation (0.020414) followed by Birla Sun Life Income Plus Growth (0.018286), Birla Sun Life Income Fund (0.017836), Birla Sun Life Monthly Income Plus was least risky scheme with lowest standard deviation (0.017068). Calculation of systematic risk as measured by beta shows that all the income schemes found low systematic risk as beta less than 1, Birla Sun Life Income Fund have highest beta (0.17482) followed by ICICI Prudential Income Fund (0.12054), Birla Sun Life Income Plus Growth (0.02204) and Birla Sun Life Monthly Income Plus Fund (0.09035). The maximum and minimum value of R2 was found in the case of Birla Sun Life Income Plus Growth (0.0148) and ICICI Prudential Income Fund Growth (0.0023) and in case of Birla Sun Life Monthly Income Plus (0.3576). As per Sharpe ratio Birla Sun Life Monthly Income Plus (0.230694) maintain 1st Rank followed by Birla Sun Life Income Plus Growth (0.145737), Birla Sun Life Income Fund (0.139881) and lowest Sharpe ratio found in the case of ICICI Prudential Income Fund Growth (0.137973)
ii.
iii.
iv.
v.
443
ZENITH
vi.
As per Treynor Ratio ICICI Prudential Income Fund (0.233666) highest ratio, followed by Birla Sun Life Income Fund (0.142715), Birla Sun Life Income Plus (0.120927), and Birla Sun Life Monthly Income Plus (0.043573). As per Jensons alpha Birla Sun Life monthly Income Plus (0.008485) performed well followed by ICICI Prudential Income Fund (0.007756), Birla Sun Life Income Plus (0.007555), and lowest Jensons alpha found in the case of Birla Sun Life Income Fund (0.007408).
vii.
BALANCED SCHEME i. As far as the balance schemes are concerned, Birla Sun Life 95 was at the top with highest average monthly return (1.5434%) followed by ICICI Prudential Balance Fund (1.1527%), Birla Sun Life Freedom Fund (0.9223%). Calculation of total risk as measured by standard deviation shows that Birla Sun Life 95 Fund was the most risky scheme with highest standard deviation (0.069698) followed by ICICI Prudential Balance Fund (0.062286), Birla Sun Life Freedom Fund (0.060821). Calculation of systematic risk as measured by beta shows that all the balanced schemes found low systematic risk as beta less than 1, Birla Sun Life 95 Fund have highest beta (0.43115) followed by ICICI Prudential Balance Fund (0.36749) and Birla Sun Life Freedom Fund (0.32581). The maximum and minimum value of R2 was found in the case of Birla Sun Life 95 Fund (0.514) and Birla Sun Life Freedom Fund (0.4022). As per Sharpe ratio Birla Sun Life 95 Fund (0.149705) maintain 1st rank followed ICICI Prudential Balance Fund (0.104787), lowest Sharpe ratio found in the case of Birla Sun Life Freedom Fund (0.069438). As per Treynor Ratio ICICI Prudential Balance Fund (0.177599) highest ratio, followed by Birla Sun Life 95 Fund (0.0242), Birla Sun Life Freedom Fund (0.012962). As per Jensons alpha Birla Sun Life 95 Fund (0.013278) performed well followed by ICICI Prudential Balance Fund (0.009689), Birla Sun Life Freedom Fund (0.007594).
ii.
iii.
iv. v.
vi. vii.
Out of the total 20 schemes studied, five schemes (25%) showed an average return higher than in comparison to the market return while the remaining 15 schemes (75%) generated lower returns than that of the market. The top five performers are Reliance Growth Fund, Reliance Vision Fund, ICICI Prudential Tax Plan, HDFC Top 200 and Birla Sun Life Equity Fund. The Sharpe ratio is important from small inventors point of view who see diversification through mutual funds, i.e. mutual funds are supposed to protect small investors against vagaries of stock market and the fund managers of these schemes have done well to protect them. Reliance Growth Fund, Reliance Vision Fund, ICICI Prudential Tax Plan, HDFC Top 200 and Birla Sun Life Equity Fund have performed better than the other schemes.
ZENITH
Treynor ratio is the excess return earn over risk free return per unit of systematic risk i.e. beta. Reliance Growth Fund, Reliance Vision Fund, ICICI Prudential Tax Plan, HDFC Top 200 and Birla Sun Life Equity Fund indicate that investors who invested in these schemes to form well diversified portfolio did receive adequate return per unit of systematic risk undertaking. Jensens measure is the regression of excess return of the scheme with excess return of the market. Higher positive value of alpha posted by the schemes indicates its better performance. The analysis of the schemes shows Reliance Growth Fund, Reliance Vision Fund, ICICI Prudential Tax Plan and HDFC Top 200 have highest positive alpha. CONCLUSION The analysis of the open ended schemes shows that out of twenty, five schemes namely Reliance Growth Fund, Reliance Vision Fund, ICICI Prudential Tax Plan, HDFC Top 200 and Birla Sun Life Equity Fund, performs better in comparison to benchmark index BSE-100 index in terms of monthly average return and risk involved in these schemes less then benchmark. In respect of models suggested by Sharpe, Treynor and Jensons measures these schemes also perform better. REFERENCES 1. Anjaria, D.C., AMFI Workbook, AMFI Mumbai, 2. Singh, Jaspal, Mutual Funds: Growth Performance and Prospectus, Deep and Deep Publication Pvt. Ltd., New Delhi, 2006 3. Pandian, Punithavathy, Security Analysis and Portfolio Management, Vikas Publication House Pvt. Ltd. 4. Sahadevan and Raju MT, (1996), Mutual Funds Data, Interpretation and Analysis, Prentice hall of India. 5. Agarwal P.R. (1996), Mutual funds-A Comprehensive Approach, Orient Law house, Delhi.
6. Khuran, Ajay (1996), Top Management Turnover An Empirical Investigation of Mutual Fund Managers, Journal of Financial Economics, 3. 7. Jayadev M. (1996) Mutual Fund Performance; An Analysis of Monthly Returns, Finance India, Vol. X, No.1, (March), Sadhak H, (1997) Mutual Fund Investment and Market Practices in India, Sage Publication India. 8. Jayadev M. (1998), Performance Evaluation of Portfolio Managers: An Empirical Evidence on Indian Mutual Funds, Applied Finance Vol.5, No.2, July.
ZENITH
9. Gupta, O.P. and Sehagal S. (2000), Investment Performance of Mutual Funds: The Indian Experience, In Indian Capital Markets: Trends and Dimensions edited by UMA Shashikant and Arumugam, Tata McGraw Hill, New Delhi. 10. Rao K.V. and Venkateshwarlu, K. (1998), Market Timing Abilities of Fund ManagersA case Study of Unit Trust of India, A paper presented at the Second Capital Market Conference Organized by UTI Institute Capital Market, Mumbai. 11. Mishra B, (2001), A study of Mutual Funds in India, unpublished Research paper under the aegis of Faculty of Management Studies, University of Delhi.
446
ZENITH
UNEARTHING THE EPIDEMIC OF NON-PER FORMING ASSETS -A STUDY WITH REFERENCE TO PUBLIC SECTOR BANKS IN INDIA
DR.HOSMANI.A.P*; MR.JAGADISH HUDAGI**
*Associate professor, Department of Commerce, Gulbarga University Gulbarga, Karnataka. **Research Scholar, Department of Commerce, Gulbarga University.
INTRODUCTION The economic reforms initiated by the then finance minister and present prime minister of India Dr. Manmohan Singh would have been remained incomplete without the overhaul of Indian banking sector. The important aspect of norms and guidelines for making the whole sector vibrant and competitive. The problem of losses and lower profitability of Non-Performing Assets (NPA) and liability mismatch in banks and financial sector depend on how various risks are managed in their business. Non-performing Assets (NPAs) are the smoking gun threatening the very stability of Indian banks. NPAs wreck a banks profitability both through a loss of interest income and write-off of the principal loan amount itself. In a bid to stem the lurking rot, RBI issued in 1993 guidelines based on recommendations of the Narasimham Committee that mandated identification and reduction of NPAs. Their implementation immediately pushed many banks into the red. So serious is the problem that an RBI report suggested that reducing NPAs be treated as a National Priority. According to the concept of Non-Performing Assets in banks are those assets, which cease to generate income for the banks and remain irregular due to non payment of interest and principal amount. In the milieu of the complex changes when the dilemma of banks NPA was gradually recognized for the first time at its peak velocity, in 1992-93 there was resultant uproar and confusion as the problem in large magnitude exploded unexpectedly commercial banks were unable to analyze and make a realistic or complete assessment of the prevailing situation. The partial perceptions and hasty judgments led to a policy of ad-hoc-ism. This characterized the approach of the authorities during the last two-decades towards finding solutions to banking ailments and dismantling recovery hindrance. Even after repeated effort made to correct it, but the out comes were unfavorable, the problem was challenging in fact it has became an epidemic. The level of NPAs of the Indian banking system are now comparable to several advanced economies and significantly lower than several economies in world. RBI rates reduction in NPAs is one of the major achievements of the Indian banking sector of recent times. But still the Indian banking sector is facing a serious problem of exploding amount of NPAs. Magnitude of the problem can be understood by the fact that the level of NPAs which are to the tune of Rs.59926 Crores in Public sector banks, Rs.17639 Crores in Private sector banks, Rs.84747 Crores in Scheduled commercial banks, and Rs.7180 Crores in foreign banks, for the year 2009-10. The earning capacity and profitability of many banks and financial institutions has been badly
447
ZENITH
affected by the high level of NPAs. Controlling the growing NPAs becomes a challenging task in Indian economic scenario. It affects the liquidity, profitability, and equity. This present research paper is designed to examine the existing position of banks in respect of Non performing assets, ascertain the causes of the problem and its remedial measures. STATEMENT OF THE PROBLEM Credit is like putting paste out of a tooth paste, it is easy to get it but recovery is some what difficult, like putting that paste back in to the tube. That is the reason why good money lent, some times becomes bad and doubtful, in the banking parlance it is called as Non-Performing Asset. NPA are like flab, which causes in convenience to the Banking sector, it is a brought forward legacy accumulated over the past decades, when prudent norms of Banking were unoccupied relaxing by the radiance of security provided by government ownership. It is not wrong to have pursued social goals, but this does not justify relegating banking goals and fiscal discipline to the background. Ever increasing NPAs have a direct impact on profitability, liquidity and solvency. Since Indian banking industry is largely dominated by Public sector banks with almost two third share of total advances in the economy it is facing an acute problem with regard to NPAs. There is a need to manage the ever increasing level of NPAs. Keeping this issue in view the present study has undertaken. REVIEW OF LITRATURE: In the context of banking sector, the issue of Non performing assets has been studied and keenly observed by plenty of researchers, a synoptic review of the relevant literature on the topic of NPAs has been described as under. Basavaraj.G.Bhavi, (1990), a teacher fellow, conducted a study on Assessment of Regional rural banks credit on target groups- A case study of Krishna Grameena Bank. The essential objective of the study is to Banks credit on target groups in terms, Formation of assets, and to examine the extent of repayment of loan and overdue position and reasons for over dues. Bhatacharya (2002), studied NPA management of banks and stated that surest way of containing NPAs is to prevent their occurrence. He offered suggestion on proper risk management, strong and effective credit monitoring, co-operative working relationship between banks and borrower etc should be tenets of NPA management policy. Ramkrishna and Bhargavi (2004), study on Non performing asset management, found that the asset quality of commercial banks has improved considerably due to bringing in the reform packages. C.Chandrakant, (2007), conducted a study on Non performing assets in Karnataka State financial Corporation A case study of Gulbarga Division. The main objective of the study was to assess the impact of NPA. And he suggested that better credit risk management will be an effective tool in resolving the issue NPAs.
ZENITH
Ashok Khurana and Mandeep Singh (2009), stated that issue of mounting NPAs is a challenging to public to public sector banks. The study found that the asset wise classification of PSBs is in right direction and there is significant variation in the recovery of NPAs in the different sector. The research observed that PSBs should not be loaded with the twin object of profitability and social weal fair. NATURE AND SCOPE OF THE STUDY The present study is empirical and descriptive in nature. The study is confined to examine the state of Non performing assets in Commercial banks operating in India wise public sector banks has been taken in to account, a period of 5 years has been considered. OBJECTIVES OF THE STUDY The banking sector striving very hard to nullify NPAs, in fact it is the level of NPAs that to a great extent determines its fincial health. Hence the following objectives have been set for our study. 1. To study the magnitude and trend of NPA of Public sector banks in India. 2. To evaluate the asset portfolio and NPA proportion of Public sector bank. 3. To study the strength and weakness in recovery aspect, and provision created for NPAs in sample banks. 4. To focus on sector wise NPAs and determine depth of it. 5. To offer necessary measures for effective management of NPAs in the light of our findings. For this purpose Public sector banks which are operating in India are considered. An attempt also been made to cross sectional analysis of NPAs. HYPOTHESIS OF THE STUDY 1. There is no significant association between gross NPAs to gross advances of the public sector banks. 2. There is no significant difference between, priority sector, public sector, & non priority sector from NPAs point of view. 3. There is no significant relation between various recovery channels, likewise Lok Adalats, DRTs and SARFESI Act. 4. There is no significant reduction in the portion of gross NPAs to gross advances.
449
ZENITH
METHODOLOGY The study is descriptive and investigative in nature, it evaluate the NPAs level in public sector, banks for a period between 2005-06 to 2009-10. By going through the path of objectives set for the study, the relevant secondary data has been collected through various sources like, RBI web site, Trend and progress in banking various issues, economic survey of India. The data so collected has been tabulated and analyzed by using various ratio techniques the study also examines the trend of NPAs in various sample banks. The findings of the study are inconformity with the statistical tools applied as such, Average, ANOVA, correlation, and comparative percentage analysis. ANALYSIS AND INERPRETAION It is the quality of loan assets which determines the financial viability and strength. The increasing overdue advances turning as a cause of non performing assets in public sector banks in India. This not only hampers the profitability but also dry out the liquidity of the bank. Complete avoidance of such losses is tough task, the management of a bank most of the strive hard avoid such losses. The volume of such non performing assets decides the fate of a bank. In order to assess the waves of non performing assets in public sector banks in India, the data has been tabulated shown in the following tables. TABLE-1: GROSS NPAS OF PUBLIC SECTOR BANKS. (AMOUNT IN-CORERS) GrossYear Advances 2005-06 2006-07 2007-08 2008-09 2009-10 1134724 1464493 1819074 2282081 2736347 NPAs 41358 38968 40595 44957 59926 3.6 2.7 2.2 1.97 2.19
Gross %
Gross NPAs to Gross Advances ratio. Sources: RBI Trends & report of Banking in India 2005-2010
ZENITH
TABLE-2: CORRELATION BETWEEN GROSS NPAs AND GROSS ADVANCES Gross NPAs Gross NPAs Pearsons Correlation Level of Sig. (2-tailed) N 5 1 Gross Advances Public Sector Banks 0.838 10.1 5
TABLE-3: ANOVA TEST Model 1 Regression Residual Total Sum of Squares 204717000 86994400 291711400 d.f 1 3 4 Mean square 204717000 28998133.33 7.06 10.1 F Sign.
Predictor: (Constant) Gross advances,(Dependent variable) Gross NPAs. It can be noticed from the table that the gross advances public sector banks increased from amt 1134724 crore in 2005-06 to amt 2736347 crore in 2009-10. A drastic raise of 241.14 percent between 2005-06 to 2009-10. It is clear from the fact that there is continuous upturn trend of gross advances during the study period. At the same time gross NPAs of the public sector banks have raised from amt 41358 crore in 2005-06 to amt 59926 crore in 2009-10. It has shown an increase of 144.89 percent during the study period, in case of gross NPAs also an increase has been recorded. The statistical test of Pearson correlation shows that there is a high degree of positive correlation between gross advances and gross NPAs with r = 0.838. From table values of ANOVA, F= 7.06 and at 5 percent level of significance the table value which is higher, thus the null hypothesis of no significance between gross NPAs and gross advances of public sector banks has been accepted.
451
ZENITH
TABLE-4: NET NPAs OF PUBLIC SECTOR BANKS. (AMOUNT IN-CORERS) Public sector Banks Year 2005-06 2006-07 2007-08 2008-09 2009-10 Total Average Net Advances 1106288 1440146 1797504 2250532 2694910 9289380 1857876 Net NPAs Percentage 14566 15145 17836 21155 29644 98346 19669 1.3 1.1 1.0 0.9 1.1 5.4 1.06
Net NPAs to Net Advances ratio. Sources: RBI Trends & report of Banking in India 2005-2010 Net advances public sector banks increased in absolute terms from amt 1106288 crore in 2005-06 to amt 2694910 crore in 2009-10. A drastic raise of 243.59 percent between 2005-06 to 2009-10. It is clear from the fact that there is continuous upturn growth of Net advances during the study period. By looking at the Net NPAs of the public sector banks an increasing trend is noticed from amt 14566 crore in 2005-06 to amt 29644 crore in 2009-10. It has shown an increase of 203.51 percent during the study period. During the study period on an average Net advances of public sector bank is amt 1857876 crore, on other hand the average Net NPA is amt 19669 crore 1.06 percent of average advances which is quite an alarming indication by looking at the volume of Net NPAs ( Table 4).
452
ZENITH
TABLE-5: CLASSIFICATION OF LOAN ASSETS. (AMOUNT IN-CORERS) Bank Group
Standard Assets
SubStandard Assets
Doubtful Assets
Loss Assets
Total NPAs
Amount Year Amount % Amount 11453 14275 17290 26603 28791 19682 % 1.0 1.0 1.0 0.9 1.0 0.9 Amount 25028 19873 19291 21019 25383 22119 % 2.2 1.4 1.1 0.9 0.9 1.3 5636 4826 4018 4296 5750 4905 % 0.5 0.3 0.2 0.1 0.2 0.26 Amount 42117 38974 40598 51918 59924 46706 % 3.7 2.7 2.2 2.2 2.1 2.6
% Change 00 -1.0 -0.5 00 -0.1 -0.5
2005-06 1092607 96.2 2006-07 1425519 97.3 2007-08 1778476 97.8 2008-09 2237556 97.9 2009-10 2673534 97.8 Average 1841538 97.4
Figures in percentage column are loan assets as a percentage to Total loan assets of respective year. Classification of Assets as RBI guidelines Sources: RBI Trends & report of Banking in India 2005-2010 Loan assets of banks are classified in to four categories i.e. standard assets, sub-standard assets, doubt full assets, and loss assets. Standard assets being the good quality of loan assets on the other hand sub-standard assets, doubt full assets, and loss assets put together constitutes non performing assets. All the other three categories of NPAs as a percentage to loan assets are recorded a decline trend over the study period. Sub-standard assets showed a reduction from 1.0 percent in 2005-06 to 0.9 percent in 2009-10. The doubt full assets reduced from 2.2 percent in 2005-06 to 1.3 percent in 2009-10. The loss assets also registered decline from 0.5 percent in 2005-06 to 0.26 in 2009-10. Overall the non performing assets came down considerably i.e. from 3.7 percent in 2005-06 to 2.1 percent in 2009-10. Indicating a positive trend of financial soundness. The average standard assets, sub-standard assets, doubt full assets, and loss assets are amt 1841538 crore, amt 19682 crore, amt 22119 crore and amt 4905 crore. Lastly the average NPAs being amt 46706 crore (Table-5).
453
ZENITH
TABLE-6: SECTOR WISE NPAs OF PUBLIC SECTOR BANKS: (AMOUNT IN-CORERS) Priority Sector Year Amount 2005-06 2006-07 2007-08 2008-09 2009-10 Average 22374 22954 25287 24318 30848 25156 % 54.0 59.1 63.6 55.2 53.8 57.1 Non Priority Sector Amount 18664 15158 14163 19251 25929 18633 % 45.1 39.2 35.6 43.7 45.3 41.7 Public Sector Amount 340 490 299 474 524 425.4 % 0.8 1.2 0.7 1.1 0.9 0.94 Total NPA Amount 41378 38602 39749 44043 57301 44215 % 100.0 100.0 100.0 100.0 100.0 100.0
Figures in percentage column are loan assets as a percentage to NPAs amount. Sector wise NPA to Gross NPA percentage. Sources: RBI Trends & report of Banking in India 2005-2010 TABLE-7: ANOVA TEST Sources of Variation Between Within Total Sum of Squares 1642800000 131417000 1774220000 d.f 2 12 14
Mean Square 821401000 10951400
F-Value
Table Value 3.89 at 5% level of significance
75.004
In the above Table.No-6 NPAs have been classified in to three sectors i.e. priority sector, public sector and non priority sector. As per the guidelines on lending. The average sector wise NPAs of priority sector, non-priority sector and public sector observed as follows amt 25156 crore, amt 18633 crore and amt 425.4 crore respectively. It is found that asset quality of banks recorded considerable improvement in reduction of NPAs on an average with respect to public sector i.e.0.94 percent compared to an average of 57.1 percent with priority sector and an average of 41.7 percent in case of non-priority sector (Table-6).
ZENITH
Sector wise analysis of ANOVA shows that F=75.004 at 5 percent level of significance the table value is 3.89 percent which is lower, thus the null hypothesis of there is no significant difference between, priority sector, public sector, & non priority sector has been rejected (Table-7). TABLE 11: PROVISSION FOR NPA. (AMOUNT IN-CORERS) Public sector Banks Year NPA Amt 2005-06 2006-07 2007-08 2008-09 2009-10 Average 41358 38968 40595 44957 59926 45161 ProvisionAmt 25024 22139 21180 22658 28402 23881 % 60.5 56.8 52.1 50.4 47.4 52.9
Gross NPAs & percentage of provision. Sources: RBI Trends & report of Banking in India 2005-2010 The NPA provisioning for the year 2005-06 amt 25024 crore where as the volume increased to 28402 crore, but it is interesting to note that even though the volume increased considerably the percentage of provisioning came down significantly i.e. in 2005-06 from 60.5 percent to 47.4 percent. At the same time on average 52.9 percent provision has been made during the study period (Table-11).
RECOVERY MEASURES FOR BAD LOANS The Reserve Bank of India concerning to the issue of bad loans proposed prompt corrective action (PCA) mechanism for controlling the menace of NPA and has introduced various measures like Credit risk management models, Compromise settlement methods, effective use of Debt Recovery Tribunals (DRTs), Asset Reconstruction Companies, Securitization and Reconstruction of Financial Assets and Enforcement of security interest (SARFAESI) Act-2002, circular of information on defaulters, Corporate Debt Restructuring (CDR), Lok Adalats and so on to curb the epidemics of NPAs. In the following table-9 an attempt has been made to measure the performance of various recovery channels through which the bad loans commercial banks in India have been recovered.
ZENITH
TABLE-9: NPAS RECOVERY THROUGH VARIOUS CHANNELS (AMOUNT IN-CORERS) Lok Adalats Year 2005-06 2006-07 2007-08 2008-09 2009-10 Average Amount Involved 2144 758 2142 4023 7235 3260 Reco very 265 106 176 96 112 151 DRTs Amount Involved 6273 9156 5819 4130 9797 7035 Reco very 4735 3463 3020 3348 3133 3540 SARFAESI ACT Amount Involved 8517 9058 7263 12067 14249 10231 Reco very 3363 3749 4429 3982 4269 3958 Amount Involved 16934 18972 15224 20220 31281 20526 Total Reco very 8363 7318 7625 7426 7514 7649 % 49.38 38.57 50.08 36.72 24.02 37.26
NPA amount recovered through various Legal modes and its percentage. Sources: RBI Trends & report of Banking in India 2005-2010. TABLE-10: ANOVA TEST Sources of Variation Between Within Total Sum of Squares 43592500 2643910 46236400 d.f 2 12 14 Mean Square 21796200 220326 98.92 F-Value Table Value 3.89 at 5% level of significance
The various recovery channels have been introduced from time to time for expediting the recovery of bad loan amount banks. Among the several channels of recovery available with the banks, debt recovery tribunals (DRTs) and SARFAESI Act have been the most effective in terms of amount recovered. On an average recovery amount from DRTs measured as 50.31 percent and the SARFAESI Act stood at 38.68 percent but in case of Lok Adalats it is just 4.63 percent from bad loans. Even by looking at the over all recovery percent of bad loans it was 49.38 percent in 2005-06 it came down drastically to 37.26 percent in 2009-10 (Table-9).
456
ZENITH
The statistical test of ANOVA table shows F= 98.92 and at 5 percent level of significance the table value is 3.89 which is lower, thus the null hypothesis of there is no significant relation between various recovery channels has been rejected (Table-10). REASONS AND CAUSES FOR NPA There are numerous factors responsible for the alarming level of non performing assets. Some of the most crucial aspects of such reasons are mentioned as under. Improper and ineffective proposal appraisal system. Inefficient credit risk management. Reckless funding in order to achieve the illegitimate loan sanctioning targets. Intentional will full defaulters and faulty projects. Recession and variation in economic conditions. Poor audit practices and building up pressure for loan sanction. Direct lending under subsidy schemes. Un-sound financial condition of the borrower.
MAJOR FINDINGS OF THE STUDY Stitch in times save nine, timely support may save a genuine unit. Have head and heart together, for a human approach. The followings are some of the important findings of the study. The fund blocked in as Gross NPA is huge i.e. amt 59926 crore during the year 2009-10. But there is no time frame and follow up to recover the blocked amount. The NPA level during the study period is quite alarming but it is positive sign to note that the percentage of NPAs is reducing i.e. it was 3.6 in 2005-06 and came down to 2.19 in 2009-10. The non performing assets came down considerably i.e. from 3.7 percent in 2005-06 to 2.1 percent in 2009-10. Indicating a positive trend of financial soundness. Sector wise analysis of NPAs shows that the proportion of NPAs for the priority sector loan has increased on an average i.e. 57.1 percent compared to 41.7 percent to non priority sector and only 0.94 percent to public sector. Result of ANOVA sector wise break up of NPAs indicates that the null hypothesis of no significant association between, priority sector, public sector, & non priority sector has been rejected.
ZENITH
Like wise ANOVA result of various recovery channels, indicates that the null hypothesis of no significant relation between various recovery channels has been rejected. Specific recovery targets wise monthly, quarterly, and annually were fixed, but these targets neither monitored properly nor achieved regularly. Lack of commitment towards the work by the bank employees. Political involvement in the administration. In ability to adopt, changes and rigidity in decision making by the public sector banks compared to Private sector banks, Foreign banks and NBFC to improve its performance.
SUGGESTIONS In the light of our findings of the study, following suggestions offered to deal effectively in reducing the non performing assets. Third Basel Committee report on banking supervision should be completely implemented in regular practices of the bank. IFRS accounting practices need to be adopted to have more transparent and effective accounting system. Introducing KYC norms effectively & client profile cards to have proper monitoring system. It is better to discourage too ambitious loan proposal where ambitious projects and over enthusiastic promoters involved, it may take longer gestation period to implement the project & which invents high risk. NPAs management cell can be constituted at Head Office and Branch Offices to monitor the cases. To look into the NPA Portfolio of every branch. CONCLUSION Indian banking industry is largely dominated by public sector banks with almost two third share of total advances in the economy. The committee report on banking supervision Basel-III and IFRS accounting practices need to be adopted since the global rules with respect banking and accounting practices are changing, this in tern helps in better asset quality management and transparency in accounting. The study conducted on the topic unearthing the epidemic of non performing assets with reference to public sector banks in India, found that there is a slight improvement in the asset quality reflected by decline in the diverse NPA percentage. But even then the quantum of NPAs is alarming with public sector banks in India, since NPA being as an important parameter for assessing financial performance of banks the mounting volume of NPAs will deter the financial health in terms of profitability liquidity and economies of scale in operation. The bank has to take timely action against degradation of good performing assets.
458
ZENITH
BIBLIOGRAPHY 1. Dr. Vibha jain, Non performing assets in Commercial banks, Google books 2007. 2. Parameshwaran, R, and Natarajan, S, Indian Banking Sultan Chand and Sons, 2002. 3. R.K. Bharadwaj, Chetya Anuradha R, Majumdar kakali, Quantitative Techniques for Business Managers Himalaya publication 2009. 4. T.V. Gopalkrishna, Management of non performing assets a study with reference to public sector banks in India, Indian Institute of Banking and Finance, Google books, 2004. 5. Subharao, P, principles and practice of Bank Management, Himalaya publication 1988. 6. Dr. Jaynal Ud-din Ahmed, The Management Accountant, Management of non performing assets of Commercial Banks in India, June 2009. 7. Dr.Ashok Khurana and Dr.Mandeep singh, NPA management: A study of new private Sector Banks in India, Indian journal of finance, September 2010. 8. Dr. K.Rajender, Management of non performing assets in public sector banks. The Indian Journal of commerce, January-March 2009. 9. Reserve Bank of India Reports, 2005-06 to 2009-10. 10. Report on Trends and Progress in Banking 2005-06 to 2009-10. 11. Shri, M, Narashimam Working Group Recommendations 1975. 12. Google Web site.
459
ZENITH
WORKING CAPITAL MANAGEMENT OF INDIAN ELECTRICAL EQUIPMENT MANUFACTURERS-A COMPARATIVE STUDY

T.CHANDRABAI*; DR.K.VENKATA JANARDHAN RAO**
*Assistant Professor in Department of Management Studies, Padmasri Dr.B.V.Raju Institute of Technology, Narsapur, Medak, **Professor of Commerce & Business Management, Kakatiya University, Warangal, AP.
ABSTRACT The companies in the electrical equipment industry have performed fairly well for financial year 2010. The sales of most of the companies have increased which has resulted in an overall increase of 10.39% for the year 2010 as compared to the year 2009. In this Industry the MultiProduct companies comprises of companies like ABB, Areva T&D, Crompton, L&T, Siemens, BHEL etc. The performance of these companies (Multi-Product) is fairly well for the year 2010. The sales have increased by 9.8%, Operating profit has increased by 37.9% for the year 2010. The management of Working Capital is one of the most important and challenging aspect of the overall performance of the organization. Merely more effective and efficient management of working capital can ensure survival of a business enterprise. Working Capital Management is concerned with the problems that arise in attempting to manage the Current Assets, Current Liabilities and the interrelation that exists between them. This study analyses the comparative study of working capital management in Indian Electrical Equipment Industry and it is limited to the companies BHEL and ABB Ltd represent public and private sector enterprises respectively. Relevant data has been extracted from the consecutive annual reports between financial years 2005-06 to 2009-10 of both the companies. KEYWORDS: Working Capital, Liquidity, Operating cycle, Profitability. ______________________________________________________________________________ INTRODUCTION The world in which we live is not perfect. It is characterized by considerable amount of uncertainty regarding the demand, market price, quality and availability of own products and those of suppliers. These real world facts introduce problems and require the necessity of working capital. The most important areas in the day to day management of the firm, is the management of working capital. Working Capital Management refers to all management decisions and actions that ordinarily influence the size and effectiveness of the working capital. It is concerned with the most effective choice of working capital sources and the determination of appropriate levels of the current assets and their use. It focuses attention to the managing of current assets, current liabilities and the relationships that exist between them. Proper management of working capital leads to a material savings and ensures financial returns at the optimum level even on the minimum level of capital employed. Both excessive and inadequate working capital is harmful for a firm. Excessive working capital leads to unproductive use of
460
ZENITH
scarce funds. On the other hand, inadequate working capital usually interrupts the normal operations of a business and impairs profitability. In this article an effort has been made to analyze the working capital management in Indian Electrical Equipment Manufacturers during the period 2005-06 to 2009-10. And this study is limited to the companies BHEL and ABB Ltd represent public and private sector enterprises respectively. PROFILE OF THE COMPANIES BHEL has been at the helm of indigenous Heavy Electrical Equipment industry in India with a sustained track record of earning profit since 1971-72. BHEL has grown in stature over the years with continued inflow of orders, manufacturing prowess, continued thrust on technology leading to a strong presence in domestic and international markets as a major supplier of power plant equipment besides establishing substantial inroads in select segment of products in Industrial sector and Railways. BHEL caters to core sectors of the Indian Economy viz., Power Generation and Transmission, Industry, Transportation, Renewable Energy, Defense, etc. The wide network of BHELs 15 manufacturing divisions, 2 repair units, 4 power sector regions, 8 service centers, 15 regional offices, 1 subsidiary and a large number of Project Sites spread all over India and abroad enables the Company to promptly serve its customers and provide them with suitable products, systems and services - efficiently and at competitive prices. ABB is one of the worlds leading powers, automation engineering companies and provide solutions for secure, energy-efficient generation, transmission and distribution of electricity and for increasing productivity in industrial, commercial and utility operations. ABB operations in India are in excess of one billion US dollars and the company has 14 manufacturing facilities and over 6,000 employees in the country. ABB has an extensive countrywide presence with around 18 marketing offices, 8 service centers, 3 logistic warehouses and a network of over 850 channel partners. OBJECTIVES OF THE STUDY The main objective of the present study is to analyze the working capital management in BHEL and ABB Ltd-A comparative study over a period of 5 years i.e., from 2005-06 to 2009-10. The specific objectives of the study are as under: To study liquidity position of the company by taking four measures at time namely, inventory to current assets, debtors to current assets, cash and bank to current assets and loan &advances and other assets to currents assets. To analyze the component of working capital to identify the items responsible for changes in working capital.
ZENITH
METHODOLOGY The samples selected for this study are BHEL and ABB Ltd represent public and private sector enterprises respectively. . The study covers five years period from 2005-06 to 2009-10. This study is based on secondary data which is collected from annual reports of the companies and various studies made available through library work. For assessing the performance of the working capital position, in this study the technique of ratio analysis have been used. The collected data have been analyzed in five ways: 1. Analysis of liquidity ratio. 2. Analysis of liquidity position. 3. Analysis of operating cycle. 4. Analysis of components of Gross working capital. 5. Liquidity ranking. For assessing the behavior of data statistical techniques have been also used e.g. mean, growth rate, standard deviation and coefficient of variation in this study. ABBREVIATIONS USED Current Ratio Quick Ratio Absolute Liquid Ratio Inventory/Sales Age of Inventory Debtors/Sales Working Capital Turnover/Total Assets Current Assets/Sales Age of Debtors Debtors Cash &Bank Balances Land &Advances CR QR ALR INV/S AINV D/S
WCT/TA CA/S AD DEB C&B L&A
ZENITH
Gross Working Capital Standard Deviation Coefficient of Variation FINDINGS
GWC S.D C.V
The current ratio of BHEL is decreased from 1.58 in 2005-06 to 1.31 in 2008-09 again it increased from later years. Fluctuations were observed in ABB ltd Companys current ratio. The average current ratio of BHEL (1.41) is less than ABB Ltd (1.44). Both the companies having the current ratio less than the ideal which is 2:1. The quick ratio of both the companies also received in the same proportion like current ratio. But the quick ratio of both the companies is more than the ideal which is 1:1. It is cleared that company's short-term liquidity position is satisfactory for creditors working capital point of view (From TABLE_1). The absolute liquidity ratios of both the companies are in satisfactory position because it is more than the ideal ratio which is 0.5:1. It means both the companies having enough cash in hand and cash at bank (From TABLE_1). Inventory to sales ratio measures the velocity of conversion stock in to sales. Usually, a high inventory sales indicates efficient management of inventory because more frequently the stock will be sold, the lesser amount of money is required to finance the inventory. This ratio in BHEL is higher than ABB Ltd and fluctuations were observed in both the companies (From TABLE_1). Age of Inventory shows moving position of inventory during the year. If age of inventory is minimum it means companies activity position is satisfactory, they are able to sell their product within shorter period of time which indicate sound liquidity position of organization. This is very less in BHEL than ABB Ltd and fluctuations were observed in both the companies. On the other, if age of inventory is too high it indicate slow moving of stock, which affected directly liquidity position of company(From TABLE_1). Debtors to sales ratio indicate the velocity of debt collection of the firm. Generally, the higher value of debtor's turnover the more efficient is the management of debtors/sales or more liquid are the debtors. This ratio is higher in BHEL than ABB Ltd and it is increased from 2005-06 to 2009-10 continuously, which is not good sign for liquidity point of view (From TABLE_1). Working capital turnover ratio measures the efficiency with which the working capital is being used by a firm. A higher ratio indicates efficient utilization of working capital. But a very high working capital turnover ratio is not a good situation for any firm. This ratio is higher in BHEL than ABB Ltd(From TABLE_1).
463
ZENITH
Current assets to sales ratio indicates the efficiency with which working capital turns into sales. A lower ratio implies by and large a more efficient use of funds. Thus, a High turnover rate indicates reduced lock up of fund in working capital. This ratio is higher in BHEL than ABB Ltd (From TABLE_1). Average collection period measures the quality of debtors. Generally, shorter the average collection period the better is the quality of debtors as a short collection period implies quick payment by debtors. Longer the average collection period, longer are the chances of bed debts. This ratio is higher in BHEL than ABB Ltd (From TABLE_1). The liquidity position of both the companies analyzed in TABLE_2 and TABLE_3. In BHEL the current assets had been increased from 2005-06 to 2009-10 with a growth rate of 162.9%. The liquid assets had been increased with a growth rate of 167.74% and the growth rate of current liabilities is 214.36%. In ABB Ltd the current assets had been increased from 2005-06 to 2009-10 with a growth rate of 76.14%. The liquid assets had been increased with a growth rate of 73.15% and the growth rate of current liabilities is 68.06%. The growth rate of current assets, liquid assets and current liabilities in BHEL is higher than ABB Ltd. But the working capital growth rate in ABB Ltd (201.17%) is higher than BHEL (74.57%). The coefficient of variation in BHEL is higher than ABB Ltd in case of current assets, liquid assets, current liabilities and working capital. From TABLE_4 & TABLE_5, the share of each element has been calculated in percentage separately. In BHEL out of the four element of working capital the element namely debtors contributed highest in gross working capital with a mean of 44.86% which shows that working capital blocked up due to increases in debtors resulting collection charges and bad debts are increases. Where as the other current assets occupied the second position. The mean of inventory to working capital is 21.29%, and it played third position in total current assets. A decrease of inventory in total current assets is positive sign for liquidity and working capital point of view. The same situation has observed in case of ABB Ltd. The mean percentage of all these elements in BHEL is higher than ABB Ltd. From TABLE_4 & TABLE_5, the liquidity ranking in case of debtors to current assets ratio, cash & bank to currents ratio and other currents assets including loan & advances to current assets ratio, a high value indirect relatively favorable position and ranking has been done in that order. On the other hand, a low inventory to current assets ratio shows a more favorable position and hence ranking has been done in that order. Final ranking has been done on the principle that the lower points scored the more favorable are the liquidity position. From TABLE_6 & TABLE_7, the operating cycle indicate efficient utilization of working capital within the organization. If the operating cycle is maximum, means the working capital is properly and efficiently utilized. The operating cycle and cash cycle in BHEL is increased from 2005-06 to 2009-10 with fluctuations. The same situation has observed in case of ABB Ltd. But the operating cycle and cash cycle in BHEL is higher than ABB Ltd.
464
ZENITH
TABLE_1: LIQUIDITY RATIOS OF SELECTED COMPANIES Company Year CR QR ALR INV/S AINV (%) 213.2 1131 255.7 1017 237.5 875 259.6 658.5 242.2 672.9 241.6 870.9 D/S WCT/ TA BHEL ABB BHEL ABB BHEL ABB BHEL ABB BHEL ABB Mean(BHEL Mean(ABB) 1.58 1.22 0.88 2005- 1.41 1.23 0.62 06 1.46 1.17 0.79 2006- 1.37 1.21 0.56 07 1.40 1.11 0.79 2007- 1.42 1.22 0.52 08 1.31 1.03 0.74 2008- 1.52 1.28 0.60 09 1.32 1.04 0.69 2009- 1.47 1.26 0.59 10 1.41 1.12 0.78 1.44 1.24 0.58 0.28 0.08 0.24 0.08 0.30 0.09 0.30 0.12 0.28 0.11 0.28 0.09 0.54 0.37 0.56 0.41 0.62 0.43 0.61 0.46 0.63 0.46 0.59 0.43 0.34 0.26 0.29 0.24 0.27 0.26 0.22 0.29 0.22 0.27 0.27 0.26 1.22 0.64 1.22 0.69 1.43 0.69 1.41 0.76 1.31 0.78 1.32 0.71 179.4 111.1 178.6 122.9 204.1 144.2 194.6 170.7 203.4 167.9 192 143.4 CA/S AD
Source: Annual reports of BHEL & ABB Ltd

ZENITH
TABLE_2: LIQUIDITY POSITION OF BHEL (RS IN CRORES) Year Current Assets Liquid Assets Current Liabilities Working Capital Increase/ Decrease in 2005-06 2006-07 2007-08 2008-09 2009-10 Mean Growth Rate (%) S.D C.V 16330.78 21062.97 27906.18 36901.07 42934.81 29027.16 162.9 9811.26 33.8 12586.41 16845.3 22169.78 29064.05 33699.35 22872.98 167.74 7722.44 33.76 10320.02 14420.11 20022.30 28332.90 32441.72 21107.41 214.36 8281.78 39.24 6010.76 6642.86 7883.88 8568.17 10493.09 7919.75 74.57 3509.77 44.32 +632.1 +1241.02 +684.29 +1924.92 -
Source: Annual reports of BHEL TABLE_3: LIQUIDITY POSITION OF ABB LTD (RS IN THOUSANDS) Year Current Assets 27,966,725 41,106,989 46,998,260 47,492,652 49,262,216 42565368.4 76.14 Liquid Assets Current Liabilities 19,919,063 29,993,114 33,215,206 31,319,765 33,476,911 29584811.8 68.06 Working Capital 8,047,662 11,113,875 13,783,054 16,172,887 24,237,036 12102139.8 201.17 Increase/ Decrease in 2005-06 2006-07 2007-08 2008-09 2009-10 Mean Growth Rate (%) 24,419,730 36,219,887 40,571,726 40,198,591 42,283,690 36738724.8 73.15 www.zenithresearch.org.in 466
3066213 2669179 2389833 8064149 -
ZENITH
S.D C.V
7797739.15 18.32
6472032.71 17.62
4998633.24 16.89
6067414.91 50.13
Source: Annual reports of ABB Ltd TABLE_4: BHEL COMPANYS COMPONENTS OF WORKING CAPITAL (%) Year INV/GWC DEB/GWC C&B/GWC L&A/GWC Liquidity 4 1 2005-06 2006-07 2007-08 2008-09 2009-10 Mean 22.93 20.02 20.75 21.24 21.51 21.29 2 43.89 46.03 42.91 43.29 48.18 44.86 3 25.32 27.58 30.05 27.95 22.81 26.74 7.35 5.42 4.97 6.57 6.55 6.17 Rank 1 4 2 3 13 10 13 11 9 5 2 5 3 1 Total Final Rank Rank
5 3 4 1 1 2 3 4 2 5 1 5 3 4 2 2 4 1 1 3
Source: Annual reports of BHEL TABLE_5: ABB LTD COMPANYS COMPONENTS OF WORKING CAPITAL (%) Year INV/GWC DEB/GWC C&B/GWC L&A/GWC Liquidity 4 1 2005-06 2006-07 2007-08 2008-09 2009-10 12.7 11.9 13.7 15.4 14.2 56.1 58.9 63.3 60.2 59.4 2 19.5 15.6 7.40 11.1 11.9 3 6.36 6.82 7.50 6.70 7.20 Rank 1 2 4 3 4 1 1 5 3
Total Rank
Final Rank
2 5 1 5 13 1 4 2 3 10 3 1 5 1 10 5 2 4 4 15 4 3 3 2 12
ZENITH
Mean
13.58
59.58
13.1
6.92
Source: Annual reports of ABB Ltd TABLE_6: OPERATING CYCLE OF BHEL (IN DAYS) Component Inventory conversion period Debtors conversion period Total operating cycle Less: Creditors conversion period Cash cycle Source: Annual reports of BHEL TABLE_7: OPERATING CYCLE OF ABB LTD (IN DAYS) Component Inventory conversion period Debtors conversion period Total operating cycle Less: Creditors conversion period Cash cycle Source: Annual reports of ABB LTD
2005-06 171.22 179.31 350.53 126.06 224.47
2006-07 142.71 178.54 321.25 113.69 207.56
2007-08 153.68 204.08 357.76 121.67 236.09
2008-09 140.58 194.60 335.18 106.44 228.74
2009-10 150.72 203.62 354.44 118.58 235.86
2005-06 32.28 110.99 143.27 109.45 33.82
2006-07 35.86 122.91 158.77 112.25 46.52
2007-08 41.71 144.13 185.84 115.07 70.77
2008-09 55.42 170.69 226.11 126.37 99.74
2009-10 54.24 167.88 222.12 118.52 103.60
CONCLUSION From the viewpoint of conventional standard of working capital, the quick ratio, absolute liquidity ratios in both the companies are satisfactory. The age of inventory, working capital turnover is very much satisfied in BHEL than ABB Ltd, so some improvement is required in case of ABB Ltd. In this study it is cleared that the overall position of the working capital in both the companies are satisfactory. In both the companies the major portion of the current assets are in form of debtors and loan and advances. The liquidity position mainly depends upon debtors and debt collection policy, but other components like inventory, loan and advances, cash and bank balance and bills receivable etc. are also responsible. The ratio debtors to gross working capital is very high in case of ABB Ltd, Average collection period is very high in case of BHEL,
ZENITH
so in this study we found that there is a need of improvement in debtors and debt collection policy. The management of should be try to proper utilization of debtor's and also try to maintain the debtors as per their requirement so liquidity will not interrupted. REFERENCES I. M. Pandey: "Financial Management theory and practices", Vikas publishing company, New Delhi (2000). Prasanna Chandra: "Financial Management theory and practice", TMH, New Delhi (2001). www.bhel.com www.abb.co.in
469
ZENITH
THE CONSTRUCT OF THE LEARNING ORGANIZATION: THE DYNAMICS AND THE DIAGNOSTIC TOOL
A.V.L.N. RAO*
*Research Scholar, IIT Kharagpur.
ABSTRACT Continual change is the distinguishing feature of todays global competitive challenges. The organization that can quickly learn and innovate is capable of adapting to a continually changing business environment with a sustainable competitive advantage. Learning organization (LO) facilitates the learning of its members and continuously transforms itself. Empirical studies on LO focused on individuals, teams, and organization-level issues, workplace based learning, innovative management practices, measurement systems, and different characteristics of LO. With mixed results, scholars suggest, for implementation, different strategies and characteristics to become a LO. An empirical study has been carried out to explore how the concept of LO is presently implemented by Indian organizations. The three organizations studied are Indian multilocation organizations with global presence. It uses a diagnostic tool to assess the LO status of organizations and to determine LO related strengths and weaknesses, which can then be used to develop improvement action plans. This paper presents the process of development of the construct of LO and on that basis the development of a diagnostic tool, named Diagnostic Tool for Learning Organization (DTLO). DTLO was validated through the empirical study and then used to assess the status of LO in the participating organizations. This paper also describes the way DTLO can be used by other Indian organizations. Results indicate that, on average, there is scope for improvement in implementation of the characteristics of LO. KEYWORDS: Diagnostic tool for learning organization, learning disciplines, characteristics of learning organization, workplace based learning, change management, learning organization ______________________________________________________________________________ 1. INTRODUCTION Challenges faced traditionally by a number of organizations have led to the focus and interest in studying the topic of Learning Organization (LO) and the characteristics of Learning Organization (CLO). LO and CLO differentiate superior performance vs. average/suboptimal performance (Hitt, 1995, p. 18). Traditional organizations have faced a number of issues that limit their growth and impact their competitive advantage in the industry; barriers such as defensive routines, learning disabilities and barriers to effective learning (Senge, 1990; Watkins & Marsick, 1993), dynamic and complex systems, inadequate and ambiguous outcome feedback, misperceptions of the feedback, and poor interpersonal/ organizational inquiry skills. In contrast, LOs have certain distinct characteristics that distinguish them from the traditional organizations and are a significant source of competitive advantage in the current fast paced, dynamic and increasingly global external environment. Many leading scholars (e.g. Senge, 1990) have studied
ZENITH
and codified the definition of LO and CLO. This study builds on the deep and insightful existing research available on LO to carry out an empirical research. In the process, a construct has been designed to represent the critical dimensions of LO. The objective of this study is to provide a comprehensive diagnostic tool for learning organizations (DTLO), based on the designed construct, to assess LO status of Indian organizations and identify their LO related strengths and weaknesses. Further, the tool will enable respective organizations to engage in productive discussions that promote dialogue and foster learning. 2. LEARNING ORGANIZATIONS Business environments are too chaotic and organizational change too complex to establish firm objectives, fixed plans, and concrete programs of change. Amid sometimes unpredictable, always uncertain, and highly turbulent business conditions, an organization's ability to learn as it goes may be its only true source of competitive advantage (Rowden, 2002). Where change and adaptability are integral to an organization's capability and are built into its overall vision and mission, the organization is better equipped to generate short-term mission, which would then influence long-term strategy. Change is an essential feature of LO. In the era of turbulent changes in the external environment, the idea that change in the organization cannot be a onetime matter, but must be continual, is a paradigm shift. Change measured in terms of days, months, and years is no more valid as was the case in the past. LO creates an in-built mechanism to absorb change. Change, seen as an opportunity (Pitts & Lei, 2003), facilitates learning and helps organizations to create new sources of competitive advantage in their areas of operations, which in turn helps them to flourish and grow. As a result, both profit and non-profit making organizations make drastic revision to ensure that they are better geared to their environment and in particular, to their customers (Bergenhenegouwen et al., 1997; Boam & Sparrow, 1992). In the early 1990's the LO was at the idea stage, without an established repertoire of approaches, tools, methodologies or even case studies to create a LO. As many scholars contend, life in today's world is about performance and results. Institutionalizing a system of effective organizational learning lays the foundation for effective problem solving. To ensure success, organizations need to nurture a combination of individual and organizational learning, along with full involvement and commitment of their workers and leaders. As a result of this continual learning which propels the organization to higher levels of learning, LOs become more adaptive to their external environment, continually enhance their capability to change/ adapt, develop collective as well as individual learning, and use the results of learning to achieve better results (Skyrme, 1995). Further, LOs are better places to work on account of (1) being more fun to go to work, (2) giving people hope that things can become better, (3) providing suitable playground for creative ideas, (4) creating a safe place to take risks, experiment with new ideas and behaviors, and face challenges needed to stretch beyond perceived limits. Thus, in LOs, everyone's opinions are valued and peoples contribution is not determined by position in the organization. On this basis, organizations like 3M, ABB, American Airlines, AT&T, Boeing, Electricit de France, Fiat, General Electric, General Motors, Google, IBM, L.L. Bean, Motorola, Mutual Investment Corporation, Nippon Electric, Sony, Toyota, the U.S. Army, and Xerox (Edwin et al. ,2009; Garvin, 2000; Pitts & Lei, 2003; Liker, 2004) evolved into LOs and their
471
ZENITH
organizational practices have become as examples for other organizations intending to develop into LOs and benefit from the outcome. A LO also promotes exchange of information between and among employees, thus, create a more knowledgeable workforce. This produces a very flexible organization where people accept and adapt to new ideas and changes through a shared vision. In simple terms, learning is used in the sense of learning to do, not in the sense of knowing things (Karash, 1995). Thus, LO comprises, (1) creating knowledge in terms of capacity for effective action and (2) generating learning in terms of increasing knowledge. 3. DEFINITIONS OF LEARNING ORGANIZATION Learning organization came into the management lexicon in 1990 when Senge (1990, p. 4) identified, Learning organizations are possible because, deep down, we are all learners. Senge defines LO as, an organization where people continually expand their capacity for effective action (a journey from knowledge to learning), where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to learn (increasing knowledge or capacity for effective action) together (Senge, 1990, p. 3). Garvin (1993, p. 80) defines LO as an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights. Senge et al. (1994, p. 49) advocate "Learning in an organization means the continuous testing of experience, and the transformation of that experience into knowledge- accessible to the whole organization, and relevant to its core purpose". Similarly, Pedlar et al. (1997, p.3) considered LO as, an organization that facilitates the learning of all its members and consciously transforms itself and its context. The definition of LO (Senge, 1990) points out that enhancing capability is learning. Therefore, learning is an essential feature of learning organizations that is continuously experimented (Wang & Ahmed, 2003) to achieve desired result through systematically planned change. Learning is not just about training. It constitutes 4 levels to develop higher level of knowledge and skills (Skyrme, 1995). They are (1) learning facts, knowledge, processes, and procedures, that is applicable to known situations where changes are minor, (2) learning new job skills that are transferable and applicable to other situations, where current responses need change. Bringing in outside expertise is a useful tool here, (3) learning to adapt, that is applicable to more dynamic situations where the solutions need developing; Experimentation, and deriving lessons from success and failure are the mode of learning here, and (4) learning to learn, which is about innovation and creativity; designing the future rather than merely adapting to it. This is where assumptions are challenged and knowledge is reframed. 4. CHARACTERISTIC OF LEARNING ORGANIZATION When in performing organizations leadership painstakingly builds LOs on the basis of understanding of the benefits that ensue, we discover some unique characteristics in each such LO. Scholars perceive, however, that like continual learning even becoming a LO is also a perpetual journey and not a destination. Nevertheless, as the initiatives are nurtured, more characteristics of learning organization (CLO) develop setting examples for other organizations
472
ZENITH
to emulate in their specific organizational context. Studies on LO, comprising theoretical/ conceptual and empirical studies, have been mostly carried out in the Western business context. Overall, there are relatively sparse empirical studies on LO in the Indian business context. Different scholars and studies on LOs and performing organizations have focused on individual and collective learning, organizational learning, learning disciplines, workplace based learning, tacit and explicit knowledge, systems framework, synergistic teams, technology and resources, unique organizational practices, leadership behavior, areas of strategic concern and so on, each having specific features, attributes or variables. All these and those identified by organizational learning theorists represent CLO (Table 1). TABLE 1: CHARACTERISTICS OF LEARNING ORGANIZATIONS From LO scholars/ studies Page 1 of 3 Scholar/ Study/ LO CLO
Sonys six steps
Six steps: Allocation of resources for innovation and experimentation Extensive decentralization of operations A bias against overspecialization Frequent rotation of employees Use of multiple product development teams A balance between psychological and monetary rewards.
Pitts and Lei (2003)
Six KOPs:
Companies like Sony, IBM, Frequent rotation of managers 3M, ABB etc. fully Continual learning incorporated Decentralization of decision making Encouragement of Multiple experiments High tolerance for failure Openness and diversity of viewpoints
ZENITH
Watkins and Marsick (1998)
Continuous learning Dialogue and inquiry Team learning Embedded system
Empowerment Leadership Financial performance Knowledge performance
Watkins and Marsick (2009)
Four features: Individual learning Team/group learning Organization learning Measurement of performance at the organization level
Garvin et. al. (2008b)
Three building blocks comprising 10 components: 1) Supportive learning environment: Psychological safety Appreciation of differences Openness to new ideas Time for reflection 2) Concrete learning processes and practices Experimentation Information collection Analysis Education and training Information transfer 3) Leadership behavior that reinforces learning
ZENITH
TABLE 1: CHARACTERISTICS OF LEARNING ORGANIZATIONS (CONTINUED) From LO scholars/ studies Page 2 of 3 Scholar/ Study/ LO CLO
Emery (2004)
Workplace based learning: 8 Inspiring to experiment and learn factors new ways Reward for learning Time of study and learning Enjoying studying as part of a group
Learning resources in work area Learning from others in team meetings Organization enabled computer skills Internet use for learning Hitt (1995) Eight characteristics: Synergistic teams Shared values Management style Strategy/ action plan Watkins & Marsick (1993) Three types learning: Formal Senge (1990) Five disciplines: Systems thinking Personal mastery Pedlar et al. (1991, Shared visioning Mental modeling Team learning of Structure Staff characteristics Distinctive staff skills Measurement system workplace Informal Incidental
A learning approach to strategy Enabling structures
ZENITH
1996, 1997)
Participative policymaking Informating
Workers scanners and
as
environmental
Inter-company learning Formative control accounting Learning climate Self-development opportunities Leadership
Internal exchange Reward flexibility
Watkins and Marsick Six characteristics: (1993); Calvert et. al. Continuous learning opportunities (1994); Kerka (1995) Using learning to reach their goals Linking individual performance with organizational performance Fostering inquiry and dialogue, making it safe for people to share openly and take risks Embracing creative tension as a source of energy and renewal Interacting with environment. du Plessis et. al. (1999) Three areas of strategic concern: Strategy as a learning process Structures and systems to support the attributes of LO The role of leadership and teams in the learning processes Garvin (1993, 2000) Systematic problem solving
Experimentation with new approaches Learning from ones own experience and past history Learning from the experiences and best practices of others Transferring knowledge quickly and effectively throughout the organization Set of organizational practices
ZENITH
TABLE 1 CHARACTERISTICS OF LEARNING ORGANIZATIONS (CONTINUED) From LO scholars/ studies Page 3 of 3 Scholar/ Study/ LO CLO
Moilanen (2001)
LODT: Driving forces Finding purpose
Questioning Empowering Evaluating
Taylor (2004)
Seven dimensions of top managers behavior: Relationship with external environment Conducive structures Fitness of work processes Managers role How information is found and used Learning climate
Liker (2004) on Toyota
One of 14 principles: To become LO
Kontoghiorghes (2005)
et.
al. Three strong predictors:

Open communications and information sharing Risk taking and new idea promotion Information, facts, time, and resource availability Garvin et. al. (2008a) Six aspects of leadership behavior that reinforces learning: Active questioning Listening
ZENITH
Promoting problem identification Knowledge transfer Reflective post-audits Willingness to entertain alternative points of view Edwin et. al. (2009) Griego et al. (2000) Systems that support learning Training and education Rewards and recognition Vision and strategy Information flow From organizational learning theorists/ scholars Individual development and team
Author: topic of focus
CLO
Argyris and Schon Individual learning
(1996):
Staff training and development
Glynn et al. (1992): Process or Enhancement of information processing and problem system solving capability Creation and maintenance of learning culture: collaborative Drew and Smith (1995): Culture or team working, employee empowerment, and involvement, metaphor etc. Fiol and Lyles (1985): Knowledge Facilitation of interaction and strengthening of knowledge management base Pedlar et.al. (1991): Continuous The adoption of TQM practices improvement
5. KEY DYNAMICS OF LEARNING ORGANIZATION Based on the most frequent use and relevance, the CLO can be classified (Table 2) in terms of certain dynamics that represent LOs and hence explain their status when measured with an appropriate and holistic diagnostic tool.
ZENITH
TABLE 2: CLASSIFICATION OF CLO IN TERMS OF DIMENSIONS/ DYNAMICS/ CONSTRUCTS/ FOUNDATIONS S.No 1 Dimension/ Dynamic/ Construct/ Foundation/ Template of LO Supporting structures & environment (Workplace based learning) Most frequently used CLO Learning climate Learning opportunities Rewards for learning Culture Enabling structure Knowledge management 2 Learning disciplines/ processes/ component technologies Learning strategy Vision and strategy Awareness of big picture
Organizational/ management practices
Continuous learning Participative policymaking Tolerance of mistakes Openness to new ideas Policies and practices that support training
Set of organizational practices Leadership External environmental factors 4 5 Organizational performance Other factors/ features Business results
ZENITH
Thus, the classification of CLO (Table 2) used in different studies reveals that supporting structures and environment, learning processes, and organizational practices are the three key dynamics of LO. This study uses workplace based learning (WBL), Internalization of learning disciplines (ILD), and key organizational practices (KOP) as equivalent to the three dynamics. All the three represent CLO. However, it is important to bring the identified CLO related to the three dynamics together in a model (OKeeffe, 2002, p. 138) that can explain comprehensively the complexities of LO and hence form together a measure for the assessment of status of LO. Organizational performance factors, both physical and financial, and other business result factors like productivity are considered to be outcome of LO status and are not directly relevant to assess the status of LO. The role of leadership is addressed through the institutionalization of the key organizational practices, applicable in a given context. The issue of knowledge management is an important constituent of the workplace based learning. Relevant culture and structure for learning encompass all the three dynamics. Organizational performance and external environmental factors have not been considered in this study. However, at variable level it is possible to include additional characteristics as found necessary in a given context. In effect, the study focused on the selected three dynamics. 6. DESIGN OF CONSTRUCT Various models of LO have developed based on the theoretical roots and perspectives held by different authors. This study takes a holistic theoretical view that draws on the LO concepts of Emery (2004), Senge (1990) and Pitts and Lei (2003) to derive the WBL, ILD, and KOP characteristics. Thus, it uses a characteristics model (Altman & Iles, 1998) of the LO and considers the CLO that are associated with the three dimensions of the construct evolved. According to Burns (2002, pp. 82-84), the key features of LO are (1) a learning culture, (2) key management processes that encourage interaction across boundaries, (3) tools and techniques that aid individual and group learning, and (4) skills and motivation to learn and adapt. Learning culture is akin to ILD, Key management process to KOP, tools and techniques to WBL, and skills and motivation come from features of all the three. Thus, this study supports the construct validity of the concept of LO used in this study. Researchers and practitioners discussed, under the auspices of American Society for Training and Development, on the basis of a review of the literature and an analysis of selected diagnostic instruments and identified the core features of LO (Marsick, n.d.). Integrating these features with relevant organizational systems and practices, it is possible to arrive at an appropriate assessment tool for LO status. However, scholars often caution against a one-sizefits-all approach to creating the LO. One needs to take a closer look at the nature of learning process in a given organization and install an appropriate checklist of practices that fit and work (Marsick, n.d.). Accordingly, keeping in view the general nature of organizational learning in the Indian business context which is more prescriptive to start with and evolutionary through debate and dialogue as people achieve psychological maturity with higher levels of learning, the three dynamics of LO have been selected. Senges (1990) model addresses the three levels of learning at individual, team, organization as a whole. The works of Emery (2004) and Pitts and Lei (2003) support the need for relevant facilitating organizational systems for change management, which support learning.
480
ZENITH
Moreover, the construct validity of this study and the DTLO was further corroborated and supported by three comparable studies in the literature. First, Watkins and Marsick (2009), in the process of development of their instrument DLOQ, construct a set of observable variables to form measures for their theoretical construct. They define the construct from an organizational culture perspective and thus provide adequate measurement domains for scale construction. DLOQ includes dimensions of LO at all levels. According to Redding (1997), the framework created by Watkins and Marsick (1996) was among the few assessment tools of LO that covered all learning levels (that is, individual, team, and organizational) and system areas. Second, Garvin et al. (2008b) in a comparable study made available a tool considering the three dimensions of supportive learning environment, concrete learning processes and practices, and leadership behavior that reinforces learning. Clearly, these are much more akin to the dimensions proposed in this study. Third, rtenblad (2002), through a comprehensive review of literature on LO, identifies four understandings of the LO concept (1) the organizational learning perspective, with focus on the storage of knowledge in LO and its application at different levels amounting to learning, (2) the learning at work perspective, which sees a LO with individuals continually learning at the workplace, (3) the learning climate perspective, which sees the LO continually facilitating the learning of its employees, and (4) the learning structure perspective, which considers LO as a flexible entity. While the theoretical framework based on the three dynamics proposed for the construct of this study covers fully the first three understandings of the LO, the fourth learning structure perspective is considered through a set of key organizational practices. Looking at the outcome of the three studies (Watkins & Marsick, 2009; Garvin et al., 2008b; rtenblad, 2002), the construct validity of the DTLO developed is corroborated and supported. 7. CONCEPTUAL MODEL The three dimensions identified for this study, comprising WBL, ILD, and KPOs, are brought together in a conceptual model (OKeeffe, 2002, p. 138) to explain comprehensively the dynamics of LO. For assessing the LO status of organizations, both the means and the ends are important (Easterby-Smith & Araujo, 1999; Armstrong & Foley, 2003). The design of construct is, therefore, such that it does not fit neatly into either category. The use of supporting learning environment and learning disciplines by and large represents the means and the key organizational practices tend to lean towards the ends. Further, learning disciplines comprise individual learning, team learning, and along with systems thinking, organizational learning (Rao et. al., 2004). They are about the skills to be mastered (Senge, 1998b). For effective internalization of these skills (learning disciplines), supportive learning environment is a prerequisite. The ends obviously depend on the means. Thus, both the extent of presence of supportive learning environment and internalization of learning disciplines predict the extent of presence of key organizational practices. Accordingly, the conceptual model (Fig. 2.1) has been configured. The framed hypothesis and research questions test the critical propositions and also answer questions related to relationships and impact within and across the means and ends. As without both the mechanisms of means and ends a LO is unlikely to emerge, the assessment of LO status comprises the three dimensions representing the means and ends in a holistic and integrated perspective. Thus, the conceptual model for this study has three dimensions (1) status of workplace based learning, (2) internalization of learning disciplines, and (3) presence of key organizational
481
ZENITH
practices of LO. The first two contain eight and five predictor variables respectively. The third represents six dependent or outcome variables. These variables have in all 56 items in the three questionnaires as measures. Dimension 1 uses the items measured on 4-point Likert-style scale (1 representing stronger traits and 4 representing weaker traits). The direction of the scale was retained as per Emery (2004). The scores were transposed during analysis. Dimension 2 and Dimension 3 use the items measured on 4-point Likert-style scales (1 = almost never, 4 = almost always).
Predictor Variables
Status of workplace based learning WBL
1. 2. 3. 4. 5. 6. 7. 8.
Time of study and learning Learning resources in work area Organization enabled computer skills Internet use for learning Inspiring to experiment and learn new ways Reward for learning Enjoying studying as part of a group Learning from others in team meetings
Predictor Variables
Internalization of learning disciplines ILD
1. 2. 3. 4. 5.
Personal mastery Shared visioning Mental modeling Team learning Systems thinking
Dependent Variables
Presence of key organizational practices of learning organization KOP
1. 2. 3. 4. 5. 6.
Frequent rotation of managers Continual learning Decentralization of decision making Encouragement of Multiple experiments High tolerance for failure Openness and diversity of viewpoints www.zenithresearch.org.in 482
FIGURE 1: THE CONCEPTUAL MODEL FOR STUDY Most firms are not yet learning organizations. These firms face varying levels of resistance in implementing change. Pitts and Lei (2003, pp. 466-467) contend that top managers can make their firms learn and create competitive advantage by institutionalizing key organizational practices of LO. Sensing the need for strategic change, leadership may initiate awareness programs, stimulate debate about alternate solutions, work out a consensus for a preferred approach, assign responsibility for implementation, and allocate resources to sustain
ZENITH
change. These are especially valuable when environmental developments begin to erode existing sources of competitive advantage. With several examples from the corporate world, Pitts and Lei (2003, p. 481) portray a picture of how even firms that once dominated their industries need to reinvent themselves in new ways to serve their markets. They specifically describe in detail how General Electric had instilled the idea of change as part of its corporate culture (Pitts & Lei, 2003, pp. 481-484). Since their choice of selection of KOPs is based on excellent companies from the corporate world, the chosen KOPs provide a justifiable basis for selection of their work in this study. Along with other variables, KOPs form a reliable set of CLO to assess the status of LO in an organization. 7.1 EPISTEMOLOGICAL UNDERPINNING OF THE CURRENT STUDY Coming to the epistemological aspects of this study, both the quantitative methods with the administration of the DTLO and the qualitative/ ethnographic methods of unstructured interviews and focus group discussions have been used. As the communities of respondents in either are the same, the two methods complement each other in arriving at the truth regarding the current LO status of the participating organizations. If it is only for testing of the DTLO, dependence of only quantitative methods with larger number of organizations, each with reasonable number of respondents, would suffice. Since the main aim is to assess the LO status of organizations, it was necessary to verify the attributes from qualitative methodologies. Moreover, the points explored in unstructured interviews and focus group discussions were mostly drawn from the questionnaires. Imaginative comparison of the outcomes from both methods and integration into unified viewpoints helped in arriving at useful findings not only for the participating organizations but also for other Indian organizational in general. 7.1.1 RESPONDENTS AND PROCEDURES The study was conducted and DTLO was tested in a group of 422 respondents from three organizations with the aim of having a diverse group of respondents for analyzing the DTLO, and the organizations themselves as whole organizations. The organizations were chosen from product manufacturing industry, process industry and educational services having multi-unit, multi-location operations, with global presence. All the three organizations were large and the respondent groups represented only small sections of these organizations. The respondents were asked for their designation, gender, age, total experience, period of time they have been employed by the current organization and the functional areas they have worked in. They were also asked to provide the number of days of training in the previous year and also total number of programmes attended in their service with the organization. Long-lasting employment was typical. The spectrum of their designations and different functional areas was broad and diverse. Occupations were in operations, maintenance, HR, marketing and sales, IT and systems, material management, project management, quality management, safety management and so on. All were executives from middle and senior levels. The educational background was mostly higher technical and management education. The questionnaires were handed out personally or mailed. The response rates were monitored but not analyzed, the principal target of this data gathering was not only analyzing the questionnaires but also draw further conclusions about the organizations themselves. The
483
ZENITH
procedures involved administering DTLO and then analyzing the results to determine the LO status and identify strengths and weaknesses in each organization. Further, certain relationships between workplace based learning, internalization of learning disciplines, and presence of key organizational practices have also been researched and established. 7.1.2 DATA ANALYSIS The information provided by the questionnaires was recorded and filed and the Excel software was used to process the data. The data were processed for two purposes: first the more pragmatic purpose, namely to discover and give feedback to the participating organizations and second the scientific purpose, involving the testing of the DTLO itself, The data thus collected and organized was then transformed to SPSS for the descriptive, correlation, regression, reliability, and principal component factor analyses. After addressing the important aspects of validity of measures and reliability of scales, the results have been discussed and findings arrived at for the participating organizations. 7.1.3 VALIDITY OF MEASURES According to Nunnally and Bernstein (1994, p. 83), the term validity denotes the scientific utility of a measuring instrument broadly statable in terms of how well it measures what it purports to measure. Looking into this study, the purpose is to design the construct of a holistic LO and to assess its status in Indian organizations. This implies, thus, making the very abstract concept of LO more explicit and accessible by developing a DTLO composed of suitable dynamics, variables, and items. This study analyzed a great variety of domains and variables related to the concept of LO. As noted by Nunnally and Bernstein (1994, p. 86), domain size and specificity are closely related; the larger the domain of observables related to a construct, the more difficult it is to specify the variables that belong in the domain. The task of defining LO and making it more concrete and pragmatic by using a few observable variables is a challenging task. The construct defined is a holistic way of analyzing LOs. A construct is only a word, and although the word may suggest explorations of the internal structure of an interesting set of variables, there is no way to prove that any combination of these variables actually measures the word (Nunnally & Bernstein, 1994, p. 107). There have been several alternative options within the process, and the result could be said to be based on theory as well as intuition. The theorizing process is clearly intuitive (Nunnally and Bernstein, 1994, p. 88). Therefore, there can be some uncertainties, in spite of clear purposes and thorough analyses of related theories. A discussion of how one can, if all, obtain sufficient evidence how a domain of observables to relate to a construct requires an analysis of the deepest innards of scientific explanation (Nunnally and Bernstein, 1994, p. 90). The development of the DTLO and questionnaire were based on certain theories. As explained, the most relevant parts representing the idea of holistic LO were selected and a model structure covering the whole was developed. 7.1.4 GENERAL ORGANIZATIONS IMPLICATIONS FOR THE THREE PARTICIPATING
The implications of the study for the three participating organizations can be profound because LOs are about fast paced continuous improvement, where all employees understand the systems
484
ZENITH
and willingly participate in achieving the outcomes. In order for the organizations to be successful in the global context today, it is critical to create systems where all employees learn and then quickly share the learned information. Understanding the characteristics of a successful LO will help the organizations and their constituents realize success in producing effective outcomes for the internal and external stakeholders. Another general implication of this study is that organizations compete with private business and other government entities for both entry level and leadership level executives. Over time, the most successful people want to work for successful organizations. To be a successful organization and attract the highest quality human resource, the organizations need to continually improve and compete with several organizations. A successful LO provides an environment where change is welcomed and anticipated by employees who also happen to be true stakeholders in making the organization successful. Lastly, the LO approach to leading the organization facilitates creation of an environment where the senior level executives work effectively with each other to solve customer problems and offer the highest quality products and services. This is especially true for the organizations operating in the current fast paced, dynamic, and increasingly global external environment. 8. APPLICATION OF THE DIAGNOSTIC TOOL Over the past years, the extensive and diversified debate on LO is limited to describing and defining and rarely there are efforts to diagnose and measure the concept. This led to the development of DTLO for diagnosing LOs as whole entities with an integration perspective. Not only existing instruments vary a lot, but also very few have tested the reliability of their tools. In the absence of knowledge about the process of developing the tools, validity and reliability are difficult to analyze, assess, and establish in most cases (Moilanen, 2001). Thus, full comparison of existing diagnostic tools is difficult to carry out. Often, the value rests in its internal use and benefits. DTLO developed in this study covers the construct of LO as equally well as other comparable tools, even though, like others, it can be made more thoroughgoing by incorporating other CLO. However, it definitely serves well in providing an assessment of the present state of LO and it is also a useful tool for further development. Being sufficiently general in its approach, it is applicable for different organizations and respondents. Looking into the literature review, we discover that the dynamics involved in LOs comprise supporting structures and environment, learning processes, and organizational practices. The first one can be theorized as workplace based learning, the second as learning disciplines or component technologies and the third as key organizational practices of LO. Thus, this study uses three dimensions of LO: (a) status of workplace based learning with the eight variables used by Emery (2004), (b) internalization of the five learning disciplines propounded by Senge (1990), and (c) presence of the six key organizational practices of LO discovered by Pitts and Lei (2003). The DTLO developed (Rao et al., 2009c) by this study uses all the three to assess the status of LO. Factors used in all the three put together represent the characteristics of LO. These are to be made more comprehensive by including features of knowledge management and external environmental factors. Since this study did not attempt to integrate the factors used
ZENITH
by all researchers, there is scope to make the constructs to reflect such other dynamics involved in LOs. Thus, the DTLO gives a reasonable assessment of LO status of organizations. There are two methods of administering this tool. Any individual can take it or several members of a unit or even an organization can complete the instruments, average their scores, and scale them up. By design, the instruments are flexible enough to gather individual or group responses. TABLE 3: BENCHMARK SCORES FOR LO DIAGNOSTICS
Scaled Scores Learning Organization Questionnaires Facets and their Sub Components A. Current Status of workplace based learning (Reverse Scale) Composite for this block B. Internalization of the five learning disciplines of Senge (1990) 100-59 58-48 47 46-34 33-25 Bottom Quartile Second Quartile Median Third Quartile Top Quartile
1. Personal Mastery 2. Shared Visioning 3. Team Learning 4. Mental Modeling 5. Systems Thinking Composite for this block C. Presence of Key Organizational Practices of Learning Organization'
43-68 25-60 30-65 25-54 35-64 34-65
69-74 61-74 66-74 55-69 65-74 66-73
75 75 75 70 75 74
76-82 76-85 76-89 71-79 76-85 75-82
83-100 86-100 90-100 80-100 86-100 83-100

ZENITH
Frequent rotation of managers, Continual training of personnel, Decentralization of decision making, Encouragement of multiple experiments, Tolerance to failures and Openness & diversity of views Composite for this block 28-53 54-62 63 64-71 72-100
Note: The scaled scores for status of workplace based learning, internalization of the five disciplines individually and compositely and the extent of presence of key organizational practices of learning organization are computed by multiplying each respondent's score on the four-point scale by 100 and dividing it by four. Since the 422 respondents cover service and manufacturing organizations with proven learning culture-orientation, these scores may serve as bench mark scores for other Indian organizations. The next step is to compare individual or group scaled scores (Table 4) with benchmark scores (Table 3). The benchmark scores (Garvin et al., 2008b) are stratified into quartiles that is, the bottom 25%, the next 25%, the third 25% and the top 25% for each aspect and its subcomponents described around the median. After identifying the quartile in which ones score falls, it is possible to identify both strengths (areas of excellence) and areas for improvement. If employees, in multiple functional areas or units, complete the instruments, comparisons could be made unit-by-unit or even organization. This will also bring out learning culture differences and common facets to learn from each other. By pooling individual and group scores, leadership as a whole can promote a healthy debate (e.g., Rao et al., 2009e) to address specific issues and foster learning. And when people know they are consulted and that their ideas are welcome, they offer innovative ways for laying a more solid foundation for their organizations success (Edmondson et al., 2008). The benchmark scores have been derived from 422 respondents from Indian service and manufacturing organizations. Individual and groups average scores (Table 4) can be compared with the benchmark scores (Table 3). If the scores fall below the median in any of the facets or subcomponents, especially if they are in the bottom quartile, one may consider initiating an improvement program in that area. This program can ideally be developed through brainstorming by an assembled team. Where group scores fall above the median, especially if they are in the top quartile, concrete strategies that this group can articulate would benefit other groups and units in their areas of weakness. To illustrate the application of the DTLO, the data obtained from Zorg is used to develop the group scores (Table 4). The suggested approach can then be used to obtain useful information for further processing.
487
ZENITH
TABLE 4: ZORG GROUP AVERAGE SCORES Zorg Group Learning Organization Questionnaires Facets and their Sub Components A. Current Status of workplace based learning (reverse scored) Composite for this block 47 40 Third Bordering median Median Study Group Score Quartile Remarks
B. Internalization of the five learning disciplines of Senge (1990) 1. Personal Mastery 2. Shared Visioning 3. Team Learning 4. Mental Modeling 5. Systems Thinking Composite for this block 75 75 75 70 75 74 78 75 81 74 82 78 Third Median Third Third Third Third Bordering median Bordering median Bordering median
C. Presence of key organizational practices of learning organization Frequent rotation of managers, Continual training of personnel, Decentralization of decision making, Encouragement of multiple experiments, Tolerance to failures and Openness & diversity of views Composite for this block 63 66 Third Bordering median
Where scores are bordering the median, improvement programs may be developed for implementation in that area. In this regard, suitable communication exercises could be initiated. In all cases, looking at the item-level scores, specific action areas may be identified and addressed after team discussions.
ZENITH
Further, for organizations aspiring to become LO, the application of DTLO has the benefits of (1) helps in promoting dialogue and sharing thereby facilitating learning, (2) precise understanding of how an organization learns and identification of specific steps to learn better, (3) as part of an innovative process of self-organization, teams can come together to explore on the basis of scores, new ideas for improvement, (4) facilitates strengthening of CLO and (4) enables thorough analysis with a holistic perspective (Mitleton-Kelly, 2003; Garvin et al. 2008b). To be a successful LO, organizations need to create a level of debate, through encouragement of out of the box thinking, and aim for organizational (Peters, 1996). When analyzing the scores using DTLO and arriving at improvement opportunities, people go through a healthy debate and inquiry. While the basis of DTLO is in existing thoughts and concepts, but the whole is not a direct derivation of any one of these. The most frequently used characteristics that are relevant to assess LO status were compiled to form a conceptual framework containing three dimensions, 19 variables, and 56 items at four levels. The items covering the whole being more general than specific, the framework is equally applicable to different type of organizations. The composition of the whole can be considered as very good estimate of LO status of organizations. Further, after analysis the reliability of the instrument was measured with Cronbachs alpha. Cronbachs alphas for the elements of the tool varied between 0.5 and 0.8. Validity of the tool was established by presenting the process as a chain of phases from theory to statements. Comparison between DTLO and other tools presented a unified picture with comparable tools, except where the purposes of the tools are totally at variance. As explained, DTLO is aimed to create a holistic and integrated picture for further analysis, inquiry, debate, and discussions and to serve as useful diagnostic tool for development. However, the field that the LO concept covers is so vast that the content of the diagnostic tool could also be enhanced by formulating other kind of items representing other variables. It is also possible to develop more tailor made instruments for different other specific purposes. The study and DTLO are aimed at an audience involved in LOs and their development. The results suggest that DTLO is a useful tool to assess the status of LO, determine the strengths and weaknesses, participate in a healthy debate, and arrive at improvement action plans for implementation. 9. CONCLUSION As explained, the empirical study has been carried out to explore how the concept of LO is presently implemented in Indian organizations. This paper described the process of development of the construct of LO and on that basis the development of the DTLO. DTLO was then used to assess the status of LO in the participating organizations. This paper also described the way DTLO can be used by other Indian organizations. Results indicate that, on average, there is scope for improvement in implementation of the characteristics of LO. Further, recommendations made to organizations based on this study and its findings are (1) to create a desired outcome statement that addresses the commitment on the part of leadership to create a LO, (2) to conduct an organizational-wide assessment of LO status using an appropriate diagnostic tool, (3) to determine strengths and weaknesses using the process of dialogue among teams, to derive improvement action plans, and to
ZENITH
implement them, (4) to determine deficiencies in LO leadership training at mid- and seniormanagement levels and implement the same, (5) to measure the actual outcomes and compare with the desired level and take corrective actions, and (6) for the new hires, to establish transactional leadership traits and transformational leadership characteristics as hiring criteria for senior level employees and promotional criteria for mid-management employees to ensure alignment with LO intent and rapid-onboarding. REFERENCES Altman, Y., & Iles, P. (1998). Learning, leadership, teams: Corporate learning and organizational change. Journal of Management Development, 17 (1), 4455. Argyris, C., & Schn, D. (1996). Organizational learning II: Theory, method and practice. Reading, Mass: Addison Wesley. Armstrong, A. & Folay, P. (2003). Foundations for a learning organization: organization learning mechanisms. Learning Organization, 10 (2), 7482. Bergenhenegouwen, G. J., ten Horn, H. F. K., & Mooijman, E. A. M. (1997). Competence development a challenge for human resource professionals: Core competences of organizations as guidelines for the development of employees. Industrial and Commercial Training, 29(2), 55 62. Boam, R., & Sparrow, P. (1992). Designing and achieving competency: A competency-based approach to developing people and organizations. London: McGraw-Hill Burns, R. (2002). The adult learner at work: The challenges of lifelong education in the new millennium (2nd ed.). Warriewood, NSW: Business Publishing. Calvert, G., Mobley, S., & Marshall, L. (1994). Grasping the Learning Organization. Training, 48(6), 38-43. Drew, S.A.W. & Smith, P.A.C. (1995). The learning organization: change proofing and strategy. The Learning Organization, 2(1), 4-14.
du Plessis, D., du Plessis, M., & Millett, B. (1999). Developing a learning organization: A case Study. Journal of Management Practice, 2(4), 71-94. Easterby-Smith, M. (1997). Disciplines of organizational learning: Contributions and critiques. Human Relations, 50 (9), 10851106. Easterby-Smith, M., & Araujo, L. (1999). Current debates and opportunities. In M. EasterbySmith, L. Araujo & J. Burgoyne (Eds.). Organizational learning and the learning Organization. London: Sage. Edmondson, A. C. (2008). The competitive imperative of learning. Harvard Business Review, July-Aug. 2008, 60-67.
ZENITH
Edwin, C. N., Anthony, J. V., & Janet, M. G. (2009, March 1). Understanding organizations as learning systems. Retrieved January 15, 2011, from http://www.solonline.org/res/wp/learning_sys.html . Emery, H. (2004). Delivery of workplace based learning as a contextual orientation to e learning. Oxleas NHS Trust, UK. Fiol, M., & Lyles, M. (1985). Organizational learning. Academy of Management Review, 10(4), 803-813. Garvin, D.A. (1993, July-August). Building a learning organization. Harvard Business Review, pp. 78-91. Garvin, D. A. (2000). Learning in action: A guide to put the learning organization to work. Boston: Harvard Business School Press. Garvin, D. A., & Lynne C. L. (2008a). The multiunit enterprise. Harvard Business Review, June 2008, 106-117. Garvin, D. A., Edmondson, A. C., & Gino, F. (2008b). Is yours a learning organization?. Harvard Business Review, March 2008, 109-116. Glynn, M., Milliken, F., & Lant, T. (1992). Learning about organizational learning theory: an umbrella of organizing processes. Paper presented at the Academy of Management Meetings, Las Vegas, NV. Griego, O.V., Geroy, G.D. & Wright, P.C. (2000). Predictors of learning organizations: a human resource development practitioners perspective. The Learning Organization, 7(1), p. 5. Hitt, W. D. (1995). The learning organization: Some reflections on organizational renewal. Leadership & Organization Development Journal, 16(8), p.18. Karash, R. (1995). Groupware and organizational learning. Retrieved April 9, 2004, from http://world.std.com/~rkarash/GW-OL.
Kerka, S. (1995). The learning organization: myths and realities. Eric Clearinghouse. Retrieved from http://www.cete.org/acve/docgen.asp?tbl=archive&ID=A028. Kontoghiorghes, C., Awbrey, S.M., & Feurig, P .L. (2005). Examining the relationship between learning organization characteristics and change adaptation, innovation, and organizational performance. Human Resource Development Quarterly, 16(2), 185-211. Liker, J. (2004). Toyota Way. Marsick, V. J. (n.d.). Learning organizations. Retrieved May 09, 2011, from http://www.calproonline.org/eric/docs/marsick/marsick3.pdf
ZENITH
Mitleton-Kelly E. (2003). Ten Principles of Complexity & Enabling Infrastructures in Complex Systems & Evolutionary Perspectives of Organizations: The Application of Complexity Theory to Organizations, Elsevier, ISBN 0-08-043957-8 Moilanen, R. (2001). Diagnostic tools for learning organizations. The learning organization, 8(1), 6-20. Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating company. New York: Oxford University Press. Nunnally, J.C., & Bernstein, I.H. (1994). PsychometricTheory. New York: McGraw-Hill. OKeeffe, T. (2002). Organizational learning: A new perspective. Journal of European Industrial Training, 26(2), 130 - 141. rtenblad, A. (2002). A typology of the idea of learning organization. Management Learning, 33, 213230. Pedler, M., Burgoyne, J., & Boydell, T. (1991;1997). The learning company: A strategy for sustainable development. (2nd ed.). London: McGraw-Hill. Peters, J. (1996). A learning organization syllabus. The learning Organization, 3 (1), 4-10. Pitts, R. A., & Lei, D. (2003). Strategic Management: Building and Sustaining Competitive Advantage (3rd ed., pp. 463-491.). Thomson, South-Western. Rao, A. V. L. N., Sinha, G., & Tewari, H. R. (2004). Learning organization An exploration of the concept. Growth: Journal of the Management Training Institute, Steel Authority of India Limited, 32(1), 20-25. Rao, A. V. L. N., & Tewari, H. R. (2009a). Building learning organizations Indian experience. The Journal of Institute of Public Enterprise, 31(1,2 & 3,4), 73-90. Rao, A. V. L. N., Sinha, G., & Tewari, H.R. (2009b). Status of learning organizations - An empirical study. RVIM Journal of Management Research, R. V. Institute of Management, India.
Redding, J. (1997). Hardwiring the learning organization. Training and Development, 51 (8), 61 67. Rowden, R. (2002). The learning organization and strategic change. Advance Management Journal, 3, 11-16. Senge, P. M. (1990). The fifth discipline: The art and practice of the learning organization. New York: Doubleday 1990. Century Business: 1992. Senge, P. M. (1990b). The leader's new work: Building learning organizations. Sloan Management Review. pp. 7 - 22.
ZENITH
Senge, P. M., Kleiner, A., Roberts, C., Ross, R., & Smith, B. (1994). The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization. New York: Doubleday, pp. 593. Senge, P. M. (1994a). The laws of the fifth discipline. In The Fifth Discipline (pp. 57 - 67). New York: Currency Doubleday. Senge, P. M. (1994b). The leader's new work. Executive Excellence, 11(11), 8 - 9. Senge, P. M. (1994c). Senge's five disciplines for learning organizations. Personnel Journal, 73(11), p. 66. Senge, P. M. (1998a). Learning organizations, learning to alter mental models, sharing knowledge and systems thinking. Retrieved March 21, 2004, from http://www.solonline.org/res/kr/learningorg.html, mentmode.html, shareknow.html and systhink.html. Senge, P. M. (1998b). Leading learning organizations & the leaders new work. Retrieved January 10, 2008, from http://www.solonline.org/res/kr/learningorg.html. Senge, P. M., Cambron-McCabe, N., Lucas, T., Smith, B., Dutton, J., & Kleiner, A. (2000). Schools that learn - A fifth discipline fieldbook for educators, parents, and everyone who cares about education. New York: Doubleday/Currency Skyrme, D. (1995). The learning http://www.skyrme.com/insights/3lrnorg.htm. organization. Retrieved from
Taylor, W. G. K. (2004). Growth through organizational learning, Growth: Journal of the Management Training Institute, Steel Authority of India Limited, 32(1). Wang, C. L., & Ahmed, P. K. (2003). Organizational learning: a critical review. The organization, 10(1), 8-17. learning
Watkins, K., & Marsick, V. (Eds.). (1993). Sculpting the learning organization - Lessons in the art and science of systematic change. San Fransisco: Jossey-Bass.
Watkins, K., & Marsick, V. (1996). In action: Creating the learning organization. Alexandria, VA: American Society for Training and Development. Watkins, K.E. & Marsick, V.J. (1998). Dimensions of the Learning Organization Questionnaire. Partners for the Learning Organization, RI, Warwick. Watkins, K., & Marsick, V. (2009). Dimensions of learning organization questionnaire. Retrieved September 9, 2009, from http://www.partnersforlearning.com/quesions2.asp
ZENITH
ASSESSING JOB SATISFACTION LEVEL OF EMPLOYEES IN A TERTIARY CARE HOSPITAL -A TOOL FOR TALENT RETENTION
MS. SYEDA AMTUL YAFE*
*Head & Associate Professor, Department of Hospital Management, Deccan School of Management, Owaisi Hospital & Research Center, DMRL X Roads, Hyderabad-500058, India.
ABSTRACT Employee job satisfaction is the fulfillment, gratification and enjoyment that comes from work. Its not just the money or the fringe benefits, but the feelings employees receive from the work itself. Hospital is a highly labour intensive organization, where the satisfaction of employees is vital for achieving the organizational objectives, since there is high employee end customer interaction. There are two basic sources of job satisfaction-- the employees pride in their work and the work environment both physical and interpersonal. Review of literature suggests that among other things, the ability to deliver health care service, the quality of the work, the opportunity to learn and express creativity, the sense of pride in their profession impact job satisfaction of employees in a healthcare setting. Individuals may vary to the degree in which each of these factors contributes more or less to their own job satisfaction. But the end result is that high job satisfaction typically leads to career success for employees and talent retention for organizations. This study aims at finding out job satisfaction level of staff in a tertiary care Hospital. The study was conducted for a sample size of 100 medical professionals and chi-square test was applied. One of the primary reasons for evaluating employee satisfaction is to improve the quality of patient care and to retain qualified health professionals. This paper would like to assess the job satisfaction level of employees, identify the factors influencing job satisfaction and offer suggestions to improve the job satisfaction level of employees for retention. KEYWORDS: Employee job satisfaction, Talent retentions, Quality of Patient care, Health professionals, Tertiary care hospital. ______________________________________________________________________________ INTRODUCTION Retaining talented employees is the greatest challenge faced today by organizations. Human asset is the most important asset and retaining them is more important than finding a successor to the vacant position. The cost of employee turnover is from 40% - 100% of an employee's annual salary, when productivity, recruiting costs, reduced efficiency in transition and time is considered.
494
ZENITH
The challenge is not only to attract the best talent but also to retain them. Rising opportunities for carrier development, lifestyle decisions, job changing, unbalanced work life, poor mentoring and stress are some factors which influence an individual's decision to continue or quit. Job satisfaction and occupational success are major factors in personal satisfaction, self-respect, self-esteem, and self-development. To the worker, job satisfaction brings a pleasurable emotional state that can often leads to a positive work attitude. A satisfied worker is more likely to be creative, flexible, innovative, loyal and will tend to add more value to an organization. For the organization, job satisfaction of its workers means a work force that is productive, retained, motivated, committed to high quality performance and reduction in complaints, grievances, absenteeism, turnover, and termination; as well as improved punctuality and worker morale. Job satisfaction is also linked with a healthier work force and has been found to be a good indicator of longevity. IMPORTANCE OF EVALUATING EMPLOYEE SATISFACTION There is a definite link between employee attitudes and patient satisfaction. If employees are unhappy or dissatisfied, despite their best efforts; it is difficult for them to conceal this factor when interacting with patients and other staff members. One of the primary reasons for evaluating employee satisfaction is to identify problems and try to resolve them before they impact on patient care and treatment. Improving the quality of patient care in hospitals is a vital and necessary activity. Patients report they receive less individual attention than ever before. They complain that doctors and nurses are too busy tending to the technical aspects of care to provide the much needed attention to patients personal needs. Not only is it important in terms of quality of patient care, assessing employee satisfaction is a critical component in retaining qualified health professionals. Many health care providers feel frustrated and disillusioned in jobs they expected to find fulfilling. They have less time to do a quality job of caring for patients; they are continually expected to cut corners, but see waste and feel unable to change the situation; they feel unappreciated and they feel their skills are underused. This leads to low morale, staff turnover, and overall disenchantment with job opportunities in health care. REVIEW OF LITERATURE According to Weiss Job satisfaction is defined as a pleasurable emotional state resulting from appraisal of ones job, an effective reaction to ones job and an attitude towards ones job.1 Herzberg et al reviewed more than 150 studies and listed various job factors of job satisfaction as Intrinsic aspect of job, Supervision, Working conditions, Wage and salaries, Opportunities for advancement, Security, Company and management, Social aspect of job, Communication and Benefits.2 In a study conducted by Al-Eisa Ibrahim S et al a self-administered questionnaire based on socio-demographic characteristics and job satisfaction was given to 89 participants. The study consisted of 42 males and 47 females; 56.2% were Kuwaiti, 82.0% were married and 73.0% had children. The results of study showed that the overall satisfaction was 61.8%. Significantly the
495
ZENITH
higher the age the higher the job satisfaction. There were no significant differences in overall job satisfaction for nationality, sex, marital status and number of children. GPs were less satisfied with the rate of pay and the amount of variety in work but more satisfied with their colleagues. Young physicians appear to need more attention and Job satisfaction of primary health care physicians is critical for improvement of health systems.3 Al-Enezi. Naser et al took a stratified random sample size of 500 nurses working in Ministry of Health hospitals in Kuwait and a questionnaire was distributed among them to identify factors related to the job satisfaction of nurses and the effect of selected background characteristics on the global satisfaction scale by using the McCloskeyMueller Satisfaction Scale. Factor analysis identified five factors: satisfaction with (a) professional opportunities; (b) praise and recognition; (c) scheduling of duty; (d) control and responsibility, and (e) extrinsic rewards. These together explained 59.5% of the total variance. Nurses were found to be dissatisfied with two of five factors: professional opportunities and extrinsic rewards and satisfied with the remaining three factors, although levels of satisfaction were not very high. The relationship of job satisfaction with nationality and marital status was positive and significant. However, a higher level of educational qualification showed an inverse relationship with job satisfaction. Based on findings, recommendations were made to develop a strategy to improve various aspects of nurses professional development and extrinsic rewards.4 A descriptive, co-relational and cross-sectional study conducted by Mosadeghrad Ali Mohammad et al to gain a better understanding of the relationships between job satisfaction and organizational commitment of employees, and their impact on turnover intention at Isfahan Hospitals. Data was collected by the distribution of two questionnaires among 629 employees of these hospitals through a stratified random sampling method. The results indicate that hospital employees are moderately satisfied with their jobs and committed to their organization. Employees' job satisfaction and organizational commitment were closely inter-related and correlated with turnover intention (P < 0.001). The positive correlation between the two was expected, but there was also unexpected correlation with turnover intention. As job satisfaction and organizational commitment have strong correlation with turnover, it was suggested to reinforce them by applying the right human resource policies.5 RESEARCH METHODOLOGY STATEMENT OF PROBLEM Job satisfaction is very important for a persons success in his/her professional life and for the development of the organization he/her is working for. This study aims at finding out job satisfaction level of staff in the organization and its impact on talent retention. OBJECTIVES 1. 2. To assess the job satisfaction level of employees in a tertiary care hospital. To identify the factors which influence job satisfaction.
ZENITH
3.
To offer suggestions to improve the job satisfaction level of employees for retention.
RESEARCH DESIGN: The research design adopted for the project is descriptive in nature. SAMPLING UNIVERSE: 300 bedded Tertiary care hospital in Secunderabad. SAMPLING DESIGN: The sampling technique employed for the research is Probability sampling. SAMPLING METHOD: Stratified Random sampling The different Strata into which the population of study is divided in this research are as follows: i) Medical ii) Non- Medical iii) Nursing PROPORTIONAL ALLOCATION Population size for Medical N1 = 190 Population size for Non- medical N2 = 328 Population size for Nursing N3 = 372 Total Population size N = 890 Required sample size n = 100 Calculation of sample size from each stratum: i) For Medical: P1 = 190/890 n1 = (190/890) 100 n1 = 21.3 = 21 (approx.) ii) For Non-medical : P2 = 328/890 n2 = (328/890) 100 n2 = 36.8 = 37 (approx.) iii) For Nursing: P3 = 372/890
ZENITH
n3 = (372/890) 100 n3 = 41.7 = 42 (approx.) SAMPLE SIZE: 100 DATA COLLECTION: Primary data is collected using structured questionnaire with closedended questions. DATA ANALYSIS: The acquired data is analyzed using statistical methods like simple statistical methods, Chi- Square. LIMITATIONS 1. 2. The study is subjected to the understanding, bias and prejudices of respondents. The study was conducted under constrained accessibility and short time-span.
DATA ANALYSIS AND INTERPRETATION JOB SATISFACTION STATUS TABLE 1: JOB SATISFACTION STATUS Frequency Valid Satisfied Dissatisfied Total Source: Primary Data GENDER BASED ANALYSIS
Percent 97 3 100 97.0 3.0 100.0
Valid Percent 97.0 3.0 100.0
TABLE 2: GENDER OF THE RESPONDENTS Frequency Valid male female Total Source: Primary Data 45 55 100 Percent 45.0 55.0 100.0
ZENITH
CHI SQUARE TEST FOR GENDER SATISFACTION
OF
THE RESPONDENTS
AND JOB
Null Hypothesis (H0): Job satisfaction is independent of gender of the employee Alternate Hypothesis (H1): Job satisfaction is dependent on gender of the employee COUNT TABLE 3: DATA FOR CHI-SQUARE TEST BETWEEN GENDER AND JOB SATISFACTION describes the satisfaction status of the respondent satisfied gender of the employee Total Source: Primary Data CHI SQUARE TEST TABLE 4: CHI-SQUARE TEST BETWEEN GENDER AND JOB SATISFACTION Value Pearson Chi-Square .587a Df 1 Asymp. Sig. (2-sided) .444 male female 43 54 97 dissatisfied 2 1 3 Total 45 55 100
499
INTERPRETATION: Since P value is >0.05, Null Hypothesis is accepted and Alternate Hypothesis is rejected, which implies the job satisfaction is independent of the gender of the employee
ZENITH
EXPERIENCE BASED ANALYSIS (IN STUDY HOSPITAL) TABLE 5: EXPERIENCE OF THE RESPONDENTS (IN STUDY HOSPITAL) Frequency Valid less than 6 months 6 months - 1 year 1-5 years above 5 years Total Source: Primary Data CHI SQUARE TEST FOR EXPERIENCE OF THE RESPONDENTS IN STUDY HOSPITAL AND JOB SATISFACTION Null Hypothesis (H0): Job satisfaction is independent of experience of the employee in study hospital. Alternate Hypothesis (H1): Job satisfaction is dependent on experience of the employee in study hospital. COUNT TABLE 6: DATA FOR CHI-SQUARE TEST BETWEEN EXPERIENCE & JOB SATISFACTION describes the satisfaction status of the respondent satisfied Experience in study hospital Total Source: Primary Data
500
Percent 11 30 46 13 11.0 30.0 46.0 13.0 100.0
Valid Percent 11.0 30.0 46.0 13.0 100.0
100
Dissatisfied 11 28 45 13 97 0 2 1 0 3
Total 11 30 46 13 100
less than 6 months 6 months - 1 year 1-5 years above 5 years
ZENITH
CHI SQUARE TEST TABLE 7: CHI-SQUARE TEST BETWEEN EXPERIENCE AND JOB SATISFACTION Value Pearson Chi-Square 2.236a df 3 Asymp. Sig. (2-sided) .525
INTERPRETATION: Since P value is >0.05, Null Hypothesis is accepted and Alternate Hypothesis is rejected, which implies the job satisfaction is independent of the experience of the employee in study hospital. DEPARTMENT BASED ANALYSIS TABLE 8: DEPARTMENT OF THE RESPONDENTS Frequency Valid MEDICAL NON MEDICAL NURSING Total Source: Primary Data 21 42 37 100 Percent 21.0 42.0 37.0 100.0 Valid Percent 21.0 42.0 37.0 100.0
501
ZENITH
TABLE 9: EMPLOYEE SATISFACTION SURVEY S. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Components Cleanliness of common areas Sufficient materials & equipments Job clarity Cooperation bet departments Liberty Process and procedure easy to work Salary structure Adequate technical training Cooperation bet co-workers Effective Conflict resolution Fair treatment by supervisor Value to suggestions Communication by top management Rewards & Recognition Decision making Awareness of employee rights Good place to work Will recommend to others Survey helps in understanding needs Clear understanding of policies 2 1 3
disagree somewhat disagree Neutral somewhat agree agree Total
1 5 5 3 12 3 24 3 17 2 2 7 5 19 8 3
8 15 8 9 8 11 9 5 26 6 4 3 4 26 18 3 2 2 2 6
2 9 2 7 11 8 4 7 11 9 7 15 13 11 14 12 7 18 10 9
21 22 23 30 24 26 26 25 13 27 19 39 29 19 22 17 26 18 26 18
68 49 62 51 45 52 37 60 33 56 68 36 49 25 38 65 65 60 61 64
100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
100 100 100 100 100
Source: Primary Data
ZENITH
FIGURE 1: EMPLOYEE SATISFACTION SURVEY
JOB SATISFACTION INDEX There is a five-point scale in the questionnaire based on which the employee responses range from Agree, Somewhat Agree, Neutral, Somewhat Disagree to Disagree. The total number of questions with answers against each response is calculated. (5, 4, 3, 2, 1) The TOTAL SCORE RECEIVED = (total number of responses of 5 * 5)+(total number of responses of 4 * 4)+(total number of responses of 3 * 3)+(total number of responses of 2 * 2)+(total number of responses of 1 * 1) Calculate the MAXIMUM TOTAL SCORE This gives the INDEX which is the (TOTAL SCORE RECEIVED / MAXIMUM TOTAL SCORE) * 100
CALCULATION OF JOB SATISFACTION INDEX JSI = (Total Score Received/Maximum Total Score) * 100 = (8156/ 10000) * 100 = 81.56
503
ZENITH
FINDINGS AND SUGGESTIONS FINDINGS The Job Satisfaction Index of the employees at study hospital is in a scale of 100 is 81.56 97.0% of employees are satisfied with their jobs, while only 3.0% dissatisfied Most respondents (55%) are female, while only 45% are male Most respondents (46%) have 1- 5 years of experience in study hospital, 30% of the respondents have 6 months to 1 years experience , 13% have more than 5 years , while only 11% have less than 6 months experience in study hospital Most respondents (42%) are from Non-Medical department, 37% are from Nursing, while only 21% are from Medical department Most respondents (68%) agree that common areas are kept clean, only 1% disagree and 2% have no opinion on the same. This implies that the cleanliness and hygiene of the hospital is satisfactory. Most respondents (49%) agree that they have materials and equipments to do their work right, only 5% disagree while 9% did not share their opinion. This implies that they should revisit the infrastructure available to employees. Most respondents (62%) agree that they are explained the duties and responsibilities entailed in their job description, only 5% disagree while 2% did not share their opinion. This implies that the employees should be properly briefed about their responsibilities towards their work. Most respondents (51%) agree that different departments cooperate with each other; only 3% disagree while 7% did not share their opinion. This implies that the interdepartmental co-operation can be made better. Most respondents (45%) feel free to offer comments and suggestions, 12% disagree while 11% did not share their opinion. This implies that suggestions from people should be more welcome. Most respondents (52%) find that the process and procedures at study hospital make it easy for them to work well; only 3% disagree while 8% did not share their opinion. This implies that processes can be made more approachable to people to ensure best results. Most respondents (37%) agree that their salary is decided according to their experience and skills, 24% disagree while 4% did not share their opinion. This implies that the salary structure should be reviewed and transparency should be maintained.
504
ZENITH
Most respondents (60%) agree that they receive adequate technical training; only 3% disagree while 7% did not share their opinion. This implies that technical training and learning is taken care of. Most respondents (33%) agree that people they work with are cooperative, 17% disagree while 11% did not share their opinion. This implies that they should take training for employees for their self development. Most respondents (56%) feel that they have easy and effective conflict resolution system, only 2% disagree while 9% did not share their opinion. This implies that they should have proper conflict resolution methods. Most respondents (68%) feel that they are treated fairly by their supervisors; only 2% disagree while 7% did not share their opinion. This implies that subordinates are treated fairly. Most respondents (39%) somewhat feel that top management pays careful attention to employee suggestions, only 7% disagree while 15% did not share their opinion. This implies that the senior management team should be more open to ideas made by the employees. Most respondents (49%) agree that top management communicates about the changes or decisions that affect the employees, only 5% disagree while 13% did not share their opinion. This implies that the senior management could enhance their communication channels to keep employees well informed about the changes in the company. Most respondents (26%) somewhat feel that they are not recognized and rewarded for good work, 19% feel that they are not at all recognized and rewarded for good work while 11% did not share their opinion. This implies that they should revisit the rewards and recognitions procedure. Most respondents (38%) feel that they are involved in decision making regarding areas that affect their work, only 8% disagree while 14% did not share their opinion. This implies that employee participation in decision making procedure should be encouraged.
Most respondents (65%) feel that they are aware of employee and patient rights that exist at study hospital, only 3% disagree while 12% did not share their opinion. This implies that people are aware of their rights. Most respondents (65%) feel that study hospital is a good place to work, only 7% did not share their opinion while none disagreed. This implies that people are happy to work for study hospital. Most respondents (60%) state that they would recommend employment at study hospital, only 2% disagree while 18% did not share their opinion. This implies that people would recommend and promote working at study hospital.
ZENITH
Most respondents (61%) agree that this employee satisfaction survey will help the organization understand its employee needs, only 1% disagree while 10% did not share their opinion. This implies that they should start a survey to take feedback from people about their needs and expectations. Most respondents (64%) feel that they have a clear understanding of organizations policies; only 3% disagree while 9% did not share their opinion. This implies that people are aware of the companys policies. SUGGESTIONS Employees should be given proper Job Orientation at the time of joining. The Inter as well as Intra-Departmental communication should be effective, informative and systematic. Training programs should be conducted to develop interpersonal and soft skills of the employees. There should be transparency in Compensation and Benefit Plans. Proper Performance appraisal techniques should be followed periodically. Employee should be aware of their KRAs and also should have development plan discussions with supervisors. Periodic counseling of the employees should be done. They should revisit the infrastructure available to employees. Develop a highly conducive and proactive work culture. REFERENCES
1. Weiss, H. M. (2002). Deconstructing job satisfaction: separating evaluations, beliefs and

2. Herzberg, F., Mausner, B., Peterson, R. and Campwell, D. (1959). Job attitude: Review of research and opinion. Pitsberg: Psychological Services of Pitsberg. 3. Al-Eisa Ibrahim S et al (2005) Job Satisfaction of Primary Health Care Physicians at Capital Health Region, Kuwait Middle east journal of family 3 (3) 4. Al-Enezi. Naser et al (2001) Job satisfaction of nurses with multicultural backgrounds: a questionnaire survey in Kuwait Nursing Leadership 22(2)
affective experiences. Human Resource Management Review, 12, 173-194, p.174
ZENITH
5. Mosadeghrad Ali Mohammad et al (2005). A study of the relationship between job satisfaction, organizational commitment and turnover intention among hospital employees Health Services Management Research 21(4)
507
ZENITH
A REQUISITE FRAMEWORK FOR ASSESSMENT & DEVELOPMENT OF LEADERSHIP COMPETENCIES

SATYA PRAKASH MEDAVARAM*; DR. SINDHU**
*Research Scolar, School of Management Studies, JNTUH, Hyderabad, India. **Associate Professor, School of Management Studies, JNTUH, Hyderabad, India.
ABSTRACT While attempting to assess competencies of their managers and leaders, organizations pursue numerous techniques that include multi-rater assessments like 360 degree feedback surveys, assessment centers etc. However, in spite of such attempts, many organizations do not precisely succeed in being effective in this regard, which necessitates, prior to assessment, defining and differentiating leadership competencies from generic skills, elaborating means of enhancing proficiency levels as employees grow in hierarchy etc.; perhaps due to a one size fits all approach. What would be very appropriate at this juncture is development of a customized, periodic process which helps organizations to objectively measure the most desirable competencies and augment the same to keep their leadership pipeline full and flowing. This paper is an attempt to customize the Assessment and Development Center Methodology with a focus on Modeling and Measuring Leadership Competencies, as compared to weighing employees on a generic, pre-determined set of competencies. ______________________________________________________________________________ INTRODUCTION Leadership is one vast subject that cannot be defined fully in a single sentense. But to suit to todays workplace context, the term leadership can be abridged as the process of positively influencing individuals by aiding and supporting in accomplishment of tasks. In this process, a fundamental criterion of leadership, development of several leaders is taken care of. It is an organizational imperative to develop leaders at all levels and be prepared to both compete in global market and as well to endure unanticipated adversities. However, despite the awareness of such need, so many organizations, regardless of their age and size, fail to be ready when opportunities arrive and fall prey when crises strike. Reasons could be well known to the organizations but such occurances are obvious, apparent and rather frequent.
508
ZENITH
A global survey conducted by AMA-HRI (Global Leadership Survey 2005-2015) finds that Lack of Measurement of Leadership Competencies is the top barrier for Leadership Development in organizations (8.35 on a scale of 1 to 10, as mentioned in the graph). The other barriers include Inadequate Leadership Development Program Content and Lack of Rewards for Leadership Behaviours etc. It is evident from the graph that the issues are not much related to budgetary constraints, Fig 1: Top Barriers for Leadership Development organizations do spend millions of dollars on executive and managerial development initiatives. If closely observed, it could be apparent that the issues are more systemic in nature than anything else. The genesis of this issue lies mainly, but not limited to, in the following areas. One of the primary issues with most of the performance management systems is that while focusing on measuring the past performance, less weightage (or almost no weightage) is given to measuring the potential of employees. i.e., what has been accomplished gets measured, what the individual is capable of accomplishing gets ignored Another major issue is the complexity involved with the nature of behavioural competencies. Like that of an iceberg, it is only a small portion of a competency that is visible and assessable i.e., technical skills and knowledge part, above the water line, as shown in the picture. However, a major portion of it is too difficult to assess i.e., behavioral aspect, below the water line. The tools that are used to assess the visible portion would not be as effective to assess the not visible portion. It could be possible that an employee does not find an occasion to exhibit many of the competencies that are considered for measurement. Therefore lack of opportunity to
Fig 2: Competency Iceberg Model
509
ZENITH
display competencies is, in a way being labeled as low competence or sometimes incompetence. Inaccurate techniques of measuring competencies provide input for future plans of competency development and assessment. The regular techniques, after failing to focus on what to measure and how to measure, fail further to address the fundamental questions whom to develop, what to develop, how to develop, and how much to develop.
To effectively deal with all the issues stated above (and those not mentioned also), what organizations would need is a robust, foolproof methodology. There are several methods that could address these issues but depending on a single technique might not help in eliminating the issues altogether. What would be appropriate is development of an integrated approach which also helps in streamlining the cycle of acquiring new knowledge and contribute more. The integrated approach should essentially include a) What is the current expected skill level of an employee b) What is the current skill level of the employee c) Current skill gap (a minus b) d) What is the future expected skill level of an employee e) Skill gap for future (d minus b) The integrated approach that is being proposed in this study is a comprehensive and customizable Assessment and Development Center that culminates in identifying skill gaps and developmental areas on priority basis for now and future. OBJECTIVES OF THE PAPER To study some of the existing models of competency assessment and gap identification To elucidate the shortcomings of the techniques currently under use and emphasize on the need for a more systematic competency assessment in the changing business scenario, To present a competency model that includes various categories of competencies, To detail an elaborate and easy to use set of guidelines for carrying out an assessment and development center, To identify various assessment tools and illustrate the integration of competencies & assessment tools which form competency-tool matrices, To provide guidelines to develop assessment reports and utilize the same for developing leadership bench strength
ZENITH
SCOPE OF THE PAPER To build a competency model by enlisting competencies that are essential for employee excellence To develop a process guide for conducting assessment and development center by following a step by step method To provide guidelines for generating assessment reports and using the same for employee development
THE COMPETENCY MODEL All the major steps of this approach would be similar to that of a regular assessment or development center, where as the competencies taken here for assessment form a definite competency model that has leadership competencies required for self, teams and organizational Strategy, more suitable for middle and senior management as a whole, as mentioned in the picture below.
III:
Leadership
Competencies
needed
for
management of ORGANIZATIONAL STRATEGY II: Leadership Competencies needed for
management of TEAMS I: Leadership Competencies needed for
management of SELF
The basic idea of dividing competencies into these categories is somewhat similar to the research study titled The Leadership Gap carried out by Center for Creative Leadership. However, listing of competencies has been done keeping the typical developmental needs of professionals working for Indian companies. A small set of competencies may be selected to suit an organizations requirement from each of the three levels with a view to map the end result of the entire initiative into the following format.
511
FIG 3: MODEL FOR LEADERSHIP COMPETENCY ASSESSMENT & DEVELOPMENT
ZENITH
S. No
Skill
Current Level
Expected Level
Gap 1
Future Expected Level
Gap 2
The competencies to be selected / measured from I, II and III levels are listed below. (Indicative list, competencies can be added also) I. Competencies for Leading Self o Communication and Interpersonal Skills o Creativity o Cultural Adaptability o High Intelligence Quotient o Personal Initiative o Planning Skills o Self-Awareness o Work-Life Balance II. Competencies for Leading Teams o Coaching & Mentoring Skills o Conflict Management o Confrontation of Problematic Team Members o Motivating & Inspiring Commitment o Networking & Building Collaborative Relations o Participative Management o Persuasion & Influencing Skills o Problem Solving & Analytical Skills o Respect for Individual Differences o Spiritual Intelligence o Being Resourceful o Business Acumen o Decision Making Skills o Decisiveness o Delegation & Empowering Skills o Developing Others o Emotional Resilience o Initiative o Management of Adversity / Risk
III. Competencies for Managing Organizational Strategy
o Management of Change o Quick Learning o Risk-taking Ability o Strategic Thinking o Visioning Skills
ZENITH
Organizations shall define each of these as relevant to their requirement and also prepare competency dictionaries for all those they include in their model. Few sample statements are given below. More statements need to be added to complete the competency dictionary. SAMPLE 1 COMPETENCY PROBLEM SOLVING & ANALYTICAL SKILLS Proficiency Level 1 (for Juniors) The individual recognizes the existence of a problem; Gathers information from a variety of sources (both internal/external) including experts, in order to completely understand a problem/situation. Proficiency Level 3 (for Middle Level) The individual uses several analytical techniques to break complex problems into component parts; Considers the organizations priorities while analyzing the costs and benefits of various alternative solutions; Presents problem analysis and recommends solutions to others rather than just identifying or describing the problem itself Proficiency Level 5 (For Seniors) The individual examines the environment for potential problems and takes proactive measures to either mitigate or preclude a problem from materializing; Delegates/ empowers others appropriately to deal with problems.
SAMPLE 2 - COMPETENCY INITIATIVE Proficiency Level 1 (for Juniors) The individual identifies areas where natural learning and training can take place; Works to meet a standard set by manager/leader; Seeks out from others involved in a situation to learn their perspectives Proficiency Level 3 (for Middle Level) The individual tries out new ideas after consideration of all factors involved and potential consequences and outcomes. Takes action to avoid impending problem or to capitalize on imminent opportunity. Sets a personal standard of excellence beyond that required by others Proficiency Level 5 (For Seniors) The individual digs beneath the obvious to get at the facts, even when not asked to do so; Creates opportunities or minimizes potential problems by anticipating and preparing for these in advance; Takes action to avoid or minimize potential problems or maximize potential opportunities in the future by drawing extensive personal experience
513
ZENITH
THE ASSESSMENT & DEVELOPMENT PROCESS Further to development of competency dictionary, each of the stages of Assessment and Development Center can be taken up. The major phases are as below o Phase I: Collecting Data for conducting Assessment Center o Phase II: Developing a Competency-Tool Matrix and Assigning Weightages o Phase III: Developing Exercises, Cases and Assessor Guidelines o Phase IV: Conducting the Assessment Center o Phase V: Generating Report & Providing Feedback to the participants o Phase VI: Action Planning for Individual Development PHASE I: COLLECTING DATA FOR CONDUCTING ASSESSMENT CENTER The HR Manager who initiates the exercise can use the questions mentioned below to gather all relevant data. ASSESSMENT CENTER COLLECTION: PREREQUISITES QUESTIONS FOR DATA
WHO ARE THE PARTICIPANTS? o Top/Senior Level Management o Middle Management o Are they working in the organization since more than 3 years or relatively new
WHAT IS THE PURPOSE/DESIRED OUTCOME OF THE ASSESSMENT CENTER? WHAT SHOULD BE THE NATURE AND SCOPE OF THE ASSESSMENT CENTER? o Focus on assessing the current level of competencies & future potential o Focus on assessing the developmental needs
WHAT DATA IS AVAILABLE? o Job Analysis/Job Description/Job Evaluation documents o Competency Profiles/Maps used earlier o Previous Performance Appraisal /Competency Assessment records
ZENITH
o Personal Development Plan documents WHAT KIND OF CONTENT WILL SUIT THE ASSESSMENT o Group Exercises o Individual Presentations, write-ups, Cases etc. o Role-plays, Management games, and others DID ANY PARTICULAR FRAMEWORK/PATTERN PROVED SUITABLE EARLIER OR HAVE ANY LIMITATIONS BEEN OBSERVED? WHAT SHOULD BE THE DEPTH AND SPAN OF THE ASSESSMENT CENTER? o Complex, multiple assignments, special projects, exercises & cases; spread over a period of 2-3 months or more o Moderately complex, combination of different types of exercises; 1 full day o 2-3 individual and/or group exercises; in half a day WHAT IS THE MEASUREMENT CRITERION? o Only numerical score awarded objectively by assessors o Combination of objective and subjective feedback o Only subjective feedback as observed and explained by assessors WHAT KIND OF REPORT IS OF USE & WHAT KIND OF FEEDBACK IS EFFECTIVE? o In-depth score analysis and descriptive feedback for coaching the participants and also for records o Overall feedback to generate an immediate action plan IS ANY OTHER USEFUL INFORMATION AVAILABLE?
PHASE II: DEVELOPING A COMPETENCY-TOOL MATRIX AND ASSIGNING WEIGHTAGES
ZENITH
FRAMEWORK FOR STAGE-I OF ASSESSMENT I (a)

TOOL COMPETENCY
I (b) Role Play Creating a New Relation
I (c) Acting in Imaginary Difficult Situation
I (d) Presentation on Learning from Career
I (e) Mental Agility Test (or) Creative ability test
Write up on future Goal Setting
Communication Skills Interpersonal Skills Planning Skills Personal Initiative Creativity SCORE
10 5 50
10
10
15
STAGE-I TOTAL SCORE (@ 5 points to each tick-marked item, added vertically) FRAMEWORK FOR STAGE-II OF ASSESSMENT II (a)
TOOL COMPETENCY
II (b) In-Basket / Prioritization Exercise
II (c) Addressing Low Performance - Role Play with subordinate
II (d) Caselet Situational Leadership
II (e) PPT on 2 Weeks Assignment New Solution for old Problem
Problem Solving Skills Analytical
516
Functional Problem Solving Case
ZENITH
Skills Conflict Management Skills Management of Difficult Individuals Network / Relation Building Persuasion / Influencing Skills Coaching & Mentoring Skills Motivating Others SCORE 20 20 STAGE-II - TOTAL SCORE (@ 5 points to each tick-marked item, added vertically)
20
20
20 100
517
ZENITH
FRAMEWORK FOR STAGE-IV OF ASSESSMENT III (a) Strategy Case Study Analysis (Related to the Industry) III (b) PPT on 2 Weeks Assignment Design & Development of a New Process III (c) PPT on 1 Month Project Improvement of an Internal Process III (d) PPT on 2 Months Project Working with Cross Functional Team III (e) Personal Stress Interview with Senior Management Team
TOOL COMPETENCY
Strategic Thinking Visioning Skills Business Acumen Management of Change Decisiveness Decisionmaking skills Delegation / Empowering Skills Emotional Resilience Developing Others Risk-taking ability SCORE
10 30
35 25
50
518
ZENITH
STAGE-III - TOTAL SCORE (@ 5 points to each tick-marked item, added vertically) FOR STAGE-IV OF ASSESSMENT
150
360 Feedback on competencies that are not covered in the assessment center; Psychometric Testing & Subjective interpretation on some of the tests like MBTI, 16 PF, FIRO-B, Johari Window Test, Belbin Team Roles Test, Career Orientation Test, Coaching Styles Test, Influencing Styles Test etc. can be considered. PHASE III: DEVELOPING EXERCISES, CASES AND ASSESSOR GUIDELINES DEVELOPMENT OF EXERCISES: The HR Manager shall attempt to create/obtain a fresh set of exercises keeping in mind the expectations from the assessment center incumbents. As this process is about testing individuals on their competency gaps and their eligibility for promotion, the exercises/cases shall be developed with a futuristic view, i.e. considering the skills and competencies required for the incumbents in future. The Leadership Pipeline model (book by Ram Charan, Stephen Drotter and James Noel) could be referred to understand and evaluate them on SKILL REQUIREMENTS: The new capabilities required to execute the new responsibilities TIME APPLICATIONS: New time frames that govern how one works WORK VALUES: What people believe is important and so become the focus of their effort
The exercises shall, in a way, help to understand the bench strength or the skilled manpower who are equipped to become the future leaders in the organization. Further, such understanding would help to comprehend the amount of talent development required to ensure that the organization has adequate leadership bench strength. ASSESSOR GUIDELINES: The assessors shall be made familiar to the framework of the entire process at least a couple of days before the assessment/development center is conducted. The HR Manager shall develop a comprehensive booklet elucidating each stage/phase of the process, i.e., the booklet shall contain details of participants, purpose of the exercise (promotion / identification of competency gaps etc.), detailed explanation of the competency-tool matrices, competency definitions and descriptors of desired level, scoring sheets and scoring guidelines and copies of all the tools to be used, along with the schedule of the exercise. The guidelines provided to assessors should be useful in Observing, Recording, Classifying Behaviour, Summarizing, and Evaluating / Rating during the assessment center process.
519
ZENITH
PATTERN FOR INTERPRETING THE SCORES AWARDED TO PARTICIPANTS (SAMPLE): OVERALL SCORE (%) 0 40 Inadequate Skills, Need substantial improvement 41 50 % - Below Moderate 51 60 % - Moderate 61 75 % - Good 76 85 % - Very Good 86 % and above Excellent
PHASE IV: CONDUCTING THE ASSESSMENT CENTER The stage-wise assessment center shall be scheduled and all the concerned shall be informed in advance. The HR Manager shall ensure that both the assessors and participants receive their respective sets of guidelines and follow the same. The participant guidelines should contain the introduction, purpose and the nature of the exercise, the list of individual and group exercises to be conducted, the schedule etc. The assessor guidelines should contain the details of the participants, the assessment center frameworks, the competency descriptors, the scoring sheets, scoring guidelines, the schedule etc.
PHASE V: GENERATING REPORT & PROVIDING FEEDBACK TO THE PARTICIPANTS Scores provided by all the assessors shall be consolidated and average of the scores awarded by all the assessors shall be computed for each section and subsection of the exercise. The subtotal scores thus arrived can be analyzed (a) Competency wise (b) Section wise. The interpretation of this analysis can be given in a descriptive form for easy understanding. The analysis and description forms a report of an individuals performance in the entire exercise. Feedback to Participants: This report helps in providing feedback to the individual and to coach him through a formal one-to-one session. If there are any low-scoring areas found in the analysis, the report may contain inputs of actions to be taken for improvement in those areas. During this discussion, both the individuals and their supervisors can obtain clarity on the reasons for low scoring in specific areas and the ways for improving those. A coach would be required to prepare and rehearse prior to giving a feedback. The feedback session shall result in an agreement between the employee and coach; that the employee would make a conscious attempt to develop himself and the coach would provide learning opportunities and support employee development.
ZENITH
Feedback for Decision making: The assessors can give their recommendations such as Individual is eligible for promotion Individual can be promoted with training on specific areas Individual can be promoted after 6 months /1 year provided he is trained in specific areas Individual is not eligible for promotion
PHASE VI: ACTION PLANNING FOR INDIVIDUAL DEVELOPMENT Based on the assessment center report and the feedback provided by the assessors, organizations shall take decisions related to promotion or non-promotion of employees. Further, action plans shall be prepared for future training and development initiatives for all the participants and such action plans shall strive to bridge the competency gaps identified. Finally, the participants shall be given clarity on the next cycle of competency assessment, the content for assessment and expectations from the exercise etc. CONCLUSION The key objective of this paper is to clarify the lacunae in the existing approaches and detail a process that would help resolve inefficiencies related to competency assessment and development. Though the guidelines provided do not specify a particular level, the details help in customizing the procedure from a junior level to a very senior level (ideally from an assistant manager level to senior manager level). An assessment and development center exercise, if executed with utmost care, can help organizations keep track of its leadership bench strength. A steady supply of leaders provides organizations the level of confidence required to take up anticipated and unanticipated challenges. For an employee, such exercise helps to realize his own potential and facilitates self introspection. An employee with such awareness will surely do what it takes to stay ahead of competetion. It is, indeed, a win-win situation for employees, their teams and the organizations as well. REFERENCES 1. 360 Degree Feedback & Assessment Centers (Vol III) T.V.Rao Excel Books-2010 2. Leading into the Future Aglobal Study of Leadership: 2005-2015 by AMA-HRI 3. Leadership Gap Indicator Center for Creative Leadership August 2009 4. Is past performance a good predictor of future potential? T.V.Rao & Mohit Juneja Indian Institute of Management Ahmedabad 2007
ZENITH
5. Building Leaders at Every Level - A Leadership Pipeline Ram Charan et al. Ivey Management Services May 2001 6. The Leadership Gap by Jean B. Leslie Center for Creative Leadership June 2009 7. What the Future Demands: The growing Challenge of Global Leadership Development Mercer Oliver Wyman 2007
522
ZENITH
HUMAN RESOURCE MANAGEMENT PRACTICES IN ORGANIZED RETAILING - A STUDY OF SELECT RETAILERS

DR D. MAHESWARA REDDY*; SURESH CHANDRA CH**
*Assistant Professor, I T M Business School, Warangal. **UGC JRF (Ph.D) Research Scholar, Kakatiya University, Warangal.
ABSTRACT Retailing displayed its significance in Indias market with tremendous contribution to the Indian economy. The development in the organized retail sector has showed the perfect platform to the Indian companies to enter into this sector. The entry of global players in retailing business has created huge challenges to the Indian companies. The organized retailer,s in order to respond to the competition, started to realize the need for efficient man power. The HR practices and the employee satisfaction became the primary concern for the organized retailers. The present study will provide a clear picture on the issues related to the HR practices and its impact on employees. The study will also focus on the various problems and challenges faced by the HR department in procuring and retaining the employees of organized retailing companies. KEYWORDS: HRM, special tellers, GDP, attrition. ___________________________________________________________________________ 1.0). INTRODUCTION Human resource management (HRM) practices are most effective when matched with strategic goals of organizations. HRMs role in the companys success is growing rapidly with the growth in many sectors in the present globalized era. HRM is a vital function in organizations and becoming more important than ever. The HRM practices are crucial in designing the structure for man power, staffing, performance appraisal, compensation, and training and development. HRM practices are a primary means for defining, communicating and rewarding desired role behaviours and desired role behaviours are a function of organizational characteristics. Innovative HRM practices can play a crucial role in changing the attitude of the companies and its employees in order to facilitate the entry and growth in the markets. The HRM practices in service sector especially in the area of retailing have found significant importance in the present scenario. The retailing is one of the service sectors where the need of qualitative human resources is highly expected. Retailing is an important element of business around the globe. Retailing consists of all activities that result in the offering for sale of merchandise to consumers for their own use. Retailing is the final step in bringing goods to consumer. They sell both goods and services. Retailing is the process of Sale of goods or merchandise, from a fixed location such as a departmental store or kiosk, in small or individual lots for direct consumption by the purchaser.
523
ZENITH
Retailing may include services, such as product delivery. Buyers may be individuals or businesses; a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells in smaller quantities or lots to the end users or consumers. Retailers are the end links of the supply chain as an important part of manufacturing/marketer overall distribution strategy. 1.1). OVERVIEW OF INDIAN RETAIL INDUSTRY Retailing is one of the pillars of economy because of its 13% contribution to GDP. Though the Indian retail sector is dominated by unorganized sector with 90% share, it is providing immense opportunities for large scale retailers to set-up their operations. The organized retailing sector is steadily increasing with the entry and operations of departmental stores, hyper markets, supermarkets and specialty stores which are replacing the traditional formats dramatically altering the retailing landscape in India. India is the third most attractive retail market for global retailers among the 30 largest emerging markets, according to US consulting group AT Kearneys report published in June, 2010. The total retail sales in India will grow from US $ 395.96 billion in 2011 to US $ 786.12 billion by 2015, according to the BMI India Retail report from the third quarter of 2011. Robust economic growth, high disposable income with the expansion in middle and upper class consumer because, the report identifies potential in Indias tier-II and tier-III cities as well. The greater availability of personal credit and a growing vehicle population providing improved mobility also contribute to a trend towards annual retail sales growth of 12.2 percent. An increasing number of people in India are turning to the services sector for employment due to the relative low compensation offered by the traditional agriculture and manufacturing sectors. The organized retail market is growing at 35 percent annually while growth of unorganized retail sector is pegged at 6 percent. Though the retailing sector is growing rapidly, some of the constrains are restricting its growth. Apart from the regulations and approval for Foreign Direct Investments (FDIs), the sector is strongly lacking the effective human resource practices. The problems of lack of trained work force, low skill level for retailing management, lack of development programmes to the existing human resources and problems in retaining qualitative manpower are some of the obstacles creating huge challenges to the Indian retail sector. At present, to overcome some of the challenges faced by retail, the companies are investing heavily in training and recruitment of qualitative work force. 1.2). STATEMENT OF THE PROBLEM In the present competitive scenario, the role of retailing is increasing rapidly with the entry of global players. Many Indian companies strongly keeping their aim on entering in retail industry. With increasing globalization, firms are entering a dynamic world of international business that is marked by liberalization of economic policies in a large number of emerging economies like India. To face the challenge of increasing competition that has resulted from liberalization, Indian organizations have initiated adoption of innovative human resource management practices both critically and constructively to foster creativity and innovation
524
ZENITH
among employees. The huge opportunities in organized retailing encouraging the companies to enter in retail industry. The last 2 decades has witnessed the tremendous potential for organized retailing. The growing needs of retail industry can be matched up with the aggressive human resource practices. The present retail organizations which are performing organized retailing are facing huge challenges in procuring and retaining and maintaining qualitative human resources. Hence, an attempt was made to analyze the various human resource practices followed in select retailers in organized retailing. 1.3). RESEARCH OBJECTIVES The major objective of this study is to study the human resource management practices pursued in the organized retailing. The study covers the retailer wise employee satisfaction on the various HRM practices employed in the retail outlets. Further, the study is also aimed at studying the various problems and challenges ahead for HR managers in the implementation of HRM practices in selected organized retail outlets. 1.4). RESEARCH METHODOLOGY The present research paper is an empirical one. The survey for the present research is conducted through primary data with the help of a questionnaire surveyed to employees of select organized retailers. The sample taken for the study consisted of 100 which include daily wage workers and employees from the select retail outlets situated in Warangal District. 1.5). ANALYSIS AND DISCUSSION The research survey is conducted in order to analyze the various Human Resource Management (HRM) practices adopted in the select organized retailers. For the purpose of studying the HR practices implemented and to evaluate, the following organized retailers are selected. A). ORGANIZED RETAILERS SELECTED FOR THE STUDY S.No. Name of the Organized Retailer 1. Reliance Fresh, Company Name Reliance Industries Limited Spencers Retail Limited Aditya Excise Colony, Warangal Naim Nagar, Subedari Adalath Circle Warangal 40
Places
District
Sample Size
2.
Spencers,
25
3.
More,
Birla Circuit
House Warangal
10
ZENITH
Group 4. Reliance Super , Reliance Industries Limited
Road Alankar Circle Warangal 25
Total Source: Field Survey
100
Overall, 4 organized retailing units are selected for the study. Reliance Fresh outlets are being more in number; hence, 3 retailing units are selected for the study. And the 3 other retailing units were selected for the study include Spencers, More, and Reliance Super. The samples selected from the retail outlets include the sales persons, supporting staff, teller employees and the executive and managerial level employees. B). EMPHASIS ON EMPLOYEES SHARE ON DIFFERENT ASPECTS Name of Share of Specia the part lty retailer timers Tellers Spencer' s Reliance Fresh More NA 20% 18% 10% Extra Selectio n Test No No Incentiv e based pay Yes Yes Hours for orientation period 12 10 % in Employee involvemen t 61-80% 21-40%
Typical New Hire Graduate Graduate Under Graduate & Graduate Graduate & Post Graduate
12%
16%
No
Yes
10
21-40%
Reliance Super
22%
26%
Yes
Yes
18
41-60%
Source: Field Survey NOTE Share of part-timers refers to the percentage of employees work fewer than 5 hours a week. Specialty tellers refers to the percentage of tellers that perform only a subset of teller tasks during a typical shift
ZENITH
Typical new hire gives the highest education level of the typical new employee Extra selection test refers to the use of additional selection procedures beyond background reviews, skills tests and personal interviews. Incentive-based variable pay refers to the presence of any incentive pay program other than standard merit pay. Orientation period refers to the hours a new employee spends in training before beginning work. % of Employee Involvement refers to the percentage of employees involved in group problem-solving, quality circles, or other similar activity. From the above table, it is evident that Reliance Super is on top in terms of share of part timers, i.e., the percentage of employees work fewer than 5 hours a week. Again Reliance Super is leading in terms of specialty tellers , i.e., the percentage of tellers that perform only a subset of teller tasks during a typical shift. And More retail store showed that the education level for its employees begin with undergradutation which is least educational qualification compared to the employees of other retail outlets, as the employees highest education level starting from Graduation and where as the Reliance Super is achieved new hire with Graduates and Post Graduates. And also Reliance Super is engaging the employees through Extra Selection Test. Where as other retail outlets are not concentrating on extra selection test while recruiting the employees. And from the survey, it was found that all the retail outlets are adopting incentive based pay to its employees. When it comes to Orientation period, Reliance Super is making the employees to get accustomed to the work activities. Finally, the employees involvement statistics clearly showing that the employees of Spencers have more commitment towards problem solving and other activities. C). OBSERVATIONS RETAILERS ON HRM PRACTICES IN SELECTED ORGANIZED
Name of Organized Retailer

S. No . 1 2 3
HRM Practices % employees whose skills & abilities are fully utilized % employees whose jobs help them acquire skills needed for other jobs in the company
Reliance Fresh 65.12% 62.0% 42%
Spen cer's 71.26 % 65.19 % 36%
Mo re 58.2 0% 65.0 6% 42%
Reliance Super 62.34% 82.16% 58%
% employees who have more than one position
ZENITH
available to them for promotion 4 5 6 7 8 9 % employees whose jobs are highly enriched % employees whose performance appraisals are formalized %employees whose performance appraisal results are used to determine compensation % employees whose performance appraisals focus on how job is done, not how well % employees who have a say in the criteria used in their performance appraisal % employees whose performance appraisals are based on objective quantifiable results appraisals are 56% 52% 72% 72% 44% 56% 56% 66% 74% 70% 38% 64% 50% 48% 68% 68% 52% 52% 58% 64% 78% 76% 64% 62%
10. % employees whose performance used to identify their training needs Source: Field Survey
56%
64%
52%
62%
From the survey on the opinions of the employees regarding different HR practices employed in the retail organizations, the following observations were made. 71.26% of the Spencers employees favoured to the factor percentage of employees whose skills & abilities are fully utilized. For the second factor, 82.16% of the Reliance Super employees favoured to the factor percentage of employees whose jobs help them acquire skills needed for other jobs in the company. For the third factor, 58% of the employees of Reliance Super favoured to the factor percentage of employees who have more than one position available to them for promotion. For the fourth factor, 58% of the employees of Reliance Super favoured to the factor percentage of employees whose jobs are highly enriched. For the fifth factor, 66% of the employees of Spencers favoured to the factor percentage employees whose performance appraisals are formalized. For the sixth factor, 78% of the employees of Reliance Fresh favoured to the factor percentage of employees whose performance appraisal results are used to determine compensation. For the seventh factor, 76% of the employees of Reliance Fresh favoured to the factor percentage of employees whose performance appraisals focus on how job is done, not how well. For the eighth factor, 64% of the employees of Reliance Fresh have favoured to the factor percentage of employees who have a say in the criteria used in their performance appraisal. For the ninth factor, 64% of the employees of the Spencers favoured to the factor percentage of employees whose performance appraisals are based on objective quantifiable results. For the
528
ZENITH
tenth factor, 64 % of the employees of Spencers favoured to the factor percentage of employees whose performance appraisals are used to identify their training needs. D). TABLE SHOWING THE OPINION OF THE EMPLOYEES REGARDING THE PERFORMANCE APPRAISAL THAT HAS COME FROM S.No. 1. 2. 3. 4. 5. 6. Evaluator Supervisor Supervisors boss Peers Subordinates Subordinates Clients Total Source: Field Survey Note: Values indicate the means percentage of employees who were covered by the practice. Respondents divided 100 points among the categories listed. From the above table, it is evident that the role of supervisor is vital for the organized retailers in implementation of performance appraisal. 79% of the employees of Reliance Fresh favoured that Supervisor is the initiator for the Performance appraisal. 72.89% of Spencers employees, 73.56% of the More employees and 72.21% of the Reliance Super employees favoured that supervisor is the initiator for the Performance appraisal system in their respective retail organizations. Apart from that the next decider plays key role in the performance appraisal are Supervisors boss. The role of peers, subordinates, clients are less in making decisions about the performance appraisal system in the selective retail organizations selected for the study.
Reliance Fresh 79.19% 10.92% 2.01% 1.92% 2.99% 2.97% 100%
Spencers 72.89% 13.69% 2.56% 1.59% 4.92% 4.35% 100%
More 73.56% 11.98% 2.56% 2.5% 6.31% 3.09% 100%
Reliance Super 72.21% 8.12% 1.96% 3.49% 5.62% 8.6% 100%
ZENITH
E). TABLE SHOWING EMPLOYEES OPINION ON THE MOTIVATIONAL ASPECTS ENCOURAGED THEIR PERFORMANCE Name of the Organized retailer S.N o. 1 Appraisal process motivated for better performance 2 Positive work environment encouraged for better performance Name of factor Relia nce Fresh 12.50 % 32.65 % Spenc ers 15.00 % Mor e Relia nce Super 10.00 % 25.00 %
8.5%
20.5%
10.5 0%
3 Good team commitment encouraged for better performance
18.50 %
25.00 %
15.0 0%
10.45 %
4 Healthy environment in the work flow encouraged the performance
12.50 %
10.50 %
25.0 0%
10.25 %
5 Incentive encouraged for better performance
13%
8.50%
25.0 0%
13.80 %
6 Qualitative training and better scope for promotion encouraged for performance
10.85 %
20.5%
16.0 0%
30.50 %
Total Source: Field Survey
100%
100%
100 %
100%
530
ZENITH
From the above table, it is clear that, the employees of the Reliance Fresh favouring more to the factor positive work environment which is encouraging for better performance. The employees of Spencers have opinioned that good team commitment encouraged for better performance. The employees of More are favouring to the fact Incentive schemes encouraged for better performance. The employees of Reliance Super have favoured more to the fact qualitative training and better scope for promotion encouraged for better performance. E). TABLE SHOWING THE OPINIONS OF THE EMPLOYEES REGARDING THE SATISFACTION OVER THE FACILITIES PROVIDED IN THE RETAIL OUTLETS Name of the Organized retailer S.No . 1 2. 3. 50% Satisfaction over the transportation facilities 4. 0% Recreational area with landscaped sit out 5. 6. Refreshment stalls and canteen for healthy food 7. Staff accommodation NA NA NA NA NA NA NA NA
Name of factor
Relianc e Fresh 12.50% 70%
Spencer s 15.00% 55% 80%
More 25.5 % 75% 45%
Relianc e Super 35.00% 80% 70%
Employee Rest rooms Sanitation & Water facilities
0% 45%
0% 30%
0% 50%
On-site First-aid Clinic
45%
Source: Field Survey Note: NA refers to Not Applicable. Figures indicate the percentage of employees showed their satisfaction over the facilities offered to them by the retail organizations. From the above table, it is observed that , the employees of Reliance Super have the satisfaction of 35% over the employee rest room facilities. The employees of Reliance super again topped as 80% of the employees of Reliance Super have shown their satisfaction over the sanitation & water facilities. For the factor satisfaction over the transportation facilities, 80% of the Spencers employees showed their intent of satisfaction. When it comes to the facilities
ZENITH
about recreational area with landscaped sit out, no employee of any of the selected retail out lets showed their satisfaction. When it comes to On-site First-aid Clinic, 50% of the employees of Reliance Super have showed their satisfaction. And regarding the staff accommodation, no retail outlets selected for the survey are providing staff accommodation. G). PROBLEMS & CHALLENGES AHEAD Human resources people are the backbone of any company and the success of retail business depends a lot upon the kind of human resource strategies it is following and how people are managed. Because of increasing competition between organized retailers, the retail industry is facing the challenges and hurdles from different areas. From the survey on select organized retailers, the following observations were made. 1. HIGH ATTRITION: Employee retention and motivation of staff has become the major concern for HR department in the organized retailing sector. Because of the strenuous schedules and tasks involved in the retail industry, it becomes imperative for HR staff to take good care of their employees who form the building blocks of their retail chain. The undercurrents among the employees regarding company policies are many and they must be felt from time to time to sustain the quality crowd and reduce the attrition rate. From the report of Retailer, it is found that the attrition rates are comparatively high when it comes to the retail industry in India. The attrition rate in the Indian retail industry is 30-35 percent. The main reasons found to be the typical nature of job where a particular employee of an organized retail company need to work on his feet the whole day and the job is reaction intensive and the business is mainly transactional. 2. TRAINING FOR COMPETITION: The need for efficient trained sales team is of great importance in the organized retailing at present. For every retail organization, the secret behind the success of their business is to keep the list of their loyal consumers interact. The need for a well designed HR practices are greatly needed for proper training to the newly recruited people to the retail organization. Providing training to the sales staff plays a significant role in every business operation. Nowadays, the organized retailers are looking at a sales training company to help the sales staff gain more proficiency and expertise in their respective field. 3. OBSERVATIONS FOUND IN TRAINING SESSIONS OF SELECT ORGANIZED RETAILERS From the field based survey, it was found that the organized retailers at Warangal District, apart from using the services of outsourcing firms to train its sales people, they are also using some of the innovative new training techniques to the staff. The techniques which are observed during the survey are: A). STRESSING UPON BENEFITS OF ADVERTISING: The HR managers and trainers are emphasizing upon making the sales people to think and act innovatively in designing the retail out let and as well as attracting the customers through innovative promotional strategies. The
532
ZENITH
trainers are focusing on making the staff to effectively use advertising as a tool to enhance sales, promote growth, and attract new consumers. B). COUNTING THE CUSTOMERS: In this, the retail firms and the trainers are making the staff of the retail organization to increase the customer relationship management. Through effective training, the trainers are working on highlighting the components of marketing strategies which the sales people should perform activities of promotion, product development, relationship management, distribution and pricing. The trainers are making the retail staff which include sales staff and supporting staff to identify the firms marketing goals, and are explaining about how the goals can be achieved. 3. ONLINE TRAINING: The trainers of HR department are showing the visuals of well designed and successfully running retail organizations outlets to the employees in order to make them to realize the importance of the design of retail outlet. Apart from that, from the survey it was also realized that the trainers are focusing on online training which include web based support to enhance the abilities of the staff of the retail outlets. 4. High Labour costs and Complex nature of labour laws: Because of the increasing competition and the complex nature of the work, the retail outlets are facing the problems of labour costs. Apart from that, various labour laws are giving restrictions to the HR department to achieve desired objectives of the retail organizations. From the survey, it was found that the HR department is facing with the problems like lengthy leisure hours and frequent absenteeism of the employees to the duties. Even, it was found that the existing labour laws in India forbid employment of staff on a contractual basis that makes it difficult to manage employee schedule. Especially, when retail organizations are performing 365- day operation, the problems in encouraging and motivating the employees to perform well is a tough challenge for the HR department. 1.6). FINDINGS & SUGGESTIONS The human resource management practices are vital for the development of any business or sector. The HRM practices have inevitable dependence on the organized retailers. From the study it was found that, right from new hire to orientation period, there are many differences in the implementation of HR practices in the selected organized retailers. The satisfaction levels of various performance appraisal measures adopted in the selected retail outlets showed that the employees are not only favoured to the incentive plan but also the healthy environment and close relations between the peers are playing vital role for their performance. Further, the supervisor has the key role in taking initiative in the implementation of performance appraisal at the select organized retail outlets. The employee facilities in the select organized retail outlets found to be not satisfactory to the employees of the retail outlets. The HR department is facing the challenges which include high attrition rate, absenteeism, and implementation of innovative practices in the retail outlets. Hence, from the study, it was found that the HR management practices in the select retail outlets are still in the initial stages of development. The employee facilities and proper performance appraisal measures will always encourage the employees to achieve the best. Hence, the retail outlets should decide and implement proper HR practices in order to retain and develop the work force who are the assets for the development of
533
ZENITH
organizations. The government should also need to bring revision of existing labour laws and should provide flexibility in working hours and should encourage with its laws that can bring conducive environment. REFERENCES BOOKS 1. James R. Ogden & Denise T. Ogden(2008), Integrated Retail Management, Biztantra, An Imprint of Dreamtech Press, Reprint Edition 2008, New Delhi. 2. U.C. Mathur(2010), Retail Management Publishing House Pvt. Ltd., New Delhi. - Text and cases, I.K. International
3. Michael Levy & Weitz(2007), Retailing Management, Tata McGraw-Hill Publishing Company Limited, New Delhi. 4. Barry Berman & Joel R. Evans(2007), Retail Management A strategic approach, 10th Edition, Eastern Economy Edition, New Delhi. JOUNRALS 1. Ashok Som, Bracing for MNC Competion through innovative HRM Practices: the Way ahead for Indian Firms, Thunderbird International Business Review, Wiley InterScience, Vol.48(2) 207-237, March-April,2006., Pg.No.207-211 2. Wharton, How will competition change Human Resource Management in Retail banking? A Strategic Perspective, Workiing Paper Series, Wharton School, University of Pennsylvania, Pg. No.1-29. 3. Susan E.Jackson & Randall S. Schuler, HRM Practices in Service-based organizations: A role theory perspective, Advances in Services Marketing and Management, Vol.1, Pages:123-157. 4. A CII A.T. Kearney report, Retail in India: Getting organized to drive growth. 5. Derek C.Jones, Panu Kalmi & Antti Kauhanen, How Deos Employe Involvement Stack Up? The effects of Human Resource Management Policies on Performance in a Retail Firm, Working Papers , Cornell University. WEBSITES 1. http://www.ibef.in/industry/Retail.aspx 2. http://en.wikipedia.org/wiki/Retailing_in_india 3. http://retail.franchiseindia.com/articles/Store-Operations/Staffing/ 4.http://retail.franchiseindia.com/articles/Retail-Operations/HR-and-People/Making-the-most-ofwaiting-time-489/
534
ZENITH
CHANGING WAVES IN INDIAN RETAILING: IMPACT OF CUSTOMERS PERCEPTION AND CRM ON INDIAN RETAILING IN THE CHANGING BUSINESS SCENARIO
MRS. SUDHA VEMARAJU*
*Assistant Professor in Management, Studies, Malla Reddy Institute of Technology and Sciences.
ABSTRACT We are living in a period of upheaval, where change is the norm. In this current changing business scenario, retail industry has witnessed major revolution and global attention. The Indian retail industry is the 5th largest and 3rd attractive in the world and accounts over 10% of the countrys GDP and 8% of total employment. In the background of changing retail trends, understanding customers perceptions, building relationship and retaining customers has been identified as major source of competitive advantage. So the present paper attempts to bring three critical areas in retailing: 1. 2. 3. Customers perceptions CRM Changing waves in retailing
To test the hypothesis a survey was conducted in Hyderabad using questionnaire method from 150 respondents. Twelve store and five product attributes were measured using Likerts five point scale and final score has been calculated using weighted ranking method. Research identified the major opportunities and challenges in retailing and indicates that product, quality, variety, customer relationship and service were given highest preference. ______________________________________________________________________________ INTRODUCTION
We are all living in a place of upheaval, where change is the norm. In this current changing business scenario, retail industry has witnessed major revolution and global attention in recent times due to liberalization, globalization and privatization. The presence of retailing industry is far centuries old (Pre-1990s) but the consolidation & growth of the industry has started only in the recent times (since 2010). India has been ranked the third most attractive nation for retail investment among 30 emerging markets by A.T KEARNEY in its annual global retail development index. The Indian retail industry is the fifth largest in the world and expected to grow at a pace of 2530% annually. The retail sector accounts over 10% of the countrys GDP and 8% of the total employment of nations work force. In the background of changing times retail is trying to adapt
ZENITH
Indian customer psyche as opposed to earlier strategies of mere adaption. Therefore understanding Indian customers perception became biggest challenge and very crucial in designing retail strategies. Building relationships with customers and retaining customer loyalty has been identified as a major source of competitive advantage within the retailing sector (CHANG & TU, 2005). So retail managers need to identify the significance of CRM as a complex tool in influencing customers perception and decision making. So, the study attempts to bring 3 critical areas in retailing 1. Customer perceptions on retail attributes 2. Effect of customers perception on CRM 3. Changing Indian retail sector with changing times. A survey of 150 respondents was conducted in Hyderabad to obtain responses of shoppers on a structured questionnaire based on the above 3 areas. Five variables were identified under product attributes and 12 variables were identified under store and retail attributes on the basis of review of related studies in the past in order to identify important factors that effect customers perception in choosing a particular store. Majority of the questions are close-ended, in order to maintain accuracy & to facilitate data analysis. Data was analyzed using Likerts five point scale and final results thus obtained has been calculated using weighted ranking method. OBJECTIVES OF THE STUDY The study was focused on the following broad objectives: 1. To understand the concept of Relationship marketing and its application to the Indian retail stores. 2. To understand customers perceptions and evaluate the key Retail attributes and their effect on elationship marketing 3. To identify and evaluate the changing waves, opportunities and challenges in Indian retailing in 21st- century. 4. To develop relational marketing strategies for effective management of Indian retailing THEORITICAL FRAMEWORK OF THE STUDY Maslows hierarchy of needs is used as theoretical underpinning for this study. Mooy &Henry (2002) defines motivation factor as, The arousal directed at the processing of product and store related information. The customer preferences might be affected by various factors like product attributes and store attributes which motivates them and stimulates the consumer.
ZENITH
According to Knowles (1993) consumer preference building technique remains popular even today. As a result of repeated simultaneous behaviour the consumers will closely associate with the product/store. Price is the main motive in buying according to the Gitomer.J, (2005). Morschett (2005) states that the influence of product attributes has much more profound effect on attitude towards retail stores than the perception of store attributes. METHODOLOGY The present study is focused on understanding customer perceptions .The study identified the key retail attributes and their effect on relationship marketing in the retail sector. Since the Indian retail sector is in consolidation & growth stage, the study also identified the various opportunities and challenges in Indian retail sector. To attain these objectives a survey of 150 respondents had been carried out in Hyderabad using convenience sampling method. The key retail attributes were measured using Likerts five point scale from strongly disagree to strongly agree. The final results thus obtained have been calculated using weighted ranking method. In order to identify the changes, opportunities & challenges in retail industry a thorough study of literature on Indian retail industry has been carried out. LIMITATIONS OF THE STUDY 1. The present study is mainly focused in Hyderabad. Since, India is a land of diversity so the sample results may not be a representative of entire population. Further the research needs to cover diverse regions. 2. It is not possible to study the entire universe due to lack of time & resources. So, the study is based only on the information obtained from 150 respondents. 3. All the respondents might not give the accurate information because there is lot of difference in what they say and what they do. Further research can compare consumers using different retail formats & different retail attributes. REVIEW OF LITERATURE The review of literature is mainly carried out in three broad areas 1. Retail attributes 2. Customer relationship management 3. Customer experience management. RETAIL ATTRIBUTES In this study retail attributes refers to a combination of store and product attributes. The overall perceptions of customers about the retail store are a result of product attributes and store
ZENITH
attributes. Consumer perceptions of store attributes are influenced by retail format, type of the products, cultural value, shopping intention and customer base (Paulins & Giestfield, 2003). Customers perception on product attributes vary according to product nature and socio economic nature of the consumer (Uusitalo, 2001). Previous research has identified store attributes as a multi-dimensional construct including location of store, nature and quality of stocks, in-store promotions, sales personnel, physical attributes, convenience of store, atmospherics and loyalty cards that influences consumer behaviour (Miranda, Konya and Havrila 2005). Reactional shoppers look for high quality with variety and services and other shoppers are concer6ne6d about convenience and cost (Bellener, Robertson and Greenberg). Consumers evaluate alternative stores on set of attributes depending on their individual preferences would patronize the best store (Tripathi & Sinha, 2006). Product attributes are often continues in nature (Viswanathan & Childers, 1999). The product attributes like quality, price, variety, assortment and value drive the customers to the store (Gwin and Gwin, 20030) Sinha and Banerjees (2004) study in India indicate that store convenience and customer services positively influence consumers store choices, whilst, entertainment, parking and ambience facilities had a negative influence on consumer choice. Indian consumers were also found to be price sensitive and quality conscious (Tuli and Mookerjee, 2004). Choo, Jung and Pysarchik, 2004) note that Indian consumers attitude towards new products are changing significantly and this can increase their intention to shop in new retail formats such as supermarkets. Consumers have a perception of low overall prices of those stores that offer a small discount over large number of items (Schiffman & kanuk, 2008). Location plays an important role in the success or failure of the outlet (Mendes and Themido, 2004). Developing close sales person customer relationship could give a key differential advantage (Reynolds & Arnold, 2000). Thus, product attributes such as quality, price, and availability of new products, variety are important constructs within the Indian context. Promotional offers and discounts are effective tools for encouraging consumers to buy more (Shi, Ka-man & Gerald, 2005). According to Duncan 2005, consumer motive is defined as internal impulses when simulated initiate some type of response. Therefore, from the above literature the study identifies customer service, quality, ambience, location and convenience of the store, price, value, promotional offers & discounts, sales personnel, speed, variety, parking facilities, advertising and availability of new products, information as the key retail attributes that effect customers perception on relationship marketing in Indian retail store context. CUSTOMER RELATIONSHIP MANAGEMENT The concept of CRM was first captured by Pine Peppers and Rogers (1995) in an article published by the Harvard business review where they defines CRM as Customer whether consumers or businesses do not want more choices. They want exactly what they want-when, where and how they want it- and technology now makes its possible for companies to give it to them
538
ZENITH
(Don Peppers and Martha Rogers, 1993), predicted the need to focus less on products and more on Customer relationships in their watershed book The one to one Future. They also said that a true relationship relies on a two-way dialog between a company and its customers and allow customer to truly express the desires the company can fulfil. It costs 6 to 8 times more to attract new customers than to retain an existing customer (Gruen, 1997). CRM is concerned with creating improved shareholder value through the development of appropriate relationships with customers. This requires an integration of people operations and marketing capabilities---PHILIP KOTLER Customer relationship marketing strategies in the organized retail sector have become extremely important lately with a spate of loyalty programmes and focus on customer service. It refers to the marketing with the conscious aim to develop and manage long-term and or trusting relationships with customers. It involves the complex activities in all the areas of retail business which combine to deliver the retail attributes in a fashion that is perceived as satisfactory by the customer and which advances the stores objectives. According to (Bajaj, Tuli, Srivastava, 2007) In general retail in organized sector, the pressing need now is to focus on what drives loyalty programmes, what customers actually prefer, and what the future is likely to bring . Most retailers accept that they need to build relations and have adequate knowledge about customers, and that should be centrally recorded so that it is available to employees when they need it. Todays dynamic business environment provides ample alternatives to customer to shop at every stage from kirana store retail format to the retail store format, so much so that they may buy from one store today and shift to another tomorrow. Not that they think that the earlier store was bad, but it is the luxury of variety which customers enjoy. CUSTOMER EXPERIENCE MANAGEMENT It is a strategy that focuses the operations and processes of a business around the needs of the individual customer. The goal of customer experience management is to move customers from satisfied to loyal and then loyal to advocate. The concept of customer experience management is almost a mirror image of CRM. It says that every time a company a customer interact, the customer learns something about the company. Depending upon what is learned from each experience customers may alter their behaviour in the ways that affect their individual profitability.
539
ZENITH
DATA ANALYSIS AND DISCUSSIONS TABLE 1: DEMOGRAPHIC PROFILE Demographic Factors Characteristics Below 25 25-35 Age 35-50 51 and above Male Gender Female Matriculation and below Under Graduate Education Graduate Post Graduate Unmarried Martial status Married Below 4 members Family Size 4 to 6 More than 6 Student Business Occupation Professional Service Others Annual Income Rs.10,000 and below 95 62 68 20 34 12 40 55 8 30 63.33% 41.33% 45.33% 13.33%
Frequency(n = 150) 54 64 22 10 89 61 15 38 45 52 55
100% 36.00% 42.67% 14.67% 6.67% 59.33% 40.67% 10.00% 25.33% 30.00% 34.67% 36.67%
22.67% 8.00% 26.67% 36.67% 5.33% 20.00%
ZENITH
Rs.10,000 to Rs.25,000 Rs.25,000 to Rs.50,000 Rs.50,000 and above
24 55 41
16.00% 36.67% 27.33%
Retailing in 21st century witnessed levels of market velocity and volatility that demands completely new approach to market and retail intelligence. The information that retailer would need to understand the diversity of retailing is demographic trends. Respondents are asked to respond on seven demographic factors which are Age, gender, Martial status, family -size, education, occupation and income. Out of 150 respondents 59.3 % are male and 40.66% are females. The study includes different age groups, out of which 49% of them belong to 25-35 years and 36 % of them are below 25 years, 14.6% of them belong to age group 35-50 and only 6.6 % of the respondents belong to age group 51 and above. From this statistics it is clear that most of them are young people mainly up to the age of 35 years. Qualification wise 34.6% are postgraduates, 30% are graduates and 25.33% are under graduates and rest 10% are below matriculation. Martial status of 63.6% respondents was married and rest 36.4 % is unmarried. People from Service sector ranked high in participation with 36.4% and 26.6 % are professionals, 22.6 % are students, 8 % of them are businessmen and 5.3% are from other background. Coming to family size 52% are living with family of size 4 to 6 and 41.33% of them are below 4 members. Annual income of 36.6 % of the respondents was from 15,000 to 20,000, 27.33% earn above 20,000 and 20% of them earn below 10,000 and rest of them earn 10,000 to 15,000 per month. Analysis suggests that majority of respondents are males. Majority of respondents are young people under 35 years. Maximum no of respondents were post graduates Majority of the respondents are married (63.3%) Majority of the respondents are dominated by customer whose family size was 4 to 6. Analysis also indicates hat maximum number of customers belong to service sector. Majority of the customers are earning income Rs.15000 to 20,000 per month.
541
ZENITH
TABLE: 2 SHOPPING PREFERENCE Number 1 2 3 4 Preference WHOLESALERS RETAILOUTLETS DISTRIBUTOR OTHERS Frequency 18 122 8 2 100% 12.00% 81.33% 5.33% 1.33%
One of the major characteristic features of service is Intangibility. Hence the value of services cannot be measured like physical product through value but can be measured only through experience and perception of the customers. This experience is ultimately got from the place where the consumers shop their products. To succeed and win in this dynamic environment the focus should be on customers buying experience. So the present study identified shopping preference as a key element. The information thus analyzed from Table: 2 indicate that majority of the respondents prefer to shop from retailers (81.33%) and the reason mainly being the total experience which they derive from the retail store. TABLE 3: MODE OF PAYMENT S.no 1 2 3 Mode of Payment Credit / Debit Card Cash Others No. of Respondents 98 49 3 100% 65.33% 32.67% 2.00%
542
From the above Table 3: analysis indicates that majority of the respondents(89.33%) of the customer prefer to pay by cash and only few respondents (8.66%)prefer to purchase on credit and 2% respondents prefer to pay through other modes.
ZENITH
TABLE 4: EFFECT OF PRODUCT ATTRIBUTES ON CRM Somewh at Importa nt 3 9 18 39 35 36 Very Importa nt 3 67 58 52 52 48 Extremel y Positio Importa n nt Weight s Ran 4 k 74 69 49 63 57 665 641 587 628 603 1 2 5 3 4
Product Attributes Product Price Variety Product Quality Product Availability
Not Importa nt 1 0 0 3 0 2
Least Importa nt 2 0 5 7 0 8
Business exists to satisfy customers- Peter Drucker. Therefore the existence of retailer is dependent on customer. The success of the retailer depends upon how consumers perceive about the product attributes. If there is a good match the positioning strategy can be deemed to be success. Therefore the retailers need to identify the various influences that lead up to a purchase not just the store where the purchase was made. So considering these influences the study measured five variables under product attributes namely, product, price, availability, variety, quality and also analyzed the factors which effect consumers in purchase decision. The respondents were asked to rate the various factors in order of their preference. Analysis from the above table indicates that originality of the product was given highest preference followed by price, product quality, product availability and product variety. So the above analysis indicates that Indian customers are more price sensitive and give more preference to originality of the product.
ZENITH
TABLE 5: CUSTOMERS PERCEPTIONS ON STORE ATTRIBUTES AND RETAILING
N O
Description You prefer to buy from the retail store that delivers more value you like to shop from the retail store that has good ambience Location and convenience always affects your purchase decision Retailers always provides better information
Strongly Disagree 1
Disagre e 2
Neither Disagree 3
Agree
nor Agre e 4
Strongly Agree 5
Position Weights
Ran k
12
29
24
50
35
517
44
11
29
48
18
435
11
46
58
32
553
35
13
31
51
20
458
10
ZENITH
than wholesalers You prefer to purchase from the retail store that maintains good customer relationship You prefer to shop from the retail store that provides good promotional offers and discounts Sales personnel always drives you to a particular store Advertising always influence your
11
30
26
52
31
512
38
51
49
583
2
31
12
32
53
22
473
56
15
24
44
11
389
11
ZENITH
purchase decision You prefer to shop from the retail store that provides good parking facilities You prefer to shop from the retail store that provides best customer service Retailers are always good in understandin g customers perceptions Speed of delivery always affects your purchase decision.
25
15
29
56
25
491
10
11
17
61
60
608
11
13
35
24
51
27
494
12
20
23
25
54
28
497
546
ZENITH
Increased competition and expansion of retail markets has forced many retailers to rethink their strategies. Competing and winning in a value driven world requires the retailers to develop a comprehensive strategies which involve in understanding customers perceptions on retail attributes. So the study identified twelve factors for measuring store and retail attributes which forms the base in designing retail strategy. The twelve variables are value, ambience, location, sales personnel, information, customer relationship, promotional offers and discounts, speed of delivery, advertising, customer service, parking facilities and finally retailers ability in understanding customers perceptions. From the above table:5 analysis indicates that customer service has been given highest preference followed by promotional offers and discounts, location, value, customer relationship management and speed of delivery. The research also identified that customers felt that retailers are better in understanding customers perceptions because they are the persons who are directly in contact with customers. Parking facilities and sales personnel have moderate effect on customers and advertising and ambience has least effect on customers. PART-2 WAVES OF CHANGES IN INDIAN RETAIL SECTOR IN 21ST CENTURY The waves of changes that have transformed the Indian retail industry are: 1. The first wave of change which has revolutionized the Indian retail sector was LPG means liberalization, globalization and privatization. According to BMI India retail report -2011, 100% FDI is permitted under automatic route for trading companies for cash and carry trading and wholesale trading. FDI up to 51% under government route is allowed in retail trade of single brand products. The consumer affairs ministry has given green signal to allow 49%. FDI in multi-brand retail SEBI has notified the increase in the retail investment limit to US $4,391.19 in initial public offer (IPOS). So, the proposed FDI norms will open up strategic investment opportunity for global retailer to invest in India. The second wave which began 10 years later is customer relationship management in retailing which now transformed and paved the way for CEM (customer experience management). To withstand the global competition and compete successfully in the 21st century retailers must focus on customer buying experience.
2.
3.
The third wave of change which is a continuous one is Uniqueness of Indian customers and their changing preferences. So, the retailers in this 21st century must make continuous efforts in understanding customers perceptions and must create diversified and innovative retail formats. Differentiate or die, is the current trend in 21st century.
4. 5.
Indian customers shifting from unorganized kirana stores retail format to organized retail formats like hypermarkets and malls. Spreading fad and fashions consciousness of Indian retail customers.
ZENITH
OPPORTUNITIES IN INDIAN RETAILING IN 21ST CENTURY 1. UNTAPPED RURAL MARKET IN INDIA
Indian rural market offers a sea of opportunity for retail sector. The urban-rural split in consumer spending stands at 9:11 with rural India accounting for 55% of private retail consumption. According to Singh, 12.2% of the worlds consumers live in India. Rural households form 72% of the total households. This puts the rural market at roughly 720 million customers. Total income in rural India about 43% of the total income is expected to increase from around US $220 billion in 2004-2005 to US $425 billion by 2010-2011, a CAGR of 12% (India knowledge@wharton, 2011) So the retailers can exploit the opportunities and tap the Indian rural market with focused attention and strategies. 2. INDIA-A VIBRANT ECONOMY
Indian retail market is expected to be worth about US $410 billion, with 5%of sales through organized retail, means that opportunity in India remains immense. According to the Retail report, Expanding opportunities for global retailers released by A.T. Kearney, 2010 Indian retailing is estimated to grow rapidly up to US $535 billion by 2013 with 10% coming from organized retail. India topped the list of emerging markets for retail investment for three consecutive years. India is the second fastest growing economies in the world, the third largest economy in terms of GDP and fourth largest in PPP. India is rated among top 10 FDI destinations. From the above figures we can conclude that India is definitely a country for healthy investments and provides better opportunities for retailing. 3. YOUNG AND TALENTED POPULATION AND WORKING WOMEN CLASS:
Increase in young and talented population and also the working women class have created high disposable incomes that lead to higher consumption and thus opened the doors for more opportunities for retailers to flourish. 4. INTERNET REVOLUTION AND E-TAILING:
Internet revolution and E-tailing are allowing global brand to understand Indian customers psyche and influence them even before entering the market. Due to the wide reach of media even in remote markets, consumers awareness on global brands are increasing and providing better opportunities for global retailers in India.
ZENITH
CHALLENGES IN INDIAN RETAIL SECTOR: 1.SUSTAINABILITY is the biggest challenge in the 21st century whether retailers accept it or not. Finance minister Pranab mukherjee in his budget speech 2010-11 addressed on the wastages in storage as well as in the operations of the existing food supply chains in the country. So, the retailers challenge in the 21st century is concentrate on developing a strong back-end support to help to reduce wastages which is estimated to be 40% of nations produce. 2. Tax structure is also one of the challenges in retailing because it favours small retail business 3. High costs of real estate 4. Poor infrastructural facilities. 5. Lack of adequate retail research on India. Considerable research has been directed towards retail attributes in western countries however limited attention has been paid in Indian retail context (Carpenter & Moore, 2006). 6. Shortage of trained manpower. CONCLUSION AND SUGGESTIONS: This study highlights the key attributes that act as motivational factors to drive customers to the store. The study provides an insight to test the effect of Indian customers perceptions on retail attributes in the changing business scenario in 21st century. Findings suggest that: 1. 2. Product attributes has more profound effect on customers than store attributes. Findings reveal that majority of the customers prefer to purchase from retail outlets on cash payment mode. This indicates that there are better opportunities for growth in Indian retail sector. This study concludes that originality of the product was given highest preference and Indian customers are more price sensitive and quality conscious.
3. 4. 5.
Findings also indicates that customers are more inclined to the retail store that offer better customer services, promotional offers and discounts. Location and customer relationship management are another important factors identified by the customers because they want to reduce the time, energy and psychic costs involved in shopping from a retail store.
ZENITH
To compete successfully in this 21st century retailer must focus on customer buying experience. Sustainability of the fittest and fastest in the market is the mantra of todays game plan. So the difference between a successful retailer and a failed one would be in Understanding customers perceptions Speed in reaching customers Updating with latest trends, ideas, and services and forming long term relations with customers. Therefore the future belongs to the multi-cannel retailers which provides all in one roof rather than the single- channel retail stores that offer a network of channels and store formats that are more transparent to customers delivering high value. BIBLIOGRAPHY Bearden, W.O., 1997. Determinant Attributes of Store Patronage: Downtown versus Outlying Shopping Centres. Journal of Retailing, 53 (2), 15-22. Carpenter, J.M., Moore, M., 2006. Consumer Demographics, Store Attributes, and Retail Format Choice in the US Grocery Market. International Journal of Retail and Distribution Management, 34 (6), 434-447. Bajaj, Tuli, Srivastava. 2007 : Retail Management , Oxford University Press . Chang, C.H., Tu, C.Y., 2005. Exploring Store Image, Customer Satisfaction, and Customer Loyalty Relationship: Evidence from Taiwanese Hypermarket Industry. American Academy of Business, Cambridge, 7 (2), 197-202. Choo, H.C., Chung, J.E., Pysarchik, D.T., 2004. Antecedents to New Food Product Purchasing Behaviour among Innovators Groups in India. European Journal of Marketing, 38 (5/6), 608-625. Sinha, P.K., Banerjee, A., 2004. Store Choice Behaviour in an Evolving Market. Journal of Retail and Distribution Management, 32 (10), 482-494. Tuli, R., Mookerjee, A., 2004. Retail Formats: Patronage Behaviour of Indian Rural Consumers. South Asian Journal of Management, 11 (3), 57-75. Gwin, C.F., Gwin, C.R., 2003. Product Attributes Model: A Tool for Evaluating Brand Positioning. Journal of Marketing: Theory and Practice. 11 (2), 30-42. Published : June 18, 2009 in India Knowledge@Wharton
550
ZENITH
Miranda, M.J., Konya, L., Havrila, I., 2005. Shoppers Satisfaction Levels are not the Only Key to Store Loyalty. Marketing Intelligence and Planning, 23 (2), 220-232. Uusitalo, O., 2001. Consumer Perception of Grocery Retail Formats and Brands. International Journal of Retail and Distribution Management, 29 (5), 214-226. Viswanathan, M., Childers, T.L., 1999. Understanding How Product Attributes Influence Product Categorisation: Development and Validation of Fuzzy Set-Based Measure of Gradedness in Product Bellenger, D.N. Robertson, Greenberg- 1977, shopping center patronage motives, journal of retailing 53-2Categories. Journal of Marketing Research, 36 (1), 75-94. Pine, Joseph, Don Peppers and Martha Rogers, Do you want to keep your customers forever? Harvard Business Review, 73 (march-April), 1995, 103-114. KPMG INDIAN RETAIL REPORT-2009
551
ZENITH
EMPIRICAL STUDY ON SATISFACTION OF THE POLICYHOLDERS TOWARDS THE SERVICES PROVIDED BY LIC OF INDIA IN MADURAI DIVISION
DR. J. ARULSURESH*
*Assistant Professor, Loyola College ,Chennai, India.
ABSTRACT The success of the life insurance business depends on the awareness of the policyholders about the products and satisfaction of the policyholders regarding the service rendered by LIC of India. Life insurance being a service sector is no exception to this principle. The basics of Customer Relations Management (CRM) include a business strategy that focuses on developing and retaining the relationships existing between customer and organization. CRM also provides the customer with a much needed avenue to find expression for his problems, ideas and suggestions. Hundreds of sales leads are lost yearly as disinterested employees pay slack attention to customer suggestions. A venue is required for these suggestions. This is supplied by CRM implementation. ______________________________________________________________________________ 1.1 INTRODUCTION The current scenario in the insurance industry is a complex and competitive environment tinged with little stability. The major hassle the industry faces is obtaining clients. This is due to the fact that the big fish in the insurance industry dominate the sector. It has become increasingly difficult for this particular sector to gain profits while curtailing costs. Right now insurers can achieve excellent policy administration; good billing systems etc but fall short on the customer front. However this alone is insufficient to survive on. Insurers have now realized that CRM is essential if they want to deliver high quality services since it satisfies current customers and gains new ones. This is because policies get sold only if relationships are built. CRM solves these problems with its user-friendly, web-based CRM tools that increase sales opportunities 1.2 METHODOLOGY This study is an empirical research based on survey method. It is a blend of both descriptive and the analytical methods of study. An interview schedule was prepared separately for finding out the perception of the policyholders towards the service rendered by LIC of India. 1.3 CONSTRUCTION OF TOOLS A pilot study was undergone by the researcher in order to identify the research problem and tools. Based on this, the researcher has decided to use structured interview schedules. With a view to identify the variable for constructions of the interview schedules, the researcher
ZENITH
obtained an in-depth review of previous studies. Moreover, discussions were held with the policyholders and officers of LIC of India, Madurai Division. In the light of the information gathered, interview schedules were constructed for this study to collect data from the policyholders. This was done to assess and test the validity in the context of the LIC of India of Madurai division. In this way, the interview schedule was tested. The comments and suggestions offered by the policyholders, were duly incorporated in the interview schedule. Thus the interview schedule was finalized. 1.4 SAMPLE DESIGN As per the instructions given by IRDA, the LIC of India opened branches in rural and semi urban and urban areas. The LIC of India Madurai Division is located in six districts. There are about 25 branches in this division. The researcher has selected all these branches under census method for this study. There are about 300 policyholders selected at random in order to obtain their opinion of the service offered by LIC of India. That is, 12 policyholders from each branch were selected. 1.5 FIELD WORK The field survey, for this study, was conducted by the researcher himself. As each interview schedule required nearly one hour for securing information. Most of the LIC of India branches in Madurai Division have working hours between 10.a.m and 4.p.m. So the researcher contacted them after the working hours. On the dates fixed, in the first instance, the policyholders were interviewed. As there were 25 branches in the sampling area it took 6 months for the researcher to complete the survey of the policyholders of the LIC of India. 1.6 DATA PROCESSING After completing the data collection, a thorough check was made. The whole interview schedule was processed for coding the data in a computer. Then, the cross tables were prepared by using experts and appropriate tools were framed to get good results. 1.7 FRAMEWORK OF ANALYSIS In order to analyse the perception of the policyholders, techniques namely Percentage Analysis, and Factor Analysis were used. 1.8 OPINION ABOUT THE SERVICE RENDERED BY THE LIC OF INDIA TO THE RESPONDENTS FACTOR ANALYSIS Insurance industry is a service-oriented unit. It renders services like available space; display adequate information, suggestion box and so on to the policyholders. It is essential that LIC of India should attract and satisfy the policyholders in different ways. There are 14 measures identified by the researcher and the respondents were asked to fill in the respective
ZENITH
columns. The researcher has used multivariate technique called factor analysis in order to classify the selected variables. Factor analysis is a statistical method used to describe variability among observed variables in terms of fewer unobserved variables called factors. The observed variables are modeled as linear combinations of the factor, plus error terms. The information gained about the interdependences can be used later to reduce to it a set of variables in a data sheet. Factor analysis originated in psychometrics and is used in behaviour sciences, social sciences, marketing product management, operations research and other applied science that deal with large quantities of data. Factor Analysis is a method for investigating whether number of variables of interest Y1,Y2,.Yn are linearly related to a smaller number of unobservable factors F1,F2,.Fn.. Factor analysis is a way of grouping of variables based on the criterion of common characteristics which would serve as a common denominator for such a classification. 1.8.1 THE ANALYTICAL FRAMEWORK This technique was adopted to analyse the opinion of the policyholder about the service provided by LIC of India branches in Madurai Division. But the principal factor method with orthogonal variance rotation is mostly used widely available in factor analytic computer programmes. One of the final outcomes of a factor analysis is called rotated factor matrix, a table of co-efficient that compresses the ratios between the variable and factor that have been prepared. The sum of the squares of the factor loading of a variable is called communalities (h2). The communalities of a factor are its common factor variance. The factors whose factor loading is 0.50 or greater are considered significant factors. This limit is chosen because it had been judged that factors with less than 50 per cent common variation with the rotated factor pattern are too weak to report. In the present study, the principal factor analysis method with orthogonal varimax rotation is used to identify the significance of different variables of the opinion of policyholders on service provided by LIC. The estimated results are presented in Table 1.1 1.8.2 RESULT AND DISCUSSION OF OPINION OF THE POLICYHOLDERS There are 14 statements given to the respondents. They have filled in their opinion in different columns. Besides, the rotated factor loadings received by F1,F2 are presented in Table 1.1
ZENITH
TABLE 1.1 OPINION OF THE POLICYHOLDERS ON SERVICE PROVIDED BY LIC OF INDIA Sl.No. 1. 2. 3. 4. 5. Variables Branch is Easy to Approach Amenities are Adequate Parking Facilities are Available Availability of Space Customers Meet the Officers Periodically Customers can Periodically Meet Factor 1 0.758 0.750 0.722 0.718 Development 0.675 Factor 2 Communalities 0.666 0.470 0.385 0.643 0.579
6.
the
Agents 0.585
0.395
7.
Displays all Information on Notice 0.576 Board Clarification Officials of Doubts with LIC
0.491
0.176
8.
0.797
0.577
9. 10.
Pamphlets for all the Policies Complaints are Considered without Delay Touch Screen to know about the Position of Policies Suggestion Box is Available Branch Premises are Kept Clean Branch following Time Norms
0.761 0.741
0.576 0.343
12. 13. 14.
0.612 0.609 0.449 0.487
0.713 0.666 0.170
Source: Primary Data.

555
11.
0.653
0.556
ZENITH
Table 1.1 represents the matrix of common factor co-efficients or factor loading. The number factor extracted was from LIC policyholders. The ratios which have the highest loading (>0.50) in each fact are grouped, that is the ratios which are more closely related to particular group are bolded. In the following section, these results have been interpreted by carefully examining the significant loadings for ratios clustering on each factor. 1.8.3 FACTOR 1 In the first factor variable like, branch is easy to approach (0.750), amenities are adequate (0.750) parking facilities are available (0.722), customers can meet the development officers periodically (0.675) customers meet the agents periodically (0.58) and displays all the information on the notice board (0.576) have been examined, LIC branches were easy to approach (0.758) have the highest significant positive loading. Hence factor one is characterized as Availability of Services in LIC Branch. 1.8.4 FACTOR 2 The second factor consists of the variables namely, clarification of doubts with LIC officials (0.797), pamphlets for all the policies (0.761), complaints are considered without delay (0.741), touch screen to know about the position of policies (0.653) suggestion box is available (0.612), branch premises are kept clean (0.609) and branch follows time norms (0.487). These are the variables with the highest significance in factor two. These variables represent protection of policyholders. Factor two is termed as grievance redresal mechanism. 1.9 CONCLUSION Since most insurance companies are not adequately equipped to help their agents deal with customer centered problems CRM insurance enables insurance organizations to survive in a tough economic climate by using the data the insurance company has on the existing customers and then use it to increase the level of profitability. It manages to enhance customer relationships based on customer's unique requirements. CRM enables customers themselves to do research on products, have answers to their questions etc. In addition to this policyholders can check their claim status, change their account information, submit complaints etc. Insurers find that CRM is assisting them in their marketing efforts as well through a comprehensive understanding of the client base. CRM aids the insurance companies by ensuring that campaigns are more affective. REFERENCES
1. www. insurancejournal.com 2. M.N. Mishra, Insurance-Principle and Practice, S. Chand and Company Ltd, New Delhi,
1998, p.230.
3. www. insurancenetworking. com
ZENITH
4. Charles Dutt, Insurance Marketing its Principle and Practice, - A Short Overview,
Swiss Re-insurance Company, First Edition, p.28.
5. G.R. Desai, Life Insurance in India-its history and Dimensions of Growth, MacMillan
Indian, New Delhi, 1973, pp.13-15.
6. Prasoon Kumar Roy, Life Insurance Lightens the Hope of the People, The Insurance
Times, Vol.7, February 1987,pp.10 and 11.
7. National Council of Applied Economics Research Attitude towards Life Insurance

Cover, Report on Household Income and its Disposition, New Delhi, 1979, pp.1-87.
8. M.N. Mishra, Life Insurance Corporation of India-A Study of Working and

Performance, RBSA Publishers, Jaipur, 1991, pp.49-182.
9. LIC of India, Spreading the Light Yogakshema, Vol. 44, No.5, May 2000, p.24.
557

Research Paper of Hemant Kumar

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Research Paper of Hemant Kumar

Загружено:

Авторское право:

Доступные форматы

ZENITH INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY RESEARCH

ISSN: 2231-5780 VOL.1 ISSUE 8 DEC. 2011 GUEST EDITOR

FOREIGN DIRECT INVESTMENT IN THE INDIAN TELECOMMUNICATION SECTOR AN OVERVIEW

TABLE 1: FACTORS CONSIDERED BY THE RESPONDENTS IN SELECTION OF THE SCHOOL

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Total. No...Of Respondents 125

Both(wife and husband)

Friends and colleagues

Advertisement from school

Source: surrey data.

Total...Noof Respondents 34 166 200

Total.No.of Respondents. 200 0 200 (100%)

High 74(37%) 0(0) 74(37%)

126(63%) 0(0) 126(63%)

high 58(30%) 16(7%) 74(37%) 180(90%) 20(10%) 200(100%)

122(60%) 04(3%) 126(63%)

Low Satisfied Not satisfied Total 67(34%) 58(29%) 125(63%)

High 57(28%) 18(9%) 75(37%) 124(62%) 76(38%) 200(100)

Total..No...of Respondents. 192(96%) 08(4%) 200(100%)

20. School survey Experts 2011, UK 21. www.ed.gov 22. www.greatschool.net

CURRENCY FUTURES IN INDIA: AN INTRODUCTION

Price Rising Rising Falling Falling

Open Interest Rising Falling Rising Falling

FIGURE 4 III. MONTHLY TURNOVER

NORMALITY IN THE DAILY CHANGES IN VALUE OF RUPEE

Jun. May Apr.0 Mar. Feb. 09 09 9 09 09 21 19 15 18 16

Jan. Dec. Nov. Oct. Sept. 09 08 08 08 08 19 20 17 15 20

Kolmogorov-Smirnov .494 Z Asymp. Sig. (2tailed) .967

a. Test distribution is Normal. b. Calculated from data

FIGURE 1: HOSPITAL SERVICE QUALITY MEASUREMENT MODEL

DISSATISFACTION DISSATISFACTION PROCESS (I34-I38)

Here Z = 1.96, p = 0.20, q = 0.80, d = 0.05,

246 8 78 160 246 183 63 246

3.54 0.68 2.31 1.43 1.32 1.38

0.44 2.31 1.77 0.72 -0.18

STUDY OF TRADE IN UNDER-GRADUATE BUSINESS EDUCATION BETWEEN INDIA AND OMAN

ROLE OF EMOTIONAL INTELLIGENCE ON THE PERFORMANCE OF EMPLOYEE WORKING IN SERVICE SECTOR

EMOTIONAL INTELLIGENCE (E.I.) FRAMEWORK

0.718 0.53 0.453 0.741 6.048

0.481 0.53 0.571 0.711 0.59 0.791 0.709 4.383

0.653 0.744 0.671 0.73 0.647 0.604 4.048

0.668 0.891 0.792 0.82 3.171

0.701 0.512 0.714 0.436 2.359

0.622 0.459 1.081

AN EXPLORATORY STUDY OF GLASS CEILING IN INDIAN EDUCATION SECTOR

2.50 2.19 2.42 2.82 2.35 2.87

2.09 2.05 2.22 3.13 2.27 2.80

4.63 .613 1.03 1.81 .174 .089

.032 .435 .312 .180 .677 .766

TABLE -3 ONE WAY ANOVA: EFFECT OF QUALIFICATIONS ON VARIOUS STATEMENTS

F .488 .535 .220 11.141 .571 1.322 .089 .317

Sig. .615 .587 .803 .000 .565 .269 .915 .728

2.28 2.02 1.92 2.23 3.09 2.28 2.64

2.56 2.50 2.00 2.28 2.69 2.34 3.16

2.43 2.30 2.31 2.31 3.12 2.28 2.91

.683 2.247 2.830 .101 1.010 .026 1.605

.506 .108 .061 .904 .366 .974 .203

CONSUMER PREFERENCES TOWARDS SERVICE INDUSTRY: A FACTORIAL STUDY OF HEALTHCARE INDUSTRY

4. Staff Responsiveness 10. Promptness of Service

PANCHAYATS AND RURAL ELECTRIFICATION: A CASE STUDY OF WEST BENGAL

IMPLEMENTATION OF RURAL ELECTRIFICATIONA CASE STUDY OF WEST BENGAL

Percentage of villages electrified in West Bengal

74 1997 1998 1999 2000 Year 2001 2002 2003 2004

17.72 37.50 26.58 0.07 22.15 22.07 109.55