SRM MANAGEMENT DIGEST - 2011

April - 2011 Volume: 9 ISSN 0973-6905

EDITORIAL
Greetings and wishes from the editorial forum of SRM Management Digest to the readers. I am very happy to inform you that this present issue of the Digest 2011 is a special publication and this comprises the selected research papers of the International Conference on Business Research (ICBR)2011.
Editor:

Prof. Dr. R. Velu

SRM School of Management SRM University Email: dr_rvelvan@yahoo.com Mobile No: 09884091724

The ICBR was held in our SRM UNIVERSITY at Kattankulathur campus. It was held for two days ( January 20 & 21, 2011). In this conference various international research papers were presented on functional areas of management, viz., finance, marketing, operations, human resource and general management. From these research papers, selected papers are published in this digest 2011. And moreover, The SRM Management Digest, 2011 is available to you online. You can access it through the web site of SRM University. The address of web site is www.srmuniv.ac.in in which when you select school of management you can notice on the right hand side SRM Management Digest issues of three years. You can down load the research papers and be benefitted. Editor

SRM School of Management

Prof. Dr. Oliver Linton

London School of Economics

Associate Editor:

SRM University SRM Nagar, Kattankulathur - 603 203 Kancheepuram District Telephone No:. +91-44-27453901 / 27453903

SRM MANAGEMENT DIGEST

Volume: 9, April 2011 Annual and Blind Referred Digest of SRM School of Management ISSN 0973-6905

Editor

Dr. Velu
2011 by SRM School of Management SRM Nagar, Kattankulathur - 603 203 Kancheepuram District, Tamil Nadu, India

All right reserved

A Note to Readers: The views expressed in articles are the authors and not necessarily those of SRM Management Digest, SRM School of Management or SRM University, Authors may have consulting or other business relationship with the companies discuss. All right reserved. No part of the publication may be reproduced or copies in any form by any means without prior written permission. The articles originally published in other magazines / journals are reprinted with permission.

Published by SRM School of Management SRM University SRM Nagar, Kattankulathur - 603 203 Kancheepuram District, Tamil Nadu, India

SRM MANAGEMENT DIGEST - 2011

Volume: 9 ISSN 0973-6905

April - 2011

E D I T O R I A L B O A R D

Chief Editor
Dr. R. Velu Economics

Associate Editor
Dr. Oliver Linton London School of Economics

Referees
Dr. Jayashree Suresh Dean, Strategic Business Management Dr. R. Krishnaraj General Management Dr. T. Ramachandran Financial Management Dr. Ravi Lochanan Operations Management Dr. A. Chandra Mohan Human Resources Management

Dr. V.M. Shenbagaraman Systems Management

Dr. Shanthi Venkatesh Marketing Management

SRM MANAGEMENT DIGEST - 2011

Volume: 9 ISSN 0973-6905

April - 2011

Contents
A study on Consumers behaviour on purchase pattern of food products in Salem District of Tamilnadu
Dr. S. Mahalingam & P. Arun

10

An empirical study : Farmers perception towards contract farming

S. Arunkumar , S. Gugananthan & N. Kaarthik

18 30

An ethnographic approach to understand conversations using exploratory research for better brand communication
Prof. Prasanta Parida

Applicability of SERVEQUAL scale in Indian retailing N. Udaya Bhaskar & Dr. B. Raja Shekhar Consumers perception on Matching quality of celebrity and brand features in advertisement
P. Raja & Dr. N. Mahesh

37 42

Customer loyalty on Telecom mobile

P. S. Rajeswari & Dr. P. Ravilochanan

47 52 59 66 71 78

Customer shopping experience in malls with entertainment centers in Chenni

D. Anuradha & Dr. Rangarajan

Drivers of new product success

Prof. K. Viayan & Dr. Jayshree Suresh

E-marketing in Pharmaceutical business

Ms. Sheeja, V. S., Indumathi & Dr. R. Krishnaraj

Emerging trends in the life style of apparel consumers in India

Ram Mohan, A., & R. R. Krishnaraj

Factors influencing retail investors attitude towards investing in equity stocks : A factor analysis
Bennet, E & Dr. M. Selvam

Impact of social media on Global business

Dr. Sankaran & Ravikumar, T

84 89 93

Influence of children advertisements on Consumer decision making

Raghuram, J.N.V. & Prof. P. Ravilochanan

Customers attitude, satisfaction and potentiality of online shopping in Chennai

Dr. N. Mahesh & K. Sadasivan,

Rural producer and urban buyer

D. Subramaniam

100 105 110 118

Service quality gap in healthcare services in India a birds eye view analysis
Dr, Y. Lokeswara Choudary & Dinesh Doha

The impact of FDI in retail, more advantageous

Rabi Jayakumar

A study of paradigm shift in management of capital in flows in Indian financial system in the post-liberalization era
Anli Suresh

An empirical study Consumers preference towards Unit linked Investment Plan [ULIP]
Arunkumar, S, Murali, R & Bharath, S

123 134

A comparative study between ANN - Arima and Hybrid of ANN and Arima for predicting the Gold rates
Priyadarshini, E & Dr. A. Chandra Babu

Mutual funds motivating factors behind investment

Rabika Begum & Dr. P. S. Valarmathy

142 148 154

Impact of Financial crisis on Indian economy A strategic route map to future

Dr. Y. Lokeswara Choudary & Mr. Yaseen Masvood

Estimation of appropriate Lambda value for Indian markets (money, sovereign debt, forex and interest rate swap market)
Natarajan, R & Dr. V. Balasubramanian

A study on cultural intelligence in Cross-cultural leaders

Kalailakshmi & Dr. S. S. Rau

159 163

The Impact of IT governance practices & human resources on business IT alignment with reference to selected IT industries
Dr. Mu. Subramanian & Lakshmi Vishnu Murthy Tunuguntla

Monthly effects in Indian stock market

Nageswari, P & Dr. M. Selvam

169 176

Mutual fund investor education program a study on the awareness, response and impact among individual investors
Anila Mathews &Dr. P. Ravilochanan

Qualitative research in Vamana industries limited

Divakaran, N

181 185 191

An impact of knowledge management in IT industry

Shanmugam, R & Dr. K. Kalpana

Challenges and learning in human resource Management a study on customer service and employee engagement in the Indian healthcare industry
Dr. B. Shivraj, Bharath, C & Dr. B. Rose Kavitha

Emotional recognition readiness and leadership

Kavitha Sethuraman

197

Human resource management socio-economic factors influencing the success of women entrepreneurs in network marketing industry
Manjula Pattnaik & Balachandra Pattanaik

201

Impact of strategic HRM implementation on firm performance : an empirical study on the Indian IT sector
Prof. Shameem, A

206

Analysis and awareness of IPR in India a study among the graduates in Chennai city
Alfred Benjamin, Y. & Dr. Y. Lokeswara Choudary

211 215 219 226

Will transactional form of interdependence improve group effectiveness?

Dr. V.L. Narasimham

An overview of support services to women entrepreneurs

Sindhu, K.

Competencies required by entrepreneurs in emerging economies : some research propositions

Manisha Karia

Determinants of income generation of women entrepreneurs through SHGs

Ms. Revathi Pandian & Karthick, D

233 240 247 254 271 277

Forecasting of land price at Madhavaram in Chennai metropolitan area

Sampathkumar, V &Helen Santhi, M

Predictive model for success of ERP implementation

Dr. K. Santhosh Kumar & Dhinakaran Samuel, R

A study on stress and anxiety among the two wheeler riders in Chennai city
Dr. G. Rajesh Kumar & Rajan Daniel

Vertical integration emerging trends and challenges

Madhavi Latha Kanniganti & Dr. Ravilochanan, P.

A study on sources of fruit wastages in cold storage and fruit processing industries in Tamilnadu
Arivazhagan, R. & Dr. Ravilochanan, P

An instrument for the measurement of vendor perceptions of software quality in off-shoring

S.Sankaran, K. & Kannabiran, G

282

Factors contributing to perishability in traditional fresh produce distribution system a study on Tomato and Banna chains in Andhra Pradesh
Dr. G.V.R.K. Acharyulu

290

Panorama of a strategic alliance on arbitrator logistics a peep into the Chennai Port trust
Venkatachalapathy, R &Dr. B. Balamurugan

296

Analysis of Quality work life and perceived public image among the Teachers of Dindigul, Tamilnadu
Sabarirajan, A, Geethanjali, N. & Lavanya, D.

303

Creating ecological value : an evolutionary approach from business to business

Dr. G. Vijaya Kumar & S. G. Balaji

309 315 320 324

Exit interviews & their empanelment : the current scenario

Dr. M. Sureesh Baabu, Radha Mohan Chebolu & Balaji, S. G.

Mental health among private and public sector employees a comparative study
Narayanan, R. & Dr. M. Syed Zafar

An empirical study on impact of demographics on buying behaviour of food and grocery consumers in Punjab
Anupama Prashar

Brand valuation : an empirical study with special reference to Indian car industry
Dr. P. Natarajan & U. Thiripurasundari

334 340 345 349 367 376 385 390 398 402 409 413 419 426

Online performance appraisal system : an empirical study at BHEL piping centre, Chennai
Prof. Ponnaiah, V.M., Ms. Bala, R & Ms. Jonisha S. Jones

Knowledge management in ICICI bank and Bank of Baroda

Dr. Pulidindi Venugopal, Dr. P. Vijayakumar & Gandadhar, R

An empirical analysis on e-procurement for construction projects using e-RAs

Baladhandayutham, T &Dr. Shanthi Venkatesh

Chaotic behaviour of financial time series an empirical assessment

Dr. Ravindran Ramasamy & Mohd. Hanif Mohd. Helmi

Eco system impacting entrepreneurial youth

Ramaraj, R & Raghava Simha, D

Effect of emotional intelligence intervention among software professionals

Nithya sankar & Dr. S. S. Rau

Emerging HR competencies
Dr. Mu. Subramanian & O. Sivaramakrishnan

Impact of activity based learning in Chennai city schools

Nandini Nagarajan & Dr. R. Krishnaraj

KPO as an emerging sector in India Challenges, opportunities and the way out
Satheesh Babu &Dr. Lokeswara Choudary

Cloud computing trend to eco-friendly business

Vijayakumar, S & Saravanakumar, S. G.

Role of E-business in business

Asha Mathew

ERP solutions and hospitality industry

Dr. S. Govindarajan & Sandeep Mohanty

HGRID : An economical model for mass-health care system using latest technology [GRID computing]
Kanchana Devi, S, Dr. S. Govindarajan & Uma Maheswai, K.M.

The influence of factors affecting repeat buying intentions : a study with reference to super market
Joseph Mary Rahila & Ms. Vaishnavi

432

Emerging trends in IT / ITES markets

Dr. S. Govindarajan &F. Ezhil Mary Arasi

436 442 449 456 463

A study on Work life balance among service sector

Ms D. Maria Angelin Jayanthi & Dr. N. Santhi

Economic analysis of highway projects in India

Siva Kumar, T

The strategic role of corporate boards in organizational decision making

Hanoku Bathula & Sanjaya S. Gaur

NPA Management in public sector banks a Case study with reference to State Bank of Travancore
R. Balaji & Dr. Lokeswara Choudhury

MSMEs in hospitality sector a study on problems and prospects of rural tourism

Dr. Lokeswara Choudhury, Chithra & Malar Vizhi

474 480 487

A study on supply chain operational performance of coconut oil industry.

Jacob Prathapraj and Reeves Wesley, J

Total quality management in single sampling for sequentially inspected manufacturing processes that exhibit Markovian character
Dr. Nagajyothi & Krishnakumar

Impact of emotional intelligence [EI] on individual job performance : am empirical study at selective BPO
Dr. Ramakrishnan

492

A study on cultural knowledge needed in cross-cultural environment Savitha, L & Dr. Sheela Rani A case study on best practices in management education with reference to Karpagam University, Coimbatore Sudhagar, Dr. Mahesh Narasimhan & Vetrichelvi

500 503

Back to Basics 510 Dr Jeyaraman & Ponnuswamy Optimized multi-criteria decision in Supply chain organizations using AHP model a review Balaji & Dr. Lokeswara Choudhury A Study On Factors Influencing Consumer Behaviour In Retail Industry TR.Kalai Lakshmi & DR S.S.Rau Attritition In Bpo Industry S. Muthumani & M.L. Gnanadasan 515 524 543

A STUDY ON CONSUMERS BEHAVIOR ON PURCHASE PATTERN OF FOOD PRODUCTS IN SALEM DISTRICT OF TAMIL NADU
Dr. S. Mahalingam Reader, BSMED, Barathiar University, Coimbatore P. Arun Research Scholar, BSMED, Barathiar University, Coimbatore I. Introduction
In the present scenario, purchase behavior of consumers in India is different from one consumer to another consumer due to their change in personal, cultural, social, environmental factors. These factors influence the consumers while purchasing the food products. Due to the influence of technology like print and TV media advertisement, the behavior of consumers in India with respect to purchasing pattern of food products is dramatically changing. Consumers are so concerned on price and then quality while purchasing the food products. According to NSSO (National Sample Survey Organization) in the year 2004-2005 report monthly per capita expenditure on food products for rural consumers goes up to 5.3% where as it is only 39.4% for the urban Indian consumers. So there is a dramatic fluctuation on purchase behavior of consumers in purchasing food products as rural consumer vs. urban consumers because of their cultural and economic changes According to NSSO (National Sample Survey Organization) in the year 2004-2005 report monthly per capita expenditure on food products for urban consumers have fallen down to 42.5% a and it shows a drop of 5% since the year 2000. According to NSSO year 2006-2007 report (63rd round) MPCE (Monthly Per Capita Expenditure) on food products goes up to 52.3%where as in urban area it declines to 39.4% .So there is a large change in consumer expenditure on purchasing behavior of food products in rural vs. urban area. Online purchasing is dramatically increased in the most of the urban areas. Consumers in India especially in urban area people like to purchase some of the food products through online because consumers are feeling that while purchasing food products in online time will be saved. One more important factor that consumer feels is that while on purchasing through online we can buy products in other country that may not be got in India

2. Research Objectives

To study overall profile of the consumers To analyze factors influencing the purchase decision To assess the store selection process of the consumers. To evaluate brand preference, brand loyalty among the consumer To identify the major promotional tools attracting the consumers on purchasing To identify the overall individual attitudes of the consumers towards purchase decision

3. Statistical Tools

Percentage analysis ANOVA-test

Table 1: General profile of the respondence

Gender Male 37 57.8% Female 27 42.2% Total 64 100% Profes sional 34 53.1% Occupation Worker 02 03% Others 28 43.8% 10 Total 64 100% Salem 15 23.4% Omalur 01 1.6% Place Kolathur 19 29.7% Mettur 29 45.3% Total 64 100%

Interpretation of gender: From the data it is revealed that 57.8% of Consumer are male. Remaining 42.2% of respondents are female. It could be concluded that percentage of male respondents is higher than the female respondents. Interpretation of occupation: From the data it is revealed that 53.1% of Consumer is professional. 3.1% of respondents are Workers. Remaining 43.8% of consumers are others. It could be conclude that percentage of professional respondents is higher than the workers and others.

Secondary data were collected from journals, text books and internet. Primary data Primary data were collected from survey in Salem Dt. Sample data of 64 respondence were selected for the survey. Statistical tools applied Chi square and ANOVA test were measured for measured above objectives Table: 1 sample profile of the respondents (N=64)

Interpretation of place: Consumer purchase pattern is different from one consumer to another consumer .From the above table it clearly shows that in total sample of 64 respondents 23.4% of respondents were from Salem area, 1.6.% of respondents were from Omalur, 29.7.% of respondents were from Mettur dam,45.3% of respondents were from Kolathur. Interpretation of marital status: From the data it is revealed that 95.4% of respondents are married. 3% of respondents are un married. Remaining 01.6% of consumers are widow. It could be conclude that percentage of married respondents is higher than the unmarried and widow.

Interpretation of gender: From the data it is revealed that 57.8% of Consumer are male .Remaining 42.2% of respondents are female .It could be conclude that percentage of male respondents is higher than the female respondents Interpretation of place: Consumer purchase pattern is different from one consumer to another consumer .From the above table it clearly shows that in total sample of 64 respondents 23.4% of respondents were from Salem area, 1.6.% of respondents were from Omalur, 29.7.% of respondents were from Mettur dam,45.3% of respondents were from Kolathur

4. Research methodology
Secondary data Secondary data were collected from different sources. Interpretation of occupation: From the data it is revealed that 53.1% of Consumer is professional.

5. Analysis and interpretation

I percentage analysis

Table 2: Purchase pattern of food products

Regu larly Purchasing 18 14 4 11 Occation Nally purcha sing 7 0 0 38

Food Products Jam Sauce Soup Atta

Not purch asing 27 46 56 3

Percen tage 42.2 71.9 87.5 4.7

Percen tage 28.1 21.9 6.3 17.2

Mostly Purc hasing 6 2 2 6 11

Percen tage 9.4 3.1 3.1 9.4

Frequently purch asing 6 2 2 6

Perce ntage 9.4 3.1 3.1 9.4

Percen tage 10.9 0 0 59.4

3.1% of respondents are Workers. Remaining 43.8% of consumers are others. It could be conclude that percentage of professional respondents is higher than the workers and others. Interpretation of jam: From the data it is revealed that 42.2%% of Consumer are not purchasing jam. .28.1% of respondents is regularly purchasing jam. .9.41% of respondents are mostly purchasing jam.9.4% of respondents are frequently purchasing jam, 10.9% of respondents are occasionally purchasing jam in total of 64 respondence. Interpretation of sauce: From the data it is revealed that 71.9% of Consumer is not purchasing sauce. .21.9% of respondents is regularly purchasing sauce.

3.1% of respondents are mostly purchasing sauce.0% of respondents are occasionally purchasing sauce, 3.1 % of respondents are frequently purchasing sauce .in total of 64 respondence. Interpretation of soup: From the data it is revealed that 87.5% of Consumer is not purchasing soup. .6.3% of respondents is regularly purchasing soup. 3.1% of respondents are mostly purchasing soup.3.1% of respondents are occasionally purchasing soup, 0%of respondents are frequently purchasing .in total of 64 respondence. Interpretation of atta: From the data it is revealed that 4.7% of Consumer are not purchasing atta .17.2% of respondents are regularly purchasing atta. .9.4% of respondents are mostly purchasing atta.9.4% of respondents are occasionally purchasing jam, 59.4% of

6. ANOVA
Table no 3: Ranking of factors that influencing consumer purchase behavior respondents are frequently purchasing jam. In total of 64 respondence Factors Mean
Cultural factors influence on purchase Life partners influence on purchase Childrens influence on purchase Parents influence on purchase Friends influence on purchase Easy product identification in the store influence on purchase Shopping space available inside the store influence on purchase Active checkout counters inside the store influence on purchase Broad casting medias influence on creating awareness Print medias influence on creating awareness 3.52 3.67 2.83 2.09 1.94 3.92 3.36 3.84 3.63 3.00

Rank 5 3 8 9 10 1 6 2 4 7

Gender & influence of various factors on buying behavior Hypothesis 1: Ho: There is no significant difference between gender & influence of various factors on buying behavior H1: There is a significant difference between gender & influence of various factors on buying behavior =0.05%L.O.S

Table No 4: Gender & influence of various factors on buying behavior

Influencing Factors Cultural factors influence on purchase F-ratio 3.404 12 ANOVA table value (Sig. value) .070 Significant/not significant Not significant

Life partners influence on purchase Childrens influence on purchase Parents influence on purchase Friends influence on purchase Easy product identification inside the store influence on purchase Shopping space available inside the store influence on purchase Active checkout counters inside the store influence on purchase Broad casting medias influence on creating awareness Print medias influence on creating awareness

1.533 .355 .792 .073 .035 .057 .296 .001 .042

.220 .553 .377 .788 .853 .812 .589 .979 .838

Not significant Not significant Not significant Not significant Not significant Not significant Not significant Not significant Not significant

Interpretation: gender and all 10 factors i) From the above table, since, F (1, 62) = 3.404, p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between gender and influence of cultural factor on buying behavior. From the above table, since, F (1, 62) = 1.533, p > 0.05, the null hypothesis is failed to be accepted. Hence there is no significant difference between gender and influence of life partner on buying behavior. From the above table, since, F (1, 62) = 0.355 p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between gender and influence of children on buying behavior. From the above table, since, F (1, 62) = 0.792 p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between gender and influence of parents on buying behavior. From the above table, since, F (1, 62) = 0.073 p > 0.05, the null hypothesis is failed to be rejected. Hence there is no significant difference between gender and influence of friends on buying behavior. From the above table, since, F (1, 62) = 0.035 p <0.05, the null hypothesis is accepted. Hence there is significant difference between gender and easy product identification on buying behavior. From the above table, since, F (1, 62) = 0.057 p > 0.05, the null hypothesis 13

is accepted. Hence there is no significant difference between gender and shopping space availability on buying behavior. From the above table, since, F (1, 62) = 0.296 p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between gender and active checkout counter on buying behavior. From the above table, since, F (1, 62) = 0.001 p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between gender and broad casting media on buying behavior. From the above table, since, F (1, 62) = 0.042 p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between gender and print media on buying behavior Occupation Hypothesis 2: Ho: There is no significant difference between occupation & influence of various factors on buying behavior H1: There is a significant difference between gender & influence of various factors on buying beaviour =0.05%L.O.S

Table No 5: Occupation & influence of various factors on buying of various factors on buying behavior
Influencing Factors Cultural factors influence on purchase Life partners influence on purchase Childrens influence on purchase Parents influence on purchase Friends influence on purchase Easy product identification inside the store influence on purchase Shopping space available inside the store influence on purchase Active checkout counters inside the store influence on purchase Broad casting medias influence on creating awareness Print medias influence on creating awareness F-Ratio 1.566 .337 .787 .769 .444 .977 3.703 3.683 .955 .213 ANOVA table value Significant/not significant (Sig. .217 .715 .460 .468 .644 .382 .030* .031* .391 .808 Not significant Not significant Not significant Not significant Not significant Not significant significant significant Not significant Not significant

Interpretation: Occupation and all 10 factors From the above table, since, F (2, 61) = 1.566 p > 0.05, the null hypothesis is failed to be rejected. Hence there is no significant difference between occupation and cultural factor on buying behavior. From the above table, since, F (2, 61) = 0.337, p > 0.05, the null hypothesis is failed to be rejected. Hence there is no significant difference between occupation and life partner on buying behavior. From the above table, since, F (2, 61) = 0.787 p > 0.05, the null hypothesis is failed to be rejected. Hence there is no significant difference between occupation and children on buying behavior. From the above table, since, F (2, 61) = 0.769 p > 0.05, the null hypothesis is failed to be rejected. Hence there is no significant difference between occupation and parents on buying behavior. From the above table, since, F (2, 61) = 0.444 p > 0.05, the null hypothesis is failed to be rejected. Hence there is no significant difference between occupation and friends on buying behavior. From the above table, since, F (2, 61) = 0.977 p > 0.05, the null hypothesis is failed to be rejected. Hence there is no significant difference between occupation and easy product identification on 14

buying behavior. From the above table, since, F (2, 61) = 3.703 p < 0.05, the null hypothesis is accepted Hence there is a significant difference between occupation and shopping space availability on buying behavior. From the above table, since, F (2, 61) = 3.683 p < 0.05, the null hypothesis is accepted. Hence there is a significant difference between occupation and active checkout counter on buying behavior. From the above table, since, F (2, 61) = 0.955 p > 0.05, the null hypothesis is failed to be rejected. Hence there is no significant difference between occupation and broad casting media on buying behavior. From the above table, since, F (2, 61) = 0.231 p > 0.05, the null hypothesis is failed to be rejected. Hence there is no significant difference between occupation and print media on buying behavior Place of residence Hypothesis 3: Ho: There is no significant difference between place of residence & influence of various factors on buying behavior H1: There is a significant difference between place of residence & influence of various factors on buying behavior =0.05%L.O.S

Table No 6: Place of residence & influence of various factors on buying behavior

ANOVA table value (Sig. .948 .378 .950 .056 .003 .042

Influencing Factors Cultural factors influence on purchase Life partners influence on purchase Childrens influence on purchase Parents influence on purchase Friends influence on purchase Easy product identification inside the store influence on purchase Shopping space available inside the store influence on purchase Active checkout counters inside the store influence on purchase Broad casting medias influence on creating awareness Print medias influence on creating awareness

F-Ratio .119 1.048 .117 2.668 5.090 2.898

Significant/not significant Not significant Not significant Not significant Not significant significant significant

1.660

.185

Not significant

1.687

.179

Not significant

3.021 1.830

.037 .152

significant Not significant

Interpretation: Place and all 10 factors From the above table, since, F (3, 60) = 0.199 p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between place and cultural factor on buying behavior. From the above table, since, F (3, 60) = 1.048, p > 0.05, the null hypothesis is accepted. Hence there is no significant above table, since, F (3, 60) = 0.117 p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between place and children on buying behavior. From the above table, since, F (3, 60) = 2.668 p < 0.05, the null hypothesis is accepted. Hence there is a significant difference between place and parents on buying behavior. From the above table, since, F (3, 60) = 5.090 p <0.05, the null hypothesis is accepted. Hence there is a significant difference between place and friends on buying behavior. From the above table, since, F (3, 60) = 2.898 15

p <0.05, the null hypothesis is accepted. Hence there is a significant difference between place and easy product identification on buying behavior. From the above table, since, F (3, 60) =1.660 p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between occupation and shopping space availability on buying behavior. From the above table, since, F (3, 60) =1.687 p >0.05, the null hypothesis is accepted. Hence there is no significant difference between occupation and active check out counter. From the above table, since, F (3, 60) = 3.021 p<0.05, the null hypothesis is accepted. Hence there is a significant difference between occupation and broad casting media on buying behavior. From the above table, since, F (3, 60) = 1.830 p > 0.05, the null hypothesis is accepted. Hence there is no significant difference between occupation and print media on buying behavior

1. Findings and suggestion Followings are the findings of the study i) With reference to the gender & all influence of 10 factors findings suggest that none of the 10 factors are significantly related ii) With reference to the occupation & all influence of 10 factors findings suggest that shopping space available inside the store with occupation of the consumer is significantly related iii) With reference to the occupation & all influence of 10 factors findings suggest that active check out counter inside the store with occupation of the consumer is significantly related iv) With reference to the occupation & all influence of 10 factors findings suggest that easy product identification inside the store with occupation of the consumer is significantly related v) With reference to the place of residence & all influence of 10 factors findings suggest that place of residence of consumers and influence of friends on purchase on purchasing food products by the consumer is significantly related vi) With reference to the place of residence & all influence of 10 factors findings suggest that place of residence of consumers and influence of broad casting media on purchase of the consumer is significantly related vii) From the data it is revealed that 42.2%% of Consumer are not purchasing jam. 28.1% of respondents is regularly purchasing jam. 9.41% of respondents are mostly purchasing jam.9.4% of respondents are occasionally purchasing jam, 10.1% of respondents are mostly purchasing jam 9.4% of respondents are frequently purchasing jam. In total of 64 respondents viii) From the data it is revealed that 71.9% of Consumer is not purchasing sauce. 21.9% of respondents is regularly purchasing sauce. 3.1% of respondents are mostly purchasing sauce. 3.1 %of respondents are 16

ix)

x)

frequently purchasing sauce in total of 64 respondents. From the data it is revealed that 87.5% of Consumer is not purchasing soup. 6.3% of respondents is regularly purchasing soop respondents are mostly purchasing soup 3.1% of respondents are occasionally purchasing soup, From the data it is revealed that 4.7% of Consumer are not purchasing atta 17.2% of respondents are regularly purchasing atta. 9.4% of respondents are mostly purchasing atta 9.4% of respondents are occasionally purchasing atta, 59.4% of respondents are frequently purchasing atta.

7. Suggestion
The research study suggest that by reducing the cost of advertisement & giving to the consumers in affordable price it will be helpful for consumers at the time of purchasing food products. It is also suggest that promotional activities are giving only at season time (deepavali etc).if it giving by the company to maximum times it is also be helpful for the consumers to purchase more food products.

8. Conclusion
In broad conclusion about buying behavior among the consumers indicated that consumers preference plays important role in the final purchase as for as food product is concern. In store purchase behavior of consumers like identification of food products easily while on purchasing food products in shopping malls , active check out counter inside the shopping malls for the consumers to finish the checking and billing perspectives quickly because in the busy world consumers in Tamil nadir especially Salem dt .Next consumers prefer space inside the shopping centers . Most of the Consumers raked active check out counter is very important and it influencing high to select and purchase the particular store. Above study also conclude that easy product identification got highest mean value of 3.92.Least is shopping space available inside the store that got mean value of 3.32. With respect to media creating awareness about the food products on

pre purchasing behavior consumers raked broad casting media as high since it got 3.63 as mean value compare to print media as it got mean value of 3.Domestic factors influencing consumers as for as the above study states that life partner influencing consumer high since it got the mean value of 3.67. As for as food product is concern 42.2% of consumers not purchasing jam of neither HUL nor any other company Jam item which means only 28.1% of consumers are purchasing jam of neither HUL nor any other company jam item as regularly, 9.4% of consumers are purchasing jam of neither HUL nor any other company jam item as occasionally. 10.1% of consumers are purchasing jam of neither HUL nor any other company jam item as frequently. Next sauce 71.9% of consumers not purchasing sauce of neither HUL nor any other company sauce items which means only 21.9% of consumers are purchasing sauce of neither HUL nor any other company sauce items as regulerly.3% of consumers purchasing mostly.14% percentage of consumers occasionally. 3.1 % of consumers purchasing frequently. Next soup neither 87.5% of consumers not purchasing soup of neither HUL nor any other company sauce items means only 6.3% of consumers are purchasing soup of neither HUL nor any other company sauce items as regularly.3.1% of consumers are purchasing soup of neither HUL nor any other company sauce items as mostly. 3.1% of consumers are purchasing soup of neither HUL nor any other company sauce items as occasionally

Believes & purchasing practices of cape town consumers reg: organic produced food Journal of family ecology and consumer science volume 31, 2003 2. (Egay 1989,ott 1990,Huang et al 1990, Huang et al 1993,Misra et al 1991,jolly et al 1989,jolly 1991,Goldman Lewies 2001,the and Clancy et al 1991,Ekeland 1993,Sylvander 2002,wold 1990,Baker and Crosbe 1993,Swanson and 1993,Groff parker 1993,The Parker 1998,Oystein et al 2001,jolly 2001,Demeritt 2002) Organic and Conventional food: A literature review of the economics of consumer perception and preference 3. Aguirre(2001) Organic And Conventional food: A literature Review of the economics of consumer perception and preference Marketing and consumption of organic products in Costa Rica, Working paper no 5, the school for field studies, center for sustainable development-Atenas, Costa Rica 4. Fotopoulos and Kryskallis, 2002; Larue et al., 2004; Wier and Calverley, 2002)Organic food consumer purchase pattern willing to pay premium price Fotopoulos, C., and Krystallis, A. (2002), Purchasing motives and profile of Greek organic consumer: a countrywide survey, British Food Journal, 104 (9), 730-764., Wier, M., and Calverly, C. (2002), Market potential for organic foods in Europe, British Food Journal, 104 (1), 45-62.

9. Reference
1. Lane & Bruhn(1992) ,Believes & purchasing practices of cape town consumers reg: organic produced food Journal of family ecology and consumer science volume 31, 2003 Sunders(1999),Hutcines & Green halgh(1997)

17

AN EMPIRICAL STUDY: FARMWDS CONTRACT FARMING

S. Arun Kumar Asst. Professor, Department of Management Studies, Saranathan College of Engineering, Trichy, Tamilnadu, India S. Gugananthan, N.Kaarthik II MBA, Saranathan College of engineering, Trichy, Tamilnadu , India. 1. Introduction
Singh, S., (1998) describe that the entry of large businesses into agribusiness sector has led to a new arrangement in raw material production and procurement in India, known as contract farming. This is happening as good quality, timely and cost effective raw material is a prerequisite for any successful agribusiness firm, whether operating in the domestic or the international market. Given the Land Ceiling Act in India, agribusiness firms cannot own and cultivate land for their raw material requirements. Also, most of the times, it is not a Viable option[22]. Vyas, V. S., (2001) stated that therefore, the only option for them to procure raw materials is to have contractual arrangements with the primary producers which are also suggested as an alternative to corporate farming or liberalisation of land ceiling laws [26]. Key, N. and D. Runsten (1999) prescribed that contract farming refers to the production and supply of agricultural produce under advance contracts, the essence of such contracts being a commitment to provide an agricultural commodity of a type, at a time and a price, and in the quantity required by a known buyer. It basically involves four things - pre-agreed price, quality, quantity or acreage (minimum/maximum) and time. The contracts could be of three types; (i) procurement contracts under which only sale and purchase conditions are specified; (ii) partial contracts wherein only some of the inputs are supplied by the contracting firm and produce is bought at pre-agreed prices; and (iii) total contracts under which the contracting firm supplies and manages all the inputs and the farmer becomes just a supplier of land and labour. The relevance and importance of each type varies across products and over time, and these are not mutually exclusive [15]. As according to Eaton, C. and A. W Shepherd, (2001) a contract reduces price risk for a farmer and can be terminated at reasonably short notice. Also, contractual 18 arrangements are attractive to farmers seeking capital and new technology and other inputs and production services as generally new crops with modern technology or existing crops with new seeds and other inputs are promoted under such arrangements. On the other hand, food processors can minimize their overhead costs per unit of production by operating their plants at or near fully capacity by obtaining assured, stable and quality raw material supplies from farms under contracts. For a processor, contracts are more flexible in the face of market uncertainty, make smaller demands on scarce capital resources and impose less of an additional burden on management. They also overcome land constraint for corporate firms, reduce Production risk, and are politically more acceptable than corporate farming [7]. Baumann, P., (2000) said that contracting can give a positive image to the company as it may be perceived as progressive especially if it works with small farmers, and can help it get access to state or donor funds [1]. Gill, S. S., (2004) & Grosh, B., (1994) stated that at more macro economic level, contracting can help to remove market imperfections in produce, capital, land and labour markets, remove intermediaries and therefore make upstream value chain (agricultural marketing) more efficient, and can help in better co-ordination of local production activities as it often involves initial investment in processing, extension etc. [11&12]. Haque, T. and P. S. Birthal, (1998) provide that from an institutional economics perspective, contract farming could be looked upon as a way of creating positive externalities, created better by private sector instead of the state, which can result in overall rural development. Contracting can lead to more employment opportunities for farm and non-farm labour as generally it deals with labour intensive high value crops requiring labour for harvesting, grading, and packaging at the farm level, and in processing, transportation, packaging and marketing

at the post-farm stage, reducing the seasonality of employment and giving higher wages through Competition in the labour market. There can also be larger developmental effects from the improvement in infrastructure and other amenities due to contracting and general expansion of demand due to higher incomes under contracting [13]. Little, P. D. and M. J. Watts (eds.), (1994) given that the failure of government mechanisms for support to agriculture, there is wide support for contract farming under the Structural Adjustment Programme (SAP) and liberalisation. Given the enthusiastic promotion of this mechanism by the international development agencies like the World Bank, the United States Agency for International Development (USAID), the International Finance Corporation (IFC) and the Commonwealth Development Corporation (CDC) [17], Hayami Y. and A. Damodaran, (2004)reveal that it is inevitable that new forms of contracts will be tried by the agribusiness firms. This is the only way to ensure good quality and timely availability of raw material for processing, especially when, in India, captive farming is not allowed at present under the Land Ceilings Act. Besides, captive farming means putting large resources in raw material production which may not be the best economic option for many agribusiness firms in India, especially small firms, or may not be a viable practice any more in competitive markets like in the case of tea plantations in south India[14].

and Haryana of Cucumber in Andhra Pradesh and cotton in Tamil Nadu found that the net returns from those crops under contract being much higher than those under non contract situations though production cost in tomato was much higher than the contract system.

3. Research Problem
Indian agriculture is expected to take three main challenges in time ahead. First, the area under cultivation is estimated to come down from 170 million hectares to 100 million hectares by 2020. There will be a shortage of irrigation water. The number of people will decline in Agriculture. Hence to overcome these forecasted pitfalls contract farming practices are highly welcome in our Indian agricultural practices.

4. Research Objectives
To understand the farmers perception towards contract farming Practices. To understand the Socio-demographic and Rational profile of farmers with reference to rice bowl of Thanjavur, Tamilnadu , India. To identify the important underlying dimensions of contract farming among farmers. To identify the dominant variables, which is a strong predictor of contract farming among farmers in Thanjavur ,Tamilnadu , India.

2. Contract Farming in India

Contract Farming is fast evolving as a mechanism of alternative marketing in the country. Punjab, Karnataka, Maharashtra, Madhya Pradesh, and Tamil Nadu have been the front runners in this regard. The experience of contract farming in India shows that there is considerable saving in consumption of inputs due to the introduction of improved technology and better extension services. Contract farming has usually allowed the farmers some form of credit to finance use of production inputs. In some cases, viz. Appache Model of contract farming for cotton in Tamil Nadu, there are arrangements for loans from commercial banks. Contract farming has been successful in effecting crop diversification in many states. Studies of Tomato contract production in Punjab 19

5. Scope of the Research

This study is confined to the farmers in Thanjavur. This study creates awareness about contract farming among farmers. This study will help to overcome the future food insecurity problem.

6. Review of Literature
Sunanda S. (2005) has stated that contract farming is a form of vertical integration where the farmer is contractually bound to supply a given quantity and quality of product to a processing or marketing enterprise. The buyer agrees in advance to pay a certain price to the farmer and often provides technical advice and inputs (the cost of the inputs being deducted from the farmers revenue once the product has been sold to the buyer). All inputs were provided on credit through

cooperatives, groups, or middlemen. Contract farming usually involves the following basic elements -preagreed price, quality, quantity or acreage (minimum/ maximum) and time. The key to the success of this venture lies in building up a healthy trust between grower and buyer. The finance extended by the private banks for contract farming are termed as corporate linked agri finance. Neither the corporate nor the farmer is interested in fixing the price upfront. Banks have adopted the market price as the relevant price on the date of the procurement [27]. A look at history displays that the principles of contract farming existed way back to the 19th century when the mechanism was used in the United States for processing crops such as sugar, beets and peaches, and in Taiwan, for sugar production under the Japanese colonial rule [27]. Chen, K., Shepherd, A. and Da Silva, C. (2005) have enumerated that these transformations, and the government responses thereof, are creating challenges and Opportunities for producers, processors, wholesalers, retailers and other supply chain actors. Small farmers in developing countries, in particular, are perceived to be especially vulnerable to changes. Modern organisational arrangements in agro-food systems might promote the emergence of power imbalances and unfavourable terms of trade in the transactions between smaller-scale chain actors and the larger players which typically exercise the leading coordination role in a managed supply chain[2]. Da Silva, C., (2005) argues that not withstanding, contract farming is being promoted by governments and development agencies as a coordination mode that can facilitate the integration of small farmers into supply chains[5]. According to Agricultural produce market committee act (APMC) the basic objective of setting up of network of physical markets has been to ensure reasonable gain to the farmers by creating environment in markets for fair play of supply and demand forces, regulate market practices and attain transparency in transactions. [21] According to Erappa, S., (2006) the main objective is to increase crop production, improve quality farm produce and possibly minimize cultivation cost [9]. 20

7. Advantages of Contract Farming

Erappa, S., (2006) describes that experiences showed that farmers are benefited from technical guidance, supply of quality farm inputs and assured purchasing at remunerative price[9]. Da Silva, C., (2005) It was argued that the private firms, with their profit maximising motive, would invest heavily in the input segment, which coupled with their technical advice during pre- and post-harvest period, would come useful for farmers. Economically it makes more sense for the corporate to go for the large farmers rather than the small and marginal farmers as tenants [5]. Debashis Chakraborty, (2009) reveals that a major precondition for agricultural investment in rural areas is the existence of an adequate communication system that includes roads, transport, telephones and other telecommunication services. Reliable power and water supplies are particularly vital for agro-processing and exporting of fresh produce. The availability of suitable educational and medical services is also important for those who participate in contract farming, whether they be direct employees of the sponsor or the farmers themselves. Sponsors need to be assured that they will be able to organize the supply of all necessary inputs for the farmers and for their own processing needs. All inputs should be identified and ordered well in advance, either from local sources or from overseas. Provision of inputs and production services Many contractual arrangements involve considerable production support in addition to the supply of basic inputs such as seed and fertilizer. Sponsors may also provide land preparation, field cultivation and harvesting as well as free training and extension. This is primarily to ensure that proper crop husbandry practices are followed in order to achieve projected yields and required qualities. Contract farming usually allows farmers access to some form of credit to finance production inputs. In most cases it is the sponsors who advance credit through their managers. However, arrangements can be made with commercial banks or government agencies through crop liens that are guaranteed by the sponsor, i.e. the contract serves as collateral. When substantial investments are required of farmers, such as packing or grading sheds, tobacco barns or heavy machinery, banks will not normally advance credit without guarantees from the sponsor [6].

The major benefits accruing to the farmer are quality inputs, technical guidance, assured market and price. There is an enhanced farm productivity & income [3]. As per Debashis Chakraborty, (2009) Guaranteed and fixed pricing structures sponsors indicate in advance the price(s) to be paid and these are specified in the agreement. On the other hand, some contracts are not based on fixed prices but are related to the market prices at the time of delivery. In these instances, the contracted farmer is clearly dependent on market volatility. If either the sponsors or their contracted farmers fail to achieve consistent and attractive financial benefits a venture will collapse. A further precondition, therefore, is that the sponsor needs to be sure that farmers will obtain higher net incomes from entering into a contract than they could from alternative activities with the same, or less, risk. Sponsors should calculate realistic yields in order to forecast whether production by farmers can be profitable at prices the sponsors are able to pay. These estimates should be based on the experience of farmers

in the chosen area, their historical production data, soil fertility and, sometimes, field trials. Once estimates are compiled and production costs known, the sponsors are in a sounder position to calculate a realistic pricing structure that is mutually profitable. Guaranteed, regular and attractive incomes should encourage farmers to make a long-term commitment both as a facilitator and guarantor in the event of crop failure [6]. Sukhpal Singh ,(2003) has said experiences showed that farmers are benefited from technical guidance, supply of quality farm inputs and assured purchasing at remunerative price[24].In case of any lapses from companies, the government should intervene and come to rescue of farmers. Motivating private insurance companies to participate in the contract farming may be considered to act as a liaison authority [8]. In the words of Singh, S., (2005), technological progress in farming can help the rural poor by raising farm productivity, lowering food prices, increasing employment, and reducing farming risk[23].

Figure 1 : Research Model

21

8. Research Methodology
Here in this research study descriptive type of research used. Sampling method is Non probability purposive sampling with a sample size of 127 respondents taken for the study. Content validity is tested by showing the variables to farmers ,agricultural scientist & academicians and then subjected to pilot testing with a total of 30 farmers and they were asked to comment on any perceived ambiguities, omissions or errors concerning to the drafted questionnaire. The feedback received was rather ambiguous thus only minor changes were made. For instance, technical jargon was rephrased to ensure clarity and simplicity. Reliability refers to the confidence we can place on the measuring instrument to give us the numeric value. If the same set of objects are measured again and again with the same or comparable measuring instrument and the results obtained are the same or similar, then the measuring instrument is said to be reliable. Here, a Cronbachs Alpha value of .722 has obtained which seems to be having higher reliability coefficient. Data were collected by means of a structured questionnaire comprising three Sections namely A, B and C. Section A , contained thirteen questions pertaining to farmers demographic and rational profile, Section B, on the other hand, is composed of 17 items for contract farming, a scale uniquely developed to embrace different aspects of a contract farming procedure and offering of consumer perceptions and finally Section C, to provide an overall rating of the contract farming. In the subsequent fullscale survey, data were collected from farmers in Thanjavur, the rice bowl of Tamilnadu, for the period of May, 2010 to June, 2010. The data collected will be analysed using Simple percentage analysis, Chi-square test, ANOVA, Factor analysis, multiple regression and interpreted using statistical package for social sciences (SPSS).

Inference A test of reliability is an important test of sound measurement. A reliability test score of 0.6 and above is said to be reliable. Cronbachs alpha reliability test for the study was done and the score was found to be 0.722 which rendered the study reliable. The Financial Analysis reveals that the above table , 118 (93%) of the respondents are male and 9 (7%) of the respondents are female, 71 (56%) of the respondents are in the age group of 21-30, followed by 28 (22%) of the respondents are in the age group of 31-40, and 16 (13%) of the respondents are in the age group of 41-50 and 12(9%) of the respondents are in the age group of more than 50 year , 3 (2%) of the respondents are 2 dependents, 17 (13%) of the respondents are 3 dependents, 28 (22%) of the respondents are 4 dependents, 31 (24%) of the respondents are 5 dependents and 48 (38%) of the respondents are above 5 dependents , 28(22%) of the respondents income is below Rs 25000, 60(47%) of the respondents income is below Rs 25000-50000, 27 (21%) of the respondents income is below Rs 50000-100000 and 12(9%) of the respondents income is above Rs 100000, 17(13%) of the respondents are above 10 acre land holders, 34(27%) of the respondents are 5-10 acre land holders,40(31%) of the respondents are 3-5 acre land holders,33(26%) of the respondents are 2 acre land holders and 3(2%) of the respondents are below 2 acre land holders, 28(22%) of the respondents are primary education, 45(35%) of the respondents are middle class, 30(24%) of the respondents are higher secondary and, 24(19%) of the respondents are college education , 29(23%) of the respondents are below 5 years experience, 20(16%) of the respondents are 5-10 years experience, 27(21%) of the respondents are 10-15 years experience, 17(13%) of the respondents are 1520 years experience and 34(27%) of the respondents are above 25 years experience , 72 (57%) of the respondents are river irrigation system, 23(18%) of the respondents are bore well irrigation system 10 (8%) of the respondents are lake irrigation system and 20 (16%) of the respondents are well irrigation system , 90(71%) of the respondents have own land, 6(5%) of the respondents have contract land and 31(24%) of the respondents have own and contract land , 62(49%) of the respondents have wet land, 30(24%) of the respondents 22

9. Empirical Analysis Interpretation And Findings

Table1: Reliability Statistics
Cronbachs Alpha .722 Source: Primary data N of Items 17

have dry land and 35(28%) of the respondents have wet and dry land , 8(6%) of the respondents produce cash crops, 47(37%) of the respondents produce food crops, 6(5%) of the respondents produce fruits and 66(52%) of the respondents produce cash and food crops , 27(21%) of the respondents getting loan from banks, 52(41%) of the respondents are getting loan from primary agriculture co-operative bank, 35(28%) of the respondents are getting loan from private moneylenders and 13(10%) of the respondents are getting from bank and PACB.26(21%) of the respondents are using chemical fertilizers,11(9%) of the respondents are using

organic fertilizers ,90(71%) of the respondents are using other type of fertilizers.

KMO and Bartletts Test Bartletts test of sphericity indicates whether your Correlation matrix is an identity matrix, which would indicate that your variables are unrelated. The significance level gives the result of the test. Very small values (less than .05) indicate that there are probably significant relationships among your variables. A value higher than about .10 or so may indicate that your data are not suitable for factor analysis. Table 3: KMO and Bartletts Test

10. Factor Analysis

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.506

Bartletts Test of Sphericity

Approx. Chi-Square Df Sig.

683.354 136 .000

Source: Primary data Inference The significance .000 is lesser than the assumed value .05. This means that factor analysis is valid. We look at the KMO coefficient which is .506. The value is more than 0.05. So this implies that the factor analysis for data reduction is effective. Communalities indicate the amount of variance in each variable that is accounted for. Initial communalities are estimates of the variance in each variable accounted for by all components or factors. For principal components analysis, this is always equal to 1.0 (for correlation analyses) or the variance of the variable (for covariance analyses. Extraction communalities are estimates of the variance in each variable accounted for by the factors (or components) in the factor solution Small values indicate variables that do not fit well with the factor solution, and should possibly be dropped from the analysis.

11. Rotated Component Matrix (a) Table 5: Component 1 Willingness to give land for contract. Mentally prepared for long term lease. -.085 .129 2 .031 .121 .022 .085 3 .158 -.020 -.263 .275 4 .707 .838 .568 .158 5 .251 6 7 -.188 .181 -.373 -.025

-.077 .117 .225 .272

Abide by the rules and regulation of .466 corporate. Remuneration based on crops yield. .687
23

-.105 -.134 .169

Fixed lease amount as Remuneration. Freedom to produce any type of crops. Freedom to use all kind of pesticides Preference to grow short term crops Preference to grow long term crops. Use of Contract bonds for availing loans. Advance payment from corporate. Contract farming increases employment opportunities. Mandatory Government intervention Aided with agriculture equipments. Facilitation for crop insurance. Stipulation to protect soil fertility.

.836 .132 .457 .192 .118 .492 .172 .105 .066 .375 -.075 -.013

.055 .038 .029 .034 .047 .118 .635 .067 .727 .625 .841 .090

.019 .814 .377 .190 .140 .190 .004 .763 .060 -.333 .152 .195 .035

-.031 .004 .092 .054 .114 .184

.248 .291 .346

.076 -.076 -.526

-.132 .012 .022 .146 .248 .160 .054 .170 -.070 .116 .211 -.066 .055 -.005 .092 .004 .115 .753 .822

.100 .744 .812 .024 -.445 -.303 .086 .441 -.117 .198 -.290 -.320 .068 .258 .172 .114

-.200 -.006 -.271

Protection of the environment. .017 -.033 Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization. a Rotation converged in 9 iterations. This table (called the Pattern Matrix for oblique rotations) reports the factor loadings for each variable on the components or factors after rotation. Each number represents the partial correlation between the item and the rotated factor. These correlations can help you formulate an interpretation of the factors or components. This is done by looking for a common thread among the variables that have large loadings for a particular factor or components Inference Hence from the above table it is inferred that the following factors namely Remuneration based on crop yield and Remuneration based on fixed leased amount for Factor 1 with the factor loading value of

-.074 -.092

0.687 and 0.836. In Factor 2 Advance payment from companies, Government intervention, Aided with agriculture equipments and crop insurance with the factor loading value of 0.635, 0.727, 0.625, and 0.841. In Factor 3 Freedom to produce of crops and Contract farming increasing employability contributes with the factor loading value of 0.814 and 0.763. In Factor 4 Willingness to give land for contract, long term lease and Abide rule and regulation of corporate companies contributes with the factor loading value of 0.707, 0.838 and 0.568. In Factor 5 protected soil fertility and Protected environment contributes with the factor loading value of 0.753 and 0.822. In Factor 6 Favour to grow long term crops contributes with the factor loading value of 0.812. In Factor 7Freedom to use pesticides and Favour to grow short term crops contributes with the factor loading value of -0.526 and 0.744. `

12.Multiple Regression analysis:

Model 1 2 3 4 R .601(a) .660(b) .684(c) .704(d) R Square .361 .436 .468 .495

Table 6:
Adjusted R Square .356 .427 .455 .479 24 Std. Error of the Estimate .81029 .76438 .74523 .72903

a b c d

Predictors: (Constant), Protected environment Predictors: (Constant), Protected environment, Contract bonds availing for loans Predictors: (Constant), Protected environment, Contract bonds availing for loans , Favour to grow long term crops Predictors: (Constant), Protected environment, Contract bonds availing for loans , Favour to grow long term crops, Remunerated based on fixed leased amount. This table displays R, R squared, adjusted R squared, and the standard error. R, the multiple correlations co-efficient, is the correlation between the observed and predicted values of the dependent variable. The values of R for models produced by the regression

procedure range from 0 to 1. Larger values of R indicate stronger relationships. R squared is the proportion of variation in the dependent variable explained by the regression model. The values of R squared range from 0 to 1. Small values indicate that the model does not fit the data well. The sample R squared tends to optimistically estimate how well the models fit the population. Adjusted R squared attempts to correct R squared to more closely reflect the goodness of fit of the model in the population. Here we use R squared to help us to determine which model is best. Here we choose a model with a high value of R squared that does not contain too many variables. Models with too many variables are often over fit and hard to interpret.

13. ANOVA(e)
Model Regression 1 Residual Total Regression Residual Total Regression 3 Residual Total Regression 4 Residual Total 64.841 128.457 68.310 128.457 63.616 82.072 128.457 56.007 72.450 128.457 60.146

Table: 7
Sum of Squares 46.385 1 125 126 2 124 126 3 123 126 4 122 126 25 15.904 .531 29.924 .000(d) 20.049 .555 36.100 .000(c) 28.003 .584 47.928 .000(b) Df Mean Square 46.385 .657 F 70.647 Sig. .000(a)

a Predictors: (Constant), Protected environment b Predictors: (Constant), Protected environment, Contract bonds availing for loans c Predictors: (Constant), Protected environment, Contract bonds availing for loans , Favour to grow long term crops d Predictors: (Constant), Protected environment, Contract bonds availing for loans , Favour to grow long term crops, Remunerated based on fixed leased amount. e Dependent Variable: Overall encouraging contract farming This table summarizes the results of an analysis of variance. The sum of squares, degrees of freedom, and mean square are displayed for two sources of variation, regression and residual. The output for Regression displays information

about the variation accounted for the model. The output for Residual displays information about the variation that is not accounted for by our model. And the output for Total is the sum of the information for Regression and Residual. A model with a large regression sum of squares in comparison to the residual sum of squares indicates that the model accounts for most of variation in the dependent variable. The mean square is the sum of squares divided by the degrees of freedom. The F statistic is the regression mean square divided by the residual mean square. If the significance value of the F statistic is small (smaller than say 0.05) then the independent variables do a good job explaining the variation in the dependent variable.

14. Coefficients(a)

Table : 8
Unstandardized Coefficients Standardized Coefficients t Sig.

Model

B 1 (Constant) Protected environment 2 (Constant) Protected environment Contract bonds availing for crop loans (Constant) Protected environment Contract bonds availing for crop loans Favour to grow long term crops (Constant) Protected environment Contract bonds availing for crop loans Favour to grow long term crops 1.435 .510 .785 .477 .222 1.173 .507 .196 -.141 .738 .519 .159 -.187

S t d . Beta Error .187 .061 .239 .058 .055 .272 .057 .054 .051 .316 .056 .055 .054 .075 .562 .276 .597 .244 -.185 .611 .198 -.246 .178 .601 7.660 8.405 3.292 8.244 4.058 4.304 8.822 3.615 -2.730 2.334 9.194 2.903 -3.492 2.555 .000 .000 .001 .000 .000 .000 .000 .000 .007 .021 .000 .004 .001 .012

Remunerated based on fixed leased .192 amount. 26

a Dependent Variable: Overall encourage and welcome of contract farming Multiple R=0.704, F-Value =29.924, d.f (122,126), p-value <0.01, R Square =0.495 = 0.738+0.519x1+0.159x2-0.187x3 + 0192x4 Where, is the estimated value of Overall contract farming. The above equation shows the impact of the variables of contract farming aspects such as protected environment, fixed yearly contract cost and getting loan through contract bonds. On an average, if the protected environment change by 1 unit, there will be 0.519 units increase in the overall service quality when other variables are kept constant. Moreover the result of the t-test confirms that the calculated partial regression coefficient such as (0.519), (.192) and (.159) are highly significant at 1 percent level and 5 percent level. From the above analysis, it is concluded that the variables of contract farming namely protected environment, Remunerated based on fixed leased amount and Contract bonds availing for crop loans were the dominant variables that predict the overall encourage and welcome of farmers towards contract farming.

govt support, autonomy abiding corporate requirements, concern about environment, long term crops , allowing pesticides usage and short term crops are responsible for affecting the choice of farmers towards contract farming. With the emergence of the free market economy in the wake of liberalisation, globalisation, privatisation, the fast expansion of agri-business and climate changes, small farmers may find it difficult to cope up with the resultant volatility in the economy. Hence, to improve contract farming practices from these research study the necessary recommendations are suggested. Companies should come out with strategies like Educative Advertisement on contract farming, Contract farming Awareness programs focused towards farmers Government and corporate should tie-up in their operational and promotional Activities to achieve credibility among farmers. Companies should create awareness about advance payment policy from companies for agriculture and insist on that to benefit the low income farmers and to encourage initiation from the farmers end towards contract farming.It is inferred from the conclusion that, there seems to be a significant difference observed between Low income farmers with that of government support. Hence, to Nullify those Opinion differences government should come forward and take strong initiative by bringing in stringent policy & measures for small farmers to built trust and credibility among small farmers. Fertilizer subsidies should be extended to farmers through corporate bodies initiatives. From regression analysis, it is observed that the attributes namely to protect the environment and fixed lease amount are the dominant variables which encourage corporate farming among farmers, hence to support these Corporate should provide organic fertilizer to farmers in order for them to protect the environment and fixed lease amount to be given to farmers by through government insurance arrangements even during uncertainty caused due to natural calamities. It is inferred that significance difference observed between education of farmers and crop insurance awareness, hence Companies should educate the benefit of crop insurance to farmers irrespective of their education to manage uncertainty in returns. 27

15. Conclusions
By this study, only 18% of farmers are willingness to give land for contract farming. It is inferred from the study there observed to be significant difference between demographic variables like gender, annual income, area of land, education qualification, and experience with that of willingness to give land for contract, long term lease, and crop insurance and abide company rules and regulation. From the multiple regression analysis protected environment, remuneration based on fixed leased amount and contract bonds availing for crop loans were the dominant variables that predict the overall encouragement and welcoming of contract farming by the farmers. From the factor analysis ,it is concluded that seven factors namely remuneration, corporate and

16. References
1 Baumann, P., (2000) Equity and Efficiency in Contract Farming Schemes: The Experience of Agricultural Tree Crops, ODI Working paper No. 139, ODI, London,October. Chen, K., Shepherd, A. and Da Silva, C. (2005). Changes in Food Retailing in Asia: Implications of Supermarket Procurement Practices for Farmers and Traditional Marketing Systems, FAO AGSF Occasional Paper No. 8.

Contract Farming in India in K T. Chandy and O S Tyagi (eds.),Future of Farming in India: Contract or Co-operative Farming, Indian Social Institute New Delhi 14. Hayami Y. and Damodaran A. , (2004) Towards an Alternative Agrarian Reform TeaPlantations in South India, Economic and Political Weekly, 39 (36), September 4-10, 3992-3997. 15. Key, N. and D. Runsten (1999) Contract Farming, Smallholders, and Rural Development in Latin America: The Organisation of Agro-processing Firms and the Scale of Outgrower Production, World Development, 27 (2), 381-401. 16. Kirsten, J. and Sartorius, K.I. (2002) Linking Agribusiness and Small Farmers in Developing Countries: Is There a New Role for Contract Farming?, Journal of Development Southern Africa 19, (4). 17. Little, P. D. and M. J. Watts (eds.), (1994) Living Under Contract - Contract Farming and Agrarian Transformation in Sub-Saharan Africa, University of Wisconsin Press, Madison. 18. Mac Donald, J., Perry, J., Ahearn, M., Banker, D., Chambers, W., Dimitri, C., Key, Nigel, Nelson, K., and Southard, L. (2004). Contracts, Markets and Prices: Organizing the Production and Use of Agricultural Commodities,Agricultural Economic Report Number 837, USDA, November 2004. 19. Morrison, P.S., Murray, W.E. and Ngidang , D. (2006.) Promoting Indigenous Entrepreneurship through Small-scale Contract Farming: The Poultry Sector in Sarawak, Malaysia, 20. Sarvesh Shah Contract Farming : The new face of traditional farming. Retrieved August 7, 2010 from http://www.renege.com/contract%20 farming-the-new-face-of-traditional-farming/ 21. Md. Salleh Hassan, Hayrol Azril Mohamed Shaffril, Musa Abu Hassan and Jeffrey Lawrence D Silva Developing Agriculture in Malaysia: Internet Utilization among Malaysian Youth Agro-Businessman . European Journal of Social 28

2.

3 Contract Farming Retrieved July 10 2010, from http://agritech.tnau.ac.in/horticulture/ contract%20farming.pdf 4. Contract Farming Retrieved September 15 2010, from http://www.scribd.com/doc/26028211/ Contract-Farming 5. Da Silva, C., (2005) The Growing Role of Contract Farming in Agrifood Systems Development; Drivers, Theory and Practice, Working Document, Agricultural Management, Marketing and Finance Service 6. Debashis Chakraborty , (2009) contract farming in india:unique solution to multilayer Agricultural problems 1:83 DOI 10.1177/097492920900100105 7. Eaton, C. and A. W Shepherd, (2001)Contract Farming - Partnerships for growth FAO, Rome. 8. Economics, Journal of African Economies, 3(2), October, 231-261. 9. Erappa, S., (2006) contract farming in karanataka : A Boon or bane Agriculture and rural development,1-62. 10. GahukarR.T (2007)contract farming for organic crop production in india 93#12. RetrievedSeptember6,2010from http://www.ias. ac.in/currsci/dec252007/1661.pdf 11. Gill, S. S., (2004) Small Farmers and Markets (a book review), Economic and Political Weekly, 39(23), June 5, 2356-2358. 12. Grosh, B., (1994) Contract Farming in Africa: an Application of the New Institutional 13. Haque, T. and P. S. Birthal, (1998) Prospects of

Sciences Volume 11, Number 2 (2009). 22. Sharma,D.K.,RetrievedNovember22,2010from http://www.scribd.com/doc/7760414/APMC-act. 23. Singh, S., (1998) Should Indian Farming Go Corporate?,Business India, Aug.24 24. Singh, S., (2005). Contract Farming for Agricultural Development; Review of Theory and Practice with Special Reference to India, New Delhi, India: New Concept Information Systems Pvt. Ltd. 25. Sukhpal Singh ,(2003). Contract Farming in India Impacts on women and child workers, Gatekeeper 111. Retrieved June 3, 2010 from http://pubs.iied. org/pdfs/9281iied.pdf 26. Sunanda S.(2005),Farm - Firm Linkages Through Contract Farming In India Retrieved

November12,2010fromhttp://typo3.fao.org/ fileadmin/user_upload/contract_farming/ presentations/Contract_farming_in_India_2.pdf. 27. Suraj Kumar Sabat, Kamalika Pal, (2008). Rural Marketing: Term paper Contract Farming. Retrieved July 6 , 2010 from http://www.renege. com/contract%20farming-the-newface-oftraditional-farming/ 28. Vyas, V. S., (2001) Agriculture: Second Round of Economic Reforms, Economic and Political Weekly, 36 (10), March 10, 829-836. 29. Warning , M and Hoo , W. (2000). The Impact of Contract Farming on Income Distribution: Theory and Evidence, Paper prepared for presentation at the Western Economics Association International Annual Meetings, June 2000.

29

AN ETHNOGRAPHIC APPROACH TO U N D E R S TA N D CONVERSATIONS USING EXPLORATORY RESEARCH FOR BETTER BRAND COMMUNICATION
Prof Prasanta Parida Asst. Professor at KiiT school of Rural Management, KiiT University, Bhubaneswar, Ordisha 1. Introduction
What do people mean when they talk about products, services or brands? In Lewis Carrolls Through the Looking Glass, points: When I use a word it means just what I choose it to mean neither more nor less. In 21st century marketing research have often wondered w h e t h e r our respondents mean what they say or even say what they mean. In 1990 bestseller book You Just Dont Understand, by the respected sociolinguist Deborah Tannene argued that the language women use is designed to make connections and to reinforce intimacy but men, by contrast, use words to establish status and to delimit their independence. We wondered, that when a set of words is used to describe a product or service in a particular way, it can mean one thing as spoken by a woman and something totally different coming from a man. first phase the respondents were all relatively young (mostly in their mid-twenties) and had grown up together in a fairly affluent middle-class. The respondents were settled into a comfortable room, provided with ample refreshments and asked merely to get on with it with unknown recording. Analysis of the recordings yielded a preliminary insight into how females and males talk about products, services and brands. Significantly, it appeared to suggest that conversational interaction differs between the sexes. With no guidance from moderator the topics was discussed. Women in this study were much more inclined than men to speak about their personal lives. Males seemed more inclined to focus on what they regarded as deeper issues such as religion or business s t r a t e g y. We found that the depth of information given on specific products or services varied significantly between the sexes. It was expected that the topics were discussed widely. However, the themes covered by males were quite dissimilar to those discussed by females. While males tended to speak about these things in general terms, females were inclined to place great emphasis on specific brand and company names. Within our data we found that males tended to speak more neutrally about specific topics, whereas women were more inclined to refer to subjects in either a positive or negative manner. In the female group, members often publicly disagreed with each other, so both positive and negative comments emerged. With an open conversational agenda, the males rarely disagreed: we observed how they seemed less intimate and less prying, seldom speaking of their personal experiences and opinions. From the emerged data was the way in which product, service and brand information is exchanged by the two sexes. The results suggested that the amount of 30

2. The Research Studies

We needed a set of tools that would enable us to identify the key points of contact between interpersonal communication and goods, services and brands. Our interest was very much in studying the relationship between people, and the ways in which these relationships might be mediated by the artifacts of everyday life. The content of the study was developed in three stages. In each stage the studied suggested same-sex conversations, observed respondents that were largely of the same age group and social class.

3. Study 1
We recruited two groups, three males and three f e m a l e s each. Each set meet three t i m e s in an informal location for an unstructured, unscripted research episode. These sessions were of 20 m i n u t e s but extending to 3 0 m i n u t e s . In this

information given, and the extent to which it was sought, differed between male and female groups. It appeared that passing on information came more naturally to females and was more regular in allfemale groups than it was in all-male ones. Indeed there appeared to be no instances in which a male explicitly imparted product information to the other members in his group. After thorough a n a l y s e s and interpreting our data, we made the following observations. The verbal content and meanings embedded in the dialogues (in common with most marketing studies looking at word-of-mouth, it has to be noted). But we really needed to understand the whole nature of the communicative in the verbal transcripts. The respondents engaged i n natural, spontaneous discourse i n the way any young people would communicate a m o n g themselves. Our datagathering method was not ideal for picking up these verbal interactions, and completely missed the physical interactions of contact and b o d y l a n g u a g e t h a t characterize inter- personal communication. At this stage we chose to undertake some preliminary interrogation of the data by reference to the literature in particular, aspects of social psychology and sociolinguistics.

4. Study 2
We therefore chose to extend the work in two important areas: first we decided to study middleaged consumers, and second we felt it important to supplement the verbal content of the discussions with visual elements. When it came to addressing the female half of the research agenda, it was comparatively straightforward to replicate the first stage, merely by adding a digital camcorder to the voice recorder u s e d previously. Three friends male and female separately were recruited, each aged in the region of 45 to 50, all of whose children attended the different schools. As with the previous stage of the research, the respondents were made comfortable at the home of one of the group, the recording devices were switched on and then the researcher left the room for 90 minutes. 31

Female respondents in this stage had insisted on being given a short topic guide. In practice they addressed only three explicit themes in the 90 minutes allowed to them: shopping, hairdressers and clothes. It was apparent that, a s time passed, the respondents were increasingly less aware of deviating from the subject. The respondents in this phase, like the younger females in stage one, found it perfectly natural to talk about any aspect of almost any consumption decision: data were both expected and given products, prices, brands, locations. Invariably, however, the older group preferred to talk of these things as they affected others in their lives, particularly their children, but occasionally their partners. The older men, by contrast, were as limited in their topics of conversation as their younger counterparts. Mostly t h e i r t a l k c e n t e r e d o n work. One of the most striking elements to emerge from this stage, from visual medium was the importance of bodily position and eye contact. Although t h e womens chairs were positioned at right angles to each other, eye contact was obligatory and almost constant. With the men, two people positioned themselves at right angles, while the third sat face-to-face. We found that, regardless of age, the same sort of rules applied to same- sex dialogues. Women would commence a narrative, pausing regularly for encouragement, clarification and points of detail. Each narrative would be backed up with a regular chorus of agreement, plus occasional interruptions to clarify points of information or to add emphasis. We also noticed how frequently o n e speaker w o u l d p a u s e , uncertain, mid-sentence a n d allow her friends to complete the narrative or to find the words that were eluding her. Listeners would also encourage the speaker to carry on when a narrative was apparently over: So what happened? With the men, however, it appeared that there were clearly defined conversational rules, based around whose turn it was to speak: only when the speaker had signaled the end of his piece would the second man respond. We found older women to be just as active as their younger contemporaries in providing and seeking out knowledge, using the sharing of

information as collaborative and friendship building. This appeared to be done very much on an equal footing and women tended to avoid taking a didactic stance, even where they clearly had specialist knowledge or experience to share. The women pooled their knowledge where to shop for bargains, what teenagers could be persuaded to eat, when supermarkets reduced t h e i r prices on fresh produce. The men, however, used knowledge to establish or reinforce hierarchies in their relationships in much the same way we observed with the younger group It is important to note that this sort of jockeying for position was done without apparent malice or aggression. But while a female would appeal to her listeners for help or corroboration, the male equivalent was independent and emphatic in his declarations. Another f e a t u r e noticed earlier, how men tended to talk in generalities, was evident here too.

in public transport venues such as bus and train stations. The attraction o f this approach was that it potentially involved hundreds of people; in practice, however, it was possible only to monitor a few e x c h a n g e s on each journey, and at times even those were fragmentary. Our methods could be described as pure ethnography in the sense that there was no direction, and the process of data gathering involved no more than natural interaction with ones subjects. In keeping with this, we took minimal notes on the journeys, but compiled this post-hoc from memory. We focused on dialogues involving single-sex participants in order to maintain the overall theme of the research. Most of the young travelers were of school or college age; with the males in this group, their natural topics of conversation were about friends and mutual associates, particularly anyone who was spotted during the journey. Indeed, there was comparatively little spontaneous conversation, and an almost total absence of product or brand d i a l o g u e s . The triggers for these were invariably visual and immediate: the carrier-bag one was holding, the mobile phone another was showing off. These young males used conversation for socializing and forming; this was noticeable in their use of slang and profanities. On the whole, however, their conversations were intermittent and infrequent. Young females, by contrast, appeared to be far more vocal together; their conversational strategies seemed to mirror those already observed among middle-class women in terms of rules of engagement. Once again, however, products, brands and services rarely featured in mostly of the conversations. The most vocal groups appeared to be the elderly. Once again, however, products, services and brands rarely featured in their extensive narratives. The main topics for female conversation were the weather, ones health and relationships, holidays, bereavements, grandchildren. This again corresponds issues (Albrechtsen 2007). Brain scans of females and males when subject to emotional stimuli show 32

5. Re-evaluation of study 2
We found that the decision to include both audio and visual elements to the data gathering was vindicated in terms of the additional richness it brought. Body language, facial expressions and other non-verbal cues were as much a part of the answer as the words used in the exchange. However, we recognized that although many of the themes identified in the young respondents were apparently shared by middle-aged respondents, we were still looking at only a partially p a i n t e d c a n v a s .

6. Study 3
We attempted to address these limitations in the third study. Noting how promising observation had appeared to be, we decided to expand the use of this technique but to restrict the data gathering as much as possible to working-class subjects. We found that, by careful choice of location, w e were able to start to build a picture of attitudes to products, services and brands among a wider section of the population, including the elderly. Our observation work was carried out on public transport in a working-class area of M u m b a i . Over a period of a fortnight we took over a dozen bus journeys, supplemented by an occasional train trip and some ad- hoc work

that much more activity takes place in female brains than in male brains in response to such stimuli. Elderly m e n t e n d e d to t a l k a b o u t sports and hobbies. There w e r e additional triggers for conversation too, s u c h as posters, b u i l d i n g s a n d other visual elements either inside or outside the vehicle. Sometimes a passenger, usually a woman, would start to show off the proceeds of her shopping trip to a fellow traveler, sharing information on place, price and related elements in the way we observed with middle-class women. Counterintuitively, we noticed that few elderly people dwelt on the past (apart from the recent past), being very much tied up with describing the present and planning for the future. It was particularly noticeable that where a mixed-gender couple were travelling, they would invariably choose a member of their own sex with whom to engage in dialogue. In this process the partner appeared to be almost completely ignored as the malemale or female female dialogue developed. It was also very striking that, f o r the elderly females at least, eye contact was essential in any dialogue. This factor regularly determined seating position, and we noticed that the start of a conversation would often have to be deferred until both participants had rearranged themselves in such as way as to be able to see eye to eye.

communication was employed. However, stage three produced results that were by no means so clear-cut. What we seemed to have found was a p a t t e r n of b e h a v i o r among middle-class people, between the ages of about 25 and 55s. When we came to look at the under- 25s and over 60s, these patterns did not seem to hold. Perhaps it was that stage three drew predominantly on working-class subjects. Or maybe the differences in data-gathering methods (contentrich, overt data gathering vs. a more superficial, covert study) were responsible for the dichotomy. In the earlier part of the study we saw males using interpersonal discourse to create, negotiate, m a n a g e and strengthen social ties within the group. While there was little overt aggression, the key source of power was knowledge, and respondents appeared to be using it to make power statements and to position themselves vis--vis other group members. Many of the male interventions seemed designed to show the speaker in a new light intelligent, articulate, well informed, widely travelled, well read, and so on. Table 1 summaries the gendered differences we found in conversational styles, ignoring the effects of social class. In course of observed middle-class females, both the younger and middle- aged, engaged in more debate, covered a wider range of topics and were apparently more open to socialization than male counterparts. This seemed to be true also for working-class women. In the later stages of the research we add the supporting evidence of non-verbal communication, and to suggest that interpersonal discourse used as social glue in a way that was not evident with middle-class men. It is important to remember, while trying to be non-judgmental, that both groups were using discourse for socialization.

7. Analysis
The first two stages of research seemed to indicate clear patterns of behavior, qualitative differences in the ways in which women and men engage in conversation, the reasons they did so, and the topics they talked about. We noticed these differences in the words they used and in the ways in which non-verbal

Table 1 Gendered differences in conversational styles not class specific

33

But w h i l e the womens approach seemed t o b e c o m m u n i t a r i a n , the underlying theme in the middleclass mens groups may have been authoritarian. See Table 2 for a summary. We felt that the interpersonal communication in the womens group moved through three key phases in discussion, and a fourth element outside the group. However, this was not a linear process as there could be any number of strands to the discussion, each involving a different consumption experience. We saw the key rules of debate being interrogation, evaluation and negotiation; validation took place later when members of the group may themselves have assessed the group knowledge by using the product that had been discussed. The interrogation phase was very evident in our data. Debate was encouraged and accepted. Interrogation was not an undermining process, but we saw Table 2 Gendered differences in conversational styles: middle-class respondents

women using it to provide more information w i t h o u t f o r m i n g a judgment. Indeed, in this stage what often appeared to be statements by one respondent or another were actually questions or hypotheses to be debated by this micro community. From this process came the evaluation phase where the respondents, having ascertained the facts, debated t h e salient aspects and started to form views. In the negotiation phase a group consensus was arrived at, an implicit agreement negotiated through each member having been entitled and encouraged to have her say. In our data, what might have appeared to be argument, taking on board the non-verbal cues, could be reinterpreted as sharing knowledge, but in a dialectic learning process where discussion and debate helped the respondents to develop knowledge (see Figure 1). Personal narratives Conversation (Integration, Evaluation, Negotiation)

Common Knowledge Validation (Experimental)

Figure 1 How female respondents used conversations to develop knowledge. When at the start of this paper we implied there was little guidance in the literature we could have been accused of selectivity, ingenuousness, or both. While it is true that the marketing literature on word of mouth is dominated by unhelpful studies of Word-of-Mouth effectiveness and Word-of-Mouth practices, our search failed to unearth any reliable research in gender-related differences in communication strategies. It has to be remembered that market researchers are interested in the views, motivations and opinions of consumers, and the ways in which these are formed. In this area there have been some useful contributions to knowledge in terms of understanding the reasons why people engage in product- or service-based interpersonal communication. But arguably some of the most valuable (and overlooked) insights are also the most dated. ( Dichter (1966)), for example, suggested that although talking about products may simply be a means of social interaction, motivations for engaging in this sort of discussion are actually much 34

more complex. Indeed, Whyte (1954) had already been arguing that conversations about products are entered into in order to advance the interests of the self. Dichters interpretation was that people are unlikely to pass on their views unless they gain something from it, and that this could be in terms of reduced perceived risk. All of this is consistent with our findings in relation to the womens group in our study, although it fails to take account of our interpretation of male patterns of interpersonal discourse. Other studies, by Coleman et al. (1966), Roselius (1971) and Buttle (1998), reinforce the claim that discussing products and services is a risk reduction strategy that can eliminate the uncomfortable feeling of exposure or doubt. Moreover, according to cognitive dissonance theory, speaking to friends and relatives about the positive qualities of a recently purchased product or service relieves tension created by the experience and confirms the consumers original judgment (Bansal & V oyer 2000). This seems to mirror the dialectic process we identified in our female subjects. None o f these studies, however, e x p l i c i t l y identified or explored g e n d e r differences. There are important lessons again for market researchers in Dichters (1966) seminal research, where he argued that consumers make productrelated comments, disclose their opinions and make recommendations in order to affirm their sense of self. As we suggested in interpreting male use of interpersonal discourse, so Dichter claimed that discussing products and services serves as a tactic to gain attention, feel loved, demonstrate insider information, denote status, show connoisseurship, connote pioneering spirit, spread the gospel and assert superiority. More tellingly in relation to our interpretation of male didacticism in interpersonal communication is the fact that social exchange theory predicts that this type of intervention is motivated by status and power needs (Gatignon & Robertson 1987). Consumers also share product, service or company experiences with loved ones as a way of expressing care, love or friendship for them. 35

And further tentative confirmation of some aspects of our analysis comes again from Dichter (1966): he demonstrated that individuals often engage in product discussion because of the personal satisfaction that can be gained from influencing the people.

8. The Implications for market research

Ethnographic methods seemed to generate some promising consumer insights, precisely because of the non-directive nature of the research instruments. Yet our most interesting data seemed to come from groups where there was some direction. Left t o their own devices, h o w e v e r , our respondents seemed to be able to provide only snippets of information that might be of interest to a brand owner, a service provider or a policy maker. From a marketers point of view, our study suggests that a consumer will engage in a d i a l o g u e (as p e r f o r m e r or audience) where there is a compelling narrative, regardless of gender. Research suggests that when we merely take crude measures of satisfaction and dissatisfaction, without allowing for the gender of the respondent and the context in which the opinion is given, the measures may be open to serious misinterpretation.

9. Conclusions and further research

This study has shown some of the potentials and frustrations of ethno- graphic research. We believe that market researchers can usefully introduce potentially biasing thematic direction to what otherwise would be an ethnographic study; indeed one of the most productive episodes in our study involved allowing respondents to choose from a menu of topics. While recognizing that our results a r e based on small samples and ad hoc methods lack some generalisability, we believe we can find some support in other areas of study. Our c o u n t e rintuitive findings, therefore, deserve some further detailed investigation. It may be that what we had been picking up was actually age r e l a t e d , with under-20s and over-60s showing different patterns of behavior. It is worth remembering that while Tannin (1990) and Gray (1993) were able to give sociolinguistic

studies a mass-market appeal, their focus was primarily on relationships and barely touched the commercial. Tannen and others have successfully taken the subject into the workplace and commented on gender and language in the context of people management (see, for example, Tannens 1994 bestselling book Talking from 9 to 5). We suggest, on the basis of this exploratory study at least, that the consumers of products, services and brands do indeed say what they mean when they are interacting with other consumers. The difficulty for a market researcher is that the words they choose may mean any number of things, depending on the gender, age and social class of the speakers and their audience. The problem is neatly summed up in Through the Looking Glass, when Alice suggests that T h e question i s whether y o u can make words mean so many different things.

6. Chrzanowska, J. (2001)

Men are focus

groups, women are group discussions. AQR Discussion Paper, online at http://www.aqr.org. uk/inbrief (accessed 26 September 2007). 7. Coleman, J.S., Katz, E. & Menzel, H. (1966) Medical Folklore, Innovation: A Diffusion Study. Indianapolis: Bobbs-Merrill. Croft, R. (2006) families and fear: understanding decisions through the oral consumption

tradition. Journal of Marketing Management, 22, 9/10, pp. 10531076. 8. Croft, R. & Pentucci, C. (2006) Dangling conversation: exploring the word-of- mouth behaviours of men and women. Proceedings of the Academy of Marketing Conference, Middlesex University. 9. Dichter, E. (1966) How word-of-mouth marketing works. Harvard Business Review, 44, 6, pp. 147165. 10. Gardner, M. (1960) The Annotated Alice. New York: Clarkson Potter. Gatignon, H. & Robertson, T.S. (1987) An exchange theory model 534538. 11. Gray, J. (1993) Men are From Mars, Women are From Venus. New York: HarperCollins. Hussey, J. & Hussey, R. (1997) Business Research: a Practical Guide for Undergraduate and Consumer Postgraduate Students. Basingstoke: Palgrave Macmillan. Roselius, T. (1971) Marketing, 35, 1, pp. 5661. 12. Sarantakos, S. (1997) Social Research, 2nd edn. Basingstoke: Palgrave. Stewart, J. & Logan, C. (1998) Together: Communicating Interpersonally, 5th edn. New York: McGrawHill. rankings of risk reduction methods. Journal of of interpersonal communication. Advances in Consumer Research, 13, 1, pp.

10. References
1. Albrechtsen, J. (2007) Feminism begs to differ, but unisex brain is a fantasy. The Australian, 27 September, p. 14. 2. Bansal, H.S. & Voyer, P .A. (2000) Word-ofmouth processes within a services purchase decision context. Journal of Service Research, 3, 2, pp. 166177. 3. Boddy, C.R. (2005a) Projective techniques in market research: valueless subjectivity or insightful reality? A look at the evidence for the usefulness, reliability and validity of projective techniques in market research. International Journal of Market Research, 47, 3, pp. 239254. 4. Boddy, C. R. (2005b) Groups in focus: the distinctive difference between focus group discussions and focus group interviews. Australasian Journal of Market and Social Research, 13, 2, pp. 2938. 5. Buttle, F. (1998) Word of mouth: understanding and managing referral marketing. Journal of Strategic Marketing, 6, 3, pp. 241254. 36

Applicability of SERVEQUAL Scale in Indian Retailing

N. Udaya Bhaskar
Assistant Professor, School of Management Studies, Adikavi NannayaUniversity, Rajahmundry, Andhra Pradesh

Dr. B.Raja Shekhar

Reader,School of Management Studies, University of Hyderabad, Hyderabad, Andhra Pradesh

1. Introduction
In the present day of retailing, service quality has become the basic tool for retailers to create competitive advantage and to enhance shopping experience. The quality of services significantly effect customer satisfaction, company revenues, cross selling and also repeat purchase behavior (Berry, 1986; Hummel and Savit, 1988; Reichheld and Sasser, 1990). Indian retailing is one of the fastest growing sector and ranked tenth among the largest retail markets in the world. The sector is growing at a rate of 25-30 percent per annum; revenues from this sector are expected to reach US$ 24 billion by the end of 2010. The fast pace of the Indian retail industry presents many companies with a host of daily challenges. In todays competitive environment and with the growing importance of services, delivering high quality services has become the basic retailing strategy. With the rise in competition, change in environmental factors, shift in consumer attitudes, the concern for service quality is growing. As service quality has become the key marketing strategy, it is necessary on the part of marketer to measure the service quality effectively. The most popular tool to measure service quality is SERVEQUAL, an instrument developed by Parasuran et.al (1985; 1988). The scale has 22 items for measuring service quality in five dimensions and was initially tested in five service settings like Retail banking, Credit card services, Repair and maintenance of electrical appliances, long distance telephone services, and Title brokerage. Later on the scale has been used to measure service quality in different service settings (Ladhari, 2008), but the scale has not been tested and proved to be applicable to the emerging service settings like Apparel retailing, Furniture retailing, Jewelry retailing etc The present paper aims to study the applicability of SERVEQUAL scale in Indian Retailing and will also reviews the SERVEQUAL research in 37

terms of Definition, Measurement, reliability and validity of service quality.

2. Service Quality
The concept of quality has different meanings to different people; the product based approach sees quality as a precise and measurable variable, the manufacturing based approach focuses on conformance to internally developed specifications, the value based approach measures quality in terms of benefits against costs, the user based definitions of quality feels that, quality lies in the eyes of beholders and equates with maximum satisfaction, another transcendent approach views quality as a mark of uncompromising standards and high achievement. Parasuraman, Zeithaml and Berry, defined Service Quality as A global judgment or attitude, relating to the overall superiority of the service. The characteristics of services like intangibility, perishiability, inseparability and heterogeneity make measuring service quality indefinable and abstract. Due to this ambiguity measuring the service quality has become the biggest challenge for the service marketers. With this background Gronroos (1984) defined perceived service quality as: The outcome of an evaluation process, [whereby] the consumer compares his expectations with the service he perceives he has received, i.e. he puts the perceived service against the expected service. The result of this process will be the perceived quality of service. By the above definition, service quality is the Gap between customer expectations and perceptions. Customer expectations are standards/reference points that they bring into service experience, whereas customer perceptions are subjective assessment of

actual service experiences. The customer gap is the resultant of other four provider gaps. Gap1: Not knowing what customer expect Gap2: Not selecting the right service designs and standards Gap3: Not delivering to service designs and standards Gap4: Not matching performance to promises Customer Gap = Gap1+Gap2+Gap3+Gap4. As stated by Parasuraman et al. (1985), consumers evaluate service quality based on their perceived experiences against their expectations about the service. In order to close the customer gap it is required to close the other four gaps and measuring the customer gap is the resultant of all other gaps. In order to measure various aspects of service quality they developed a survey research instrument called SERVEQUAL, which can be applied to a broad spectrum of service industries. The scale consists of 22 perception items and a series of expectation items, reflecting five dimensions of service quality which were extracted from ten dimensions in their earlier research. The five critical dimensions of service quality are Tangibles, Reliability, Responsiveness, Assurance, and Empathy. Several research studies taken place in different countries like USA, China, Australia, Cyprus, Hong Kong, Korea and South Africa during the period from 1995 to 2007. The scale is widely used in different service industries like Health care (Carman 1990), Banking (Mels et al, 1997), Tele communications (Van der Wal et al. 2002), Retail Chains (Parasuraman et al., 1994), Information systems and also in Library services. It is evident from the earlier studies that little research was done in India related to measuring service quality and more specific to Indian retail sector which indicates the need for research in this area.

servequal scale was reliable and values ranges from 0.74 to 0.94 proving the high reliability of the servequal scale. There are basically three types of Validity: Convergent, Discriminant and Predictive validity. Convergent validity is the degree to which items on a scale which relate to the same construct and correlates strongly with one another, Discriminant validity is the degree to which those items on the scale which relate to different constructs are uncorrelated with one another. Predictive validity is the degree to which an individuals score on a scale is predictive of his/her performance on some criterion measure. The validity of an instrument refers to whether it accurately measures the attribute of interest whereas reliability of an instrument concerns whether the instrument identically produces results in repeated applications. In the studies conducted by Landrum et.al (2007) and Carrillat et.al (2007) the validity of the servequal scale was examined and found high predictive validity, thus the scale is fairly reliable and valid.

4. Applicability of SERVEQUAL scale in Indian Retailing

It is evident from the literature that majority of the SERVEQUAL scale applications happened outside India and little research is taking place on service quality measurement in India. The question arises here is the generic scale which was developed by Parasuran et.al (1985; 1988) is applicable in all service settings with in India and all the 22 items were appropriate to measure service quality. Sureshchander et.al (2001) conducted a study to identify weather Servequal and Servepref addresses the critical aspects of customer perceived service quality in India. To measure service quality in retail banking Aldlaigan and Buttle (2002) developed a scale called SYSTRA-SQ containing 21 items comprising of four dimensions like system quality, behavior quality, machine quality, service transactional accuracy. As stated by Gefen (2002) service quality dimensions comprised into three (tangibles, empathy and a combined dimension of responsiveness, reliability and assurance) when applied to online services. Later Parasuran et.al (2005) developed E-S-QUAL 38

3. Reliability and Validity of Servequal

Reliability can simply be defined as the degree of consistency with which a scale measures a specific attribute. The value of Cronbachs Alpha coefficient is considered to test the reliability. The test value ranges from -1 to 1 and a higher positive Cronbachs Alpha indicates higher reliability. Ridah Ladhari (2009) stated

having 22 items with four dimensions like efficiency, system availability, fulfillment, and privacy for online customers. In the year 2007 Cristobal et.al developed a scale consisting 17 items with four dimensions. From the above they concluded that measuring service quality in online service requires special dimensions as it differs from manufacturing service quality. The SERVEQUAL scale was tested in different countries having different cultural contexts. Researchers like Chi Cui et.al (2003) applied servequal to Korean banking customers and observed that instead of five dimensions three dimensions (empathy, tangibles, and reliability/responsiveness) have fit good for their data. Later the three dimension structure was tested again by Arasli et.al (2005) at Greek banking sector; they found that dimensionality of the scale will vary according to different cultural contexts. It was also observed that selection of the construct, items and method will play a very important role in order to reduce the bias. As stated by Gagliano and Hathcote (1994) measuring service quality in retailing differs from other service or product environments, with this a scale was developed to measure retail service quality by Dabholakar, Thrope and Rentz (1996) and coined the name Retail Service Quality Scale- RSQS which has a five dimensional structure (Physical aspects, Reliability, Personal interaction, Problem solving and Policy) they have also identified in their extended study that all these five dimensions were valid in the USA. Later The RSQS was tested by Mehta, Lalwani and Han (2000) for measuring the service quality perceptions of supermarket consumers in Singapore and found appropriate. Kim and Jin (2001) tested the RSQS across two cultural contexts of USA and South Korea and identified rather than five dimensions four dimensional structure was suitable to measure service quality. Subhashini Kaul, (2005) applied the RSQS in the Indian Retail setting with a sample of 119 apparel retail customers selected in one of Indias fastest growing cities i.e. Bangalore. She observed that rather than five dimensions of Service Quality Four dimensions were appropriate to measure Apparel Retail Service Quality. There is a need 39

to extend the study to other cities with large sample having varied demographics to explore new dimensions of retail service quality scale. So it is evident from the earlier studies that there was no generic scale to measure service quality in Indian Retailing.

5. Conclusion
Servequal scale is one of the popular tools and still is useful to measure service quality though it has some empirical shortcomings. When applying the scale to different industries, in different countries having different cultural contexts, the generic items of the scale has to modify, test, and then apply to fit according to the research need. When the scale was modified as Retail Service Quality Scale (RSQS) and applied to the Indian retailing sector found that the scale is valid and reliable but not clearly explaining all the sub dimensions of the scale unless otherwise the retailers can not take strategic decision to improve their service levels. The scale requires modification and examination of the factor structure so as to fit to the Indian retailing. The future research may be carried out on applicability of the scale in different retailing sectors like Furniture, Jewelry, Foot ware etc. and test it in different geographical places with in India with an appropriate sample size. This enables to develop and standardized new scale to measure service quality in Indian retailing.

6. References
1. Aldlaigan, A.H. and Buttle, F.A. (2002),SYSTRA-SQ: a new measure of bank service quality, International Journal of Service Industry Management, Vol. 13 No.4, pp 362-81 2. Gefen, D. (2002), Customer loyalty in e-commerce, Journal of the Association for Information Systems, Vol. 3, pp.27-51. 3. Arasli, M.G., Nataraajan, R. and Jaheera, J.S. (1999), Service quality in the banking industy: an assessment in a developing economy, Managing Service Quality, Vol.15. No.1, pp.4156 4. Berry, L.L (1986) Retail businesses are Service

usiness Journal of Retailing, Vol.62, spring, pp. 3-6. 5. Carman, James M. (1990), Consumer Perceptions of Service Quality: An Assessment of the SERVQUAL Dimensions, Journal of Retailing, 66 (Spring), 33-55. 6. Chi Cui, C., Lewis, B.R. and Park, W. (2003), Service Quality Measurement in the banking sector in South Korea, International Journal of Bank Marketing, Vol. 21 Nos 4/5, pp.191-201. 7. Cattillat, F.A., Jaramillo, F. and Mulki, J.P. (2007), The validity of the SERVEQUAL dimensions, Journal of Retailing, Vol.14, pp.60-72. 8. Cristobal, E., Flavian, C. and Fuinaliu, M. (2007), Percieved e-service quality (PeSQ): measurement validation and effects on consumer satisfaction and web site loyalty, Managing Service Quality, Vol. 17 No.3, pp 317-40. 9. Dabholkar, Pratibha, Dayle Thorpe and Joseph Rentz (1996). A Measure of Service Quality for Retail Stores: Scale Development and Validation, Journal of the Academy of Marketing Science, 24 (Winter), 3-16. 10. Gagliano K.B. and Jan Hathcote (1994). Customer Expectations and Perceptions of Service Quality in Retail Apparel Specialty Stores, Journal of Services Marketing, 8 (1), 60-69. 11. Gronroos.C (1984), A Service Quality model and its Marketing Implication , European Journal of Marketing, Vol. 18 No.4, pp. 36-44. 12. Hummel, J.W. and Savitt, R. (1988), Integrated Customer Service and Retail Strategy, International Journal of Retailing, vol.3 No.2, pp. 5-21. Mels, G., Boshoff, C. and Nel, D. (1997).The dimensions of Service Quality: the original European perspective revisited, Service Industries Journal, Vol.17 No.1, pp 173-89. 40

13. Kim, Soyoung and Byoungho Jin (2002). Validating the retail service quality scale for US and Korean customers of discount stores: an exploratory study, Journal of Services Marketing, 7 (2), 223-237 14. Landrum, H., Prybutok, V.R. and Zhang, X. (2007), A comparison of Magals service quality instrument with SERVPERF, Information & Management, Vol. 44 Bo.1,pp. 104-13. 15. Mehta, Subhash C., Ashok Lalwani and Soon Li Han (2000). Service quality in retailing: relative efficiency of alternative measurement scales for different product-service environments, International Journal of Retail & Distribution Management, 28 (2), 62-72 16. Parasuraman, A., Valarie Zeithaml and Leonard Berry (1988). SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality, Journal of Retailing, 64 (Spring), 12-40. 17. Parasuraman, A., Zeithaml, V.A. & Berry, L.L. (1985) A conceptual model of service quality and its implications for future research, Journal of Marketing, 49, pp. 41- 50. 18. Parasuraman, A., Berry, L.L. & Zeithaml, V.A. (1991) Refinement and reassessment of the SERVQUAL scale, Journal of Retailing, 67, pp. 420- 450. 19. Parasuraman, A., Berry, L.L. & Zeithaml, V.A. (1993) More on improving service quality measurement, Journal of Retailing, 69, pp. 140147. 20. Reichheld, F.F. and Sasser, W.E.Jr (1990), Zero defections: Quality comes to services, Harvard Business Review, Vol.68 No.5, pp. 105-11 21. Riadh Ladhari (2008) A Review of twenty years of SERVEQUAL research , International Journal of Quality and Service Sciences, Vol.1 No.2, pp.172-198.

22. Subhashini kaul (2005), Measuring Retail Service Quality: Examining Applicability of International Research Perspectives in India, Indian Institute of Management, Ahmedabad, Working Paper No. 2005-10-2, pp 1-19. 23 Sureshchander, G.S., C. Rajendran and T.J. Kamalanaban (2001). Customer perceptions of Service Quality A Critique, Total Quality Management, 12(1), 111-124

24. Van der Wal, R.W.E, Pampallis, A. and Bond, C. (2002), Service quality in a cellular telecommunications company: a South African experience, Managing Service Quality, Vol.12 No.5, pp.323-35.

41

Consumers perception on Matching Quality of Celebrity and Brand Features in Advertisement

Raja Sr. Lecturer, Dept. of Management Science, Velammal Engg. College, Chennai Dr. N. Magesh Sigma MU-Research Consultancy Sciences, Chennai 1. Introduction
Advertisements of all varieties pop up everywhere on streets, in stores and restaurants, and on public transportation. Each of these advertisements attempts to steal at least a fraction of an unsuspecting persons time to inform him or her of the amazing and different attributes of the product at hand. Because of the constant media saturation that most people experience daily, they eventually become numb to standard advertising. The challenge of the advertiser is to find a hook that will hold the subjects attention and keep them from changing the channel or turning the page. One well-used approach at differentiating advertisements is the use of celebrity endorsements. Using celebrity fame, bought or contrived, has certain advantages and risks. A celebrity-product association can capture a viewers attention, increase the publics awareness of the product, and cause consumers to purchase the product endorsed. In contrast, celebrityproducts associations can be very costly and risky based on the potentially volatile image, nature, and credibility of the personalities used. Celebrities cut through advertising clutter, hold viewer attention, contribute to brand name recognition and transfer positive qualities such as physical attractiveness and likeability to the brand (Dyson and Turco, 1998; Charbonneau and Garland, 2005). The source credibility model suggests message effectiveness depends on the endorsers perceived credibility. Celebrity combines both expertise and trustworthiness. Through the process of internalization, credible sources influence consumer beliefs, attitudes and or behaviour (Kamins, 1990; Ohanian, 1991). The source of attractiveness model proposes that message effectiveness depends on the similarity between source and receiver, source likeability and source familiarity through repeated 42 media exposure. Information from an attractive source is accepted because of the consumers desire to identify with that source (Erdogan, 1999). In the product match-up model, effective advertisement results when the messages conveyed by celebrity image are compatible with product image (Pornpitakpan, 2003). With this background, the present study was attempted to study the matching qualities of the celebrity with advertisement, brand image and consumers perception and relationship between matching qualities of celebrity and advertisement in Madurai city of Tamil Nadu.

2. Methodology
The Madurai city is purposively selected for the present study since it is the predominating trade center for South Tamil Nadu. About 120 respondents were selected by adopting simple random techniques and were interviewed. Information/data was collected by interviewing the respondents by using a pre-tested, well-structured interview schedule. The data and information collected pertains to the year 2009-10. The descriptive statistics, frequency analysis and mean score and ranking were carried out to draw meaningful interpretations.

3. Spearmans Rank Order Correlation

In order to identify the relationship between matching qualities of celebrities and advertisement in celebrity endorsement, the Spearmans rank order correlation was worked out and the formula is; r=1 6 d2
2

( n-(n -1) )

Where, d = Difference in Ranks n = Number of Pairs.

4. Chi-Square Test In order to study the differences between brand features and perception of the consumers, the Chi-Square Test has been employed and the formula is:
2 =

5. Results and discussion

The general and socio-economic characteristics of consumers were analyzed and the results are presented in Table-1. The results indicated that the majority of the consumers (64.16 per cent) were the age group of 21-30 years followed by less than 20 years and 31-40 Years. About 45.80 per cent of were married while 79 per cent were males. The majority of consumers (49.17 per cent) were postgraduates and about 30 per cent of consumers were under-graduates. The monthly income of consumers were ranging from Rs. 0-5000(85 per cent) followed by Rs.5000- 10000(8.34 per cent). About 70.83 per cent of the consumers have a family size of 4-6 members followed by less than 3 members (25.00 per cent).

Where O = Observed Frequency in each category E = Expected Frequency in the corresponding category d.f = Degree of Freedom (n-1) 2 = Chi Square

Table-1: Socio-Economic Demographic Characteristics of Consumers

Respondents(N=120) Variables with Category Number Age < 20 Years 21-30 Years 31-40 Years 41-50 Years > 51 Years Gender Male Female Educational Qualifications Secondary Higher Secondary UG PG Others 8 12 36 59 5 6.66 10.00 30.00 49.17 4.17 43 79 41 65.80 34.20 16 77 14 8 5 13.33 64.16 11.67 6.67 4.17 Marital Status Married Unmarried Family Size <3 4-6 >6 30 85 5 25.00 70.83 4.17 55 65 45.80 54.20 Per Cent Monthly Income(Rs) 0-5000 5001-10000 10001-15000 > 15000 102 10 4 4 85.00 8.34 3.33 3.33 Variables with Category Number Per Cent Respondents(N=120)

The matching qualities of the celebrity with advertisement were analyzed and the perceptions of the consumers are presented in Table-2. The confident of the celebrity in the advertisement, easy identity of celebrity, worthiness and similarity were the main

qualitative attributes that match the celebrity with advertisement. Besides, advertisement, product-match, positive image and celebrities behaviour were also the important factors that influence the matching qualities of the celebrity with advertisement.

Table-2 Matching Qualities of the Celebrity with Advertisement

Attributes Similarity Identity Confident Worthy Brand Scandal Positive Image Attractiveness Product match Advertising Mean Ranking 0.93 1.21 1.34 1.09 0.98 0.90 0.87 0.86 0.84 0.82 Order of Importance 5 2 1 3 4 6 7 8 9 10

The relationship between matching qualities of celebrity and advertisement, the Spearman rank order correlation was computed and the results are presented in Table-3 The results showed that similarity was positively correlated with identity and confident at one per cent level of significance while similarity was negatively associated with positive image and attractiveness at one per cent level of significance.

The attribute of identity was positively correlated with confident while it was negatively associated with favourite, scandal and positive image at one per cent level of significance and it was negatively correlated with attractiveness at five per cent level of significance. The confidence was positively correlated with brand, favourite and scandal while it was negatively associated with attractiveness, perfect match and celebrity value at one per cent level of significance.

Table -3 Relationship between matching qualities of Celebrity and Advertisement- Spearman Rank Order Correlation
Similarity Similarity Identity Confident Brand Favourite 1.00 0.14** (0.00) 0.35** (0.00) -0.06 (0.20) -0.02 (0.65) 1.00 0.29** (0.00) 0.03 (0.50) -0.13** (0.00) 1.00 0.14** (0.00) 0.11** (0.01) 1.00 0.09** (0.04) 1.00 Identity Confi dent Brand Fav ourite Scan dal Positive Image Attrac tiveness Perfect Match Celebrity Value

44

Scandal Positive Image Attrac tiveness Perfect Match Celebrity Value

0.08 (0.08) -0.13** (0.03) -0.16** (0.00) -0.00 (0.95) -0.01 (0.88)

-0.14** (0.00) -0.13** -0.11* (0.02) 0.00 (0.99) 0.07 (0.14)

0.13** (0.00) 0.03 (0.52) -0.27** (0.00) -0.10** (0.03) -0.17** (0.00)

0.17** (0.00) -0.03 (0.57) 0.02 (0.65) -0.06 (0.15) -0.20** (0.00)

0.14** (0.00) 0.06 (0.18) -0.08 (0.07) -0.13** (0.00) -0.17** (0.00)

1.00 -.01 (0.75) -0.09* (0.03) -0.03 (0.52) -0.15** (0.00) 1.00 0.06 (0.17) 0.10* (0.02) 0.01 (0.83) 1.00 0.19** (0.00) 0.36** (0.00) 1.00 0.32** (0.00) 1.00

Note: ** indicates significance at one per cent level. *indicates significance at five per cent level The brand was positively associated with favorite and scandal while it was negatively correlated with celebrity value at one per cent significance level and the favorite was positively correlated with scandal and it was negatively associated with perfect match and celebrity value at one per cent level of significance. The scandal was negatively correlated with attractiveness at five per cent level of significance and it was also negatively associated with celebrity value at one per cent level of significance. The positive image was positively correlated with perfect match at five per cent level of significance. The attractiveness was positively correlated with perfect match and celebrity value at one per cent level of significance while perfect match and celebrity value were positively associated at one per cent level of significance. The relationship between brand features and consumers perception was analyzed by computing Chi-Square test and the results are presented in Table-4 The results showed that the Pearson Chi-Square value was 0.0196 and the likelihood ratio was 193.365 indicating that the test statistic was significant at five per cent level of significance thus, there was a significant differences among the consumers perception of the consumers about brand features as noticed by them.

Table -4 Brand Features and Consumers Perception -Chi Square Test

Asymp. Sig. (2-sided) .000 .000

Value Pearson Chi-Square Likelihood Ratio N 0.0196 193.365 2500

df 20 20

6. Conclusion
The forgoing analysis indicated that the majority of the consumers (64.16 per cent) were the age group of 2130 years. About 45.80 per cent of the consumers were married while 79 per cent were males. The majority of consumers were postgraduates and about 30 per cent of consumers were under-graduates. The monthly income of consumers were ranging from Rs. 0-5000(85 per cent) followed by Rs.5000- 10000(8.34 per cent). The results indicated that about 35.84 per cent of consumers occasionally visited the market followed by fortnightly (30 per cent) and about 28.33 per cent of the consumers visited the market at least monthly once. The similarity of celebrity was positively correlated with identity and confident at one per cent level of significance while 45

similarity was negatively associated with positive image and attractiveness at one per cent level of significance. The attribute of identity was positively correlated with confident while it was negatively associated with favourite, scandal and positive image at one per cent level of significance and it was negatively correlated with attractiveness at five per cent level of significance. The confidence was positively correlated with brand, favourite and scandal while it was negatively associated with attractiveness, perfect match and celebrity value at one per cent level of significance. In overall, the brand features of celebrities help me to remember the brand, creditability of the brand, quality of the brand, advertisement of the brand and price of

its products were noticed by the consumers and there was a significant differences among the consumers perception of the consumers about brand features as noticed by them. The consumer looks for a variety of aspects from the endorsement like the credibility and likeability of the endorser. When one endorser endorses many brands, then the recall of the endorsement depends entirely on the power of the brand. There are definitely some brands that go unnoticed and the recall for those stands is at a bare minimum. The company can heighten the advertising content because that grabs a special place in the mind space of the consumer. Since celebrities have the impetus to market the product quickly, they have the advertisers running behind them for various benefits including brand credibility, creating interest; thereby, creating a win-win situation.

8. Erdogan (1999), Celebrity Endorsement: A Literature Review, Journal of Marketing Research, 15: pp. 291-314. 9. Jagdish, A. and Wagner, K.A. (1995), The Economic Worth of Celebrity Endorsers: An Event Study Analysis, Journal of Marketing, 56(3):pp. 56-62. 10. Kamins, Michael A.(1990), An Investigation into the Match Up Hypothesis in Celebrity Advertising: When Beauty May be Only Skin Deep, Journal of Advertising 19(1) : p. 413. 11. Louie, T.A., Obermiller, C. (2002). Consumer Response to a Firms Endorser (Dis) Association Decisions, Journal of Advertising, 31( 4): pp. 41-52. 12. Ohanian, R.(1991), The Impact of Celebrity Spokespersons. Perceived Image on Consumers Intention to Purchase, Journal of Advertising Research, 31(1): pp. 46-54. 13. Pornpitakpan, Chanthika (2003), Validation of the Celebrity Endorsers Credibility Scale Evidence from Asians, Journal of Marketing Management, 19 (1/2): pp.179 - 195. 14. Saleem, Farida(2007), Effect 0f Single and Multiple Celebrity Endorsement on Low Involvement and High Involvement Product Advertisement, European journal of social sciences, 5(3): pp.125-132. 15. Sternthal, Brian, Ruby Roy Dholakia, and Clark Leavitt(1978), The Persuasive Effect of Source Credibility: Tests of Cognitive Response, Journal of Consumer Research, 4: pp.252-260. 16. Tripp, C., Jensen, T.D., Carlson, L(1994). The Effects of Multiple Product Endorsements by Celebrities on Consumers Attitudes and Intentions. Journal of Consumer Research,20:pp.535-547. 17. Walker, M.; Langmeyer, L., Langmeyer, D. (1991), Celebrity Endorser: Do You Get What You Pay For?. The Journal of Services Marketing, 6: pp.35-42. 18. Zafer Erdogan (2001), Selecting Celebrity Endorsers: The Practitioners Perspective, Journal of Advertising Research, 41 (3): p 39. 46

6. References
1. Agrawal,J and Kamakura.W(1995), The Economic Worth of Celebrity Endorsers: An Event Study Analysis, Journal of Marketing, 59: pp. 56 62. 2. Basil, Michael(1996), Identification as a Mediator of Celebrity Effects, Journal of Broadcasting and Electronic Media, pp. 478495. 3. Buhr, T A, Simpson, T L and Pryor, B (1987), Celebrity Endorsers Expertise and Perceptions of Attractiveness, Likability, and Familiarity , Psychological Reports, 60:pp. 1307 - 1309. 4. Caballero, M.J., Lumpkin, J.R., and Madden, C.S. (1989),Using Physical attractiveness as an Advertising Tool: An Empirical Test of the Attraction Phenomenon, Journal of Advertising Research, 29 (4):pp. 16-22. 5. Charbonneau, J. and Garland, R. (2005), Talent, Looks or Brains? New Zealand Advertising Practitioners views on Celebrity and Athlete Endorsers, Marketing Bulletin, 16: pp. 1- 10. 6. Dawra, Jogrook and Katyal, Kanupriya (2006), Brand Celebrity Conformance, The ICFAI Journal of Brand Management, 3(2): p. 6. 7. Dyson, A. and Turco, D (1998), The State of Celebrity Endorsement in Sport, The Cyber Journal of Sport Marketing, 1 (2): pp. 34 - 35.

Customer Loyalty on Telecom Mobile

P.S. Rajeswari, Assistant Professor Dr. P. Ravilochanan, Professor School of Management, Srm University Kattankulathur 1. Introduction
The Indian telecommunications Industry is one of the fastest proliferating sector in the World and India is projected to bench the second largest telecom market globally by 2011.Indicators are clearly representing the increased competition and that induced the customers to hop for low cost options . This in turn entangled with disloyalty and as the industry saturates, it become imperative for the mobile operators to shift their focus from rapid acquisition strategies to strategies which helps to maintain and enhance margins from existing customer base. that influence customer churn. It enables the Telco to understand which customer is likely to leave and why, which in turn can help the company take the necessary measures to counter it. Subject Area: Customer loyalty can be determined through the customer profile, level of satisfaction, and their buying behavior with regard to Indian mobile telecom providers.

Research Methodology 4. Research problem

Indian mobile telecommunication is facing very high churn and disloyalty in the market inspite of its tremendous growth. It is highly critical to analyze the factors influencing customer loyalty and their level of satisfaction on the cellular providers.

2. Impact of the problem

Though many service industries are affected by the churn phenomenon the problem is extremely acute in the telecom industry, with customers joining and quitting in short periods. According to research firm Gartner, Indias churn rate is anywhere between 3.5 percent to 6 percent per month, one of the highest in the Asia-Pacific region. Considering that the cost of acquiring a new customer is as high as Rs 3,000, the losses are immense.

5. Research purpose
The purpose of this research is to determine customer loyalty by identifying the operational factors that are influencing customer buying behavior, level of satisfaction with regard to Indian Mobile telecommunications.

3. Customer loyalty and its significance

Research is all about Customer loyalty on Indian cellular market, is a process by which data from customer behavior is aggregated and analysed to gather the purpose and factors influencing them to be loyal in their purchasing pattern. Recent statistics depicts very high churn in this Industry, is mainly rooted by the Youth segment Hence this study of customer loyalty is mainly focusing on Youth segment to lead not only to better and more productive customer relations in terms of sales and service but also to improvement in supply chain management (lower inventory and speedier delivery) and thus lower costs and more competitive pricing. It facilitates to assess the Customer profitability index and Customer lifecycle, Customer loyalty enables an operator to gain a better understanding of the variables 47

6. Research Objective
Recent trend line shows the growth and prospects of youth marketing and especially in the field of Telecommunications, they are marking tremendous development. At the same time indicators are highlighting very high churn rate in this segment. Hence this Research focuses on Youth segment and Research objectives are listed below. 1. To identify the factors influencing the customer loyalty with respect to Indian mobile telecommunications. 2. To determine the level of customer satisfaction with regard to their perceived product quality, services and values.

7. Research Design
Research design adopted for this study is Exploratory type of research.

Excel were used for statistical analysis to find out the relationship between the customer loyalty and our data. List of Variables taken for the Data Analysis: Totally 10 Dependent variables and 13 Independent variables are taken for the analysis and they are

8. Data collection
The research work is in need of first hand information and also secondary information so as to assess the changes happening in customer satisfaction.. So Primary and Secondary data are collected for this survey.

15. Dependent variables

1. Mobile operators 2. Service quality-quality of phone calls 3. Service quality-quality of coverage 4. Service quality-quality of SMS 5. Service quality-quality of network 6. Service quality-quality of convenience & reliability 7. Service quality-quality of service center and hotline 8. Service quality-rate of pricing for given quality 9. Service quality-score accumulation plan, bonus 10. Service quality-Advertisement

9. Primary Data
Survey method was adopted for collecting the primary data. As mentioned above in the research objective, youth segment falling under the age group of 18 to 34 are selected as the respondents for the research. Questionnaire was designed in the structured objective pattern focusing on the Research objectives.

10. Secondary Data

The secondary data had been collected from the previous Research findings, scholarly reports, telecommunication reports, respective marketing departments and through the different sources of literature such as journals, articles etc.

16. Independent Variables

1. 2. 3. 4. 5. 6. 7. Satisfactory level over performance-in general Satisfactory level over performance-customer services Satisfactory level over performance-billing system /RCV Satisfactory level over performance-tariff rates Satisfactory connectivity Satisfactory level over performance-network coverage Satisfactory level over performancesubscription easiness 8. 9. 10. 11. 12. 13. 48 Satisfactory level over performance-SMS, MMS, VAS Satisfactory level over performance-offers, discounts10. Satisfactory level over Performance-internet services Satisfactory level over performance-ringtones, caller tones Satisfactory level over performance-social responsibility Satisfactory level over performance-ad and other promotional activities level over performance-call

11. Sampling plan

Simple Random sampling has been adopted by the researcher.

12. Sample size

For academic and effective result, the targeted customer base of 200, falling under the age group of 18 to 34 is selected for sampling.

13. Pilot study

The questionnaires were distributed randomly to 30 of the samples.

14. Process of data analysis

In order to analyze all the data collected, SPSS 18.0 and

Table 1 Multiple Regression Analysis

Dependent variables 1.Mobile operators 2. Service quality of Network coverage 3. Service QualityQuality Of SMS Independent Variables Satisfactory level over offers ,Discounts Satisfactory Level Over PerformanceNetwork Coverage Satisfactory Level Over PerformanceSMS,MMS a)Satisfactory Level Over PerformanceTariff Rates b) Satisfactory Level Over PerformanceInternet Services a)Satisfactory Level Over PerformanceInternet Services b)Satisfactory Level Over PerformanceBilling System /Rcv 5.991** .278 3.685** 7.913** .403 5.652** F value 4.538* Beta coefficients .150 t value 2.130*

8.321**

.469

5.934**

3.635**

.249

3.339**

.218

2.806*

4. Service QualityQuality Of Network

5. Service QualityQuality Of convenience & Reliability

.170

2.313*

6. Service QualityQuality Of Service Center And Hotline 7. Service QualityRate Of Pricing For Given Quality 8. Service Quality-Score Accumulation Plan, Bonus 9. Service QualityAd

Satisfactory Level Over PerformanceCustomer Services Satisfactory Level Over PerformanceInternet Services Satisfactory Level Over PerformanceRingtones,Callertones Satisfactory Level Over PerformanceAd And Other Promotional Activities

4.249**

.260

3.166**

3.491**

.162

2.092*

3.958**

.208

2.674*

3.098*

.166

2.238*

*at 0.05significance level ** at 0.01 significance level 49

Step 1:-Performed correlation, by taking each one of the dependent variables with all the Independent variables and list of Independent variables extracted from the correlation matrix whose value fell below 0.5 with statistical significance. This is mainly due to avoid multicollinearity among the predictor variables, as these extracted Independent variables are subjected to Multiple Regression analysis. Step 2:-By performing Multiple Regression for each Dependent variable, the list of Independent variables are selected as per the significance.

change in billing service will pose the impact of 0.27 unit change in the Service quality of convenience .Hence for post-paid segment marketers should facilitate billing system for customer accessibility and precision. 6. For every unit change in the satisfactory level on Customer services and Ringtones influencing 0.2 unit change in their service quality .This indicates that customer services and product utilities should get strengthened for attaining customer loyalty 7. Each unit of satisfactory level on advertisements influences 0.16 unit of change on service quality implies Teleco should concentrate on Advertisements to create high loyalty.

17. Interpretation
1. For every unit of change in discounts and offers or promotions, affects 0 .15 unit of change in the mobile operators .Hence Mobile operators can increase their customer loyalty rate and implement Retention strategy based on Offers, Discounts and with other promotional tools. 2. Satisfactory level on Quality of Network coverage influences for its every one unit with 0.469 units of change in the service quality of Network. Therefore Operators should take necessary steps to focus mainly on quality of the network to increase customer loyalty, 3. Every single unit change of Satisfactory level over the performance of value added services influences 0.249 unit change in the service quality of VAS .Since the market taken for the Research is youth, Telecom companies should concentrate on Value added services by giving offers and promotional Recharge coupons with good quality. 4. Service quality of Network is highly influenced by satisfactory level on Internet services and with their tariff rates. Since for every unit of change in the satisfactory level of internet services and with their tariff rates, inducing 0.4 unit and 0.2 unit of change in the service quality of network respectively, marketers have to equip themselves to bridge up the customer mind gap. 5. From the table it is clear that for every unit 50

18. Recommendations
Based on the above analysis, Telecom marketers should prioritize and concentrate on Quality of network coverage and internet services. Web oriented loyalty programs and promotional schemes to be introduced to increase customer loyalty. Marketers should give importance to enrich Customer services, value added services and adding promotional offers for SMS, MMS etc. The fact that youth, especially teens, are the biggest users of SMS and MMS services in markets is drawing increasing attention from marketers. Mobile marketing campaigns for youth audiences are to be devised for everything ranging from new product launches and mobile coupons to wireless community and mobile auctions Joint promotional campaigns can be engaged to ascertain customer loyalty. Successful marketing to youth should entertain and empower, be very responsive to their queries and needs, give them free reign in designing Web content, and engage them in quick-win SMS-based competitions. Marketers can add benefits with RCVs and in Advertisements to capture and sustain customer loyalty.

19. Conclusion
The mobile industry of India is undergoing a vibrant change and the mobile number portability is paving the pathway for the subjective Research. This study is one such attempt to enhance the exposure on customer loyalty and it is also expected to facilitate the marketers

to design the essential operational parameters for designing the retention strategies and to enhance Customer Experience management.

20 References
ACSI: Fornell, C. Johnson, M. D., 1996. The

American customer satisfaction index: Nature, purpose, and findings, Journal of Marketing, 60. 7-19 Ahn, J. H., Han, S. P., Lee Y. S., 2006. Customer churn analysis: Churn determinants and mediation effects of partial defection in the Korean mobile telecommunications service industry, Telecommunications Policy, 30, 552-569.

51

Customer Shopping Experience in Malls With Entertainment Centres in Chennai

D. Anuradha Asst. Professor, MBA Dept, Vel Tech High Tech Dr.Rangarajan Dr.Sakunthala Engineering College, Chennai & Research Scholar, Anna University 1. Introduction
Today the word Mall has become a part of people living in Metro and big cities. Mall culture is mushrooming across the countrys landscape at a faster pace. Few years before people felt that Malls are for upper middle class people but now Mall mania is common among all people .Also that earlier people had to make a choice among shopping stores or movies but today all that is available under one stop shop with a good shopping experience. Today people believe that the malls are the best place to shop or hang out. Name Spencer Plaza Abirami Mega Mall Alsa Mall Chennai Citi Centre Prashanth Real Gold Tower Ampa Mall Express Avenue The Laurel Mall Mayajaal Isphaani Centre Coromandel Mall Marg Junction Phoenix Market City Velachery Gold Souk Grande Vandalur Grand Velachery Mall Riverside Chandra Metro Mall Prestige Forum Vadapalani Matrix Mall Saligramam Prestige Forum Teynampet Ramee Mall Ten Square Mall Ozone Mall Challa Mall Indi Mall Brook Field Plaza Year 1863 2003 1998 2006 2008 2009 2010* 2010* 2003 2005 2011 2012 2011 2012 2011 2011 2010 2010 2011 2012 2010 2011 2011 1996 2009 52 According to the report by Northbridge Capita, Indian retail industry is expected to grow up to US $833 billion by the year 2013 and reach US $1.3 trillion by the year 2019 at a CAGR 10%. In India the consumer spending pattern has enormously increased and in the last few years, the consumer spending in India has raised up to 75%. As a result of increase in disposable income, Indian retail industry is expected to grow. In fact, malls play a major role in consumers lifestyle (Terblanche, 1999). They have become not only a centre for shopping but also a community centre for social and recreational activities (Ng, 2003). Stores, food courts, restaurants, cinemas, childrens play areas, interactive entertainment, social use areas, relaxation spaces and promotional areas are now major components of any mall (Terblanche, 1999). It has a multiple role in modern culture, with a constant change in its appearance. The concept of globalization has made the customers expose to different types of brands. Also that Indians travel abroad for work and business has made them experience different lifestyle, products and services available there. This has led the retailers in India to develop quality of life in India with a provision of modern retailing. And so, there are many malls upcoming in Chennai trying to match international outlook (The list of malls in Chennai is provided) The Mall growth shows the economic prosperity of the country. The growth in retailing has led to the competition between the malls and the decision of which mall to choose since all the malls have apparent similarity in terms of stores. With the growing number of malls, shoppers tend to be more selective. They are more likely to patronize malls that are more attractive and have a

wide variety of stores and merchandise that match their preferences (Mohammed Ismail El-Adly) . Therefore, it is essential for mall managers to know the extent to which their malls are attractive to their shoppers (Wong et al., 2001). However, mall attributes that are attractive for some shoppers are not necessarily attractive for others. Therefore, the purpose of this paper is to provide an insight of the role of external and internal variables in influencing the choice of Mall and shopping behavior.

Clulow (2004), Retail concentration: a comparison of spatial convenience in shopping strips and shopping centres, the findings yielded three important insights (1) The shopping centre was found to offer consumers greater spatial convenience (2) the findings add support to the notion that the demise of the shopping strip could be linked to its inability to satisfy the needs of a convenience-oriented society. (3) While the shopping strip may be at a competitive disadvantage in terms of spatial convenience, market mechanisms.

2. Review of Literature
Intensive efforts have been made to find the relevant studies in customer shopping experience in shopping malls with entertainment centres. Only a limited study is available in this field especially in India. A summary of literature reviewed is reported here. Machleit A. Karen, Sevgin A.Eroglu (2000), the findings indicate that the broad range of emotions felt in the shopping context vary considerably across different retail environments. They also show that the Izard (Izard, C. E.: Human Emotions, Plenum, New York. 1977) and Plutchik (Plutchik, R.: Emotion: A Psycho evolutionary Synthesis. The findings indicate that in the specific context of the shopping experience, across the retail environments. The Izard measure contains many negative emotion types and may be more appropriate for studies that look at the unpleasant, rather than the pleasant, aspects of shopping. The Plutchik emotion types of expectancy and acceptance also may be particularly relevant in studies of salesperson interactions with shopper. Taylor Lee Susan and Robert M.Cosenza (2002), Profiling later aged female teens : Mall shopping behaviour and clothing choice ,the study was conducted to examine shopping choice behaviour of an important and viable segment of teen market called, Later aged female teen. The results revealed that typical later aged female teen made right choice especially for clothing products. Finally the groups desire to stay and shop at the local mall seemed to be a function of the mall composition and excitement. Reimers Vaughan and Val 53 Michon Richard, Jean-Charles Chebat and L.W. Turley (2005), Mall atmospherics: the interaction effects of the mall environment on shopping behavior, the final results are that Ambient odors positively influence shoppers perceptions only under the medium retail density condition. Also that mood has little direct effect on the perception of product quality. Wesley Scarlett, Melody LeHew, Arch G. Woodside (2006), Consumer decision-making styles and mall shopping behavior: Building theory using exploratory data analysis and the comparative method . The result is that gender is prime antecedents associating with CDM styles i.e. Demographics moderate the influence of consumer decision-making styles on planned expenditures. Preez Du R., E.M. Visser and L. Zietsman (2007), Profiling male apparel consumers : Lifestyle, shopping orientation, patronage behaviour and shopping mall Michon Richard and Jean Charles Chebat (2004), Cross-cultural mall shopping values and habitats - A comparison between English- and French-speaking Canadians, the findings indicate that French are less likely than English shoppers to use the mall for other activities than buying goods and services. Haytko L. Diana and Julie Baker (2004), Its all at the mall: exploring adolescent girls experiences, this study provides insight into young girls patronage behaviors and motivations, the results indicate five characteristics of the mall environment influenced the girls perceptions of their experiences: comfort, safety, retail mix, accessibility and atmosphere.

behaviour .The results of the study are Male apparel consumers differ in terms of price ,quality, selection of shopping mall, they were also media-oriented. Ofir Chezy and Itamar Simonson (2007), The Effect of Stating Expectations on Customer Satisfaction and Shopping Experience. The findings of the research suggest that stated expectations tend not to be met, and explicitly stating expectations influences the likelihood that post experience evaluations would be lower than they would have been had the participants not articulated their expectations. Michon Richard, Hong Yu and Donna Smith (2008), The influence of mall environment on female fashion shoppers value and behaviour, the results indicate that mall atmospherics has no or little effect on the utilitarian value of low- or high-fashion oriented shoppers. Rajagopal (2008) has focused on the impact of growing congestion of shopping mall in urban areas on shopping conveniences and shopping behavior. The findings reveal that the perspectives of shopping mall ambience and shopping satisfaction effectively become a measure of retailing performance, customer attraction and propensity to shop for urban shoppers. The above review gives an understanding that only limited systematic attempt has been made across the world on the select dimensions of the shopping behavior of customers in shopping centres. This is so in India, where no study that focused directly on the issue, shopping experience in malls.

4. Objectives of the Study

The study has the following objectives: To study the profile of the shoppers To determine the relative importance of criteria which influence the overall attractiveness of mall. To assess the reasons for visiting the mall and their expenditure pattern To propose a model depicting Shopping Mall attractiveness

5. Methodology
Most of the previous research on malls with entertainment centers, focused only on one mall, this study has attempted to conduct research across 2 different malls in Chennai. The malls include Express Avenue and Citi Centre in Chennai. Both the malls fit commonly in terms of varieties of entertainment offered such as theatres, rides for children and shopping outlets. The survey instrument used is structured personal interview questionnaire. Interviews was conducted from a random sample of mall shoppers from each of these malls. The questions focus on the following areas Distance traveled to reach the mall, reasons for visit, whether the respondent had visited the mall earlier, amount of time spent/ would like to spend in the mall, opinion about the food court/ theatre/stores, Opinion about the mall atmospherics, etc. The questionnaire was distributed among 115 shoppers who visited the mall; out of this 93 completed questionnaires have been received. As such, the total sample size is 93. The collected data has been processed using percentage, cluster and factor analysis. Likerts scaling technique was used wherever necessary

3. Research Problem Identified

The purpose of this paper is to assess customer shopping experience in malls with entertainment centres in Chennai. This research aims to explore the shopping experience of customers at malls with entertainment centres visit them due to the availability of large scale entertainment centres. The purpose of this paper is to provide an insight of the role of external and internal variables in influencing the choice of Mall and shopping behavior. 54

6. Result and Analysis

a) Profile of the Shoppers: - The profile of the sample respondents is summarized in the following Table no.1

Table No.1
Demographic Age > 18 yrs 19-30 yrs 31-40 yrs 41-50 yrs 51-60 yrs 61 & older Gender Male Female Marital Status Single Married Purpose of Mall Visit Shopping Get-Together with Friends/Relatives Entertainment To spend time Business Travel to the Mall Bus Bike Car Auto / Cal Taxi Others Shopping Companion Alone Companion Shopping Frequency (per month) 1-1 time 2-3 times 4-5 times 6-7 times More than 8 times Expenditure Pattern at Malls 10,001 30,000 30,000 60,000 60,000-1,00,000 1,00,000 & above b) Attractiveness & Reasons for visit to Mall The results reveal the attractiveness of the Shopping mall with entertainment centres. To understand the customer shopping experience at shopping malls, the shoppers in both the malls (Citi Centre and Express Avenue) were asked to mark the reasons why they prefer a shopping 55 Number %

06 41 31 8 5 2 41 52 62 31 24 21 27 19 2 09 39 32 12 1 9 84 21 42 18 10 2 Less than 10,000 51 35 6 1 Nil

6% 44% 34% 9% 5% 2% 44% 56% 71% 29% 26% 23% 29% 20% 2% 9% 43% 34% 13% 1% 9% 91% 23% 45% 19% 11% 2% 55% 38% 6% 1% -

mall for shopping instead of independent outlet. The reasons identified were (in the order of preference): Shopping ambience, Availability of different types of shops, Entertainment offered at Malls, Parking facility, Ease of shopping, Good product quality, Pride and Prestige attached shopping.

The different types of stores visited by shoppers in the Mall apart from the entertainment centres like multiplex theatre, snow bowling, video games are: Apparel store followed by food Services, leather stores, fashion stores, consumer service, professional services, electronic stores, departmental stores, home ware and so on. Internal Variables affecting shopping experience at shopping malls The Internal Variables influencing shopping experience include : Entrance, Exterior Display, Architectural style, Surrounding stores,

Address and Location, Parking availability, Traffic and Congestion, Height, Size and colour of building External Variables affecting shopping experience at shopping malls The External Variables influencing shopping experience include: Flooring/ Carpeting / Painting, Lighting /Music / Scent, Merchandise, Temperature, Cleanliness, Restroom and waiting area. Factors influencing opinion on shopping experience at malls with entertainment centres

Table No.2
Factors and Items Loadings

Factor 1 : Shopping Ambience 1. Pleasant Atmosphere Of This Mall 2. Parking Facility 3. Cleanliness, Lighting and Temperature 4. Address and Location of the Mall 5. Restroom and Waiting area 6. Lift and other Facilities Factor 2 : Layout of Store 1. Ease Of Locating The Mall 2. Overall Convenience Of The Mall 3. Ease of locating the stores 4. Easy access to restrooms 5. Easy access to food court 6. Easy to get around and shop Factor 3 : Variety of Shops 1. Number Of Stores In This Mall 2. Quality of stores 3. Price offered by retailers in the store 4. Fashionability of merchandise Factor 4 : Service offered at Mall 1. ATM , Banking And Other FOREX Facilities 2. Quality of Multiplex Theatre 3. Childrens Play area Factor 5 : Design 1. Architecture is attractive 2. Attractively decorated Factor 6 : Desire to Stay in Mall 1. Enjoy spending time in this mall 2. Felt a sense of adventure 56

0.78 0.84 0.61 0.91 0.80 0.61 0.65 0.75 0.84 0.68 0.61 0.71 0.81 0.84 0.62 0.60 0.92 0.90 0.61 0.60 0.62 0.86 0.81

The dimensions according to which the consumers evaluate the shopping experience at shopping malls with entertainment centres are: Shopping Ambience, Layout of Store, Variety of shops, Service offered at Mall, Design, Desire to stay in Mall, if any. These dimensions describe the factors to which the shoppers evaluate their shopping experience at large shopping malls such as Citi Centre Mall and Express Avenue Mall with entertainment centres in Chennai.

purpose, and they spend additional time at food court, stores in the mall (Salil, 1997). The findings are in supportive of the similar studies across the world. The marketing strategists has to concentrate on the five factors identified in this study such as : Shopping ambience, Layout of the store, Variety of shops, Service offered at Mall, Design, Desire to stay in Mall. The study has the following limitations in terms of one location considered for the study that too with a limited sample size. Therefore generalization of the findings requires enough caution. The researcher recommends that the study may be extended in the following lines: by including large number of samples; covering all the major cities in India; The comparative number of malls may be increased.

7. Conclusion, limitations and directions for future study

The study enables to conclude that the shoppers visit shopping malls with entertainment centres for making use of all facilities under one roof. This indicates that shoppers visit the malls for social and entertainment

Shopping Model

57

References
1. Wesley Scarlett, Melody Lehew, Arch G.Woodsire. Consumer decision-making styles and mall shopping behavior: Building theory using exploratory data analysis and the comparative method Journal of Business Research 2006; 535548 2. Michon Richard, Jean-Charles Chebat Crosscultural mall shopping values and habitats A comparison between English- and Frenchspeaking Canadians. Journal of Business Research2004; 883-892 3. Taylor Lee Susan, Robert M.Cosenza. Profiling later aged female teens: mall shopping behaviour and clothing choice. Journal of Consumer Marketing 2002. 393-408 4. Haynes Joel. Consumer shopping experience in Malls with large scale entertainment centres. The Mid-Atlantic Journal of Business. 1997. pp.153 5. Anonymous (2000), Canadian shopping centres head in new direction: Canadian centres need novelty, main street retail to capture youth sales, Canadian Appraiser, Vol. 44 No. 1, pp. 334. 6. Darden WR, Reynolds FD. Shopping orientations and product usage rates. J Mark Res 1971;8:505 8 (November). 7. Deighton J. The consumption of performance. J Consumerism Res 1992;19:36272 (December). 8. Areni CS, Kim D. The influence of background music on shopping behavior: classical versus topforty music in a wine store. In: McAlister L,

9. Rothschild ML, editors. Advances in consumer research 1993. Provo (UT): Association for Consumer Research; 1993. p. 336 40. 10. Areni CS, Kim D. The influence of in-store lighting on consumers examination of merchandise in a wine store. Int J Res Mark 1995;11(4): 117 25. 11. Areni CS, Duhan DF, Kiecker P. Point-ofpurchase displays, product organization, and brand purchase likelihood. J Acad Mark Sci 1999;27(4): 428 41. 12. Babin BJ, Darden WR. Consumer self-regulation in a retail environment. J Retail 1995;71(1):47 70. 13. Babin BJ, Hardesty DA, Suter T. Color and shopping intentions: the intervening effect of price fairness and perceived affect. J Bus Research 2003;56(July):541 51. 14. Bagozzi RP. Advanced methods in marketing research. Cambridge (MA): Basil Blackwell; 1994. 15. Babin BJ, Attaway JS. Atmospheric affect as a tool for creating value and gaining share of customer. J Bus Res 2000;49(2):91 100. 16. Babin BJ, Darden WR, Griffin M. Work and/or fun: measuring hedonic and utilitarian shopping value. J Consum Res 1994;20:64456 (March). 17. Alexandris, K., Kouthouris, C., Andreas, Meligdis, 2006. Increasing customers loyalty in a skiing resort. International Journal of Contemporary Hospitality Management 18 (5), 414.

58

Drivers of New Product Success

Prof. K. Vijayan Valliammai College of Arts & Science Dr. Jayshree Suresh Dean, School of Management, SRM University, Kattankulathur

1.Introduction Objective
The following are the objectives of the study. 1. To identify factors that are antecedents and predictors of new product success. 2. To determine the impact of factors identified on the success of selected new products. 3. To examine the success of products with reference to FMCG and is consumer durable company. Null Hypothesis : There is no difference in the means of each of the drivers of new product success between company A and B.

Repackaged, price change and new brand. (C. Merle Crawford, 1987) B) New Product by product characteristics 1. Performing an entirely new function. 2. Offers improved performance of an existing function 3. A new application of an existing one 4. Offers additional functions 5. An existing product offered to a new market 6. A product which reaches more buyers through lower cost 7. An existing product integrated into another existing product 8. Marketing components/sub assemblies of a product offered separately 9. A restyled product. (Adapted from Philip Marvin, Product Planning Simplified, 1972)

2. What is a New Product?

A new product has a new FORM attained through TECHNOLOGY which is the power to do work, that delivers BENEFITS that the customer has a need or desire for. Further a new product essentially is of the right quality at the right time at the right cost. (C. Merle Crawford, 1987).

4. Success / Failure Rate of New Products

Different studies have indicated a success rate between 60-70% and a failure rate of 30-40% which involves hundreds and thousands of crores of loss and trauma to the executives and firms that launched the products (that failed).

3. What is a product?
By product we mean anything offered for sale. The newness of the product can be in terms of : 1. Newness to the Firm : a. Improved versions b. Line extensions or companion products c. Brand extensions d. Diversification 2. Newness of the product to the Marketed place : a. Similar to the products in the market b. An improvement c. New to the market/new to the world 3. Newness of product as perceived by buyers / users : 59

The new product success rate is 69% according to Larry and Dwyer (1993), 65-70% according to Crawford (1987) and 80% according to Hopkins and Baily (1971) The variation in new product success failure rates depend on several factors such as the product characteristics, degree of product innovation and on how well the product met its goals (Crawford 1991). Further, the perception of success or failure depends on the performance criterion employed and the time horizon for judging performance (Urban and Hauser 1980). The

new product success, can be explained by the success or performance measures used by Cooper (1985) Larry, Dwyer and Robert Mellor (1993). According to them the following seven measures are used to measure the success or performance of new Products :

8. Firm Strategy Characteristics

6) Marketing synergy is the match between the existing marketing skills of the firm and the marketing skills needed to make and market a new product successfully. 7) Technological synergy or the match between the existing technological skills of the firm and the technological skills needed to execute a new product initiative successfully. 8) Order of entry which is the timing of marketplace entry of a product. 9) Dedicated human resources in terms of focussed commitment of personnel resources to the new product project. 10) Dedicated R & D resources.

5. The Measures of Success of New Products

1.

2.

3.

4.

5.

6. 7.

Percentage of firms sales made up by new products introduced over the past five years. Percentage of new products that succeeded, failed or were terminated prior to market launch. The extent to which the new product program met its financial performance objectives over the past five years. The importance of the program in generating sales and profits for the firm. The extent to which the profits from the new products exceeded the program costs. The successfulness of the program relative to the competitors An overall success rating.

9. Firm Process Characteristics

11) Structured approach in terms of employment of formalized product development procedures. 12) Predevelopment task proficiency with which a firm executes the pre-launch activities of idea generation screening, market research and financial analysis. 13) Marketing task proficiency 14) Technological proficiency 15) Launch proficiency 16) Reduced cycle time or reduction in concept-to-introduction time (time to market) 17) Market orientation or the degree of firms orientation to its internal, competitor, and customer environments. 18) Customer input : Incorporation of customer specifications into the new product initiative. 19) Cross functional integration or the degree of interdepartmental participation in the new product effort. 20) Cross functional communication : Level of communication among department in a new product effort. 60

6. Drivers of new product success

Out of the various possible predictors of new product success studied in over 60 studies, the following 24 factors classified into different categories are found to be predictors more often than others. Therefore they have been selected as the predictors whose effect on product success has been examined in this study.

7. Product Characteristics

1) Product advantage, superiority or differentiation over competitors offerings. 2) The extent to which product is perceived to satisfy desires/needs of the customer 3) Perceived price performance congruency or value 4) Perceived technological sophistication of the product 5) Product innovativeness is perceived newness/originality/uniqueness of the product

21) Senior Management support to the new product initiative.

10. Market Characteristics

22) Likelihood and degree of competitive response to a new product introduction. 23) Degree, intensity or level of competitive response to a new product introduction. 24) Market potential : Anticipated growth in customers/customer demand in the market place. In the past studies on new product success exceeding sixty in numbers the following factors are found to be the dominant predictors of new product success.

as David Henard and David Szymanski (2001) due to reasons including excessive heterogeneity in the values of the individual correlations.

13. Dominant drivers of new product success

In the research mentioned above it was found that 10 factors are dominant drivers of new product success (mean r>40), The dominant factors that emerged are; market potential (r = 0.54), dedicated human resources (r=0.52), marketing task proficiency (r=0.50), product meeting customer needs (r=0.50), product advantage (r=0.48), predevelopment task proficiency (r=0.46), dedicated research and development resources (r=0.45), technological proficiency (r=0.43), order of entry (r=0.41) and the technological sophistication of the product (r=0.41). The new product success phenomenon is complex yet more and more clear in terms of the causal factors. The intricate and multifaceted nature of the new product performance phenomenon is seen from the fact that three predictors that are of product characteristics which are : products meeting customer needs, product advantage and product technological sophistication; two of strategy characteristics, (R & D and human resources); four of process characteristics, (marketing, predevelopment, technological and launch proficiencies) and one market place characteristics; (market potential). The above study aims to assess in the Indian context, as well as to evaluate the most frequently modelled predictors; (n>40 modeled effects), marketing synergy (n=61), market orientation (n=60), cross functional communication (n=58), structured approach (n=53), product advantage (n=44), and marketing task proficiency (n=40). Note : r = corrected mean correlations n = number of times a predictor has been modeled.

11. Major factors that influence new product success

New product introduction is acknowledged as a major factor in the sustainable success of a business. The predictors or drivers of new product success mainly investigated by various researchers, i.e., 1. Product advantage 2. Market Potential 3. Meeting Customer Needs 4. Predevelopment task proficiencies and 5. Dedicated resources have a causal impact on product performance.

12 Measurement Empirical studies on causes of New Product Performance

In the 60 empirical studies that document the statistical relationship between new product performance and the causal factors identified by David.H.Henard and David.M.Szymanski, correlation was the main metric. These researchers emphasized models level correlations (an averaging of reported correlations across all models and all studies to arrive at an estimate of the central tendency of the predictor criterion relationship) rather than the study level correlations (an initial averaging of the correlations reported within the study followed by a further averaging of the mean correlations across studies). A model-level analysis has been followed and advocated by Glass, McGraw and Smith (1989) as well as meta analyses by Assmus, Farley and Lehman (1984) Churchill et al (1985), Sultan, Farley and Lehman (1990), Tellis (1988) as well 61

14. Implementation for the success of the New Product

Key Result Areas (KRAs) need to be emphasized : 1. Ideation-to-launch stage gate system and its effectiveness 2. Cost-Volume-Profit Analysis

3. Effectiveness of proposed advertising 4. The number of households buying the product and repeating purchase 5. New actions such as new packaging that have to be executed. 6. Adequate trial purchase during early launch. 7. Responsiveness of trial purchase to advertising and sales promotions. Competitive Response to the New Product identifying where volume gains have been made is necessary to ensure that the overall strategy for the new product is on track. At this point the following need to be considered. 1) The market share 2) Did the new product attract new category buyers? 3) How much has the market grown on a result of this new product. Long term forecast for the new product. Assessment, long term forecast of the new product future are essential to determine the long term viability of the product as well as to allocate capital needed. The issues to be considered are : 1. What should be the revenue, market share, Return on Capital employed and capital required for factory and equipment. 2 What form/flavour extensions can be considered?

three products of each of the two companies were selected using the seven measures of new product success mentioned earlier and with the type of product in mind. A census survey of all managers in company A, an FMCG company and B, a consumer durable products company was made. In the consumers survey 124 effective respondent consumers of company A, and 33 effective respondents consumers of company B were covered. Both internal data from managers and external data from consumers of both companies were collected. Structured, tested questionnaires were employed in both the managers and consumers surveys.

17. Data Analysis

The data collected was codified, tabulated and analysed. The T-Test on Managers survey data with the Independent Samples Test was carried out. The high and low classification of differences in the means of company A and B are presented in table No.1. The analysis of T-Test of consumer survey data is presented in Table No.2.

18. Findings
T-Test was performed on each of the predictor variables, to test the difference in the means of company A and Company B

15. The Current Study

An effort to find any differences in the predictors of new product success between the product categories of Fasting Moving Consumer Goods (FMCG) and consumer durables significant differences were found between company A and B through the T Test described below and after tests as well.

19. Managers Survey Data T-Test

Ho.: There is no difference between the means of an item (k) with respect to company A and B. Level of significance is 5% In the independent sample test using Levenes Test for equality of variances there is difference in the means of 21 drivers relating to company A and B. In the case of the following categories, there is no significant difference in the means between Company A and B: Technological Sophistication Separate Team working Cross functional Integration 62

16. Data Collection

In FMCG category Company A was selected as it is a company with successful new products; and company B was selected for examination as it was a consumer durables company with successful new products. The

On the basis of analysis, the null hypothesis is accepted for 3 drivers mentioned and rejected for the other 21 drivers. Company A is a Fast Moving Consumer Goods (FMCG) company and company B is a consumer durable product company. 1) In the analysis of T-Test on Managers survey data (Table-1) low differences including very low is found between the means of the following 7 factors (25%) relating to company A and B . Technological Sophistication (Product) More Advantageous (Product) Meets Needs Cross Functional Integration Cross functional communication Senior Management Support Market Potential It is found that there is high difference (including very high) between the means of the following factors : Marketing Synergy Suitable price Product Innovativeness Time of Introduction Separate Team working Market Proficiency Launch Proficiency Customer Oriented Product Development Structured Approach Marketing synergy Technological Synergy Dedicated R&D Success of precious products Technological proficiency Market/Consumer Orientation Reduced Cycle time Likelihood of competitive response Competitive response intensity Thus it is found that in the case of the above 18 variables (72%) their influence on product success is different in the company As products and Bs products. 63

20. Consumers The significance of difference of means of each item with respect to Company A and Company B is given below: Ho : There is no difference between the means of an Item (k) with respect to Company A and B. Level of significance is 5% It is found the there is no significant difference between the means of A and B with respect to the following items: Suitable Price Technological Sophistication Separate Team Working Dedicated R & D Success of Previous Products Market Potential Product Success The consumers of items of both the companies are considered. Total number of consumers = 157. The null hypothesis is accepted for the above 7 drivers (24%) and rejected for the other 10 drivers (76%). It is found that in the case of 9 variables the difference in the means between Company A and Company B are low, while in the case of 9 other variables the difference in the means between the two companies is high, as in Table-2.

21. Conclusion
In Technological Sophistication and Separate Team working belonging to firm strategy characteristics, no significant difference is found in the Managers responses as well as the Consumers responses. In the consumers responses, Suitable Price A Product characteristic and Separate Team Working, dedicated R

& D and Success of Previous Products (Firm Strategy Characteristics) are identified as factors where there is no significant difference between the means of companies A and B. All other factors can be classified as follows : Product Characteristics : Product Innovativeness, Firm Strategy Characteristics : Marketing Strategy, Technological Synergy, Time of Introduction. Firm Process characteristics : Market Proficiency, Launch Proficiency, Customer oriented Product

Development, Structured Approach, Technological Proficiency, Reduced Cycle Time Market Characteristics : Competitive Response Intensity, Likelyhood of Competitive Response. They exhibit high difference between the means of company A and B. This could be attributed in some measure to the type of products (FMCG and Consumer Goods) and in some measure due to factors such as, differences in the products and markets.

Table 1 Analysis of Means

T-Test Managers Survey Data. Difference in the means of company A and B.
Item 1. More Advantageous 2. Meet Needs 3. Suitable Price 4. Technological Sophistication 5. Product Innovativeness 6. Marketing Synergy 7. Technological Synergy 8. Time of Introduction 9. Separate Team Working 10. Dedicated R & D 11. Success of Previous Products 12. Market Proficiency Product 13. Technological Proficiency 14. Launch Proficiancy 15. Market/Custmer Orientation 16. Customer Oriented Product RDevelopment 17. Reduced Cycle Time 18. Structured Approach 19. Cross Functional Integration 20. Cross Functional Communication 21. Senior Management Support 22. Likelihood of Competitive Response 23. Competitive Response Intensity 24. Market Potential 25. Product Success Very Low Low 0.5634 0.4308 ----------------0.4767 0.5653 0.4064 --0.4737 -High Very High

0.1755 ---------------------64

0.9269 -0.7641 --0.8733 0.6335 --0.7953 -0.6335 -0.8460 -0.7953 ------0.7589

---1.0858 1.3664 --1.2368 1.5117 -1.4464 -1.0331 -1.778 ----1.2125 1.4542 ---

Table 2 Analysis of Means

T-Test Consumers Survey Data. Difference in the means of company A and B.
Item 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. More Advantageous Meet Needs Suitable Price Technological Sophistication Product Innovativeness Marketing Synergy Technological Synergy Time of Introduction Separate Team Working Dedicated R & D Success of Previous Products Market Proficiency Product Technological Proficiency Launch Proficiancy Market/Custmer Orientation Customer Oriented Product RDevelopment Market Potential Product Success Very Low ---0.3323 ----0.0791 0.3345 0.3941 -----0.1052 0.0288 Low --0.5269 --------0.5237 --0.6394 ---High ------------0.7319 0.9765 -0.9527 --Very High 1.0327 1.3265 --1.7697 1.3710 1.1429 1.9429 -----------

22. References
1. Assmus Gert, John U, Farley and Donald R Lehman, How Advertising Affects Sales ; Meta Analysis of Economic Results, Journal of Marketing Research, 1984. 2. Booz-Allen and Hamilton (1982) New Product Management for the 1980s New York; BoozAllen and Hamilton. 3. Churchill, Gilbert A., Jr, A Paradigm for Developing Bette, Measures of Marketing constructs, Journal of 1985 Marketing Research. 4. Cooper Robert G, The dimensions of Industrial New Product success and Failure, Journal of Marketing, 1979. 5. Glass Gene V., Barry Mcgraw and Mary Lee Smith, Meta Analysis in Social Research, Beverly Hills, CA, Sage Publication 1989. 6. Larry dwyer and Robert Mellor, Organisational environment, New Product Process Activities 65 and Project outcomes Journal of Product Innovation Management 1993. 7. Philip Marin, Product Planning Simplified, Amercian Management Association, New York, 1972. 8. Fareena, John U Farley and Donald R Lehman, A Meta Analysis of applications of Diffusion Models, Journal of Marketing Research, 1990. 9. Tellis Gerard J, The Price Elasticity of selective Demand; A meta Analysis of Econometric Models of Sales, Journal of Marketing Research., 1988 10. James M., Lattin, J.Douglas Carroll and Paul E.Green; Analyzing Multivariate Data; Thomson Brooks / Cale. 2007. 11. Kothari C.R.Research Methodology. Methods and Techniques; New Age International Publishers 2004.

E-Marketing in Pharmaceutical Business

Sheeja.V.S Lecturer,(Research Scholar) SRM College Of Pharmacy, SRM University Indumathi Lecturer,SRM College of Pharmacy, SRM University Dr. R. Krishnaraj HOD,General Management, SRM School of Management,SRM University 1. Introduction
The pharmaceutical marketing strategies (as well as advertising strategies) are different from other businesses because pharmaceuticals or drugs can negatively affect both- the end consumers or the patients and the health care profession. Also, the advertising strategies included in the marketing plan of any pharmaceutical company are not direct to consumer. Any pharmaceutical marketing strategy targets the health care professionals or the Doctors who in turn prescribe the drugs to the patients (end consumers) liable to pay for the products.

Sponsoring continuing medical education.

Pharmaceutical representatives, also popularly known as medical representatives, are the major players for marketing drugs directly to the physicians. Typically, the expense of this sales force of any pharmaceutical company comprises anything ranging from 15-20% of annual product revenues. However, with changing times and new developments, the pharmaceutical industry faces some serious strategic issues.

The internet and related technologies have revolutionized many aspects of society. For the pharmaceutical industry, as for other sectors, this has brought new marketing opportunities. The internet can greatly expand a companys reach. For example, a popular video on YouTube may potentially be seen by thousands of people. Perhaps more importantly, internet-based technologies are enabling new styles of communication between the industry and its targets, including more interactive and customer-responsive campaigns. Consultancies have been established and books written for the pharmaceutical industry to help in developing internet-based marketing.(1)

3. Need for New Pharmaceutical Marketing Strategies

While most of the pharmaceutical companies successfully employ a host of marketing strategies to target various types of customers, the current business and customer trends are continuously creating new challenges as well as opportunities for increasing profitability. If the pharmaceutical companies want to improve their Return-On-Investment (ROI), they have to adopt new communication technologies (digital media) along with their conventional sales force of medical representatives. They really need to adopt this multi channel marketing strategies for the following reasons.

2. Traditional Pharmaceutical Marketing Strategies

The pharmaceutical companies traditionally adopt four major marketing strategies for promoting their products

Giving drugs as free samples to doctors; Providing details of their products through journal articles or opinion leaders; Gifts that hold the company logo or details of one or multiple drugs and 66

The concept of blockbuster drugs is dying out for big pharmaceutical companies where 2-3 drugs were good enough to pay back the whole investment for a larger number of manufactured drugs. Now the limited prospective for blockbuster drugs (thanks to low investment on R&D and patent expiry) makes it essential to focus on more specialized drugs sold in lower volumes. And when there is low volume products, sales driven marketing strategy (with high cost of sales force) is not feasible

As far as small pharma companies are concerned, they already have small sales force. However, with the use of digital media, having a lower investment cost (both for the company and its targeted customer) they can easily get return on investment. Customer behavior (doctors behavior) is rapidly changing. Doctors, who are getting more and more patients, can be hardly seen by the medical representatives. They are more inclined towards Internet for obtaining relevant information. It is the time for pharmaceutical companies to build their marketing strategies around this digital media. Website marketing, online marketing, blogs, social media, forums, chat rooms and any other such media is an influential means to present the companys products and offers through opinion leaders.

the doctors participated in a clinical trial of a SanofiAventis drug and entered anonymous patient data into the device. The company aimed to build relationships with the doctors, to use the device as an advertising medium, and to gather feedback. The company also reported that these doctors then prescribed more of its diabetes products.(3) An important aspect of e-detailing is that it enables predictive marketing. This means that companies can be more effective and timely in eliciting feedback from prescribers in order to tailor marketing strategies to their individual preferences and needs.(4)

5. Promotion by Corporate blogs and websites

The global reach of the internet means that Australians now have easy access to overseas blogs and websites promoting prescription medicines and other products, and even selling them. Safety concerns have been raised about the purchase of prescription, non-prescription and complementary medicines over the internet.(5), (6) Companies are also using blogs and websites to develop customer relationships. As GlaxoSmithKline says on its corporate blog in the USA for a weight loss product (http://alliconnect.com), it is a place for you to have a conversation with us about weight loss issues. Such conversations may enable companies to gather patient stories and feedback for use in positioning their products. The discussions are not only mined for information (http://pharmamkting.blogspot.com), but also ensure the repetition of marketing messages. Sometimes companies use multiple websites to promote their products and issues to different market segments. For example, GlaxoSmithKline also promotes weight loss issues at www.questioneverything.com Websites are also used for patient support programs and education, although it is not always clear from the website name that who is behind it. In the USA, Pfizer runs such a program (www.get-quit.com) for varenicline users, providing regular emails and other prompts such as a personalized web page to support their product use. In Australia, the companys advertising and marketing 67

4. Electronic detailing
In the context of drug promotion, detailing has traditionally involved face-to-face contact between a visiting sales representative and a health professional. However, drug companies, especially in North America and Europe, are increasingly adopting electronic detailing as the process to market their products. E-detailing includes diverse strategies, such as videoconferencing, the provision of electronic education modules, and the use of email and related technologies as prompts and to promote two-way communications. It has been used for disease-awareness campaigns, and for customer relationship management. Presentations to a pharmaceutical marketing conference in Europe suggest that e-detailing is not popular with all doctors.(2) However, it is cheaper than traditional sales representatives and can result in a significant return on investment through increased sales. Top companies are providing financial incentives for doctors to participate in e-detailing, such as honoraria, product samples, practice tools, and patient education resources.(3) In Poland, for example, Sanofi-Aventis lent physicians internetconnected hand-held devices which were loaded with clinical support information, drug indexes, abstracts of clinical studies, information from key opinion leaders, and advertising and educational materials. In exchange,

campaign is backed by a consumer website (www. outsmartcigarettes.com.au) that includes prompts for questions to ask doctors. Meanwhile, a Wyeth Consumer Health Care website (www.caltrate.com.au) sounds the alarm on osteoporosis and encourages people to see a doctor if they answer yes to any questions on a one minute risk test, including the question have either of your parents broken a hip after a minor bump or fall?. Company websites can link to other sites that may not meet regulatory requirements. GlaxoSmithKlines Australian website raising consumer awareness of genital herpes and treatment issues (www.thefacts.com.au) links to the Australian Herpes Management Forum but advises that external links such as this may not comply with the Australian regulatory environment. The Forum, whose board comprises prominent physicians, aims to improve the awareness, understanding, management and control of herpes virus infections in Australia, and is sponsored primarily by pharmaceutical and diagnostic companies. Pharmaceutical companies are not alone in using the internet to market products and to conduct awareness-raising campaigns that may affect patients interactions with doctors. The complementary medicines company Black mores, for example, has a sophisticated website (www.blackmores.com.au), while Nescafe has launched a website (www.nescafe.com.au/ hcp password: Coffee) supported by advertising in the medical press which promotes coffee as an agent that may help lower the risk of developing type 2 diabetes.

viewers describing their experiences with varenicline. It was unclear whether any of these videos were commercially generated. However, the first one identified by the search (http://au.youtube.com/ watch?v=Vx7baviT1DQ) linked to a website whose name suggests it is an individuals personal site (http:// www.kims-website.info), although it appears in fact to be a commercial site. On the other hand, such networks are also being used for public health purposes, including promoting messages about the quality use of medicines. YouTube also includes, for example, a US Food and Drug Administration (FDA) video discussing potential adverse effects of varenicline.(7) Even when listings are clearly commercials, as with a bizarre video on YouTube promoting a new medicine for insomnia, ramelteon, it is not necessarily clear who is responsible for posting them. The video features an insomniac chatting with Abraham Lincoln and a talking beaver over a chess board. These characters also appear in a direct-to-consumer television advertising campaign in the USA. The video was submitted to YouTube in 2006 by lewisusauk, who said: New Rozerem Ad Campaign. Possibly the best prescription drug ad since the FDA relaxed the rules on drug advertising. According to a pharmaceutical marketing blog by John Mack (http://pharmamkting.blogspot.com), lewisusauk is a sock puppet a false identity through which a member of an internet community speaks while pretending not to, like a puppeteer manipulating a hand puppet. Apart from disseminating company-generated content, social networking sites also offer opportunities for companies to insert themselves anonymously into conversations between site users through postings and comments on blogs. John Mack says some of the postings about the ramelteon video on YouTube smack of this practice, and are attempting to hijack the conversation by submitting commercial messages (that is advertisements) disguised as genuine comments from ordinary citizens. Meanwhile, in the Netherlands, an industry-driven campaign conducted via Hyves (a Dutch equivalent of Face book) gathered more than 80,000 signatures in only three weeks for a petition aimed at influencing decisions about funding for human papillomavirus vaccines. According to Dr Ruud Coolen van Brakel, 68

6. Viral marketing and social networking sites

Social networking sites such as YouTube and Face book have been successfully exploited by many consumer product companies for viral marketing campaigns. These campaigns are so named because the transmission of a marketing message through the networks is seen as analogous to the spread of a viral infection in a population. It can be extremely difficult to identify who is responsible for content spread through such networks, and it is not clear how widely the pharmaceutical industry is using them. A recent search for Champix on YouTube (accessed 12 November 2008) identified 46 videos, many of which appeared to be of ordinary

Director of the Dutch Institute for the Proper Use of Medicine, it was a very effective way to create public awareness and commitment to a commercial cause disguised as a public health issue. Pharmaceutical companies are also seeking to capitalize on medical social networking sites. Pfizer, for example, is reportedly collaborating with Sermo Inc, a web venture based in Cambridge USA, where tens of thousands of doctors discuss diagnostic and treatment issues in anonymous postings. The collaboration allows Pfizers doctors to ask questions and respond to posts. Members can also rank postings, which will give insights likely to help the companys development of marketing messages. Sermo is said to be in talks with other companies as well. The site earns money by letting clients such as hedge funds monitor doctors anonymous conversations and thus gain insight into, say, the popularity of certain treatments. Sermo rewards physicians whose input is highly ranked by other members and plans to offer to pay doctors for participating in its clients surveys.(8),(9)

Natural Search or Organic Search. The other being Paid Search related. According to researcher, there are approximately eight hundred million people who access the internet. Out of them, approximately 86% people search for their information via internet search engines. The same researches say that the majority of those seeking search engine help for getting information will only look at the first two or three pages listed by the search engine. So, you want your website as high as possible. The best way that you can achieve a high ranking is by an insistent search engine marketing campaign. This is the better way to find a piece of that eight hundred million people On the Internet, whenever somebody wants to find something, they use Search Engines. Search Engine Marketing is quick becoming the strategic choice for companies who want to reach a global audience 24 hours a day, 7 days a week, either for free or for as little as USD $0.05 per visitor. As the Internet becomes more and more a part of our everyday life, the greater their role becomes in helping businesses connect with their customers at that crucial point in their buying decision process. Right now, there are almost certainly people needs potential customers who are looking for whatever products or services you are offering on any or all of the major Search Engines. When potential customers type in the keywords that they are searching for and press that Search button, do they find you or your competitors instead?

7. Search Engine Marketing

Search Engine Marketing referred to as Search Marketing or SEM, is fast up-and-coming as a great online client achievement feed. A lot of companies are now attracting Search Engine Marketing very acutely because, it has a unbelievable return on investment(ROI) and has incredible potential for

Lead generation Increased sales revenue. Greater brand attentiveness and Better corporate visibility

8. Regulation
The Medicines Australia Code of Conduct attempts to regulate the promotion of prescription medicines on the internet. However, it is difficult to police the anonymous marketing of drugs on blogs and forums, or to regulate consumers access to information from countries where pharmaceutical marketing may be less regulated than in Australia.

Search Engine Marketing is about making sure that your web site appears on the top 20 of search results every time potential customers search for whatever products and/or services that you offer on any of the major Search Engines including Google, Yahoo and MSN which collectively accounts for over 90% of all Search Engine originating traffic. SEM is actually a merger of two core techniques. One is Search Engine Optimization, also known as SEO or 69

9. Conclusion
The ongoing development of internet-related technologies is likely to provide pharmaceutical

manufacturers with further opportunities to influence consumer expectations of health care and prescribing practices. It is also providing new opportunities for those concerned with the quality use of medicines and evidence-based education.(10) Much can be gained from constructive engagement with the world wide web, and 21st century doctors also need to understand its use as a marketing tool.

LN, Hiller JE. Surfing, self-medicating and safety: buying non-prescription and complementary medicines via the internet. Qual Saf Health Care 2003;12:88-92. 6. Armstrong K, Schwartz JS, Asch DA. Direct sale of sildenafil (Viagra) to consumers over the Internet. N Engl J Med 1999;341:1389-92. 7. Food and Drug Administration. Patient safety news: New safety warnings about Chantix [video]. www.youtube.com/ watch?v=ep3U0SVfpW4 [cited 2008 Nov 18] 8. Pfizer becomes latest to partner with fastgrowing online doctors forum Sermo. The Age (Melbourne). 2007 Oct 15. http:// healthyskepticism.org/library/2007.php Go to HSL12469 [cited 2008 Nov 18] 9. Johnson A. Pfizer-doctors web pact may get looks. The Wall Street Journal. 2007 Oct 15. http://healthyskepticism.org/library/2007.php Go to HSL12470 [cited 2008 Nov 18] 10. Boulos MN, Maramba I, Wheeler S. Wikis, blogs and podcasts: a new generation of Webbased tools for virtual collaborative clinical practice and education. BMC Med Educ 2006;6:41. www.biomedcentral.com/14726920/6/41 [cited 2008 Nov 18]

10. References
1. Dogramatzis D. Pharmaceutical marketing: a practical guide. Englewood (CO): Interpharm Press; 2002. 2. Heutschi R, Legner C, Schiesser A, Barak V, sterle H. Potential benefits and challenges of e-detailing in Europe. J Med Market 2003;3:263-73. 3. Bates AK. Conference Insights: Online marketing and eDetailing: in-depth report from an eyeforpharma conference. J Med Market 2006;6:298-300. [More detailed version available at www.keywordpharma. com] 4. Lerer L. E-business in the pharmaceutical industry. J Med Market 2002;3:69-73. 5. Bessell TL, Anderson JN, Silagy CA, Sansom

70

Emerging trends in the life style of apparel consumers in India

A . Ram Mohan
Senior faculty, Department of Management Studies, K S Rangasamy College of Arts and science, Tiruchengode

Dr. R. Krishnaraj, MBA, PGDMM, Ph.D. Asst. Professor & Head General Management, SRM School of Management, Kattankulathur 1. Introduction
In the Global business environment, India is considered as a fast growing economy. This paper analyses the changing life style of apparel consumers in India. This paper also deals with the increasing buying power, spending behavior, dominance of fashion, influence of celebrity and media, impulsive buying and online buying.

2. The increasing buying power of Indian consumers

By the end of this decade, Indias income demographics are going to be unrecognizable. These could translate into an enormous buying power for luxury consumption. We are able to feel the emergence of new market. We are able to see that growing number of Indians are enjoying unprecedented levels of affluence. The proportion of disposable income for spending is also found to be increasing significantly.

Table 1 : Mapping Indias Income classes

The Classes Rich (Rs.215,000 +) Benefit Maximizers Own Cars, PCs Consuming (Rs. 45,000-215,000) Climbers (Rs. 22,000-45,000) Cash Constrained Benefit Seekers Aspirants (Rs. 16,000-22,000) New Entrants Destitutes (Less than Rs. 16,000) 1994-95 1 29 48 48 35 1999-2000 3 55 66 32 24 2005-06 6 75 78 33 17

Source: NCAERs MISH Report, as reported in 2003-04 BW Marketing White book

Table 2: Distrbution of Income Classes among Urban Households (%)

Income Low Middle High 1989-90 37.1 59.1 3.8 1992-93 38.4 56.7 4.9 1994-95 33.6 60.4 6.0 1999-2000 15.9 69.1 15.0

Source: NCAERs MISH Report, as reported in 2003-04 BW Marketing White book

Table 3: Urban Indias Income Classes by Size ( All figures in million)

Income Classes The very rich The consuming class The climbers The aspirants The destitute 1995-1996 0.8 16.6 16.8 7.1 5.3 2001-2002 1.9 26.5 17.4 9.9 2.7 2006-2007 4.0 40.8 13.7 0.7 0.9

Source: NCAERs MISH Report, as reported in 2003-04 BW Marketing White book

71

Table 4: Urban Classification Based on Income Class and number of Families

Consumer Classification Income Class (in Rs. 000) Number of Families (in 000) 3212 1122 454 103 53 Growth Rate (in %) 17.50 19.40 21.30 23.40 25.90

Strivers 500-1,000 Near rich 1,000-2,000 Clear rich 2,000-5,000 Sheer rich 5,000-10,000 Super rich 10,000 + Note: Income figures per annum at 2001-2002 prices. Source: National council for Applied Economic research, India Economists have explained this phenomenon as; the decisions on how much to save and spend depend on expectation of life time income and not on annual income. This is here wealth influences. Consumers who have substantial wealth like financial assets, real estate, etc. are spending despite temporary variations in their annual income. In the future it is expected that the income of the household will increase and thus will have a positive effect on the industry as a whole. Especially, the rich category, which is expected to reach 6 million households in 2007 from 1 million in 1995, will help the niche industry to grow. Also the lower income group will decrease to 17 million households by 2007 from 35 million in 1995. It is also expected that the total households will increase by around 81 million in high income groups during the same period. The households in the low income groups are found to be reducing significantly. This will increase the market potential for the organized retailing in the apparel sector across all income segments.

as the key link between buyer and seller. Studying the demographic shift by 2010 as projected by the Merrill Lynch, there is considerable increase in population in the age group of 20-34 years, which constitutes the major segment of population. Also analyzing the spending behavior in the personal grooming products across different age groups, the age group above 35 years are the major contributors to the apparel segment. We also see from the report that the consumers spending have increased from 6.6% in 2002 to 7% in 2003. Thus we can conclude that there is a huge potential in the future for apparel retailing.

4. Demand for ready-made garments in India: Past & Future

3. The changing spending behavior of consumers

Indias population is around 1170 millions, as on July, 2009. Considering the change of consumer preferences over time, India appears to be a promising market for apparels, with vast potential. Consumer markets are witnessing change at a rapid pace not seen before. Apparel markets also offer new opportunities and challenges. This can be attributed to dramatic shifts in the buying behavior, growing urbanization, emergence of the service sector, changing trends or lifestyle, and most prominently, the increasing power of retailers 72

Year Rs. Billion 2007-08 1162 2008-09 1313 2009-10 1490 2010-11 1676 2011-12 1860 2012-13 2055 2013-14 2270 2014-15 2509 2019-20 4133 (Source: 2004, Cygnus Business Consulting & Research) The demand for ready-made garments is expected to increase nearly 4 times between 2007 and 2020. 5. Ready-made garments: Market growth Period Per cent 2001-02 to 2006-07 11.6 2006-07 to 2011-12 12.5 2011-12 to 2019-20 10.5 (Source: 2004, Cygnus Business Consulting & Research)

rates in India

The market growth rate is predicted to be steady. Ready-made garments: Market structure in India Segment Share (%) Organised (Branded) 25 Informal 75 (Source: 2004, Cygnus Business Consulting & Research) Branded ready-made garments contribute to 25% of the total market.

when she starts selecting her office wear at the retail outlet. Comfort comes second, followed by exclusivity, feminine touch and glamorous looks in the order. So, the garment purchase pattern among Indian women is very much in a stage of transformation. Price as an overriding factor is diminishing. In the garment they look for fit, style and fabric. They want the garment to provide them elegance, comfort and exclusivity (2004, Cygnus Business Consulting & Research).

4. Factors influencing choices of men apparels

Fabrics and textures are found to be the most important factors driving sales of mens shirts; overall looks of the shirt mattered next, followed by pricing and fits in the order (2004, Cygnus Business Consulting & Research).

6. Increase in fashion consciousness

Undergraduate students are very significant in India in terms of both magnitude and spending capacity. The 20-25 million Indian teen to early 20s middle class has extensive spending power and is an important market segment (Bansal, 2004). The most important items purchased by young people are clothes. Clothing purchases are the biggest expenditure in a young persons budget (Sarikisian, Miller, 2003) and more than 85 percent of teenagers have a say in buying decisions of clothes (Tootelian and Windeshausen, 1976). It is important to study clothing purchase behavior of teenagers and youth not only because clothes are the frequently purchased item by them but also because they become trend setters and opinion leaders for dress and living styles (Axford, 1970). Hence over 90 percent of clothing manufacturers target the youth group of 15 to 24 years (Seo and Hathcote, 2001). The youth market is significant to Indian marketers not only because of the size and spending potential but also because they are the trendsetters for the rest of the population. According to Paretos rule, 80 percent of the purchase or usage of a product can be attributed to 20 percent of the population. There is a need to understand their psychographics so that it becomes easy for the marketer to reach out to them or to target and position themselves more appropriately for them. Product designs and communication strategies are considered as vital in fashion business. In he light of the recent view that homogeneity of global youth consumption practices is misconstrued and glocal structural commonalities are manifested in diverse youth culture across nations (Kjeldgaard and Askegaard, 2006) which implies that what is true of youth of USA might not be true for youth of India or 73

5. Factors influencing choices of women apparels

Maximum Indian working women across all age groups prefer to wear Ethnic Salwar-Kameez (34.3 per cent) at the work place, that too tailor-stitched. But the branded offerings are not far behind. Amongst the youngest group of working women, aged 21-25 years formal shirt with trousers emerges as the most widely used dress. The age factor clearly appears to have a positive impact on fashion lifestyles of working women. Formal shirt with trousers is the most widely used office wear among women in the 36-40 age group as well. Format shirts with trousers (28 per cent) are the second most widely used work wear across all age groups except for the age group of above 40years where the women prefer mostly saris. Then comes Indo-Western Kurta (10 per cent) followed by formal shirt with jeans (6.9 per cent), T-shirt with jeans (6.2 per cent) and finally sari (5 per cent). About 72 per cent of the working women had more than 5 sets of salwar-kameez (which includes chridars) in their wardrobe; T-shirts and formal shirts were also plentiful with 66.7 per cent and 91.6 per cent of working women having five or more pieces of these respectively. Saris, trousers and jeans were the other well-stocked items. Now when it comes to liking, women go for the apparel that gives them flattered figure whereas, men go for comfort. Dignified looks emerges as the top consideration on the back of the Indian womans mind

Brazil. Traditional demographic variables like income, education or gender can not identify the complete characteristics of different markets; (Solomon, 2002) because consumers in the same demographic group have very different psychographic make-ups (lifestyles). Generally it has been felt that psychographic or life-style traits should be more directly related to acquisition, use and disposition of goods and services than standard personality traits (Jacoby, 1976). Values affect attitude, which in turn affect behavior (Henry, 1976). Psychological variables, like innovativeness are much more strongly associated with frequent clothing purchase than demographic variables. Frequent clothing buyers are also more exposed to fashion-oriented media and innovative towards new fashion. It would be wise for a clothing company to identify a fashion conscious segment. Youth in general place more emphasis on their appearance than older people and thus clothing occupies a more vital position in their life-style. These young consumers are more likely to wear casual wears. The most frequent buyers of casual wear are found to be fashion conscious. In conclusion it is clear that Fashion-consciousness and Innovativeness are the relevant psychographic traits that predict clothing purchase behavior (Goldsmith. 2002). Innovativeness could be explained as the consumers like to try new and different things. They like trying new things. Their life is determined by their own actions. They enjoy making their own decisions. They like the challenge of doing something they have never done before. Fashion-consciousness could be explained as the consumers want to be considered fashionable. They dress more fashionably than most people. They follow the latest trends and fashions. They like to dress in the latest fashions (Sudas Roy & P. Goswami, 2007). Excitement, respect, warmth, and fun are considered as inner-directed values. Self-respect, security, 74

fulfillment, belonging and accomplishment are described as outer-directed values.

7. Dominance of fashion in apparel business

To the producer, the primary function of fashion is the creation of product obsolescence, i.e. Obsolescence of desirability. Fashion is used as a competitive device by the manufacturer. It serves to differentiate the product of a particular firm and results in non-price rather than price competition. Fashion is used for successful creation of demand for the fashion products. Apparel industry is characterized by perfect competition, where the number of sellers is so large that the actions of one seller have little impact on his competitors. Brand names, which have been used by firms in other industries to maintain their market share, have been less successful in the apparel industry. As a result of the dominance of fashion in apparel, we have a competitive, uncertain, and easy to enter industry in which technological advances have been relatively slow. Thus fashion inflates the price; the consumer pays for the fashion. Finally the dominance of fashion may lead to negligence of performance characteristics by both producers and consumers. Such characteristics, however, determine to a considerable extent consumer satisfaction with the garment during its wear-life. Failures related to durability, appearance retention and ease of care have been cited by consumers often as major sources of dissatisfaction. One recognized benefit is the role of fashion in satisfying the consumers desire for change. In apparel business consumer tastes and preferences are changing continuously. The apparels are of semi-durable nature. Fashion garments are relatively inexpensive. But the cost of product differentiation is usually high (Rachel Dardis). In the market place, the consumers have shown willingness to pay for such product differentiation. We can not over look the limitations like, many low income consumers would find it difficult to participate in the fashion cycle. Another question that arises in our mind is whether fashion is a class phenomenon or a mass phenomenon.

8. Leading fashion brands marketed in India Arrow Allen Solley Van Heusen Louis Phillipe Park Avenue Zodiac Lee Excalibur Flying Machine Ruf n Tuf Newport Peter England Levis Straus Stencil Rod Lever Raymonds Vimal John Miller Playboy Charagdin Double Bull Weekender VIP Lacoste Benetton Tussady Scottish Weave Scabal Old Trafford San Frisco Byford Tamarind Rivolta Killer Lee Cooper Jordachee Shotgun Hoffman Dare Teseas Best Waist Oxemberg Kilroy Sunnex Tommy Hifigur Evisu Diesel Gucci Christion-Dior

Source: Textile Fibres and Products, TX0501, Garments

9. Fast fashion
According to Mintel (2007) the exceptional growth of fast-fashion retailers can be attributed to high impulse buying, an increase in sourcing from lowcost countries and a change in consumer attitude. The appeal of newness remains very alluring to teens and Gen-Y consumers, looking for something different to wear while socializing. Such projection suggest that fast fashion will remain buoyant for the foreseeable future, thanks to its attraction to the young and fashionhungry, as well as its practical appeal to the lower socioeconomic groups. In order to satisfy the consumers apparel marketers are successfully combining Justin-time practice and Quick-response strategy along with Fast-fashion.

of new trends and are sources of inspiration for other consumers when adopting and buying latest styles. Amongst adolescents aged 12-17, there are more females in the innovators and early adopters categories and more males in the late majority and laggards categories. Fashion innovators are well aware of their appearance. They were found to have a unique self-image. They are passionate about dressing style and physical appearance. They tend to shop at the reputed retail stores. They love socializing activities. They have colorful entertaining activities. They take certain amount of risk also.

11. Influence of celebrity and media

Recent research by Birtwistle and Moore (2006) indicates that fashion innovators and early adopters, compared with followers are heavily influenced by fashion media. They are also influenced by in their purchase habits by celebrities.

10. Buying behavior of Fashion Innovators

Research by Rogers (1983) indicates 2.5% are innovators, 13.5% are early adopters, 34% are early majority, 34% are late majority and 16% are laggards. The marketing and apparel literatures are unanimous in reporting that fashion leaders tend in general to be young consumers. When compared with other consumer groups, fashion leaders, or innovators, deem fashion to be of importance to their lifestyles. They have strong opinions about taste, are advocates 75

12. Impulsive buying

When the buyer is influenced by emotional attraction (irrational) rather than rational judgments (such as price) it is called as impulsive buying. According to Rook and

Fisher (1995), impulsiveness is a consumers tendency to buy spontaneously, unreflectively, immediately and kinetically. In impulsive purchases social roles and interactions dominate over the buyers financial capabilities. Fashion oriented impulsive buying occurs as a customer sees the product in an innovative style and decides to buy immediately. Fashion innovators especially male college students are found to be impulsive.

are realigning their activities towards meeting specific customer needs, radically changing business models and exploring new ways of collaboration between buyers and sellers.

15. References
1. Bijapurkar,R (2003), The New Improved Indian Consumer, Businessworld, December. 2. Goswami.P,(2006), Media usage behavior of the college-goers of Kolkata in the era of Globalization: a psychographic study, ICFAI Journal of Marketing Management, No.3. 3. Lall.R.R, (2006), Young India among happiest, The Times of India, November 21. 4. Kim.H.S (2005), Consumer profiles of apparel product involvement and values, Journal of Fashion Marketing and Management, Vol.9, No.2. 5. Sheth Jagdish.N, Bruce I Newman and Babara L.Gross (1991). Why we buy: A theory of consumption values, Journal of Business Research, Vol.22, No.1. 6. National Council for Applied economic Research, India, MISH Report as reported in 2003-04 BW Marketing White Book. 7. Sudas Roy and Paromita Goswami, (2007), Structural equation modeling of valuepsychographic trait-clothing purchase behavior: a study on the urban college-goers of India, Vol.8, No.4. 8. Krishna Das Gupta, Changing Paradigms of luxury consumption in India: A conceptual model, South Asian Journal of Management, Vol.16, No.4. 9. Rachel Dardis, Fashion behavior: A consumerist view, University of Maryland, Advances in Consumer Research. 10. FangWan, Seounmi Youn, Tammy Fang, (2001), Passionate surfers in image-driven consumer culture: Fashion-conscious, appearance-savvy people and their way of life, Advances in Consumer research, Vol.28. 11. Louise R.Morgan and Grete Birtwistle,(2009), An investigation of young fashion consumers disposal habits, International Journal of Consumer Studies, 33. 76

13. Online buying

Consumers who already buy from catalogues would respond positively to online purchases. 46% of online buyers are willing to pay more; 57% stated that Internet shopping saves time (Nua, 2000). Online buyers of clothing regard self esteem and personal style as more important factors than price. One limitation of online fashion retailing would be the touch and feel factor (Enhmann, 2000).

14. Conclusion
Frequent cloth shoppers would place more emphasis on outer-directed values than inner directed values. Outerdirected values significantly influence psychographic traits like fashion-consciousness and innovativeness, which in turn positively influence purchase frequency behavior. The marketer should formulate his product and communication strategies in such a way that it appeals to the fashion-conscious and innovative consumers. For segmenting, targeting and positioning this identification effort would be useful. In the context of marketing communication with frequent clothes purchasers, the marketer should also emphasize outerdirected values rather than inner-directed values (Sudas Roy & P.Goswami, 2007). Clothes purchased for socializing are only worn a few times; meanwhile, work garments are expected to be kept for longer. Fashion followers are more concerned with whether clothing is practical and could be worn again the following season. Intense competition, shifting customer loyalties, aggressive marketing and the presence of global players are some of the salient features that have resulted in the change of industry outlook recently. Companies

12. Ian Phau and Chang-Chin Lo, (2004), Profiling fashion innovators: A study of selfconcept, impulse buying and Internet purchase intent, Journal of Fashion Marketing and Management, Vol.8, No.4. 13. Goldsmith.R.E, (2002), Some personality traits of frequent clothing buyers, Journal of Fashion Marketing and Management, Vol.6, No.3. 14. Nigel Hill & Jim Alexander, (2003), Handbook for measuring customer satisfaction and loyalty. 15. Paul Peter.J & Jerry C.Olson, (2007), Consumer behavior & Marketing strategy, 7th edition. 16. Birtwistle.G & Moore.C.M, (2007), Fashion clothing where does it all end up?, International Journal of Retail & Distribution Management, 35. 17. Assael.H, (1987), Low involvement decisionmaking, Consumer Behavior and Marketing Action, 3rd Ed. 18. Evans.M, (1989), Consumer behavior towards fashion, European Journal of Marketing, Vol.23, No.7. 19. Del I.Hawkins, Roger J.Best, Kenneth A.Coney, Amit Mookerjee, 2007, Consumer Behavior, 5th Edition. 20. Paul Greenberg, (2004), CRM at the speed of light: Essential customer strategies for the 21st century, 3rd edition 21. Kotlet.P, Keller.K.L, Koshy.A, & Jha.M, Marketing Management, 13th edition. 22. Cygnus Business Consulting & Research, (Apr. 2004), Apparel Retailing: Industry Insight. 23. Intecos Ciers , Market forecasts and Indicators: Projections 2010-2020. 24. Bansal.R, (2004), The currency of cool, Business world. 25. Axford.C.B, (1970), How banks can relate

their things to youth,Burroughs Clearing House, Vol.54. 26. Henry.W.A, (1976), Cultural values do correlate with consumer behavior, Journal of Marketing Research, Vol.13, No.2. 27. Jacoby.J, (1976), Consumer psychology: an octannium, in Rosenweig.M.R, and Porter.L.W, (Eds), Annual Review of Psychology, Annual Review, Palo Alto, CA. 28. Kjeldgaard.D, & Askegaard.S, (2006), The glocalization of youth culture: the glocal youth segment as structures of common difference, Journal of Consumer Research, Vol.33. 29. Sarikisian-Miller.N, (2003), TRU, Womens Wear Daily, Vol.8, April. 30. Seo.J.I, & Hathcote.J.M, (2001), Casual wear shopping behavior of college men in Georgia, USA, Journal of Fashion Marketing and Management, Vol.5, No.3. 31. Solomon.M.R, (2002), Consumer Behavior Buying, Having and Being,Prentice-Hall of India, New Delhi. 32. Tootelian.D.H, & Windeshausen.N.H, (1976), The teen-age market: a comparative analysis, 1964-1974, Journal of Retailing, Vol.52, No.2. 33. Mintel, (2007), Clothing Retailing, Mintel Intelligence, London. 34. Rogers.E.M, (1983), Diffusion of rd Innovations, 3 edn. The Free Press, New York. 35. Ehmann.C, (2000), Picture imperfect, available at http://retailindustry.about.com/cs/ apparel_concepts/ (30/11/2010) 36. Nua, (2000), Researchers divided on price and branding, available at: www.coams.com/ NewHome/theoutlook/0004/inthenews.html 37. Rook.D & Fisher.J.R, (1995), Normative influences on impulsive buying behavior, in Bearden.W & Netemeyer.G.R (Eds), Handbook of Marketing Scales, 2nd edn.

77

Factors Influencing Retail Investors Attitude Towards Investing in Equity Stocks: A Factor Analysis
Research Scholar, Department of Commerce and Financial Studies , Bharathidasan University, Tiruchirappalli Associate Professor and Head , Department of Commerce and Financial Studies, Bharathidasan University, Tiruchirappalli

E. Bennet, Ph.D Dr. M. Selvam

1.Introduction
Research in behavioural finance is comparatively less in India, when compared to other foreign countries. Within behavioural finance it is assumed that information structure and the characteristics of market participants systematically influence individuals investment decisions as well as market outcomes. The behavioral finance mainly focuses on how investors interpret and act on micro and macro information to make investment decisions. Behavioural finance is defined by Shleifer, A (1999), a rapidly growing area that deals with the influence of Psychology on the behavior of financial practitioners. The globalization of financial markets has been increasing the retail investors community over the past two decades by providing a wide variety of market and investment options. However, it makes much more complex in their investment decisions process. The retail investors consider their investment needs, goals, objectives and constraints in making investment decisions, but it is not possible to make a successful investment decision at all times. Their attitude is influenced by various factors such as dividend, get rich quickly strategy, stories of successful investors, online trading, investor awareness programme, experience of other successful investors etc. A better understanding of behavioral processes and outcomes is important for financial planners because an understanding of how investors generally respond to market movements should help investment advisors in devising appropriate asset allocation strategies for clients. Hussein et al (2006). The various studies have been conducted in other countries but to the best of the researchers knowledge, the researcher could not find any similar study in Tamil Nadu. Hence this study attempts to find out the factors influencing investors attitude towards investing in equity stocks. 78

2. Review of Literature In this paper a comprehensive literature review about behavioural finance has been carried out. Peter Roger Eiving (1970) carried out a study to identify those factors which motivate (or) Guide the investment decisions of the common stock investors. The study identified the factors (i) Income from dividends (ii) rapid growth (iii) purposeful investment as a protective outlet of savings (iv) Professional investment management. Shanmugam (1990) studied a group of 90 investors to examine the factors affecting investment decision. The study focused its analysis on the investment objective and the extent of awareness on factors affecting investment decision. The study found that the investors are high risk takers. Investors possessed adequate knowledge of government regulations, monetary and fiscal policy. Warren, et. al., (1996) attempted to develop lifestyle and demographic profiles of investors based on the value and types of investment holding. Krishnan and Booker (2002) analyzed the factors influencing the decisions of investor who basically used analysts recommendations to arrive at a shortterm decision to hold or to sell a stock. Merikas et. al., (2003) analyzed the factors influencing Greek investor behaviour on the Athens Stock Exchange. The results indicated that individuals base their stock purchase decision on economic criteria combined with diverse other variables. Hussein A Hassan (2006) identified the factors influencing the UAE investor behaviour. Six factors were found the most influencing factors on the UAE investor behaviour. The most influencing factors were expected corporate earnings, get rich quick, past performance of the firms stock. On the other hand few factors were found to be least influencing like expected losses in international financial markets, family member opinion, gut feeling on the economy. Kannadhasan. M (2006) examined the factors that influence the retail investors decision in investing. The decision of the

retail investors are based on their various dependent variables viz., Gender, age, marital status, educational level, income level, awareness, preference and risk bearing capacity. Glaser, et. al., (2009) tested whether individual investor sentiment was related to daily stock returns by using vector auto regressive models and Granger causality tests. They found out that there exists a mutual influence between sentiment and stock market returns, but only in the very short-run (one and two trading days). The returns have a negative influence on sentiment, while the influence of sentiment on returns is positive for the next trading day. The influence of stock market returns on sentiment is stronger than vice versa. From the above review, it is clear that there are some differences among the retail investors on the factors that influence investors attitude towards investing in equity stocks.

for the study. Totally ten important places in Tamil Nadu were identified (Chennai, Coimbatore, Trichy, Madurai, Karaikudi, Kumbakonam, Hosur, Tirunelveli, Erode and Tiruppur). From each identified places two approved stock brokers were chosen and four investors were contacted with the help of brokers. However, on a detailed scrutiny of the filled in questionnaires, it was found that 3 of them had given incomplete information and hence the responses could not be used for further analysis. Thus, this study is based on 157 selected respondents from the retail investors. 4. Variables Participants were asked to evaluate the importance of 26 variables, identified from the literature and personal interviews as potentially influencing the value of equity shares, by making seven choices for every one of the 26 variables: strongly agree for the variables which had a strong influence on the factors considered to be influencing equity shares and strongly disagree for the variables that does not have much influence on the factors considered to be influencing equity shares. 5. Statistical Tools: The data collected have been analyzed though Descriptive Statistics and Factor analysis. 6. Results And Discussions Factor Analysis: Kaiser-Meyer-Olkin Measure of Sampling Adequacy is employed to examine the appropriateness of the data for factor analysis. High values (between 0.5 and 1) indicate that the factor analysis is appropriate. Further, Bartletts Test of Sphericity is a test statistics used to examine the hypothesis that the variables are uncorrelated in the population. From table 1 it is clear that the data used for the study is conducive for performance factor analysis. It is also evident from Table 1 that the variables are significantly related to the population.

3. Methodology
3.1 Objective of the Study To identify the various factors that influences the retail investors attitude towards investing in equity stock markets. 3.2 Sources of Data: The research design for the study is descriptive in nature. The researcher depended heavily on primary data. The required data were collected from the Retail Investors living in Tamil Nadu. The study was conducted during the period between May and July 2010 through a structured questionnaire. 3.3 Sampling Size and Procedure: The sample size covered 160 retail investors who were spread through ten different places in Tamil Nadu. The important places where large investors are available are identified for this study using purposive sampling method. In order to collect information from the retail investors, the sampling design has been carefully decided and properly chosen

Table 1: KMO and Bartletts Test

Variable Factors influencing investors attitude Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.725 79 Bartletts Test of Sphericity Approx. Chi-Square 2.159 df 325 Sig. 0.000 Significant Result

Table 2 presents the results of factor analysis of the sample data as well as the suggested label for each factor. Factor loading for each item exceeded the minimum threshold level of 0.40 (Kim and Mueller, 1978; Noursis 1985). Table 3 shows the mean value and the standard deviation of each statement that could possibly influence the attitude of the retail investors investing in equity stocks.

The average value of the five top highly influential factors according to the sample retail investors were Investors tolerance for risk with a mean value of 5.53 (SD 1.201), Strength of the Indian economy with a mean value of 5.49 (SD 1.217), Media focus on the stock market with a mean value of 5.46 (SD 1.443), political stability with the same mean value of 5.46 (SD 1.313) and finally Government policy towards business with a mean level at fifth position of 5.43 (SD 1.167).

Table 2: Results of Factor analysis for profitability indicators

Factor 1: Item Cost cutting by companies Technological advancements at company level Investors tolerance for risk Mergers and acquisitions in the corporate sector Performance of Internet stocks Variance explained (%) Eigen Value Cronbachs Alpha Factor 2: Item Total variance of factors influencing retail investors towards investing in equity market explained by two factors = 70.743 Satisfactions with the investments in equity stocks Availability of corporate research Government policies towards business Rate of Inflation Variance explained (%) Eigen Value Cronbachs Alpha Factor 3: Item Performance of the Indian Stock Market Confidence level of institutional investors Greed among investors Strength of the financial sector Media focus on the stock market Variance explained (%) Eigen Value Cronbachs Alpha 80 0.562 0.775 0.656 0.607 0.586 9.793 2.017 0.814 Loading 0.655 0.589 .596 10.824 2.384 0.733 Loading 0.782 0.738 0.814 0.689 0.520 11.838 7.587 0.824

Factor 4: Item Strength of Indian economy vs other countries Access to information Access to tools and technology Low cost of executing trade Variance explained (%) Eigen Value Cronbachs Alpha Factor 5: Item Total variance of factors influencing retail investors towards investing in equity market explained by two factors = 70.743 Stories of successful investor Get rich quickly philosophy Price to earning ratio Variance explained (%) Eigen Value Cronbachs Alpha Factor 6: Item Online trading Political Stability Variance explained (%) Eigen Value Cronbachs Alpha Factor 7: Item Information available on the internet Perception of easy money among investors 0.679 0.729 0.740 0.714 8.368 1.185 0.560 0.806 0.806 0.620 8.941 1.400 0.759 0.537 0.776 0.675 0.599 9.598 1.685 0.780

Variance explained (%) Eigen Value Cronbachs Alpha 81

6.462 1.112 0.759

Table : 3 Descriptive Statistics

Mean My satisfaction with the Investments Dividend Availability of corporate research Government policy towards business Rate of Inflation Stories of successful investors Get rich quick philosophy Price to earnings ratio Information available on the internet Perception of easy money among investors Strength of the Indian economy Access to information Access to tools and technology Low cost of executing a trade Performance of the Indian Stock Market Confidence level of institution investors Greed among investors Strength of the financial sector Media focus on the stock market online trading cost cutting by companies Technological advancements at company level Investors tolerance for risk Mergers and acquisitions in the corporate sector Performance of Internet stocks Political stability The Sample retail investors also felt that the following four factors were given lowest priority or which had low influence on the attitude of the retail investors investing in equity stocks. Stories of successful investors was considered to be the lowest influencing factors among 82 5.33 5.27 5.19 5.43 5.38 4.85 4.94 5.31 4.95 5.15 5.49 5.38 5.42 5.25 5.36 5.38 5.23 5.41 5.46 5.29 4.99 5.29 5.53 5.29 5.39 5.46 Std. Deviation 1.303 1.509 1.321 1.167 1.168 1.610 1.731 1.320 1.353 1.424 1.217 1.258 1.331 1.399 1.167 1.393 1.572 1.524 1.443 1.241 1.403 1.237 1.201 1.520 1.435 1.313

the four with a average mean value of 4.85 (SD 1.610), Get rich quick philosophy with a mean value of 4.94 (SD 1.731), Information available on internet had a mean value of 4.94 (SD 1.353), cost cutting by companies had a mean value of 4.99 (SD 1.403).

7. Conclusion
It was found out that certain factors were influencing the retail investors attitude towards investing in Equity Stocks. The average value of the five top highly influential factors according to the sample retail investors were Investors tolerance for risk, Strength of the Indian economy, Media focus on the stock market, political stability and finally Government policy towards business. Four factors were given lowest priority or which had low influence on the attitude of the retail investors investing in equity stocks. Stories of successful investors was considered to be the lowest influencing factors among the four, Get rich quick philosophy, Information available on internet, cost cutting by companies.

An empirical study of the UAE Financial Markets, The Business Review, Cambridge; Summer 2006; 5,2 PP 225-232. 4. Kannadhasan. M (2006), Risk Appetite and Attitudes of Retail Investors with Special Reference to Capital Market, The Management Accountant, June 2006, pp 448 453 5. Krishnan, R and Booker, D.M. (2002). Investors Use of Analysts Recommendations, Behaviour Research in Accounting, 14, 129 158. 6. Nagy, R.A and Obenberger, r.w (1994). Factors influencing Investor Behaviour, Financial Analysts Journal, 50, 40, 63-68. 7. Petter Roger Ewing., ( 1970): Motivating Factors Guiding the Common Stock Investor; Dissertation Abstracts International Vol 31, No.5 1970 P-1975A 8. Shanmugam, A Study on Investors Awareness of Investment, 1990. 9. Shleifer, A (1999), Inefficient Markets: An Introduction to Behavioral Finance. Oxford University Press. 10. Warren William C. Robert. E. Stevens and C. William Meconky., ( 1996)., Using Demographic and the Life Style Analysis to Segment Individual Investors., Financial Analyst Journal , Volume xxx pp:74-77

8. References
1. Anna A. Merikas, Greece Andreas G. Merikas, Greece George S. Vozikis, Dev Prasad, (2000), Economic Factors And Individual Investor Behavior: The Case Of The Greek Stock Exchange, Journal of Applied Business Research, Vol 20, No 4,PP 93-97. 2. Glaser, Markus, Schmitz, Philipp and Weber, Martin, Individual Investor Sentiment and Stock Returns - What Do We Learn from Warrant Traders? (October 2, 2009). Available at SSRN: http://ssrn.com/abstract=923526 3. Hussein A. Hassan Al-Tamimi, Factors influencing Individual Investor Behaviour:

83

Impact of Social Media on Global Business

Dr. Sankaran M.Com, M.Phil, PhD,
Associate Professor & Head, Dept. of Commerce, D.B. Jain College, Chennai

T. Ravikumar M.Com,MBA,MHRM,
Research Scholar, School of Commerce & Management, Dravidian University, Kuppam

1. Introduction
Social media is a channel for social interaction, using highly accessible and scalable techniques. Social media uses web-based technologies to turn communication into interactive dialogues. Andreas Kaplan and Michael Haenlein define social media as a group of Internetbased applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content. Businesses also refer to social media as consumergenerated media (CGM). Social media utilization is believed to be a driving force in defining the current time period as the Attention Age. A common thread running through all definitions of social media is a blending of technology and social interaction for the co-creation of value.

2. Accessibility - the means of production for industrial media are typically owned privately or by government; social media tools are generally available to anyone at little or no cost. 3. Usability - industrial media production typically requires specialized skills and training. Most social media does not, or in some cases reinvent skills, so anyone can operate the means of production. 4. Regency - the time lag between communications produced by industrial media can be long (days, weeks, or even months) compared to social media (which can be capable of virtually instantaneous responses; only the participants determine any delay in response). As industrial media are currently adopting social media tools, this feature may well not be distinctive anymore in some time. 5. Permanence - industrial media, once created, cannot be altered (once a magazine article is printed and distributed changes cannot be made to that same article) whereas social media can be altered almost instantaneously by comments or editing. Community media constitute an interesting hybrid of industrial and social media. Though community-owned, some community radios, TV and newspapers are run by professionals and some by amateurs. They use both social and industrial media frameworks. In his 2006 book, The Wealth of Networks: How Social Production Transforms Markets and Freedom, Yochai Benkler analyzed many of these distinctions and their implications in terms of both economics and political liberty. However, Benkler, like many academics, uses the 84

2. Distinction From Industrial Media

People gain information, education, news, etc., by electronic media and print media. Social media are distinct from industrial or traditional media, such as newspapers, television, and film. They are relatively inexpensive and accessible to enable anyone (even private individuals) to publish or access information, compared to industrial media, which generally require significant resources to publish information. One characteristic shared by both social media and industrial media is the capability to reach small or large audiences; for example, either a blog post or a television show may reach zero people or millions of people. The properties that help describe the differences between social media and industrial media depend on the study. Some of these properties are: 1. Reach - both industrial and social media technologies provide scale and enable anyone to reach a global audience.

neologism network economy or network information economy to describe the underlying economic, social, and technological characteristics of what has come to be known as social media. Andrew Keen criticizes social media in his book The Cult of the Amateur, writing, Out of this anarchy, it suddenly became clear that what was governing the infinite monkeys now inputting away on the Internet was the law of digital Darwinism, the survival of the loudest and most opinionated. Under these rules, the only way to intellectually prevail is by infinite filibustering. There are various statistics that account for social media usage and effectiveness for individuals worldwide. Some of the most recent statistics are as follows:

A total of 234 million people age 13 and older in the U.S. used mobile devices in December 2009.

Twitter processed more than one billion tweets in December 2009 and averages almost 40 million tweets per day.

Over 25% of U.S. internet page views occurred at one of the top social networking sites in December 2009, up from 13.8% a year before.

Australia has some of the highest social media usage statistics in the world. In terms of Facebook use Australia ranks highest with almost 9 hours per month from over 9 million users.

Social networking now accounts for 11% of all time spent online in the US.

3. Some of The Big Social Media Network

85

3. Social Media and its Marketing Strategy

1) Listen to conversation - Tap into the online conversations to find out who is talking about you, what they are interested in and where they are saying it. 2) Establish share of voice - There are millions of conversations online every day. When you tap in to the once about your industry what share of voice do you have. 3) Set goal/Benchmark - Use the information and insight you got to set the goals you should pursue in social media. 4) Find Bloggers and communities - You have to know where the conversations and discussions are taking place so you can allocate your resource for best ROI. 5) Identify Influences - What or who influences people has changed dramatically in the last few years that do your customers trust? 6) Develop a content strategy - Success in social media depends on the quality of your quantity its about engaging people. 7) Pick tools - Should you have a facebook page? Should you be on Twitter? 8) Create and Deliver the content - Once you have content strategy bright ideas will naturally flow about what to create, how to deliver this content. 9) Engage and Facilitate conversation - Social media is about a two way flow of conversation. People are no longer willing to be passive. They went to part of the conversation. 10) Measure Results - Having Mountains of data is all very well but what does this mean is a crucial question? Social Media can be measured. 86

4. Social Impacts
Web based social network services make it possible to connect people who share interests and activities across political, economic, and geographic borders. Through e-mail and instant messaging, online communities are created where a gift economy and reciprocal altruism are encouraged through cooperation. Information is particularly suited to gift economy, as information is a non rival good and can be gifted at practically no cost. Facebook and other social networking tools are increasingly the object of scholarly research. Scholars in many fields have begun to investigate the impact of social networking sites, investigating how such sites may play into issues of identity, privacy, social capital, youth culture, and education. Several websites are beginning to tap into the power of the social networking model for philanthropy. Such models provide a means for connecting otherwise fragmented industries and small organizations without the resources to reach a broader audience with interested users. Social networks are providing a different way for individuals to communicate digitally. These communities of hypertexts allow for the sharing of information and ideas, an old concept placed in a digital environment.

5. Four Ways To Measure Social Media

1: Measuring Social Media Exposure: How many people could you have reached with your message? In social media, this measurement is about as reliable as a print magazines circulation, but knowing your potential audience does have value because it represents your potential sales lead pool. Unfortunately, as of the writing of this post, some of these metrics have to be accounted for manually, so youll have to balance the level of effort to track the metrics versus the value youll receive from them to determine their importance to your overall strategy. A good example of where there can be unreliability in social measurement is when isolating unique users for each of your metrics. You want to avoid counting the same person twice in the list below, but realistically its difficult to do.

Exposure is the top of the brand awareness funnel and represents your potential sales lead pool. #2: Measuring Engagement: How many people actually did something with your message? This is one of the most important measurements because it shows how many people actually cared enough about what you had to say to result in some kind of action. Fortunately engagement is fairly easy to measure with simple tools such as Radian 6, Biz360 and Tweet Effect. These metrics highlight who you want to target to retain on social media channels. #3: Measuring Influence This category gets into a bit of a soft space for measurement. Influence is a subjective metric that relies on your companys perspective for definition. Basically, you want to look at whether the engagement metrics

listed above are positive, neutral or negative in sentiment. In other words, did your campaign influence positive vibes toward the brand or did it create bad moot? You can also use automated tools like Twitalyzer, Social Mention, Radian 6 or Scout Labs to make it a little easier, but ALWAYS do a manual check to validate any sentiment results. Influence is generally displayed as a percentage of positive, neutral and negative sentiment, which is then applied in relation to the engagement metrics and to the metrics for reach where applicable. #4: The Lead Generation Funnel After youve measured through the influence portion of the funnel, youre now creeping into where too many companies are starting their measurement efforts: the lead generation funnel. This is where the brand awareness portion of the funnel ends and the traditional ROI-driven action begins.

87

Exposure, influence and engagement represent brand awareness in the measurement funnel. Understanding your reach, engagement and influence through these primary social channels will allow you to define your presence and impact, which can then be applied as a model to other social networks. Now that youve tracked all of this information, how do you make it meaningful? Excel is a great tool to help organize your data. Build yourself a standard dashboard in Excel that highlights the key metrics that matter to the organization. Create a tab for a high-level overview of multiple campaigns, and a tab for each campaign for the time period youre reporting on. Ultimately, you should put the information into the same format that youve used to report on traditional brand awareness campaigns, with social media as just another vehicle in the overall marketing mix.

are good to implement in business because they are low in cost as compared to Television and print media. Social media marketing is not difficult at all. It is something everyone can do with some effort and knowledge. It isnt some secret art form that only experts can master. Unlike other skills, social media has a remarkably low barrier of entry. Everyone is invited to the party. No one is excluded. References 1. Socialnomics: How Social media transforms the way we live and do business, Erik Qualman, Anz Publication, New York, 2009. 2. The Whuffie Factor: Using Power of Social networks to build your Business, Tara Hunt, Mc Milan Publication, 2008. 3. Crowdsourcing: Why the power of crowd is driving the future of the business? : Jeff Howe, 2009. 4. Viral Loop: From facebook to twitter, how todays smart businesses grow themselves? : Adam L. Penenberg, 2009.

Conclusion
In conclusion, social media has proved to be effective channel in global marketing. Social media campaigns

88

Influence of Children Advertisements on Consumer Decision Making

J. N. V. Raghuram, Assistant Professor (Senior) VIT Business School, VIT University, Vellore
School of Management, SRM University, Kattankulathur ,Tamil Nadu, INDIA,

Prof. P. Ravilochanan

1. Introduction
Today the world has become so competitive that in every field, products do require some sought of promotion to make a stand in the market. Days were there when we used to emphasis on the importance of marketing mix, where evaluation on Product feature, price, place and then promotion used to be done. But today marketers are more concentrated on the term promotion. Customers are in a state of confusion in choosing a product, because almost all the companies are coming with more or less the same product features, price and just next to the customers place. Promotion, is a concept where the product is positioned in the minds of customers and done with the help of Ads, hoardings, direct mailing, telephonic, event sponsoring, etc, which are all the various tools used to promote the product depending on the reach to the customers. In fact along with the reach, marketers used to take care of the appeal which really touches the minds of the customers. New types of communication have evolved in the field of marketing for promoting, but none except the TV ads have high impact on the consumer in context to the consumer durables and FMCG products. Advertisements a tool used more to create an impact on the consumers because it really makes a consumer visualize the product and as well makes the consumer to become a character in the ad and be involved. Creating advertisement is now days a very difficult issue as the field of advertisement is involved with increasing talent heads on creativity. Advertising agencies are working hard to create an ad which really positions perfectly in the minds of the consumers. An advertisement is supposed to be in a very short period build ones respect for a company, its supposed to create a feeling of liking for the product and the manufacturer. An

attractive advertisement when directed at adults, in promoting an adult product, tends to aim at building brand loyalty, focusing on product characteristics that are perceived to be of long-term value. But when creating an advertisement for child product the ad has to be updated frequently which enhance on the theme and the characters that garb the attention of a child. Creative advertisement concept is developing on a rapid scale which tells about how a customer looks at an ad and what different tools advertisers should use to attract the consumers. (Mario Pricken, 2008). For business to move in positive direction, both negative and positive methods of advertising are necessary to attract business and to save a business. What type of ad do the customers remember the most and why they do so? And the answers will most likely be the funny ones or the stupid ones even a commercial one complains about still stays in his/her mind! But that is what the ad writers are trying to do, get people to remember their advertisement, with reference to the bottom line is that the person remembers the ad and when making a decision to buy something, that brand name comes to mind first. But this again is good; the entire survival of a company depends on the simple act of buying their product. Advertising may influence consumers in many different ways, but the primary goal of advertising is to increase the probability that consumers exposed to an advertisement will behave or believe as the advertiser wishes. Thus, the ultimate objective of advertising is to sell things persuasively and creatively. The forms that advertising takes and the media in which advertisements appear are as varied as the advertisers themselves and the messages that they wish to deliver. 89

2. Uses of Advertisements
The primary function of an advertisement is to first identify a product and that has to be positioned in the minds of the customer. In the process of position the product has to be differentiated from the other products and make its uniqueness, so that the customer buys that product or remembers that product when the product is displayed in the shop. Apart from differentiation the advertisement should also communicate the attributes and also persuade. Advertisers should struggle hard to find out the best ways of coming out with creativity and make the best ad. A classic example how a mistake done on the production floor can be used for advertisement purpose is, a soap maker at Procter and Gamble left his machine running during his lunch period and returned to find a whipped soap that, when made into bars, floated. The company decided to capitalize on this mistake by advertising Ivory Soap with the phrase It Floats. This characteristic of Ivory Soap served to uniquely identify it and differentiate it from other bars of soap. This how ads took a vital role from promotion and the best tool for promotion. But then of course its just not the concept of what to communicate as in the olden days, but than today, it is all about whom to communicate and who will communicate is more important in advertisement. With these concepts becoming stronger in the ad making process, lot many appeals started coming in the field of Advertisement.

to apply the theories and methods of psychology to its study. Individuals such as Harlow Gale began to conduct experiments designed to determine the power of individual advertisements to attract attention and persuade consumers to buy. First hurdle for an advertiser is to obtain the attention of the consumer. This involves two important actions. First, it is important for the advertiser to know where a communication should be place to increase the odds of reaching a particular type of consumer; this is the media decision. The attention of a consumer who is, in fact, exposed to an advertisement is a significant challenge for advertisers, but at the time advertisers should also take care of the concept like Wear out(Philip Kotler).

5. Information processing by the consumer

Advertisements that are interesting, entertaining, and even irritating can attract attention; however, such advertisements may not result in the consumer attending to or understanding the intended message of the advertiser. It is important when creating the advertisement to understand how consumers think about products and product benefits and to use language that the consumer will understand. Apart from the product, product message should also be the focal point in creating an advertisement. Thats the reason when creating an ad; advertisers should consider the characters and the background very cautiously. The time duration of the ad also will have an impact on the minds of the customers.

3. Role of Advertisements
Advertising became especially important in the second half of the nineteenth century as retailers began to advertise products and prices that would bring customers to their stores. Advertising for patent medicines also played a prominent role in the development of advertising, and by the end of the nineteenth century, the firms that would become advertising agencies had already begun to form.

6. Attitudes formation
Attitudes are predispositions/tendencies to make a consumer behave or respond in a consistent way over time. There is an affect, feeling or dimension associated with attitudes. The goal of advertising is to create a positive impact on attitudes; these attitudes, in turn, influence future behavior. In other words when the consumer next goes to the stores to buy a particular type of product, these attitudes influence the choice of the product.

4. Marketing and Psychology

Marketing means an in depth study of the consumers Attitude, Perceptions, Beliefs, Values, personality and many more components of Consumer Behavior. Psychologists began to recognize that advertising was an important form of communication and began 90

7. Attractive media for Promotion

Today probably more attractive ways of promoting a product is through an Electronic media. In this E-media,

Televisions play a vital role, which have the highest number of spectators and almost all types of consumers or customers. This media can create the advertisement of a product with very attractive figures, background and excellent closures.

bombarded with 1000 of ads every day and at the same time every child is also getting exposed to all these ads from morning to evening till they sleep. In fact children are more susceptible and get easily influenced by advertisements. Kids represent an important demographic to marketers because they have their own purchasing power, they influence their parents buying decisions and theyre the adult consumers of the future. The power of the children on the decision making of the parents is very high. Every parent now a days are more depended on the Childs attractiveness towards the product promotion. Even child is very much sharp to grasp any type of appeal of an advertisement. That is what the power of children to drag their parents towards the products. This power is known as the delighting power or in other words Pester Power. It is well known that every parent only looks at the delightment of his or her child and obliviously buy the product which makes their child delighted. In fact some products are not at all concerned with the child but then still the ads are depicted by the children. Companies are able to craft sophisticated marketing strategies to reach young people by analyzing childrens behavior, their fantasy lives, art work and even their dreams. This is how the advertisers are positioning themselves in the minds of the children. Prahlad Kakkar shared with the audience about old Pepsi commercial showcasing street kids with a mask, which he directed as since street kids do not have the affordability to buy a Pepsi, he was under pressure to use professional child artists or rich kids. But Prahlad insisted that the insight is not to promote Pepsi, but promote the aspirations (Yeh Dil Mange More!) Whilst this child-targeted marketing used to concentrate on sweets and toys, it now includes clothes, shoes, a range of fast foods, sports equipment, computer products and toiletries as well as adult products such as cars and credit cards.

8. Child in an Advertisement
The advertisements now days are more concentrated towards the children rather than the adults. The advertisers are using an appeal which touches the customers minds and makes the sale for the product. An appeal is a tool which creates the attention and then the tension in the minds of the customers and makes him motivates towards the product. Thus lot of changes and various trends are evolving in making an advertisement position perfectly in the minds of a consumer. Ads were earlier or even now sometimes use big celebrities in promoting a product, but of course as the word celebrity it self speaks about huge investments on the advertisement. Celebrity endorsements are as a part of marketing communication strategy, has become common among organizations around the globe. Depending on the status of the Celebrity, endorsements could run into millions of rupees. In fact in one of the research work it was found that the celebrity advertisements made the sales increase for the product and non celebrity ads could get that much of success. But now days many of the marketers shifted from using the celebrities to small kids. What is the reason and how this is effecting the promotion of a product? In using a child in an advertisement the marketer is reducing lot of investment as compared to celebrities ads, which are very much costlier. Apart from cost reduction another interesting issue over here is the target segment. Now targeted segment means who? Is it the consumer or the child?. Over here the child is only a tool in creating an interest to the target segment. Products like Biscuits, Milk, Boost, Bournvita, Johnsons baby products, Chocolates etc can be positioned in the minds of the customers by using children. But today the interesting issue is creating an advertisement for products like washing machine, Paints, Luxury Car by using a 10 year old kid is definitely a new trend in the creation of an advertisement. Every customer is 91

10. Child becoming a customer

Young children are increasingly the target of advertising and marketing because of the amount of money they spend themselves, the influence they have on their

parents spending (the nag factor) and because of the money they will spend when they grow up. Advertising to children has long been a very successful way to build a solid consumer base. Today advertisement towards children has increased globally and the European Union estimates to generate $620 to $930 million a year in revenue from marketing products to children. However these ads not only bring funds but brings out an effect called as NAG Factor (Chetan Choudhari & Milind Marathe). The Nag Factor is when a child sees an ad for a product then cries and complains to a parent until the parent purchases the item. Over the last five years, theres been a substantial increase in the amount of influence kids have on durable goodscars, boats, big-ticket items. The power in the household is being ceded to the children. Kids these days are much more computer literate than their parents. According to McDonald and Lavelle, In todays families, many kids also serve as chief technology officers. When it comes to computers and other electronic purchases, even 7-year-olds may boast more expertise than Mom or Pop. A 1999 survey by Yankelovich found that 60 percent of parents dont shop for technology without consulting their kids. Thats just another reminder of the tremendous positive effects of advertising to children. With children either spending or influencing 500 billion dollars worth of purchases, marketing techniques have been turned upside down. In the past the most effective way to sell childrens products was through mom and dad. Now the opposite is true, children are the focal point for intense advertising pressure seeking to influence billions of rupees of family spending. Advertisers are aware that children influence the purchase of not just kids products anymore, but everything in the household from cars to toothpaste. Thus these adult products are being paired with kid- oriented logos and images. Research also makes clear that childrens purchaseinfluence attempts have a relatively high degree of success. Frequent parental yielding to childrens purchase requests has been reported in studies that rely on parent self-reports as well as unobtrusive observation of behavior in the supermarket. In sum, although the 92

process may be indirect, television commercials that are targeted at children are highly effective at accomplishing their intended goal of promoting product sales. Parents today are willing to buy more for their kids because trends such as smaller family size, dual incomes and postponing children until later in life mean that families have more disposable income .The marketers are using various tools or strategies to attract the consumers or position rightly at right time in the minds of the customers. A huge market with huge investments, but the impact of these Advertisements on the sales of a product may be a debatable.

11. Conclusion
Children are a vulnerable audience, with limited information-processing capabilities that constrain their early understanding of the nature and purpose of television advertising. Because of these limitations, young children are more easily persuadable than are older children or adults. They are more trusting of advertising claims and appeals, and they are more susceptible to commercial persuasion.

12. References
1. Mario Pricken, Creative Advertising: Ideas and Techniques from the Worlds Best Campaigns, Thames & Hudson, (2004). Chetan Chaudhari and Milind Marathe, Marketing To Children: Issues and Remedies, Proceedings on International Marketing Conference on Marketing & Society, IIMK (2007) p.167-168. Prahlad Kakkar, Talk on Advertising, at Manipal Institute of Communications annual communication Festival, in 2009 James U. McNeal, The Kids Market: Myths and Realities, Paramount Market Publishing, 1999 Strasburger, Victor .C, Call it kid-fluence. U.S. News & World Report, July 30, (2001) p.32. McDonald, Marci and Lavelle, Marianne. Call it Kid-fluence. U.S. News & World Report 131. 4 (2001) p. 32 Philip Kotler, Principles of Marketing, Pearson.

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Customers Attitude, Satisfaction and Potentiality of Online Shopping in Chennai

Dr. N. Mahesh
Sigma-Mu Research Consultancy Services, Chennai Sadasivan Assistant Professor, School of Management, SRM University, Kattankulathur
New information and communication technologies are constantly emerging, altering business methods, and particularly, the relationship an organisation establishes with its customers. Technological innovations ensure that, as soon as consumer behaviour in any field is on the verge of stability and explainability, new products and services are introduced to destabilise the consumer behaviour model so as to create competitive openings for challengers, niche players, and other contenders (Firat et al., 1995). The popularity of interactive media such as the World Wide Web (WWW) has been growing at a very rapid pace. From a marketing perspective, this has manifested itself primarily in two ways: (1) a drastic increase in the number of companies that seek to use the WWW to communicate with (potential) customers, and (2) the rapid adoption of the WWW by broad consumer segments for a variety of purposes, including pre purchase information search and online shopping (Alba et al., 1997). The combination of these two developments provides a basis for substantial growth in the commercial use of interactive media. Today Internet is not only a networking media, but also as a means of transaction for consumers at global market. Internet usage has grown rapidly over the past years and it has become common means for delivering and trading information, services and goods.(Alan and William, 2003). Considering that Internet shopping, is still at the early stage of development, little is known about consumers attitudes towards adopting this new shopping channel and factors that influence their attitude toward(Eun and Youn, 2004). The consumers attitude towards online shopping is known as the main factor that affects e-shopping potential (Michieal, 1998). That means that, through motivation and perception, attitudes are formed and consumers make decisions. Thus, attitudes directly influence decision making. 93 The proliferation of online shopping has stimulated widespread research aimed at attracting and retaining consumers from either a consumer or a technologyoriented view. The two views do not contradict but rather reinforce each other. Because the success of an electronic market largely depends on consumers willingness to accept it. The consumer-oriented view focuses on consumers attitude about online shopping. The potential benefits of online shopping for consumers include convenience, various selection, low price, original services, personal attention and easy access to information, among others (Vijayasarathy, 2002). A unique characteristic of online shopping environments is that they allow for the implementation of very high degrees of interactivity. It is a multidimensional construct, the key facets of which include reciprocity in the exchange of information, availability of information on demand, response contingency, customization of content, and real-time feedback(Michael and Erik,2001;Rowley, 2000). In the context of computermediated communication, a distinction has been made between person interactivity and machine interactivity (Venkatesh, 1998; Venkatesh et.al., 2003). While the former describes the ability to communicate with other individuals, the latter refers to the ability to interactively access information in an online database (Hoffman and Novak 1996). Indeed, the Internet has not only provides new ways for consumers to learn about and acquire products and services online but has also reshape consumer buying patterns. With this background, the general objective of the research paper is to explore factors that affect potential of online sales of a specific product and to investigate the consumer online behaviour, potential of online sales to identify those factors that influence online potential sales of a specific product.

1. Methodology
Conceptual Foundation and Framework The present research study concentrates on conceptual framework of consumer online behavior and e-shopping. This framework emphasizes the decision variables, which affect potentiality of online sales to specific product. The research framework and conceptualization of the relationship between potential of online sales and affective factors are constructed in the Figure- 1. This particular framework shows that potential of online sales is influenced by three factors including consumer attitudes, product type and familiarity of consumer to the product. In addition, demographic characteristics and environmental characteristics influence consumer attitude towards online shopping and entered into the model as controlling factors. Product type is affected by human sensory attributes. Moreover, familiarity and confidence to the product is influenced by brand name, shopping experience and satisfaction. The hypotheses of the research study are constructed in order to establish the relationships between factors.

Hypotheses H1: The consumer attitude towards online shopping is not statistically significantly different based on consumer demographic characteristics. H2: The consumer attitude towards online shopping is not statistically significantly different based on e-shopping environment. H3: There is no significant difference between influences of human senses in online shopping. H4: There is no significant relationship between shopping experience and familiarity and confidence in online shopping. H5: There is no significant relationship between satisfaction and familiarity and confidence in online shopping. H6: There is no significant relationship between customers attitude towards online shopping and potential of online sales. H7: There is no significant relationship between product type and potential of online sales. H8: There is no significant relationship between familiarity and confidence and potential of online sales.

94

2. Data Collection
A structure questionnaire was used to collect the necessary data which served as primary data to answer the research questions and objective regarding identified potentiality online shopping in Chennai. The data and information were collected from 200 questionnaires during the year 2009-2010.

5. Logistic Model
In order to investigate relationships in potential of online sales, a Logistic model was developed. As the potential of online sales it is probability in nature and changing between zero and one, so it appropriately treated as a binary or two choices variable the following Logistic equation was estimated. Lij = ij + ij 2 .PCij + ij3 .CAij + ij4 .FCij Where, PC refers to product type, CA refers to consumer overall attitude towards online shopping and FC refers to familiarity and confidence.

3. Statistical Techniques
The descriptive statistics, Analysis of Variance (ANOVA), Friedman Test, Chi-Square test and correlation measures were the statistical techniques which were used to analyze the data and information. For hypothesis testing, overall consumer attitude towards online was measured by Fishbeins behavioural model.

6. Results And Discussion

The age distribution of respondents showed that mean age was 32 years old while minimum age was 17 and maximum age was 45. The gender distribution of the respondents was 75 per cent males and 25 per cent females. Also nearly 55 per cent of respondents were married and the rest of 45 per cent were unmarried. Regarding to the respondents job, the largest group belong to businessmen in IT fields (32.50 per cent), followed by private sector professionals (26.40 per cent), businessmen in non IT fields (20.70 per cent), government servant (9.80 per cent)and others (10.60 per cent). In the term of the family income, families with Rs. 15000 to Rs. 20000 per month were the largest group among the respondents (34 per cent) then families with more than Rs 20000 (18.50 per cent). Also 7.5 per cent of respondents reported that they earn less than Rs. 10000 per month. Furthermore, 93 per cent of respondents had access to the Internet, 76 per cent were aware of e-shopping but 68 per cent have not had any experience in e-shopping. Along with this, 35 per cent said they will purchase online in next six months.

4. Fishbeins Behavioral Model

Measuring attitude in survey studies are widely used in different researches today. Fishbeins behavioural model is one of the most influential and widely researched models about attitude (Shwu-Ing Wu, 2003). According to the Fishbeins model, attitudes of people are formed toward a specific object based on their beliefs (perceptions and knowledge) about these objects. Fishbeins model was constructed to measure persons overall attitude toward some object and could be derived from his beliefs and feelings about various attitudes about the object. This model can thus be used as a multi attribute attitude measurement model. In this study five attributes namely, convenience, information, speed, enjoyment, and customer service were chosen to measure consumer overall attitude towards online shopping. Fishbeins attitude model can be expressed in equation form as: n Ao = bi ei i=1 Where: Ao = the persons overall attitude toward object o. bi = the strength of his belief that the object is related to attribute i. ei = evaluation or intensity of feelings toward attribute i. n = the number of relevant beliefs for that person. 95

7. Demographic Characteristics
The relationships between overall consumer attitudes towards online shopping and consumer demographic characteristics were analyzed by using ANOVA and the results are presented in Table-1. The results indicated that two factors of gender and family income have significant relationship with overall attitude towards online shopping at 95 per cent of confidence level (P 0.05).

Table-1. Analysis of Variance for Customer Demographics Demographic Features F Age 3.245 Gender 9.002** Education 0.765 Marital Status 0.000 Job 0.260 Family Income 3.462**

Sig 0.096 0.012 0.746 1.102 0.986 0.026

Note: ** indicates significant at 5 per cent level.

The relationships between overall attitudes towards online shopping and experiences were analyzed and the results are presented in Table-2. The results showed that three factors viz., internet use, e-shopping experience and willing to e-shopping in future have significant relationship with overall consumer attitude towards online shopping (P 0.05).

8. E- shopping Environment

Table-2. Analysis of Variance for Environmental Characteristics Demographic Features F Internet Access 0.068 Internet Use 4.385** E-shopping Awareness 0.026 E-shopping Experience 3.472** Future Purchase 6.024**

Sig 0.764 0.003 0.899 0.002 0.003

Note: ** indicates significant at 5 per cent level. 9. Product Type

The significant difference between the applicability of human senses and online shopping was analyzed and the result is presented in Table-3. The human senses were categorized then based on the virtual online space. The Friedman Test was used to test significantly differences of ranking human senses. The results showed with 95 per cent confidence, there is significant difference in human senses in online shopping.

Table-3.Friedman Test of Ranking Human Senses in Online Shopping Statistic Value Sample Size 200 Chi-Square 467.802 Asymp.Sig 0.000
Table-4 shows ranking result of effectiveness of human senses. From the table, products which need sense of sight to be chosen online are more likely to be sold online followed by sense of sound, sense of smell, sense of taste and sense of touch.

Table-4. Online Shopping Virtual Ranking of Human Senses Human Sense Mean Rank Sense of Sight 1.54 Sense of Sound 2.32 Sense of Smell 3.16 Sense of Taste 3.98 Sense of Touch 4.35
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10. Familiarity and Confidence

Where consumers already know the product brand name and have purchased it before and been satisfied with their experiences, familiarity and confidence for e-shopping is higher. The respondents were asked to report their familiarity with Indian Railways and their previous shopping and satisfaction. Chi-Square test and Spearman correlation were used to investigation significantly of relationships between these variables and the results are presented in Table- 5 and Table- 6.

Table-5. Correlation among Familiarity, Confidence and Satisfactory

Test Chi-Square Spearman Rank Correlation Statistics 102.458 0.286 Sig 0.000 0.019

The results proved that where consumer purchased a product and especially if he/she satisfied of previous purchase, familiarity and confidence of consumers to purchase the product online is increased.

Table-6. Correlation among Familiarity, Confidence and Experience

Test Chi-Square Spearman Rank Correlation Statistics 115.290 -0.469 Sig 0.000 0.000

11. Potential of Online Sales

In order to identify factors affecting potential of online sales of a specific product, the logistic model was developed and the results are presented in Table-7. The dependent variable was the potential of online sales that takes 1 when product has bought online and 0 when product has bought offline. According to the results with 95 per cent confidence, all coefficients were significant. It is mean that potential of online sales has significant relationship with the variables. The constant coefficient of the equation also was significant in same confidence level. The negative value of the variable PC (Products type) indicates that when the dependency of choosing a product to human senses increases, potential of online is decreased. Using analysis of variance and overall attitude mean with 95 per cent confidence and result showed that only two factors, gender and family income had significant relationship with overall attitude towards online shopping (P .05). It reveals that overall attitudes of families with higher income are higher than others. In addition, men have stronger attitudes to online shopping compared with women.

Variables Constant CA FC PC

Table-7. Estimation of Coefficient of Logistic Regression B Wald df ** -3.964 5.102 1 ** 5.987 1 0.086 ** 6.846 1 0.925 7.142 1 -1.432**

Sig 0.035 0.010 0.034 0.026

Note: ** indicates significant at 5 per cent level. 97

The estimation of logistic model shows with 95 per cent confidence all coefficients were significant. It means that potential of online sales has significant relationship with overall attitude towards online shopping, product type and familiarity and confidence. The negative value of the variable PC (Products type) indicated that in online shopping when consumer has to apply physical human senses such as touch and taste, potential of online sales will be reduced.

confuse potential buyers; they should ensure that they provide an efficient delivery service to their customers. The leading telecommunication and internet service providers in Chennai need to provide cheaper internet access in order to encourage more consumers to become internet users. Introduce more affordable high-speed internet access to cater online customers who require high bandwidth in the delivery of digitized products such as computer software, music, videos and games through the internet, which are presently popular and frequently purchased by users of internet shopping. In fact, the potential of e-shopping will get significant privilege when customers will show less traditional culture and shopping behavior attitude.

12. Conclusion And Implications

The forgoing analysis indicated that gender and family income had significant relationship with overall attitude towards online shopping and environment characteristics and there is no any significant relationship between internet access and overall attitudes towards online shopping, but weekly internet use having in e-shopping and willingness to more shopping online have significant relationship with overall attitudes online shopping. It means internet access rate is high among people but few percentages have intention for e-shopping. In addition, results of this study investigated significant differences between human senses in e-purchasing process. The result also proves that there is a significant difference between human senses in online decision making process. Moreover, results concluded from Logistic model and showed strong relationship among the three independent variables with dependent variable which belong to brand familiarity, product types and consumer attitudes for online shopping. These results are significantly different from the electronic shopping test in which attitudes towards online shopping have the strongest influence on e-shopping possibility. Also depart from estimation of the Logistic model and verified that companies present physical product online but need to gain the advantages of famous brand name and sales experience are likely to be successful than those companies offer virtual products without familiar brand name and are new in the market. For online retailers need to ensure that online shopping process through their website is designed and made as easy, simple, and convenient as possible. The web site should also be designed in such way not to 98

13. References
1. Alan D. Smith and William T. Rupp; (2003). Strategic online customer decision making: leveraging the transformational power of the Internet; Online Information Review; Vol. 27 (6): 418-432. Alba, Joseph, John Lynch, Barton Weitz, Chris Janiszewski, RichardLutz, Alan Sawyer, Stacey Wood. 1997. Interactive home shopping:consumer, retailer, and manufacturer incentives to participate in electronic marketplaces. J. Marketing 61 (July) 3853. Brynjolfsson, E and Michael D. Smith, (1999). Frictionless Commerce? A Comparison of Internet and Conventional Retailers, Management Science Vol. 46 (4) 563-585. Charles Dennis, Lisa Harris, and Balraj Sandhu, (2002). From Bricks to Clicks: Understanding the E-consumer, Qualitative Market Research An International Journal, Vol. 5 (4): 281-290 Degeratu, A. M., Arvind Rangaswamy, and Jianan Wu (1999). Consumer Choice Behavior in Online and Traditional Supermarkets: The Effects of Brand Name, Price, and Other

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Rural Producer and Urban buyer

Mr. D.Subramaniam, B.Sc, MBA, M.Phil, (Ph.D), Asst.Professor, Xavier Institute of Management and Entrepreneurship (XIME), & Research Scholar. Sri Chandrasekharendra, Saraswathi Vishwa Mahavidyalaya University, Kanchipuram,

1. Introduction
Many of the marketing text books have described the various strategies that can be adopted to market a product keeping the profile of people in general. Of late advances have been made and books have been written based on the profiles of the consumer behaviours of the urban and rural population. Marketers have found the necessity to understand the varying needs of the urban and rural buyer in order to succeed in their endeavor. Very recently it has been established that the urban market is reaching a saturation level and the producers have felt the necessity to penetrate the rural population. Especially in India with over 70% of the population living in the rural side, they see a huge potential for their future markets in rural India.

So, one has to have a proper understanding of the rural buyers need before trying to market the product in that sector in order to succeed. Similarly the rural producers when they try to enter the urban market also need to have a proper understanding of the needs of buyers who are in urban sector before entering into urban segment. The kind of rural producers exist are as evidenced by their pattern of occupation as given below;

3. Occupation Pattern Occupation Cultivators Agriculture labourers Trading & craftsmanship Non-agriculture labourers (kivestock,forestry,fishing, hunting,plantations etc) Salary earners Total

2.All India Population distribution

Distribution Total Rural Urban Population 102,7015,247 741,660,293 285,354,954 Population % 100 72.22 27.78

Proportion of rural population % 50 27 10 10 3 100

Source: National Council for Applied Economic Research NCAER 2002 It is also established that marketing strategies that has clinched success for them in urban India is not yielding the same success in rural India. They encounter severe challenges in this regard. A common sense approach will reveal that this difficulty is faced mainly because the profile of the rural buyer differs from the profile of the urban buyer in terms of their literacy level awareness level income level social environment and culture 100

Source: Chart used in the book, rural marketing in India (2004) by KS Habeeb ur rahman, Pg 22) But there are many an item produced in the rural sector and doest not have much of market in the rural side but has huge potential in the urban sector. This is interesting an aspect which calls for the understanding of the urban mind set for these products and accordingly devises the marketing strategies. For example a handicraft is mainly produced only in rural side, doest not have much potential in the rural sector as such. However it has a better market potential in the urban side as urbanites can afford and also have a taste for these kinds of items.

Many of the agriculture products are similarly making their way to urban side for better profit realization. Some of the commonly used items both in rural as well a in urban but produced mainly in rural side also have succeeded commercially well when branded. For example the butter commonly used product has made a huge headway in the form of AMUL from the rural side to many of the urban centers all over the country. Similarly Aavin has succeeded as a milk sachet at the regional level in Tamil nadu though it now has many competitors.

6. Bridging the Gap

If this mismatch in skill is identified and facilitated for their removal the rural products can easily reach the urban sector. This will also enable rural producers to understand the urban buyers expectation and attain the ability to reach them. The so called Gap between the rural producers and urban buyers can thus be bridged. This will transform the rural economy in specific and the whole economy in general. The above responsibility of bridging the skill can best be handled by Government and sometimes the Government can also take the help of NGOs as it calls for massive involvement, plan and resources. Also it requires different approaches at different places with the ultimate goal remaining the same. One important task is to identify the linkages of various variables that have an impact on factors leading to the removal of the negatives as listed above or strengthen the positives of the rural businessmen. For example rural literacy is a function of rural income & urban expenditure is a function of rural income. This phenomenon requires a sort of long term focus to work on these interdependent variables to create a climate conducive for the growth especially of rural side. The nature of variables are such that they can be nurtured only by the Governments in power on a long term basis and private players can be drafted in as additional players to make the development process speedily. Similarly the role of technology in information sharing and its potential to create a powerful impact on rural development is another area which can be handled both by private as well as Government sources. The successes that have been witnessed on account of the scheme e-choupal conceived and developed by ITC in Indian rural side is worth emulating. The user friendly environment that has been enabled was the key factor to the success of this scheme involving technology. Here opportunities exist for both Government and private sector to invest in ITES sector in the rural side. Many firms have tasted success by establishing e-kiosks in the rural side. The ITC a big corporate of India was able to taste success by going in for large scale IT 101

4. Urban Vs Rural divide in business approaches

It has been found that many firms have tasted success in rural areas when they found urban market getting saturated for their products. It has been comparatively easier for these firms as they were able to understand the needs of the customer and accordingly devised their marketing strategies. This is not happening when a rural business tries to enter an urban sector as the rural producers lack such an expertise. This is precisely because they only have a skill to produce but not the skill to market. This necessitates the role of a middleman to fill this gap. If only the rural producer is equipped to acquire the skill to market and to manage the business they will be able to succeed easily. It is more easily said than done.

5. Skill Gap
The negatives of rural businessmen are Generally they are illiterates They lack business acumen They lack money for investment They lack infrastructure

They lack access to information The positives of rural businessmen are They have the creative skill to produce. Generally they are low cost and qualitative They have enough time at their disposal Cheap labour

investment (e-choupal scheme ) in the rural side and by providing the required training to the rural youth they were able to taste success in their business. The technology helped in better sourcing of agricultural products, monitoring of agricultural production, monitoring of their price patterns and planning of logistics etc. Also recently C I I (Confederation Indian Industry) has signed a memorandum of undertaking with Khadi and Village Industries Commission (KVIC) & Ministry of Panchayathi raj to promote a new concept of Rural Business Hubs (RBH). These RBH enable direct business linkage between industry and rural business community. It helps farmers, Artisans, and rural business enterprises to establish market linkages enabling knowledge transfer, enabling reduction in logistics costs etc. The buyer also benefits by way of reduction in procurement cost and standardized sources of supply. There are certain globally proven methods to accelerate the economic growth in the economy such as increased spend on Infrastructure and thereby bringing about growth and development especially in the rural side which again is the domain of the Government. In todays economic scenario where recession is setting in in global economy many countries are resorting to massive investments in infrastructure. For example, Chinese Government has announced a package of $ 586 billion investment in infrastructure and public welfare spending to boost economy and revive employment opportunities. The multiplier effect is supposed to set in and bring growth to the economy. This is one possible action the government can take. This will not only improve the infrastructure but also improve the income in general and rural income in specific. This action addresses some of the concerns listed under the negatives as above. Further one has to understand that mere increased spending in infrastructure alone can not bring in results as such spending has to take place in projects that can help stimulate growth. Hence spending has to take place with increased focus .Also it has to strike a balance between projects that yield quicker results and the projects that are likely to take longer time to yield 102

results. For example spending on rural education is an important action that can benefit the rural economy in the long run. But one has to wait for it to bring success in the long run. The elimination of ignorance and enriching the rural folk with knowledge will lead to bridging the skill gap that is currently depriving him of success. This will eliminate the dependence on the middlemen and enable him or her to be independent. Thirdly the power of information has to be understood in the proper context for achieving success in any business. To-day many companys are spending a lot on information management as they help in qualitative decision making and thereby get a competitive edge in the market. The ERP (Enterprise Resource Planning) is one such investment which will enable capturing information at the source and provide consistent information at all levels of the management hierarchy for decision making. Also the role of technology has to utilize fully to exploit information power. While the type of technology to be used may vary, an appropriate use of technology is inevitable. For example the use of ERP may be appropriate for an established business in the urban area: it may be too much for the asking for a small or medium business of the rural side. But still the business in the rural side also has to use an appropriate IT tool to succeed in their venture. For example the power of internet is exceptional for any upcoming business. This enables a rural educated youth to exploit the opportunities in the market. of course the ERP manufactures have now realized this and hence have brought about new concepts such SaaS (ERP on demand) /Cloud Computing etc to make this technology affordable. The initiatives as discussed above have the potential to bridge the skill gap and make the rural entrepreneur to be independent. Fourthly, the importance of training can never be over emphasized. Here again the initiatives can come from both Government and private sectors. NGOs can also actively contribute. There have been many instances of rural arts disappearing over a period of time due to lack of support for those arts and the younger generation has not been able to inherit the art from their fore fathers. For

example Crafts Council of India has initiated a venture to help rural handicraft artisans in acquiring skills. The government of India Ministry of textiles in their annual report 2000-01 has also listed many initiatives taken for revival of languishing arts like Bamboo Etching in megalaya.Scroll Painting of Manipur etc. Schemes as above can again bridge the skill gaps listed above. Also, there is a linkage between the income levels of urban to the increased manufacturing activity at the rural side especially if the rural product depends upon urban market for its survival. The rural product in such a situation has to depend upon the urban market to have higher income levels more specifically higher personal disposable income for its success. It has been established in several studies carried out that the rural economy is growing faster than urban economy due to higher income level among the urbanites. A study carried out by Roopa Purushothaman, a U S trained economist in their research paper Is urban growth good for rural India has listed the following revelations. - 10 % increase in urban expenditure has lead to 4.8 % increase in rural nonfarm employment. Rs 100 increase in urban spending resulted in increase of Rs 39 in rural income. The rural economy has grown @ 7.3% average when compared to just 5.4 % in the urban economy. The study also reveals quoting central statistical figures indicating the contribution of rural economy as 49 % of GDP in 2000 indicating a high increase in contribution compared to 46%.of period 1993-94. There is a declining trend in the process of urbanization as a result of economic growth. The rural agricultural employment 103

growth was as low as 1% during 2000 and 2005 whereas the non farm jobs have grown by 20% for the said period. The other factor that can bring about success for a rural product is that if the rural location is visited by outsiders such as urban buyers, tourists, floating population etc. This is possible if the rural location happens to be a tourist destination. This will enable direct contact between the buyer and the rural seller. For example, many miniature -versions of TAJMAHAL are made using marble stones which are available locally in AGRA. Since the place is visited by many tourists the rural manufacturer of the above product are able to sell it directly to buyers visiting as tourists. All the above linkages clearly establish the various levels of impact on the rural economy and help in reducing the skill Gaps as listed above.

6. Conclusion
The product produced in rural side has to reach the urban hands as necessitated by the market forces. In order for the above transaction to take place certain skill gaps have to be bridged which act as a bottle neck. Government has a very vital role to play in removing such an obstacle and so also others like private players, NGOs etc. The schemes like investment in infrastructure improvement, cresting a conducive environment for rural investment, rural education, and information accessibility and training opportunities are aimed at addressing these obstacles so that rural economy flourishes.

7. References
1. Azhar Kazmi, 2nd edition, Business Policy and strategic management, Tata McGraw-Hill 2. Dell I Hawkins-Roger J Best Kennet A Coney Amit Mookerjee ninth edition Consumer Behaviour Building marketing strategy The McGraw-Hill Companies. Dr.N.Rajan Nair & Sanjith R.Nair seventh edition,1993, Marketing Sultan Chand & Sons

3.

4.

S.A.Sherlekar,thirteen revised edition, Marketing management Himalaya Publishing House.

6.

Rural business hub, www.rbh.in report/

7. http://apparel.indiamart.com/annualhandicrafts.html

5. K.S.Habeeb ur rehman Rural marketing in India-2004 ICFAI

8. http://knowledge.wharton.upenn.edu/india/ article.cfm

104

Service Quality Gap In Healthcare Services in India - A Birdseye View Analysis

Asst.Professor& Research Supervisor SRM B-School, SRM University, Vadapalani, Chennai Dinesh Doha, Research Scholar, SRM B-School, SRM University, Chennai
The fruit of SILENCE is Prayer- The fruit of PRAYER is Faith The fruit of FAITH is Love- The fruit of LOVE is Service The fruit of SERVICE is Peace. 2.47 million people in India are estimated to be HIV positive. India is one of the four countries worldwide where polio has not as yet been successfully eradicated and one third of the worlds tuberculosis cases are in India .According to the World Health Organization 900,000 Indians die each year from drinking contaminated water and breathing in polluted air . As India grapples with these basic issues, new challenges are emerging for example there is a rise in chronic adult diseases such as cardiovascular illnesses and diabetes as a consequence of changing lifestyles .There are vast disparities in peoples health even among the different states across the country largely attributed to the resource allocation by the state governments where some states have been more successful than others. Better efforts are needed by the local governments to ensure that the health services provided are actually reaching the poor in worst-affected areas. In the era of globalization all the services are delegated to the private organisations. Like many other basic service Health care facilities are also taken up by both private as well as public sector. Health care facilities provided by private sector vary.

Dr. Y. Lokeswara Choudary

1. Introduction
Health Care in India has can be traced back nearly 3500 years. From the early days of Indian history the Ayurvedic tradition of medicine has been practiced. During the rule of Emperor Ashoka Maurya (third century B.C.E.), schools of learning in the healing arts were created. Many valuable herbs and medicinal combinations were created. Even today many of these continue to be used. During his reign there is speculation that it was attempted for the state to provide health care to all of its citizens. Healthcare in India is the responsibility of constituent states and territories of India. The Constitution charges every state with raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties. The National Health Policy was endorsed by the Parliament of India in 1983 and updated in 2002 .Although India has eradicated mass famines, half of children in India are underweight, one of the highest rates in the world and nearly double the rate of Sub-Saharan Africa. Water supply and sanitation in India continue to be abysmal; only one of three Indians has access to improved sanitation facilities such as toilet. Indias HIV/AIDS epidemic is a growing threat. Cholera epidemics are not unknown. The maternal mortality in India is the second highest in the world. Providing healthcare and disease prevention to Indias growing population of more than a billion people becomes challenging in the face of depleting resources. 105

2. Salient features of healthcare in India

Changes in demographic with nuclear families spring up in ever large numbers leading to more awareness in health related problems. There has been increase in various disease owning to the life style of the people. Increase in population from 1 billion to 1.2 billion will lead to increase in number of treatment from 1.6 bn to 1.9 bn. There has been increase spending power and higher disposable income in personal health by the people. The no of beds is dismally low in India,

currently at 1.5 beds per 000 population as against the world average of 3.3. There are currently 105 million beds in the country, and there will be a need for additional 75 million in 10 years. This will be driven by the need to expand the number of tertiary beds by over 50% to 150 million beds. Indias healthcare industry is currently growing at 17% annually. The growth is being propelled by an increasingly middle-income group of 100 million who are seeking and willing to pay for a higher standard of healthcare. The entry of private insurance companies into India market is expected to transform the healthcare landscape in India increasing the customer base by including people of middle and rural population. At present only 0.25% of the Indian population is covered by medical insurance in any form. It is stated to grow 5 times in the next 6 years. There has been increase in health awareness due to easy access to information through varied media.

multi-specialty private hospitals, characterized by professional management, state-of-the art equipment and world class specialists. Equipment: Foreign manufacturers with extensive service networks (GE, Phillips, Hitachi, Siemens) dominate the high end of the equipment market. Indian manufacturers are producing higher quality medium tech equipment, though local products maintain the stigma of unreliability. The price of imported equipment is bloated by the combination of steep duty tariffs (between from 40-50%) and the weak rupee. Education and Training: In 1998 99 there were 162 Medical Colleges in India. With over 498,689 doctors and 565,696 nurses there is a tremendous stock of intellectual capital in Indian healthcare (source: OPPI, 1998-99 estimates) but there is a pressing need for qualified, specialist nurses. Several private hospitals have invested in nurse education, but are concerned about loyalty: trained nurses often leave India, attracted by the higher wages offered in the Gulf countries. Specialist nurse training will become vital as the number of specialty and multi-specialty hospitals increases. Doctors in India are inclined towards UK medical processes and accreditation bodies such as the Royal Colleges. While private hospitals are attracting the most qualified individuals, entrepreneurial doctors have set up their own private clinics or nursing homes in addition to their hospital work. Management Information: Indian healthcare is plagued by a lack of standardization and accreditation, highlighting the need for information management expertise. This nebulous aspect of the market covers a variety of sectors including public health, insurance, hospital management, clinical research and clinical trials. Information Technology, a core competence of the western and southern regions, facilitates management of information. Healthcare services: Two services that are desperately needed in India are emergency medical services (EMS) and clinical waste management. In both cases there is willingness for the private and public sectors to work together to implement effective systems. 106

3. Features of the Indian Health Care Market

Size of the Market: Government-run hospitals and those operated by charitable organizations were the main providers of subsidized healthcare until the early 1980s. However, the last decade has seen the mushrooming of corporate and privately run hospitals both small hospitals (popularly called nursing homes, which typically have 4 50 beds) and large. Most large trust and corporate hospitals have invested in modern equipment and focus on super-specialties.

4. Key Market Characteristics

Hospitals: These doctors have lacked the funding and management skills necessary to establish large, private multi and super-specialty hospitals. Interest rates on such projects have been prohibitively high and exchange rate exposure has limited foreign investment in hospital construction. Recently, the Apollo Group has succeeded in developing a chain of high quality,

Insurance: Insurance will drive quality consciousness and increase demand for better standards, accreditation and patient/management information systems. Corporations will be the first to subscribe to private insurance schemes, developing the market for third party administration of insurance packages. The major international players will establish networks of affiliated hospitals and may seek direct involvement in the development of new facilities, especially costeffective diagnostic centres. Pharmaceuticals: India became a member of the WTO in January 1995 when it agreed to amend its patent laws to grant product patents. However a 10-year concession has been granted, which means that process patents will continue to be recognized until 2005.

was necessary to incorporate marketing as an integral function in the hospital operations. But the major argument at that time lay in understanding whether this professional orientation was really required for its viability, profitability and sustainability. This argument however became favorable in the late nineties as corporate companies like Wockhard and Max India started venturing into the hospital industry, apart from the ongoing mergers and acquisitions that were already taking place at that time.

7. Categorisation of the Health Care Industry

The Health Care industry is mainly classified into two main heads. Social Commercial Social marketing: This relates to areas of family planning, child immunization and health and family welfare, AIDS etc., mostly carried out by the Government and some NGOs. Mass communication media like TV, print media, cinema, transit advertising, direct mail scheme etc. and personal communication are used in promoting these services. Commercial marketing: According to the law, hospitals cannot advertise their services but can do advertisement with some social message. Competition has forced the private hospitals to take up advertising in print media, encouraging people to take preventive healthcare by having regular check-ups, etc. Several schemes such as medical insurance policies by the GIC, Oriental Insurance, LIC etc. have also been promoted during the last decade.

5. Different types of health care services available in India

Hospitals Pathology Clinics Blood Banks Meditation Centres Emergency services like Ambulances, etc. Online Medical Services Telemedicine Naturopathy Yoga Centres Fitness Centres Laughter Clubs Health Spas

In the Constitution of India, health is a state subject. Central govts intervention to assist the state govt is needed in the areas of control and eradication of major communicable and non-communicable diseases, policy formulation, international health, medical & paramedical education along with regulatory measures, drug control and prevention of food adulteration, besides activities concerning the containment of population growth including safe motherhood, child survival and immunization programme.

8. Marketing Mix Variables for Hospitals

Quality Level: When we talk about marketing hospitals, it is very natural that we are very particular to manage our services in the right fashion. Supportive services play an important role in improving the quality of Medicare. These services, which include laboratory, blood-banks, catering, radiology and laundry, in a true sense determine the quality of services made available by medical and para-medical personnel. 107

6. Marketing in Hospitals
Marketing in unethical was the frequent refrain in the eighties, when very few hospitals realized that it

Accessories: This is a very good way of segmenting customers. Many hospitals provide additional services such as catering, laundry, yoga sessions, cafeterias etc. for customers (patients) who are willing to pay extra. Hospitals have different wards General and Special. Packaging : This is the bundling of many services into the core service E.g. Apollo hospital offers a full health check-up to patients. Similarly other hospitals also offer package deals for health check-ups. Product line : Hospitals offer patients services catering to a wide range of customer needs. Brand name: The hospitals use a brand name to differentiate themselves and their services from others. The intangibility factor of the service makes it all the more important for them to do so.

9. Medical Insurance
Opening of the Insurance Sector: Consultants, Financiers and Insurance Agencies stand to benefit from this boom. The insurers will use PPOs, which will grow into HMOs, to assume insurance risks on the clients behalf. Medical equipment, medical software and hospitals will see the biggest boom. Apart from starting insurance by corporate hospitals, for example government of Tamil Nadu signed up private Health Insurance company to provide quality health care to the people below poverty. Medical Equipment: All the surgical equipment required in this field also contributes a lot to the healthcare industry. Although it forms an inseparable part of this industry, it is not a service but a product. These products sometimes are so expensive to install or maintain that it gives rise to other services in the healthcare industry. This kind of service includes pathological laboratories, blood banks, organ banks etc. Since all the hospitals or small clinics and nursing homes cannot afford to purchase such expansive equipment, they outsource these services.

10. Suggestions for improving health care in India

Setting New Hospital: Going through the huge variation in demand & supply of hospital 108

and growing trend in the industry, there is need of setting of new hospitals, particularly in B class cities. According to a World Health Organization report, India needs to add 80,000 hospital beds each year for the next five years to meet the demands of its population. Tapping the middle income group : The current growth in the healthcare segment is on account of increasing number of middle class population of 100 million who are seeking and willing to pay for a higher standard of healthcare. Thus alliance with private national insurance company can serve a tap the middleincome group. Tie-ups: Alliance with small nursing homes can be undertaken, where in the technology and expertise of the tertiary hospital will be shared with small nursing homes. Tie-ups with existing nursing homes are a less capitalintensive strategy for tertiary hospital as well it benefits small nursing homes. Customer Awareness: Since the service product is intangible more stress must be made to make customer aware of the service product in order to change the perception of the public with regard to the services that are available to them. a. This includes a customer education about the various diseases treatment available, treatment cost, profile of doctors and other related information should be made. Well-informed patients will work as watchdog, leading Hospital to improve upon its services. b. Organizing programmes and awareness campaigns in the community as well as updating the general practitioners about contemporary developments and advancements in the different aspect of healthcare, who can really bridge the gap between the patients treatment needs and providers available service range.

Setting Clinics: Setting a number of satellite centres connected to a common hub (tertiary care hospital) called Hub and spoke model can be preferred as a solution to make healthcare easy and accessible to the vast and diverse Indian population. The hub and spoke model offers great opportunity for vastly improving quality care.

11. Conclusion
Even though Health sector is emerging in India, still quality health care for all is distant dream. India is a place where frequent outbreak of epidemic disease is common. During that time, government is not in a position tackle the situation. When situation arises, private sectors are also not in a position to tackle the

situation. International organizations like world health organization and World Bank emphasis government to consolidate the program with a tighter geographic focus on the poorer states.The Banks work also emphasizes the strengthening of governance in health systems, and the monitoring and evaluations of outcomes. They currently collaborate with the government to improve governance and capacity in the Ministry of Health and Family Welfares focal unit for health sector procurement. There are different types of health care facilities are provided by the private sector. Private sectors effective marketing strategies attracting customers to utilize the services. Unlike other sectors Health services have to go long way to provide effective service delivery.

109

The Impact of FDI in Retail, More Advantageous

Rabi Jayakumar Retail Consultant

1. Introduction
Amidst todays time of fierce competition and a quest to achieve and enhance a substantial level of economic and social development; each and every nation is trying to liberalize its economic policies in order to attract investments from domestic & International players across the globe. Consequently, people with generous reserves of funds, all around the globe, are expanding their wings and seeking opportunities of investing in different spheres of this lucrative market. The advent of FDI in India was witnessed during the end of 1990s when the Indian national government announced a number of reforms which aimed at helping in the process of liberalization and deregulation of the Indian economy. Since its inception there has been a remarkable surge in the FDI inflows in the country. The total amount of FDI in India came to around US$ 42.3 billion in 2001, in 2002 this figure stood at US$ 54.1 billion, in 2003 this figure came to US$ 75.4 billion, and in 2004 this figure increased to US$ 113 billion. This shows that the flow of foreign direct investment in India has grown at a very rapid pace over the last few years.

According to the latest data released by Department of Policy and Promotion (DIPP) the India achieved a substantial 85% increase in FDI flows in calendar year 2008the highest increase across all countrieseven as global flows declined by 14.5 per cent. Needless to say, but FDI inflows has evidently proved to be very advantageous for the overall development of the Indian economy and inter alia has resulted in increased capital flow, improved technology, notable management expertise and favorable access to international markets. Now coming to the captioned topic of FDI in the Indian retail sector, it is submitted that the scenario of the same is kind of depressing and unappealing, since despite the ongoing wave of incessant liberalization and globalization, the Indian retail sector is still aloof from progressive and ostentatious development. This dismal situation of the retail sector undoubtedly stems from the absence of an FDI encouraging policy in the Indian retail sector. However, it needs to be noted here that unfortunately this dismal situation is there to exist, especially in the light of the recent developments in terms of the abrupt change in the ideology of the political parties.

2. Salient Features of Indian Market

Key Developments Largest democracy, Stable Govt Dominant Private sector Robust banking sector; Capital markets World class IT & telecom infrastructure Yesterday Protected market Small consumer markets Underdeveloped infrastructure One of the fastest growing economies 110 Today Resilient Economy even during global crisis Opening up sectors for investment Promising consumer markets, with 8-9 % GDP Investment in infrastructure development

The key Growth primarily driven by the strong domestic market with domestic savings rate at more than 35%, India projected to be the 5th largest consumer market by 2025, worth over USD 1,500 Bn CAGR of 7.3% (Source: McKinsey Institute)

resources of banks. Inflation has been under strict control and is currently hovering around 5 per cent. Import duties are being increasingly brought down. Currently, these are around 15 per cent, down from a high of over 130 per cent only a decade earlier. India is being sought after as a major destination by international retailers. Even China which until recently was greatly favored, is now occupying a back seat compared to India. Availability of resources, adequate skilled labor at competitive cost, increased purchasing power, the bulging of the middle income group with disposable incomes, reduced transaction costs, improving rural economy helping to create a surge in demand for all goods and certainly demanding FDI, Indian Consumers remain most upbeat in the world despite food price concern at home and improving outlook elsewhere, India registered 129 points in the latest Nielson Global consumer confidence survey

3. Reforms and consumerism

Economic reforms have increased the spending power of the middle-income group which is growing bigger day by day. Consequently, purchasing power is on a high with malls, department stores, discount stores, all springing up in various parts of the country. The consumer today demands value for money. Quality is of prime importance and the consumer is prepared to pay a price for it. Privatization has become a bye-word today in the economy of the country. Cheap loans are being made available to meet the basic needs of shelter. The demand for these loans has outstripped available

Consumer Confidence Index - 2010 Country India Indonesia Vietnam Philippines China Brazil Russia US UK Egypt Spain Japan Lithunia World Average Points 129 119 119 113 103 108 88 87 78 78 69 55 52 93

69% of Indian Consumers think that India has not gone under a recession 92% of Indians are optimistic about their job prospects in next 12 months 85% of Indians consider their state of finance in coming year is good or excellent 59% of Indian consumers think that this is the right time to buy. 63% of Indian put their spare cash in savings 48% love to invest in Stocks and MF 36% spend on technology products 34% love to spend on new clothes 29% spend on home improvements 30% will pay of debts.

The number of shopping malls cropping up across India has made you wonder where they will find shoppers and tenants. The fact is mall culture is still in nascent stages in the country when compared to developed and other developing countries. According to a study done by Asiapac, a Bangalore based real estate development 111

consultancy, only the countrys largest 12 malls qualify as regional malls (5 11.2 Lakh Sq.Ft) while Australia has 75 regional malls besides 15 super malls. Clearly there is room for hundreds of more mega malls as country continues its drive to become a super power economy with a huge middle class market.

4. Modus operandi on Foreign Direct Investment In Retail

Importantly,there is a complete ban on foreign investment inmulti-brand, front-end retail. This has resulted in keeping all the giant corporate backed retailersof the world like Wal-Mart (USA), Carrefour (France), Tesco (UK),and Metro (Germany), who are very keen to foray into Indias retail sector, away fromentering into the country. All of these retailers, therefore, to make their presence feltin the country, have either tied-up or trying to tie-up with local corporate, tooffer theirservices for back-end operations like sourcing, logistics, inventory management, among others, for front-end, multi-brand retail operations of such corporate. The retail industry in India is of late often being hailed as one of the sunrise sectors in the economy. AT Kearney, the well-known international management consultancy, recently identified India as the second most attractive retail destination globally from among thirty emergent markets. It has made India the cause of a good deal of excitement and the cynosure of many foreign investors eyes. With a contribution of an overwhelming 14% to the national GDP and employing 7% of the total workforce (only agriculture employs more) in the country, the retail industry is definitely one of the pillars of the Indian economy. According to the Investment Commission of India, the retail sector is expected to grow almost three times its current levels to $660 billion by 2015. It is expected that India will be among the top 5 retail markets then. The organized sector is expected to grow to $100 bn and account for 12-15% of retail sales by 2015. There is certainly a lucrative opportunity for foreign players to enter the Indian terrain. Growth rates of the industry both in the past and those expected for the next decade coupled with the changing consumer trends such as increased use of credit cards, brand consciousness, and the growth of population under the age of 35 are factors that encourage a foreign player to establish outlets in India. However, it is not out of place to mention here that the government policies towards FDI are the only hindering factors that do not make way for foreign players. 112

Retail trade reforms still continue to be in a limbo, nearly seven years after the first report, commissioned by the Department of Consumer Welfare, recommended that permitting entry of foreign direct investment in the sector would result in a win-win outcome for all stakeholders. The conclusion was reinforced by another study by ICRIER, done for the Department of Industrial Policy and Promotion (DIPP). These findings, based on a scientific and unbiased primary enquiry, should have been enough to convince even the biggest skeptics of the need for retail reforms. Yet, the government is unable to muster the political will to liberalize FDI in multi-brand retail, even as it assures all our foreign partners that the reform is just round the corner.

5. Opposing Will Never Work

Those who oppose the reform must understand that they are standing in the way of Indias progress. The country cannot achieve its desired rate of growth while being shackled by a backward trading sector characterized by low productivity, obsolete processes, technological stagnation, unacceptable employment conditions and multiple layers of intermediation that lack transparency in price formation. By contributing to the relatively high prices of wage goods like food grains, vegetables and daily necessities of life, a backward retail trade sector prevents India from achieving higher rates of economic growth while maintaining price stability, an outcome that China has managed by rapidly modernizing its trading practices. The emotive argument made in favour of retaining the status quo is that the small trader, the owners of kirana stores and street vendors and hawkers would fade out shortly, which is nothing but a myth stopping Indias aggressive growth.

6. Big, Small Can Co-Exist

With economic growth of 9% per annum, the size of the retail sector would be more than double every eight years. This will surely leave more than enough space for the growth for the modern and self-organized retailers. In fact, it should be clear that mom and pop stores will not be able to meet the needs of a rapidly growing economy and this will result in a severe bottleneck, as urbanization gathers pace and the burgeoning middle

class demands greater convenience and minimal time and effort to meet its basic consumption needs. The present estimates are that the market share of modern retail will increase from a merely 4% now to 16% in 20 years later, the remaining 84% share that will still remain with the kirana stores will amount to a business output of no less than $800 billion. Despite the fact 100% FDI is allowed or not MNC would exist in Indian market probably with different business arrangements with local partners. Such as Walmart with Bharati and Carrefour with Future Group Without the colored glasses of ideology and of shortterm vested interests, it is clear that both the modern and self-organized sectors can happily co-exist and generate synergies that would enhance both producer and consumer welfare. The consumers, unanimously, want both formats to develop to take advantage of the distinct advantages that the two formats such as Organized and Unorganized can offer. The smaller producers of non-branded manufactured goods will gain because large retailers contract them to improve their bargaining position vis--vis established brands and improve their margins. Empirical studies reveal that farmers get up to 25% higher for their output when supplying directly to retail chains.

down to them. On a survey conducted across 8 Cities in India among traditional retailers, we have found that they have several start up barriers which is confining them to realign to fierce competition which is round the corner. Start up barriers for Unorganized Retailers Base Respondent 1001 Lack of funds 14% Not Sure, if the idea will click in saturated Mkt Involves far too much risk Happy continuing the same job Having no interest in turning big Gestation time - Time taken for execution Time taken for Break-even Lack of experience Not viable in shaky economic environment Sole earning business / No back up No Mentor Total 14% 10% 10% 8% 8% 8% 7% 7% 7% 7% 100%

7. Should small stores fade out?

This is the million dollar question to which everyone almost always thinks the answer is a straight yes. I think there is scope for a counter argument to this. The answer is also likely to vary by category while luxury categories (which most kirana stores do not operate in) may expand the market, specific categories may see consolidation such as electronics Retailing and Grocery Retailing. While organized retail will likely bring differentiation with their marketing investment, they will still likely have to provide competitive service and prices that appeal to the same segment of the population that will shop at the traditional retailers as well. Who may gain are the farmers and end consumers, who are likely to see some of the benefit of the disintermediation trickle 113

8. Benefit to Producers
Moreover, large retailers critically dependent on assured and timely supplies of fresh farm products that meet minimum standards will introduce new seeds and processes to the farmers and attract investments in postharvest logistics and supply chains. Thus, modernizing the retail trade will directly result in modernization of the agriculture sector and give our poor farmers the opportunity to improve yields and incomes. Today at least $25 billion worth of agriculture produce is wasted because of poor handling and lack of post-harvest processing. Even if half of this is saved it would represent major value addition and employment generation. We can ensure that local farmers and producers do not suffer by making it incumbent on retailers to procure

a given share of their supplies from local farmers and producers. And farmers could be encouraged to get into cooperative organizations for achieving better bargaining outcomes when negotiating with the retailers.

9. Modernizing retail in India cannot be interrupted

With rising aspiration of the youth, new mindset and attitude, our entrepreneurial drive has already unleashed the beginning of a new consumption drive. This drive demands new products, new services, alternate uses and myriad of desires. The assortment required to fulfill these desires cannot be fitted into a small 500-800 sq ft store.Somebody within the supply chain has to meet these demands now and in the future. The process of modernizing retail cannot be interrupted in India anymore. The question to ask is how we modernize, who will bring in the capital to modernize and how will the small shops in the current eco system participate in the consumption drive of modern Indians. Sustained capital infusion, expertise in managing modern retail, building the business from scratch and nurturing it to grow to a scale over a 15-25 years period are essential to build and grow modern retail in India. India can achieve high growth only if modern retail is 30-40% of the retail sector and becomes a primary driver of growth and consumption. Even with such high penetration, large modern retail companies may not get into cities and towns of less than half a million population. The size and scale of consumers required for modern retail to survive does not exist in the smaller towns.Therefore the question is not whether we need to allow modern retail to grow, or the current retailers to modernize, but how to allow flow of capital to help modernize retail. We need to create a level playing field for every new business, small or big to enter the retail industry. This will take away the need to distinguish between Indian and foreign or big and small. The impact of small and big, Indian or foreigner on the small shops will be the same. Allowing foreign investors will not only help investment in the front end but also all through the supply chain. We should open up the industry at the earliest so that modern retail can support development of the total retail eco system.Modern retail will help and support the small stores in the next 15-20 years 114

before it starts harming them unless Traditional retailers revamp themselves. Our society will develop in existing localities and in new suburbs. In the existing localities, the infrastructure that small retailers enjoy cannot be duplicated by the modern retailers and therefore new retailers will have to develop cooperation and collaboration with the existing kiranas. By delaying modernizing of retail and not allowing FDI to flow in, we are actually hurting the small retailers. We require many more players and large capital infusion to meet the growing needs of modern Indian Retail.

10. Will Retail FDI harm the Regional Players

Certainly no, take a look at the sheer size and volume of the sector. Total retail business is near Rs 12,00,000 crore, 40 million of our workforce is engaged in Retail sector, It is estimated there are 15 million retail outlets in this country accounting for the highest retail outlet density in the world. Only 4% of our retail outlets have larger than 500 sq feet area. Food constitutes 70% of retail sector, eventually three out every 10 men in the city work in retail sector, these 40 Million labors has mediocre education with no big pay packets hence they deserve a fair deal which would be provided by large retailers who could offer better jobs with lower prices and inflation.

11. Uniqueness of Indian Retail

As India enters its second phase of organized retailing, it is interesting to take stock of first phase learnings. Organized retailing in India took off with great gusto in the early 2000. Capital markets and large business houses saw immense potential in retail as less than 4% of the trade was organized. Capital markets gave astronomical valuations to retail businesses, developers started creating malls everywhere, the best in the industry was lured away offering double of what they were earning earlier, and those who had international exposure of developed retail markets could demand any price. So what has changed in The Second Phase? Why have malls started struggling? According to estimates only about half the retailers in merely 10 of the 200-odd malls make money. Why did Indias first mall in South Mumbai shut down? Why are some key retailers deserting malls? Why are the valuations not robust anymore?

The answer lies in one simple word, execution The retailer-developer-capital markets combine, decided to use fixed benchmarks those of the developed western markets. So the retailers copied the strategies and operating procedures of successful international retailers, the developers planned their pricing based on international sales and the analysts merely took international growth stories and valued Indian brands accordingly. While doing all this, industry ignored one basic element of the chain the consumer, his usage and attitudes, his affordability and most importantly his living conditions. Likewise, there is much hype about tier- 2 and 3 towns. Smaller towns in the US fuel retail growth and so it was believed that the same would apply for India. There was utter disregard to the consumption patterns, propensity to spend, income levels, and socio-economic indicators for the city/area. We now have the experience to script a truly successful story for the Indian retail industry. Clearly, the rules need to be different now. We must understand the hugely heterogeneous Indian customers completely their tastes, preferences, mindsets, regional sensitivities, weather conditions, propensity to spend, their socio-economic outlook etc. The Indian market is very unique, especially so during this phase of rapid economic growth. To be successful here, primary understanding on consumer behavior plays a major role which would take lot of time for MNC to adapt and execute, within this time frame the regional and traditional players have to ensure they adapt to the momentum

2006, suggested that 49% FDI be allowed in the Indian retail sector without any restrictions on the number of outlets or location of stores. The Indian retail boom and the Investment Commissions suggestions renewed the debate on the issue of allowing FDI in the retail sector. The Commission opined that that foreign investment would help in improving the retail and Supply chain infrastructure. Ultimately, the consumers would benefit due to the availability of more product offerings, lower prices, and efficient service. Foreign retailers have to spend sizeable time in the domestic market to capture their market share, before that if Regional and Unorganized players should equip themselves for the competition there is no question of death or fading out from business; there will only coexistence for sure.

13. Employment generation through FDI

The FDI will help to overcome both the lack of experience in organized retailing as well as lack of trained manpower. FDI in retail would reduce cost of intermediation and entail setting up of integrated supply chains that would minimize wastage, give producers a better price and benefit both producers and consumers. From the stand point of consumers, organized retailing would help reduce the problem of adulteration, short weighing and substandard goods. Moreover, it is submitted that in the fierce battle between the advocators and antagonist of unrestrained FDI flows in the Indian retail sector, the interests of the consumers have been blatantly and utterly disregarded. From this point of view, it can inter alia be concluded that the interest of the consumers should take precedence over the interest of the retailer and consequently healthy flow of FDI in retail should be permitted. Further, it would be worthwhile to list down certain advantages from the point of view of consumers which will inevitably flow from the establishment and development of larger stores and supermarkets:

12. Retail Makeover

It is to be noted that lately there has been an remarkable surge in the demand for the liberalization of the Indian retail sector both in domestic and as well as at the international front and it seems that the government is giving the matter a very pensive and careful consideration. Some of the factors that have contributed to this trend are the evident profits in the ever growing but conserved Indian retails sector, reduction in tariff, cheaper real time communications, and cheaper transport. In wake of relentless protests for the opening up of the Indian retail market for the reception of unrestrained FDI, the Investment Commission in July, 115

14. FDI in Retailing Isnt a need of the hour

India is targeting for its GDP to growth of 8% to 10% per year. This requires raising the rate of investment as

well as generating demand for locally produced goods. 1. To reduce gap between farm prices and final retail prices through structural change in distribution - Inflation control mechanism. 2. To acquire market-savvy, market-intelligent and best management practices Provide an aid to Indian agriculture to become lowest cost source of farm produce. 3. India should focus on foreign investment because strong trade base can prosper the economy of India, to increase liquidity by the way of foreign exchange reserves FDI will not just provide access to larger financial resources for investment in the retail sector but simultaneously will rationally allow larger supermarkets, which tend to become regional and national chains (i) to negotiate prices more aggressively with manufacturers of consumer goods and thus pass on the benefit to consumers; and (ii) to lay down better and tighter quality standards and ensure that manufacturers adhere to them. Apart from this, by allowing FDI in retail trade, India will significantly flourish in terms of quality standards and consumer expectations, since the inflow of FDI in retail sector is bound to pull up the quality standards and cost-competitiveness of Indian producers in all the segments. It is therefore obvious that we should not only permit but encourage FDI in retail trade. Reiterating the Indian Council of Research in International Economic Relations (ICRIER), projections that worth of Indian retail sectorto reach$496 billion by 2011-12 and ICRIER has also come to conclusion that investment of big money(large corporates and FDI) in the retail sector would in the long run not harminterestsof small or traditional retailers, hence it can be safely concluded that allowing healthy FDI in the retail sector would not only lead to a substantial surge in the countrys GDP and overall economic development, but would inter alia also help in integrating the Indian retail market with that of the global retail market in addition to providing not just employment but a better paying employment, which the unorganized sector (kirana and other small time retailing shops) have undoubtedly failed to provide to the masses employed in them. 116

15. The sources and advantages in allowing FDI in retail:

1. Only a few global firms possess proprietary expertise in retail trade. They would not transfer their expertise to local firms unless they were allowed to operate in the domestic market. 2. The government needs FDI to meet its foreign exchange requirements. 3. Only global retailers can satisfy the rising and varied demands of Indian consumers. Trade liberalization and improvement in communication systems have increased opportunities for retailers to buy their products from producers worldwide. Some of the factors that have contributed to this trend are the reduction in price, incentives provided to foreign investment, cheaper real time communications, and cheaper transport.

16. Legal Implication on FDI in retail

1. Post-investment protection to Retail companies. 2. Protection of all material and intellectual property of the company 3. Independent and binding disputes settlement mechanisms 4. The right of the company to determine its own ownership structure and provisions on legal, regulatory and administrative transparency

17. Beneficial or Detrimental

Last decade has indeed witnessed tremendous growth in Indian retail industry and has integrated our Indian economy with the world. Retailing in India is progressively inching its way toward becoming the next boom industry. It has emerged as one of the most dynamic and fast paced industries accounting for over 10% countrys GDP. This growth has become major attraction for foreigners to enter in India. The challenge to the retail on the other hand is the requirement of heavy initial investments which leads to difficulty in achieving break even and this is the reason that many of these players have not tasted success so far. However, the growing trend of the market, changes in the lifestyle of consumer segment, increasing per capita income and emerging technologies in operations still promises success in the long run with achievement

of economies of scale. India is the fourth largest economy as far as purchasing power is concerned just behind, USA, Japan and China. Even though 25% of the population lives below poverty line, India has a large and growing middle-income group of over 300 million, making it a strong emerging market.

elsewhere. Hence, both the consumers and the suppliers would lose, while the profit margins of such retail chains would go up. Our burecrats have to become possibilitarian. No matter how dark things seem to be or actually are, raise your sights and see possibilities always see them, for theyre always there. However, it can be said that the advantages of allowing unrestrained FDI in the retail sector evidently outweigh the disadvantages attached to it and the same can be deduced from the examples of successful experiments in countries like Thailand and China; where too the issue of allowing FDI in the retail sector was first met with incessant protests, but later turned out to be one of the most promising political and economical decisions of their governments and led not only to the commendable rise in the level of employment but also led to the enormous development of their countrys GDP. As the Indian Retail Industry has come to a saturation point to evolve consumer experiences hence it is the right time for trying to do something beyond what we have already mastered, otherwise failure is imminent. During a recent study by American Express it is found that 8 out of 10 Indian consumers are willing to pay upto 11% more for products and services if the company provided quality customer service, this shows the sheer attitudinal change of Indian consumers in recent past which open the window of possibility for Retail FDI who are urging to show a difference in consumer service & quality levels to domestic consumers. It is to be noted that FDI in retail would undoubtedly enable Indian Inc to integrate its economy with that of the global economy. Achievement seems to be connected with action. Successful economies keep moving. They make mistakes, but they dont quit.

18. Threats on Retail FDI

1. Threat on unorganized retail players It remains as a threat definitely regional players would coexist; they would die only when they dont adapt to the competition which may also lead to Marginalizing. 2. Huge spread of retail chain stores The financial strength would equip the MNC to negotiate best retail properties which may shoot up the real estate prices 3. Monopoly among suppliers - The suppliers may become monopolist in supplying their brands / goods to respective retailers because they provide huge margin to suppliers to enjoy monopoly displacing domestic players

19. Conclusion
It is submitted that the antagonists of FDI in retail sector oppose the same on various grounds, like, that the entry of large global retailers such as Wal-Mart etc would kill local shops and millions of jobs, since the unorganized retail sector employs an enormous percentage of Indian population after the agriculture sector; secondly that the global retailers would conspire and exercise monopolistic power to raise prices and monopolistic (big buying) power to reduce the prices received by the suppliers; thirdly, it would lead to asymmetrical growth in cities, causing discontent and social tension

117

A Study of Paradigm Shift in Management of Capital in Flows in Indian Financial System In The Post Liberalization Era
Anli Suresh, Asst. Professor, Madras Christian College India 1. Introduction
In most of the period since the mid-1990s, external sector developments in India have been marked by strong capital inflows. Capital inflows, which were earlier mainly confined to small scale official confessional finance, gained momentum from the 1990s after the initiation of economic reforms. As well as increasing in size, capital inflows have undergone a compositional shift from predominantly official and private debt flows to non-debt-creating flows in the post-reform period. Though capital inflows are generally seen to be beneficial to an economy, a large surge over a short span of time in excess of domestic absorptive capacity can be a source of stress, leading to upward pressure on the exchange rate, overheating of the economy and possible asset price bubbles. This paper elaborates on various aspects of capital inflows to India. as it allowed assessing whether the increase in capital inflows influences new challenges, which in turn affect monetary and exchange rate management.

1.4 Hypothesis
The increase in capital inflows influences new challenges, which in turn affect monetary and exchange rate management.

2. Literature Review
1. The Indian economy is now a relatively open economy, despite the capital account not being fully open. The current account, as measured by the sum of current receipts and current payments, amounted to about 53 per cent of GDP in 2007-08, up from about 19 per cent of GDP in 1991. Similarly, on the capital account, the sum of gross capital inflows and outflows increased from 12 per cent of GDP in 1990-91 to around 64 per cent in 2007-08.i With this degree of openness, developments in international markets are bound to affect the Indian economy and policy makers have to be vigilant in order to minimize the impact of adverse international developments on the domestic economy. 2. Whereas the Indian current account has been opened fully, though gradually, over the 1990s, a more calibrated approach has been followed to the opening of the capital account and to opening up of the financial sector. The evidence suggests that the greatest gains are obtained from the opening to foreign direct investment, followed by portfolio equity investment. The benefits emanating from external debt flows have been found to be more questionable until greater domestic financial market development has taken place (Henry, 2007; Prasad, Rajan and Subramanian, 2007) ii. 3. The rate of increase in foreign exchange market turnover in India between April 2004 and April 2007 was the highest amongst the 54 countries covered in the latest Triennial Central Bank Survey of Foreign 118

1.1Statement of the problem

In India, capital inflows in the post liberalization period increased sharply and have been well above the current account deficit, which has largely remained modest. This has posed new challenges for monetary and exchange rate management. So the problem of this study is to have an insight into the management of capital inflows in India in the post liberalization era.

1.2 Objective of the study

To Study the composition of capital inflows in India in the post liberalization era. To study the capital inflows and exchange rate management in the post liberalization era. To study the capital inflows and monetary management in the post liberalization era.

1.3 Methodology
The preliminary findings of this research, comprising of a literature review, roundtable discussions and focus groups. The analysis improved upon previous work

Exchange and Derivatives Market Activity conducted by the Bank for International Settlements (BIS). According to the survey, daily average turnover in India jumped almost 5-fold from US $ 7 billion in April 2004 to US $ 34 billion in April 2007; the share of India in global foreign exchange market turnover trebled from 0.3 per cent in April 2004 to 0.9 percent in April 2007 iii. i BIS Review 122/2008 Page No.1. ii Henry, Peter Blair (2007), Capital Account Liberalization: Theory, Evidence, and Speculation, Journal of Economic Literature, Vol. XLV, December. - Prasad, Eswar S., Raghuram G. Rajan and Arvind Subramanian (2007), Foreign Capital and Economic Growth, Brookings Papers on Economic Activity, 1. iii Mohan (2007b), Indias Financial Sector Reforms: Fostering Growth While Containing Risk, Reserve Bank of India Bulletin, December.

including short-term borrowings and deposits from non-resident Indians (NRIs). As a result, the proportion of short-term debt in Indias total external debt had increased significantly by the late 1980s. The third phase was marked by the balance of payments crisis of 1991 and the initiation of the reform process. The broad approach to reform in the external sector was based on the recommendations made in the Report of the High Level Committee on Balance of Payments 1991. The objectives of reform in the external sector were conditioned by the need to correct the deficiencies that had led to payment imbalances in 1991. Among the components, since the 1990s, the broad approach towards permitting foreign direct investment has been through a dual route, i.e. automatic and discretionary, with the ambit of the automatic route being progressively enlarged to almost all the sectors, coupled with higher sectored caps stipulated for such investments. Portfolio investments are restricted to institutional investors. The approach to external commercial borrowings has been one of prudence, with selfimposed ceilings on approvals and a careful monitoring of the cost of raising funds as well as their end use. In respect of NRI deposits, some modulation of inflows is exercised through specification of interest rate ceilings and maturity requirements. In respect of capital outflows, the approach has been to facilitate direct overseas investment through joint ventures and wholly owned subsidiaries, and through the provision of financial support to exports, especially project exports from India. Ceilings on such outflows have been substantially liberalized over time. The limits on remittances by domestic individuals have also been eased. With the progressive opening-up since the early 1990s, the capital account in India today can be considered as the most liberalized it has ever been since the late 1950s.The process of capital account liberalisation is managed by keeping in view the elasticity of supply and other responses in the economy, and vulnerabilities or potential shocks. The issue is handled with extreme caution given the potential for sudden capital reversals. 3.2 Composition of Capital inflows in India: Net capital inflows, which increased from 2.2% of GDP in 1990/91 to around 9% in 2007/08, do not, however, 119

3.1. Historical backdrop

For the first four decades after independence in 1947, the economic policies of the Indian government were characterized by planning, control and regulation. Until the 1980s, Indias development strategy was focused on self-reliance and import substitution. There were periodic attempts at market-oriented reform, usually following balance of payments pressures, which induced policy responses that combined exchange rate depreciation and an easing of restrictions on foreign capital inflows. However, these controls were relatively an arrow in scope and had little impact on actual inflows, which remained small. The situation changed dramatically with the onset of reform programs introduced in the early 1990s in the aftermath of the balance of payments crisis of 1991. Broadly speaking, Indias approach towards external capital flows can be divided into three main phases. In the first phase, starting at the time of independence and spanning up to the early 1980s, Indias reliance on external flows was mainly restricted to multilateral and bilateral concessional finance. In the second phase however, in the context of a widening current account deficit during the 1980s, India supplemented this traditional external source of financing with recourse to external commercial loans,

reflect the true magnitude of capital inflows to India. Gross capital inflows, as a percentage of GDP, have undergone a more than fivefold increase from 7.2% in 1990/91 to 36.6% in 2007/08. Much of this increase has been offset by corresponding capital outflows, largely on account of foreign institutional investors (FIIs) portfolio investment transactions, Indian investment abroad and repayment of external borrowings. Capital outflows increased from 5.0% of GDP in 1990/91 to 27.4% of GDP in 2007/08. The gross volume of capital inflows amounted to $428.7 billion in 2007/08 as against an outflow of $320.7 billion. Strong capital inflows to India in the recent period reflect the sustained momentum in domestic economic activity, better

corporate performance, and the positive investment climate, the long term view of India as an investment destination, and favorable liquidity conditions and interest rates in the global market. Apart from this, the prevailing higher domestic interest rate along with a higher and stable growth rate have created a lower risk perception, which has attracted higher capital inflows. The large excess of capital inflows over and above those required to finance the current account deficit (which is currently around 1.5% of GDP) resulted in reserve accretion of $110.5 billion during 2007/08. Indias total foreign exchange reserves were $308.4 billion as of July 2008.

Figure3.1.Foreign Investment Inflows In The Indian Capital Market

in FOREIGNINVESTMENTINFLOWSINTHEINDIANCAPITALMARKET(inUS$billion)
900 800 700 600 500 400 300 200 100 0 Series1

of $ US billions

SERIES 1

103

133

559

415

513

489

613

538

240

518

678

815

601

156

153

214

298

616

213

Source: Reserve Bank of India Economic Survey 2009-10.

3.3 Capital inflows and exchange rate management

In India, with the gradual removal of restrictions on international capital inflows and greater integration of domestic with global financial markets, understanding the precise nature of the causal relationship among capital inflows, the exchange rate, interest rates and reactions of monetary policy has certainly become more complex. The response lag of the exchange rate and domestic liquidity to monetary policy actions in the form of direct intervention in the exchange market as well as changes in the short-term policy rates has important implications for the stability of foreign exchange markets and external price competitiveness. 120

The importance of capital inflows in determining exchange rate movements has increased considerably, rendering some of the earlier guideposts of monetary policy formulation. Capital inflows have been observed to cause overshooting of exchange rates as market participants act in concert while pricing information. In the Indian case, notwithstanding the persistence of a large trade deficit, capital inflows have led to appreciation of the exchange rate, indicating the dominance of capital inflows in determining exchange rate movements. In India, since a market-determined exchange rate system was set in place in March 1993, the exchange rate has been largely determined by demand and supply

conditions in the market. Over the years, transactions in the Indian foreign exchange market have experienced tremendous growth. The increase in foreign exchange market turnover in India between April 2004 and April 2007 was the highest amongst the 54 countries covered in the Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity conducted by the BIS in 2007. According to the survey, the daily average turnover in India jumped almost fivefold from $7 billion in April 2004 to $34 billion in April 2007, whereas global turnover over the same period increased

by only 69%, from $1.9 trillion to $3.2 trillion. Reflecting these trends, the share of India in global foreign exchange market turnover trebled from 0.3% in April 2004 to 0.9% in April 2007. The average daily turnover in Indian foreign exchange market almost doubled from $25.8 billion in 2006/07 to $48.0 billion in 2007/08. Despite interventions by the Reserve Bank in the face of large capital inflows, the exchange rate in the recent period has been marked by significant bidirectional movement, implying greater flexibility.

Figure3.2 Average Daily Volume Of Transactions In The Indian Forex Market

in of $ US billions

Source: Reserve Bank of India Economic Survey 2009-10.

3.3 Capital inflows and monetary management

In the recent period, in India, one of the most serious challenges to the conduct of monetary policy emerges from capital inflows in view of their significantly higher volatility as well as the fact that capital inflows in gross terms are much higher than those in net terms. Swings in capital inflows can have a significant impact on exchange rates, domestic monetary and liquidity conditions and overall macroeconomic and financial stability. In fact, the Indian experience illustrates the tight link between external sector management and domestic monetary management. With a view to neutralizing the impact of excess forex flows on account of a large capital account surplus, the Reserve Bank has intervened in the foreign exchange market at regular intervals. Most techniques to offset the impact of forex inflows can be classified as either market-based or non-market based. The market-based approach involves financial transactions between the central bank and the market, 121

which leads to withdrawal or injection of liquidity, as the case may be. It aimed at neutralizing part or whole of the monetary impact of foreign inflows is termed sterilization. The non-market-based approach involves the use of quantitative barriers, rules or restrictions on market activity, which attempt to keep the potential injection of liquidity outside the domestic financial system. In the face of large capital inflows coupled with a declining stock of government securities, the Reserve Bank introduced a new instrument of sterilization, the Market Stabilization Scheme (MSS) to sustain market operations. Since its introduction in April 2004, the MSS has served as a very useful instrument for medium-term monetary and liquidity management. In recognition of the cumulative and lagged effects of monetary policy, pre-emptive monetary tightening measures have also been put in effect since September 2004 and continued during 2006/07, 2007/08 and 2008/09, in part to manage monetary effects of excess capital inflows.

Figure 3.3 Mss Operations (In billions of rupees)

MSSOPERATIONS(InbillionsofRs)
Interestpayments Outstandingamount 1683.9

642.1 290.6 20.6 200405 34.2 200506 26.1

629.7 83.5 200708

200607

Source: Union Finance Accounts and budget documents 2009.

4. Conclusion
Recent global developments have considerably heightened the uncertainty surrounding the outlook for capital inflows to India, complicating the conduct of monetary policy and liquidity management. In view of the strong fundamentals of the economy and massive injections of liquidity by central banks in advanced economies, there could be sustained inflows, as in the recent past. Hence the study based on the hypothesis that the increase in capital flows influences new challenges, which in turn affect monetary and exchange rate management is proved. The policy makers should focus on this aspect in order to have sustainable financial system in India.

Foreign Exchange Risk. Kluwer Academic Press, Norwell, MA. Periodical Articles 3. Datar, M. K. and Basu, P. K. (2004), financial sector Reforms in India: Some Institutional Imbalances, Conference volume, AWBMMDC, Australia, and July. 4. Nagraj, R. (1996): Indias Capital Market Growth, Trends, Explanations and Evidence, Economic and Political Weekly, Spl. Number, September, pp. 2553-61. Reports 5. International Monetary Fund (2008a), Global Financial Stability Report, October --- (2008b), World Economic Outlook, October. (Mohan, 2007b)Mohan, Rakesh (2006), Coping With Liquidity Management in India: A Practitioners View, Reserve Bank of India Bulletin, April. ---- (2007a), Development of Financial Markets in India, Reserve Bank of India Bulletin, June. ---- (2007b), Indias Financial Sector Reforms: Fostering Growth While Containing Risk, Reserve Bank of India Bulletin, December. 6. Reserve Bank of India Economic Survey 2009-10.

5. Bibliography
Books 1. Ajit Singh (1998): Liberalization, the stock market and the market for corporate control: A bridge too far for the Indian Economy. In I.J.Ahluwalia and I.M.D Little (Eds), Indias Economic Reforms and Development, Oxford University Press, pp.169-191. 2. Jacque, L.L. (1996). Management and Control of

122

An Empirical Study-Consumers Prefernce Towards Unit Linked Investment Plan (ULIP)

S. Arun Kumar, Assistant Professor, R.Murali , II MBA, & S.Bharath, II MBA
Saranathan College of engineering, Trichy, Tamilnadu , India.

1. Introduction
Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual. Unit Linked Insurance Plan (ULIP) provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV).ULIP came into play in the 1960s and is popular in many countries in the world. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers. As times progressed the plans were also successfully mapped along with life insurance need to retirement planning. In todays times, ULIP provides solutions for insurance planning, financial needs, financial planning for childrens marriage planning etc., Unit Linked Insurance Plan - is a financial product that offers you life insurance as well as an investment like a mutual fund. Part of the premium you pay goes towards the sum assured (amount you get in a life insurance policy) and the balance will be invested in whichever investments you desire - equity, fixed-return or a mixture of both. In India Insurance Regulatory Development Authority(IRDA) on the recent regulations 1st September 2010 states that the following changes such as Increasing cap on various charges, change in the lock in period from 3 to 5 years and the assured return has been stated as 4.5%.Hence there is a need to understand the consumer perception.

in a family, the need and scope for life Insurance operation has increased tremendously. Life Insurance are not only best suited for the purpose of insuring the life but also are capable of meeting future financial challenges effectively. Hence, this study explores about the customers perception and awareness level of Unit Linked Insurance Policy (ULIP).

3. Objectives of the Research

To study the demographic and rational profile of customers of ULIP To study the Customers Perception towards ULIP To identify those factors which develops a favorable opinion among consumers towards ULIP.

4. Review of Literature Conceptual Review

Unit Linked Insurance Policies [ULIP] was first offered in the United States in 1976, [after being developed and sold successfully in The Netherlands, England, and Canada] in the name of Variable Life Insurance. Basically it was a type of whole life insurance whose values may vary directly with the performance of a set of earmarked investments. A plan which gives complete clarity about the various charges deducted and why its being deducted and so how your fund will grow over time. Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to mutual funds in terms of their structure and functioning. As is the case with mutual funds, investors in ULIPs is allotted units by the insurance company and a net asset value (NAV) is declared for the same on a daily basis. Similarly ULIP investors have the option of investing across various schemes similar to the ones found in the mutual funds domain, i.e. diversified equity funds, balanced funds and debt funds to name a few. Generally speaking, ULIPs can be termed as mutual fund schemes with an insurance component. However it should not be 123

2. Problem Statement
With the increase in domestic savings and improvement in awareness of value of life of the earning person

construed that barring the insurance element there is nothing differentiating mutual funds from ULIPs. ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation opportunities. In ULIPs, a part of the investment goes towards providing you life cover. The residual portion of the ULIP is invested in a fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by you. Simply to put in nutshell, ULIPs are structured in such a way that the protection element and the savings element are distinguishable, and hence managed according to your specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency.

half yearly or yearly. Out of the premium amounts, deductions will be made towards Initial administrative charges like, Investment management charges [there will be an extra charge if the policyholder utilizes the switch over (from equity to debt or debt to balance) option], Annual administration charges, Risk cover and the balance will be invested in a selected fund [debt or equity or balance]. In case of death during the premium paying term or the term of the policy, the sum assured [Rs.1 Lakh in example] or value of policy fund, whichever is higher, is paid to the beneficiaries. In case of survival up to maturity, the value of the fund is paid out. The returns on that day [maturity or death] on the plan depend upon the performance of the market, be it equity or debt. So if the fund value falls below amount invested on that day, the policyholder will receive a lesser amount. Hence one can see that the risk here is transferred to the policyholder as nothing is guaranteed. The Net Asset Value [NAV] will reflect the underlying value of assets, which in turn is dependent on the movement of the Sensex. 1. Research Review: 2. According to Agarwal(2010), ULIP helps to manage the risk return profile. With the double advantage of security and investment, ULIPs have become the most popular insurance product from the available range of life insurance policies. With a higher rate of return, ULIPs gives tough competition to traditional insurance products like endowment plans and money back plans.The basic reason for opting for policies other than the term insurance is ensuring highest maturity value for invested sum besides mortality benefits. In maturity value the important factors to be considered is the internal rate of return (IRR) on investment. IRDA has fixed 6% and 10% as the assumed rate of return for projecting future benefits.The general rule for DebtEquity portfolio management in ULIPs is that you should go conservative by increasing your investment in debt when the markets are at their highest, very unstable and likely to start falling any time. Vice versa when the markets are very low and depressed. [1] 3. Dipak Mondal (2010) The minimum sum assured (life cover) in Ulips is five times and most 124

5. Working of ULIPs
It is critical that you understand how your money gets invested once you purchase a ULIP: When you decide the amount of premium to be paid and the amount of life cover you want from the ULIP, the insurer deducts some portion of the ULIP premium upfront. This portion is known as the Premium Allocation charge, and varies from product to product. The rest of the premium is invested in the fund or mixture of funds chosen by you. Mortality charges and ULIP administration charges are thereafter deducted on a periodic (mostly monthly) basis by cancellation of units, whereas the ULIP fund management charges are adjusted from NAV on a daily basis. Since the fund of your choice has an underlying investment either in equity or debt or a combination of the two your fund value will reflect the performance of the underlying asset classes. At the time of maturity of your plan, you are entitled to receive the fund value as at the time of maturity. Unit linked plans provide an opportunity for the discerning investor to benefit from the return available in their capital market without going for direct investments in capital market. 1. Now many markets are offering these ULIPs in children plans [ICICI Smart Kid policy] endowment and retirement plans [LICS Forty Plus policy] also. These plans give an option to the investor to choose between three fund options debt, equity, and balanced. In these products, premiums can be paid quarterly,

policies offer cover between 5-10 times the annual premium which has been the signaling factor for the investors[2] 4. Amar ranu(2010), leading financial conglomerate says that other market related products lags behind ULIPs return by a larger margin in the long term which confirms that investment in ULIPs are ideal investment vehicle for wealth creation in long run. ULIP score over other products in terms of returns and additional benefits such as insurance cover. However it scores below PPF as investment in ULIPs involves high risks. [3] 5. ULIPs are covered under sec 80(C), 10 10(D) of IT Act, hence tax benefits up to a maximum of Rs.1, 00,000 investment can claimed in these plans.( Sanjay Mathew,2010) [4] 6. As per the news published on business line on Monday, December 13, 2010 the changes made by

IRDA on ULIP includes the top-up premium. IRDA said adding all limited premium ULIPs, other than single premium products, shall have premium paying term of at least five years. The premium has also gone up to 10 times of the year premium compared to existing 5 times. All ULIP pension or annuity products will offer a minimum guaranteed return of 4.5% per annum or as specified by the IRDA from time to time. [5] 7. According to Suddhadeb Chakraborti(2010), financial consultant and author discuss about the latest amendments that it provides mortality health cover in which it has been made mandatory to have Mortality Health Cover for all ULIPS apart from Pension and Annuity schemes. No partial withdrawal is available under new ULIPS. This enables a person to stay invested and hence protect his corpus. A guaranteed return of 4.5% has been announced to keep investors happy. [6]

125

6. Research Methodology
Descriptive research is used. The sampling method is non probability purposive sampling. In that, the sample is chosen so that a particular research purpose is served and is adequate for it. The sample is typical. The sample size is 105 respondents. Content Validity which refers to the extent to which a measurement reflects the specific intended domain of content. Reliability which refers to the confidence we can place on the measuring instrument to give us the numeric value. If the same set of objects are measured again and again with the same or comparable measuring instrument and the results obtained are the same or similar, then the measuring instrument is said to be reliable. Pilot study was carried out were the draft questionnaire was eventually subjected to pilot testing with a total of 30 consumers, and they were asked to comment on any perceived ambiguities, omissions or errors concerning the draft questionnaire. The feedback received was rather ambiguous thus only minor changes were made. For instance, technical jargon was rephrased to ensure clarity and simplicity. Data were collected by means of a structured questionnaire, all the items were presented as statements on the questionnaire, with the same rating scale used throughout, and measured on a five point Likert-type scale that varied from 1 = strongly disagree to 5 = strongly agree. In the subsequent full-scale survey, data were collected from the insurance consumers who have ULIP Transactions. The data collected will be analyzed and interpreted using statistical package for social sciences (SPSS). Statistical tools used namely, Simple percentage analysis, Chi-square test and Factor analysis. Results and Discussions:

Table: 1
Demographic Variables Gender Male Female 18-25 26-35 36-55 Above56 12th Qualification Graduate Post Graduate Government Service Businessman Private Company Self Employed Retired Person Any other Below 150000 150001-250000 250001-350000 350001-450000 More than 450000 Below 10000 10001-25000 25001-50000 50001-100000 More than 100000 126 Categories Number of Respondents 71 34 14 46 33 12 6 53 46 20 11 62 2 9 1 29 36 20 13 7 37 32 16 15 5

Age

Occupation

Income

Savings

Tax Saving Good Returns Investment decision Better Future after Retirement Wealth Creation Any Other Mutual Funds Stocks and Shares Opinion about investment Insurance Schemes Govt. Bonds and Securities Post Office Schemes Investment in Gold and Silver Bank Deposits 1-2 times 3-5 times 5-10 times

19 40 25 19 2 28 21 41 3 2 3 7 57 37 11

How many times do you invest in a year

7. KMO and Bartletts Test: Bartletts test of sphericity indicates that whether the correlation matrix is an identity matrix which would indicate that the variables are unrelated. Table: 2 Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartletts Test of Sphericity Approx. Chi-Square Df Sig. .803 957.632 300 .000

The significance level (.000) gives the result of the test. Very small values (less than .05) indicate that there are probably significant relationships among the variables. A value higher than about .10 or so may indicate that the data are not suitable for factor analysis.

Table: 3
Communalities Investment Decision Opinion About Investment Preferably you would like to Invest in How many times do you invest in a year Insurance Products are susceptible to very low Risk Name the Insurance Company that come to your mind instantly Do you own an insurance policy with regard to ULIP Amount of risk involved in ULIP. Rate of Return is High? Extra Returns for Same Investment 127 Initial 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Extraction .825 .701 .571 .772 .748 .695 .761 .784 .690 .711

Tax Benefits are high Compulsory Investment Transmission Gaining and enriching Investment Knowledge Wealth Creation and Accumulation High Maturity Benefits Switching of Options within the fund Risk Coverage Benefits payable after death Partial Withdrawals Minimum Premium Surrender Options Recommendations from friends and relatives Life Coverage Overall I will prefer to have ULIP for my investment, since I am overall satisfied with it

1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000

.671 .506 .637 .676 .652 .589 .764 .685 .800 .780 .662 .802 .669 .668 .733

8. Initial Communalities
Initial communalities are estimate of the variance in each variable accounted for by all component or factor. For principal component analysis this is always equal to 1.0(for correlation analysis).

9. Extraction Communalities
Extraction communalities are estimate of the variance in each variables accounted for by the factors. Small values (0.564, 0.495, 0.497, 0.561, 0.575, and 0.558) indicate variables that do not fit well with the factor solution and should possibly dropped from the analysis.

Table 4.1:Total Variance Explained

Component Total 1 2 3 4 5 6 7 8 9 10 11 12 13 6.944 1.696 1.573 1.520 1.354 1.247 1.136 1.066 1.016 .896 .773 .757 .658 Initial Eigen values % of Variance 27.777 6.784 6.291 6.080 5.416 4.990 4.544 4.265 4.063 3.585 3.093 3.027 2.631 Cumulative % 27.777 34.561 40.853 46.932 52.349 57.339 61.883 66.148 70.211 73.796 76.889 79.916 82.546 128 Extraction Sums of Squared Loadings Total 6.944 1.696 1.573 1.520 1.354 1.247 1.136 1.066 1.016 % of Variance 27.777 6.784 6.291 6.080 5.416 4.990 4.544 4.265 4.063 Cumulative % 27.777 34.561 40.853 46.932 52.349 57.339 61.883 66.148 70.211

14 15 16 17 18 19 20 21 22 23 24 25

.599 .552 .491 .457 .429 .414 .328 .260 .239 .219 .212 .164

2.397 2.210 1.965 1.827 1.715 1.654 1.311 1.040 .957 .874 .849 .655

84.943 87.153 89.118 90.944 92.659 94.313 95.625 96.665 97.622 98.496 99.345 100.000

In the above table principal component analysis is used for the purpose of extracting the data. This table gives Eigen values, variance explained and cumulative variance explained for the factor solution. There are 9 factors or components extracted using rotated Component Matrix.

Table 4.2- Rotated Component Matrix (a)

Variables Investment Decision Opinion About Investment Preferably you would like to Invest in How many times do you invest in a year Insurance Products are susceptible to very low Risk Name the Insurance Company that come to your mind instantly Do you own an insurance policy with regard to ULIP What is the amount of risk involved in ULIP? Rate of Return is High? Extra Returns for Same Investment Tax Benefits are high Compulsory Investment Transmission Gaining and enriching Investment Knowledge Wealth Creation and Accumulation High Maturity Benefits Switching of Options within the fund Risk Coverage .822 .714 129 .702 .585 .548 .519 .624 .804 .781 .792 .691 .805 .850 .800 .654 .811 1 2 3 4 5 6 7 8 .892 9

Benefits payable after death Partial Withdrawals Minimum Premium Surrender Options Recommendations from friends and relatives Life Coverage Overall I will prefer to have ULIP for my investment,since I am overall satisfied with it .573 .786 .608 -.548 .644

.830

Chi-square Test: Table: 5.1 Age Group (in years) * Rate of Return is High. Hypotheses: The age group of the respondent and the rate of return is high H0: There is no significant relationship between age group and the rate of return. H1: There is significant relationship between age group and the rate of return. Value Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases 23.174(a) 23.900 .098 105 df 12 12 1 Asymp. Sig. (2-sided) .026 .021 .754

Inference From the above table it is inferred that the calculated P value (0.026) which is less than (0.05), hence null hypothesis (H0) is rejected and the alternative hypothesis (H1) is accepted. Hence the age group has the significant association with the Rate of return. Table: 5.2 Age Group (in years) * Tax Benefits are high Hypotheses: The age group of the respondent and the tax benefits are high H0: There is no significant relationship between age group and the tax benefits. H1: There is significant relationship between age group and the tax benefits. Value Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases 23.646(a) 23.652 5.390 105 130 Df 12 12 1 Asymp. Sig. (2-sided) .023 .023 .020

Inference From the above table it is inferred that the calculated P value (0.023) which is less than (0.05), hence null hypothesis (H0) is rejected and the alternative hypothesis (H1) is accepted. Hence the age group has the significant association with Tax benefits. Table: 5.3- Qualification * Compulsory Investment Hypotheses: To test the relationship between the Qualification and Compulsory Investment H0: There is no significant relationship between Qualification and Compulsory Investment H1: There is significant relationship between Qualification and Compulsory Investment Value Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases 17.598(a) 15.288 1.445 105 Df 8 8 1 Asymp. Sig. (2-sided) .024 .054 .229

Inference From the above table it is inferred that the calculated P value (0.024) which is less than (0.05), hence null hypothesis (H0) is rejected and the alternative hypothesis (H1) is accepted. Hence, the Qualification has the significant association with Compulsory Investment. Table: 5.4- Qualification * Gaining and enriching Investment Knowledge Hypotheses: To test the relationship between the Qualification and Gaining and Enriching Investment Knowledge. H0: There is no significant relationship between Qualification and Gaining and Enriching Investment Knowledge. H1: There is significant relationship between Qualification and Gaining and Enriching Investment Knowledge. Value Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association 18.958(a) 23.639 .090 Df 8 8 1 Asymp. Sig. (2-sided) .015 .003 .765

N of Valid Cases

105

Inference From the above table it is inferred that the calculated P value (0.015) which is less than (0.05), hence null hypothesis (H0) is rejected and the alternative hypothesis (H1) is accepted. Hence the Qualification has the significant association with Gaining and Enriching Investment Knowledge. 131

Table: 5.5- Occupation * Tax Benefits are high Hypotheses: To test the relationship between the Occupation and Tax Benefits are high. H0: There is no significant relationship between Occupation and Tax Benefits are high. H1: There is significant relationship between Occupation and Tax Benefits are high. Value Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases 40.346(a) 33.425 .749 105 variables loaded in factor analysis also determine their preference. I f you look at the factor analysis ,39% of variance is explained in factor one ,hence those factors like Tax benefits are high, Transmission, Switching of Options within the fund, Risk coverage, Life Coverage plays a prominent role in bringing customer preference towards ULIP. Df 20 20 1 Asymp. Sig. (2-sided) .005 .030 .387

Inference From the above table it is inferred that the calculated P value (0.005) which is less than (0.05), hence null hypothesis (H0) is rejected and the alternative hypothesis (H1) is accepted. Hence the Occupation has the significant association with Tax Benefits are high.

10. Conclusions
The age groups having significant association with tax benefits availed using ULIP and rate of return and same variables also got loaded in factor analysis, if we analyze the frequency analysis most of them are youth, so their preference is quiet clear on their requirements on tax benefits and good rate of return .Good rate of return denotes the clear youth expectation on ULIP. If you look at the qualification which has significant association with compulsory investments and gaining investment knowledge, as the respondents mostly belong to graduates segment these people expect these variables as a mandatory requirement for making ULIP choice and the same variables got prominence through factor loading. Most of the respondents belong to private company occupations and hence the variable tax benefits really influence the customer in preferring ULIP and also the rate of return 132

11. Recommendations
For the above stated conclusions the marketers need to focus attention on creating confidence among customers about good rate of return and tax benefits by educating them through elucidating the rate of return with clear transparent references and testimonials will help them to attract more customers. Marketers need to educate and bring awareness among customers about the need for compulsory investments and mostly respondents are from private companies they should run promotional programs to them to attract more number of customers, education about the need for insurance policy should be educated to them through various strategies like in house company campaigning programs and focused advertisements strategy reaching those focused graduate segment belong to private companies. Marketers need to bring awareness and build confidence among consumers about the benefits availed on risk coverage and life coverage with focused niche advertisement strategies.

12. Bibliography
1. Agarwal, (n.d.). Long Term Ulip Management. Retrieved December 13, 2010, from http:// www.articlesnatch.com/Article/Long-TermUlip-Management/1411742. Dipak Mondal (Apr 15 2010), The Businessline, , New Delhi., Many Ulips offer life cover of 50 times yearly premium Retrieved December 13, 2010 from http://www.mydigitalfc.com/ insurance/many-ulips-offer-life-cover-50times-yearly-premium-965

in/bw/2010_06_28_IRDA_Issues_Ulip_ Guidelines.html. 6. Suddhadeb Chakraborti (22 nova 2010) New ULIP Guidelines: Benefits and Impact Retrieved December 13, 2010 from http://ezinearticles. com/?New-ULIP-Guidelines:-Benefits-andImpact&id=5398783. 7. Appa Rao. Machiraju Risk Management and Family Economics Yogakshema, April, 1998. 8. Bernstein, Peter L., (1998): Against the Gods, John Wiley and sons, New York. 9. Black, Jr. Kenneth and Harold Skipper Jr. (2000) th edition), Life and Health Insurance, (13 Prentice - Hall, Inc., Englewood cliffs, N.J. 10. Joseph M. Belth Life Insurance a Consumers Handbook Indiana University Press, Bloomington, London. 11. Huebner.S.S. (1927) The Economics of Life Insurance (3rs Edition), Appleton century Crofts, Inc., New York 12. Rejda, George. E (2001), Principles of Risk th management and Insurance, (7 edition), Addison Wesley Longman, Inc., Boston, MS.

2.

3. Amar Ranu, (16 Mar 2010). Invest in ULIPs - A Good Wealth Creator Tool in Long Term Retrieved December 13, 2010 from http://ezinearticles.com/?Invest-in-ULIPs--A-Good-Wealth-Creator-Tool-in-LongTerm&id=3939540. 4. Sanjay Mathew, (n.d). ULIP-Merits and Demerits Retrieved December 13, 2010 from http:// www.articleslash.net/Insurance/571692__ ULIP-Merits-and-Demerits.html The Business Line (13, 2010, December) IRDA Issues ULIP guidelines Retrieved December 13,2010 from http://www.businessworld.

5.

133

A Comparative Study Between Ann,Arima And Hybrid of Ann and Arima for Predicting The Gold Rates
Research Scholar, Sathyabama University, Chennai Dept of Mathematics, MNM Jain Engineering College, Chennai

E.Priyadarshini

Dr. A. Chandra Babu

1. Introduction
Recent studies have established that non-linearity exists in financial data and artificial neural networks can be successfully used to model the relationship among this data.Since Neural Network can extract valuable information from a mass of historical information and can be efficiently used in financial areas, the applications of neural networks to financial forecasting have become very popular over the last few years[Zhang, et al, 2004, Refenes, 1995; Kate, et. al, 2000, Abu- Mostafa, at el, 2001] Artificial neural networks have a natural way of solving problems that involve learning and pattern recognition. It can detect patterns in data through learning and are much easier to program .New researches suggest that seeing the nature of gold rates, combining two or more computational models synergistically is better approach for prediction problem. The basic idea behind this is that each models unique capability can be used to model different patterns of data.

able to explain this residual variance and produce more reliable predictions of the stock price movements.A hybrid ARIMAANN model for time series prediction synergically combines the advantages of the easy-touse and relatively easy-to-tune ARIMA models and the computational power of ANN.

2. Neural Network Forecasting Model

The Artificial Neural Networks, the well-known function approximators in prediction and system modelling, has recently shown its great applicability in time-series analysis and forecasting . ANN is more effective in describing the dynamics of non-stationary time series due to its unique non-parametric, non-assumable, noise-tolerant and adaptive propertiesRecently neural networks have been used for modeling nonlinear economic relationship because of its ability to extract complex nonlinear and interactive effects. Neural networks are a class of nonlinear model that can approximate any nonlinear function to an arbitrary degree of accuracy and have the potential to be used as forecasting tools in many different areas. There are many different neural net learning algorithms found in the literature. No study has been reported to analytically determine the generalization performance of each algorithm.

1.1 Literature Survey

Contemporary studies show that the techniques of ANN and ARIMA when combined, offer a competitive edge over each of the individual model. The benefits of such methods appear to be substantial especially when dealing with non-stationary series .Results from study (Sallehudin, et al.,2008) show that GRANN_ ARIMA(Grey Relational Artificial Neural Network_ Auto Regressive Integrated Moving Averages) is better than the individual model and conventional hybrid model in terms of accuracy and robustness since it produces small forecasting errors and can work well in both small and large scale data. Technical analysis, (Murphy, 1999) refers to the various methods that aim to predict future price movements using past stock prices and volume information. It is (Mills, 1990; Priestley, 1988) possible that non-linear models are 134

2.1Neural Network Architecture and Design

An Artificial Neural Network (ANN) is an information processing system whose performance characterizes biological neural networks. ANNs are mathematical models of neural biology based upon the assumption that: 1. Information processing occurs at many simple elements called neurons. 2. Signals are passed between neurons over connection links. 3. Each connection link has an associated weight, which multiplies the signal transmitted.

4. Each neuron applies an activation function (usually non linear) to its net input (sum of weighted input signals) to determine its output signal. ANN is characterized by (1)a pattern of connections between the neurons called its architecture (2) Method of determining the weights on the connections called training algorithm and (3) activation or transferring function from one neuron to another neuron. Neurons in ANN are organized in single or multi layers. The current work without emphasizing on these strategies assumes learning rate, momentum, epochs, error tolerance and target randomly. Back Propagation Algorithm is the most commonly used algorithm for developing ANN models for financial data.

(say 0.000001), then stop. Otherwise, reset E=0, and repeat from Step 1 for another iteration.

3.Arima Methodology
The art of ARIMA modeling involves the following st eps:

3.1. Model Identification

The foremost step in ARIMA modeling is to check for stationarity of the series. A cursory look at the graph of the data and the structure of autocorrelation and partial autocorrelation may provide clues for the presence of stationarity. If the model is found to be non-stationary, stationarity can be achieved mostly by differencing the series. The next step in the identification process is to find the initial values for the orders of parameters p, q. They could be obtained by looking for significant autocorrelations and partial autocorrelation coefficients. The autocorrelation function (ACF) and partial ACF (PACF) are very important for the definition of the internal structure of the analyzed series. Theoretically, both an AR (p) process and an MA (q) process should be associated with well-defined patterns of ACF and PACF.

2.2 Back Propagation Algorithm (BPA)

Back propagation Algorithm assumes that there is supervision of training of network. The method of adjusting weights is designed to minimize the sum of the squared errors for a given training data set. ANNs are developed by BPA in following steps. Step 1: Select an input and output variables and decide the architecture of ANN for modeling the variables.x presents the input , y hidden and z output layer. Step 2: calculate the net inputs and outputs of the hidden layer neurons Netjh =

i =1

N +1

wji x i ,yj =f(Net j h )

3.2. Estimation
At the identification stage, one or more models are tentatively chosen that seem to provide statistically adequate representation of the available data. Then we attempt to obtain precise estimates of the model by least squares as advocated by Box &Jenkins.

Step 3: calculate the net inputs and outputs of the output layer neurons Netk0 =

j =1

J +1

v kj yj

,zk =f(Netk0 )

Step 4: update the weights in the output layer (for all k, j pairs) v kj vkj +c (d k - z k )z k (1- z k)yj Step 5: update the weights in the hidden layer (for all i, j pairs) k (dk -zk )zk wji wji + c 2 yj( 1 yj )xi { k = 1 ( 1 z k ) v kj } Step 6: update the error term

3.3.Diagnostics
Different models can be obtained for various combinations of AR and MA individually and collectively. For the models obtained, perform diagnostic tests using (1) Residual ACF (2) Box pierce Chi-square tests (d)Forecasting: Arima models are developed basically to forecast the corresponding variable. There are two kinds of forecasts-sample forecasts and post sample forecasts. The former are used to develop confidence in the model and the latter to generate genuine forecasts for future planning. Arima model can be used to yield both these kinds of forecasts.

k =1

(dk - zk )2

and, repeat from Step 1 until all input patterns have been presented (one iteration.) Step 7: If E is below some predefined tolerance level

135

4.Hybrid Model of Ann and Arima (Ann_arima)

In the proposed model there are mainly two stages. In the first stage ANN is used to predict the gold rates using four predictors,namely two yearly moving average,one yearly moving average,six monthly moving average,three monthly moving average.Then the residual generated is provided to the ARIMA which will forecast the error forecast. In the second stage , the predicted price by ANN is summed with the error forecast generated by ARIMA which produces the final forecasted value.

Fig 1.Flow Chart of the Proposed Hybrid Approach (ANN and ARIMA)

5. Data Analysis

The data for analysis is taken from the average monthly gold rates from the June 1999 to April 2010 obtained from World Gold Council. In this study, we used time delay moving average as technical data. The advantage of moving average is its tendency to smooth out some of the irregularity that exits between market days. The predictor that are chosen are two yearly moving average,one yearly moving average,six monthly moving average,three monthly moving average.

Fig 2:Sequence Chart of Gold Rates 136

5.1Modeling using ANN:The neural network model has 4 inputs for 4 predictors,two hidden layer and one output unit to predict gold rate. Historical data are used to train the model. Once trained the model is used for.forecasting . Fig 3:Network Diagram of ANN

Hidden layer activation function: Hyperbolic tangent Output layer activation function: identity

Table 1:Network Details for Multilayer Perceptron model of ANN

Network Information 1 2 3 4 Number of Unitsa Rescaling Method for Covariates Number of Hidden Hidden Layer(s) Dependent Variables Number of Units Activation Function Error Function 137 Layers Number of Units in Hidden Layer 1a Activation Function 1 oneyrMA sixmnthMA ThreemnthMA twoyrMA 4 Standardized 1 1 Hyperbolic tangent goldrate 1 Standardized Identity Sum of Squares

Input Layer

Covariates

Output Layer

Rescaling Method for Scale Dependents

Table 2:Estimated values of the parameters

Parameter Estimates Predicted Predictor (Bias) oneyrMA sixmnthMA ThreemnthMA twoyrMA Hidden Layer 1 (Bias) H(1:1) Hidden Layer 1 H(1:1) .179 .185 .087 -.612 -.197 .348 -2.135 Output Layer goldrate

Input Layer

5.2.Model Identification, Estimation and Diagnosis in the merged ARIMA The input series is the residual or error generated from the difference of actual and predicted gold price of the indices from ANN model during the same time period. First stage is to verify that whether the series is stationary or not with the help of sequence graphs. It can be seen from the Figure that series is not stationary and requires to be differenced once. ACF and PACF on the input series will help to find out the tentative values of three parameters p, d and q of ARIMA (p, d, q).After analyzing ACF, PACF and performing various iterations by taking different p and q parameter values with d as 1 and best fit was found having minimum Bayesian Information Criteria (BIC) value(Table 3). The best fit was selected after applying various p and q values the model. To check the adequateness of the model the ACF and PACF plots of the error between the input series and its fit were generated. In the process of diagnosis,to determine whether the time series is white noise or not, the Box-Ljung Q statistic is compared with the chi-square distribution with (h-m) degrees of freedom. Here h is the number of lags and m is the number of parameters. Table 3 clearly demonstrates that the Q* statistic has same distribution as chi-square with (h-m) degrees of freedom. The plots and the Autocorrelation generated indicate that the model fits well(fig4).It was found that ARIMA(0,1,0) is the model that fits the residuals generated by the ANN.

Table 3:Model Parameters of ARIMA(0,1,0) model

Model (0,1,0) Gold Rate

RMSE 28.397

MAPE 3.196

MaxAPE 14.895

MAE 19.356

MaxAE Q*Statistics 114.758 6.739

DF

Sig

BIC 0.414

18.652 18

138

Fig 4:Residuals of the ACF and PACF of the fitted ARIMA model

The fit of the input (residual of ANN) series generated by the ARIMA models is summed with the predicted close value generated by ANN. This results in the final predicted value.

139

Fig 5:Chart of actual versus predicted values.

Fig 6:Chart of predicted versus residuals.

6.Conclusion In the current research attempted to study whether a hybrid model achieves better results than an individual model .Hybrid model was developed using techniques of ANN and ARIMA and comparison is also made between the conventional hybrid approach using ARIMA, ANN and proposed hybrid approach using ANN, ARIMA based on the error measures Mean Absolute Error(MAE),Mean Absolute Percentage Error(MAPE),Mean Square Error(MSE) Root Mean Square Error(RMSE) and Percentage Mean Absolute Deviation(PMAD)(Table 4).

Time Series Plot of gold rate, predANN, PredARIMA, finalhyb

1000
Variable gold rate predA NN PredA RIMA finalhy b

Average Monthly gold rates

900 800 700 600 500 400 300 200 Month Jun Year 2001

Jun 2002

Jun 2003

Jun 2004

Jun 2005

Jun 2006

Jun 2007

Jun 2008

Jun 2009

Fig 7:Comparative Graph showing the plot of actual rates,predicted ANN rates ,predicted ARIMA rates and hybrid ANN_ARIMA rates. Table 4: Error Measures for ANN,ARIMA,Hybrid ANN_ARIMA Error ANN ARIMA Measures MAE 16.82615 19.355 MAPE MSE RMSE PMAD 0.03036 496.8101 22.28923 0.030755 0.03195 798.2354 28.25306 0.035025

HYBRID ANN_ARIMA 6.59235 0.01159 86.6236 9.30718 0.01205

Results show that prediction of hybrid ANN_ARIMA model for the average monthly gold outperformed the traditional ARIMA Model and the contemporary ANN Model in all the error measures.Hence it can be successfully used for forecasting than the ANN and ARIMA models. 7.References 1. Abu- Mostafa, Y. S., et al. (2001). Neural Networks in Financial Engineering, IEEE Transactions on Neural Networks, 12(4): 653-656. 2. Box, G.E.P. and Jenkins, G.M., (1976). Time Series Analysis: Forecasting and Control. San Francisco, CA: Holden-Day. 3. Brabazon, T. (2000). A Connectivist Approach to Index Modelling in Financing Markets, Proceedings of 140

Coil / EvoNet Summer School. University of Limerick, Briys, E., Bellalah, M., Mai, H. M. and Varenne, F. de (1998). Options, Futures and Exotic Derivatives. England: John Wiley & Sons Ltd. 4. Brockwell, P.J., Davis, R. A. (1996). Introduction to time series and forecasting Springer. 5. Fama, E.F. (1965). The Behaviour of Stock Market Prices, Journal of Business, 38: 34-105. 6. Fama, E.F. (1970). Efficient Capital Markets: A Review of Theory and Empirical Work, Journal of Finance, 25: 1465-1468. 7. Granger, C.W.J. and P. Newbold, (1986),Forecasting Economic Time Series (Academic Press, San Diego). 8. Hanke, John E. and Wichern, Dean W. (2007). Business Forecasting. New Delhi: Pearson EducationInc,79-80. Joarder Kamrwzaman and Ruhul A Sarkeg(2003). Forecasting of currency exchange rates using ANN: a case study, IEEE Int. Conf. Neural Networks & Signal Processing,Nanjing, China. 9. Kate A., Simth, Jatinder, N. D, Gupta (2000). Neural Networks in Business: Techniques and Applications for the Operations Researcher, Computer and Operations Research, 27: 1023-1044. 10. Kim, Kyoung-jae and Lee, Won Boo (2004). Stock Market prediction using Artificial Neural Networks with Optimal Feature Transformation, Neural Computing and Application, 13: 255260. 11. Kumar, Satish (2004), Neural Networks: A Classroom Approach, Tata McGrawHill Publishing Company Limited, New Delhi.

12. Mills, T. C. (1990). Non-linear Time Series Models in Economics, Journal of Economic Surveys, 5: 215241. 13. Merh, Nitin, V.P. Saxena and Kamal Raj Pardasani (2008), Artificial Neural Network for Stock Market Forecasting, Nirma University Journal of Business and Management Studies (NUJBMS), 2(3 & 4): 3-19. 14. Murphy, J. J. (1999). Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications. New York: Institute of Finance, 4-5. 15. Nitin Merh, Vinod P. Saxena and Kamal Raj Pardasani(2010).A Comparison between hybrid approaches of ANN and ARIMA for Indian stock trend forecasting. Business Intelligence Journal,23-43. 16. Priestley, M. B. (1988). Non-linear and Non-stationary Time Series Analysis. London: Academic Press. 17. Refenes, A. P., (Ed) (1995). Neural Network in the Capital Markets. England:John Wiley & Sons Ltd, 149-161. 18. Sallehuddin, Roselina., Shamsuddin, Siti Mariyam. and Hashim, Siti Zaiton Mohd (2008). Hybridization Model of Linear and Non-linear Time Series Data for Forecasting. Second Asia International Conference on Modelling & Simulation, IEEE Conference Proceedings, DOI 10.1109/AMS.2008.142, 597 602. 19. Samanta G.P. and Bordoloi, Sanjib (2005). Predicting Stock Market- An Application of Artificial Neural Network Technique Through Genetic Algorithm, Finance India, 19(1): 173-188.

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Mutual Funds Motivating Factors Behind Investment. R.A.Rabika Begum, Research Scholar, (Ph.D In Commerce) Mother Teresa Womens University, Kodaikanal Dr. P. S. Valarmathy Head, Department of Management Studies, Vel Tech Institute
To grow is to develop and to develop is to achieve a designed target. Creation of wealth is the primary objective of investors. There are a number of investment opportunities all around the investor to achieve his objectives. There are bank deposits, company deposits, equities, bonds, life insurance policies, small savings scheme, and mutual fund products etc. which create wealth and which in a way compete among themselves for the choice of the investor. A mutual fund is the ideal investment vehicle for todays complex and modern financial scenario. actual practice. These expectations of the investors are influenced by their perception and humans generally relate perception to action. Formulation of schemes and marketing of the mutual fund products requires an indepth study of the financial behaviour of the investors. In this paper an attempt is made to identify the major factors that Influence the investors in their selection of the fund/scheme.

4. Need for the Study

Mutual fund is a growing industry and considered as the major mobilizes of financial resources for the stock market and the economy in general. . The rapid growth of the mutual fund industry in India has attracted a number of private players into the market. The various mutual funds companies have been successfully operating in the industry by providing a wide range of products to suit a variety of investors needs. Formulation of alternative schemes by various mutual fund companies has become important to fight the battle and to secure a sound position in the industry. Mutual Fund as an investment Vehicle is capturing the attention of various segments of the society, like Academicians, industrialists, financial intermediaries, investors and regulators for varied reasons and deserves an in-depth study.

2. Scheme of the Paper

Background Information Need For The Study Objectives Of The Study Limitations Of The Study Review Of Literature Analysis And Findings Future Prospectus

3. Background Information
Put not your trust in money put your money in trustis the perfect way by which the concept of mutual funds can be understand. Mutual funds are dynamic financial intermediaries, which pool the savings of numerous individuals and invest the money thus raised in a diversified portfolio of securities. 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. In financial markets, expectations of the investors play a vital role. They influence the price of the securities; the volume traded and determines quite a lot of things in 142

4. Objective of the Study

To identify the major factors that influence the investors fund/scheme selection

5. Methodology
The required data was collected by means of a structured questionnaire distributed among 60 investors spread over the city of Chennai but only 52 questionnaires which was complete in all aspects used for the study .

6. Limitations of the Study

The data collection procedure was taken up from mutual fund investors of Chennai City only. Personal bias and prejudice of the respondents could have affected the results of the study.

7. Review of Literature
The existing Behavioural Finance studies are very few and very little information is available about investor perceptions, attitudes and behaviour. Ippolito (1992) says that fund/scheme selection by investors is based on past performance of the funds and money flows into winning funds more rapidly than they flow out of losing funds. Goetzman (1997) states that there is evidence that investor psychology affects fund/scheme selection and switching. De Bondt and Thaler (1985) while investigating the possible psychological basis for investor behaviour, argue that mean reversion in stock prices is an evidence of investor over reaction where investors over emphasize recent firm performance in forming future expectations. Kulshreshta (1994) offers certain guidelines to the investors in selecting the mutual fund schemes. Shanmugham (2000) conducted a survey of 201 individual investors to study the information sourcing by investors, their perceptions of various investment strategy dimensions and the factors motivating share investment decisions, and reports that among the various factors, psychological and sociological factors dominated the economic factors in share investment decisions. Madhusudhan V Jambodekar (1996) conducted a study to assess the awareness of MFs among investors, to identify the information sources influencing the buying decision and the factors influencing the choice of a particular fund. The study reveals among other things that Income Schemes and Open Ended Schemes are more preferred than Growth Schemes and Close Ended Schemes during the then prevalent market conditions. Investors look for safety of Principal, Liquidity and Capital appreciation in the order of importance; Newspapers and Magazines are the first source of information through which investors get to 143

know about MFs/Schemes and investor service is a major differentiating factor in the selection of Mutual Fund Schemes. Sujit Sikidar and Amrit Pal Singh (1996) carried out a survey with an objective to understand the behavioural aspects of the investors of the North Eastern region towards equity and mutual funds investment portfolio. The survey revealed that the salaried and self employed formed the major investors in mutual fund primarily due to tax concessions. UTI and SBI schemes were popular in that part of the country then and other funds had not proved to be a big hit during the time when survey was done. Syama Sunder (1998) conducted a survey to get an insight into the mutual fund operations of private institutions with special reference to Kothari Pioneer. The survey revealed that awareness about Mutual Fund concept was poor during that time in small cities like Visakapatnam. Agents play a vital role in spreading the Mutual Fund culture; open-end schemes were much preferred then; age and income are the two important determinants in the selection of the fund/scheme; brand image and return are the prime considerations while investing in any Mutual Fund. Anjan Chakarabarti and Harsh Rungta (2000) stressed the importance of brand effect in determining the competitive position of the AMCs. Their study reveals that brand image factor, though cannot be easily captured by computable performance measures, influences the investors perception and hence his fund/ scheme selection. Since 1986, a number of articles and brief essays have been published in financial dailies, periodicals, professional, research journals, explaining the basic concept of Mutual Funds, and highlight their importance in the Indian capital market environment. They touch upon varied aspects like Regulation of Mutual Funds, Investor expectations, Investor protection, Trend in growth of Mutual Funds and some are critical views on the performance and functioning of Mutual Funds. From the above review it can be inferred that Mutual Fund as an investment vehicle is capturing the attention of various segments of the society, like academicians, industrialists, financial intermediaries, investors and regulators for varied reasons and deserves an in depth study.

8. Need for the Present Study

Even though studies were already made in this subject, the investors behaviour tend to change over a period of time and it also differs among the investors , in this article an attempt is made to study the major factors, which influence the investors in their selection of the fund/scheme. Predominant Factors influencing the investors fund/scheme selection: Factor analysis is applied to identify the factors that influence the investors fund/scheme selection, 19 variables were identified based on theory and past research. The Investors were asked in the questionnaire to express their agreement & disagreement with the motivational factors attributing to investment in Mutual funds from their personal experience. Factor analysis is applied on the 19 variables influencing the investors. This analysis is multivariate tool generally used to condense the greatest number of variables in to least number of factors. The results of factor analysis are presented as follows. FACTOR ANALYSIS The identified variables were classified under the appropriate group. 19 variables have emerged into 5 major factors I Financial Factor/Economic Factor II Brand Image III Quality Factor IV Macro Factors V Investor Services

Table 1.1
I Financial Factors/Economic Factors A1 A2 Mutual Fund products maximizes return Products with tax benefits is an important criterion in choosing Mutual Fund units Factor Loading .77098 .67706

A3

Management fees payable is very low/Cost of record keeping is low / in mutual fund investment

.55128

A4

Funds/Schemes past performance/track importance while investing

record

is

given

.54044

The above table explains the variable loadings of each factor. The above table denotes that factor 1 has 4 variables which can be uttered as Financial Factor/Economic Factors. I FINANCIAL FACTOR/ECONOMIC FACTOR Lower cost of Investment Tax Benefits High Return Past performance

144

Table 1.2
II Brand Image B1 B2 B3 Favorable rating by a rating agency influences the investors of mutual fund I make investment in mutual funds based on the reputation of the scheme Investors are mostly influenced by the reputation of the asset management company I am always impressed upon on the expertise of the fund managers in managing money Factor Loading .82341 .73988 .72236

B4

.56650

From the above table it is observed that Factor 2 has 4 variables under it Reputation of the Asset Management Company Reputation of the Scheme Fund Managers expertise Favorable Rating by a rating agency The factor can be named as BRAND IMAGE.

Table 1.3

III Quality Factors Innovative features of Mutual Funds attracts customers towards mutual funds Easy entry and exit to and from Mutual Funds Mutual Funds provides good infra structure facilities Investors in Mutual Funds can liquidate their investments at any time The extent of diversification of risk in MF is commendable

Factor Loading

C1 C2 C3 C4 C5

.91859 .87809 .66562 .59579 .52782

It is ascertained from the above table that Factor 3 has the following variables Quality Factor Flexibility Liquidity Innovative features Diversification of Risk Infra structure facilities These Variables can be suitably named as QUALITY FACTOR 145

Table 1.4

IV Macro Factors Declining interest rates on government backed securities shifts small savings to Mutual Funds Uncertain and unattractive bank deposit interest rates makes Mutual Fund investment attractive Mutual funds are well regulated as it is continuously monitored by SEBI

Factor Loading

D1

.85677

D2

.62316

D3

.44298

It is prominent from the listed table that Factor 4 contains the following 3 variables MACRO FACTORS Lower return on Government Securities Unattractive Interest on Bank Deposits Effective Monitoring by SEBI These variables together can be named as MACRO FACTORS IV

Table 1.5
V Investor Services E1 E2 Individual has no time & energy to monitor his portfolio MF operation is very transparent Fringe benefit like free insurance, free credit card, loans on collateral influences investment in Mutual Funds Factor Loading .80358 .76446

E3

.68193

It is eminent from the above table that Factor 5 has 3 variables under it V INVESTOR SERVICES Convenient Administration Transparency Fringe benefits This factor can be correctly termed as INVESTOR SERVICES The data for each of the 5 sub-groups were factor analysed using Principal Component Analysis, with the objective of identifying the factor in the sub-group which turns out to be significant in the fund/scheme selection.

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FACTOR ANALYSIS PRINCIPAL COMPONENTS ANALYSIS S.No 1 2 3 4 5 Factors FINANCE FACTOR BRAND IMAGE QUALITY MACRO FACTORS INVESTOR SERVICES Eigen Value 4.8925 3.54509 2.03949 1.69851 1.49970 PercentageOf Variance 25.8 18.6 10.7 8.9 7.9 Cumulative Percntage 25.8 44.4 55.1 64 71.9

Findings of the study: The 19 fund related variables were analyzed for their importance. The analysis reveals that the investor considers finance factor as the first influencing factor followed by the other factors .Still all the 19 variables are important in the selection of the fund/scheme. Running a successful Mutual fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investor. This study has made an attempt to understand the financial behaviour of Mutual Fund investors. The post survey developments are likely to have an influence on the findings. Behavioral trends usually take time to stabilize and they get disturbed even by a slight change in any of the influencing variables.

10. Future Prospectus

In the future, Mutual Fund industry has to face competition not only from within the industry but also from other financial products that may provide many of the same economic functions as mutual funds but are not strictly Mutual Funds. Hence, surveys similar to the present one need to be conducted at intervals to develop useful models. Unless the Mutual Fund schemes are tailored to the changing needs of the investors, and unless the AMCs understand the fund selection/ switching behaviour of the investors, survival of funds will be difficult in future. Nevertheless, it is hoped that the survey findings will have some useful managerial implication for the AMCs in their product designing and marketing.

147

Impact of Financial Crisison Indian Economy A Strategic Route Map to Future

Dr. Y. Lokeswara Choudary
Asst.Professor & Research Supervisor, SRM B-School, SRM University, Chennai

Mr. Yaseen Masvood

Asst.Professor& Research Scholar, School of Management, SRM University, Kattankulathur, Chennai

1. Introduction
The OECD and IMF forecasts for 2009 suggest that for the first time since the 1930s GDP will fall in the industrialized economies that make up the OECD. Yet even these forecasts are based on relatively optimistic assumptions that the financial markets begin to stabilize in the months ahead and that there are not other major shoes to drop in terms of negative financial shocks. History has shown that crises on this scale lead to social and political instability with unpredictable and often tragic results.

A national and global regulatory architecture needs to be built so that financial markets return to their primary function: to ensure stable and cost-effective financing of productive investment in the real economy. Moreover, governments must acknowledge the urgent need to begin work on a more inclusive, just and democratic system for the governance of global markets. To stabilize the present crisis the global economy and governments need to contemplate on the areas which can pave way to fill the gap of present crisis and future economy.

2. Impact on Employment and Social Life

Working families have an enormous stake in the response of governments and the international institutions to this crisis. How protracted and deep the global recession proves to be depends on how timely and well-focused government action is. However, for more than two decades social cohesion has been under stress as a result of growing inequality in most countries. Today, those who are losing homes, jobs and pensions as a result of the financial crisis for which they bear no responsibility, are being called onas taxpayersto bail-out those who are responsible. This produces a strong political cocktail that governments would do well to heed. While shortterm action to save the banking system, stop major companies going under and stimulate demand to help the recovery of the real economy are all necessary, there can be no return to business as usual once the recovery is underway. This is a point OECD appears to accept in principle, but what about in practice, in the analysis and advice they give to their member governments. This most serious economic crisis since the Great Depression must mark an end to an ideology of unfettered financial markets, where self-regulation has been exposed as a fraud and greed has overridden rational judgment to the detriment of the real economy. 148

3. Impact on It And Ites

The current crisis parallels the 2001-2002 bust especially for Indias IT (export) sector. Approximately 61% of the Indian IT sectors revenues are from US clients. If you just take the top five India players who account for 46% of the IT industrys revenues, the revenue contribution from US clients is approximately 58%. About 30% of the industry revenues are estimated to be from financial services. In addition, from a qualitative standpoint, the tentacles of the financial sector business are quite well-entrenched and have significant structural impact as well. The size and maturity of the IT industry today are far ahead of the 2001 days, and the current model has signs of irreversibility and long-term competitive advantage. While GE invented the industry along with Indias biggest IT outsourcing firms, the US financial services and insurance sector (BFSI) was one of the earliest adopters of the outsourcing trend in a big way.

4. Impact of Exchange Rate Risk

The Rupee-Dollar exchange rate benefit for a company that would have done zero-hedging is in the range of 10-12%. However, if we analyze the top few firms, the median seems to be around an offset benefit of around 2-3% on the bottom-line, assuming some hedging. The Rupee has depreciated since the last quarter by more than 10% which has had a positive effect on both top line

and the bottom-line in Rupee terms. This is to an extent countered by the significant hedging done by the IT biggies, the ramifications of which translated into forex losses for them in the June quarter. This may bite them again this quarter. For example, TCS has hedged about US$ 2.2 billion for the year at Rs.45/US$. According to the June quarter results transcript, at Rs.45/US$, the mark-to-market loss on this would be about US$100 million. And, considering the Rupee has moved beyond Rs.47/US$ into the first week of October, this can be far worse.

6. Real Estate Market

The big risk is a possible repeat of what happened in 1996. Projects that are halfway to completion, or companies that are stuck with cash flow issues on businesses that are yet to reach break even, will run out of cash. The big sector that potentially could be hit would be real estate, where building projects are halfdone all over the country and some developers who touted their land banks find now that these may not be bankable. The only way out of the mess is for builders to drop prices, which had reached unrealistic levels and assumed the characteristics of a property bubble, so as to bring buyers back into the market, but there is not enough evidence of that happening.

5. Credit Markets
Inter bank lending has been slow globally. This means that banks are lending to each other at high rates which further implies more expensive credit .In short, capital has suddenly become more expensive than a few months ago and, in many cases, it may not be available at all. Many consumers today in India are quite leveraged. More expensive money means that floating rate loans begin to get more and more expensive.

7. Stock Market
Any uncertainty in global markets always proves to be a poison pill for the stock markets. The drop in real estate and stock prices robs a much larger body of consumers of the wealth effect, which could affect spending on a broader front. The stock market values can fall further if the foreign institutional investors start pulling out money in large numbers over a short period of time.

8. Low Risk And High Potential Economic Indicators of India

Table: Relative Weight of EME in Capital Markets (billions of $)
GDP World Euro Area United States Japan Emerging Markets 54545,1 12202,0 13807,6 4381,6 17281,7 Stock Markets 65105,6 610040,1 19922,3 4663,8 20950,2 Debt Securities 79821,9 23023,8 29879,3 9217,5 7820,1 Bank Assets 84784,5 30137,1 11194,1 7839,4 15003,8 Capital Markets 229712 63461,4 60995,7 21720,6 43774,1

Relative Weight of EME Capital Markets as % of world Euro Area United States Japan Emerging Markets 22,4% 25,3% 8,0% 31,7% 15,4% 30,6% 7,2% 32,2% 28,8% 37,4% 11,5% 9,8% 35,5% 13,2% 9,2% 17,7% 27,6% 26,6% 9,5% 19,1%

149

The above table clearly indicates the strength of the emerging markets in terms of GDP, Assets holding in stock markets, debt securities, bank assets, and capital markets. Emerging markets play a keen role during crisis when compared to developed economies due to market rational behaviour and conservative approach of investments. This can be a better solution to crisis. Table 2: Showing Inflation trends for food products in India during global financial crisis

The annual Wholesale Price Index-based inflation inched closer to zero in the first week of March, setting the stage for the Reserve Bank of India to cut interest rates further to prop up growth. Despite the decline in the headline inflation estimate to a three-decade low of 0.44 per cent, food products inflation continues to rule high and hurt at the consumer-level. The latest Consumer Price Index for Industrial Workers, to be released on Friday, is expected to be around 10.4 per cent. According to data released by the Ministry of Commerce and Industry here on Thursday, the annual WPI inflation rose 0.44 per cent for the week ended March 7, sharply lower than the previous weeks annual rise of 2.43 per cent. Inflation was recorded at 7.78 per cent a year ago and the sharp dip in the latest reported week has been partially attributed to the base effect coming into play. The drop of 199 basis points in the latest WPI inflation estimate is the steepest since the week ended November 1, 2008. There is no record of inflation dipping this low since 1977-78, according to Government estimates. 150

Deflationary phase: Data released by the Finance Ministry on the contribution of broad commodity groups to the yearon-year inflation during the latest week show that primary articles contributed 227 per cent to inflation, a quadrupling of its share from 56 per cent in the previous week. In manufactured products, the contribution to inflation was 166 per cent in the week under reference, from 90 per cent in the previous week. The fuels group, on the other hand, showed a negative contribution at (-) 289 per cent against (-) 46 per cent the previous week, registering a six-fold drop. Even as analysts predict that inflation is likely to turn negative starting April and could remain so until the end of 2009, the Government, on its part, allayed fears that the economy could be entering a deflationary phase. The International Monetary Fund, earlier this week, said that India should rely more on monetary policy to support the economy as high public debt makes fiscal efforts difficult. The RBI had, on March 4, cut its key repo rate to an all-time low of 5 per cent, having pruned it by 400 basis points since October.

Industrial output as measured by the index of industrial production for January was weighted down by poor output from intermediate goods such as auto ancillaries and chemicals and basic goods, which fell 9.2% and 1% respectively. However, consumer durables output grew 2.5% moving into positive territory after three months of decline, on the back of high growth in automobile sales. But capital goods sector saw strong growth, with output rising 15.4%, led by an impressive expansion in production of machinery and equipment. The improvement in production of consumer goods hints at a demand pick up and improvements in credit availability. The worst quarter is behind as, and on revisions.

relatively year-on-year inflation rates. In the fuel and power group, inflation dipped further to clock minus 6 per cent versus minus 5.1 per cent in the earlier week. In manufactured products, inflation rate decreased to 1.3 per cent in the current week, from 4 per cent last week. Inflation in most sub-groups declined or remained steady relative to rates recorded in the previous week.

10. Strategies to Overcome Crisis

Initiate a major recovery plan to stabilize global capital markets, move economies rapidly out of recession, stave off the risks of a global depression and get back on the track of creating decent work. There should be further coordinated interest rate cuts as necessary. Governments should bring forward infrastructure investment programmes that can stimulate demand growth in the short term and raise productivity growth in the medium term. Now is the time to move forward with a Green New Deal to create jobs through alternative energy development and energy saving and conservation. Tax and expenditure measures should be introduced to support the purchasing power of middle and low income earners. Development assistance budgets need to be maintained to the Least Developed Countries (LDCs) 151

9. Inflation and Price Index

The sharp fall in headline inflation during the latest reported week was on account of an across-the-board dip in inflation levels. In primary articles, the yearon-year inflation dipped to 4.4 per cent for the latest reported week, against 5.8 per cent the previous week. In food articles, inflation fell to 7.4 per cent after being stable at 8.3 per cent in the previous two weeks. Cereals, pulses, salt, milk and sugar, however, clocked high

to help meet the Millennium Development Goals (MDGs) with the adoption of binding commitments and a timetable to meet the UN target of 0.7 % of GDP. Ensure that a financial crisis on such a scale never happens again. For two decades most governments, together with the International Financial Institutions (IFIs) have promoted the lightly regulated new financial architecture that has characterized the global financial markets responsible for this crisis. Governments have now been forced to intervene to save the banking system; the quid pro quo must be properly regulated financial institutions. The agenda must cover: the public accountability of central banks; countercyclical asset requirements and public supervision for banks; the regulation of hedge funds and private equity; the reform and control of executive compensation and corporate profit distributions; the reform of the credit rating industry; the ending of offshore tax havens; the taxation of international financial transactions; proper consumer protection against predatory lending and aggressive banking sales policy; and active housing and community-based financial service public policies. The new system needs to reflect the requirements of all regulators; bank regulators, tax and competition authorities, and governance and consumer bodies in each country. There must be no more piecemeal approaches to reform. Establish a new structure of economic governance for the global economy. This must go beyond financial markets or currency systems to tackle all the imbalances of growth and capital flows that contributed to the crisis. Just as the post-World War II economic settlements included the strengthening of the International Labour Organization (ILO), in parallel with the creation of the United Nations, the new postcrisis settlement must address international economic governance. Governments must start work on the necessary structures. But this debate should not be held between bankers and finance ministry officials behind closed doors. Trade unions must have a seat at the table. Combat the explosion of inequality in income distribution that lies behind this crisis. The new system of economic governance must tackle the crisis of distributive justice that has blighted the global 152

economy. It must ensure more balanced growth in the global economy between regions, as well as within countries, between capital and Labour, between high and low income earners, between rich and poor and between men and women. Fiscal deficits are being cited as constraints, yet there is no choice: governments must step in as investors of last resort as the private sector has seized up. Better to incur deficits to support the recovery of the real economy than to face a collapse of public finances, not to mention investor and consumer confidence, due to the accelerating contraction of the real economy. In the short term, governments have little choice but to continue their efforts to stimulate economic activity. 2009 will be tough. Unemployment is rising, consumers are hesitant and investors are standing on the sidelines. The first and most urgent task for policy makers is to stabilize financial systems while persevering with tax cuts and infrastructure spending to bolster economies by encouraging demand and creating jobs. Working people need action. They require a seat at the table in these meetings and institutions. They have understandably little confidence that bankers and governments meeting behind closed doors will get it right this time. In fact, many business people and governments share this distrust. There must be full transparency, disclosure and consultation. The global union organizations are ready to play their role in this process.

11. Conclusion
The conclusions can be more detailed on the areas where financial market supervision and regulation must be reformedcounter-cyclical capital requirements for banks, reformed executive pay, supervision of credit rating agencies, codes for hedge funds and private equity, reformed accounting standards, tighter regulation and transparency of offshore financial centers. We also need new thinking in other areas, from competition, investment and pensions policies to tackling climate change, social exclusion and poverty. We need to raise productivity while keeping trade and investment frontiers open. We must find ways to spread opportunity and the fruits of future growth more evenly and encourage the low-carbon innovation needed for a green recovery.

Promoting economic co-operation is core to the OECDs mission. For nearly half a century, OECD had worked with governments and with business, labour and civil society to help markets grow, societies advance and countries emerge from poverty. By involving such key world players as Brazil, China, India, Indonesia, Russia and South Africa in this work, together, they are pursuing a collective long-term goal to build a stronger, cleaner and fairer global economy, free of the corruption, tax evasion, fraud, greedy exploitation and resource destruction that have discredited globalization and obstructed the benefits it can bring. Such initiatives will help to build our economy tomorrow. The financial crisis has knocked both us and others off balance. But it has not knocked us off course. There is no time to lose in responding, and we count on business leaders to help us in our efforts. We can take steps together towards such a better future, 2009 could brighten up after all. 2009 marks the Chinese Year of the Ox, a symbol of patience and hard work, and inspiring confidence in others. The crisis has knocked governments off balance, but like the ox, we must not be knocked off course. The long-term job of building a better tomorrow starts now.

4. TED spread Bloomberg.com Investment Tools Confer Thomas Philippon: The future of the financial industry, Finance Department of the New York University Stern School of Business at New York University, link to blog [1] 5. For this term see: Arrighi, G., & Silver, B. J. (1999). Chaos and governance in the modern world system Minneapolis: University of Minnesota Press. And: [2] John Bellamy Foster: Monopoly finance capital and the crisis. Interview with John Bellamy Foster for the Norwegian daily Klassekampen, conducted on October 15, 2008. 6. Whitney, Meredith (2009-03-10). Credit Cards Are the Next Credit Crunch: Washington shouldnt exacerbate the looming problem in consumer credit lines. Wall Street Journal.http://online.wsj.com/article/ SB123664459331878113.html. 7. The Run-Up in Home Prices: Is It Real or Is It Another Bubble?, Dean Baker, CEPR, August 2002 8. Shiller, Robert J. (November 2, 2008), Challenging the Crowd in Whispers, Not Shouts, pp.BU5, http://www.nytimes. com/2008/11/02/business/02view.html, retrieved on 2009-03-08 9. Lohr, Steve (November 5, 2008), In Modeling Risk, the Human Factor Was Left Out, The New York Times: B1, http://www.nytimes. com/2008/11/05/business/05risk.html, retrieved on 2009-03-08 10. Shiller, R. 2006. Irrational Exhuberance Princeton, NJ: Princeton University Press.

12. References
1. Wall Street Journal. TED Spread spikes in July 2007. Wall Street Journal. http://www. princeton.edu/~pkrugman/ted-spread-wsj.gif. 2. Norris, Floyd (August 10, 2007), A New Kind of Bank Run Tests Old Safeguards, The New York Times, http://www.nytimes. com/2007/08/10/business/10liquidity.html, retrieved on 2009-03-08 3. Elliott, Larry (August 5, 2008), Credit crisis - how it all began, The Guardian, http:// www.guardian.co.uk/business/2008/aug/05/ northernrock.banking, retrieved on 2009-03-08

153

Estimation of Appropriate Lambda Value for Indian Markets (Money, Sovereign Debt, Forex and Interest Rate Swap Market)
R. Natarajan
AVP (Derivatives), The Clearing Corporation of India Limited, 5th Floor, C-Wing, Trade World, Mumbai Dr. V. Balasubramanian, Professor, School of Management, SRM University

1. Introduction
Volatility, a variation in asset returns, has become a major concern in the financial arena. Volatility, which once was due to domestic events, now has gone global due to integration of global markets. Volatility, which differs for each asset class, is measured by the variability in the price over time measured as the variance or the standard deviation of the returns on the asset. Variance and standard deviation are statistical measures of the dispersion of returns around the expected (actual) returns. Volatility is also a measure of riskiness of an asset (more the variability, more the unpredictability associated with the returns of an asset).

2. Value at Risk (VaR)

Monitoring market risk is a major concern for financial institutions and banks as the value of their vast portfolio, comprising of various financial products, changes as and when market conditions change. The need for quantifying the financial market risk, which has resulted in many financial disasters in past, has led to a development of Value at Risk (VaR). VaR is a standard method of assessing market risk. It measures the worst expected loss over a given horizon under normal market conditions at a given confidence interval. Value-at-Risk (VaR) has emerged as a widely used tool of financial institutions for measuring and managing volatility. Due to its simplicity, VaR is widely used by corporate treasurers, fund managers and financial institutions. Even regulators use VaR to determine the capital that a bank should keep to reflect the market risk it is bearing. The successful implementation of VaR depends heavily on the accurate estimation of the conditional distribution of portfolio returns. Among various methodologies used to calculate VaR, Simulation method and Variance-covariance method are quite popular. Simulation method can be classified 154

as Historical Simulation and Monte-Carlo Simulation. In Simulation Method, various scenarios are created to generate the entire distribution of future portfolio returns. Variance-covariance method is the simplest way of calculating VaR. This method is a parametric method and assumes that the returns are normally distributed. The most important variable in Variancecovariance method is volatility. Variance estimation can be bifurcated into historical and implied (implicit) approach. Historical approach takes into consideration the past history of the asset returns while estimating volatility. On the contrary, implied approach ignores history, i.e. it estimates volatility by current market prices. Historical approach can be further classified as Simple variance, EWMA variance and GARCH variance. The assumption underlying EWMA and GARCH is that volatilities and correlations are not constant over the period. Sometimes they are relatively low and sometimes they are relatively high. These two models measure the variations in the volatility or correlation through time.

3. EWMA Variance
In EWMA method, greater weight is assigned to most recent returns and the weight goes on decreasing to prior returns. EWMA uses lambda () as a smoothing factor. The value of lambda should always be less than 1. Under this method, the variance forecast is computed using the recursive formula: 2 n = 2 n - 1 + (1 ) U2n-1 Whereas 2 is Lagged variance, U2 is lagged return and is lambda, weight assigned to lagged variance. The limitations associated with Variance-covariance methods are the assumptions considered while

evaluating VaR. This method assumes that the returns are normally distributed but in practice, financial asset returns are not normally distributed. Also, this method is applicable for linear portfolios and hence it has limited usage area.

4. Lambda A time decay factor

RiskMetrics refers Lambda as a decay factor which determines the relative weights that are applied to the observations (returns) and the effective amount of data used in estimating volatility. High value of lambda (nearer to one) indicates slower decay in the series, i.e. shocks are less quickly absorbed due to a smoother series and more historical data is included. Low value of lambda indicates faster decay, i.e. the weights fall off more quickly and fewer data points are used. J.P. Morgan conducted an extensive research to measure the market risks in portfolios of fixed income instruments, equities, forex, commodities and derivatives markets. It launched its study through RiskMetrics Technical document in October 1994. RiskMetrics, in its technical document, has mentioned the methodology to determine an optimum decay factor which would be suitable for any market worldwide. RiskMetrics considered 480 time series across various countries to estimate volatility and correlation. RiskMetrics has adopted Root Mean Squared Error (RMSE) to arrive at optimal decay factor considering all time series. RiskMetrics has chosen optimal decay factor as 0.94 for daily returns and 0.97 for monthly estimates which are globally widely used for estimating volatilities and correlation forecasts. Exchanges and clearing houses in India too are using the lambda value of 0.94 in their EWMA method for computing volatility. It has ignited the curiosity to see as to whether any other lambda value could be more justifiable and which could be arrived at based on the movement of market variables in Indian money market, sovereign debt market, forex market and interest rate swap market. 5. Data To begin the analysis, it was decided to undertake the study the suitable lambda value, proposed to be computed by different methodologies, for the above 155

markets in India. Accordingly, we have considered seven various active benchmark asset classes viz. MIBOR Overnight, MIBOR 12 Months Swap Rate, MIBOR 3 Year Swap Rate, MIBOR 5 Year Swap Rate, INR/USD Exchange Rate, CBLO O/N Rate and G-sec 10-year yield. A look-back period of data for the 500 days was considered for the analysis. While the traded rates were included in respect of CBLO and G-Sec 10 year time series, the rates published by RBI for INR/ USD reference rate was considered for the exchange rate. Similarly, rates published in Reuters for MIBOR 12 Months Swap Rate, MIBOR 3 Year Swap Rate and MIBOR 5 Year Swap Rate and MIBOR overnight rate published by NSE were considered in the time series.

6. Methodology
The lambda value for each of the above time series was calculated by employing Root Mean Squared Error (RMSE) criterion and Normal Likelihood (LKHD) criterion as under:

7. Normal Likelihood (LKHD) criterion

Normal LKHD criterion assumes that returns are conditionally normal, which specifies the joint probability density of returns given a value of the decay factor. The density function for the return on day t is given by: The value for density function is calculated for all 500 days. The conditional distributions for all days are combined to arrive at the following equation.

The above equation is known as the normal likelihood function. The maximum likelihood (ML) principle stipulates that the optimal value of the decay factor lambda is one which maximizes the above likelihood function. This equation can also be written as following:

The lambda can also be calculated by minimizing the above equation.

8. Root Mean Squared Error (RMSE) criterion

According to RMSE criterion, squared variance error is calculated for all 500 days. By combining all the errors, root mean squared prediction is arrived at which is given by:

The above equation is a function of lambda. The optimal decay factor is calculated by minimizing the above equation. The optimal decay factor applied by RiskMetrics is a weighted average of individual optimal factors where the weights are a measure of individual forecast accuracy. Results Using the above two methods, the lambda value for different asset classes and the results are as under:

Table-1: Benchmark-wise lambda values based on RMSE criterion and Normal Likelihood criterion Normal Likelihood Benchmark RMSE criterion criterion MIBOR Overnight 0.3497 0.9351 MIBOR 12 months Swap 0.9390 0.9179 Rate MIBOR 3 year Swap Rate 0.9503 0.8767
MIBOR 5 year Swap Rate CBLO O/N Rate G-sec 10-year INR/USD Xrate 0.9511 0.9601 0.9584 0.9336 0.8958 0.9244 0.8670 0.8234

The optimal decay factor is arrived at by taking weighted average of individual optimal decay factors. Accordingly, the lambda value arrived at based on these two methods is given below:

Table-2: Lambda Value Normal LKHD

Lambda () It is interesting to observe from Table-1 that the lambda value calculated by RMSE method is greater than 0.93 for all assert classes except MIBOR Overnight for which the lambda value is found to be a clear outlier, i.e. 0.3497. However, the lambda value computed as using Normal Likelihood Function, as per Table-1 above, is fluctuating between 0.82 and 0.94. But, the weighted average lambda value has been found to be 0.9497 i.e. 0.95 under RMSE and 0.8885 i.e. 0.89 under Normal LKHD. The lambda value of 0.95 computed using RMSE method is almost closer to the value recommended by RiskMetrics. In order to test the significance of the lambda value computed as per the above methods in forecasting 156 0.8885

RMSE 0.9497

variance, the lambda values so arrived were subjected to exception analysis i.e. how many days that the actual variance exceeds the forecast variance. The actual variance was compared with forecasted variance using such lambda values and an attempt was made to capture the failure rate by counting the number of times that the volatilities fall beyond the limits at 99% Confidence Interval (CI) on distribution. EWMA variances were calculated for all the seven time series followed by the standard deviation. Further, standard deviation was multiplied with z-score at 99% CI to set the limits on distribution. Subsequently, the returns were compared to check as to whether the actual values were within the EWMA values or not and this process was repeated for all 500 data points for all series. The results are tabulated below for comparison.

Table-1: Benchmark-wise lambda values based on RMSE criterion and Normal Likelihood criterion Normal Likelihood Benchmark RMSE criterion criterion MIBOR Overnight 0.3497 0.9351 MIBOR 12 months Swap 0.9390 0.9179 Rate MIBOR 3 year Swap Rate 0.9503 0.8767
MIBOR 5 year Swap Rate CBLO O/N Rate G-sec 10-year INR/USD Xrate 0.9511 0.9601 0.9584 0.9336 0.8958 0.9244 0.8670 0.8234

From the Table-3 above, it can be seen that the failure rate for lambda at 0.9497 computed as per RMSE method was found to be lower as compared to the failure rate for lambda at 0.94 and 0.8885. The volatility forecast using the lambda value of 0.9497 has thrown 3.57% failure as against 3.74% and 4.51% failure in the case of volatility forecast with lambda value of 0.94 and 0.8885 respectively. The Technical Document of RiskMetrics talks about the number of historical observations required by the EWMA Model for a specific decay factor at specific tolerance level. Following table shows the relationship between the tolerance level, the decay factor, and the effective amount of data required by EWMA:

Decay Factor 0.85 0.86 0.87 0.88 0.89 0.90 0.91 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99

Table-4: Effective Amount of Data Required Days of historical data at tolerance level 0.001% 0.01% 0.1% 71 57 43 76 61 46 83 66 50 90 72 54 99 79 59 109 87 66 122 98 73 138 110 83 159 127 95 186 149 112 224 180 135 282 226 169 378 302 227 570 456 342 1146 916 687

1% 28 31 33 36 40 44 49 55 63 74 90 113 151 228 458

The above table reveals that while the lambda at 0.89 requires only 40 days at 99% CI, the lambda at 0.94 requires 74 days at same CI. Thus the lambda value of 0.89 gives more weight to the volatility of recent days as compared to lambda value computed by RMSE. Professor Jayanth R. Varma from IIM-A, in his research paper Risk Management Lessons from the Global Financial Crisis for Derivative Exchanges, has talked about the relevance of choosing lambda value as 0.94 over 0.995. He stated that when lambda is 0.94, the most 157

recent 11 days account for half the weights and the most recent 37 days account for 90% of the weights. However, when lambda is raised to 0.995, the corresponding numbers are 138 days and 459 days. Therefore the effect of a wrong initial volatility estimate lasts for about 1-2 years when lambda at 0.995. On the other hand, with lambda at 0.94, the initial value affects the estimates only for the first month or so. It is proposed that when lambda at 0.995 is used, the volatility estimates should be initialized on a date at least 3 years in the past so that

the initial value has a negligible impact on the current volatility estimate. When lambda of 0.89 (generated by LKHD method) is used, it is observed that the most recent 6 days account for half the weights and the most recent 20 days account for 90% of the weights whereas the lambda of 0.95 (generated by RMSE method) is used, it is observed that the most recent 14 days account for half the weights and the most recent 45 days account for 90% of the weights. Conclusion The selection of lambda value primarily depends on the consideration of volatility for the number of days in past. If the market is volatile for longer time in past, then higher lambda value can be selected. With high lambda value, the weight decays at a slower rate and more number of days can be taken into consideration. On the contrary, if volatilities across few days are to be considered then lower value lambda can be chosen. Lower value will cause the weight to decay at higher rate and less number of days can be considered.

RiskMetrics Group found that the variance forecast at lambda equal to 0.94 is more close to realized variance rate than any other lambda value. Our study has found that the lambda value of 0.95 has performed better than 0.94 and 0.89 in the exceptional analysis. Since, the number of research studies on lambda value is very limited, it, at this juncture, appears that the lambda value of 0.94 as advocated by RiskMetrics Group for forecasting of variance is appropriate. Moreover, it also needs to be studied as to whether it would be beneficial to compute the lambda value for each asset class at periodic intervals and also across asset classes by taking into account the correlation factors and use such values for forecasting variance rather than adhering to a single value at all times. References: 1. RiskMetrics Technical Document, 1996 2. Varma J R (2009) Risk Management Lessons from the Global Financial Crisis for Derivative Exchange, February 2009

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A study on Cultural intelligence in Cross-Cultural Leaders KALAI LAKSHMI, Senior Lecturer, Dept. of Management Studies, Sathyabama University, Chennai Dr. S. S. Rau, Registrar, Sathyabama University, Chennai.

Culture is developed, transformed and transmitted through the conscious and unconscious activities of every member in the organization. It is however, the leaders driving force and ability to facilitate preferred mind-sets as well as preserve, create, and transmit the essence of existing culture as he leads his subordinates to new challenges. Culture and leadership augment each other in bringing excellence to the enterprise. (Schein, 1997).Cultural intelligence is defined as the ability to interact with others from diverse cultural backgrounds, being aware of our cultural values that drive our attitudes, behaviors, and beliefs. In certain cultures, trust is built quickly and is based on competence, proactive sharing of information, and integrity. In some other cultures, the preference is for deep trust that develops over time, and that is based on compatibility, benevolence, and security. In these cultures, relationships, reputation, and influence are the building blocks for trust. We live and work in a world that is an integrated entity, increasingly influenced by external cultural factors. For those in leadership positions it is not only necessary to have a high IQ and EQ (emotional intelligence), but strong Cultural Intelligence (CQ) is also increasingly regarded as a necessary skill to succeed in todays global business community. Effective global leaders are a vital asset for organizations today (Van Dyne & Ang, 2006). In this global environment, leaders who are capable of understanding, functioning and managing are valuable, rare, and inimitable resource that can offer firms a competitive advantage (Ang & Inkpen, 2008; Barney, 1992). Training and development of global leader competencies is one of the top five organizational practices that significantly influences effectiveness of multinational companies (Stroh & Caligiuri, 1998).

Introduction

Leaders in global Environment Adapting

Culturally intelligent leaders are comfortable in adapting their behavior to suit different circumstances without changing their inherent leadership style. With stronger awareness they can determine whether, for example, their followers are from an individualistic versus a collectivist culture, whether they work better in an autocratic versus a bureaucratic environment, whether they are motivated by incentives versus punishment, whether they respond to an informal versus formal approach, etc. Successful global leaders spend time with their followers to understand their comfort level and listen to what is said and not said.

Communicating
Culturally intelligent leaders understand that the way they communicate is critical to their success. Once they are aware of the cultural attributes of their followers and have adapted to their environment, it will be easier to tweak their communication style accordingly. Apart from the obvious need to use clear language, this may also mean determining how much information needs to be imparted in order to achieve the required goal and what the consequences and/or rewards are for the followers. It also means adjusting communication styles to take into account whether the followers culture is one that exhibits an implicit rather than explicit manner, as well as non-verbal communication traits.

The Cultural Intelligence (CQ) Model

Most of us know that IQ or intelligence quotient is a measurement of ones intellectual capabilities. In recent years, weve also seen the significance of EQ or emotional intelligence ones ability to lead and interact with effective emotional sensibilities. Cultural intelligence builds upon some of these same ideas 159

Fig 1: Leaders in global environment

but instead focuses specifically on ones capability to effectively understand and adapt to a myriad of cultural contexts as an additional and essential skill set needed by contemporary leaders (Ng, Van Dyne, & Ang, 2009). Thus, cultural intelligence provides a researchbased model for becoming a more effective leader in culturally diverse settings and across cultural settings.
Cultural intelligence

so we can plan and interpret whats going on in diverse contexts. Its the ability to think about our own thought processes and draw on our cultural knowledge to understand a different cultural context and solve problems in that situation. When meetings involve individuals from different cultural contexts all the rules change thats were metacognitive comes in. Metacognitive includes Awareness o Being in tune with whats going on in ones self and others Planning o Taking the time to prepare for a cross-cultural encounter, anticipating how to approach the people, topic, and situation. Checking o It is the monitoring we do as we engage in interactions to see whether the plans and expectations we had are appropriate

Motivational

Cognitive

Metacognitive

Behavioral

Fig2: Factors intelligence

Enhancing

Overall

Cultural

The factors that are helpful for enhancing overall cultural intelligence.

Motivational CQ (Drive)
The motivational factor of CQ refers to the leaders level of interest, drive and energy to adapt cross-culturally; it gives the energy and self-confidence, to pursue the needed cultural understanding and planning. Motivational cultural intelligence includes

Behavioral CQ (Action)
It provides us with the ability to engage in effective flexible leadership across cultures. It influences whether we can accomplish our performance goals effectively in light of different norms across cultural situations. one of the important aspects of behavioral is knowing when to adapt to another culture and when not to do so. The behavioral factor includes the capability to be flexible in verbal and non-verbal actions Verbal Tone - Loud vs. soft In which words are spoken can convey different meaning across cultures

Intrinsic motivation

The degree to which you derive enjoyment from culturally diverse situations

Extrinsic motivation
The more tangible benefits you gain from culturally diverse experiences and self efficacy-your confidence that you will be effective in a cross-cultural encounter.

Cognitive CQ (Knowledge)

It provides us with an understanding of basic cultural cues. It also includes the overall understanding of the ways that cultures vary from one context to the next. It refers to the leaders level of understanding about culture and cultures role in shaping the way to do business and interact with others across cultural contexts.

Non-verbal
The exact words and phrases we use when we communicate specific type of messages.

Feedback loop

Metacognitive CQ (Strategy)
It allows us to draw upon our cultural understanding, 160

Others respond to our behavior; this influences our Motivational CQ; and the cycle starts over leading to further enhancement of overall cultural intelligence.

Hofstedes dimension
Hofstede (1993) identified five cultural dimensions that provide a framework for identifying similarities and differences across cultures. Each of these characteristics will be applied to determine the best cultural fit with leadership theory.

Power Distance
The degree of inequality among people which the population of a country considers as normal: from relatively equal (that is, small power distance) to extremely unequal (large power distance) (Hofstede, 1993, p. 89). In order to be effective, the leader requires significant participation and interaction with employees. Employees must feel free to contribute their thoughts, opinions and recommendations, while leaders must respect these contributions and utilize them as a basis for building a more effective workplace. In a society where each member is viewed as having an important role regardless of his or her social or economic position, or his or her position in the societal or organizational hierarchy, it is expected that there will be a free flow of ideas and discussion, thereby empowering employees to take some control and responsibility in the workplace.

spite of the leader but rather he or she succeeds with the leader. Success requires cooperation between leaders and followers, and it requires cooperation among the leaders themselves .More constructive feedback will be provided when the employee recognizes the importance of each individuals contribution to the success of the team. Organizations are increasingly applying the team concept in the design of work. Leaders today must be effective at managing and leading not just individuals but teams as well. A servant-leader is an excellent fit with the self-managing teams employed in many of todays organizations. These teams are empowered to manage themselves and the leaders role is to assist the team by removing any roadblocks that interfere with its path to success. In other words, the leader is there to develop the employees into leaders and employee development is a key characteristic of the servant-leader. A low to moderately individualistic culture appears to be the best fit for the leader.

Masculinity
The tough values like assertiveness, performance, success and competition with the male role, while he identifies more tender values like quality of life, maintaining warm personal relationships, service, care for the weak, and solidarity with the female role (Hofstede, 1993, p. 90). The effectiveness of the leader depends on his or her ability to develop a personal connection with the employees. It requires that leaders understand the needs and desires of their employees so that they can individualize their jobs, rewards, and training to fit the needs, experiences and desires of those employees. It requires building trust and loyalty so that the leader can empower those employees to take the lead in the workplace. The application of feminine qualities is a way to secure the valued masculine outcomes. The culture rating low to moderate on the masculinity characteristic would provide an environment most conducive to the success of the leader.

Low power distance

Leaders from low power distance countries are much more likely to acknowledge the capabilities of their employees to assume these tasks and complete them successfully.

High power distance

It is unlikely that employees would provide accurate feedback to their managers and it is similarly unlikely that managers would consider it a meaningful and useful source of data for performance improvement.

Individualism
The degree to which people in a country prefers to act as individuals rather than as members of groups. The leader and the employees work together much more closely as a team. Employees and leaders jointly address issues in the workplace and collectively determine an outcome that is in the best interest of the employees and the organization. The employee does not succeed in 161

Uncertainly Avoidance
The degree to which people in a country prefer structured over unstructured situations (Hofstede, 1993, p. 90). Rather than a traditional workplace where the leader

sets the rules, the quotas, assigns the work and evaluates the performance of the employee, a workplace guided by a leader will push these responsibilities down to the employees themselves. The employees must be prepared to stand up and accept these new responsibilities. For many this will be new territory and there will likely be some reluctance as they are uncertain about how to perform these new roles. But as employees gain experience and confidence, the leader fulfils his or her goal to develop new leaders for the organization. The leader will provide training and guidance to employees as they take on these new responsibilities, and ultimately the employees will experience personal and professional growth and success. A society that shuns new experiences, that resists change and new organizational structures will fail to embrace these new opportunities. Employees who do not develop leadership skills will therefore be trapped in their current roles with no hope of self actualization. Leaders and employees who have a higher tolerance for uncertainty will be more effective. Long-term versus Short-term Orientation On the long-term side one finds values oriented towards the future, like thrift (saving) and persistence. On the short-term side one finds values rather oriented towards the past and present, like respect for tradition and fulfilling social obligations (1993, p. 90). The leader work is to develop the employee in such a way as to maximize his or her long-term potential. The leader seeks to develop each employee by meeting his or her needs in both the short-term and the long-term. This means the leader utilizes immediate rewards (like cash compensation) but also takes a longer-term view of building a more committed and engaged employee and ultimately an organizational leader. The leader will utilize training, career development, challenging job assignments, and educational opportunities to build skills that the employee will need in the long term. Acquiring more skills and higher level competencies that will prepare the employee for future opportunities.

effectiveness, strategic planning, decision-making, negotiation, conflict resolution, team building and information sharing, while working with diverse cultural groups and in new global settings. To be a competitive player in the global scene, incorporating IQ, EQ and CQ competencies is a necessity. Due to the impact of progressed globalization on firms and the factor that lead to effective global leadership, businesses need to embrace cultural and emotional intelligence as portion of their global leadership program. Any cross-cultural leader is not born as a leader and is able to improve the leadership capabilities by training

Reference
1. Chen Oi Chin, Ph.D U.S.A. Global Leadership Competence: A Cultural Intelligence Perspective 2. Nerella Campigotto. Cultural Intelligence: The Key to Global Leadership 3. Linn Van Dyne, Soon Ang Nanyang, David Livermore Cultural Intelligence: A Pathway for Leading in a Rapidly Globalizing World Michigan State University, Technological University, Cultural Intelligence Center East Lansing, Michigan 4. Livermore, D. (2009) Leading with cultural intelligence: The new secret to success. New York: 5. Business Horizons (2005), 48 pp501-512 Global leadership success through Emotional and cultural intelligences 6. Maureen Hannay, Troy University, Journal of International Business and Cultural Studies 7. The Cross-cultural leader: The Application of servant leadership theory in the international context.

Conclusion
In order to interact effectively with diverse followers in given situations, effective global leaders require IQ, EQ and CQ competencies. Cultural Intelligence, while not new, is newly recognized. There is much more research required on how it affects leaders communication 162

The Impact of IT Governance Practices & Human Resources on Business- IT Alignment

- Dr. Mu.Subrahmanian, Professor, Dept. of Management Sciences, Velammal Engineering College, Chennai, Lakshmi Vishnu Murthy Tunuguntla, Research Scholar, School of Management, SRM University Chennai,

1.Introduction
Information technology (IT) alignment with business has been a significant management concern over the last two decades (Luftman, Kempaiah and Nash 2006). Information systems (IS) strategic alignment is a nebulous concept that has engendered much debate and many definitions (Chan, Huff, Barclay and Copeland 1997). In fact IT Governance is thought out in different organizations and High Level IT-Governance models were created. However developing the High Level IT Governance model to improve Business-IT alignment is only a first step. Much depends on the implementation of this model at the organization level. This paper is focusing on both the parts. IT governance is the organizational capacity exercised by the board, executive management and IT management to control the formulation and implementation of IT strategy and in this way ensure the fusion of business and IT (Van Grem- bergen, 2000). The three layers of IT Governance responsibility is described as shown below.

The Business- IT alignment is described as shown in the below diagram

163

2. Literature Survey and Critical Governance Practice Identification The IT governance literature has been surveyed and the following IT governance Practices are found to be influencing the Business IT Alignment. The critical ones that have the maximum information were included in the references. 1. 2. 3. 4. 1. Vision for IT department/understanding the Vision for IT Build Enabling Mechanisms Business Value Planning Build and Implement Communication Strategy Objective of the Study Understand and Analyze the relationship between the Business/IT alignment and various factors influencing the Business/IT alignment as listed in the Research model in the Indian context in the entities that are captive IT organizations, system integration and Product development service providers Hypothesis Formulation Hypothesis 1 (H1) - Articulating and communicating the vision for IT would positively influence the IT-Business alignment. Hypothesis 2(H2) - Building enabling mechanisms would positively influence the ITBusiness value alignment Hypothesis 3 (H3) - Performing Business value Planning would positively influence the IT-Business alignment Hypothesis 4 (H4) - Development

5. 6. 7. 8.

Enabling Technology Build Partnership Develop Scope and Implement architecture Develop & Implement Portfolio Management

Practices 9. Develop and Implement IT (Project) Investment management

10. Human resource skills All these IT Governance Practices are organized in to an integrated Frame work as described below. communication strategy would positively influence the IT-Business alignment Hypothesis 5 (H5) - Building relational mechanisms would positively influence the ITBusiness alignment Hypothesis 6 (H6) - Develop Scope and implement appropriate IT architecture would positively influence the IT-Business alignment Hypothesis 7 (H7) - Develop and Implement IT (Project) investment practices would positively influence the IT-Business alignment Hypothesis 8 (H8) - Develop and Implement IT Portfolio Management practices would positively influence the IT-Business alignment Hypothesis 9 (H9) - Build Human resource skills would positively influence the ITBusiness alignment (Dependent and

2.

3. Research Model Independent Variables)

164

165

7.

Research & Sample Design

to Business-IT alignment . Sampling Frame or Source List The source list will be consisting of the Program Managers, Directors/ Vice Presidents and top management of the organizations that are sampled Size of Sample 40 organizations which are in to Application development development/Product

Research Design Descriptive research has been planned for this study. The study is a fact finding investigation aimed at presenting the current state against the Independent variables identified from the Literature. Based on the understanding of the current state of the independent parameters, identify a set of IT governance factors that have correlation with Business- IT alignment in the Indian context. Sample Design Type of Population finite universe: In this study, it is planned to cover IT Industry (Captive IT Organizations, Application (Bangalore, Sampling Application India Population The Parameters Role of the Designation, Unit social is unit: product Organization that involved development, Hyderabad, product Chennai, Development organizations) in India Mumbai and Pune)

or Captive units would be chosen . A total population of 300 people are envisaged from the above categories. Sampling Plan - Probabilistic,

purposive / judgmental sampling plan selected in such a way that only the important item representing the true characteristics of the population are included in the sample Desired Outcome Provides the correlation between the listed IT governance factors and Business IT alignment Provides the list of Governance Practices that are effective that could be used by the Industry to improve Business IT alignment in the Indian context.

development,

development or Captive IT units in

Person/ Experience Level in IT/ Business Program Managers, Vice Presidents and top management of the organization in India handling Program Management, Product development and responsible for the value add to the customer contributing 166

9.References 1. A Study of the Causal Relationship between IT Governance Inhibitors and Its Success in Korea Enterprises Chi-Hoon Lee, Jung-Hoon Lee, JongSung Park, Kap-Young Jeong Graduate School of Information, Yonsei University, Seoul, Korea chihoon@yonsei.ac.kr, yonsei.ac.kr, jeongky@yonsei.ac.kr 2. Practices in IT Governance and Business/ IT Alignment, By Steven De Haes, Ph.D., and Wim Van Grembergen, Ph.D. 3. Structures, processes and relational mechanisms for Information Technology Governance: Theories and practices Wim Van Grembergen, University of Antwerp & University of Antwep Management School Steven De Haes, University of Antwerp Management School Erik Guldentops, IT Governance Institute 4. 5. Achieving andSustaining Business- IT alignment Jerry Luftman, Tom Brier 9. Framework and Roadmap: How to Plan, Deploy and Sustain for Competitive Advantage Dr. Gad J. Selig, PMP, Managing Partner, GPS Group, Inc & Associate Professor, Management and Technology and Director, Center for Business Information 167 10. 8. 7. jhoonlee@ bizajou@yonsei.ac.kr, 6.

Technologies, University of Bridgeport Pete CA A Process Oriented Framework for Waterhouse, Director, Product Marketing, Business Service Optimization,

Assessing the Business Value of Information Technology Mooney, John, University of California, Irvine, Gurbaxani, Viijay, University of California, Irvine Kraemer, Kenneth L., University of California, Irvine A Causal Model Of Strategic Alignment Performance Masadeh, Raed, Nottingham University Business School, Jubilee Campus, Wollaton Road, Nottingham, UK, raedmasadeh2003@ yahoo.co.uk Kuk, Road, George, Nottingham UK, University g.kuk@ Business School, Jubilee Campus, Wollaton Nottingham, nottingham.ac.uk GETTING VALUE FROM IT BEGINS WITH AGILE, RESULTS-ORIENTED IT GOVERNANCE Eric Bartholet, Mark Budd and Fran Turisco Aligning IT to Corporate Objectives: Organisational Factors in Use Ivor Jonathan Farrell Dip.Tech., ASSESSING STRATEGIC ALIGNMENT IN REAL-TIME Raymond Papp, University of Tampa And Firm

11.

IT Governance on one Page, MIT Sloan, Peter Weill, Jeanne W.Ross 13. Ideal patterns of strategic alignment and business performance: Francois Bergeon, Louis Raymond , Suzanne Rivard

12. Why business needs should shape IT architecture Mekinsey on Business TEchnolgy Nov 2010

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Monthly Effects in Indian Stock Market

P. Nageswari, Ph.D Research Scholar
Dept. of Commerce and Financial Studies, Bharathidasan University, Trichy Associate Professor and Head, Dept. of Commerce and Financial Studies, Bharathidasan University, Trichy

Dr. M.Selvam

1. Introduction
Efficient Market Hypothesis (EMH) is one of the grossly researched areas of financial economics. One of the significant anomalies of EMH is seasonal effect. It is important that testing for a seasonal effect in monthly returns has been given considerable attention in the financial literature. The existence of the seasonal effect negates the week form of the EMH and it implies market inefficiency of the markup. Several studies and tests investigated the seasonal behavior of monthly stock market returns on all forms of EMH. Some cross sectional differences among stock returns were found to occur with regularity. These regularities in the stock returns have been termed as anomalies. An investigation to these anomalies can be used to frame investment strategy to outperform a nave buy and hold strategy. The different patterns identified in stock returns include the January effect, day of the week effect, different monthly effect like Turn of the month effect, semi month effect, the end of the month effect, etc.

Kiran Jindal (2006) investigated one of anomalies by segmenting pre and post rolling settlement. The result of this study found that the returns of the month effect and semi monthly effect were prevalent in the Indian stock market. Guneratne B Wickremasinghe (2007) using the sample of 75 companies from Colombo Stock Exchange (CSE) found that there are no statistically significant differences among the returns for different days of the week. The analysis of this study indicates that the returns for the month of January are not different from those that of the other months of the year. The study found that daily and monthly patterns of returns cannot be used to devise any method to profit from trading in shares in the Colombo Stock Exchange (CSE). Hareesh Kumar.V and Malabika Deo(2007) analyzed the efficiency of Indian Stock Market by using S&P CNX 500 Index. They found out the presence of Day of the Week Effect in the Indian Stock Market, which affected both the stock returns and volatility, thereby proving the Indian Stock Market to be inefficient. Ushad Subadar Agathee (2008) found that the average returns of Stock Exchange of Mauritius (SEM) lowest in the month of March and Highest in the month of June. The equality means-return tests show that returns are statistically the same across all months. The regression analysis reveals that returns are not independent on the months of the year, except for January. Khokan Bepari and Abu Taher Mollik (2009) investigated the existence of seasonality in return series of DSE of Bangladesh. The study confirmed the existence of seasonality in stock returns in DSE but didnt support the tax loss selling hypothesis. The study found that there was an April effect in DSE and invalidated the paradigm of the efficient market hypothesis in DSE. Anoki Parikh (2009) examined monthly returns of the Nifty index for the period 1999-2008. This 169

2. Review of literature
A brief review of select studies has been presented here to understand research gap and methodologies employed in the research area of calendar Anomalies. Harvinder Kaur (2004) analyzed the nature and characteristics of stock market volatility in India and the US. The study found that the response to news arrival is asymmetrical, meaning that the impact of good and bad news is not the same. The volatility forecast models are used for Sensex and Nifty returns to show that the day of the week effect and the January effect are not present. The return and volatility on various weekdays have somewhat changed after the introduction rolling settlement. There was mixed evidence of return and volatility spillover between the US and Indian markets. B. S Badla &

study used the GARCH (Generalized Autoregressive Conditional Hetroskedasticity) model & Exponential GARCH model to capture the non normality of the return series such as skewness clustering. Nageswari.P and Selvam.M (2010) examined the Day-of-the Week Effect on the Indian Stock Market after the introduction of the Compulsory Rolling Settlement. It was found that the Mean Returns were positive for all days of the week, highest being on Friday for selected indices and the day of the week pattern did not appear to exist in the Indian Stock Market. The above literature provides an overview of valuation of Monthly Effects in various Stock Markets. An attempt is made in this study to analyze the Monthly Effects in Indian Stock Market taking model of above study.

4. Objectives of the Study

The present study intends to accomplish the following objectives To identify the monthly effect exist in the Indian Stock Market, To summarize the findings of the study.

5. Hypothesis of the Study

The present study tested the following null hypotheses NH1: There are no significant differences between the monthly returns.

6. Methodology of the Study

a) Sample Selection For the purpose of this study, S&P CNX 500 Index is considered as sample Index. Besides, this is the best indicator of the performance of the whole economy. The S&P CNX 500 is Indias first broad based benchmark of the Indian capital market b) Sources of Data The required information of the present study were collected from the www.nseindia.com and prowess, which is corporate database maintained by CMIE. c) Period of the Study The present study covers a period of five-years from 1st April 2005 to 31st March 2010.

3. Statement of the Problem

The firms and Governments generally release good news between Monday and Friday and bad news on the week-ends. As a result, the bad news is reflected in lower stock prices on the next trading day (Mondays) and good news is reflected in higher stock prices on Friday. The investors, who wish to reduce their tax liability, may sell the loss making shares before filing their tax returns in order to set off capital losses against capital gains. This would reduce the share price further. Similarly, in the Month of January, firms release new information pertaining to the previous accounting year. When new positive information reaches the market, the prices become bullish due to buying pressure. The active trading strategies, based on the knowledge of market anomalies, would provide benefits to the investors; but the countervailing arbitrage will also exploit the excess return over time. In the process, observed anomalies will eventually disappear and pave the way to make the market more efficient. In this environment, it is necessary to periodically find out whether these types of Anomalies exist in the Stock Market. Against this background, the present study An Empirical Analysis of Monthly Effects in Indian Stock Market is significant. 170

7. Monthly Effect
When the returns in some months are higher than that of other months, this anomaly is called as monthly effect. January effect is the most studied pattern of month of the year effect. It is defined that the January stock return is higher than the other months of the year, and it is caused normally by a significant low return in December.

8. Tools Used for Analysis

In this study, independence of return series was investigated for Nifty and Sensex index. The following were calculated,

i) Returns: Where,

the monthly patterns we construct almost an identical model. This model has been used e.g. by Mehdian and Perry (2001). Therefore, we employ the following regression: Rit = 1i D1 + 2iD2 + 3i D3 +,, 10i D10 + 11i D11 + 12i D12 + Vit where Rit is the monthly return of the index i as defined

Rt = I n ( Pt Pt 1) * 100
Rt Return at the time t. Pt The closing price of the day. Pt 1 The closing price of the day t-1.

ii) Descriptive Statistics In this part, Statistics of the daily return, Standard deviation, Skewness, kurtosis and jerque-bera tests were analyzed. iii) Kruskall-Wallis Test The Kruskall-Wallis Test is an appropriate one for testing the data typified of non-normality, heteroskedastic variance like security returns (Jason, 1996). The Kruskall-Wallis Test employed for testing the equality of mean returns for different days of the week. The Kruskall-Wallis Test ranks the entire set of observations higher the value, higher the rank and vice-versa and then arranges them into nj x 5 matrix where nj represent the rank of the return and columns represent the day-of-the-week Monday through Friday. The formula for calculating the Test Statistic H is as under:
5 1 2 R2 j X 3( n + 1) N ( N + 1) J =1 n j

earlier in equation 1, D1 through D12 are dummy variables for each month of the year such that D1 takes a value of 1 for all January observations and zero otherwise and so on. The coefficients from 1 through 12 are estimates of the return for each month from January through December. Vit is the disturbance term. Again we can consider our null hypothesis as follows: H = 1 =2 = 3 , = 10 =11 =12= (0) Again, we want to test if stock returns in e.g. January differ from the returns in other months. We reject the null hypothesis if we find some form of monthly seasonality that is statistically significant.

9. Results and Analysis of the Study

For the purpose of this study, the following analysis is made as given below, Analysis of Descriptive Statistics Results of Kruskall-Wallis Test Results of Regression Test 1. Analysis of Descriptive Statistics for S& P CNX 500 Based Monthly Returns Table 1 presents the Descriptive statistics for S&P CNX 500 Index monthly returns on the sample period from 1st April 2005-31st March 2010. In the Table are shown number of observations (N), mean, standard deviation, skewness and kurtosis. Series normality is tested by Jarque- Bera test. The Table shows that there are negative mean returns for the months of January, February, June and October. And positive mean returns for the remaining months. Highest mean return for the month of April (.0032) most negative mean returns for the month of October. This implies that, for the month of March and investors towards the end of the year tend to sell the loss making shares so as to reduce their tax burden putting the downward pressure on the stock prices. In April they again start buying the shares. 171

H = Where: Rj = Sum of the Ranks in the jth Column nj = Number of Cases in the jth Column N= Sum of Observations in all the Columns. iv) Linear Regression Model According to the Monthly effect there appear some systemic patterns in the stock returns depending on the Month. Therefore we test if the monthly returns are statistically different from each other. Basically we do this by using Eviews program and the linear regression model and the ordinary least squares-method (OLS). Brooks (2002) suggests several assumptions for the classical linear regression model. For testing

This April puts the upward pressure on stock prices and it results in higher return in the month. Standard Deviation ranges from 1.4% to 2.5%. The highest (0.0254) Standard Deviation earned for the month of October with negative mean return and lowest (0.0144) Standard Deviation earned for the month of September. It found that the market was more volatile for the month of October and least volatile for the month of September. It also found that there is inverse relationship between return and risk (negative mean return with high Standard deviation). The monthly return distribution was positively skewed for the month of May and negatively skewed for all other months. The Peak of the Monthly Return distribution was leptokurtic for all months and highest (21.32) on for the month of May. Jarque- Bera test which is commonly used method in normality testing. The test shows that the null hypothesis, which suggests that the series are normally distributed, is rejected at 0.01 significance level for each index for all time periods. It shows that either the monthly returns are not so normally distributed. Only the returns for June and April seem to be normally distributed at 1% level. Again, one reason for non-normality could be the kurtosis. Figure 1 clearly indicates that the daily mean returns for the month April is higher than other months of the year. And also clear that there was negative mean returns earned for the month of January, February, June and October. 2. Results of Kruskall-Wallis Test for S&P CNX 500 Index The analysis of Kruskall-Wallis test for S& P CNX 500 Index is also given in Table-1. The Kruskall-Wallis test Statistic of 16.649 was lower than the Table Value of 19.7 at 5% level of significance for 11 degrees of freedom. Thus, there is no evidence to reject the null hypo thesis that there is no difference in the mean returns among the months. In other words, monthly effect did not exist for S&P CNX 500 Index during the study Period. 172

3. Regression Analysis for S& P CNX 500 Based Monthly Returns Results of the regression analysis for S&P CNX 500 Index based monthly Returns during the sample period 2005-2010 are shows in Table 2. The above Table showed the estimated coefficients for each month, t-value and p-value. The F-value measures the equality of coefficients. The coefficients in August seem to be statistically significant at 1% risk level. Other months does not seem to have any statistically significant coefficients. However, based on the F-value we cannot reject our null hypothesis and therefore we are not able to confirm August anomalies in S&P CNX 500 Index during the sample period

10. Summary of Findings and Suggestions of the Study

The following are important findings and suggestions of the study, The study found that the highest mean return was earned for the month of April and most negative mean returns for the month of October during the study period. Therefore, it is suggested that the investors would yield good returns for the month of April. So, it is suggested that April is the best month to invest in the market. The study also found that highest (0.0254) Standard Deviation earned for the month of October with negative mean return and lowest (0.0144) Standard Deviation earned for the month of September. It found that the market was more volatile for the month of October and least volatile for the month of September During the study period, the kurtosis measure of return distribution was leptokurtic for all the months of the year, but the highest (21.3263) being on May. It is to be noted that the return distribution is positively skewed for the month of May and negatively skewed for remaining months.

There is significant negative correlation between the returns of Tuesday-Friday, for S&P CNX 500 Index during the study period. The regression analysis reveals that the coefficients in August seem to be statistically significant at 1% risk level. Other months does not seem to have any statistically significant coefficients for S&P CNX 500 Index during the study period. It found out based on the F-value we cannot reject our null hypothesis and therefore we are not able to confirm August anomalies in S&P CNX 500 Index during the sample period

Seasonality: A study of the Indian Stock market, Electronic copy available at: http:// ssrn.com/abstract 4. Bodla.BS and Kiran jindal (2006) Monthly Effects in Stock Returns: New Evidence from the Indian Stock Market The ICFAI Journal of Applied Finance, Vol. 12, No.7, pp.5-13. 5. Goloka C Nath and Manoj Dalvi (2005) Day of the Week Effect and Market Efficiency Evidence from Indian Equity Market using High Frequency Data of NSE The ICFAI Journal of Applied Finance, Vol. 11, No.2, pp.5-25. 6. Guneratne B Wickremasinghe (2007) Seasonality of Emerging Stock Markets: Evidence from the Colombo Stock Exchange The ICFAI Journal of Applied Finance, Vol. 13, No.6, pp.43-65. 7. Hareesh kumar V. and Malabica Deo (2007) Efficiency of Indian Stock Market- A case of Day of the Week Effect SMART Journal of Business Management Studies, Vol.3, No.2, July December2007, pp.28-35. 8. Harvinder kaur (2004) Time Varying Volatility in the Indian Stock Market Vikalpa, Vol.29, No.4, October - December 9. Nageswari.P and Selvam.M (2010),Day-ofthe-Week Effect on the Indian Stock Market : An Empirical Analysis(Ed.)2010, Ed. By Sundarapandiyan.P Research Methods in Social Sciences VHNSN College, pp.99-103. 10. Ravi Anshuman.V and Ranadev Goswami, (2000) Day of the Week Effects on the Bombay Stock Exchange, The ICFAI Journal of Applied Finance, Vol. 6, No. 4, pp. 31-46. 11. Selvarani.M and Leena Jenefa (2009) Calendar Anomalies in the National Stock Exchange (NSE) indices, The ICFAI Journal of Applied Finance, Vol. 15, No.1, pp. 56-67. 173

11. Conclusion
The present study investigates Monthly effect on stock returns for S&P CNX 500 index of NSE. The study found that there is a maximum return for the month of April. The analysis of non-parametric Kruskall-Wallis test found that, there is no evidence to reject the null hypothesis that there is no difference in the mean returns among the months. In other words, monthly effect did not exist for S&P CNX 500 Index during the Study Period. The returns in the stock market are not independent across different months of the year. Thus the investors should be cautious enough to exploit the benefit that they may earn from the strategy i.e., to buy the securities on the Month with the lowest monthly mean returns and sell these with the highest Monthly mean returns. The findings of this study would possibly help in understanding and explaining such seasonality for the Indian stock markets. 12. References 1. Anokhi Parikh, (2009) The December Phenomenon: Month of the year effect in the Indian Stock Market,http://www.nseindia. com 2. Ariel, R.A., (1987) A Monthly Effect in Stock Returns, Journal of Financial Economic, Vol. 18, pp. 161-74. 3. Ash Narayan Sah (2009) Stock Market

Table - 1 Descriptive Statistics for S&P CNX 500 Index for the period of 2005- 2010 Std. JarqueMONTH Observations Mean Skewness Dev. Kurtosis Bera Probability JANUARY 102 -0.0020 0.0222 -1.0277 9.0207 172.014* 0.0000
FEBRUARY MARCH APRIL MAY JUNE JULY AUGUEST SEPTEMBER OCTOBER NOVEMBER DECEMBER K.W Statistics 98 102 94 105 110 108 107 103 102 102 103 -0.0011 0.0010 0.0032 0.0021 -0.0020 0.0024 0.0014 0.0018 -0.0029 0.0018 0.0029 16.649 0.0157 0.0189 0.0153 0.0223 0.0202 0.0191 0.0144 0.0140 0.0254 0.0182 0.0152 Df -0.2679 -0.7283 -0.4250 2.2696 -0.0805 -0.2887 -0.7514 -0.5180 -0.7869 -0.2591 -0.3568 11 5.0107 5.1868 3.7256 21.3263 3.8466 3.9042 4.0283 5.1965 6.7399 4.4213 17.681* 29.340* 4.892 1559.500* 3.404 5.179* 14.783* 25.311* 69.971* 9.727* 0.0001 0.0000 0.0866 0.0000 0.1823 0.0751 0.0006 0.0000 0.0000 0.0077

4.3285 9.760* 0.0076 Asymp. Sig. - 0.1186895

Source: Computed from PROWESS *Significant at 1% level.

Table - 2 Results of the regression analysis for S&P CNX 500 Index for the period of 2005 - 10 Variable Coefficient Std. Error t-Statistic Prob.
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUEST SEPTEMBER OCTOBER NOVEMBER DECEMBER -0.00187 -0.11554 0.04205 -0.06277 -0.01353 0.072616 -0.03426 0.508502 -0.20921 0.120714 0.085861 0.171086 0.00249 0.150899 0.121203 0.160895 0.139393 0.115907 0.122956 0.170165 0.172973 0.087888 0.128626 0.155563 -0.7521 -0.76564 0.34694 -0.39012 -0.09709 0.6265 -0.27866 2.9883 -1.20947 1.3735 0.66753 1.09978 P-VALUE 0.4541 0.4461 0.7295 0.6975 0.9229 0.5327 0.7812 0.0037* 0.23 0.1733 0.5063 0.2746 0.156

F-VALUE 1.476 Source: Computed from PROWESS *Significant at 1% level.

174

Figure-1 Monthly Mean returns for S&P CNX 500 Index for the period of 2005 - 2010

0.0040 0.0030 0.0020 0.0010 0.0000

Ma y No v Ma rch Au Fe Se

Mean
Ap Ja Ju Ju Oc De c g ril ne b ly p n t

-0.0010 -0.0020 -0.0030 -0.0040

Source: Computed from Table - 1

175

Mutual Fund Investor Education Program A study on the Awareness, Response and Impact among Individual Investors Asst. Professor, Anna Adharsh College for Women, Chennai Dr. P. Ravilochanan, Professor, School of Management, SRM University
The mutual fund industry in India is unusual because of the dominance of institutional investors. Retail investors account for only 37 percent of the Industry Assets under Management. By comparison, retail contribution to fund assets in markets such as China is 70 percent and US is 86 percent. Focus on institutional investors has led to poor retail penetration particularly in smaller cities and rural India. The question is can the Asset Management Companies (AMCs) operating in India sustain long being heavily dependent on the institutional investors only. It is for a fact that institutional AUM is highly vulnerable. They may all of a sudden find themselves reeling under the pressure of big size redemptions as was seen when the markets crashed following the Global Meltdown. The industry needs to shift focus to retail investors. Mutual fund penetration in India is at present very low. In a country of over 1.1 billion, there are just 4.8 crore mutual fund portfolios. It is forecasted that the retail segment will grow at a compounded annual growth rate (CAGR) of 35 percent to 42 percent in the next 5 years. During this period the mutual fund industry could see an addition of nearly 9 million first time retail customers. Only about 7 per cent of Indian households invest in mutual funds, while in the US 50 per cent of households invest in mutual funds. A January 2010 study of the Indian mutual fund industry by research outfit, Evalueserve, points out that the assets under management (AUM) of the mutual fund industry as a percentage of gross domestic product (GDP) as on December 2008 stood at 8 per cent, while it was 66.5 per cent and 55.5 per cent in developed countries such as the United States and France. Industry officials underscore the importance of awareness among investors as the first step towards the growth of the industry. Investor education also enhances investor responsibility. In this context mutual fund Investor Education and Awareness Programs plays a vital role. Against this background an attempt is 176 made to: 1. Examine the awareness and response of investors to the investor education efforts taken by Securities and Exchange Board of India.(SEBI) and Association of Mutual Funds (AMFI) 2. Analyse the relationship between attending investor education program and the future intention to invest in equity mutual funds 3. Impact of investor education on pre and post investment behavior of mutual fund investors. Research Methodology. The research is based on a survey of randomly selected 606 mutual fund investors of Chennai. The survey instrument was a well structured questionnaire. K-means clustering method was used to classify investors into different segments based on their pre investment and post investment behavior. Non parametric Chi square using the application of cross tabs was used to study the impact of investor education on both enhancing responsible behavior and on the future intention to invest in equity mutual funds. Percentage analysis was done to examine the responses to investor education programs. Analysis and Interpretation of Data Investor education and awareness programs Investor education programs are conducted regularly by SEBI in association with registered investor associations. (e.g., Tamil Nadu Investors Association). Association of Mutual Funds in India (AMFI) has set up an investor awareness committee. Investor education materials are also posted on the websites of AMFI, SEBI and the respective mutual funds. Every Fund house carries out education campaign through investor meets, seminars etc,..The main aim of these materials and programs is to educate the investors with regard to mutual fund investments Evaluating the response of investors to the investor education efforts taken by Securities and Exchange

Anila Mathews

Board of India.(SEBI) and Association of Mutual Funds (AMFI) The respondents were asked to respond to 4 dichotomous questions to study the response towards investor education efforts taken by SEBI and AMFI. Table 1 shows the response.

Table 1 Responses to Investor Education Programs

Investor Education Variables Are you aware of investor education programs sponsored by Sebi Have you read the investor education material posted by Sebi/Amfi/ respective mutual funds. Have you attended investor awareness programs sponsored by Sebi If ,Yes was it useful in enhancing investment knowledge and decision making Response Yes 296 (48) 208 (34) 97 (16) 76 (78) No 310 (52) 398 (66) 509 (84) 21 (22) Total 606 (100) 606 (100) 606 (100) 97 (100)

Note: Figures in parenthesis shows the percentage values. Analysis of the table reveals that only 48 % of the respondents are aware of investor education programs, while only 34 % and 16 % have read the investor education materials posted in the web sites and attended the investor awareness programs respectively. Of the 97 (16%) respondents who have attended the investor awareness programs more than three fourths of the respondents have found that the program has had a positive impact in enhancing their investment knowledge. It can be inferred that both awareness as well as the response to investor education is poor among the respondent mutual fund investors. But a good majority (78 %) who have attended the investor awareness programs have benefited from it. Relationship between attending investor education program and the future intention to invest in equity mutual funds It is generally believed that the vast untapped mutual fund market can be penetrated through investor education. A Non parametric Chi square test was performed on the summarized cross tabulation to determine if a relationship exists between attending investor education programs and the intention to invest in equity mutual funds. Table 2 reveals the impact of attending investor education program on future intention to invest in Equity mutual fund scheme.

Table 2 Impact of investor education program on intention to invest in Equity mutual fund
Intention Program Attended Did not attend Total Will invest 72 (74.2%) 299 (58.7%) 371 (100%) Will not invest 25 (25.8%) 210 (41.3%) 235 (100%) Total 97 (100%) 509 (100%) 606 8.228 0.004 Chi Square Significance

177

Cross tabulation of attending/not attending investor education program and future intention to invest /not to invest in equity mutual funds reveal that 74.24% of the respondents who attended investor education programs express their intentions to invest in equity mutual funds in the next one year against 58.7% of them who did not attend the program. 41.3% of the respondents who did not attend the program said they would not invest in equity mutual funds in the next one year against 25.8% who attended the program. A non parametric chi-square test performed for the summarized cross tabulation reveals that attending investor education program and intention to invest in equity mutual funds are well associated at 5% level of significance (chi-square value = 8.288 p = 0.004). Hence it can be concluded that investor education programs conducted under the umbrella of SEBI will have a positive impact on retail penetration. Grouping Investors on the basis of responsibility levels

The individual investor, be it the one who takes the direct channel or the one who works with a financial advisor, there is an increased likelihood that better investment decisions will be made and long term investing success achieved if the investor acts in a responsible manner. The respondents were asked to respond to nine statements which best described their behavior prior to and post their investment in mutual fund to assess how responsible they were in their investment behavior. K-means Clustering method was used where the 606 investors were classified into different segments based on their pre-investment and post-investment behavior. On the basis of cluster analysis two segments of investors were formed for each of the classification (pre-investment behavior and post-investment behavior). Each group had clear and differentiated behavioral strengths and weakness. The results of the cluster analysis by clustering variables are presented in Tables 3 and 4

Table 4 Post investment Behavior Final Cluster Centers

Statements I keep track of the NAVs of schemes I have invested in on a regular basis. I ensure that I revive an account statement for the money that I have invested I update myself on the performance of the scheme (e.g. Return, expense, change in fund managers etc) on a regular basis I will not hesitate to approach the investment relation officer of the concerned fund and then the appropriate authorities when I face a problem Number of investors in each cluster Number of investors Percentage of the total Intensity of responsible behavior 430 71 High 176 29 Low Clusters 1 2.62 2.86 2.43 2.60 2 1.84 2.09 1.68 2.33

Like with the pre investment behavior it is observed that investors show clear and differentiated behavioral strengths and weakness in their post investment behavior also. Again we have 2 segments of investors. 178

Cluster 1: High intensity post investment responsible behavior (71%) These investors show a clear and differentiated behavior from the investors in the second cluster. They are very strong on most statements.

Hence they can be classified as investors who exhibit highly responsible post-investment behavior. Cluster2: Low intensity post investment responsible behavior (29%) Relative to the cluster1 this group exhibits weaker post investment behavior on most aspects. Hence they have been categorized as investors exhibiting low intensity post-investment responsible behavior. Cluster analysis reveals that 64.5 percent and 71 percent of the respondent mutual fund investors exhibit high pre investment and post investment responsible behavior respectively. It can be concluded that a good majority of the respondents act in a responsible manner Impact of Investor education programs on investor responsibility Cluster analysis brought out two segments of investors for each of the classification (pre investment behavior and post investment behavior) having clear and differentiated behavioral strengths and weaknesses.

Investors exhibiting moderate pre investment responsible behavior Investors exhibiting high pre investment responsible behavior Investors exhibiting low post investment responsible behavior Investors exhibiting high post investment responsible behavior

To study the impact of investor education program two variables related to this namely, reading of investor education materials posted in the websites of SEBI/ AMFI/respective mutual funds and attending investor awareness programs organized by SEBI were used. The impact of each of these investor education variables on the different segments of investors brought out by the cluster analysis was studied with the help of non parametric Chi-square using the application of cross tabulation. Table 5 show the results of the analysis

Impact of Investor education programs on investor responsibility

Investor Education Behavior P r e i n v e s t m e n t Clusters Behavior Moderate Responsibility High Responsibility Total Chi-square value P o s t investment Behavior Low Responsibility High Responsibility Total Chi-square value Reading investor Education material Yes 65 143 208 No 150 248 398 Tot 215 391 606 %of yes 30 37 Attending investor Education programs Yes 25 72 97 No 190 319 509 Tot 215 391 606 % of yes 12 18

Table 5

2.474 (p=0.116) Yes 50 158 208 No 126 272 398 Tot 176 430 606 %of yes 28 37

4.752 (p=0.029) Yes 23 74 97 No 153 356 509 Tot 176 430 606 % of yes 13 17

3.849 (p=0.05)

1.593 (p=0.207)

An analysis of the above table reveals that

179

Only 208 (34 percent) of the respondents have read the investor education materials, while 398 (66 percent) have not read any investor education material. A dismally low 97 respondents (16 percent) have attended the investor awareness and education programs conducted by Sebi, while 509 respondents (84 percent) have not attended the programs.

To test whether investor education has contributed towards the enhancement of investor responsibility among the 208 and 97 respondents who have read the investor education material and attended the investor education program respectively, a non parametric chi square is performed using the application of cross tabs. An analysis of the above table reveals that 30 percent of the respondents who read the investor education material fall in the category of investors exhibiting moderate responsible behavior while a higher 37 percent of them fall in the category exhibiting high pre investment responsible behavior. Similarly, with respect to each of the pre investment and post investment behavior against the two variables relating to investor education namely, reading the investor education material and attending the investor awareness programs it was found that investors who have responded positively to these exhibit higher responsible behavior. (37% against30%, 37% against 28%, 18% against 12% and 17% against 13%). The non parametric chi-square values 4.752 for the association between attending investor education program and pre investment responsible behavior is statistically significant at 5 % level. Similarly chi-square values 3.849 for the association between reading investor education material and post investment responsible behavior is statistically significant at 5 %level. It can be inferred from the above analysis that investor education enhances responsible investment behavior. 180

Conclusion It can be concluded from the above study that both awareness as well as the response to investor education is poor among the respondent mutual fund investors. But a good majority who have attended the investor awareness programs have benefited from it. The study also reveals that attending investor education program and intention to invest in equity mutual funds are well associated. More over the study reveals that investor education enhances responsible investment behavior. Hence it can be concluded that investor education programs will have a positive impact on retail investor penetration. A well informed and knowledgeable investor is a boon to the industry. These investors pass on the benefits of their knowledge and experience to peers which could in turn result in an overall expansion of the Industry. Reference Books: Nalini Prava Tripathy, Mutual Funds in India, Emerging Issues, First Edition, Excel Books, New Delhi ,2007. Sadhak H, Mutual Funds in India, Marketing Strategies and Investment Practices, Second Edition, Response Books, A division of Sage Publications India Pvt. Ltd , 2003. Sundar Sankaran, Indian Mutual Funds Hand Book, Vision Books , 2008. Reports Confederation of Indian Industry and KPMG Report, Indian Mutual Fund Industry The Future in a Dynamic Environment Outlook 2015, June 2009. Confederation of Indian Industry and Pricewaterhousecoopers Report, Indian Mutual Fund Industry-Towards 2015 Sustaining Inclusive Growth Evolving Business Models, CII 6th Mutual Fund Summit, 2010. Internet: http://ww w.amfiindia.com http://ww w.rbi.org http://www.sebi.gov.in

Qualitative Research in Vamana Industries Limited

Vice President Jamuna Auto Industries,Chennai, India

Mr. N. Divakaran

Profile of the company

Vamana Industries Limited is a single largest manufacturer of under Chassis component as an Automobile Ancillary Tier1 supplier for Commercial Vehicles (CVs) in India. It is a trusted and preferred supplier to all the major CV manufacturers for over 40/50 years .The turnover has been in constant raise by 25/ 30% year after year and now touching 100 crores/ month since last 2 years. Vamana had some kind of technical arrangement with some Asian manufacturer who is pioneers in their Field of Technology, quality and quantity in the World during 90s and even now has some minor holdings by the Asian partner. To bring world class ride comfort for buses, Vamana is tying up some more understanding with, World reputed companies across the Globe for Suspension as well, in the coming future. Vamana has spread its wings across India with multi location customer based operations, The OE supply to After Market supply ratio is 10:1 significantly show the market to be tapped in the market for growth, profitability and expansion. The current SOB of OE Business is over 60% of the market requirements. To take up this expansion in the aftermarket, Vamana has set up a good net work as its subsidy with strong presence of dealers and distributor net work across the Country. With strong OE presence Vamana product command a premium in the aftermarket. Product Criticality and growing demands:Suspension system is a highly critical component in commercial vehicles. It is because of this reason that Vamana places high reliance on constant technological innovation and adoption of the best practices in world class manufacturing in all its Plants. Improvised steel grades developed combined with stringent heat treatment results in higher fatigue life of the product. This warrants a high degree of repeatability and Strong existence of Systems in place, which are proven and acceptable as a process with good sustenance for practice in the manufacturing areas. Vamana has dedicated and highly trained Research and Development team which has won appreciation from CV manufacturers for aiding them in design modification and value engineering, which enhance the vehicles load bearing capacity and overall efficiency. This way concurrent development is ensured which is the need of the modern day Technology and the original equipment manufacturer.

Need For the Research study

The Management has appointed an Expert Mr.Subramaniyan, who has spent more than 2 decades in Auto Industry as its Director-operation, giving responsibility to Study, and implemented plants to a World Class Level, acceptable to the century demands, on the following, Mr.Subramaniyan has worked in various capacity in Tier1 and Auto OEM and has a good exposure on Process and also has successful experience as a full time consultancy for similar capacity earlier. Some key areas of focus are, 1) Standardisation As it always happens, it is no different in Vamana industries where in different Plant and locations has their unique Style of operation, standard. And methods though they make the same product. Standardisation is missing to the extent that different Plants have different ISO certification with different manuals/standards, though the certifying Body is the same. These have caught the management to think in establishing a single 181

standard. With Worlds best Practices in Place to Give Customer confidence on the Capability/ ability of Vamana plants across. 2) Customer growing demands With the view to Equip for the growing Customer demands of More Multinational Players coming in to action, need for quick response quality control tools practice with daily routine management and visual controls are increasing. 3) Consolidation and up gradation Upgrade the factories which are developed over a period of time to meet the growing customer demands in terms of Concurrent Engineering, adaptation of best practices like process approach, First in First out etc. 4) Operational efficiency Improvement. Ensure all wastes are eliminated and stream line operations and improve the plants efficiency in terms of quality, cost and delivery to customers. The Expert has taken the following qualitative research approach. The expert derived two fold approaches of a theory and practical approach was constituted as below. 1) In order to derive a reliable data and bring out the ideas from inside, a questionnaire was framed. The questionnaire contained questions on the concerns, ideas of improvement and why the individual choose to work with Vamana industries. This was tested with over 20 persons from each plant thus ensuring more than 120 persons in the group, covering various levels in each plant and the focus was on to. Conduct an interview with many/ HOD people in each Plant to Bring out the VOICE of each plant, with a prescribed Questionnaire with a view to Find out Ground reality Concerns of Individuals. With respect to. welfare, facility, retention wish list etc Internal Suggestions for improvement for plant 182

function and utility. Management strengths Strength of Systems, bottleneck & Loop holes prevailing. Training and HR activities, to suit regional culture. 2) The second approach was to also have a team to study physically on the shop floor using various quality tools like Value Stream Mapping to identify the gaps in various processes existing in the company/ plants. Towards this a team was... Formed to identify areas of improvement in the manufacturing / operation areas with the application of the following tools Value Stream mapping Root cause analysis with 5W+!H ( why why & How) Identifying the need/ scope of Visual management Policy deployment in respective areas Possibility of standardisation across the plants Practice 5S and kaizens for elimination of wastes 1) Observations and results of the qualitative research were:2) 3) Systems are violated. Factory work 7 days a week and scattered weekly holidays. 4) Dependency on untrained labour is in the increase with a view to keep cost low. 5) Need a good working atmosphere with Good Light, Air Circulation and other infrastructure, like Road, Automation etc in the Plant. 6) Currently factory is working at 60% original equipment Efficiency (OEE) and with 65%

Straight pass. 7) Break Down and machine conditions are to be improved. 8) High level of inventory and First in First Out ( FIFO), traceability of product are missing 9) Need a retirement policy and medical policy,

10) Role and responsibility clarity to improve 11) To avoid Duplication of responsibility Management is Good and easily accessible

Actions initiated by the Management:Mr. Subramaniyan, made a SWOT analysis based on the study and. various action points were derived ensuring Key Important concerns/ improvement areas are addressed out as VOICE of the plants, All the deviations, improvement areas emerged out of the Value stream mapping and other quality tools are in corporate as action points . 1) The management took the following initiatives based on the report and asked the expert to continue implementation of the following 2) Conduct mapping of the Process to eliminate waste across in depth. 3) Train and develop Teams in all the plants as a Cross functional team (CFT) to accomplish the above Task. 4) Took the Change movement as a KRA of the management. Focussed review & steps to Ensure Sustenance were in Place. Results and Benefits Derived 1) Eliminated waste approx 20% and thereby made the Operations more efficient. /effective with incorporation of best Practices. 2) Process across the various Plants are unified, duplication avoided by sharing of solutions across the group. 3) Standardisation of the systems and Knowledge Sharing Across the plants. Vendors selection and cost lowered by consolidating requirements across the 183

group. Approximately saved about 35% on the input costs, quality and less inventory carrying cost. 4) Identified internal Resources for Training and established various training models across the various plants. Sustenance of the plants is ensured with trained man power availability within. Conclusion: Best practices like Daily Routine management at the shop floor to cascade the Objectives of the management, Adapting First in first out practices to ensure traceability of the product, eliminating all the waste by doing the value stream mapping were implemented at Vamana Industries limited. These activities have improved the quality, cost and delivery which has added value for the customers and there by Gained Customer Confidence.

References:
1. Voice of the customer - Wikipedia, the free encyclopaedia 2. The Voice of the Customer - How to get Answers from Your Market 3. 4. Voice of the customer definition Voice of the Customer - Enterprise Feedback Management - Market Research Software 5. 6. Voice of Customer Analysis Voice of Customer - Online Surveys - Enterprise Research Platform - Enterprise Feedback Management - Market Research Software 7. Survey Software, Enterprise Feedback Build

Management, Voice of the Customer

Online Surveys with Qualtrics Survey Software 8. 9. Survey Analtycals.com Skills Inventory Database - Online Surveys - Enterprise Research Platform - Enterprise Feedback Management - Market Research Software 10. Market Research Survey Software for Real

Time Customer Feedback 11. Employee Satisfaction Survey - Employee Feedback Survey - Employee Engagement Survey. 12. Survey Research & Enterprise Feedback Management Voice of Vovici Blog

13. Employee Satisfaction Surveys Page 1 Survey Research & Enterprise Feedback Management Voice of Vovici Blog. 14. Survey Research & Enterprise Feedback Management Voice of Vovici Blog

184

An Impact of Knowledge Management in IT Industry R. Shanmugam, MBA., M.Phil

Research Scholar, School of Management Studies, SRM university,Kattankulathur

Dr. K. Kalpana
Asst.Professor (S.G), School of Public Health, SRM University, kattankulathur

1. Introduction
Knowledge Management penlights a range of practices used in an organization to identify creates, represent, distribute and enable adoption of insights and experiences. Such insights and experiences comprise knowledge, either embodied in individuals or embedded in organizational processes or practice. An established discipline since 1991 KM includes courses taught in the fields of business administration, information systems, management, and library and information sciences. More recently, other fields, to include those focused on information and media, computer science, public health, and public policy, also have started contributing to KM research. Many large companies and non-profit organizations have resources dedicated to internal KM efforts, often as a part of their Business Strategy, Information Technology, or Human Resource Management departments. Several consulting companies also exist that provide strategy and advice regarding KM to these organizations. KM efforts typically focus on organizational objectives such as improved performance, competitive advantage, innovation, the sharing of lessons learned, and continuous improvement of the organization. KM efforts overlap with Organizational Learning, and may be distinguished from by a greater focus on the management of knowledge as a strategic asset and a focus on encouraging the exchange of knowledge. KM efforts can help individuals and groups to share valuable organizational insights, to reduce redundant work, to avoid reinventing the wheel per se, to reduce training time for new employees, to retain intellectual capital as employees turnover in an organization, and to adapt to changing environments and markets. 185

2. History
KM efforts have a long history, to include on-the-job discussions, formal apprenticeship, discussion forums, corporate libraries, professional training and mentoring programs. More recently, with increased use of computers in the second half of the 20th century, specific adaptations of technologies such as knowledge bases, expert systems, knowledge repositories, group decision support systems, and computer supported cooperative work have been introduced to further enhance the such efforts . In 1999, the term personal knowledge management was introduced which refers to the management of knowledge at the individual level . More recently with the advent of the Web 2.0, the concept of knowledge management has evolved towards a vision more based on people participation and emergence. This line of evolution is termed Enterprise 2.0.

3. Research
A broad range of thoughts on the KM discipline exists with no unanimous agreement; approaches vary by author and school. As the discipline matures, academic debates have increased regarding both the theory and practice of KM, to include the following perspectives: Techno-centric with a focus on technology, ideally those that enhance knowledge sharing and creation Organizational with a focus on how an organization can be designed to facilitate knowledge processes best Ecological with a focus on the interaction of people, identity, knowledge, and environmental factors as a complex adaptive system akin to a natural ecosystem Regardless of the school of thought, core components

of KM include People, Processes, Technology (or) Culture, Structure, Technology, depending on the specific perspective (Spender & Scherer 2007). Different KM schools of thought include various lenses through which KM can be viewed and explained, to include: Community of practice Social network analysis Intellectual capital Information theory Complexity science Constructivism Dimension Different frameworks for distinguishing between knowledge exist. One proposed framework for categorizing the dimensions of knowledge distinguishes between tacit knowledge and explicit knowledge. Tacit knowledge represents internalized knowledge that an individual may not be consciously aware of how he or she accomplishes particular tasks. At the opposite end of the spectrum, explicit knowledge represents knowledge that the individual holds consciously in mental focus, in a form that can easily be communicated to others. Early research suggested that a successful KM effort needs to convert internalized tacit knowledge into explicit knowledge in order to share it, but the same effort must also permit individuals to internalize and make personally meaningful any codified knowledge retrieved from the KM effort. Subsequent research into KM suggested that a distinction between tacit knowledge and explicit knowledge represented an oversimplification and that the notion of explicit knowledge is self-contradictory. Specifically, for knowledge to be made explicit, it must be translated into information. A second proposed framework for categorizing the dimensions of knowledge distinguishes between embedded knowledge of a system outside of a human individual (e.g., an information system may have knowledge embedded into its design) and embodied knowledge representing a learned capability of a human bodys nervous and endocrine systems. 186

A third proposed framework for categorizing the dimensions of knowledge distinguishes between the exploratory creation of new knowledge (i.e., innovation) vs. the transfer or exploitation of established knowledge within a group, organization, or community. Collaborative environments such as communities of practice or the use of social computing tools can be used for both knowledge creation and transfer. STRATEGIES Knowledge may be accessed at three stages: before, during, or after KM-related activities. Different organizations have tried various knowledge capture incentives, including making content submission mandatory and incorporating rewards into performance measurement plans. Considerable controversy exists over whether incentives work or not in this field and no consensus has emerged. One strategy to KM involves actively managing knowledge. In such an instance, individuals strive to explicitly encode their knowledge into a shared knowledge repository, such as a database, as well as retrieving knowledge they need that other individuals have provided to the repository. Another strategy to KM involves individuals making knowledge requests of experts associated with a particular subject on an ad hoc basis. In such an instance, expert individual(s) can provide their insights to the particular person or people needing this.

4. Role of HR In Institutionalizing Knowledge Management in an Organization

Impact of HR Processes and Practices in the Knowledge Sharing in a Firm At the stage of induction of new executives into the organization, coaching and mentoring systems are meant to transfer knowledge; exposure during training to variety of functions, units and geographical locations helps knowledge awareness / transfer. Employees will benefit from Mentorship, not only during the initial months but also for a long time after that. The role

Of the mentor in the later period would be to challenge the executive to look beyond the obvious, look for past learning and base decisions on a more informed platform. A. Job rotations Well-planned job (role) rotations across geographic allocations and businesses in a firm help not only people development, but also provide an important vehicle for transfer of knowledge and best practices, even though an organization cannot obviously depend on this as the main source of knowledge transfer. B. Networked organizational networked organization with people playing multiple roles, being part of multiple teamsa vertical team (Business /category) as well a horizontal team (function /knowledge domain), is the way forward to effectively leverage collective knowledge of an enterprise. HR should play a key role in developing such a networked organization, through Sponsorship and or facilitation of knowledge communities(teams), cutting across formal organizational silos. C. Training Learning and knowledge are inter-linked. Knowledge strategies should encompass learning initiatives and knowledge initiatives need to converge with training initiatives. A Companys training program needs to focus nonfunctional and business specific skill development programs. As well as competency development focused programs. Knowledge communities (Teams), as the owners and users of the knowledge, should play an active role in developing suitable course material for the functional and business specific courses. Knowledge management cannot be practiced without a clear focus on learning within the organization. E Learning is online learning. It is made available through company websites (Intranets), and even through CD-ROMs. It allows the learner to enroll into courses or programs of their choice and acquire knowledge at their own pace at the place of their 187

choice. Corporate online universities, exclusive learning space to induct managers or develop future leaders, on going programs for sales personnel and induction into new products and services are some of the e-learning offerings, some of the companies are making available to their employees to develop themselves. E-Learning provides the benefit of convenienceallows the learner to do the learning at his other pace, flexibilityLearner does not have to sacrifice a training program because of its clash with customer or personal visit, and ease of learning.. D. Culture Change Leveraging collective knowledge is possible only when people value building on each others ideas and sharing their insights. Much of this shaped by the culture of the organization. In some cultures, where knowledge is seen as power, knowledge sharing may be seen to be in conflict with the individuals personal interests (individual excellence /competitive advantage). Therefore, institutionalization of Knowledge Management requires HR to focus on managing The culture change mindset of the people to strengthen collaborative team working and knowledge sharing. Other knowledge management strategies for companies include: Rewards (as a means of motivating for knowledge sharing) Storytelling (as a means of transferring tacit knowledge) Cross-project learning After action reviews Knowledge mapping (a map of knowledge repositories within a company accessible by all) Communities of practice Best practice transfer Competence management (systematic evaluation and planning of competences of individual organization members) Proximity & architecture (the physical situation of employees can be either conducive or obstructive to knowledge sharing)

Master-apprentice relationship Collaborative technologies (groupware, etc) Knowledge repositories (databases, etc) Measuring and reporting intellectual capital (a way of making explicit knowledge for companies) knowledge brokers (some organizational members take on responsibility for a specific field and act as first reference on whom to talk about a specific subject) Social software (wikis, social bookmarking, blogs, etc)

target setting, and KM . Measurement and benchmarking show where performance or a team or unit is weak or strong, and shows which other teams or units are stronger performers, and can be sources of knowledge, or weaker performers and therefore potential users of knowledge. The strong performers can help the weaker performers. Target setting is the driver for improvement. Without target setting, teams will do what they have always done and so will always get what they have always got. Targets need to be achievable, but should be set beyond the knowledge of the team. If a team sets a goal which it knows how to meet, it will use only its own knowledge. If a team sets a goal which they know (through benchmarking) is achievable, but is outside their own performance, then they will seek the knowledge to deliver the goal. The targets can be driven by benchmarks - Poland uses 20% less energy than you - I want you To close the gap halfway by year end. Slough uses 80% of the packaging that you do - learn from them, and close the gap halfway by year end. KM is the enabler. Target setting creates the focus of knowledge sharing, while measurement and benchmarking define where that knowledge should come from. KM closes the gap, enabling the production units to learn from Slovenia, from Slough, from Syracuse. The mechanism of learning may be by site learning visits, by Peer Assist, by creating Learning Assets or training courses, or through the operation of Learning Communities. Performance management in operations Performance measurement and benchmarking, target setting and knowledge management can be closely linked in an operation, production or manufacturing environment, as part of a performance management system. Performance measurement allows an operation

5. Motivations A number of claims exist as to the motivations leading organizations to undertake KM effort Typical considerations driving a KM effort include: Making available increased knowledge content in the development and provision of products and services Achieving shorter new product development cycles Facilitating and managing innovation and organizational learning Leveraging the expertise of people across the organization Increasing network connectivity between internal and external individuals Managing business environments and allowing employees to obtain relevant insights and ideas appropriate to their work Solving intractable or wicked problems Managing intellectual capital and intellectual assets in the workforce Debate exists whether KM is more than a passing fad, though increasing amount of research in this field may hopefully help to answer this question, as well as create consensus on what elements of KM help determine the success or failure of such efforts. Performance management Performance management consists of three elements, measurement (and benchmarking), 188

or production unit to track its performance levels on key metrics (energy use per unit, water use per unit, packaging use, throughput, cost per unit, inventory, uptime, etc). Benchmarking those metrics allows it to compare those levels with other units, Identify the areas where it needs to improve, or areas where it can Help others improve Identify the business units from which it can learn, and those which it Can help Target setting allows it to focus on areas for improvement, and motivate the teams to learn Knowledge management allows it to acquire or develop the knowledge it needs in order to meet its targets.

engage can emerge and be made visible through the development of interesting activities and tools involving innovative computer network technologies. We also assume that meaningful activities will arise out of our commitment to engage in participatory design. Processes with teachers. We further assume that the tools will assist teachers in the preparation of their work, which involves tacit, informal, and unwritten or unarticulated rules, knowledge, and practical methods and techniques. Thus, we assume that collaboration with, or sharing of, resources can be helped by facilitating sharing and communication in communities governed by common work and purposes .Teacher Bridge is not just a pile of static Web pages. On the contrary, it is designed to support various teacher activities: Fieldwork: Several classes could take part in monitoring local wildlife and water quality. Data can be collectively updated in Teacher Bridges charts and tables. Online Discussion: Chat workgroups could be set up for students to discuss any number of topics. The chat Window can be integrated with a text or problem to be discussed. These chat sessions can be secured and Monitored by teachers. Class management: The system enables teachers to easily publish assignments, activity guides, due dates, and the like. Curriculum: Teachers can share lesson plan ideas and collaborate on what works/what doesnt within various Contexts. Go Virtual: Additional learning strategies, such as science fairs, gardens, journals, field trips, and Quizzes/tests, can be posted with TeacherBridges Maptool. Online Portfolios: Class projects, as well as group or individual portfolios, can be created and edited within TeacherBridge. Contests: Teachers can post students progress on 189

6. Technologies
Early KM technologies included online corporate yellow pages as expertise locators and document management systems. Combined with the early development of collaborative technologies, KM technologies expanded in the mid-1990s. Subsequent KM efforts leveraged semantic technologies for search and retrieval and the development of e-learning tools for communities of practice. More recently, development of social computing tools (such as blogs and wikis) have allowed more unstructured, self-governing or ecosystem approaches to the transfer, capture and creation of knowledge, including the development of new forms of communities, networks, or matrixed organizations. However such tools for the most part are still based on text and code, and thus represent explicit knowledge transfer. These tools face challenges in distilling meaningful re-usable knowledge and ensuring that their content is transmissible through diverse channels.

7. Knowledge Management Communities of Educators

in

Online

We are proceeding with the assumption that the formal and tacit technical resources, and the innovative and successful methods and practices in which teachers

oneTeacherBridge site where all students/classes can see Where they stand. WebQuests: Classes/students can organize Internet research with comments within TeacherBridge. In order to make collaborations like the above mentioned achievable through the Web, we must break down the stereotyped conception that the Internet is best suited to passive, uni-directional, read-only media. We need to turn the Web not only into a place to interact but also into a writable medium. Currently, however, publishing Web pages can be problematic: the page must first be downloaded, then modified off-line using special HTML editor tools, and finally reposted onto the server. This annoying download-update upload Cycle makes it difficult for teachers to prepare materials and conduct activities online. Therefore, it is Necessary to eliminate the notion of publishing to the Web as a separate process. The fundamental goals of TeacherBridge are (1) to provide environments that facilitate teacher

participation in knowledge sharing activities and (2) to support teachers in the finding, retrieving, and reusing of materials and activities created by colleagues. As a step in this direction,TeacherBridge makes it extremely easy for teachers to author online a significant portion of materials: it offers an innovative way of direct editing and page creation through (what you do is what you get). Teachers can use either a Web Editor or a Full Editor to edit materials in TeacherBridge. With Web Editor, teachers merely type the text that they wish to add with the assistance of simplified shorthandwithout having to learn HTMLand then just click the Save button. With Full Editor, teachers can interactively edit not only text, but also various non text domain specific objects. In order to use the Full Editor, teachers might want to install an application helper, called Java Web Start , which is a free Java download.

8. Conclusion
It is highly imperative to implement the right techniques of Knowledge management in the organization to enrich their HR practices to obtain the synergy.

190

Challenges and Learning in Human Resource Management - A Study on Customer Service and Employee Engagement in the Indian Healthcare Industry
Dr. B.Shivraj
Professor, Bahadur Institute of Management Sciences, University of Mysore

Manasa Gangothari,Mysore.

Mr.Bharath C (Ph.D), Manager Human Resource, Aricent Technologies (Holdings) Ltd, Bangalore Dr. B. Rose Kavitha, Professor HR & OB, CMR Institute of Technology, ACES Layout, Bangalore

1. Introduction
HRM has evolved from a number of different schools of thought and is best described as a loose philosophy of people management rather than a focused methodology. The value of this research is in its ability to recognise the organisational policies and practices that are the most important drivers of customer satisfaction in a specific organisation. Human Resources Management (HRM) plays a central role in the exchange relationships between the organisations management and its employees. Work has been organized for a very long time and many issues we find today have been addressed in the past. But each generation finds solutions that fit the culture and beliefs of the time. Ultimately, it is an organizations empowered people who can help an organization achieve its goal.

or services .Customers usually call a business when they need a solution to a problem and secondly when they want to feel special in some way. Several important factors that make a customer feel special are discussed in the following. One of the most important aspects of customer service is speed of delivery. Fast service adds value, and speedy follow-up shows empathy. Also, speed often costs nothing but has to be designed into the processes. Fast service is a distinct source of competitive advantage, especially when some customers are prepared to pay a premium price for quality products to be delivered at exceptionally quick time. Personal interaction with a customer is another important aspect of customer service. It is important to get to know all customers, and to give them full attention. Even the minor things regarding a customer such as likes and dislikes, hobbies and interests do make a difference since this adds new dimensions and richness to the relationship. The risk of defection is considerably reduced when a customer is made to feel special due to the truly personalized service. Here, positive, transparent communication plays a vital role. In particular, courtesy, politeness and manners are keys to building trust, respect and loyalty. Information and keeping the customer informed is another dimension of customer service. One of the most important ways of making a customer feel special is to keep them informed of all changes taking place. For example, the customer should be kept informed of the delivery of a product and the status of a product if it is being manufactured. Also if the customer is awaiting 191

2. HRM and Customer service

Quality is often established in real-time encounters between employees and customers in services, therefore quality is a function of HRM that has placed the right type of people in customer services positions. The service practices apparently associated with this correlation are described, concentrating on HRMs role in creating satisfied employees who are motivated and able service providers Bowen and Schneider (1988). The importance of customizing HRM practices to fit a specific market segment is highlighted in this research. Lalonde and Zinszer (1976), defined customer service as those activities that occur at the interface between the customer and the corporation which enhance or facilitate the sale and use of the corporations products

some information or change, they should be always kept up-to-date on the status of their request. On the other hand, follow-up efforts should also be made regularly, to elicit customer feedback. Ensuring effective two-way communication with the customer ensures more sales and greater customer satisfaction. Another important aspect of customer service is customer expectations. Customer expectations differ from customer to customer, so that it is important to discover what the customers expectations really are. In this context, it is very important to make promises only when one is sure that they can be delivered, and to deliver with high quality. This establishes clear expectations, and the goal should be to exceed them. In particular, quality should be the number one priority, and should be an organization-wide responsibility. This underlines the importance of a good quality management system in delivering customer service, involving establishing customer-focused standards of performance, simplifying of procedures to reduce errors, standardizing systems to ensure consistency, and understanding the processes to pre-empt all problems. Complaint handling is another important area of customer service is. In fact, complaints are opportunities to improve service, involving creativity and commitment. The people who complain are the people who want to stay customers and are looking for reasons to do so. It is important for businesses to be proactive on customer service issues, not reactive. This enables businesses to turn complaints into opportunities. The development of long-term relationships is identified as a part of customer service. A customer will feel special if he/she is rewarded for maintaining a long-term relationship with a company. Studies have shown that many people who have got used to a certain way of being served by a company will not defect to a competitor since the human mind looks to maintaining the same patterns over longer period of time. This explains why some very poor companies continue in business even with very poor service levels. But a business cannot afford to be complacent. Statistics show that 68% of customers switch away if those serving them are indifferent to their needs. In fact, every year 192

businesses typically lose 10%-50% of their customers, and the business does not know who they are. Employees have a direct bearing on customer service. Providing superior quality service to customers cannot be achieved through employee satisfaction alone; it requires employee engagement. The level of commitment and involvement an employee has towards his/her organization and its values is termed as employee engagement. The key factors in engagement are alignment of employees toward strategy, enabling employees to have the capability to engage themselves, and creating the sense of engagement, i.e. creating the sense that individuals are a part of a greater entity. Better leadership and motivational practices would strengthen employee engagement in work, in turn improving customer service. CEO Hal Rosenbluth of Rosenbluth International, a corporate travel agency wrote an excellent book about their companys approach called Put The Customer Second - Put your people first and watchem kick butt. Rosenbluth argues that when you put the employees first, they put the customers first. Put employees first and they will be happy at work. Employees who are happy at work give better customer service because: They care more about other people, including customers They have more energy They are happy, meaning they are more fun to talk to and interact with They are more motivated The present study is an exploratory study examining customer service as a Human Resource function in the healthcare services, and the impact of employee engagement on customer service.

3. Data and Methodology

The data for the present study was collected from a sample of thirty managers/ administrators of different healthcare organizations, and thirty customers of the same healthcare organizations, and from thirty employees of the healthcare organizations. The managers and customers were asked about their perceptions of importance of customer service, and about the different parameters used by them to evaluate quality of customer service.

The employees were asked about the level of employee engagement and its impact on quality of service. The scale used for data collection from employees was a standardized scale for employee engagement, including the following items: 1. I have the materials and equipment I need to do my job efficiently. 2. I receive the information and communication I need to do my job. 3. I regularly receive recognition/praise for doing good work. 4. The benefits offered here are fair and reasonable. 5. The people here are pleasant and co-operative to work with. 6. There is someone at work who encourages my development. 7. My opinions and ideas seem to matter. 8. My supervisor provides me with feedback and guidance. 9. My supervisor helps me know what is expected of me. 10. My supervisor cares about me as a person. 11. Even if I had the opportunity to get a similar job with another organization, I would stay with my present company. 12. In the last year, I have had opportunities to learn and grow. 13. I would recommend the organization as a good place to work.

the core product/service, but also included customer service elements such as providing nursing/care, psychological support, privacy, and ensuring equity (for all patients), balanced with personalized care. Customer satisfaction and feedback (33%) was another important parameter, particularly because of its linkage with word-of-mouth recommendations/referrals. Two important processes directly impacting these were information communication and query handling. Appointments management, particularly relating to promptness of treatment and availability of doctors (especially visiting doctors), and grievance handling were also crucial processes in this context. On the other hand, networking/ancillary services, such as referrals to specialists, complemented the customer relationship processes. Another very important parameter was found to be infrastructural and technological dimension (25%), which included such elements as having state-of-the-art facilities and equipment, ambience, accessibility, and providing pharmaceutical and diagnostic services. Finally, employees and employee satisfaction (10%) were also a factor impacting the effectiveness of customer service. In particular, training was an important parameter in this respect, especially in terms of skills related to handling patients, and in applying emotional intelligence. Attrition was also a source of concern in this context. From the point of view of patients, a similar pattern emerged, but with quite different emphasis. The most important factor influencing customer satisfaction with customer service was found to be interaction/ involvement/hospitality of employees (60%). In particular, this underlined the importance of friendly, cooperative employees in healthcare service delivery, providing personalized care to individual patients. On the other hand, lack of employee commitment and dedication could be easily sensed by patients, for example if employees were rude or did not promptly respond to queries; these contributed to customer dissatisfaction. A related factor was that of administration of the hospital (40%). For example, the role of reception staff in the communication of information to patients was a crucial 193

4. Limitations of the Study

The study has several limitations. The sample size considered for the study was very low (thirty of each group), so that the results of the study may not be representative. Also, the data collection instrument was not lucid. In particular, there may have been confusion between the concepts of employee commitment, dedication, satisfaction, relationship, involvement, and engagement.

4. Analysis and Inference

There were several criteria/factors used by healthcare managers to evaluate the effectiveness of their customer service, and most managers were found to use multiple factors. The most important parameter was found to be the treatment/consultation (40%), which is essentially

factor. In particular, this was found to affect posttreatment services. Another important factor influencing customer satisfaction was the treatment by the doctor (45%) and expertise/professionalism of the doctor (40%). In particular, timely treatment/waiting time/availability of doctors were all of general concern for the patients. Also, the success rate of operations was a cause for concern in this context. The infrastructure, facilities, and technology (45%) were important factors from the patients point of view. This included a wide variety of elements such as food/ canteen facilities, drinking water, diagnostic equipment/ services, pharmacy/availability of medicines, accessibility, lounge/waiting area, rush/crowdedness, and so on. Ambience (10%) and hygiene (15%) were also factors affecting patients perception of healthcare services. These functioned to convey the sophistication

of the hospital. There were also some ancillary services which were found to impact patients perception of healthcare services; for example, critical/emergency services. In terms of the perception of customer service as a supplement to the core product/service, offered free of charge, it was found that 90% of healthcare managers and 96% of patients agreed to this view. Further, in terms of the importance of customer service, 86.5% of healthcare managers rated customer service as very important or extremely important, while 93.5% of patients rated customer service as very important or extremely important. Paired-samples t-test indicated that there was no significant difference of the importance of customer service to healthcare managers and to patients (Table 1). Further, comparing these with the importance of customer service to employees shows that there is no significant difference in the importance of customer service between all three players.

Table 1: The importance of Customer Service to Healthcare Managers and to Patients Mean Std. Deviation Correlation Sig. t

Importance of customer service 4.7600 0.5110 0.0680 0.7240 1.6530 to the managers Importance of customer service 4.5200 0.6340 0.0670 0.7320 1.4320 to the patients in comparison: Importance of customer 4.6400 0.8420 0.0680 0.6230 1.5320 service to the employees Although there was no significant difference about the importance of customer service between

Sig. (2-tailed) 0.1090 0.1020 0.1040 healthcare

organizations managers/administrators and patients, the rating of importance of customer service of patients (93.5%) were relatively higher than that of managers (86.5%). The importance of employee engagement from the managers point of view is shown in Table 2. Table 2: Importance of Employee Engagement (manager point of view) Mean High quality of service is possible form a healthcare organization when 4.76 employee commitment/dedication is high High quality of service is possible form a healthcare organization when employee satisfaction/relationship is high High quality of service is possible form a healthcare organization when employee engagement/involvement is high Superior customer service helps to build effective and efficient healthcare organization 194 4.59 4.41 4.69 Std. Deviation 0.511 0.501 0.568 0.541

All aspects of employee involvement were found to have an enabling influence on quality of customer service from the managers point of view. Employee commitment/dedication was given the highest emphasis, as observed earlier. Healthcare organizations managers/administrators were found to strongly agree with the statement superior customer service helps to build effective and efficient healthcare organizations. However, the same level of agreement with the statement was not found from the employees of healthcare organizations (as shown in Table 4). From the employees point of view, the degree of engagement was found to be quite high. Table 3 shows the levels of the employee engagement variables (from the employees point of view). Table 3: Employee Engagement (employee point of view) Mean Even if I had an opportunity to get a similar job in a different company, I would stay with my present company People are pleasant and cooperative to work with I receive the information and communication I need to do my job Recommend my organization as a good place to work My supervisor helps me know what is expected of me Someone at work encourages my development My supervisor provides me with feedback and guidance I have the materials and equipment needed to do my job efficiently I regularly receive recognition/praise for doing good work My supervisor cares about me as a person My opinions and ideas seem to matter Benefits offered are fair and reasonable I have had opportunities over the last year to learn and grow 4.50 4.43 4.36 4.36 4.29 4.14 4.07 3.93 3.93 3.86 3.79 3.79 3.71 Std. Deviation .650 .646 .497 .745 .611 1.167 1.072 .997 .917 1.167 .893 .802 1.326

All the variables were found to have relatively high average levels. However, the last variable, relating to having opportunities over the last year to learn and grow, was found to have a relatively lower average level, with high variability, indicating a divergence of responses. Table 4 shows the importance of employee engagement from the employee point of view. Table 4: Importance of Employee Engagement (employee point of view) Mean High quality of service is possible form a healthcare organization when employee satisfaction/relationship is high High quality of service is possible form a healthcare organization when employee commitment/dedication is high Superior customer service helps to build effective and efficient healthcare organization High quality of service is possible form a healthcare organization when employee engagement/involvement is high 4.29 4.14 4.07 4.07 Std. Deviation 1.139 1.167 1.207 1.385

The importance of employee engagement to employees showed similar levels as those of the importance of employee engagement to managers, with higher variability. 195

Implications and Discussion: The results of the study show that employee engagement is an important parameter for quality of healthcare services. Though healthcare managers had a low priority for employee involvement and engagement, these were particularly important from the customer point of view. Further, the results show that there is no significant difference in the importance of customer service between all three players. However, there were differences in the perception of managers, employees, and customers towards the impact of employee engagement on quality of service. Healthcare managers/ administrators were found to give more importance to customer satisfaction and feedback (33%) as compared with the importance given to employees and employee satisfaction (10%). This difference may lead to patients dissatisfaction, because dissatisfied employees often give inferior customer service. Infrastructural facilities and technology was given more importance by patients (45%), compared to thatofhealthcare managers/administrators (25%), as these included such elements as food/canteen facilities, drinking water, state-of-the-art equipment/services, ambience, and hygiene, which affect the patients directly more than administrators. Interestingly, the importance of timely treatment/consultation/expertise of doctors was perceived same by both managers/administrators (40%) and the patients (40-45%). This paper contains ideas that have many different roots that do fit comfortably within one coherent and self-consistent body of knowledge. One major point of debate has been the difference - if any - between HRM and traditional personnel management and service quality. The evolution of HRM continues today as new management theories, fashions and fads are developed. There is a vast scope for further research in testing for the impact of employee engagement on service quality. Also, the underlying dimensionality of the quality of customer service may be further analyzed. There is also further scope of research on understanding the characteristics/qualities of healthcare organizations which may provide superior customer service. Some implications for HRM of these choices are outlined in this paper with research implications. Conclusion Finally, it is argued that customer-focused management in general might enhance competitiveness and better 196

service quality and employee satisfaction in the marketplace service quality beings with employees. Every employee who works for a service organization must understand the values, beliefs and overriding objectives of the organization. In this way every employee is working from the same set of beliefs. Overall this is done by creating vision/mission statements or guiding philosophies and then disseminating these to all concerned so that every individual understands what is expected of them as an employee. So one needs to create a right philosophy in the minds of both customers and employees. References Aravinth, S. and Niranjanaa Devi, K., Contemporary Strategies in Customer Satisfaction. Borrill, C. West, M.A., Shapiro, D. and Rees, A. (2000). Team working and effectiveness in health care. British Journal of Health Care, 6(8), 364-371. Carter, A.J. & West, M.A. (1999), Sharing the burden - teamwork in health care settings, in J. Firth-Cozens & R. Payne (Eds). Stress in Health Professionals,. Chichester: Wiley. Kharb, M. (2008) , Creating the Right Service Philosophy. Wall, T.D., Bolden, R.I., Borrill, C.S., Carter A.J., Golya, D.A., Hardy, G.E., Haynes, C.E., Rick, J.E., Shapiro, D.A., and West, M.A. (1997). Minor psychiatric disorder in NHS Trust staff: Occupational and gender differences. British Journal of Psychiatry, 171. West, M.A., Borrill C., Dawson, J, Scully, J., Carter, M., Anelay, S., Patterson, M., Waring, J. (2002). The link between the management of employees and patient mortality in acute hospitals. The International Journal of Human Resource Management, 13, 8. Borrill, C., West, M., Carter, M., and Dawson, J., The Relationship between Staff Satisfaction and Patient Satisfaction: Results from Wolverhampton Hospitals NHS Trust. De Villiers MR, Couper ID, Hugo J, Conradie H, Shaw V. (2005), Tools for busy hospital managers: A guidebook for the district hospital management team, Health Systems Trust. Lalonde and Zinszer, (1976), Customer Service as an element of the Marketing Mix The evaluation of a Descriptive Model of sustomer Service, Ohio State University.

Emotional Recognition Readiness and Leadership

Kavitha Sethuraman Incharge compensation & CSR, FLSMIDTH Pvt., Ltd., Chennai & Research Scholar SRM University

1. Introduction
Emotions are a physical sensation that obliges one to act. This word is derived from a latin verb emovare meaning to move. These emotions act as the basis for body and mind to communicate. We typically view emotions as primitive and instinctive responses that are not associated with complex intellectual or cognitive functions. Certainly, key stimulus elements in the environment can trigger instinctive emotional responses (imagine confronting a large, threatening animal). However, cognitiveemotional interactions are extremely important in the elicitation of everyday emotions. In primates and humans, the brain has a striking capacity to learn and remember the emotional significance of diverse stimuli and events. Furthermore, our cognitive capacity allows us to assign emotional valence to stimuli, and to change the value that was previously assigned to a stimulus. For example, a child may be initially fearful of dogs, but through positive experiences the child may eventually enjoy and approach them. As another example, imagine the emotions associated with a new relationship. Initially, seeing the person may evoke positive emotions of desire and happiness. However, after a nasty breakup, the same person could easily elicit emotions of anxiety, tension, and anger. This second example illustrates two important points. First, the sensory or perceptual analysis of the person is the same. The physical expression of emotion may also be the same (i.e., racing heart, flushed sensations , increased breathing rate). Second, the emotional reaction to the stimuli depends on cognitive processing. In other words, the evaluation of the stimulus (the person) in conjunction with past experiences determines the feelings or the conscious experience of joy or anger. Studies of brain functions reveal that neural pathways exist for these important cognitive-emotional interactions. 197

2. Emotions and Leadership:

The literature briefly described above is representative of a much wider body of knowledge which suggests that feelings serve multiple purposes in human affairs. As will be demonstrated below, it is likely that feelings play an important role in leadership. While George and Bettenhausen (1990) and George (1995) investigated some of the potential beneficial consequences of leader positive mood, it is likely that a diversity of feelings (both emotions and moods) influences leadership effectiveness. Negative moods, for example, foster systematic and careful information processing (Sinclair, 1988; Sinclair & Mark, 1992) and may be advantageous when leaders are dealing with complex problems in which errors carry high risk. As another example, relatively intense negative emotions may appropriately redirect a leaders attention to an issue in need of immediate attention (Frigda, 1988). Leaders who experience anger frequently may have a difficult time building good relationships with followers and engendering their trust (Jones & George, 1998). Similarly, a leader who frequently experiences positive moods on the job may fail to notice and attend to performance. Shorfalls that is less than apparent. Hence, this inquiry into the role of feelings in leadership is not bent on determining the right or effective moods and emotions that facilitate leadership effectiveness. Leaders are obviously human beings with the full range of moods and emotions potentially available to them. Both positive and negative moods and emotions serve numerous functions in peoples lives. Likewise, both positive and negative moods and emotions can sometimes be the cause of human dysfunctions (George, 2000). These emotions in a person will affect his leadership skills, knowing the emotional preparedness (EP1 being

low and EP4 being very high) of the subordinates would contribute to a large extent for effective leadership. For example, if a person has experienced too much of sorrow in his past, his sorrow will be at EP4 compared

to that of happiness; if that person interacts with a leader who is always very happy and excited and tries to communicate to this person with the same excitement then this person might be annoyed.

3. Overview of the Brain and the Location of Emotions:

Source: http://www.colorado.edu/intphys/Class/IPHY3430-200/image/limbic.jpg The limbic system plays a major role in our experience and expressions. This part of brain initially evolved for feeding, mating and defence of territory. This is still the part of the brain we use for evaluating what is happening and generating appropriate physiological reactions in the body. The limbic system consists of five parts namely scanner or Thalamus, evaluator or hippocampus, memory bank or Amygdala, Sensory or information and cortex or thinking cap. Although there are various areas in limbic system the most important areas of the brain involved in emotions are the memory bank and evaluator. The evaluator has an evaluative function to assess context, comparing current information with what has been seen before. We can trigger strong emotions from a relatively minor event. On the other hand Memory Bank determines the emotional significance of events and compares the threat with past events; it has a role in storing emotional memories. If there is a positive match with earlier memories, it is the memory bank which gets involved to initiate a fight or flight response. Hence the limbic system in the brain plays a major role in controlling emotions of a person.The brain produces natural chemical messengers - called neurotransmitters - that send messages from one nerve cell to another. Serotonin is known as the feel good neurotransmitter because it plays an important role in the regulation of mood. Low levels of serotonin can cause excessive feelings of sadness and anxiety. Two other important neurotransmitters - dopamine and norepinephrine - also affect mood. When the brain doesnt produce enough dopamine or norepinephrine, you can feel tired, unmotivated and foggy-headed. There should be a balance of all the three.

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4. Art and Science of Leadership:

Leadership is both an art and a science, effective leadership requires that we embrace both dimensions. The science of leadership concerns the observation, study and classification of leadership practices, resulting in a reliable explanation of what makes leaders effective.

Volumes of research, opinions and books have been written on scientific leadership methods and practices. The art is about developing practical experience in the application of the leadership practices and methods resulting from the science of leadership. To me, the art of leadership is about practice! Its about practicing the leadership science until you develop intuition.

5. Linking Emotional preparedness to leadership:

The above frame work can be explained with the following example. If a subordinate with the emotional preparedness 4(EP4) in sadness, it will be from his past experiences stored in the memory bank. These experiences could be a top down processing or bottom up processing in the brain, meaning that the top down processing is the past experiences and memories stored, on the other hand the bottom up processing is the experiences from the external stimuli. The former would be stronger than the latter as it has been experienced in the past and stored in brain. This means that the brain produces excess of Serotonin. As a next step, we form perceptions and thereby respond through actions. As we know Leadership is an attempt to influence people, if leaders are able to understand the emotional balance of their team members they will be in a better position to support and motivate them. An attempt has been made to develop the model objective. It was developed on the basis of literature review and practical 199

experiences. This model can be empirically tested.

6. Reference:
Papez, J.W. (1937). The Neurology of Emotion. Available < http://www. n e u r o a n a t o m y. w i s c . e d u / c o u r s e b o o k / neuro5(2).pdf >. [Accessed 25th November 2010]. George. M. Jennifer. (2000). Emotions and Leadership: The role of emotional intelligence. SAGE Publications, Volume 53(8): 10271055: 013316. Frigda, N.H (1988). The laws of emotion. American Psychologist, Vol 43 PP. 34958. Sinclair, R.C. Mood (1988).Categorization breadth, and performance appraisal: The effects of order of information acquisition and affective state on halo, accuracy, information

retrieval, and evaluations. Organizational Behavior and Human Decision Processes.Vol 42.PP. 2246. Sinclair, R.C. & Mark, M.M (1992). The influence of mood state on judgement and Action: Effects on persuasion, categorization, social justice, person perception, and judgmental accuracy. In L.L. Martin and A. Tesser (Eds), The construction of social judgments. Hillsdale, NJ: Erlbaum, pp. 165 93.

Jones, G.R. & George, J.M (1998). The experience and evolution of trust: Implications for cooperation and teamwork. Academy of Management Review, Vol 23.PP. 53146. George, J.M (1995). Leader positive mood and group performance: The case of customer Service. Journal of Applied Social Psychology, Vol. 25. PP. 77894. George, J.M. & Bettenhausen, K (1990). Understanding prosocial behavior, sales performance, and turnover: A group level analysis in a service context. Journal of Applied Psychology. Vol 75.PP. 698709.

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Human Resource Management Socio-Economic Factors Influencing the Success of Women Entrepreneurs in Network Marketing Industry
(With Reference to Amway) Manjula Pattnaik, Research Scholar, University of Madras Balachandra Pattanaik, Asst. Professor, Kalsar college of Engineering, Chennai 1. Introduction
The entrepreneurial spirit has been described as the most significant development in recent economic history. Entrepreneurship is the process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled (Timmons 1994). . A good entrepreneur is one who is capable of inspiring confidence in people, and has the ability to motivate them to work with him in fulfilling the economic goals set by her. 1.1 Concept of Women Entrepreneurs: Earlier research tended to focus on those issues that have created barriers to female entrepreneurship and support mechanisms that have attempted to alleviate such problems for the putative female entrepreneur. Though women constitute almost half of the worlds population their representation in gainful employment is comparatively low. global entrepreneurship Monitor (GEM) report (2007) on women entrepreneurship says that women are creating and running business around the world, contributing to the economies that represent more than 70% of the worlds population and 93% of Global GDP. Women entrepreneurship is a key contributor to economic growth in low and middle income countries like India. 1.2 Women Entrepreneurs in Network Marketing: Network Marketing is a subset of direct selling and is also known as multilevel marketing, structure marketing or Multilevel direct selling (WFDSA 2000). Business organizations have long relied on direct marketing to target customers without spending a lot of money on retail distribution. However, the Network (Multilevel) Marketers have taken the direct model one step further i.e. not only they do the sales, but recruit and train new distributors i.e., independent sales persons who are members in the network marketing company. This ingenious method was first popularized by Amway in 1950s. Women are caretakers and are well suited to network marketing. The Direct selling 201 women alliance (DSWA) says that there are about 14 million people in direct selling in united states. There are over 55 million worldwide, doing an estimated 97 billion dollars in sales value. Statistics tell us that women constitute 73% of the total direct sellers in the world. According to the IDSA (Indian Direct Selling Association) report, women constitute 60% of the total direct sellers in India. 1.3 Objective of the study: 1. to study the social as well as economic profile of women entrepreneurs in network Marketing Industry. 2. To analyse microscopically the indispensable HRM competencies of women entrepreneurs of Network Marketing Industry namely achievement motivation, teamwork, customer orientation, organizational commitment and empowerment. 1.4 Hypothesis: The following research hypothesis are formulated and structured for the study : There is no significant difference among factors of HRM competencies. Women entrepreneurs in network marketing industry do not differ in their perceptions.

1.5 Scope of the Study: The study area is restricted to Chennai city as most of the network marketing companies are having their operations in Chennai. The study covers the major HRM competencies of women entrepreneurs in this business, the determinants of entrepreneurship. 1.6 Limitations of the Study: The study focuses on the perceptions of women entrepreneurs about their HRM competencies in select network marketing companies functioning in Chennai city and these perceptions are subject to Change in the days to come. A questionnaire survey is conducted among the women entrepreneurs

of network marketing companies. As it is a perception study, the results cannot be generalize. 1.7 Research Methodology: The Research Methodology of this study based on both analytical and descriptive type of methodology. The study is conducted in two stages format, with a preliminary pilot study followed by the main study. Chennai hosts a number of network marketing companies like amway, Oriflamme, Modicare, Tupperware, Avon and Conybio and many others who have regional offices in Chennai. 1.8 Questionnaire Design: The questionnaire was based on the initial research model and propositions. Primary data were collected through questionnaire survey. The respondents were asked to give their opinion relating to the five major HRM competencies. The first part of the questionnaire comprises demographic factors with optional questions. The second part contains statements about the profile of the business. Some optional questions are included along with the rating questions and also yes / no questions. The third part consists of statements relating to the HRM competencies with Likerts 5 point scale. The fourth part of the questionnaire relates to the profile of entrepreneurship. All relevant statements are included to derive responses. The fifth part comprises statements pertaining to the constraints faced by the respondents and the reasons for the high attrition rate. Data Collection: The sample size was determined by considering the

number of women entrepreneurs attending the meetings of Amway. A total of 100 questionnaires were circulated to the women entrepreneurs. Data Analysis: All data analysis was conducted using SPSS V-15. Sample means, standard deviation and N are presented in the analysis chapter for all the variables of the study. The data were screened in order to obtain the variance between various HRM competencies. Factor analysis, cluster analysis, one way analysis of variance, karl Pearsons co-efficient of correlation, t-test, ranking analysis are discussed here. 1.9Analysis and Interpretation: This Tree analysis creates a flow chart (Trees) based on the classification model. It classifies the cases into groups or predicts values of a dependant target variable based on the values of independent predictor variables. It also provides tools for exploratory and confirmatory classifications. 1. Inability to withstand negative effects: The women entrepreneurs in network marketing industry specified the inability to withstand negative effects as the primary reason for their attrition. But the research needs to ascertain how far the five HRM competencies achievement motivation, team work, organizational commitment, customer orientation and empowerment are attributed to curtail the above mentioned reason for attrition.

Sample Reverse Auction Process ATR 1

Node 0 Mean Std. Dev. n % Predicted 4.087 1.012 412 100.0 4.087

Commitment Adj. P . Value=0.000. F=108.695. Df1=2. Df2=409 <=3.30 Node 1 Mean Std. Dev. n % Predicted 3.493 1.073 203 49.3 3.493 (3.30.3.90) Node 0 Mean Std. Dev. n % Predicted 4.556 0.499 132 100.0 4.087 >3.90 Node 0 Mean Std. Dev. n % Predicted 4.087 1.012 412 100.0 4.087

Achievement Adj. P . Value=0.000. F=25.017. Df1=1. df2=201 Node 0 Mean Std. Dev. n % Predicted Node 0 Mean Std. Dev. n % Predicted

4.087 1.012 412 100.0 4.087

4.087 1.012 412 100.0 4.087

202

From the above diagram, it is found that the attrition reason inability to withstand negative effects diminishes from the mean value 4.087 at Node 0 to 2.985 at Node 4. But it trespasses the two radical branches over the independent variables organizational commitment (F = 108.695) and achievement motivation (F = 25.017). This forces one to conclude that when there is attrition of women entrepreneurs due to the reason of negative effects in their business venture, it is safeguarded by the

two HRM competencies, organizational commitment and achievement motivation in the sequential order. 2. Poor planning / Self confidence: The second reason quoted by women entrepreneurs in network marketing for attrition is Poor planning / Self confidence. The research tries to ascertain how far the five HRM competencies are able to control attrition in the business.

Sample Reverse Auction Process ATR 2

Node 0 Mean Std. Dev. n % Predicted 3.800 0.000 412 100.0 3.800

Commitment Adj. P . Value=0.000. F=130.405. Df1=3. Df2=408 <=3.00 Node 1 Mean Std. Dev. n % Predicted 3.493 1.073 203 49.3 3.493 (3.00.3.30) Node 0 Mean Std. Dev. n % Predicted 4.556 0.499 132 100.0 4.087 >3.90 Node 0 Mean Std. Dev. n % Predicted 4.087 1.012 412 100.0 4.087

Achievement Adj. P . Value=0.000. F=25.017. Df1=1. df2=201 Node 0 Mean Std. Dev. n % Predicted Node 0 Mean Std. Dev. n % Predicted

4.087 1.012 412 100.0 4.087

4.087 1.012 412 100.0 4.087

The diagram makes it clear that the attrition reason poor planning / self confidence diminishes from the mean value 3.850 at Node 0 to 2.421 at Node 5. But it trespasses the two radical branches over the independent variables organizational commitment (F 13.405) and empowerment (F = 22.074). So it can be concluded that when there is attrition of women entrepreneurs due to the reason of poor planning / self confidence in their business venture, it is minimized by the two HRM competencies, organizational commitment and empowerment in the sequential order. This makes it clear that if the women entrepreneurs are highly committed to their business and also highly empowered (capability

to make right decisions), they are able to tide over their attrition reason poor planning / self confidence, and become more confident to plan for their future business. 3. Poor performance at the execution level: The third reason given by the women entrepreneurs in network marketing industry for attrition is Poor performance at the execution level. The research tries to ascertain how far the five HRM competencies are able to control attrition in their business. The above mentioned reason for attrition is taken as a dependant variable and the execution of the probabilistic tree model brought out the following results.

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Sample Reverse Auction Process ATR3

Node 0 Mean Std. Dev. n % Predicted 3.767 0.917 412 100.0 3.767

Commitment Adj. P . Value=0.000. F=90.326. Df1=4. Df2=407 <=3.00 Node 1 Mean Std. Dev. n % Predicted 2.948 0.000 115 27.0 2.948 (3.00.3.30) Node 2 Mean Std. Dev. n % Predicted 3557 0.544 88 21.4 3.557 >3.90 Node 3 Mean Std. Dev. n % Predicted 3.948 0.440 74 18.0 4.176 >3.90 Node 3 Mean Std. Dev. n % Predicted 3.948 0.440 74 18.0 4.176 >3.90 Node 4 Mean Std. Dev. n % Predicted 4701 0.488 77 18.7 4.701

The above diagram makes it clear that the reason for attrition poor performance at the execution level diminishes from the mean value 3.767 at Node O to 2.948 at Node 1. But it trespasses a radical branch of unique independent variable, organizational commitment (F = 90.326). This forces one to conclude that when there is attrition of women entrepreneurs due to their inability to perform effectively, it is minimized by the HRM competency, organizational commitment. This makes it clear that when women entrepreneurs possess very high degree of commitment towards their organization, they are able to break the constraints of poor performance, and try for better performances at the execution level. 1.10 Findings: Strong achievement motivation is a powerful tool to extract significant team work from the women entrepreneurs. A torrent of motivation helps the women entrepreneurs to achieve a value congruency with network marketing industry. Achievement motivation has led to customer activation in order to help the women entrepreneurs to enhance their service quality. It has helped the women entrepreneurs to deliver the product on time as their main focus is on customer satisfaction. The achievement motivation of women entrepreneurs has improved their self-confidence which in turn has led to betterment of their status both socially and economically. The motivated women in network marketing industry feel empowered because of their economic independence. 204

The optimistic co-ordination in team work has made the women entrepreneurs emotionally attached towards the organization. The team work factor synergy has led the women entrepreneurs to have value congruency with the organization. 1.11 Conclusion: Today, there is a greater awakening among women. Given an opportunity, they will deliver the results. In education, they have not only excelled but also become top rankers. Educating women is absolutely essential in strengthening their personality. therefore, encouragements of the growing intensity of motivation amongst educated young women for coming into the entrepreneurial stream and extended support with scientifically designed package of the technical and financial assistance are needed. The non-governmental organizations have a bigger role in stimulating and nurturing the spirit of entrepreneurship amongst women. There are indications, however, that women-owned businesses are only beginning to become involved international trade and other forms of globalization which may be a factor preventing them from reaching their full potential in the networking market. Towards this end, an integrated approach is necessary for making the movement of women entrepreneurship a success. The role and attitude of women entrepreneurs are critical to the success of network marketing industry. A long standing, successful relationship with the entrepreneurs allows the network marketing companies to introduce new and improved advanced products relatively easy to market, using an experienced team which knows the local market very well.

REFERENCE: Alexander Gordon, (2007). Network marketing business for women, MLM leads for India, (www.freelance bandhu.com) Allen N.J. & Meyer J.P. (1990). The Measurements and Antecedents of Affective, Continuance and Normative Commitment to the Organization, journal of Occupational Psychology P (1-18). Bateman T.S. amd Strasser.S (1984). A longitudinal analysis of antecedents of organizational commitment. Academy of Management Journal, 27: Pp (95-112). Caputo R and Dolinsky A (1998). Women choices to pursue self employment The role of financial and Human capital of Household members, Journal of small business Management 36 (3) (Pp8-17). Charumathi(1998), Mathur Rahman(1998), Acharya 2001, Developing Women Entrepreneurs in South Asia Problems and Constraints. http//www.unescap.org Daisy Johnson (2008). Sprit Driven Success Learn Time Tested Biblical Secrets to Create Wealth While Serving Others http//twindin. entrepreneurship.com

Dalton Marie, Dawn Hoyle, and Marie Watts, (2000). Human Relations, South western Educational publishing, Thomson learning 2nd Edition, Pp 180, 183. evancarmichael. com/ leadership/2946). Feather N.T., and Rauter Kartin.A (2004). Organisational citizenship behaviours in relation to Job status, job insecurity, organizational commitment and identification, job satisfaction and work values, Journal of occupational psychology 77 (81-94). Frederick Herzberg(2003). One More Time, How do you Motivate Employees? Harward Business Review, Hardward Business school press, 2003 P 45-70. Ganesh M.P.(2007). Enhancing organizational commitment among employees : Role of H.R.Practices, GITAM Journal of Management, Vol.5 No.3, Pp 182, 183. GEM Report (2007). http//www. gemconsortium.org, http//www.3. babson. edu Nunnallly J.C and Bernstein I.H(1994). Psychometric Theory (3Edn)New York, Mc Graw Hill Inc.

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Impact of Strategic HRM Implementation on Firm Performance: An Empirical Study on the Indian IT Sector
Prof & Head Department of Management Studies, Avadi - IAF Aallim Muhammed Salegh College of Engineering, Chennai

Prof. A. Shameem

1. Introduction
Strategic Human Resource Management (SHRM) is the planned pattern of human resource deployment and activities intended to enable the organisation to meet organisational goals and objectives (Noe et al. 2007). In other words, the definition of SHRM is represented by the degree of participation in core decision-making and partnership undertaken by human resource (HR) department and the specificity and formality that HR departments require in planning and implementing, all of that, to ensure that a firms human capital contributes to achieving firm business goals. Nowadays, it is a common belief in the business world that HR of an organisation can be a source of competitive advantage, provided that the policies and practices for managing people are integrated with the overall strategic goals and objectives. SHRM emphasises the importance of establishing congruence between HR policies and organisational strategic goals.

3. Importance and Justifications of the Study

The importance and justification for conducting this study by the researcher is on account of two reasons. Firstly, as the literature shows, such a study has not previously been conducted in India, especially what is related to SHRM implementation in the IT sector. The research objective is to explore the impact of SHRM implementation on organisational performance of the IT sector in India, which is considered as one of the leading growth sectors of the Indian economy. Secondly, the positive results of foreign studies on SHRM and the interest of renowned thinkers and researchers in this field have prompted this study.

4. Objectives of the Study

The objectives of this study are to gain a deeper understanding of the relationship between SHRM implementation and the organisational performance and to know if the relationship between SHRM implementation and organisational performance is affected by firms size and age.

2. Problem Statement
HRM has been developed into SHRM by researchers seeking to emphasise the importance of the concept to the effective functioning of organisations. To this end, many authors have maintained that SHRM is straightforwardly linked to organisational performance and that high-performing work organisations pay special attention to adopting particular HRM policies and linking these to the strategies of their organisations. However, regardless of the rising popularity of SHRM, there have been very few systematic evaluations of the claims that it is linked to performance and doubts remain as to its theoretical foundations (Harris & Ogbonna 2001). This problem can be particularly examined through answering the research main question How does SHRM implementation affect the Indian IT sector firms performance? 206

5. Literature Review
Within the last two decades, there has been a number of important contributions in the literature dealing with issues pertaining to the management of people. Significant attention has been directed towards HRM, which many have seen as representing a distinct approach to managing people (Guest, 1997). Interestingly, although researchers have highlighted the holistic nature of HRM, much of the initial research into the concept focused on a limited range of issues and has been criticised as `micro analytic (Delery and Doty, 1996). However, in the last decade, researchers have sought to show the importance of HRM in influencing organisational performance and it is from this premise that the current interest in SHRM has developed (Cappelli and Crocker-Hefter, 1996).

Rapid environmental change, globalisation, innovations to provide competitive products and services, changing customer and investor demands have become the standard backdrop for organisations. To compete effectively, firms must constantly improve their performance by reducing costs, enhancing quality, and differentiating their products and services. To improve firm performance and create firm competitive advantage, HR must focus on a new set of priorities. These new priorities are more business and strategic oriented and less oriented towards traditional HR functions such as staffing, training, appraisal and compensation. Strategic priorities include team-based job designs, flexible workforces, quality improvement practices, employee empowerment and incentive compensation (Jing and Huang 2005). SHRM was designed to diagnose firm strategic needs and planned talent development which is required to implement a competitive strategy and achieve operational goals (Huselid et al., 1997). Interestingly, the burgeoning interest in SHRM has not been matched by the development of appropriate theoretical constructs for the concept (Guest, 1997). Indeed, researchers have criticised the underpinning theoretical foundations of SHRM and many have called for the formulation of a theory of SHRM (Dyer, 1985). Two major reasons account for this criticism. The first is that the concept of HRM, from which SHRM originated, has itself been subjected to extensive criticisms for its poor theoretical framework (Legge, 1994). The second, and perhaps more important reason, is that researchers have approached the field of SHRM from a variety of perspectives with little acknowledgement of the differences within them and no attempt has been made to identify the common threads in the perspectives (Delery & Doty, 1996). Such an understanding is important to enable an assessment of the viability and adoption of the concept. A brief discussion is offered in what follows. In an extensive review of the literature, Delery & Doty (1996) identify three categories of researchers and the perspectives that they have adopted in theorising SHRM. They tag the first group of researchers `universalists largely because of their interest in identifying `best 207

practice SHRM policies. Delery & Doty (1996) note that ``these researchers . . . posit that some human resource practices are always better than others and that all organisations should adopt these best practices. It is within this perspective of theorising in SHRM that the present interest in developing `high performance work practices is located (Osterman, 1994). Thus, the assumption is that the adoption of certain SHRM policies is likely to result in increased organisational performance (Kochan & Dyer, 1993). The second strand of theorising identified by Delery & Doty (1996) comprises those researchers adopting a contingency approach. In keeping with the early foundation of the contingency perspective within organisational theory, these researchers argue that the success of HRM policies is contingent upon the achievement of a match between HR policies and other aspects of the organisation. For example, researchers adopting this perspective have demonstrated that different HR policies may be required at different stages in an organisations life cycle (Bird & Beecher, 1995). Delery & Doty (1996) identified a third group of SHRM theorists as adopting a `configurational approach. Delery & Doty (1996) noted that this approach is more complex and consists of researchers who seek to `` . identify configurations or unique patterns of factors, that are posited to be maximally effective. This category of researchers are also said to approach their subject from a more theoretical perspective and many of the phenomena they identify may not necessarily be empirically observable (Doty & Glick, 1994). A consistent theme in all three theoretical perspectives of SHRM is the assumption that SHRM is linked to organisational performance. However, while the literature is rich with claims that both HRM and SHRM are linked to performance, there is little empirical evaluation of this and the theoretical foundations upon which these links are based have been described as inadequate (Guest, 1997). Accordingly, a better understanding of the role of the implementation of SHRM in creating and sustaining organisational performance and competitive advantage should be achieved through further theoretical development and empirical evidence (Jing & Huang 2005).

Recent years have been characterised by an increased interest in examining the added value of HR to a firms success. The literature suggests that HRM can be a source of sustained competitive advantage (Pfeffer 1994; Wright et al. 1994). Huselid (1995), for example, suggested that a proper configuration of HR practices may not only help an organisation sustain its competitive advantage, but may also contribute significantly to a firms performance. The challenge that HRM has to face relates to the outcomes. What is important, says Ulrich (1998), is not so much what HR does, but its deliverables, or its contribution to the overall organisational outcomes. Certain research work has traditionally focused on the impact of HR practices on individuals or, alternatively, on examining that impact using the organisation as the level of analysis. Another possible distinction (Wrigh & Boswell 2002) lies in the number of practices analysed. Many scholars have focused on one or more HRM practices and examined their effect on various performance measures (e.g. Banker et al. 1996; Delaney & Huselid 1996, Delery & Doty 1996; Harel & Tzafrir 1999; Khatri 2000, among others). Studies in the late 1990s have examined the effect of sets of HR practices on performance (Arthur 1994; Becker et al. 1997) and the characteristics and orientation of the HRM function and the link to performance (Huselid et al. 1997; SnellYoundt 1995). The common denominator for these studies lies with the concept of multiple HR practices as a system, borrowing from the paradigms of systems approach. Thus, in the HRM system perspective, the implicit assumption is that a single or isolated HRM practice may have only limited competitive effects on overall performance. In fact, despite voluminous theoretical and empirical literature, no consensus exists among HR scholars regarding the ways in which HRM might have an impact on the firms outcomes (Becker & Gerhart 1996). Moreover, no consensus exists with regard to the right set of contingencies that explain the relationship between HRM practices and performance (Ferris et al. 1998), nor is there general agreement as to the precise policies and practices that comprise any HRM system (Beckert & Gerhart 1996). More importantly, the ways 208

in which HRM system is constructed may be critical to a firms success and the role of HR processes in this construction is often overlooked (Purcell 1999; Monks & Schuster 2001). To make things worse, there is no consensus on what the term performance actually means. While some researchers (e.g. Huselid 1995) concentrate on financial performance, others (e.g. Arthur 1994; MacDuffie 1995), measure productivity and quality. The absence of a widely accepted measure of firm performance construct (in addition to a HRM practices construct) makes it difficult to compare findings across studies (Rogers & Wright 1998). Most of the previous studies focus on one or two of them; subsequently, they do not adopt a more integrated view. It is thus essential to identify profiles or configurations of the essential HR policies and practices that are tied to organisational success measured in terms of financial and performance objective yardsticks.

6. Research Hypotheses
The research hypotheses framed for this study include two main directional hypotheses; and two subhypotheses generated from the first main hypothesis. They are as follows: H1 There is a significant impact of SHRM implementation on organisational performance. H1/1 - There is a significant impact of HR devolvement on organisational performance. H1/2 - There is a significant impact of HR strategic involvement on organisational performance. H2 - There is a significant variation in the impact of SHRM on organisational performance in terms of firm size and firm age.

7. Methodology
A survey method was carried out using a standardised measuring instrument. To differentiate the SHRM implementation level in the targeted firms, a questionnaire was designed based on the definition of SHRM. Additionally, objective and subjective variables were used to measure the organisational performance. The study population was IT firms operating in Chennai city and included 75 HR managers with more than 15 years of experience in the HR field. The researcher has used appropriate data analysis tools.

8. Findings of the Study

The study has shown that there is a significant impact of SHRM implementation on organisational performance. SHRM places new demand on the HR function, but brings about proper alignment of HR goals with organisational goals, improves interpersonal relations among HR and line managers and reduces turnover. HR managers of large-sized firms strongly agree and HR mangers of medium-sized firms agree that implementation of SHRM improves team-based job designs, makes available flexible workforces, improves quality practices, enhances employee empowerment and incentive compensation and helps plan talent development which is required to implement the chosen competitive strategy and achieve operational goals. Thus the study has also shown that there is a significant impact of HR devolvement on organisational performance and that there is a significant impact of HR strategic involvement on organisational performance. On the question of whether there is a significant variation in the impact of SHRM on organisational performance in terms of firm size and firm age it is seen that age and size of firm influence not only what HR does, but its deliverables, or its contribution to the overall organisational outcomes.

effectively, then HR will make a substantial impact on firm performance. A greater use of HR practices is associated with higher levels of employee commitment and contribution and is in turn linked to higher levels of productivity and quality of services.

References
Bird, A. and Beecher, S. (1995) Links between Business Strategy and Human Resource Management Strategy in US-based Japanese Subsidiaries: an empirical investigation. Journal of International Business Studies (First Quarter), pp. 23- 46. Delery. J.E. and Doty. H.D. (1996) Modes of Theorising in Strategic Human Resource Management: Tests of Universalistic, Contingency, and Configurational Performance predictions. Academy of Management Journal. 39(4): 802-35. Doty D.H, Glick W.H. (1994) Typologies as unique form of theory building: toward improved understanding and modeling. Academy of Management Review, 19:2. pp. 30 -51. Dyer L. (1985) Strategic Human Resource Management and Planning. Rowland K. Ferris G. editors. Research in Personnel and Human Resource Management (Vol. 31), pp. 488- 511. Cappelli, P. Crocker-Hefter, A. (1996) Distinctive Human Resource are Firms Core Competencies. Organisational Dynamic. 24(3). Guest, D.E. (1997). Human Resource Management and Performance: A Review and Research Agenda, International Journal of Human Resource Management, Vol. 8, no. 3, pp. 263-276. Harris, L. Ogbonna, E. (2001) Strategic Human Resource Management, Market orientation, and Organisational Performance. Journal of business research,51, pp. 157-166. Huselid, M.A. Jackson, S.E. and Schuler, R.S. (1997), Technical and Strategic Human Resource Management Effectiveness as Determinants of Firm Performance, Academy of Management

9. Suggestions
Based on the study conducted, the researcher would like to put forth the following suggestion in order to increase the effectiveness of HR functioning. The HR Department has to play the following strategic roles - Business Partner working alongside business colleagues to align HR and business strategy and manage human resources strategically; Innovator developing integrated HR strategies; Change Agent the management of transformation and change; Implementer getting strategies into action.

10. Conclusion
The assumption underpinning the practice of HRM is that people are the organisations key resources and organisational performance largely depends on them. If, therefore, an appropriate range of HR policies and processes is developed and implemented 209

Journal, Vol. 40, pp. 171-88. Jing, W. Huang, T. (2005) Relationship between Strategic Human Resources Management and Firm Performance, International Journal of Manpower, pp. 434-449. Kamoche, K. (1994) A Critique and a Proposed Reformulation of SHRM. Human Resource Management, 4(4):29 - 43. Kochan, T.A. Dyer, L. (1993) Managing Transformational Change: the role of human resource professionals. International Journal of Human Resource Management, 4:569 - 90. Legge K. (1994) Managing Culture: Fact

or Fiction: Sisson, K, editor. Personnel Management: A Comprehensive Guide to Theory and Practice in Britain. Oxford: Blackwell, pp. 397 433. R. Noe, J. Hollenbeck, B. Gerhart, and P. Wright (2007) Human Resources Management: Gaining a Competitive Advantage, 5th.Ed. McGrew-Hill Co. New York. Osterman P. (1994) How common is workplace transformation and who adopts it? Industrial Labor Review, 47:173 - 88.

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Analysis And Awareness of IPR in IndiaA Study Among the Graduates in Chennai City
Y.Alfred Benjamin, Research Scholar Dr. Y.Lokeswara Choudary, Research Supervisor
SRM B-School,SRM University, Chennai.

1. Introduction
Intellectual property (IP)is an abstract property which is legally entitled like any other property that refers to creations of mind such as musical literacy , artistic work , inventions, symbols, names ,images , and designs used in commerce , including copyright , trade marks , patents & related rights, industrial designs; geographical indications, layout designs of Integrated Circuits, and protection of Undisclosed Information. Intellectual property surrounds us in nearly everything we do. At home, at school, at rest, at play no matter what we do the fruit of human creativity and invention surrounds us. The law governing the rights for owning this Intellectual Property has taken it vital position in the recent years across the globe. This right empowers the IP owner to have certain exclusive rights in the form of limited monopolistic rights for his/her labor and efforts to these creative works which is covered by it. Though the existence of IPRs is very old it gives the social recognition to its holder with further addition of economic benefits to its holders. 2. IPR Symbol of Pride IPR has taken a status symbol of a county at this globalization phase as it becomes a strategic response for the globalization and liberalization of the economy growth of a country. It also signifies the scientific, technical and industrial development of a nation. IPR drives the industrial change and attracts foreign investment in a nation. Corporate takes IPR as the power that keeps the business moving forward. IPR as tool to maintain their competitive advantage; for significant collaborations; to streamline processes; drive new revenue streams; maximize their profitable investment, reduce risk; drive innovation effectively and efficientlyetc 211

3. IPR Outlook in India

The developed countries have any how embraced the IPR strategy long before and have made their systems align to this but the developing and the underdeveloped countries sees this as a mammoth task and unnecessary. All the developing countries except few always have a dilemma in their outlook when it comes to IPR. Due to their own state policies, lack of knowledge, lack of systems and procedures, unwillingness for change are some of the obstacles stand in the way of the IPR acceptance and implementation. According to The Economic Times Reports Manufacturing cos lead in filing patents. However Among the top 100 tech companies in India, almost 89 have not filed any patent applications as yet. During FY07 and FY08, Indias top two exporters of software services TSC and Infosys Technologies filed 14 and 22 patents, respectively. Though the stats has a raising curve yet when we compare in the global scenario it shows that Indias IPR regime had to go a long way which is not easy.

4. IPR awareness study: Methodology

This study aims to test the knowledge on IPR, its importance and the willingness to adhere and accept IPR among the college students. 7 notable colleges in the Chennai city were picked to answer a questionnaire which was prepared as a study tool for this study. The following briefings show the response to each question in the questionnaire. Q1: When did you come across the term Patent? Since most of the college students participated in the survey are from science background I had a curiosity to know when they came across the term patent in their life. The responses were little bit disappointing. 11.1%

of the students have not come across the term patent so far; 11.1% in the post graduation only; 37.04% in under graduation and 40.74% in their school level itself. As most of the students are in their PG studies this answer is little unexpected as they are the future of a country.

Q2: Correct identification of definition of Patent:

Definition for patent was given in this question and students were asked to identify this against patent, copyright, license and Trademark. 81.48% correctly marked it as patent; 7.41% marked it as copyright; 7.41% marked it as Trademark and 3.7% ticked it as License.

Q3: IPR is abbreviated as Intellectual Property Rights?

To test the knowledge on IPR we first started with the abbreviation related question. Unfortunately many of them i.e 55.56% answered wrongly and only 44% answered correctly. It is a pathetic state as the students participated were mostly in their final year.

212

Q4: Your knowledge on IPR

This question was framed to know the knowledge on IPR among each individual. As the IPR takes a centre stage in this global world it is good to see our future generation equipped with all its knowledge. There this response shows the work that India has to concentrate on its grass root level if it has to sustain in the future innovative market. Of course nobody can claim that they 100% knowledge in IPR and this survey is not different to that; only 7.41% indicated their knowledge on IPR is 75 to 80%; 29.63% of students responded that their knowledge is between 50 to 60%; 37.04% showed that they had 20 to 40% of knowledge in IPR and 25.93% of students reveal that they dont have any knowledge on IPR. This answer clearly shows that it is high time to act upon our IPR strategy for a better future. Whatever we can do to improve this knowledge to our future base we need to do it immediately. This is a big WAKE UP call for India.

Q5: Suggestions for improving IPR awareness:

We put a question to ask students to suggest on this graving problem of lack of awareness on IPR. The students responded brilliantly like 29.63% felt that this could be suggested as an optional subject in college; 62.96% responded that frequent seminars from corporate like Thomson Reuters and other could be great and 7.41% said other if any. Yes, this is brilliant.

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Q6: IPR awareness is important in India:

Finally we tossed the question to read the neediness of the students. 96.3% of students positively revealed that IPR awareness is important in India and 3.70% couldnt answer this but none said that this not important in India. Little encouraging factor right!!!

5. Conclusion
The future growth of the nations is certainly going to be based on innovation and creativity. As this becomes the base of the competition the countries which have adapted, designed, embraced and implemented will certainly have an edge over other countries. India has a long way to go but this not too late. We need to rise up to the occasion and act in unison to make ourselves competent in the global market. One of the most important and basic thing required is the preparation of our future generation. This study reveals rather some of the shocking things for which we need to take immediate action. This is an wake up call for India to gear his future with all that thing required. In this action all the educational institutions, universities, colleges, schools and it is should come forward to take this IPR awareness to the students as they are the future of the nation. Let us make India proud and make her name glorious by joining hands for this cause.

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Will Transactional Form of Interdependence Improve Group Effectiveness?

Dr. V. L. Narasimham
Assistant Professor (Selection Grade), University of Petroleum & Energy Studies P.O. Bidholi, via Prem Nagar, Dehradun, Uttarakhand State

1. Introduction
Group categories are not very new in the business and organizational management point of view, research literature has identified self-directed groups, parallel learning groups, cross-functional groups, executive groups, and group-based organizations while mapping respective effectiveness (Cohen, 1997 and literature review there in). As Cohen admits in his research, the terms, group and team may also be understood interchangeably in the following article. Synchronizing diversified personal efforts of the group members, aligning individuals roles to the group objectives, and routine conformity of all natural members to the group decision are some of the determinants that govern the group effectiveness within a given business environment. For example, groups that recommend improvements with the existing system necessarily adapt to a cautious approach among the group members, and in many circumstances, group effectiveness will be politically truthful than absolutely productive. Further, decisions on suggestive improvements will be either delayed or become obsolete over a period of time. On the other hand, built-in independency will demonstrate how conceptual group effectiveness is revealed by a group of members. Incidents such as group rewarding will not always be an irrefutable experience unless qualified competent groups demonstrate and fare poorer in relative circumstances. Different theorists (adapted from Jex, 2002, including McGrath, 1964, Gladstein 1994, Hackman 1987, Campion et al., 1993 and others,) have promulgated group effectiveness with the support of flow-chart models, but for the lack of rational determinants, group effectiveness has not empirically and competitively mapped in different management situations thoroughly. It is also equally important to note that at most of the times, mapping of selected determinants need not necessarily be extended on to a different organization or business situation on the same lines. Hence, conceptual models will largely satisfy at 215

particular organizational level than on to a series of organizations over a greater geographical space. Group effectiveness at educational institutes can be at project level (research projects in the disciplines of genetics, biotechnology, material sciences or polymers) where the group productivity can be empirically demonstrated through quantifiable patents, research publications, new arrival or renewal of research projects. Parallel groups in academic institutes are possible between industry and management education through consultancy and industrial engineering & management development programs. Educational work groups are generally formed through delegation in order to evaluate cumulative outcome than in exclusive terms of productivity and efficiency. Intellectual efficacy is quite uncertain with academic work groups for the reasons include, limited returns in terms of monetary gains to the work groups, relatively under paid emoluments, low social recognition for intellectual professions at selective places, constraints in renewing same work groups. Secondly, the work group efficacy varies with respect to a particular discipline and on how efficiently the results are derived through a particular work group. On other side of academic institutes, management student work teams do form based on convenience than on the conviction, strengths, planning or to resolve a business challenge (eg., competing a business plans, games, or case study deliberations). The returns for such successful outcomes include, one-time monetary awards, and in selected cases, possibility for getting engaged with the sponsor agents over summer internships and employment. In the recent times, management education periodically reviewed and assessed to the modern demands with the help selected management groups or faculty core teams to strengthen course plans, evaluation processes, on the conduction of faculty and management development programs, industry interactions or in initiating international

conferences. These groups can be efficient and functional when group members are aware and appear sound with the intricacies of the management education. However may be the intellectual vacuity, or in contrast, intellectual cartelization, passive endorsement to the mediocre improvements, weak appraisals, personally influenced evaluation schema, and other forms of irrational inputs will result in superficial and politically truthful group effectiveness. When effectiveness is compared at project group level of IT industries, the empirical research highlights annual turnovers, and thereby satisfies the effectiveness and productivity in terms of profits, earned. At manufacturing enterprises level, the productivity may be understood with the help of orders executed against orders received with limited rejections by the parallel groups (raw material procurement, segregating, preparing, assembling, finishing, polishing or packing for exports) responsible for part of the whole organization activity. Management group effectiveness at any industry level is governed through the brand value created by that group through organic and/ or inorganic growth, including, acquisitions or mergers, and joint ventures developed as well as attracted at specific domain level. In spite of relevant success through group networks and from team building exercises (refer to literature survey of Cohen, 1997, and Pescosolido, 2003), the competency of a group under consideration can be clearer when the effectiveness is determined using quantifiable metrics like, productivity, yield, or perceptible output than with how a meticulous planning was done to derive effectiveness (eg., failures of Fortis group acquisition of Singaporean chain of hospitals, RILs bid for North American petrochemical industries or Bharti groups business ventures with MTN, Africa). When agriculture, poultry, tourism or service industries are considered, group efficiency is clear as well as obscure depending upon geographies and groups rationale. For example, the outcomes of protectionist groups against introduction of Bt-brinjal, influencing the government to a minimum supporting price for cotton, sugarcane or wheat, voluntary participation in culling against viral spread through poultry and animals, and effectiveness of parallel groups while campaigning against H1N1/ swineflu, polio eradication, tuberculosis, AIDS or 216

other awareness rising programs may sometimes will be wrongly attributed to the government nodal agencies (unit administrations but rarely in groups) than to the participants involved. In the similar lines, propagating for incredible India campaign has been effective among the overseas tourists where the group that is behind it is hardly noticed. Project groups efficiency may be mapped through the particular activity related stories of 108 emergency teams, sanitary teams of a different municipalities, recue & safety teams, courier/ postal services, logistics supporting teams at ports, inland container depots, railway, road and other mode of transportations, hotel, banking and miscellaneous financial institutions, however, the effectiveness is largely confined to a smaller team, a gang, or a group. At the same time, successful outcomes are shared between groups and its chef, or a manager of an organization. Hence, outcomes are short living, rather mild, and go unnoticed except for using a theoretical term, effective.

2. Group effectiveness on quality outcomes

Group thinking theory has received mixed response (see Turner et al., 1992 and references there in) for the outcomes in terms of creativity, quality, feasibility, significance and competence solutions for the reasons like, i) a group cannot be in a position and initiate cohesively on a creative and quality product unless there has been a primer, manual, guidelines or directional supremacy of an individual who might head such group, ii) possible disruption in group cohesion either by deletion or addition of a member, and henceforth, creativity and quality cannot be directly attributed to the available group at the time of success/ failure evaluation, iii) any form informal communication among the groups cannot be transferred into a measurable outcome of group performance/effectiveness and iv) lack of understanding on seasonal changes, personal ambitions, attitudinal cycles, domestic issues and other unique qualities of individuals in a group that fail to demonstrate group cohesion. When successful group cohesion at academic institutes is revealed through patents, research projects, or research publications, it is imperative to believe that group heads, senior academicians, principal investigators, or research directors are pivotal in bringing in cohesion, managing a particular research group, training the

individuals, assigning research responsibilities, and effective monitoring members performance. Research progress based on Gantt Charts, accommodating interdisciplinary partnerships, attending to project short comings, and other miscellaneous research management issues will also be the part of group effectiveness. Successful executing of research project is largely the onus of the group head than group members with the help of low-profile young group members. However may be the diversification at the individual efficiency/ experience and contribution to a research project, the success (read as patent, research article, or discoveries) of a group and its effectiveness (read as credit) will usually be distributed among the members that remain at the time of final outcome (read as authorship/ patent holders). In such circumstances, group effectiveness cannot always be truthful to the group cohesion that is exhibited through research articles. But many successful outcomes of such research projects will usually be shared among the group members than negative outcomes (media reports on Chandrayan I, PSLV launches, commissioning of power plants, or democratic elections). Similarly, the quality of manufactured products will depend upon existing standards, their interpretation, tolerance set by the management, training extended to the employees (management point of view), automation, consistency of the machinery, their maintenance (manufacturing related), nurtured skills, attrition rate, compensation and other secondary benefits (employee focused) govern group performance efficiency at any particular interval of the manufacturing process. Hence, group efficiency can be a dynamic situation where, product quality is largely based on compliance to the rule book of manufacturing than cumulating effect of individuals efficiency, alone. However, when each level of manufacturing process effectively managed by a group, when operational process does not demand personal concerns and emotion based alterations, long periods of observations on a particular group may yield outcomes as poor, satisfactory or highly satisfactory. Hence, the group effectiveness can be determined with respect to the pre programmed bench marks for a given situation, geographical spaces, product variations, and objectivity of such efficiency determination. 217

Group effectiveness at service industry depends upon time based task execution where, the efficiency of the groups/teams will determine whole efficiency of a particular service industry (courier, postal, health, environmental mitigation due to coastal oil slick, detective and investigative agencies, customs clearance, and other related industries). Since the nature of the tasks do vary at a particular interval of time, the efficiency will directly depend upon the complexity of the task in review. Though many industries have rationalized the complexity, there are certain bench marks with respect to time taking into consideration a general perceivable efficiency of the individuals associated with such tasks. As more and more automation is introduced into service industries, group efficiency can be better understood through the perceivable customer satisfaction levels over a period of time. At places, the group efficiency is either positively or negatively attached to a particular brand (Saravana Bhavan, DHL/GATI Couriers, Subhiksha and others). But customer satisfaction can be a valid metric to evaluate group efficiency when there are more than one service industry is available, when the same customer has experience with both/ or group of the industries, and when customers opinion is equally rational.

3. Directives based Interdependence

Campions synthesis model of Group effectiveness (adapted from Jex, 2002) identifies certain themes like job design, interdependence, composition, context, and process and presumed to be considered as effectiveness criteria while performing productivity judgment. Though there are different models (McGrath, 1964, Gladstein 1994, Hackman 1987, and others) who have given similar such themes for assessing group effectiveness, interdependence is found to be well connected to human nature and to the task complexity. Individuals proactive nature, how extent a member is motivated to the demands of task, personal culture/ belief/ norms/ traditions, trust, and self-esteem will certainly elevate individuals initiative to perform in interdependence work environment. Though returns in terms of monetary gains motivates in the initial stages of a particular interdependency task, a point may disembark where, members will seek respect, honour, be expecting credit sharing, will turn to opportunistic, campaign for impartiality and other such actions that

may alter expected outcomes in terms of effectiveness. Interdependence will also have a bearing with the attitude of individuals towards observational or social learning (Miller and Dollard 1941, Bandura 1969, 1971, 1977, all references adapted from Petri, 1979). Social learning emphasizes vicarious, symbolic and self-regulatory process, and social learning process channelizes individuals ability in multiples and allows an individual to build patterns of behavior without having to resort to trial and error. This quality sometimes nullifies shortcomings through directives based learning and subsequent instructions based interdependence. Directives based learning compartmentalizes the abilities mechanically, and effectiveness of a group will become largely rudimentary. Longer periods of instructional based learning will result into learned helplessness as it was observed in mariners who happen to stay on sea for good length of time, and in those who have not explored opportunities to excel in creative ways of learning. Greater the opportunity for creativeness, the group effectiveness will fall short of productivity and expected outcomes. When instructional or directives based learning is applied in academic environments, group effectiveness, will result certain kinds of outcome, that are both effective and not so effective in fixed length of time (eg., academic calendar that highlights admission to convocation). On the other hand, non-directive based interdependence will result improved self-regulatory conditions for the group (eg., successful product appeals done by advertising agencies, engineering design/architectural professionals, journalistic abilities, cinematography and others). Similarly, in the manufacturing industry, product development, innovation, or introducing multi-purpose tools will take different periods of time depending upon involvement of the individuals in the group. However, when an appreciable outcome/ product/ tool or solutions is/are resulted, the brand will be recognized and recalled first, than the group and its effectiveness in the minds of the customer. Direction based interdependence will be helpful in those environments where, compulsions on the group members in the form of leaned helpless is prevailing. As and when group members initiate learning through

observations, and nurture rational thinking, there can be adverse effect for the directive-based learning and with the anticipated effectiveness. At times, it may totally disintegrate and results in as failed cohesion. In place of such transactional interdependence, introduction of more complexities into the challenges may be thought out. Tasks improvisation, rise in the existing/ anticipated outcomes, heightened expectations and mounting satisfactory levels, sophistication with ease, and multi dimensional applications with sensible utility are some of the recent challenges in which directional interdependence will be of some help while differentiating superior challenges from a routine task.

4. Conclusions
Group effectiveness will be more apparent in certain situations where as, the same will be difficult to measure except through qualitative terms. (eg., satisfactory). Quality outcome may be the term that may be perceived as utility period versus the value in particular context, but group effectiveness is the consistent but distinguishable nature for the group that abides to the task completion or till the outcome achieved through an activity over a period time. Transactional and directive based interdependence will lead to management cartelization of an activity leading to learned helplessness unless tasks improvisations happen from time to time.

5. References
1. Cohen, S. G. (1993) What makes teams work? Group effectiveness research from the shop floor to the executive suit. Journal of Management, v. 23, No. 3, pp. 239-290 2. Jex, S. M. (2002) Organisational Psychology A Scientist-Practitioner Approach pp. 321-551 John Wiley & Sons, Inc ISBN 9812-53-230-7 3. Pescosolido, A. T. (2003) Group efficacy and group effectiveness: The effects of group efficacy over time on group performance and development. Journal of Small Groups Research v. 34, No.1, pp. 20-42. 4. Petri, H. L. (1979) Motivation: Theory and research pp. 200-202, ISBN No. 0-534-00936-0 5. Turner et al., (1992) Threat, Cohesion, and Group Effectiveness: Testing a Social Identity Maintenance Perspective on Groupthink. Journal of Personality and Social Psychology, v. 63, No. 5 pp. 781-796.

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An Overview of Support Services to Women Entrepreneurs

K.Sindhu
Lecturer, Department of Corporate Secretaryship M.O.P. Vaishnav college for women

1. Introduction
It has been well renowned all over the world that womens empowerment is an excellent strategy for their overall economic and social development. The GEM 2000 report showed that among the major industralised G-7 countries, there was a very strong relationship between the level of entrepreneurial activity and annual economic growth.1 There is a positive linkage between entrepreneurship and economic prosperity. The field of self-employment and entrepreneurship has become a viable career option in the recent times. Endowed with the famous female intuition that helps women to make the right choices even in situations where experience and logic fail, women have innate flair for entrepreneurship. Cultivating the skill for entrepreneurship is an area, which promises encouraging results in this connection. By motivating, training and assisting women towards forming and running independent business ventures, it is possible to tackle many of the gender issues. Entrepreneurship is the organisation of an economic activity, with the goal of reaping the benefits and profits that accrue from it assuming all the risk that arise there from. According to Evans Entrepreneurs are person who initiate, organize, manage and control the affairs of a business unit that combines the factors of production to supply goods and services whether the business pertains to agriculture, industry, trade or profession.2 Women have owned and operated businesses for decades, but they were rarely recognized or given credit for their efforts. Often women entrepreneurs were invisible as they worked side by side with their husbands, and many only stepped into leadership positions when their husbands died. But a variety of factors have combined in recent years to contribute to the visibility and numbers of women who start their own businesses. As more women joined the work force, they gained the 219

professional and managerial skills and experience they needed as entrepreneurs. In addition, many women felt they were discriminated against in large companies, which provided them with an incentive to be their own bosses. Some women also have found entrepreneurship to be an ideal way to juggle the competing demands of career and family, and some single mothers have started businesses as a way out of poverty. The greatest deterrent to women entrepreneurs is that they are women. Male chauvinism still exists in oriental countries including India. Women are away from high-flying economic activities, which are supposedly regarded as the preserve of men. Even the financial institutions are skeptical of the entrepreneurial abilities of women to provide funds. The social setting is still not conducive as the men folk are less understanding and less co-operative to women entrepreneurs. Women in non-urban areas have to suffer still further. They have to face not only resistance from men but also of elderly women who are ingrained with this attitude of inequality. Although men and women may be motivated by different goals and expectations women entrepreneurs are just as competent as and better than their male counterparts. Women are more likely than men to admit when they do not know something and ask for help. Women are natural net workers and relationship builders, forging powerful bonds and nurturing relationships with clients and employees alike. They are also more inclined to seek out mentors and develop supportive teams. In business this translates into establishing rapport with clients and providing great customer service. This is the reason why many women tend to launch businesses that are client based or service-oriented. Women typically tend to give away too much and charge too little. Sometimes, however, a lack of training and prior experience can render women entrepreneurs susceptible to a number of pitfalls.

More women are getting enrolled in the Universities and technical institutions and their number is growing. There is evidence of a direct relationship between the growth of womens education and their numbers in the non-agricultural professions. The citadels of academic excellence are no longer the prerogatives of men, in fact women are gradually willing to accept challenges and assume responsibilities in various fields economic, social and political. Recent studies have revealed that several women are willing to become entrepreneurs due to various reasons. These reasons can be broadly classified into two: Pull factors and Push factors. Pull factors imply the factors, which encourage women to have an independent occupation. Under the influence of these factors the women entrepreneurs choose a profession as a challenge and as an adventure with an urge to do something new. Push factors are those which compel women to take up business enterprises to get over financial difficulties and responsibility are thrust on them due to unfortunate family circumstances .3 The latter category forms only a negligible percentage of the total women entrepreneurs in this country. Women start businesses for essentially diverse reasons than their male counterparts. Men start businesses mainly for development opportunities and profit potential, women most often found businesses in order to meet personal goals, such as gaining feelings of achievement and success. In many instances, women consider financial success as an external confirmation of their ability rather than as a primary goal or motivation to start a business, although millions of women entrepreneurs will grant that financial profitability is important in its own right. Their task has been full of challenges and yet they have steered clear of prejudice, oppositions and constraints and have established themselves as successful entrepreneurs. In the 1970s and 1980s women entrepreneurs were confined to kitchen-enterprises the three Ps: pickle, powder (spices) and papad or soft traditionally feminine enterprises, such as garments, beauty care, etc. However, from the 1990s and onwards, with increased levels of education, more women have opted for 220

entrepreneurial careers in plastics, electronics and leather related industries. A majority of women entrepreneurs in India are concentrated in the light manufacturing sector (leather, garments, engineering goods, beauty products). The second most common category is that of services (interior designing, management and placement, consultancy, nursery school). This is followed by the retail trade sector including boutiques, home furnishing, automobile dealing, etc. However, overall women entrepreneurs settle towards ventures with low investment and lesser technological barriers. Women business owners still face greater difficulties in gaining access to commercial credit and bidding on government contracts than do their male colleagues, and pockets of resistance to women entrepreneurs remain strong in some industries and geographic regions.4 It is estimated that women entrepreneurs presently comprise about 10% of the total number of entrepreneurs in India, with the percentage growing every year. If the prevailing trends continue, it is likely that in another five years, women will comprise 20% of the entrepreneurial force.5 With corporate eager to associate and work with women-owned businesses, and a host of banks and non-governmental organizations keen to help them get going, there has rarely been a better time for women with zeal and creativity to start their own business. The government and private organizations have entered the scene on a large scale to encourage women to be selfemployed and succeed by offering training programmes, consultancy services and guidance. . In order to harness their potential and for their continued growth and development, it is necessary to formulate appropriate strategies for stimulating, supporting and sustaining their efforts in this direction. Such a strategy needs to be in congruence with field realities, and should especially take cognizance of the problems women entrepreneurs face within the current system. An entrepreneur stands at the centre of economic activity and whose role as the organizer of human and material resources is most important and pivotal in ensuring the progress of economic development. The government of India has recognized the role of entrepreneurship in solving the problems of urban poverty and unemployment and has formulated a number of employment programmes. Any Women or group of women which innovates, imitates

or adapts an economic activity may be called woman entrepreneur. Several measures are taken by Institutions, Agencies and Governments to encourage and facilitate greater involvement of women at all levels in entrepreneurship. Some of the measures undertaken are listed below. 1. Banks and financial institutions are lending more freely to women entrepreneurs today. In public financial institutions and banks, special cells are opened for providing easy finance to women entrepreneurs. The nationalized banks and state financial corporations advance loans to women entrepreneurs on preferential basis. State Industrial development Corporations and District Industries Centers provide loans, subsidies and grants to small scale and women entrepreneurs. State level agencies assist women entrepreneurs in preparing project reports, buying machinery and building, training and hiring staff. NABARD has been supporting in setting up of Women Development Cells (WDCs) in Regional Rural Banks and Cooperative Banks. NABARD also conducts a number of training courses for women entrepreneurs. The various financial institutions providing finance for women entrepreneurs 6 are 2. Industrial Development Bank of India

(IDBI) Industrial Finance Corporation of India (IFCI) Small Industries Development Bank of India (SIDBI) National Small Industries Corporation (NSIC) State Small Industries Corporation (SSIC) Commercial Banks Co operative Banks Regional Rural Banks (RRB) Gramin Banks State Financial Corporation (SFC) State Industrial Development Corporation (SIDC) 3. In India a large number of training and promotional activities are being organized to develop entrepreneurial skills among women. Some of the programmes are exclusively for the women and the others take women along with their male participants. As self-employment breed entrepreneurship, more and more self employment programmes are undertaken and proper training are carried to bathe rural and urban youths including women. Specialized institutions, which are responsible for training and entrepreneurship development- mainly among small and medium enterprises (SMEs) 7, are Place Hyderabad Guwahati New Delhi Nilokheri Mumbai Jalandhar 221 Activities Training, research and consultancy services Training, research and consultancy services Coordinating and overseeing activities of various institutes /agencies engaged in entrepreneurship development Conducts EDP course Render services to the instrumentation industry Aims at rapid growth of the hand tool sector

Name of Institute National Institute of Small Industry Extension and Training (NISIET) Indian Institute of Entrepreneurship National Institute of Entrepreneurship and Small Business Development (NIESBUD) Integrated Training Centre (Industries) Institute for Design of Electrical Measuring Instruments (IDEMI) Central Institute of Hand Tools

Hand Tool Design Development and Training Centre Central Tool Room Central Tool Room and Training Centre Central Institute of Tool Design (CITD) Product-cum-Process Development Centre for Sports Goods Product-cum-Process Development Centre for Essential Oils Product-cum-Process Development Centre

Nagaur Ludhiana Kolkata Hyderabad Meerut Kannauj

Assistance for improvement in productivity, betterment in quality, high value addition Provides services in the area of consultancy, tool design and manufacture and technical training Training, design and manufacture of complicated precision tools for the telecom industry and other common facility services Training, CAD/CAM centre to train postgraduate trainees, automatic process control unit, and so on Training, process and product development of sports goods, R & D Modernise and upgrade technology status for the essential oils and perfumery industry Provide better technology to small-scale foundry and forging units, process and product development, and provision of design for melting equipment, testing facilities Training, technical and consultancy services Development and adoption of new technologies and products Supply of machinery, marketing assistance, training

Agra

Electronic Service and Training Centre Centre for the improvement of Glass industry National Small Industries Corporation

Ramnagar Firozabad New Delhi

Some other organizations engaged in training and Development of SME Entrepreneurs are: Indo-German Tool Room at Ahmedabad, Aurangabad and Indore Indo-Danish Tool Room at Jamshedpur Hand Tool Design , Development and Training Centre, Nagore, Rajasthan Central Machine Tool Institute at Bangalore Central Institute of Plastic s Engineering and Tools at Chennai & Ahmedabad National Institute of Foundry and Forge Technology at Ranchi DICs at District level Small Industries Development Corporations set up by various State Governments. 222

1. Both the Central Government and various State Governments are taking increased interest in promoting the growth of entrepreneurship. Projects such as Rashtriya Mahila Kosh (March 1993) and Indira Mahila Yojana (August 1995) are specially designed for empowerment of the economically backward women through micro-credit in order to promote self-employment. Trade Related Entrepreneurship Assistance and Development of Women (TREAD) scheme was launched in 1998. The scheme envisages development of micro/tiny women enterprises in the country both in the urban and rural areas. The main objective of the scheme is to empower women through development of their entrepreneurial skills by eliminating constraints faced by them in their sphere of trade. A revised scheme of TREAD was launched in May, 2004. The Government of India is implementing various programmes for promotion of entrepreneurship in general and particularly among women.

Scheme Self Employment Scheme for the Registered Unemployed

Details of the Scheme Provides subsidy to a ceiling of 25% of the loan sanctioned by banks. This scheme is in operation in West Bengal. Provides assistance towards margin money for seeking loans from banks and is being operated in Madhya Pradesh. Provides assistance for promoting small self employment ventures & operated in Maharashtra.

Self Employment Scheme

Sanjay Gandhi Swavalamba Yojana

Societies for Training and Employment Promotions (STEP) Society for Training Promotion and Training and Employment These schemes are operated in AP & other States. These Schemes are operated by different departments & ministries of Government of India in all the states. The thrust of all these programmes is mainly in 1.Employment and Income Generation Services 2.Education and Training Services 3.Support Services 4.General Awareness Services 5.Legal Support Services.

Development of Women & Children in Rural areas Rural Landless Employment Programme (RLEGP) Graduate

National Rural Employment Programme (NREP) Integrated Rural Development Programme (IRDP) Training of Rural Youth in Self Employment (TRYSEM)

Prime Ministers Rojgar Yojaja (PMRY)

Loans upto Rs. One Lakh is provided without any security. 10% would be women WDCS identify women entrepreneurs, prepareviable projects, facilitate the availability of credit through banks. Access to credit without collateral and helping women in local sales (Tamil Nadu). Helps in setting up of groups in villages and urban slums operating in 200 blocks in the country. 223

Women Development Corporation Scheme (WDCS)

Working Womens Forum

Indira Mahila Yojana

Indira Mahila Kendra at Anganwadi level Rashtriya Mahila Kosh (National Credit Fund) Mahila Samithi Yojana Khadi & Village Industries Commission (KVIC)

Economic Empowerment by ensuring direct access mobilisation & their actual participation in the development process. Extends credit to poor women (informal credit delivery) Informal Banking Provides training for women & markets products in handloom and weaving, handicrafts, products of wool, marbles, Stone, Semi Precious stones and Metal. Provide Rs. 2 lakhs as term loans & upto Rs. 1 lakh as working capital. Provides seed capital assistance for Voluntary Organisation working for the upliftment of the status of women. Loans upto Rs. 25, 000. No guarantee nor margin money

Indira Priyadarshini Yojana IDBIs Mahila Udyam Nidhi Mahila Vikas Nidhi SBIs Street Shakti Scheme State Financial Entrepreneurs Scheme for Women

Loans provided for acquiring fixed assets such as loans, building, plant & machinery. 3. Women entrepreneurs have to face severe marketing problems. Womens development corporations are holding frequent exhibitions and setting up marketing outlets to provide space for the display of products made by women. Some NGOs have marketing vans to make it even easier. 4. The development of transport and communication throughout the country have helped women entrepreneurs to market their products easily. Infrastructure to set up industries is provided in the form of industrial plots and sheds by state run agencies. Apart from allotting units to women entrepreneurs on priority basis, it is desirable to provide amenities particularly required by them in industrial areas. 5. Individuals are being encouraged to form new businesses and are being provided various subsidies like technical subsidy, know-how subsidy, power subsidy, generator subsidy and concessions like Relief, sales tax exemption, Octroi duty exemption, Electricity duty exemption, stamp duty exemption. 224

1. Government has stressed on women education and special programmes have been introduced. Skill development is being done in womens polytechnics and industrial training institutes. Under various schemes like the World Bank sponsored programme to upgrade polytechnics, separate institutes have been set up for women. At present, emphasis in women polytechnics is laid on traditional skills like embroidery, interior decoration, tailoring, knitting, etc. 2. To organize women in to self Help Groups and equip them with services of awareness generation and income generation through training, employment, credit and marketing linkages to small entrepreneurs etc., programmes like Indira Mahila Yojana (IMY) now recast as Integrated Womens Empowerment Projects (IWEP) and Rural Womens Empowerment and Development (RWDEP) have been launched. Of the total Ninth Plan target of 50000 more than 37000 groups were set up benefiting about 8 lakh women.

6. Many information bureaus have started to help women entrepreneurs in getting the required information. 7. More research programmes are conducted in recent days to analyze and solve the problems of women entrepreneurs.

2. Institutions Providing Assistance to Small / Tiny Entrepreneurs in Tamil Nadu

The following institutions have been established by the Government of Tamil Nadu to extend the assistance to the small /tiny entrepreneurs. Tamil Nadu Small Industries Corporation Ltd. (TANSI) Tamil Nadu Small Industries Development Corporation Ltd. (TANSIDCO) State Industries Promotion Corporation of Tamil Nadu (sidcot) Tamil Nadu Industrial Corporation Ltd. (tiic) Investment

professions like trade, industry and engineering. Women today are more willing to take up activities that were once considered the preserve of men, and have proved that they are second to no one with respect to contribution to the growth of the economy. Women entrepreneurship must be molded properly with entrepreneurial traits and skills to meet the changes in trends, challenges global markets and also be competent enough to sustain and strive for excellence in the entrepreneurial arena. Their role is also being recognized and steps are being taken to promote women entrepreneurship.

3. References
1. (GEM) 2005 Report Entrepreneurship. on Women and

2. Evans G.H. The Entrepreneurs and Economic Theory-American Economic Review. 3. Dr. Mohiueddin Asghaine Entrepreneurship among women Retrospects and Prospects, SEDME, Hyderabad, March 1983, p.1. 4. Sumangala Naik, The need for developing Women Entrepreneurs, Yojana, July 2003, Pp.36-39. 5. Bindu Shridhar, Women as entrepreneurs, The Hindu, Metro Plus, December 14, 2005. 6. Dr. R. Chinnadurai,Women Entrepreneurship and service sector, Kurukshetra, November 2005, Pp.19-24. 7. K. Kamalakannan, The role of Financial Institutions in Development of Women Entrepreneurs, Kurukshetra, April 2005, Pp.10-14.

Tamil Nadu Industrial Development Corporation Ltd. (tidco) Tamil Nadu Technology Mission and

tamil nadu corporation of Development of women ltd. Is exclusively established for implementing the schemes of the government relating to promotion of women entrepreneurs. The role of Women entrepreneur in economic development is inevitable. Women are also willing to take up business and contribute to the Nations growth. Women enter not only in selected professions but also in

225

Competencies Required by Entrepreneurs in Emerging Economies: Some Research Propositions

AIS St Helens, P.O.Box. 2995, Auckland, New Zealand

Manisha Karia

1. Introduction
Entrepreneurs play a critical role and are considered the prime determinant for business survival and success is the entrepreneur himself/herself (van Praag, 2005). To play this role effectively, entrepreneurs require skills and abilities to not only create new ventures but also for further growth. Man, Lau and Chan (2002) refer to these competencies as the total ability of the entrepreneur to perform this role successfully. According to these authors, entrepreneurial competence encompass the ability to recognise opportunities, developing products and /or services to meet the needs discovered, assuming risk in order to fulfil the identified goals, and employing strategic management skills. Several studies have examined the entrepreneurial competencies (for example, Baum, 1994; Bird, 1995; Baron & Markman, 2003; Chandler & Jansen, 1992; Herron and Robinson, 1993; Man et al. 2002). These studies have found positive relationship between existence of competencies and venture performance. However, it is found that most of the literature on entrepreneurial competencies, and other entrepreneurship areas, are focused on developed countries (Bruton, Ahlstrom & Obloj, 2008). Recognising the importance of the entrepreneurship role in emerging economies, some researchers have shown interest in the recent past (e.g., Ahmad, Ramayah, Wilson, Kummerow, 2010). The economic landscape of emerging economies is different from developed countries. Emerging economies are the low income countries that are experiencing rapid growth and industrialization. (Hoskisson, Eden, Lau, & Wright, 2000). Significant changes in political and market reforms encouraging liberalization, stabilization, and the encouragement of private enterprise have strengthened the market mechanism in these countries putting them on a path of rapid growth and development. 226

Therefore, Bruton et al. (2008) highlight the importance of understanding entrepreneurship in these economies. There is an urgent need to examining the competencies of entrepreneurs operating in emerging markets as the emerging economies have different environment and challenges compared to those in developed countries, and also the emerging markets themselves have diverse sub-groups. Zahra (2007) also recommends adaptation of entrepreneurship theories developed in developed countries to emerging economies. For these reasons, we believe our study in examining the competencies of entrepreneurs in emerging economy fills an important gap. The main purpose of the study is to investigate entrepreneurial competencies necessary in emerging economies. The paper is structured as follows. First, the term competencies is examined in the context of entrepreneurs. Second, a conceptual model is proposed based on review of extent literature. Third, a set of propositions on the entrepreneurial competencies and a conceptual model are presented. Finally the implications of this research are mentioned and concluded.

2. Definitional Issues of Competencies

A review of literature shows that competency has been defined from different perspectives for the purpose of serving the researchers own agendas (Burgoyne, 1993; Strebler, Robinson, & Heron, 1997; Hoffmann, 1999). In the context of entrepreneurship, Bird (1995, p.51) defines entrepreneurial competencies as underlying characteristics such as generic specific knowledge, motives, traits, self-images, social roles, and skills which result in venture birth, survival, and/or growth. According to Strebler et al. (1997) the definition of competencies has two aspects: demonstrable behaviour for effective performance in a job and minimum standard of competent performance. Hoffmann (1999)

suggests that entrepreneurial competencies can be examined from three approaches: inputs, behaviouraloutputs, and standard-outputs. This study considers the behavioural concept of competency which is closely linked to entrepreneurial performance (Herron & Robinson, 1993; Man Lau & Snape, 2008) . As mentioned earlier, Fastr & Van Gils (2007) highlighted the important role of an entrepreneur in venture performance. However, this role is multi-fold such as: being a manager (to efficiently plan and organise resources), a leader (to motivate staff and have a vision for the firm), etc. However, the tasks and roles undertaken by entrepreneurs will indicate the type of competencies required. Further, entrepreneurial researchers (Lerner & Almor 2002; Sadler-Smith, Hampson, Chaston, & Badger, 2003; Man et al., 2002; Harris & Gibson, 2006) believe that the performance of the firm will be higher when the business owner has requisite entrepreneurial and managerial competencies. According to Chandler and Jansen (1992) entrepreneurial performance depends on human/conceptual competence; ability to recognize opportunity; motivation or a drive to pursue the venture; technical/functional competence and political competence or nous.

venture performance economies.

in

emerging

Organising competencies: For establishing and managing a business successfully, Hebert and Link (1989) state that an entrepreneur should be specialized in taking responsibility for and making judgemental decisions that affect the location, form, and the use of goods, resources, or institutions (p.47). Entrepreneurs to have the ability to lead, coordinate, control, monitor, and organise internal and external resources such as finance and human resources (Chandler & Hanks, 1994; Snell & Lau, 1994; Man et al., 2002). Park and Bae (2004) also underscores the entrepreneurs capabilities in organising internal and external resources for organisational performance. In the Indian context, Panda (2002) observe that high achieving entrepreneurs have the capability to organise a large proportion of the fixed capital (over 40 per cent) and arrange for more than 90 per cent of their working capital requirement. This suggests: P2. A higher level of entrepreneurs ability to arrange and organise resources will positively influence venture performance in emerging economies. Strategic Competencies: Much literature in the area of entrepreneurial competency relates to entrepreneurs ability to have a vision in mind for their business (Mitton, 1989; Snell & Lau, 1994; Thompson, Stuart & Lindsay, 1996), to have clear goals, and to formulate and implement strategies to achieve the vision and goals (Man et al., 2002). Bracker and Pearson (1986) found that the performance of the firm was better when entrepreneurs undertook structured strategic planning rather than other types of planning. Stressing the importance of the entrepreneurs ability to be responsive to changing market conditions and customers, Mullins (1996) attested that competency facilitates responsive behaviour thereby enhancing the firms survival rate and increasing its growth potential. Not surprisingly, it was found that low levels of strategic orientation are associated with high failure rates in businesses (Sexton & Van Auken, 1985). This leads to: P3. A higher level of strategic competencies will positively influence venture performance in emerging economies. 227

3. Propositions on Competencies Required by Entrepreneurs

In this section, we examine relevant literature on entrepreneurial competencies and presents propositions that are relevant to emerging economies and a conceptual model that could be used for empirical testing. Opportunity competencies: Timmons, Muzyka, Stevenson and Bygrave (1987) refer to the ability to recognise an opportunity as the core of entrepreneurship. Business founders undertaking the classic entrepreneurial role scan their environments, identify opportunities, and take advantage of these opportunities (Chandler & Jansen, 1992). McClelland (1987) also found in his study of 24 entrepreneurs, from developing countries, that successful entrepreneurs where able to see and act on opportunities. This leads to: P1. A higher level of opportunity competencies will positively influence

Learning Competencies: Man et al. (2008) identified learning competencies as providing supporting role to the six competencies identified by them. Learning competencies include the entrepreneurs ability to learn from a variety of sources and apply the learned skills and knowledge to actual practices (Ahmad, et al., 2010). The ability to learn and apply from past experience is important to entrepreneurs (Bird, 2002, Snell & Lau, 1994). Entrepreneurs should be able to learn from their environment, their own mistakes and from other people (Cope and Watts, 2000; Harrison & Leitch, 2005). If potential entrepreneurs developed the ability of directing and utilising their learning they would be more successful in recognising and adapting to the changing roles of entrepreneurs required for enterprise growth (Bird, 2002). We posit: P4. A higher level of learning competencies will positively influence venture performance in emerging economies. Networking/Relationship Competencies: A key success factor for an entrepreneur has been found to be his or her capabilities to work with others such as employees, business partners, family, friends, customers and so forth. Falter (2007) suggests that entrepreneurs can gain access to business contacts through family members. Further to using familial relationships, entrepreneurs draw upon non-kin networks such as relationships with organizations, professional networks, friends and colleagues (Greve & Salaff, 2003; Hansen, 1995). There is evidence that network density and the proportion of strong ties in the entrepreneurs personal network are linked positively to success in launching a new venture (Davidsson & Honig, 2003) and venture performance (Vissa & Chacar, 2005). To successfully use these contacts, entrepreneurs need to possess relationship competencies such as relationship building, interpersonal abilities, and effective communication skills (McClelland, 1987). P5. A higher level of networking and relationship competencies will positively influence venture performance in emerging economies. Commitment Competencies: Entrepreneurs who strive to achieve long-term goals with strong devotion can be 228

construed to possess commitment competency (Man & Lau, 2000). Other characteristics are taking initiatives (McClelland, 1987) and possessing entrepreneurial drive (Eyre & Smallman, 1998). Neace (1999) found that entrepreneurs who never give up reveal their inner quality of ambition and determination and that this is perhaps the most important controllable behavioural trait necessary to succeed. Entrepreneurs possessing this competency will refuse to let the venture fail and will be determined to make the venture work, while making large personal sacrifices if they have to (Chandler & Jansen, 1992). This suggests: P6. A higher level of commitment competencies will positively influence venture performance in emerging economies. Conceptual Competencies: The entrepreneur requires analytical competency when faced with addressing complex situations (Eyre & Smallman, 1998, Man & Lau, 2000). Based on the tenets of cognitive theory, Palich and Bagby (1995) believe that entrepreneurs view risks positively and interpret them as opportunities while others do not see such potential. These abilities help in cognitive and analytical thinking, decision making, innovating, coping with uncertainty and risk are classified as conceptual competencies (Man & Lau, 2000). Thus, we propose: P7. A higher level of conceptual competencies will positively influence venture performance in emerging economies. Managerial/Functional Competencies: Starting a business venture is the first challenge that the entrepreneur encounters. Entrepreneurs then face new challenges as the new venture moves from one stage of development to another, requiring a different set of skills (Churchill & Lewis, 1983). Therefore, entrepreneurs require competencies that both entrepreneurial and managerial-administrative (Capaldo, Iandoli & Ponsiglione, 2004). Several studies have focused on managerial/functional competencies that business owners require for succeeding (Ibrahim & Soufani, 2002; Huck and McEwen, 1991; Prahalad & Hamel, 1990; Swiercz & Spencer, 1992). Research shows that majority of business failures can be attributed to the lack of management skills/competencies (for example, see

Bruno, Leidecker, & Harder, 1987; Terpstra & Olson, 1993). This leads us to believe that: P8. A higher level of managerial/functional competencies will positively influence venture performance in emerging economies. P9. A higher level of managerial competency combined with entrepreneurial competencies will positively influence venture performance in emerging economies. Business Environment: Entrepreneurs working in an emerging economy face different challenges due to the

institutional and cultural forces (Bruton et al. 2008). They face challenges in the areas of labour, capital, infrastructure, property rights, bribery and corruption etc. While some institutional factors are favourable, others are not (Bruton & Ahlstorm, 2003; Peng & Heath, 1996). Further it is important to understand the values and beliefs of the various cultures and how these factors will moderate the influence of the entrepreneur in starting and growing the business venture. propose: 10. The business environment significantly moderates the relationship between competencies and venture performance in the emerging economies. We

Figure 1: Relationship between competencies and venture performance

4. Conceptual Framework
Based on the review of extant literature, a model is proposed for further empirical investigation (see Figure 1). The model and propositions presented in this paper suggest that venture performance is linked to the competencies of the entrepreneur, moderated by environment and culture.

are more relevant to the context of emerging economy such as India. The role of environmental and other contextual factors could also be examined. Results of such a study will have implications for educational institutions, professional bodies, governmental agencies in designing entrepreneurial education and specific training programmes to improve the competencies of potential entrepreneurs.

5. Implications and Conclusion

Further research is necessary to test the proposed relationships between the variables proposed in this article and to determine which of the competencies 229

6. References
1. Ahmad, N.H., Ramayah, T., Wilson, C., & Kummerow, L. (2010). Is entrepreneurial

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232

Determinants of Income Generation of Women Entrepreneurs Through SHGs

Assistant Professor Velammal Engineering College, Department of Management Sciences, Chennai-600 066.

Ms.RevathiPandian and D.Karthick

1. Introduction
In almost all the societies, women have less power than men, have less control over resources and receive lesser wages for their work. It is unfortunate that because of centuries of inertia, ignorance and conservatism, the actual and potential role of women in the society has been ignored, preventing them from making their rightful contribution to social progress. Women must be empowered by enhancing their awareness, knowledge; skills and technology use efficiency, thereby, facilitating overall development of the society. In various national policies and developmental programmes, emphasis has been given on organizing women in Self Help Groups and thus, marks the beginning of a major process of empowering women (Ashford, 1995). Entrepreneurship development and income generating activities are a feasible solution for empowering women. It generates income and also provides flexible working hours according to the needs of home makers. Economic independence is the need of the hour. Participation in income generating activities helps in the overall empowerment of women. Empowering women through education, ideas, consciousness, mobilization and participatory approach can enable them to take their own decisions, make them self-reliant and selfconfident. The emergence of women entrepreneurship in the past two decades and especially in the second half of the 1990s is not a coincidence. First of all, the entire business environment has changed. Women are being encouraged to participate in various business activities a process that was unimaginable decades ago. Next, the rapid development of computers and information technology makes starting and operating a business easier, with less capital and a lower minimum efficient 233

level of production. Third, the rapid expansion and specialization of the service sector have provided women with new opportunities to pursue their own business careers. Although women are taking on important positions in the business sector, they continue to face barriers to their entrepreneurial activities, compared to their male counterparts. Women still have to struggle with their traditional role in order to balance career and household responsibilities. They have to endure negative social value and cultural bias that lead to unfair perceptions about their ability to operate a business and legal constraints also limit the pursuit of economic independence by women. With this background, the present study was attempted to study the determinants of income generation of women entrepreneurs through SHGs in Tiruvallur district of Tamil Nadu.

2. Methodology
Among the different districts in Tamil Nadu, the Tiruvallur district has been purposively selected for the present study. Among different geographical locations in the district, Madavaram, Manali, Redhills and Tiruvallur have been again purposively selected based on the concentration of number of Self Help Groups (SHGs) and members. The data and information have been collected from the respondents by adopting random sampling technique. The district has been selected purposively followed by geographical location and the sample respondents have been selected randomly thus, multi-stage random sampling technique has been adopted for data collection. The data and information have been collected from the sample size of 500 through pre-tested, structured interview schedule through direct interview method. The primary data collected from respondents pertains to the year 2008-2009.

3. Statistical Techniques Descriptive Statistics and Chi-Square Test

In order to analyze the socio-demographic features, the descriptive statistics has been carried out. Besides, in order to analyze the differences among the socio-economic features, the Chi-Square test is employed and the formula is:

= Intercept i = Partial Regression Coefficients

ei = Random Error or Stochastic Disturbance Term The and i are the coefficients which are to be calculated through Ordinary Least Square (OLS) estimation. 5. Results and Discussion Socio-Demographics The socio-demographic features of women entrepreneurs were analyzed and the results are hereunder discussed. The age distributions of women entrepreneurs were analyzed and the results are presented in Table 1. From the table, the majority of women entrepreneurs (52.80 per cent) belonged to the age group of 30-45 years followed by less than 30 years (41.80 per cent). Only 5.40 per cent of women were in the age group of 45 and above 45 years. The chi square value was 0.01 and it was statically significant at five per cent level of significance indicating that there was a significant difference between age of the women entrepreneurs.

Where O = Observed Frequency in each category E = Expected Frequency in the corresponding category 4. Determinants of Income Generation In order to assess the determinants on income generation of women entrepreneurs, the multiple linear regression analysis by Ordinary Least Square (OLS) estimation has been applied for identified variables. The functional form of multiple liner regression model are given below: Y = + i Xi + ei Where Y = Dependent Variable (Business Income) Xi = Independent Variable(Growth Determinants) i = 1 to 15

Table-1. Frequency Distribution of Age of Women Entrepreneurs

Age < 30 Years 30-45 Years 45 and Above Total Frequency 209 264 27 500 Per cent 41.80 52.80 5.40 100.00 0.010 0.00 Chi Square Value Sig

Source: Primary & Computed Data

234

The educational qualifications of the women entrepreneurs are presented in Table 2. The results indicated that about half of the entrepreneurs (50.40 per cent) have school education followed by under graduation (42.80 per cent). The post graduation and professionals accounted about only 2.60 per cent while illiterates were only 4.20 per cent. The chi square value was 0.05 and it was statically significant at five per cent level of significance indicating that there was a significant difference between educational qualifications of the women entrepreneurs.

Table-2. Frequency Distribution of Qualification

Educational Qualification School Education Under Graduation Post Graduation and Professionals Illiterates Total Source: Primary & Computed Data The source of income from business for women entrepreneurs are presented in Table 3. The results showed that about 48 per cent of women entrepreneurs earned income in the range of Rs. 50000-1 lakh from their business followed by less than Rs. 50000(33.00 per cent). About 18 per cent of entrepreneurs earned the income in the range of Rs.1 lakh-150000 and only 0.4 per cent earned their income in the range of above 2.5 lakh. The chi square value was 0.02 and it was statically significant at five per cent level of significance indicating that there was a significant difference between business income for the women entrepreneurs. Frequency 252 214 13 21 500 Per cent 50.40 42.80 2.60 4.20 100.00 0.050 0.00 Chi Square Value Sig

Table-3. Frequency Distribution of Business Income

Chi Square Value

Business Income(Rs) < 50000 50000-1 Lakh 1Lakh- 150000 150000-2.5 Lakh > 2.5 Lakh

Frequency 165 240 90 3 2

Per cent 33.00 48.00 18.00 0.60 0.40 100.00

Sig

0.02

0.01

Total 500 Source: Primary & Computed Data

The distribution of sector wise business activity is presented in Table 4. It is clear that about 48 per cent of women entrepreneurs were involving in marketing followed by supplier (23.40 per cent). About 16.60 per cent of the women carried manufacturing activities while, only 12.00 per cent was involving in service sector activities. The chi square value was 0.01 and it was statically significant at five per cent level of significance indicating that there was a significant difference between sector of business activity of the women entrepreneurs. 235

Table-4. Frequency Distribution of Sector of Business Activity

Sector Manufacturing Marketing Supplier Service Total

Frequency 83 240 117 60 500

Per cent 16.60 48.00 23.40 12.00 100.00

Chi Square Value

Sig

0.01

0.00

Source: Primary & Computed Data

The enterprise base of the women entrepreneurs is presented in Table 5. From the table, it is apparent that the enterprise base for majority of the entrepreneurs (60.40 per cent) was semi-urban followed by urban (37.60 per cent). Only two per cent of them, used metropolitan area as their enterprise base. The chi square value was 0.02 and it was statically significant at five per cent level of significance indicating that there was a significant difference between enterprise base of the women entrepreneurs.

Table-5. Frequency Distribution of Enterprise Base

Sector Semi Urban Urban Metropolitan Total

Frequency 302 188 10 500

Per cent 60.40 37.60 2.00 100.00

Chi Square Value

Sig

0.02

0.01

Source: Primary & Computed Data 6. Determinates of Income Generation

In order to assess the determinants on income generation of women entrepreneurs, the multiple linear regression analysis by Ordinary Least Square (OLS) estimation has been applied and the results are presented in Table-6. The results of multiple linear regression analysis through OLS estimation is presented in Table 4.8. The results show that the coefficient of multiple determination (R2 ) is 0.46 indicating the regression model is moderately fit. The independent variables of My past experience strengthens and develops network(X4), Correct business location contributed to my success (X6), I take measures to protect the environment as I grow (X8 ), As I gain more experience I commit less 236 mistakes (X9 ) and Orientation and training assisted me to run my business (X12 ) are statistically significant at one per cent level of significance and these variables are positively influencing the business income of the women entrepreneurs. The factors Capital planning at each stage helped me to develop ( X5 ) and Infrastructure facilities provided by the Government has led to development of the business (X13 ) are also statistically significant at one per cent of level of significance but, these factors are negatively influencing the business income of women entrepreneurs through self-help groups.

Table-6. Regression Estimates of the Variable Determining the Income Generation of Women Entrepreneurs

Growth Determinants Intercept My status improved when I achieved better results My advisers help me in smooth conduct of business My past experience strengthens and develops network Capital planning at each stage helped me to develop Correct business location contributed to my success Incentives, subsidies and concessions provided by Central/State Government are great assistance to me I take measures to protect the environment as I grow As I gain more experience I commit less mistakes Legal status of the organization led to my growth Proper pricing strategy enhanced my growth Orientation and training assisted me to run my business Infrastructure facilities provided by the Government has led to development of the business Liberalization, Privatization and Globalization policy of the Government led to my present growth Quick and prompt decision marking helped me to grow My friendly attitude towards labour led me to my success R2 Adjusted R2 F N Note: ** Significance at one per cent level Source: Computed Data
237

Regression Coefficients 2.030** -.008 -.008 -.021 .041** -.075** .072** -.035 .037** .038** -.014 -.045 .029** -.095** .038 -.017 0.46 0.28 2.304 500

t-value 11.468 -.247 -.251 -.720 2.224 -2.508 2.376 -1.038 2.145 2.227 -1.058 -1.417 2.842 -2.623 1.105 -.572

Significance .000 .805 .802 .472 .021 .012 .018 .300 .023 .020 .291 .157 .010 .009 .270 .568

0.004

7 Conclusion
The forgoing analysis indicted that the sociodemographic features of the women entrepreneurs are significantly different in various aspects. About 52.80 per cent of women entrepreneurs belong to the age group of 30-45 years followed by less than 30 years. It was evident that about 62.42 per cent of women in the business income group of Rs. less than 50000, 55.42 per cent in the income group of Rs.50000-1 lakh and 73.00 per cent in the income group of Rs. 1 lakh-15000 have invested less than Rs.25 lakhs. About 48 per cent of women entrepreneurs were involving in marketing followed by supplier (23.40 per cent). About 16.60 per cent of the women carried manufacturing activities while, only 12.00 per cent was involving in service sector activities My past experience strengthens and develops network, Correct business location contributed to my success, I take measures to protect the environment as I grow, As I gain more experience I commit less mistakes and Orientation and training assisted me to run my business are positively influencing the business income of the women entrepreneurs. Entrepreneurial development should not be left to chance, as is the practice now. The training programmes should include identification and selection of potential entrepreneurs, and their motivation into entrepreneurial career through provision training and other inputs necessary to set up entrepreneurial units. The growth of women entrepreneurs should be encouraged by providing special incentives, tax concessions, reduced rat of interest, transport and fuel subsidies. For creating a healthy entrepreneurial environment, they should also be given orientation about the various tools and techniques of accounting and finance. Lack of coordination among the institutions in providing power, water, communication and finance seriously hinder the growth of women entrepreneurship. To improve this situation, the proper coordination mechanism and monitoring system should be formulated and implemented. 238

8. References 1. Agrawal, S., Technology Model for Womens Empowerment, Kurukshetra, (2003): May, pp. 18-28. 2. Ahmad, M.A., Women Empowerment: Self Help Groups, Kurukshetra,(1999): April, pp. 13-15. 3. Ashford, L., Gender Equality and the Empowerment of Women. Population Bulletin, 50 (1), (1995): pp. 17 22. 4. Batliwala, S., The Meaning of Womens Empowerment: New Concepts from Action. In Sen, G., Germain, A., and Chen, L., (Eds). Population Policies Reconsidered: health, empowerment and rights, Boston, Harvard University Press, (1994). 5. Bharat Dogra,Women Self-Help Groups Kindling Spirit of Entrepreneurship, Kurukshetra, 50(5),(2002): pp. 40-42. 7. Deepti Agarwal, Empowerment of Rural Woman in India, Social Welfare, 48(4),(2001): pp. 3-4. 8. Gain, Raji T.S. and P. Satish,, A Micro Study on Group Dynamics and Group Functioning, Working Paper No. 6, Bankers Institute of Rural Development, (1995).

9. Huq, A. and Richardson, P., Business Ownership as an Economic Option for Middle-Income Educated Urban Women in Bangladesh, Frontiers of Entrepreneurship Research, (1997): pp. 240-241. 10. Kabeer, Naila., Resources, Agency, Achievements: Reflections on the Measurement of Womens Empowerment, Development and Change, 30,(1999): pp. 435-464.

11. Leelamma Devasia, V., V., Devasia, Empowering Women Folk Sustainable Development, Ashish Publishing House, New Delhi, (1994). 12. Manimekalai, M. and Rajeshwari, G., Nature And Performance Of Informal Self Help Groups A Case From Tamil Nadu, Indian Journal Of Agricultural Economics, 56 (3),( 2001):pp.34-46. 13. Morrison, A., Breen, J. and Ali, S., Small Business Growth: Intention, Ability and Opportunity, Journal of Small Business Management, 41(4), (2003): pp. 417-425. 14. Naggayya, D., Micro-Finance For Self Help Groups, Kurukshetra,42(2), August, (2000):pp.15-26. 15. Purithavarthy Pandian, S., R., Eswaran, Empowerment of Women through MicroCredit, Yojana, November, (2002): pp 124132. 16. Reserve Bank of India, Report of the Internal

Group to Examine Issues Relating to Rural Credit and Microfinance, (2005). 17. Senthil Vadivoo, K. and V.Sekar, Self Help Groups a Movement for Women Services: How the Poor in India Could be Better Served?, Kissan World, 31(7): (2004). Pp. 13-14. 18. Sharma, K.C., Micro Financing Through SHGs, Indian Journal Of Agricultural Economic, 56 (3), (2001):. pp. 76-86. 19. Srinivasan, R. and Sriram, M. S., Round Table Microfinance in India: Discussion, Management Review, 15(2), (2003): pp. 5286. 20. Tripathy K.K,Self-Help Groups-A Catalyst of Rural Development, Kurukshetra, 52(8) (2004): pp. 40-43. 21. Vijayanthi, Womens Empowerment through Self-Help Group: A Participatory Approach, Indian Journal of Gender Studies, (2002):pp. 263-273.

239

Forecasting of Land Price at Madhavaram in Chennai Metropolitan Area

Sampathkumar.V
Research Scholar, Sathyabama University

Helen Santhi. M
Principal, Indira Gandhi college of Engg &Tech for Women, Chengalpet

1. Introduction
Economic base of Chennai city has shifted from trade and commerce to administration and services. Buoyant Economy, increased employment rate, high disposable income, cosmopolitan atmosphere and improved life style are instrumental in driving the demand for highrise apartments. The hike in the input cost, demand on developed plots and shrunk in supply leads to hike in land price. Invest on land for a secure future becomes a reality. Investment made on land yields better returns than on apartments and traditional investment options in the past few years, in all part of Chennai. The land price depends on economical, social and physical features and gets stabilized now. The market will see a positive momentum with job security which increases number of end users. Most housing finance companies have kept their home loan rates stable also helps to stabilize the market. Nominal interest rate, increased affordable price supply is reason to predict the market will continue to rise. The revival of Information Technology (IT) sector and increased liquidity is expected to give a positive momentum to land and housing market in Chennai. The study on land price trend is felt important to support the decisions in urban planning issues. The present study focused on assessing the trend of unit land price in the study location by estimating the annual rise or fall of it, to find the interaction effect of land price on selected factors by performing correlation and regression analysis, and forecast the price of land for the forthcoming years by plugging the predicted values of factors in the developed models. The comprehensive review of literature about the factors influencing the land price and the models of land price narrowed down this study to focus on the quantifiable, fundamental economic and social factors as ingredients. After a comprehensive literature review factors are identified and used in the prediction of unit land price. Past 240

monthly data on economic factors are drawn from National statistics published by Reserve Bank of India (RBI) and from the dailies. The monthly average value of the selected factors such as National Gross Domestic Product, cost of crude oil, dollar equivalence to Indian currency, rate of inflation, gold and silver price per gram, Mumbai and National share index, population in the study area, interest rate on home loan, unit cost of construction, guideline value and time factor from the year 1997 to 2008 are collected and used for developing the models. Statistical model and training the factors in NN are made to forecast the unit price of land for the period between 2011 and 2015 with assumption on the future economic conditions. The factors are ranked based on the magnitude of influence it has on the land price.

2. About Chennai Metropolitan Area (Cma) And Study Area

Chennai city and CMA have 55 and 70 lakhs of population respectively in 2009. The contribution of CMA to state GDP is 40 %. Chennai accounts for 30 % of national auto industry, 15 % of software exports and 50 % of leather exports. Land price scouring in city area and the development along IT corridor in South and electronic hardware corridor on West has given a virtual boost to land owners to increase the price. Tidel park, existing industrial estates in Guindy and Ambattur, upcoming Sipcots on the fringes and IT units in West and Southern regions, proposed international airport, rapid transport and metro trains, over bridges, elevated and circular ring roads are the additional power of Chennai realty sector and the land price rise. Madhavaram is selected as the study area, which is a Special Grade Municipality located in the Northern premises of Chennai City about 10 kms away from the Central railway station and George Town. It is

located on the bank of National Highway No.5 and it is the gateway of Chennai from North. It has an area extent of 17.4 Sq.km and upgraded as Special Grade Municipality in 2008. It comes under Chengalpat region and it has around 127 Kilometer length of road. The total population in the study area is 76793 as per 2001 Census. It has large scale diary form, number of apartments, schools, local markets and hospitals. It can be easily accessed from the major locations in the City and its location in Chennai is shown in Figure 1.

NN is a computing technique from the artificial method. In the development of feasible NN analysis all 13 factors are used to ascertain the effect and to predict the trend of land price. All the input values are normalized using the MinMax Table. The principle behind is: Normalized value, N= [Original value - Minimum value] / [Maximum value - Minimum value], Where, 0 N 1. Back-propagation (BP) NN in MATLAB software is used in the study. A gradient descent rule is adopted in the programme of training set. NN is set to 10000 iterations, learning rate of 0.6, increase in learning rate of 0.9 with 3 hidden layers of 20, 13 and13 neurons and one linear output. Training stops when convergence obtains at the required root-mean-square-error below 0.0001 percent. It takes 54 Epochs to reach the desired target. Forecasts are being made over a period between 2011 and 2015, and the Run dialog box helps to establish the actual output. The share of influence of selected indicators is established using Garsons method. For this, the neural programme has the NN tool box that shows the change in output by weightages. This helps to know which of the factors has the most effect on the output. Share of Influence Input Node, Ii, asserts on the subject Output Node = S i % njj=1 (|wij||oj|) / (ni i=1|wij|) S i = __________________________X 10 (2) ni nj ni i=1 j=1(|wij||oj|) / ( i=1|wij|) Where ni = number of input nodes n number of hidden nodes j = wij = connection weight from input node Ii to hiddennode Hj oj = connection weight from hidden node Hj to subject output node Si

Fig.1.Location of Madhavaram 3. Multiple Regression And Neural Network Modeling Multiple regression allows more of the available information to estimate the dependent variable. More independent variables are added in the model will increases the closeness to real trend. Multiple regression looks at each individual independent variable and test whether it contributes significantly to the way the regression describes the data. Step-wise regression is the most frequently used regression method. The general multiple regression equation is (1) Y = a + b1 x1 +b2 x2 + .. bn xn Where, Y = Estimated value corresponding to the dependent variable a = y intercept x1, x2xn = values of n independent variable b1, b2bn = slopes associated with x1,x2xn respectively. 241

4. Analysis And Results

To measure the magnitude of linear relationship of land price (Y) on individual factor (X), correlation analysis is performed. Correlation analysis is a statistical tool,

which is used to determine the degree of which one variable is linearly related to another. The general form of correlation is given by (x - x) (y y) Correl (X,Y) = _____________________ ( (x - x)2 (y y)2 )1/ (3) The interaction of selected factors on Madhavaram land price per 5.5 cents (2400 Sq.ft.) is studied and the outcome is given in Table 1. Other than Dollar, Inflation and home loan interest all factors show good closeness. Forward regression analysis is performed using Statistical Package on social Science (SPSS) software, with 95 % confidence level and 5 % error significance and the analysis explains the trend very closely with a R2 of 0.9966. The analysis neglects 2 factors such as Mumbai sensex and Crude oil price which has comparatively lesser response with land price. The significant error of factors on the model at which the alternate hypothesis is to be selected is also depicted.

Table 1 Interaction Effect of Factors on Sowcarpet Land Price Factors Correlation coefficient Error significance
Time Gold price Construction cost Guideline value Inflation Dollar equivalence Silver price Home loan interest National sensex Population GDP Mumbai sensex Crude oil price 0.956477 0.952565 0.969179 0.893302 -0.0644 0.123959 0.956484 -0.45344 0.932255 0.97544 0.546645 0.904283 0.859138 0.000 0.006 0.000 0.000 0.000 0.000 0.005 0.000 0.018 0.000 0.002 0.054 0.070

The model outcome of the forward regression on land price in rupees of Madhavaram is given in equation 4 and Table 2 shows the response of model with the real trend of land price by performing analysis of variance (ANOVA). Land price per 5.5 cents (Madhavaram) =1.653E9 - 838036.045 X1 - 550.613 X2 + 1888.852 X3 - 0.274 X4 + 18886.295 X5 - 23913.094 X6 + 12519.754 X7 - 63865.298 X8 + 69.09 X9 + 327.205 X10 + 17442.337 X11 Where X1 = Time factor (Year and Month) X3 = Cost of construction per Square foot X5 = Inflation (%) X7 = Silver price per gram (Rs) X9 = National sensex Index X11 = GDP (%) 242 X2 = Gold price per gram (Rs X4 = Guideline value per ground (Rs) X6 = Dollar equivalence (Rs) X8 = Home loan interest (%) X10 = Population (No.)

(4)

R R2 Adjusted R2

Table 2 Model Summery b and ANOVA b Description Forward Regression 0.998a 0.997
0.996

Standard error 77519.910 Sum of square 2.244E14 Degree of freedom 12 Mean square 1.846E13 F 3.057E3 Sig. 0.000a a. Predictors: (Constant), Home Loan Int (%), Inflation (%), Doll Equ (Rs), Guideline Price (Rs), GDP (%), Silver Price/gm (Rs), Crude oil ($), Construction Cost/sft (Rs), BSE Index, Population (No), Gold Price/gm (Rs), NSE Index, Time & Month b. Dependent Variable: Market Price of Madhavaram (Rs)

5. Model Performance
The predictive ability of the forward regression and NN solution is compared. The market values and the predicted values using models are shown in Table 3. The model fit with market price is shown in Figure 2 with a close R2 value. The predictions show lesser difference between the model and market prices NN approach

Table 3 Prediction ability of Statistic and Neural model

Year Actual Market Price (L) 2.50 3.00 3.00 4.00 5.00 6.00 10.00 15.00 20.00 25.00 30.00 36.67 43.33 50.00 Forward Regression Model Price (L) 1.64 3.42 3.18 4.02 4.88 7.10 11.05 15.52 20.41 23.68 30.36 36.63 41.71 47.36 243 STDEV 0.6086 0.2988 0.1249 0.0111 0.0822 0.7789 0.7447 0.3718 0.2955 0.9357 0.2588 0.0259 1.1447 1.8642 BP Neural Network Model Price (L) 2.50 3.01 3.03 4.01 4.99 6.00 10.00 15.01 20.00 25.00 30.00 36.93 44.24 52.40 STDEV 0.0000 0.0041 0.0214 0.0065 0.0084 0.0002 0.0021 0.0042 0.0011 0.0006 0.0001 0.1891 0.6378 1.6979

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Fig. 2. Model Fit with Market Price The STDEV column indicates Standard Deviation (SD) from the actual (Market) value which is calculated using the formula (5) SD = [(x2 /n) (x /n) 2] The results of SD are very less (0.54 and 0.184 average respectively) and it confirms that the solutions are acceptable. Another parameter used in this comparative study is the Mean Absolute Percentage Error (MAPE): MAPE = i |(xi Fi) /xi | * 100 (6) ___________ n Where, Xi = historical (Market) price Fi = predicted price n = number of iterations used in the calculation The MAPE values of the statistical and NN solution are just 7.6 % and 0.66 % respectively, which implies that the selected indicators may be used as reliable inputs for modeling of land price and this finding provides further justification that a close relationship exists between land price and the selected factors. Ranking the Influence of Factors j=1 [(|wij||oj|) / ( i=1|wij|)] is the sum of signal transfers from input to output, shown in column 2 of Tables 4.

Table 4 Explanatory strength of indicators in BP Neural model

Indicators Silver price Time Population National sensex Mumbai sensex Construction cost Inflation Guideline value Home loan interest Gold price GDP Dollar equivalence Crude oil price Sum of signal transfer j=1 [(|wij||oj|) / ( i=1|wij|)] 0.614497749 0.60184447 0.540848382 0.518860622 0.501559525 0.499650511 0.478302467 0.478221196 0.468749084 0.436143129 0.411415804 0.397615324 0.332395335 6.280103598 244 Share of Influence 9.784834588 9.583352577 8.612093313 8.261975522 7.986484891 7.95608708 7.616155682 7.614861579 7.464034258 6.944839718 6.551099 6.331349759 5.292832034 100 Classification by ranking the strength of Factors 1 2 3 4 5 6 7 8 9 10 11 12 13 -

NN solution has ranked GDP, Population and Gold price as major influencing factors towards Land price. The influence share of factor ranges form 5.2 % to 10.6 % which show the uniformity in contribution. NN solution emphasizes these 3 indicators because they account for a large change in the land price.

6. Forecast of Land Price

To forecast the future price of land certain assumptions are made on all the factors. The factors such as Gold, Silver and Home loan interest are predicted by polynomial method and the rest of the factors by least square method from 2011 to 2015. The interest on home loan is expected to climb by 2015 and its growth is projected as 9 % annual. Construction cost is believed to rise by 6 %. The GDP is expected to increase by 3.2 %

and the inflation rise will remain at 3.5 % which peaked upto 10 % in the first half of 2010. A marginal annual rise of just 0.6 % on Dollar equivalence and 7 % on crude oil price is expected. Based on the past trends, the Consumption of precious metals, gold and silver show a remarkable increase in price of more than 20 %. As far as increase in stock is concerned, the projected increase is 6.6 % and 7 % on BSE and NSE respectively to reflect a progressively healthy economy. An increase in guide line value is justifiable by the strong demand on land and rise in population in the study area and it is expected as 1.21 % annual rise in population projected in CMDA draft. These above assumption on the factors are plugged in the Reg. model and trained in the NN. The result yields the future price of unit land and shown in and Figure 3.

Fig. 3. Forecast of Land Price (L) form 2011 to 2015 The outcome of the statistical and NN models are validated with the market price in 2009 and 2010 and it shows an average error of 4.5 % and 3.44 % respectively. From the results, the predictions offered an average STDEV of 0.54 and 0.18 which is very marginal between 1997 and 2010. Both the models show a dip in land price in the year 2011 and thereafter there is a annul rise of 8 and 5 %, respectively upto 2015. forward regression) and NN methods are employed to develop models to forecast the land price. The stepwise forward regression model accepts 11 factors and rejects 2 factors, namely BSE and crude oil price. The NN trains the factors towards land price in 54 cycles and identifies silver price, time and population as top 3 contributing factors. The regression and NN models fit with the real market price closely upto the R2 value of 0.9966 and 0.9999, respectively. The NN model performs better than statistical (regression) model in all aspects and the annual land price rise in Madhavaram would be 5 % in the forth coming years till 2015. 245

7. Conclusion
The unit price of land in Madhavaram, Chennai is forecasted between 2011 and 2015. Statistical (Stepwise

8. References 1. Gregs Musings, Factors contributing to an appreciating value of land, http://www. factorscontributing.com, 2000 2. Wilson. I.D, S. D. Paris, J. A. Ware and D. H. Jenkins, Residential property price time series forecasting with neural networks, Journal of Knowledge-Based Systems, 2002, Volume 15, Issues 5-6, pp 335-341. 3. Asabere Paul K and Barrie Harvey, Factors Influencing the Value of Urban Land: Evidence from Halifax-Dartmouth, Canada, Journal of Real Estate Economics,2003, Volume 13, Issue 4,pp361 377. 4. Benjamin D. John , Randall S. Guttery and C. F. Sirmans, Mass Appraisal: An Introduction to

Multiple Regression Analysis for Real Estate Valuation, Journal of Real Estate Practice and Education, 2004,Vol 7, No 1, 5. Newell Graeme And John Macfarlane, The Accuracy of Property Forecasting in Australia, Pacific Rim Real Estate Society Conference, 2006,Auckland. 6. Hannonen, Predicting urban land prices: a comparison of four approaches, International Journal of Strategic Property Management, 2008,Vol.2, pp 20-25. 7. Vandna Singh and Komal (2009), Prospects & Problems of Real Estate in India, International Research Journal of Finance and Economics, 2009,No.24.

246

Predictive model for success of ERP implementations

Dr. Santhosh Kumar Asst.Professor( SG) & Professor in charge of Research in School of Management Studies, SRM University & R.Dhinakaran Samuel, Research scholar in School of Management Studies, SRM University & HOD of Management Studies, Loyola institute of technology, Chennai

1. Introduction
Enterprise resource planning (ERP) packages exploded into the market during 1990s as a popular way by which companies attempted to integrate their financial, human resource, operation, and customer information. Now after a decade of experimentation, the key business driver for this implementation in most of the companies is increasing the bottom line . They expect to achieve any one of the following business benefits. Provide efficiency gains that reduce overhead or allow the company to do more without adding resources, Put the organization in compliance with legal or contractual requirements, decreases security risk or to reach technology compatible with that of the customers Supports a new strategic initiative Although ERP systems are capable of providing significant returns on investment, they can also cause havoc in an organization if not managed correctly. Unfortunately, the success rate of ERP implementations is only around 50% and approximately 90% of ERP implementations are late or over budget [ one example described in 11 ). Implementing these projects place tremendous demands on organizations time & resources. There are risks associated with this type of investments. It is important for the investor to understand the non-technical complexities before embarking on a new ERP project. This study examines what factors affecting success of ERP implementation projects. It uses case study methodology to compare successful ERP implementation with unsuccessful implementation of a same Project manager. 2. Theoretical background: Critical success factors ( CSF) are the few key areas where things must go right for the implementation to 247

be successful. Twelve CSFs are commonly identified by [1] several researchers which are pertinent for the success of ERP implementation project . These are Project management ( PM) (Coordinating, Scheduling & monitoring of defined activities to ensure the stated objectives of the implementations), Business process re-engineering ( BPR)(Fundamental rethinking & radical redesign of business processes to redesign of business processes to achieve dramatic improvement), User training & education ( UTE)( To make the user comfortable with the system & increase the expertise & knowledge level of the people.) Technology Infrastructure ( TI)( Adequate I.T infrastructure in terms of hardware & connectivity), Change management ( CM) (The way organization do business will change & the ways people do their jobs will change as well), Management of Risk ( MoR) (To minimize the impact of unplanned incident in the project by identifying & addressing potential risk before significant consequence occur.), Top management support (TMS) (Providing leadership & necessary resource), Effective communications (EC) (Sharing information between project team, communicating the whole organization about the goals & progress of the project.), Team work & composition ( TC) (Comprise competent internal & external members on all functional areas.), User involvement (UI) (User participation in the project , at the time of requirement finalization & testing ), Use of Consultant ( UC) (Use of experts who are knowledgeable about the installation & software), Goals & Objectives ( GO) (Clear goals & objectives in terms of scope, time & cost). 3. Conceptual Framework: All ERP implementations go through three phases. Success or failure depends on the activities carried out each of the phases.

Phase Selection

People involved Top management & Vendor Top management, vendor, Positional power users, Knowledge power users, Transaction users, Project team & Consultants Project team & Transaction users

Activities Requirement finalization,ERP selection &Vendor selection Business Analysis, Set up / Configuration, Conference room pilot. Customization, Production set up, Data migration, Security profile, Readiness assessment, Go live Report generations, Monthly / Yearly closing, Refinement expertise, transport & so on . Power does not rest with position, so much as in relation to the change. When faced with change people ask themselves what it will mean for them. In the case study referred there are seven type of people involved in the project , Vendor, Top management, Positional-power users , Knowledgepower users, Project team members, Transaction users, Consultants. Expected behavior from the above for the success of the project are given below: Actual status But in reality, the vendor sales man promises moon from the software & increase the expectation of the management & later it affects the scope of the project. It increase customization resulting costly implementation {12]. Most of the time due to competition the vendor capability is magnified by the sales man & some important information on the implementation is silenced. But in reality , in some cases given least priority & in many places medium priority without affecting production or sales,. But in reality, it is delegated to down the level

Implementation

Post implementation

There are number of barriers that can slow down the progress of this change process or even stop it altogether. One of the barriers that it is most difficult to overcome centers on the attitude and behavoiur of the people who are affected by the change, either directly or indirectly. The key players associated with ERP implementation & stake holder analysis is described in [2][10].The attitude and behavior of people are likely to depend on the power they have and their perceptions of the effect of the change. Power is the ability to control all types of resources, such as information, people, Sl.no People involved Behavior Explanation

Vendor

Transparency

Vendor should be transparent on the product capability, their consultants capability, resource requirements & project mile stones.

Top management

Priority

Top management should show highest priority to the project Managers to involve in the project during design & testing stage. Sharing of knowledge by these users is very vital otherwise it is identified during testing phase in trial & error basis which increases the project time line. 248

Positional power users

involvement

Knowledge power users

Knowledge sharing

But in reality, in many organisation there is no Knowledge management systems & we need to relay on individuals

Project team

dedication

Project team dedication to the project compensate gaps of internal readiness & reduce project overheads Attitude to change is absolutely required . They should learn & adopt to new way of working

But in reality, the team requires motivation

Transaction users

Change

But in reality, they have to work in both old & new systems, Resulting resistance to change, it requires some motivation. But in reality, they manage with what they know & set their mind only on project mile stone completion.

Consultants

Customer focus

Consultants to put extra effort to see what is best for the user & configure, test & train

1. Research method : It uses case study methodology to compare four successful ERP implementations with four unsuccessful implementations of a same Project manager ( the second author of this article). The Project manager has implemented ERP systems like SAP, Oracle E-business suite, JDEdwards Enterprise one etc., for more than 15 companies in India & abroad . Many projects were successful and some were failure. Details of the chosen eight companies are enclosed in Annexure-A. Data collected by conducting interviews at various levels of the subject organizations as wells recorded facts from archival. Weighted average scores are taken when multiple people responded to the same analysis. 2. Analysis : Critical success factor analysis were carried out for all this 8 implementations for both successful & failure projects, the analysis shows almost equal score. (refer Annexure B) From that score we will not be in a position to identify the failure projects. Following are the reasons for failure in the eight cases considered for study which explicitly relate to the behavioral model of people involved in the project: 1. Expectation mis-match on scope & capability of the software created by Vendor 2. Lack of support from Knowledge-power users in the organisation 3. Lack of involvement of the users / no dedicated team 4. Lack of customer focus from consultants side. 5. Lack of priority to the project by top management 6. Resistance to change 249

When applying the behavior model on the above 8 cases, the behavior model proved to be more effective in identifying the successful project. (Refer Annexure C) It is inferred that all the successful projects scored more than 7 average points and all the failure projects scored less than 5 average points. Hence we could mark clear demarcation between successful & failure projects through this behavior model.

3. Conclusion
It is evident from the above analysis the commonly indentified CSFs do not pinpoint the real causes of the failure. The behavior model play the most important role. This model can be applied in advance to predict the success of the implementation. All the parameters controlling this behavior models like Vendor transparency, top management priority, Positional power user involvement, Knowledge power user sharing, Project team dedication and Consultants customer focus are predictable factors which can be identified before start of the project.

4. References
1. T.R.Bhatt Critical success factors for the implementation of ERP, Proceedings of the 2nd International conference on Innovation & information technology, IIT 2005 2. Toni M.Somers, Klara G.Nelson, A taxonomy of players and activities across the ERP project life cycle , Information & Management 41 ( 2004), 257-278

3. Esteves, J. and Pastor, J., Analysis of

critical success factors relevance along SAP implementation phases. Proceedings of the 7th Americas Conference on Information Systems (AMCIS), Boston, Massachusetts, USA, 2001. 4. Rao S., Enterprise resource planning: Business needs and technologies, Industrial Management & Data Systems, Vol 100, Issue 2, pp 8188, 2000. Gupta (2000), Enterprise resource planning to emerging organizational value systems, Industrial Management & Data System (100), pp.114 -118, 2000. Davenport, Putting the enterprise into the enterprise system, Harvard Business Review, Vol 76, Issue 4, pp. 121 131, 1998. Subramanian Muthu, Larry Whitman, and S. Hossein Cherag , Business Process Reengineering : A consolidated methodology , Proceedings of The 4th Annual International Conference on Industrial Engineering Theory, Applications and Practice November 17-20, 1999, San Antonio, Texas, USA. Christopher P. Holland & Ben Light, A critical success factors model for ERP implementation, IEEE software, May/June 1999. Robert plant & Leslie will cocks , Critical success factors in International ERP implementations : A case research approach, Journal computer Information systems, Spring 2007..

April 2009 12. Marc N. Haines, Understanding Enterprise System Customization: An Exploration of Implementation Realities and the Key Influence Factors, Information Systems Management, 26: 182198, ( 2008) 13. Mojca Indihar temberger, Vesna Bosilj Vuki, Andrej Kovai , Business process modeling as a critical success factor in implementing a ERP system, SEE journal, Nov 2009. 14. D. L. OLSON* and F. ZHAO, CIOs perspectives of critical success factors in ERP upgrade projects, Enterprise Information Systems, Vol. 1, No. 1, Feb. 2007, 129138 15. ALAN R. PESLAK, GIRISH H. SUBRAMANIAN, GEORGE E. CLAYTON The Phases of ERP Software Implementation and Maintenance: A Model for Predicting Preferred ERP Use, Journal of Computer information systems, Winter 2007-2008. 16. BooYoung Chung; Mirosaw J. Skibniewski; and Young Hoon Kwak, Developing ERP Systems Success Model for the Construction Industry ,JOURNAL OF CONSTRUCTION ENGINEERING AND MANAGEMENT ASCE / MARCH 2009 / 207. 17. Shih-Wen Chien , Shu-Ming Tsaur, Investigating the success of ERP systems: Case studies in three Taiwanese high-tech industries, Computers in Industry 58 (2007) 783793. 18. Meg Fryling, The dynamics of ERP success,( Un Published ), Information Science and Policy , University at Albany ,State University of New York. 19. Jiang Yingjie, Critical success factors in ERP implementation in Finland, ( Published ), The Swedish School of Economics and Business Administration, 2005.

5.

6.

7.

8.

9.

10. Hein Ray Chetcuti , ERP Implementation: A multi-stakeholder analysis of critical success factors, WICT proceedings, December 2008. 11. Saad Ghaleb Yaseen, Critical Factors Affecting Enterprise Resource Planning Implementation: An Explanatory Case Study, IJCSNS International Journal of Computer Science and Network Security, VOL.9 No.4,

250

Annexure A
Sl.no 1 2 3 4 5 6 7 8 Company ( A Glass manufacturing company) SAP implementation in six month period ( A construction group with 9 different company). JDEdwards Enterprise one implementation for one company in six months) ( A medical equipment sales & service organization), JDEdwards Enterprise one implementation in six months) ( A construction company ), JDEdwards Enterprise one implementation in six months ) ( Group with more than 50 Higher sec.schools), Custom developed ERP Prodigy implementation , More than 15 months implementation, project stopped ( An IT services organization), Tried JDEdwards implementation for 4 years failed, then started Oracle E-business suite implementation for one year ( A polymer products manufacturing company ), JDEdwards Enterprise one implementation. Went live in 12 months, implementation team left immediately, Localization module not stabilized, went for re-implementation after six months. ( A needle manufacturing company), JDEdwards Enterprise one implementation , Gone live in 15 months, system crashed, re-implementation started after six months) Status Successful Successful Successful Successful Failure Failure Failure Failure

Annexure B
company 1 2 3 4 5 6 7 8 9 10 11 12 PM BPR UTE TI CM MoR TMS EC TWC UI UC GO 1 8 8 8 8 8 8 8 8 8 8 8 88 2 8 8 8 8 8 8 8 8 8 8 8 88 3 8 8 8 8 8 8 8 8 8 8 8 88 251 4 8 8 8 8 8 8 8 8 8 8 8 88 5 8 8 8 8 8 8 8 8 8 8 4 84 6 8 8 8 5 8 5 8 4 8 8 4 75 7 8 8 8 5 8 8 8 8 8 5 7 81 8 8 8 6 8 8 8 8 5 8 7 4 80

Annexure C
sl.no 1 People involved Vendor behaviour Transparency Software capability Resource requirement Consultant availability/ capability Project scope Project mile stone 2 Top mgmt Priority Attend review First priority even to loss of business 3 Pos.power involvement Attend all meetings Involve in design 4 Know.power Sharing Assigned key role to play Involved in design stage Involved in the testing stage 5 Proj.team dedication Full time involved 1 8 8 8 8 8 8 8 8 8 7 6 8 8 8 8 8 8 8 2 8 7 8 8 9 8 9 10 8 8 8 8 8 8 8 8 8 8 3 8 7 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 4 8 7 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 5 4.2 3 6 4 3 5 4 4 4 6 8 4 4 4 4 4 6 8 6 5.8 5 6 4 6 8 2 2 2 2 2 2 1.33 0 0 4 2 2 7 5.4 5 7 4 5 6 6 8 4 5 6 4 4.67 4 6 4 5.5 8 8 3.6 3 4 5 3 3 6 8 4 4 4 4 3.7 3 5 3 2 2

252

Work extra time voluntarily 6 Trans.users Change Learn with extra effort Work extra hours to complete the load Appreciate benefits in the new system 7 Consultant Customer focus Intention to satisfy customer need Exploit knowledge pool to derive best for the org, Total Final Average

8 7 8

8 8 8

8 6.33 8

8 7 7

4 4 4

2 3.66 3

3 3.66 4

2 4.3 3

5 8 8

7 8 8

5 8 8

7 8 8

4 5 5

5 5 6

4 4.5 5

5 6.5 7

54 7.7

57 8.1

54.3 7.7

55 7.8

33.2 4.7

21.8 3.1

34.7 4.9

30 .1 4.3

253

A Study On Stress And Anxiety Among The Two Wheeler Riders In Chennai City
Dr.G.Rajesh Kumar Assistant Professor (Sr.G), School of Management, SRM University Rajan Daniel, Assistant Professor (O.G), School of Management, SRM University
A driving behaviors is aggressive if it is deliberate, likely to increase the risk of collision and is motivated by impatience, annoyance, hostility and/ or an attempt to save time. susceptibility to stress. This method was employed because it enabled the survey to be conducted relatively easily over a broad area with respondents from all age groups and also because it was a well-established method generally used to research market trends by quickly obtaining many responses. This survey method was matched to this study, which required sufficiently numerous answer samples to analyze the complex and diverse characteristics of drivers susceptibility to stress. To extract answers that reflect the candid psychology of drivers, the questions used in the survey were designed in a free-answer format as shown below. Through this process, the stress elements could be classified into the following four categories: 1 Trouble (failure, something wrong, bad condition) 2 Performance (acceleration, fuel efficiency, driving stability, braking, traction) 3 Usage (operation, function, storage ability, loading capacity, livability, easy access, easy drive) 4 Sense (somatic sensation, visual sensation, auditory sensation, olfactory sensation, cognitive judgment) The sense as defined in this study, however, includes an addition of cognitive judgment for understanding and judging the information obtained through the senses. Cognitive judgment is, for example, familiarity with driving or perceptions of the distance between vehicles. Efforts to identify predictors of driving anger and aggression have examined both situational and personality explanations but have typically been 254

INTRODUCTION People are subject to stress caused by different environmental factors in their daily lives. Stress induces mental and physical burdens, distortion and pressure. Under a situation involving continued tension, stress animates the sympathetic nerves. This upsets the balance between the sympathetic nerves and the parasympathetic nerves, the latter of which work to keep the bodily functions stable. It is widely known that this is a factor that causes various physiological disorders, such as psychosomatic and psychoneurotic disorders. Driver stress is caused by various factors that can be broadly classified into two categories: short-term factors and long-term factors. One example of short-term stress is sudden emotional one that may be reflected in the drivers driving behavior. Such type of stress typically appears as anger and irritation. Also one example of long-term stress is one that accumulates over time, the typical of which is the stress induced by long-term inconvenience with car use. This type of factors may influence a customers decision when purchasing next vehicle. It is important for automakers to gain an understanding of this driver stress and improve the brand strength of the car by eliminating these factors. In this study, a free-answer questionnaire was distributed on the Web to extract stress factors. The purpose was to identify the relation in characteristics between the drivers

theoretically lean. The majority of research examining situations has explored the impact of traffic congestion or travel impedance, which is conceptually similar. More recent theoretical accounts of frustration-aggression suggest that the causal link between congestion and aggression is likely due to the activation of negative affect and anger trait differences in driving stress have been positively associated with state stress while driving. Trait aggression and stress have been positively associated with number of traffic accidents. The specific behaviors which constitute aggressive driving would include: Tailgating Weaving in and out of traffic Improper passing (eg.cutting in too close in front of vehicle being overtaken) Passing on the road shoulder Improper lane changes (failure to signal) Failure to yield the right of way to other road users Preventing other drivers from passing Unwillingness to extend cooperation to motorists unable to merge or change lanes due to traffic conditions Driving at speeds far in excess of the norm which results in frequent tailgating, frequent and abrupt lane changes Running stop signs Running red lights

There is a need to describe some of these behaviors and the circumstances under which they would occur in greater detail. For example, while tailgating is always included on lists of aggressive driving behaviors, we are never offered a more detailed description of what constitutes an unacceptable gap length between two vehicles. These descriptions can best be obtained through observational studies. The small amount of survey research on aggressive driving indicates that most drivers admit to these behaviors, at least on occasion. However, it appears that survey respondents tend to provide socially desirable responses. It is unclear if the lower incidence of certain behaviors associated with higher collision risks such as running stop signs is due to this tendency rather than to an actual low incidence of such behavior. The driving behavior generally has one or more of the following characteristics: Likely motivated by impatience, annoyance or anger with another road user(s) or with a prevailing traffic condition Calculated to save time at the expense of other road users Shows obvious disregard for other road users Intimidate or be perceived as dangerous by other road users Irritate or anger other road users Force other road users to take evasive action Driven through yellow lights that are turning red Driven 20 kms per hour or more over the speed limit Changed lanes without signaling Tailgated or driven too closely behind another car Flashed high beams at car in front of you Made rude gestures Waited until last second to merge with traffic on highway Pulled into parking space someone else is waiting for Passed on the shoulder of the road Another driver had cut very closely in front me 255

Displays of annoyance or hostility which are not intended to physically harm other road users but likely to intimidate, irritate, anger or provoke them may accompany these behaviors and serve as indicators of the underlying motivation. These behaviors would include: flashing headlights sustained horn-honking glaring at another driver to show disapproval yelling gesturing This list of specific behaviors is preliminary.

Another driver drove very closely behind me Another driver passed me in a dangerous manner Another driver cut me off at an intersection or exit Another driver made an obscene or threatening gesture Another driver wove in and out of traffic

not the only traits that may predispose an individual to engage in aggressive driving behavior. There are other personality traits that may also result in aggressive behavior. Shinar (1998) suggests that drivers possessing traits associated with extroverted or Type a personalities may be more likely to drive aggressively. While Shinars suggestion is certainly plausible, there does not appear to be any published research which reports a significant relationship between these two personality traits and aggressive driving behavior. Much of the road safety research on personality has focused on crash risk, not driving behavior. Greyetal (1989) report that personal factors which have been identified as associated with motor vehicle crashes include generally high levels of aggression and hostility, competitiveness, less concern for others, poor driving attitudes, driving for emotional release, impulsiveness and risk taking. Norrisetal (2000) conducted a prospective study of 500 drivers aged 19-88 and found that the combination of high trait hostility and low self-esteem resulted in significantly higher crash risk. Personality traits certainly appear to have some predictive value. Hennessy and Wiesenthal (1997) interviewed a small sample of 40 drivers who experienced rush hour congestion on a major divided highway in the Greater Toronto Area. They measured each drivers trait stress (i.e. the drivers predisposition to stress) and state stress (drivers exposure to traffic congestion) and interviewed the drivers to determine how these variables affected a drivers behaviour. Observed stress levels were highest in drivers with high trait stress who also experienced higher levels of roadway congestion. The concept of lifestyle refers to clusters of behaviors typically displayed by individuals with certain personalities. Beirness (1996) reviewed the fairly substantial research on the relationship between lifestyle, driving performance and collision risk. These studies, 256

REVIEW OF LITERATURE Individuals have traits which dispose them to behave regularly and persistently in a variety of situations. These traits are said to constitute their personality. Efforts have been made to explain social behavior with personality test results. Personality, however, has been found to be a poor predictor of social behavior. Sensation seeking may be defined as the need for varied, novel and complex sensations and experiences and the willingness to take physical and social risks for the sake of such experiences. A report says that only four of the thirty-eight studies did not find a positive relationship between sensation seeking and risky driving. Much of the research has focused on drinking and driving, but thirteen of the studies reviewed also assessed the effects of sensation seeking on other risky driving behaviors. The Aggressiveness to measure, respectively, sensationseeking and aggressiveness in a sample of 139 young drivers aged 17-18 and 38 adults aged 41-59. They found both personality traits were significantly related to reckless driving behaviors such as driving 20 mph or more over the speed limit, racing and passing in a no passing zone. Sensation-seeking and aggressiveness were significantly correlated, with adolescents scoring higher than adults and male adolescents scoring higher than female adolescents. This study found not only a relationship between trait aggressiveness (a general tendency to be aggressive) and reckless driving, but also found that state aggressiveness (i.e. being in an angry mood at a particular time) is related to episodes of highspeed driving. Sensation seeking and aggressiveness are

which focused primarily on young drivers, found a higher incidence of risky driving behavior and collision involvement in individuals with lifestyles characterized by a favorable disposition towards taking chances, impulsiveness and displaying aggression. These young drivers were more likely to display other delinquent and health-compromising behaviors i.e. drinking, drug use, smoking, fatigue due to late night socializing, poor academic performance and encounters with the police. Forty per cent of the sample was classified as Thrill Seekers. They were tolerant of deviant behavior and were more likely to be influenced by peers. Thirtynine per cent of participants was Conventional and displayed a strong attachment to traditional values, high levels of self-confidence and less responsiveness to peer influence. The remaining was classified as Inadequate and displayed low levels of self-confidence, difficulty controlling anger and frustration, low attachment to traditional values and poor academic performance. By the second year of the study, the Thrill Seeking group scored significantly higher on a risky driving index than either the Inadequate or Conventional groups. By the third year of the study, 27 per cent of Thrill Seeking group, 14 per cent of the inadequate group and 9 per cent of the Conventional were involved in motor vehicle collisions. Research on lifestyle factors has not been applied specifically to aggressive driving behavior. The combined focus on both personality and social factors typical of lifestyle research may improve our ability to understand the motivation of an individual who often displays aggressive driving behavior (i.e. an aggressive driver). Shinar(1999) reports a strong association between environmental conditions and manifest driver aggression. He has reported a fairly strong relationship between the length of the red phase and length of the green phase at an intersection, on the one hand, and the tendency for drivers either run a red light or honk their horns when they are delayed by a vehicle that fails to proceed when the light turns green. Drivers were more likely to run red lights at intersections with long red phases and more likely to be impatient and honk at intersections with shorter green phases. 257

Hennessy and Wiesenthal (1997) found that the most commonly reported behaviours on a divided highway in high congestion conditions were direct coping behaviours (eg. seeking pre-planned routes and listening to radio traffic reports), time facilitation behaviours (eg. listening to music or the radio) and aggressive behaviours (eg. tailgating, swearing and yelling at other drivers and horn honking). While the incidence of aggressive behaviours increased during congestion, these behaviours still ranked third behind both direct coping behaviours and time facilitation behaviours. Formal interest in aggressive driving behavior as a research topic can be traced back to a short monograph by Meyer Parry entitled Aggression on the Road. Parrys work pre-dated that of Leeming by one year. Also writing in England, he suggested that the increasing stress involved in motoring nowadays makes the psychological efficiency of the driver a more important factor than the mechanical efficiency of the vehicle he drives (Parry, 1968). He found that drivers with high scores on tests for anxiety and aggression had a higher crash risk. Parrys work makes it clear that aggressive driving is not a new phenomenon. In a study of aggressive driving, Hauber (1980) defined aggression on the road as actual or intended behavior which the offender supposes will do physical or psychological harm to the victim and which the victim experiences as such. This definition states that the aggressors must have the expectation that their behavior will cause victims to experience physical or psychological harm. Hauber, however, does not provide a list of driving behaviors he would include or exclude from this definition. Mizell (1997) for the purposes of his study, aggressive driving is defined as an incident in which an angry or impatient motorist or passenger intentionally injures or kills another motorist, passenger or attempts to injure or kill another motorist, passenger , in response

to a traffic dispute, altercation or grievance. This definition focuses exclusively on behavior intended to physically harm, or indeed, fatally injure another road user. The Mizell definition is extremely narrow and differs substantially from that offered by the National Highway and Traffic Safety Administration (NHTSA). In testimony before a Congressional subcommittee, then NHTSA administrator Ricardo Martinez defined aggressive driving as the operation of a motor vehicle in a manner which endangers or is likely to endanger people or property. For NHTSA, aggressive drivers are more likely to: speed, tailgate, fail to yield, weave in and out of traffic, pass on the right, make improper and unsafe lane changes, run stop signs and red lights, make hand and facial gestures, scream, honk and flash their lights. NHTSA is currently preparing a more thorough description of the specific driving behaviors that constitute aggressive driving. It has also undertaken research to develop the observational methods necessary to measure the incidence of aggressive driving. From NHTSAs standpoint, Mizell has provided a definition of road rage - an extreme form of aggressive driving behavior. For NHTSA, the behaviors associated with road rage are criminal offences while the unsafe driving practices associated with aggressive driving consist of traffic offences. Using Mizells own statistics, it is clear that road rage is a relatively rare phenomenon on U.S. roads. He reports that violent traffic disputes resulting in homicide and assault are increasing at the rate of 7 per cent per year. Mizells study is based on 10,037 media and police reports of violent traffic disputes over a six year period. These incidents resulted in 218 deaths. Bearing these methodological limitations in mind, it should nevertheless be noted that the incidence of this extreme roadway violence appears to be quite low relative the number of fatalities and injuries resulting from motor vehicle collisions. During the same six year period covered in Mizells study, there were 22,761,000 motor vehicle collision injuries and 290,105 motor vehicle collision fatalities recorded in the U.S. (NHTSA, 1999). According to the frustration-aggression model (the 258

dominant theory of aggression in psychology), aggression is behavior directed at a person with the intention of inflicting psychological or physical harm to that person. All aggressive behaviors are triggered by frustrating behaviors, situations or events. The level of aggression will vary depending upon three important factors. 1) The level of frustration experienced by the driver. Drivers have differing thresholds for how much frustration they will tolerate in a particular situation. Drivers who have extroverted, Type A personalities may have a low threshold and be more inclined to respond with an aggressive driving maneuver. 2) Factor affecting whether aggressive behavior will be displayed is the negative consequences for the aggression. Consequences can be broadly defined to include personal consequences, social consequences or legal consequences. As we shall see, one environmental condition which seems to increase the perception that negative consequences are unlikely is the extent to which drivers feel anonymous (eg. because they are driving at night or on a freeway). 3) Factor is the extent to which the frustration is seen as unfair or inappropriate. Surveys indicate that drivers are particularly annoyed by slow moving vehicles in the left lane of divided highways. Driving slowly in the left lane contravenes accepted driving practice which stipulates that slow moving traffic should keep to the right. Conversely, a slow moving vehicle in the right lane is less likely to irritate other motorists. Shinar identifies two broad categories of aggressive behavior: 1) Hostile: Hostile aggression is characterized by strong emotion and involves behavior intended to make the aggressor feel good. An individual engaging in hostile aggression is venting anger at someone without giving much thought to the possible consequences. An example of hostile aggression might be a driver who

decides to follow a vehicle that cut him off abruptly on the highway. The pursuing driver would be highly emotional and preoccupied with getting even. It is unlikely that a pursuing driver has given much thought to how the chase will affect arrival time at his/her original destination, what would happen if the other driver uses a cell phone to contact the police or how involvement in a fight with another motorist would affect ones personal life or livelihood. 2) Instrumental: Instrumental aggression refers to aggressive behavior which is used as a means to an end rather than an end in itself. This latter form of aggression seeks solely to overcome the frustrating situation or event. The aggressive behavior stops as soon as the source of frustration has been removed. An example of instrumental aggression might be a driver who decides to weave in and out of traffic because s/he is late for a meeting. Other drivers are simply obstacles and the aggression is not characterized by anger directed at a particular individual. The driver has presumably behaved in this way only because s/he is late. Most aggressive driving behaviors are unlikely to be exclusively hostile or exclusively instrumental. We would expect them to have elements of both hostility and instrumentality. Nevertheless the distinction is helpful to researchers because there are clearly aggressive driving behaviors that are more hostile than instrumental and vice versa. Using these concepts, Shinar defines aggressive driving as instrumental behaviors which are manifested in either 1) inconsiderateness towards or annoyance with other drivers (or) 2) deliberate dangerous driving to save time at the expense of other road users. These behaviors would include tailgating, disobeying traffic controls, weaving in and out of traffic, preventing a vehicle from passing, flashing headlights and horn-honking. Shinar also makes an important distinction between aggressive drivers and aggressive driving. Aggressive drivers constitute a small sub-set of the 259

driving population who display aggressive driving behaviors most of the time. Aggressive driving refers to the behaviors themselves which tend to be displayed by most drivers less frequently. Factors which seem to increase the likelihood of aggressive driving behavior are: Being relatively young Being male

Being in a traffic situation which confers anonymity

and/or where escape is high likely. Being generally disposed to sensation-seeking or aggressiveness in other social situations.

Being in an angry mood (likely due to events unrelated to traffic situation) Belief that one possesses superior driving skills Traffic congestion, but only if drivers do not expect it METHODOLOGY USED FOR THIS STUDIES The objective of this research studies are To study the stress among the two wheeler riders during driving in CHENNAI city. To study the behavioral pattern of driving among bikers. To come out of with remedial measures for curbing the stress among bikers. To study the responses of bikers with anxiety . The radom sample method used in this study. The sample collected from 110 respondents at various places of Chennai city through structured questionnaire. Following statistical tools were used in the study for analysis of data. Percentage Analysis Chi-square Method. ANOVA Test Weighted average method ANALYSIS OF STRESS AND ANXIETY Table 1. Gender & Marital status

From the below table it is inferred that, out of the surveyed population, 75 were males (68%) and 35 were females (32%). 86 were unmarried (78%) and 24 were married (22%). It shows that most of the respondents are male and married. MARITAL STATUS GENDER MALE FEMALE TOTAL % UNMARRIED MARRIED TOTAL %

61 25 86 78.2

15 9 24 21.8

75 35 110 100

68.2 31.8 100

Comparative analysis between gender with marital status by using chi- square Ho- There is no significant difference between GENDER & MARITAL STATUS OF RIDERS. H1- There is significant difference between GENDER & MARITAL STATUS OF RIDERS.

Observed Value (O) 61 15 25 9 TOTAL

FORMULA to calculate Experimental Value (86*75) / 110 (24*75) / 110 (86*35) / 110 (24*35) / 110

Experimental value (E) 58.6 16.4 27.4 7.6

(O-E)2 / 0.098 0.12 0.21 0.26 0.69

Calculated value Level of significant Degree of freedom Tabulated value

0.69 5% (m-1)(n-1)= (2-1)(2-1)= 1 3.84

CV< TV, Accept Ho. So there is no significant difference between marital status & gender. Table 2. The daily average duration & travel of two wheelers usage From the above table it is inferred that 24 rides(21.8%) less than 5km on an average, 28 rides(25.4%) 5-10km on an average, 20 rides(18.3%) 10-15km on an average, 38 rides(34.5%) more than 20km on an average. Also it is inferred that 72 rides(65.4%) less than 2hrs, 17 rides(15.4%) for 2-3hrs, 14 rides(12.7%) for 3-4 hrs, and 7 rides(6.5%) for more than 4hrs.

260

PARTICULARS Less than 5 km 5-10 km 10-15 km More than 20 km Total

RESPONSE 24 28 20 38 110

% 21.8 25.4 18.3 34.5 100

PARTICULARS Less than 2 hrs 2-3 hrs 3-4 hrs more than 4 hrs Total

RESPONSE 72 17 14 7 110

% 65.4 15.4 12.7 6.5 100

Table 3. Statement which best suits your response while driving It is inferred from below table that, 42 of the two wheeler riders strongly disagree that they have night mares, 49 of the rider strongly disagree that they get cold & 55 strongly disagree that their sleep is fitful and disturbed while riding the two wheelers. Also 44.4% riders strongly disagree the symptoms while driving. 1-Strongly Disagree 2-Disagree 3-Neutral 4-Agree 5-Strongly Agree

Statement Nightmare Handshake Sleep fitful Total %

1 42 49 55 146 44.4

2 25 19 25 69 20.9

3 18 19 11 48 14.5

4 15 12 14 41 12.4

5 10 11 5 26 7.8

Total 110 110 110 330 100

Table 4. What extent you perceive the action that caused you to become stress, how stress you become & for how long? It is noted that two wheeler riders perceive the action only sometimes that cause them stressed (43 riders), drivers gets stressed sometimes (55 riders) & even they get stressed they lack only for less than 2 minutes (46 riders).

Particulars Not at all Sometimes Occasionally

Response 23 43 22

Particulars Not at all Sometimes Occasionally

Response 16 55 19

How long they Response get stressed >2 minutes 46 2-5 minutes 5-10 minutes 10-15 minutes 15-30 minutes 16 15 19 4

Frequently 10 Extremely very 12 much

Frequently 14 Extremely 6 very much

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Table 5. Status which you belong to while driving It is observed that only sometimes (43 riders) drivers feel danger of being late while driving, they are not at all taking care of their driving (49 riders) i.e. stress affect their driving & 46 riders of drivers are sometimes aggressive in their driving

Danger of being late Not at all Sometimes Occasionally Frequently Extremely very much

Response 9 43 33 16 9

More careful Not at all Sometimes Occasionally Frequently Extremely very much

Response 49 20 15 12 14

More aggressive Not at all Sometimes Occasionally Frequently Extremely very much

Response 12 46 22 17 13

Table 6. Response towards a stressful situation From the below table we infer the first response towards the stressed situation was SLOWED DOWN (60 responses), second response was FLASHED LIGHTS (48 responses), third response was TAPPED OR HIT BRAKES (42 responses).

PARTICULARS Made gesture(s) Yelling Honking Name calling Muttered comments Tailgated Sped up Slowed down Flashed lights Refused lane access to other driver Tapped or Hit brakes No action at all

RESPONSE 5 31 28 15 36 25 17 60 48 23 42 0

Table 7. Comparative analysis between gender with distance travelled by riders by using chi-square test Ho- There is no significant difference between GENDER & DISTANCE TRAVELLED BY RIDERS. H1- There is significant difference between GENDER & DISTANCE TRAVELLED BY RIDERS.

262

Daily travel in kms Gender Male Female Total

Less 5kms 18 6 24

than 5-10kms 11 17 28

10-15kms 13 7 20

More than TOTAL 20kms 33 5 38 75 35 110

Observed Value (O) 18 11 13 33 6 17 7 5 TOTAL

FORMULA to calculate Experimental Value 24*75/110 28*75/110 20*75/110 38*75/110 24*35/110 28*35/110 20*35/110 38*35/110

Experimental value (E) 16.4 19.1 13.6 25.9 7.6 8.9 6.4 12.1

(O-E)2 / E .16 3.4 .03 1.95 .34 7.4 .06 4.2 18.08

CALCULATED VALUE LEVEL OF SIGNIFICANT DEGREE OF FREEDOM TABULATED VALUE

CV> TV, reject Ho.

18.08 5% (m-1)(n-1)= (4-1)(2-1)= 3 7.49

There is no significance difference b/n gender & distance traveled daily.

Table 8. Comparative analysis between marital status with distance travelled by using chi-square Ho- There is no significant difference between marital status and daily distance traveled by riders H1- There is significant difference between marital status and daily distance traveled by riders

Daily travel in Km Marital status Married Unmarried Total Observed Value (O)

Less 5kms 11 13 24

than 5-10kms

10-15kms

More than TOTAL 20kms 5 33 38 23 87 110 value (O-E)2 / E

4 24 28 FORMULA to calculate Experimental Value

263

3 17 20

Experimental (E)

11 4 3 5 13 24 17 33 Total

24*23/110 28*23/110 20*23/110 38*23/110 24*87/110 28*87/110 20*87/110 38*87/110

5.02 5.9 4.2 7.9 19.0 22.1 16.0 30.0

7.12 0.61 0.34 1.06 1.9 0.16 0.06 0.3 13.45

CALCULATED VALUE LEVEL OF SIGNIFICANT DEGREE OF FREEDOM TABULATED VALUE

13.45 5% (m-1)(n-1)= (4-1)(2-1)= 3 7.82

CV > TV, hence reject Ho. There is significance between marital status and daily distance traveled by the riders

Table 9. Comparative analysis between responses with riders, symptoms with riders by using anova test. ROW: H0 = There is no significant difference between the response and riders. H1 = There is a significant difference between the response and riders. COLUMN: H0 = There is no significant difference between symptoms and riders. H1 = There is a significant difference between symptoms and riders.

Strongly Disagree Nightmare Handshake Sleep fit Total 42 49 55 146 Strongly Disagree Nightmare Handshake Sleep fit Total 17 24 30 71

Disagree 25 19 25 69 Disagree 0 -6 0 -6

Neutral 18 19 11 48 Neutral -7 -6 -14 -27

264

Agree 15 12 14 41 Agree -10 -13 -11 -34

Strongly Agree 10 11 5 26 Strongly Agree -15 -14 -20 -49

TOTAL 110 110 110 330 TOTAL -15 -15 -15 -45

GRAND TOTAL (GT) = -45 1) CF=GT2/Total no. of observation = (-45)2/15 = 135 2) Sum of Square between Column (SSC) SSC= {[(C1)2/observation under c1] + [(c2)2/observation under c2] + [(c3)2/observation under c3] + [(c4)2/observation under c4] + [(c5)2/observation under c5] - CF = {[(71*71)/3] + [(-6*-6)/3] + [(-27*-27)/3] + [(-34*-34)/3] + [(-49*-49)/3]}- 135 = 1680.33 + 12 + 243 + 385.33 + 800.33 - 135 = 3121 135 = 2986 Degree of freedom = (c-1) = (5-1) = 4 3) Sum of Square between Column (SSC) SSC = {[(-15*-15)/5] + [(-15*-15)/5] + [(-15*-15)/5]}-135 = 135 135 = 0 Degree of freedom = (r-1) = (3-1) = 2

4) Total sum of squares = (sum of square of all the terms in the table) - CF = [(17)2 + (24)2 + (30)2 + (0)2 + (-6)2 + (0)2 + (-7)2 + (-6)2 + (-14)2 + (-10)2 + (-13)2 + (-11)2 + (-15)2 + (-14)2 + (-20)2] - 135 = 3293-135 = 3158. 5) Residual Sum of Square = 3158-2986-0 = 172 Degree of Freedom = (c-1) (r-1) = (5-1) (3-1) = 4*2 = 8 6)

Source Between column Between Row residual

7) CV of F?

Sum of square 2986 0 172

DF 4 2 8

Variance 746.5 0 21.5

Let us keep residual value as fixed and compare with column and row. F= 746.5/21.5 = 34.72 => CV DF = (4, 8) at 5% TV => 3.83 265

COLUMN: TV =?

So CV>TV, Reject H0, There is a significant difference between symptoms and riders. ROW TV =? F = 0/21.5 = 0

DF = (2, 8) at 5% TV = 4.45 So TV > CV, Accept H0 , There is no significant difference between the response and riders. Table 10. Comparative analsis between driving behaviour with riders, response with riders by using anova test ROW: H0 = There is no significant difference between the driving behaviors and riders. H1 = There is significant difference between the driving behaviors and riders. COLUMN: H0 = There is no significant difference between the response and riders. H1 = There is significant difference between the response and riders.

Extremely Not at all Sometimes Occasionally Frequently very much (1) (2) (3) (4) (5) 9 50 13 72 Not at all (1) 43 17 45 106 34 15 22 71 16 14 17 47 8 14 12 34

TOTAL 110 110 110 330

Danger of being late Carefully aggressively

Danger of being late Carefully aggressively

Extremely Sometimes Occasionally Frequently very much (2) (3) (4) (5) 9 -17 12 4 0 -19 -12 -31 -18 -20 -17 -55 -26 -20 -22 -68 -60 -60 -60 -180

-25 16 -21 -30

GRAND TOTAL (GT) = -180 1) CF=GT2/Total no. of observation = (-180)2/15 = 2160 2) Sum of Square between Column (SSC) SSC= {[(C1)2/observation under c1] + [(c2)2/observation under c2] + [(c3)2/observation under c3] + [(c4)2/observation under c4] + [(c5)2/observation under c5] - CF = {[(-30*-30)/3] + [(4*4)/3] + [(-31*-31)/3] + [(-55*-55)/3] + [(-68*-68)/3]}- 2160 = 300 + 5.33 + 320.33 + 1008.33 + 1541.33 - 2160 = 1015.33 266

Degree of freedom = (c-1)= (5-1) = 4 3) Sum of Square between Column (SSC) SSC = {[(-60*-60)/5] + [(-60*-60)/5] + [(-60*-60)/5]}-2160 = 2160 - 2160 = 0 Degree of freedom = (r-1) = (3-1) = 2 4) Total sum of squares = [(-25)2 + (9)2 + (0)2 + (-18)2 + (-26)2 + (16)2 + (-17)2 + (-19)2 + (-20)2 + (-20)2 + (-21)2 + (12)2 + (-12)2 + (-17)2 + (-22)2] - 2160 = 4914 - 2160 = 2754 5) Residual Sum of Square = 2754-1015.33-0 = 1738.67 Degree of Freedom = (c-1) (r-1) = (5-1) (3-1) = 4*2 = 8 6)

Source Between column Between Row residual

7) CV of F? COLUMN

Sum of square 1015.33 0 1738.67

DF 4 2 8

Variance 507.665 0 213.33

Let us keep residual value as fixed and compare with column and row.

TV =?

F= 507.665/213.33 = 2.379 = CV

DF = (4, 8) at 5% TV = 3.83 TV>CV, Accept H0, There is no significant difference between the response and riders. ROW TV =?

F = 0/213.33 = 0

DF = (2, 8) at 5% TV = 4.45 TV > CV, Accept H0, There is significant difference between the driving behaviors and riders

267

Table 11. Analyysis of response of bikers due to stress by using weighted average method

1 Nightmare Handshake Sleep fit 42 49 55 146

2 25 19 25 69

3 18 19 11 48

4 15 12 14 41

5 10 11 5 26

TOTAL 110 110 110 330

Category of item Nightmare Handshake Sleep fit

INFERENCE:

Calculation (1*42+2*25+3*18+4*15+5*10) (1*49+2*19+3*19+4*12+5*11) (1*55+2*25+3*11+4*14+5*5)

Value 0.775 0748 0.663

Rank I II III

From the above table it is inferred the nightmare is first symptoms given by the drivers while driving.

MAJOR FINDINGS OF THE STUDY It is observed from table 1 that, out of the surveyed population, 75 were males (68%) and 35 were females (32%) riders. 86 were unmarried (78%) and 24 were married (22%) riders. It is noted from table 2 that 24 respondants rides(21.8%) less than 5km on an average, 28 respondants rides(25.4%) 5-10km on an average, 20respondants rides(18.3%) 10-15km on an average, 38 respondants rides(34.5%) more than 20km on an average. Also it is inferred that 72 respondants rides(65.4%) less than 2hrs, 17 respondants rides(15.4%) for 2-3hrs, 14 respondants rides(12.7%) for 3-4 hrs, and 7 respondantsrides(6.5%) for more than 4hrs. It is inferred from table 3 that, 42 riders of the two wheeler riders strongly disagree that they have night mares, 49 riders of the rider strongly disagree that they get cold & 55 riders strongly disagree that their sleep is fitful and disturbed while riding the two wheelers. Also 44.4% riders strongly disagree the symptom while driving. It is cited from table 4 that drivers perceive the action only sometimes that cause them stressed (43riders), drivers gets stressed sometimes (55riders) & even they get stressed they lack only for less than 2 minutes (46riders). Table 5 shows that only sometimes (43riders) feel danger of being late while driving, they are not at all taking care of their driving (49 riders) i.e. stress affect their driving & 46 riders are sometimes aggressive in their driving. It is oberved from table 6 that the first response towards the stressed situation was SLOWED DOWN (60 responses), second response was FLASHED LIGHTS (48 responses), third response was TAPPED OR HIT 268

BRAKES (42 responses). It is noted from table 7 that there is significance between marital status and daily distance traveled by the riders Table 8 cited that there is significance between marital status and daily distance traveled by the riders It is inferred the table 11 that nightmare is first response given by the drivers while driving.

faster, but could prevent you from arriving at all; Dont go hungry - hunger can affect your concentration but dont eat at the wheel; Tell your employer if you think you may be suffering from stress due to your job-its their duty to resolve the problem

RECOMMENDATIONS Try to clear your mind of personal or work problems before driving; Focus on the drive ahead and its hazards be aware that an unexpected hazard could crop up at any moment and if you are not concentrating it could be fatal; Remember that you have a responsibility as a driver to look out for vulnerable road users (pedestrians, cyclists, motorcyclists and horseriders), which requires your full attention; Predict and accept things that bother you on the road and make a decision not to let them wind you up; Calm, controlled breathing helps to release muscular tension and relieve stress; dont drive if youre tired and take regular breaks during long journeys to refocus your concentration (the Government advises breaks at least every two hours for fifteen minutes); Plan your route carefully and allow plenty of time for your journey - rushing will only increase anxiety; Ensure the drivers seat and handle column are correctly adjusted for you; Drive at an appropriate speed within the speed limit driving aggressively, speeding and overtaking are unlikely to get you there much 269

CONCLUSION Driving Psychology is now in the beginning stages and is still evolving in content and method, in response to the new need for managing driving behavior in an industrialized society. The goal of driving psychology is to reverse the natural trend of escalating accidents that occur with a sharp increase in the number of drivers and miles driven. The escalation of accidents, injuries, and their financial cost is a preventable phenomenon, but it requires socio-cultural interventions by government, social agencies, and citizen organizations. It is not preventable or containable by law enforcement methods alone because these are external coercion mechanisms that have only a limited effect. Drivers will revert to aggressive driving styles when detection by police can be avoided. Compliance is dependent on surveillance. Therefore, internal influence is possible only through the voluntary cooperation of each individual. This voluntary cooperation can be engineered by means of the social influencing process that naturally occurs in small groups like the Quality Driving Circles (QDCs). In addition, the new driving norms that these sociocultural methods create in each community, are then spontaneously adopted from their parents by the current generation of children who will form the next wave of drivers in the region.. Thus, driving psychology is also a health-enhancing practice. Driving psychology can draw on the methodology used in allied fields such as behavior management techniques for self-modification. This feature can be used in self-assessment as well as in setting standards for testing, licensing, and rewarding or

punishing (socially, economically, and legally). HASTE MAKES WASTE

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6. Meichenbaum, D. and Goodman, S. (1979) Clinical use of private speech and critical questions about its study in natural settings. In G. Zivin (Ed.), The Development of SelfRegulation Through Private Speech. New York: Wiley. 7. Michon, J.A. (1985) A critical view of driver behavior models: What do we know, what should we do? In L. Evans and R.C. Schwing (Eds.). Human Behavior and Traffic Safety. New York: Plenum Press. pp. 485-520. 8. Mischel, W. (1991) Personality dispositions revised and revised: A view after three decades. L. A. Pervin (Ed.) Handbook of Personality Theory and Research (pp. 111-134) New York: Guilford Press. 9. Nahl,. Diane (1999) What is Driving Informatics. On the Web at http://DrDriving. org/informatics.html 10. Nahl, Diane. (1998) Novices First Use of Web Search Engines: Affective Control in Cognitive Processing. Internet Reference Services Quarterly 3(2): pp. 51-72. 11. Nahl, Diane. (1997). Information Counseling Inventory of Affective and Cognitive Reactions while Learning the Internet. Internet Reference Services Quarterly 2(2/3): pp. 11-33.

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Vertical Integration - Emerging trends and Challenges

Research Scholar, School of Management, SRM University, Kattankulathur Professor, School of Management, SRM University, Kattankulathur

Madhavi Latha Kanniganti Dr. Ravilochanan, P

1. Introduction
Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers. Contrary to horizontal integration, which is a consolidation of many firms that handle the same part of the production process, vertical integration is typified by one firm engaged in different parts of production (e.g. growing raw materials, manufacturing, transporting, marketing, and/or retailing). There are three varieties: backward (upstream) vertical integration, forward (downstream) vertical integration, and balanced (both upstream and downstream) vertical integration. A company exhibits backward vertical integration when it controls subsidiaries that produce some of the inputs used in the production of its products. For example, an automobile company may own a tire company, a glass company, and a metal company. Control of these three subsidiaries is intended to create a stable supply of inputs and ensure a consistent quality in their final product. A company tends toward forward vertical integration when it controls distribution centres and retailers where its products are sold. Balanced vertical integration means a firm controls all of these components, from raw materials to final delivery. The three varieties noted are only abstractions; actual firms employ a wide variety of subtle variations. Suppliers are often contractors, not legally owned subsidiaries. Still, a client may effectively control a supplier if their contract solely assures the suppliers profitability. This paper discusses about emerging trends in vertical integration in post recession era and probable challenges there upon.

2. In house Vs Outsource:
Major considerations for the expansion though Vertical Integration would be the In house versus Outsource analysis -to assess what part of supply chain a firm should gain control and make it an in-house versus contract out to a third party or outsource .

3. Drivers for the decision

There are 5 primary assessments which need to be conducted across the supply chain- the key drivers for In house Vs outsource decision Strategic Importance: The product/service or a business process contributing towards uniqueness or intellectual property and gaining competitive advantage due to differentiation cannot be outsourced. Factors impacting short and/ or medium term cost advantage may or may not hold true in longer term. Such assessment is required while evaluating the options. Operational Competence: If the product category / manufacturing technology under assessment is medium to highly sensitive towards quality requirements and requires medium to high technical / resource support the firm may chose to make it an In-house development or control. Supply Depth and Competitiveness: Availability of contract manufacturing options and intensity of industry competition is a relevant factor. Level of product / manufacturing technology differentiation and Level of cost competitiveness relative to firm also may impact the In-house or outsource decision. Potential Bargaining Leverage: Bargaining power of suppliers and / or distributors 271

may impact the firms decision regarding the vertical integration. Bargaining leverage the firm enjoys in its supply chain is a key assessment driver for make or to buy decision. Scale benefit from specialization: Low costs of production (cost per unit or the average cost) can only be achieved if a firm is producing an output level that constitutes a substantial portion of the

total available market. Inbound and outbound logisticsM & A may not be a better choice always. Owning a logistics division for a seasonal and limited Usage may not be an intelligent option rather than outsourcing it. A logistics firm handling operations for various firms may attain cost benefits due to economies of scale and specialization and may pass on that profitability to the outsourcing firms.

In-house Vs Outsource Analysis Drivers

1 Strategic Improtance Is product and / or technology is of strategic importance to the firm?

2 Operational Competence 3 Supply Depth and Competitivences 4 Are the upstream and / or downstream options limited? Does the firm have superior operational capability?

Potential Bargaining Leverage

Does a potential for bargaining exits?

5 Scale benefit from Specializtion Does the firm gain scale benefits from specialization?

1. Pre Recession era Vertical integration is a century old strategy pioneered during the industrial revolution. The old style vertical integration usually crossed multiple industries. With vertical integration, an organization controls the supply of raw materials and the delivery of its products. In other words, it has complete control over its supply chain. More inclined towards In-house development. Later the trend moved towards outsourcing, core competencies and gaining cost reduction due to specialization. Outsourcing has been prospering since the 90s for various reasons such as cost reduction, focus on core competencies, Risk mitigation and a long list of others. 2. Post Recession era But if we have been following the news lately, it is 272

hard to overlook the shift to vertical integration by a number of leading companies such as Oracle, Apple, Arcelor Mittal, GM, Boeing, Pepsi, Tata to name a few. Oracle has been on a spending spree over the last few years by acquiring just about any maker of software, computers, and computer components. The intent is to sell complete systems made of chips, computers, storage devices and software from Oracle. Apple which exited the semiconductor business recently shifted its strategy by silently grabbing small semiconductors suppliers so it can develop its own chips to meet its popular new devices. General Motors, despite its struggle, is also moving towards a lean vertical integration model by grabbing a number of struggling suppliers (e.g. Delphi) and

purchasing factories. The trend towards vertical integration is driven by many reasons such as more control over raw materials (e.g. Arcelor), more control over parts supply (GM, Boeing), more control over beverage distribution (Pepsi), and strategic differentiation (Oracle, apple). Major contribution to this phenomenal shift is sick units being available at through away prices and evolution of few sustained market leaders in post recession era. 3. Emerging challenges Post M&A Integration issues: This new style vertical integration (M & A) will make supply chain much more complex to manage and control. Bureaucratic, cultural and organizational issues have long plagued their supply chains which are often masked by the magnitude of the profits in this industry. Regardless of the degree of vertical integration, supply chains are unlikely to disappear or become easier to manage or control. With multiple acquisitions, organizations end up having multiple supply chains each as complex as the other. The resulting supply chain is slow and bogged by process inefficiencies and limited internal collaboration. Conflicts of Interests: Organizations comprising of multiple business units adopting Vertical integration within one or more of their business units could face challenges in addressing conflicts of interest arising due to multi point competition in related and / or unrelated industries. Challenges due to Dynamic economies: Further, countries such as India and China present unique challenges in that their fast growing economies fuel significant changes over short to medium term. This requires dynamic and agile supply chain systems which pose significant challenges to such a vertical integration. Exit barriers: Another concern is whether the anticipated economic gains will materialize. Before expanding the scope of the firm through vertical integration, management should be sure that the imagined benefits are real. Many 273

blunders have been made by firms that broadened their scope to achieve benefits that did not exist. If the barriers of exit are significant; a firm may be forced to continue to hold the acquisitions of the vertical integration, as the costs of leaving may be higher than those incurred if they continue with the holdings which may not be a desirable outcome.

4. Conclusion
Changing dynamics of economic health Vis- a -Vis evolving requirements of business post recession have fuelled significant changes in trends of vertical integration. While vertical integration is core to business models servicing growth especially in economies such as India. This paper made an attempt at highlighting key drivers which are critical for defining the future trend of vertical integration. Both strategic and operational challenges as highlighted in the paper are likely to influence the emerging trends for such integration. It is hence pertinent that business houses are cognizant of these drivers and suitable risk mitigation steps need to be put in place in order to design a sustainable vertical integration model in line with their growth business needs and addressing risks arising in short to medium term. 5. References: Mansfield, Edwin. Essential Microeconomics: Principles, Cases, Problems. Johnson G, Scholes K and Whittington R, (2006), Exploring Corporate Strategy, Prentice Hall International Bain, Joe S. Barriers to New Competition: Their Character and Consequences in Manufacturing Industries Martin K. Perry. Vertical Integration: Determinants and Effects. Chapter 4 in: Handbook of Industrial Organization. North Holland, 1988. Joseph R. Conlin. The American Past: A Survey of American History. Chapter 27 page 457 under VERTICAL INTEGRATION. Thompson Wadsworth. Belmont, CA, 2007. The Re-rise of Vertical Integration: Mega or Dead Supply Chains? By Farid Harche - Senior consultant Wipro BAS Appendix 1: Acquisition of Shantha Biotechnics by Sanofi Pasteur

Paris, France July 27, 2009 - Sanofi-aventis (EURONEXT: SAN and NYSE: SNY) and Mrieux Alliance announced the signature of a strategic agreement for the acquisition by Sanofi Pasteur of Mrieux Alliances French subsidiary ShanH, which owns a majority stake in vaccine company Shantha Biotechnics based in Hyderabad, India. A new joint committee will be chaired by Alain Mrieux on vaccine strategy for the Emerging Markets. Under the terms of the agreement, Sanofi Pasteur, the vaccines division of the Sanofi-aventis Group, will support Shanthas ongoing development as a platform to address the need for high quality affordable vaccination in international markets. Dr Varaprasad Reddy, the founder of Shantha Biotechnics, will continue to lead the company as Managing Director. Shantha Biotechnics was created in 1993 by Dr. Varaprasad Reddy and is based in Hyderabad, India. Shantha develops, manufactures and markets several important vaccines. Shantha works with supranational organizations like UNICEF and PAHO to supply major international markets including Asia-Pacific, Africa and Latin America. Sanofi-aventis, a leading global pharmaceutical company, offers the broadest range of vaccines protecting against 20 infectious diseases. Every day, the company invests more than EUR 1 million in R & D. Sanofi-aventis has a workforce of 105,000 employees in 110 countries and its net sales were of 29.3 billion in 2009. Sanofi-aventis is listed in Paris (EURONEXT: SAN) and in New York (NYSE: SNY). Mrieux Alliance, the family holding company of Alain Mrieux comprises five companies dedicated to public health that span the full range of healthcare: prevention, diagnosis, prognosis, treatment and clinical follow-up. Strategy of Acquisition For Sanofi Pasteur: Sanofi Pasteur strengthens vaccines position in India through the control of Shantha Biotechnics via Mrieux Alliance. Shantha shall operate as an R & D wing extension and new distribution channel for Sanofi in emerging markets 274

For Shantha: This evolution was rolled out respecting Shanthas philosophy to provide developing countries with international quality level products at an accessible price. Shanthas future development necessitates of bringing a state-of-the-art vaccine manufacturing facility gets a support from a major international vaccine company Alain Mrieux to chair a new Vaccine Strategic Committee of Sanofi Pasteur for Emerging Markets Context of Acquisition Mrieux Alliance acquired the majority shareholding in the Shantha Biotechnics Limited in November, 2006. ( Mrieux Alliance acquired 80% of the stake) Death of Alliance CEOs son who was supposed to take over the charge of Shantha meant the firm lacked managerial guidance and effort for nearly 3 years In 2009, Sanofi-aventis and Mrieux Alliance signed a strategic agreement for the acquisition by Sanofi Pasteur of Shantha Biotechnics. Acquisition particularly focused on successful launch of a pentavalent pediatric vaccine as well as a Cholera vaccine. Its main activity being strengthening a portfolio of new products which are in development: Rotavirus vaccine, Conjugated Typhoid vaccine, and HPV vaccine Present situation Employees have identified more with Mr. Varaprasad than the firm Shantha. Lack of sense of connect with the firm and the acquired brand contributed to many employees leaving the firmAttrition rate rose from 23 % to 73% Within a year of acquisition Sanofi Aventis-owned Shantha Biotech is recalling several lots of its 24 million five-in-one vaccines globally after WHO found it unsuitable for use and raised concerns over its safety. This is estimated to be causing a loss of around $72 million WHO and UNICEF have asked Hyderabad-based Shantha Biotech to determine the root cause of the problem and prepare a corrective action plan within two months, failing which the companys vaccines

will be disqualified from supply to the agency Besides losses from the recall, if WHO disqualifies Shan5, the Indian company could lose a $340-million UNICEF contract to supply Shan5 for 2010-12 This is a setback to Sanofi Aventis, which bought 80% in Shantha in July 2009, valuing the company at 550 million. From past 3 to 4 years Shantha Biotechnics is not in a position to launch a single vaccination Lot of money is being pumped into Shantha by sanofi to get the situation up and running and correcting the organizational disparities both in culture and technology Epilogue In lieu of above discussion it may be concluded that all M& A need not head towards a desired result. Bureaucratic, cultural and organizational issues arising from the M & A have to be taken care of. Management should be sure that the imagined benefits are real by performing an extensive due diligence. Appendix 2: Merger of Axis bank and Enam i-banking arm Axis Bank on Nov 17, 2010 announced acquisition of investment banking and other businesses of Enam Securities for Rs 2,067 crore, a move that will allow the private sector lender expand its footprint in i-banking and retail broking space similar to its rivals HDFC and ICICI banks. Under the deal, Axis Banks first inorganic growth foray, Enams shareholders -- Vallabh Bhansali, Manish Chokhani, Jagdish Master and Nimesh Shah -- will get 5.7 shares of Axis Bank for every one share held which will constitute about 3.3 per cent of the lenders equity base on enlarged capital. Bhansali will also be inducted on to the Board of Axis Bank as an independent Director while Chokhani will be the Managing Director and CEO of the newly formed entity created by the merger. Axis Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India 275

(UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The Bank today is capitalized to the extent of Rs. 408.84 crores with the public holding (other than promoters and GDRs) at 53.81%. The Bank has a very wide network of more than 1095 branches and has one of the largest ATM networks in the country. ENAM was founded in 1984 to provide knowledgedriven financial services at a time when the Indian economy was being redefined by market-oriented reforms. The founders - Manek Bhanshali, Nemish Shah, Vallabh Bhanshali and Jagdish Master - were referred to as the Formidable Four of Dalal Street. Being privately owned by professionals contributes to an exceptionally high level of commitment to excellence in client service. Almost all the key decision makers who have joined Enam over the last 20 years are still with it. Enams partnership approach is unique in the Indian context. Strategy of the Axis Bank Axis Bank will use the Enam brand , one of the strongest among the pure-play domestic financial majors, for two years and there will be a non- compete agreement on the merged business for the next five years. The transaction has the potential to create a financial services powerhouse in the country and it combines the investment banking and equities strength of Enam securities and the dominant debt market and commercial banking operations of Axis Bank. Perspective of Enam India is going to see so much capital investments that the landscape is going to change dramatically. There would have been several handicaps for Enam to grow individually since as business grows there would

have been a need for significantly large sums of capital. Enam saw this opportunity to move to the next level. Market situation The M & A deals in India bring in the fees in the range of 1% to 4% of the value of the deal and the market is worth about $800 million (About Rs 3500 crores) in terms of fees, annually On the other hand, Issuance of shares through IPOs, FPO and QIP- bring in fees in the range of 0.5% to 4% of the deal value Axis bank has been growing at about 20-30% annually without strong investment banking wing. Now with strong M& A advisory team and equity issuance issue team under its command and a strong balance sheet to back the deal -will probably make Axis Bank grow at a much faster pace It is clear attempt by Shikha Sharma( Axis bank MD & CEO) to create and integrated financial services firm that will bring banking and investment banking under one roof The deal comes at a time when the government is

planning to sell equity in about 60 state run firms. Although Government deals do not bring in much money, but that takes the merchant banker higher up the M & A league table It is well known fact that being in the top deck in the league table brings in the clients from private sector that pay for the service. Epilogue The combination of capability & capacity of Axis with the talent & experience of Enam in the equities market makes it a strong merger. Through such acquisitions, Axis Bank targets to become a one-stop financial service provider, said Gaurang Shah, assistant vice-president of Geojit BNP Paribas Financial Services. Enam, which is credited for pioneering equity research in the country, enjoys much of its strong reputation for its corporate business. The guarantee that the considerable goodwill enjoyed by Enam would get transferred to Axis Bank is still a question of debate and to be proven by time.

276

A Study on Sources of Fruit Wastages in Cold Storage and Fruit Processing Industries in Tamilnadu
R. Arivazhagan Asst. Professor, School of Management, SRM University, Kattankulathur Dr. Ravilochanan Professor, School of Management, SRM University, Kattankulathur 1. Introduction
The contribution of agriculture to Indias GDP at the time of Independence was 70% and it accounted for 85% of total employment. The share of agriculture in the countrys GDP has been gradually declining since then. At present, the contribution of agriculture to GDP is about 25%, but it still engages about 70% of the population. The annual average rate of growth of agricultural GDP has also declined from around 3.5% during mid eighties to mere 1.5 % during 2006-07. It is estimated that if the country has to maintain a GDP growth rate of over 8%, the agricultural sector has to grow at the rate of at least 4%. The country has a huge potential for growth in agriculture with about 160 million hectares of arable land and diverse agro climatic conditions, suitable for cultivation of a wide variety of crops. India is the second largest producer of overall fruits. A fresh estimate from the ministry of food processing says a whopping Rs 58,000 crore (Rs 580 billion) worth of agriculture food items get wasted in the country every year. Officials said only 7% of food in India is processed. Out of that the fruits and vegetable processing level in India is estimated to be around 2% as compared to about 80% in Malaysia, 30% in Thailand, and 60-70% in the UK and USA. In spite of being a major producer of fruits, a large quantity is wasted in the absence of storage, logistics and processing support. This study has been conducted in Tamilnadu to find out different sources of fruit wastages in cold storage and fruit processing industries. making agriculture more profitable, through efficient land use, optimum utilization of natural resources and creating skilled employment for rural masses especially womenfolk. Recent efforts have been rewarding in terms of increased production and productivity and availability of much larger volumes of fruit and vegetable crops. As a result India has emerged as the second largest producer of fruits and vegetables in the world. A large variety of fruits are grown in India. India produces over 46 million tonnes of fruits accounting for around 10% of the worlds production. The country ranks first in mango, sapota and acid lime, and in recent years recorded the highest productivity in grape. Some important fruits of India can be seen in the table below: Tropical and subtropical: Mango, banana, citrus, pineapple, papaya, guava, sapota, jackfruit, litchi and grapes Temperate: Apple, pear, peach, plum, almond and walnut Arid Zone: Anola, ber, annona, fig, phalsa Mango is the most important fruit covering 39 percent of the area accounting for almost 23 percent of total fruit production in the country. Indias share in the world production of mango is about 54 percent. Banana ranks second in area covering about 13 percent of total area. Banana contributes nearly one-third of the total fruit production. Citrus ranks third in area and accounts for about 10 percent of the countrys fruit production. Apple is another major fruit in the country with production of about 1.42 million tonnes. There has been steady increase in the area, and production of arid zone fruits particularly aonla, ber and pomegranate as a result of identification and development of suitable varieties and production technologies. The area and production of major fruit crops can be seen in the table below. 277

2. Overview of the Fruits in India

India with its wide variability of climate and soil produces a wide range of horticultural crops including fruits and vegetables. Fruit and vegetable crops have been identified as a means of diversification for

Table 1: Fruit Production in India Area Crop Banana Mango Citrus Papaya Guava Apple Pineapple Grapes Litchi (In Million Ha.) 0.62 1.56 0.56 0.07 0.19 0.25 0.08 0.06 0.05 Production (In Million Tonnes) 16.45 10.64 4.58 1.82 1.68 1.42 1.26 1.10 0.42 Percentage in Total Production 35.3 22.8 9.8 3.9 3.6 3.0 2.7 2.4 0.9

Source: Ministry of Agriculture, Government of India

3. Review of Literature
Major issues that exist in the supply chain of fruits and vegetables include the losses during post harvest handling, processing, packaging and transportation. The loss of fruits and vegetables during transportation is said to be in the range of 20 - 30% in countries like China and India. In many countries including China and India - two largest producers of fresh fruits and vegetables in the world - the existing cold storage facilities, reefer vehicles, product traceability solutions and other infrastructural facilities are insufficient to counter the problem of high supply chain losses. (Source: Articles Base SC #2720238) P.K. Mishra, secretary in the ministrys department of agriculture and co-operation, said at a Fruit and Vegetable Summit organised by Confederation of Indian Industry (CII) in 2008, that the production of vegetables in India is next only to China. The vegetable and fruit production contributes more than 30 percent of the agriculture GDP. The crop diversification has led to rise in horticulture production, which has reached 185.2 billion tonnes last year. But the real challenge starts after 278

the production. More than 72 percent of the vegetable and fruits are wasted in the absence of proper retailing. (Source: CII Fruit and Vegetable Summit - 2008) Agriculture Minister Sharad Pawar also said there were quite a few constraints in the sector. The sector is constrained by widespread fragmentation in the supply chain, low productivity levels, and huge post harvest losses arising out of inadequate storage, cold chain and transport infrastructure, logistics and supply chain management. Only organised and traditional retailing will ultimately drive the growth of the fruits and vegetable sector in the country. Pawar also called for an appropriate policy support for the growth of retail chains for fruits and vegetables in the country. (Source: CII Fruit and Vegetable Summit - 2008) Inadequate infrastructure has been identified as a major constraint in the growth of fruit and vegetable processing industries. Without a strong and dependable cold chain, a vital sector like F&V processing industry, which is based mostly on perishable products, cannot survive and grow. Even at currents level of production, wastage

in F&V is estimated at 35%, major reasons being inadequate storage, transportation, cold chain facilities and other infrastructure support facilities. Government of India has been implementing several schemes for facilitating creation of infrastructure for food processing including the following components relevant for F&V processing sector: Food Parks, Packaging Centers, Integrated Cold Chain Facility, Value Added Centers and Irradiation Facilities. (Source: Ministry of Food Processing Industry (MFPI), Government of India) The Tenth Plan schemes for Packaging Centre, Integrated Cold Chain Facilities, Value Added Centre and Irradiation Facilities have had a low response. Only 12 cold storage/ chains, 3 Value Added Centers, 1 Packaging Centre and 4 Irradiation Facilities have been supported under the four components during the Tenth Plan so far. The weaknesses identified in these schemes are as follows: Keeping in view the National Horticulture Boards Capital Subsidy Scheme for cold storages, the MFPIs assistance is limited to: Cold storages for non-horticulture produce Where the cold storage is an integral part of the processing unit or of the common facilities in the food park Special type of cold storages with Controlled Atmosphere/ Modified Atmosphere facility Integrated solution for cold chain facility from farm gate till consumer is missing. Since precooling units, mobile refrigerated transport including reefer vans etc. have been excluded from the scheme, complete cold chain facilities without any break cannot be supported under the scheme. Exclusion of horticulture produce for assistance under the scheme has created a gap. Since 1999-2000, NHB along with NABARD, NCDC and NAFED have been able to provide assistance for cold chain facilities to the tune of Rs. 273 Crores only, while the total need for investments for cold chain facilities for horticulture produce is envisaged at Rs. 2245 Crores during the Tenth Plan. 279

Another important reason why large-scale investments have not taken place in Indias cold chain infrastructure is that to be viable, investments in cold chain are expected to require not less than 100 days in a year whereas the typical inflow for raw material from agriculture is within the range of 30-40 days for each product.

The failure to build supply chain from the farm to the consumer has prevented any incentive to invest in cold chain. Fruits and vegetables are largely distributed and consumed in the immediate vicinity of production centers, requiring little cooling. It is only when production is surplus to requirements that processing is resorted to. (Source: 11th five year plan report, Government of India)

Around 5 to 10 per cent of vegetables and fruits that arrive at the Koyambedu wholesale market in the city are wasted daily for want of proper temperaturecontrolled storage facilities, according to the traders. The market receives around 3,000 tonnes of vegetables every day. The arrival at the fruits market is anywhere between 1,500 and 2,000 tonnes daily. A governmentrun cold storage facility is available near the market. But its patronage is low as traders say that maintenance of the facility is inadequate. Wholesale trader K. Ponraj said if maintained properly the facility would help in storing at least some amount of the excess produce that arrives in the market. Such storage would also help facilitate price stabilization. Vegetables such as cauliflower, potato and green peas could be stored for about a week. V. R. Soundararajan, one of the members of the Koyambedu Market Management Committee, said different vegetables and fruits have to be stored at different temperatures. But, it is not being followed properly at the cold storage facility. Traders also found the timing of the facility inconvenient. While the bulk of the business in the market takes place between 2 a.m. and 5 a.m., the facility is open only after 7 a.m. As the traders require the stocks from the cold storage before 2 a.m., not many patronize the facility, he said. The cold storage, belonging to the Tamil Nadu Co-operative Marketing Federation Ltd (TANFED), has a capacity to

store 2,500 tonnes. Officials of the Federation said only 60 per cent of the facility is being used and about 300 customers patronize it. The produce is stored between two degree Celsius and four degree Celsius according to the requirements of the customers. The officials complained that private cold storage plants are operated by some of the traders in the market, resulting in low patronage for the government-run facility. Traders said that two or three such private facilities were available to store mushrooms. (Source: The Hindu - Friday, Jun 25, 2010)

Most of the imported fruits have been received through ship logistics. It takes normally one month of lead time. This leads to reduction of shelf life and spoilage of fruits. Spoilage due to this particular reason could not able to determine, because cold storage people dispatch all the imported fruits before their spoilage. Most of the private cold storage people are doing job work for the fruit suppliers and agencies. Hence demand and supply for the private cold storage is more or less equal. So wastage during storage due to lack of demand is 0%. Some of the government based cold storage also doing job work for the suppliers, agencies, whole sellers and retailers on contract basis. Though it is job work, wastage during storage in government cold storage is around 5 to 10% per day due to poor maintenance. Beaten spots in fruits could not able to identify in raw stage. It is due to poor method of harvesting, poor handling, careless transportation etc. During the ripening process it will get directly decay without going for ripening stage. This kind of wastage happening in fruit processing industry is about 2 - 3%. Shelf life of fruits in fruit processing industrys cold storage is very high. For example, one of the mango processing industry is stored their raw materials (Mango fruits) more than 18 months under -16C temperature. Since most of the fruit processing industries are micro, small and medium enterprises, they are doing most of the process by manually. During manual peeling, some quantity of pulp and flesh will stick with outer cover layer of the fruits. Similarly, some quantity of wastage is occurring during seed and some fiber removal stage. Wastage due to manual process is coming around 5-6%.

4. Methodology
Researcher has collected list of 17 different fruit processing industries and 23 cold storages in Tamilnadu. Out of above sampling frame with 40 numbers, researcher has collected data from 25 different people of sample which includes 10 fruit processing industry and 15 cold storages. Data have been collected through telephonic interviews. Questions were asked based on fruit wastages. Researcher has identified some sources of wastages and the same were confirmed with empirical data of the respondents. Respondents themselves also have given some of the resources of fruit wastages. After collecting the data, they were tabulated and analyzed based on simple tool called average method.

5. Findings
Wastage of fruits in cold storage and fruit processing industry is 10 to 15% due to receiving of fruits with poor quality of packages, beaten spots during harvesting and post harvest handling and transportation of fruits, careless handling during processing, manual processing, peeling, seed removal etc. Cold storages are receiving fruits from different parts of India and they are importing some of the fruits from different countries which are less available in our country like apple, orange, grapes, strawberry etc. All the cold storages are felt that domestic packages are poor than the international packages. Spoilage of fruits in international packages is just 1 to 2% whereas in domestic package it is coming around 4 to 7%. Most of the suppliers are not following the terms and conditions of packaging methods and materials which used for packing. 280

6. Discussions and Conclusion

As per our review of literature more than 72% of fruits are getting waste in total production in India. Based on our study, 10 to 15% of fruits are getting waste through fruit processing industry and cold storage facilities. It is very less with compared to total wastage. Major wastage is occurring excluding these two areas. Researcher is now suspecting that major wastage is occurring before reaching in to the cold storage or lack of cold storage facilities. Cold storages are dispatching their

commodities in two different ways. First one is that to fruit processing industry. Second one is that, to market for direct selling and consumption. This study clearly states that, wastages in fruit processing industry are very less. Hence there may be chances of wastages in direct market. So finally researcher has concluded that wastage of fruits might be happen in two different areas. They are, before coming in to the cold storage (Poor harvesting methods and equipments, Poor post harvest handling, logistics and supply chain management and lack of cold storage) and markets (suppliers, agencies, whole sellers and retailers). Moreover it is confirmed that, wastage in cold storage facilities and fruit processing industry is very less. In contrast, they are good resources for reduction of wastages through proper storage and effective utilization of fruits. Though they are good resources for reduction of wastages, they are facing other problems like lack of technology and R&D facilities. If these problems could be reduced, wastage of fruits will become very meager in fruit processing industry and cold storage.

7. References 1. The IUP Journal of 92 Supply Chain Management, Vol. VII, Nos. 1 & 2, 2010 2. Articles Base SC #2720238, www.articlesbase. com 3. Ministry of Agriculture report, Government of India 4. Confederation of Indian Industry Fruit and Vegetable Summit - 2008 5. A report on Indian Food Processing Industry, Corporate Catalyst India 6. Eleventh five year plan, Report of the working group on food processing sector, Ministry of food processing industries, Government of India, November 2006 7. The Hindu - Friday, Jun 25, 2010 8. Food Industry India - Online news magazine 9. Thaindian News Online news portal 10. www.mofpi.nic.in 11. www.ibef.org 12. www.apeda.com 13. www.fao.org

281

An instrument for the measurement of Vendor perceptions of software quality in Off shoring
K. Sankaran and G. Kannabiran
Department of Management Studies, National Institute of Technology,Tiruchirappalli

1. Introduction
Many Indian software companies have become an acclaimed vendor for offshore software development projects due to their delivery capabilities, characterized by quality and cost-effective software to the customers across the globe. Predominantly driven by cost considerations, increasing number of software projects have been outsourced by organizations in the US and Europe to firms in developing countries such as India and China. In recent times, management teams of both outsourcing and vendor firms have realized that cost considerations, generally assumed to be the primary reason for offshore outsourcing, need to be balanced with the focus on high quality. In the past few years, the Indian software industry has pursued the goal of acquiring the highest standards of quality and has thus created a strong value proposition in the software and services arena. India has the largest number of companies in the world that are certified for quality standards According to NASSCOM (2006), over 440 Indian companies had acquired quality certifications with 90 companies certified at SEI CMM Level 5 higher than any other country in the world. This demonstrates the maturity levels achieved in quality by the Indian software industry. Researchers have reported that in view of the decreasing cost advantages, Indian offshore vendors need to change focus from cost to the quality related measures of the software services provided (Carmel & Agarwal, 2002; Davis et al, 2006). Therefore, managing software quality is very important in evolving strategy for both offshore vendors and customers. It is observed that there have been only few comprehensive studies on factors that impact software quality; but quantitative survey-based research is lacking on the subject (Verner & Evanco, 2005). Therefore, this paper empirically evaluates the key factors that determine the quality in offshore 282

software development, through a survey of leading IT Services Company in India. The paper is organized as follows. The review of previous research is presented followed by research objectives and methodology, data analysis and interpretation, followed by the discussion on the relative importance of the determinants. The paper is concluded with implications for practice and directions for future research.

2. Previous Research
The importance of software quality has been stressed by researchers who observed that Software quality can determine the success or failure of a software product in todays competitive market (Tian, 2004; Luftman & Kempaiah, 2008). The need for quality management in software projects becomes highly relevant in this context and quality of software is receiving a great deal of attention. Quality management is one of the methods for reducing the cost of production, by eliminating inefficiencies in the development processes. In an effort to keep costs within budget and simultaneously to meet the scheduled time of delivery, IT firms are adopting various quality management practices (Harter et al., 2000; Wali et al., 2000). The relevant previous research relating to software quality and its determinants are reviewed and presented in the following sections.

2.1 Software Quality [SQ]

Many definitions of software quality [SQ] are in use, which in general agree on what quality means and it can be enshrined by the phrase satisfaction of customer requirements (Xenos & Christodoulakis, 1997). SQ is a multidimensional measure, it is essential to determine what aspects of quality are important to organizations. There are essentially two approaches that can be followed to ensure software product quality, one being assurance of the process by which the product is developed, and the other being the evaluation of the

quality of the end product. The state of the art in software technology does not yet present a well established and widely accepted description scheme for assessing the quality of software products. Much work has been done by a number of individuals to define a SQ model which acts as a framework for the evaluation of attributes of SQ (Behkamal et al., 2009). Traditionally, SQ has been defined to be composed of correctness, reliability, usability, and maintainability (Dromey, 1995). Quality models have been developed in the past, the most widely known of which being McCalls and Boehms, and more recently the ISO9126. In 1991, International Organization for Standardization introduced a standard named ISO/IEC 9126 software product evaluation-Quality characteristics and guidelines for use (Jovanovic & Shoemaker, 1997). Finally, the ISO 9126 model follows the same approach as the other two aforementioned models, with the main difference being that the level of complexity is lower here as the hierarchy is stricter that each quality characteristic is related only to exactly one attribute, with no common attributes between characteristics. As per ISO 9126 standard, quality is defined as the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs (Agarwal & Chari, 2007). SQ has also been defined (Boegh, 2008) in terms of two types of product characteristics: (i) external quality (how the product works in its environment), like usability and reliability, and (ii) internal quality (how the product was developed), such as, software structure and complexity (Gorla & Ramakrishnan, 1997). External SQ attributes is being emphasized as they have been already validated through a study carried out in the recent past (Jung, 2007). A recent study by Gorla and Lin, (2010) on determinants of SQ through a survey of Information system project managers has found that organizational factors are more important than technical factors in impacting SQ. According to ISO 9126 model, there are six major characteristics, namely functionality, reliability, usability, efficiency, maintainability and portability, along with their associated sub-characteristics (Andreou & Tziakouris, 2007). Functionality expresses 283

the ability of a system to provide the required services and functions, when used under specified conditions, while reliability is an indication of the confidence that the software will live up to the expectations. Usability indicates the understandability of software as well as the easiness to learn and operate it (Selfah et al., 2006). Efficiency is related to the performance of software and maintainability to the means provided by the software to be upgraded and customized. In this context, software process improvement (SPI) helps to enhance maintainability of the software (Chen & Huang, 2009). Finally, portability indicates the level of adaptability/installability of a software product to different environments, as well as its conformance to related standards. In our research, since the attribute portability is considered applicable only in software products that need to be implemented on multiple platforms (Glass, 1998), it was not included. Similarly, efficiency attribute is viewed as an internal quality attribute as it deals with time behavior and computing resources consumed (Gorla & Lin 2010); thus, it was substituted by performance of the software in our chosen list of software quality attributes. However, these factors of ISO 9126 model are customized. For example, desirable SQ attributes for web applications are reliability, usability, security, availability, scalability, maintainability, and time to market (Behkamal et al., 2009).

3. Determinants of Software Quality: Vendors Perspective

Based on a detailed review of relevant literature and discussions with the project managers, it is found that the software quality can be measured with the help of six determinants: requirements uncertainty, technical infrastructure, knowledge transfer and integration, process maturity, trained personnel and communication & control. Each of these determinants is examined in the following section.

3.1 Requirements Uncertainty [RU]

Requirements uncertainty [RU] emerges from inability to apply a standardized process to convert requirements into functional specifications (Pressman 2005). Previous studies (Nidumolu, 1995; Harter et al. 2000; Han and Huang 2007) posit RU to be an important source of

poor quality in software development. The effects of RU are magnified in the offshore domain due to barriers of geographical and organizational boundaries between the client and vendor (Gopal & Koka, 2008). Therefore, it may be considered that RU will affect the quality of software in projects.

rework in software development (Harter et al. (2000). Many researchers have endorsed the view that process improvements are vital for improving software quality (Bunse et al., 1998; Li et al., 2000). Higher level of process maturity, invariably, results in the enhancement of SQ (Subramanian et al., 2007).

3.2 Technical Infrastructure [TI]

Technical Infrastructure [TI] is vital in the case of software industries, where the technological advancement is experienced at a very rapid pace and its adaptation is mandatory for the very survival of software organizations. Many researchers have found obsolescence of technologies as the major risk faced by software companies (Barki et al., 1993; Ravichandran & Shareef, 2001). Exposure to latest technology and availability of facilities, including latest hardware and software infrastructure, play a crucial role with respect to SQ.

3.5 Trained personnel [TP]

Prior research has highlighted the importance of personnel competence in developing high-quality software. This effect should be particularly true in the offshore development since there is always a supplydemand mismatch with respect to trained professionals (Shah, 2004). Pressman (2005) observed that trained programmers use better design techniques, are more aware of the link between requirements and systems parameters and are able to write better code. Experienced personnel are also more capable in testing and defect prevention activities, thereby resulting in better quality and more productive use of resources (Krishnan et al., 2000).In offshoring projects, the availability /nonavailability of trained personnel is further affected by the continuity in the staffing of projects (Gopal and Koka, 2008).

3.3 Knowledge Transfer and Integration [KTI]

Knowledge Integration is defined as the process of absorbing knowledge from external sources and blending it with the technical and business skills, knowhow, and expertise that reside in the business and IS units of a firm ( Okhuysen and Eisenhardt 2002; Tiwana & Sambamurthy, 2003). Internal knowledge Integration refers to the extent to which the development team builds on the knowledge of the stakeholders during the development process. External integration refers to the knowledge relating to market needs, regulatory constraints, external environment and business and technical developments that may affect development project (Prahalad & Krishnan 2002). Adopting the development project as the focal point, both external and internal integration are considered to be important in achieving quality (Lyytinen et al.1998).

3.6 Communication and Control [CC]

Communication helps to provide better control of processes, which in turn helps to improve quality (Bunse et al., 1998). A control mode is a formal arrangement practiced by both vendors and customers in software projects facilitating the interaction among the teams. According to (Gopal et al., 2002), communication and control mechanisms in offshore development reduce project uncertainty and thereby improve quality. Communication helps to provide better control of processes, which in turn helps to improve quality (Bunse et al., 1998). 4. Empirical Validation of Software Quality Management Constructs

3.4 Process maturity [PM]

Process maturity [PM] is defined as the indication of how close a developing process is to being complete, and capable of continuous improvement through quantitative measure and feedback. It is observed that quality improvement, cycle time and effort reduction can be simultaneously achieved by fewer defects and 284

4.1 Methodology

Measurement of the perceptions of the project managers of vendors, followed by an empirical analysis of data (by using reliable and valid instruments) is necessary to identify the key determinants of software quality management in offshore development projects, as

perceived by vendors. A questionnaire survey is widely acknowledged as an efficient tool for assessing the perceptions of individuals on a particular subject. A measurement model is specified for each construct, and by using the data collected from respondents of the questionnaire survey, a Confirmatory Factor Analysis (CFA) is run for all constructs for checking convergent validity, unidimensionality, and reliability of the constructs.

4.2 Development of Survey Instrument

For development of the survey instrument for the research, we had interacted with the senior project managers of various software companies to verify the applicability of the various constructs used in our study. First, a review was performed on questionnaires published in the area of software quality management that measured variables similar to those represented in the hypotheses. Few questionnaires were identified (Ravichandran and Rai, 2000; Rajendran et al., 2006; Gopal and Koka, 2008) from which reliable and valid questions were drawn and included as a part of the proposed instrument. This benchmarking process was aimed to reduce the risks of survey failure (i.e., to collect data that may not consistently measure the variables). A comprehensive research questionnaire was constructed to measure the constructs in the proposed research model. Items related to measure software quality attributes viz., Functionality, Reliability, Maintainability, Usability and Performance were measured using a 5-point Likert Scale (Strongly Disagree ,Disagree, Neutral, Agree and Strongly Agree). Similarly, items related to measure the determinants,viz. Requirements Uncertainty, Technical Infrastructure, Knowledge transfer and integration, Process Maturity, Trained personnel and communication & Control were measured using a 5-point Likert Scale. To ensure the correct comprehension of the terminology used and also to level the participants understanding of the concepts, a brief explanation of the research objectives was provided at the beginning of the survey instrument. Thus, basically, the scales of the constructs were developed in following three stages: (1) The scales were based on those used and reported in 285

prior work. The scale development has been based on an exhaustive survey of literature, and a pilot study in India (involving senior executives and project managers in software companies, and academics working in the area of quality management and software engineering), so that the theoretical and conceptual relevance of the constructs could be properly explained and critical dimensions of the constructs could be identified. Thus, the content validity, and face validity of the instrument have been assured in the initial stages of questionnaire development. (2) Prior to a pilot test, the scales were pre tested by two executives, selected from five different reputed software firms, comprising of at least one project manager. (3) A pilot study was conducted involving Senior Managers, Project Managers and/or Leads from a midsize software firm to further refine the scales and develop a survey instrument. Based on inputs from the respondents of the Pilot Study, the modified final research questionnaire was designed. The final research questionnaire was divided into three sections. Section A related to general details regarding the nature of software project like industry vertical, duration, project team size (number of people deployed), technology platform, country of the client and process maturity level of the vendor. Section B covered the software quality which was further subdivided into 5 sub sections namely, functionality, reliability, maintainability, usability and performance , each carrying questions anywhere between 4 6. Section C was pertaining to the independent variables namely, requirements uncertainty, Technical Infrastructure, knowledge transfer and integration, process maturity, trained personnel and communication & control; also, cost and time factors were included. Each variable contained questions in the range between4-9. Personal details relating to the age, nature of job assignment, experience and type of organization were

also collected. The complete instrument consists of 64 items.

4.3 Validity of the Survey Instrument

First, a reliability analysis of the measure of each variable was performed using Cronbachs alpha. Reliability of an instrument is defined as the extent to which any measuring instrument yields the same results on repeated trials (Carmines and Zeller, 1990). It refers to the extent to which a variable or set of variables is consistent in what it is intended to measure. If multiple measurements are taken, the reliable measures will all be very consistent in their values. Reliability differs from validity in that the latter is concerned with how well the concept is defined by the measure(s), whereas reliability relates to the consistency of the measures (Hair et al., 1998).There are several methods to establish the Factor/Construct No of Items

reliability of a measuring instrument. Of all the methods, the internal consistency method is considered as the most effective, especially in field studies. The internal consistency is estimated using a reliability coefficient called Cronbachs alpha () (Cronbach, 1951). An alpha () value of 0.70 or above is considered to be the criterion for demonstrating strong internal consistency of established scales (Nunnally, 1978). In the case of exploratory research, alpha value of 0.60 or above is also considered as significant (Hair et al., 1998). Using the data collected from the respondents to the survey, reliability of the constructs has been checked by computing Cronbachs alpha () value for all the factors. The results are presented in Table 1. It can be seen from the table that all the factors have Cronbachs alpha value above 0.70, which testifies the reliability of the instrument. Cronbach Alpha 0.75 0.79 0.85 0.81 0.80 0.71 0.79 0.81 0.88 0.70 0.82 CFI* 1.00 0.98 0.98 0.78 1.00 0.99 0.99 0.99 0.99 0.95 0.99 NFI** 0.99 0.98 0.98 0.78 1,00 0.99 0.99 1.00 0.99 0.94 0.99

Functionality 4 Reliability 4 Maintainability 6 Usability 4 Performance 5 Requirements UnCertainty 9 Technical Infrastructure 4 Knowledge Transfer and Integration 8 Process Maturity 6 Trained Personnel 4 Communication And Control 6 Cronbagh Alpha Value > 0.7 confirms reliability * CFI=Comparative Fit Index >0.90 indicates Unidimensionality

** NFI=Normed Fit Index(Bentler-Bonnet Index) >0.90 indicates Convergent Validity

4.4 Unidimensionality analysis

Second, a confirmatory factor analysis (CFA) was performed for each construct using principal components. Unidimensionality refers to the existence of a single construct/trait underlying a set of measures (Hair et al., 1998). The most important and basic assumption in measurement theory is that a set of items forming an instrument measures just one thing in common. Items within a measure are useful only to the 286

extent they share a common nucleusthe characteristics to be measured (Nunnally, 1978). The concept of unidimensionality enables to represent the value of a scale by a solitary number. For unidimensionality verification, a measurement model is specified for each construct and Confirmatory Factor Analysis (CFA) is run for all constructs. Individual items in the model are investigated to see how closely they represent the same construct. Computing the Comparative

Fit Index (CFI) value for all the factors tests the unidimensionality of the scale developed in the current study. CFI value of 0.90 or above implies that there is strong evidence of unidimensionality (Byrne, 1994). Using the data collected from the respondents to the survey, a Confirmatory Factor Analysis has been run for all constructs for checking unidimensionality of the constructs. The results are shown in Table 1. The results indicate that all the factors have CFI value above 0.90, which testifies the unidimensionality of the instrument.

4.5 Convergent validity

The evidence for convergent validity is obtained when a measure correlates well with other measures that are believed to measure the same construct (Kaplan and Scauzzo, 1993). Each item in a scale is treated as different approach to measure the construct (Ahire et al., 1996). In other words, convergent validity is the degree to which various approaches to construct measurement are similar (converge). Using confirmatory-factor-analysis technique, the convergent validity can be checked by computing a coefficient called Bentler-Bonett Fit Index (BFI) which is also termed as Normed Fit Index (NFI). A scale with BFI values of 0.90 or above is an indication of strong convergent validity (Bentler and Bonett, 1980).Using the data collected from the respondents to the survey, a Confirmatory Factor Analysis (CFA) has been run for all constructs for checking their convergent validity. The results of CFA are presented in Table 1. It can be seen that all the measures have a BFI value of more than 0.90, thereby demonstrating strong convergent validity for each construct.

offshore vendor. Considering the fact that there are only very few empirical research initiatives in the past on SQ linking the offshore development from vendors perspective, our research has explored and identified the key determinants which need to be addressed for ensuring high quality software. Nevertheless, further quantitative research may be undertaken to validate the variables based on survey of more organizations from IT Industry. Further, it may be interesting to extend and carry out future studies from different stakeholders perspective, especially the quality personnel in the vendor organizations.

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5. Findings And Conclusion

All the six determinants used in this research have exhibited strong unidimensionality (CFI0.9), reliability ( 0.7) and convergent validity (BFI0.9), as indicated in Table 1. This implies that the management of software quality in offshore software development can be conceptualized as a six-dimension structure from vendors perspective. Researchers may use this work as a basis for subsequent studies in different countries, with totally different cultures and work conditions. The study has the advantage of being unique as it identified the key determinants which influence the attributes of SQ when the software is developed by the 287

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Factors Contributing to Perishability Iin Traditional Fresh Produce Distribution System A Study on Tomato and Banana Chains in Andhra Pradesh
Dr.G.V.R.K. Acharyulu.,M.Tech.,MBA,PhD, Reader, School of Management Studies, University of Hyderabad, Central University Hyderabad AP, Inida 1. Introduction
India is continued to be the worlds second largest producer of fresh produce in last five year. It produced 68.4 million tonnes of fruits and 129 million tonnes of vegetables in the year 2008-09 (IHD, 2009). National horticulture mission statistics forecasts annual production growth is at 8.8 percent for fruits and 10.9 percent for vegetables by 2015. A total consumption of 90 million tonnes of fresh produce is supplied through 7300 wholesale assembly markets and 27294 rural weekly markets (Acharya, 2005). The consumption of fresh produce is expected to reach 140 million tonnes by 2015 (Kumar and Kumar, 2003). The research revealed that the fresh produce accounts for 50 per cent of the food and grocery bill (Kumar et.al, 2001). It indicates there is an enormous growth opportunity in fresh produce sector. India can become market leader in world horticultural produce through the vertical and horizontal integration of different components of the supply chain. The major issue in the supply chain is the inefficient post-harvest management. Cultivable waste of about 24 to 40 per cent is reported due to the inefficiency and the extent of losses of fruits and vegetables in India is estimated at about Rs. 10,000 crore to 12,000 crore per annum(Surabhi,2007). Approximately 20 per cent of Indias fruit and vegetable produce goes waste on account of the lack of cold chains. India has around 1,300 cold storage facilities, of which 50 per cent are being used for potatoes and the rest remain underutilized (CII, 2007). processes to continue. As soon as produce is harvested the processes leading to breakdown begin, and cannot then be stopped. The rate at which breakdown occurs can, however, be slowed up and losses minimized by employing the correct handling methods after harvest. Most fresh produce is highly perishable and if it is to reach the consumer in the right condition it must be marketed properly bearing in mind the most suitable temperature and humidity for each commodity as well as appropriate packaging and handling methods. Failure to address these issues leads to stress to the produce rapidly followed by spoilage and losses. The enormous losses of fruits and vegetables produced in the country are mainly because of the lack of proper infrastructure for storage and transportation under controlled conditions. Effect of Injuries: Injuries take many forms, including cuts, punctures, scraping of outer surfaces, internal and surface bruising, sunburn, heat damage and cold damage. Their effect on harvested produce is to speed up the rate at which water is lost by as much as five times, to provide sites for attack by decay agents such as moulds and bacteria, to increase the rate of heat production at injury sites, to cause dis-colouration due to internal damage and to cause off-flavours to develop. Effect of Pests and Disease: Increase in post-harvest decay occurs where produce is washed before packing. Most moulds and bacteria causing decay require free water to establish infection, particularly where injuries, even though small, are present on washed produce and the washing water is stagnant or recycled. It may also be a problem where condensation occurs on the surface of produce when it is moved from cold stores to high ambient temperatures, or when produce is exposed to rain after harvest. Produce saturated with water, from rain or other causes may become soft and more easily 290

2. Spoilage of Fresh Produce

The fruits, vegetables and root crops are still alive after the harvesting process. They contain 65 to 95 percent water, depending on the type of produce. They also contain food materials which enable living

damaged than when dry. This damage not only provides opportunity for infection by decay agents but may in itself leave unsightly surface damage, leading to downgrading and lower prices. This is often seen in citrus fruits, where fruit harvested when wet develop the skin blemish. It may not always be possible to keep produce dry but field-men should avoid harvesting freshly wet produce.

The data is collected from the AMCs that are located in the selected districts where the respondents participate in the fresh produce distribution activity.

5. Description of Variables
Perishability (y): Perishable products are those that worsen in quality over time, and become lesser in value. Perish able goods decay rapidly, if preservation and pre-cautionary technique is not employed. Common perishable goods include foods, plants and agricultural products. Fruits and vegetables are examples of time and temperature-sensitive perishable products that can rot or spoil easily. Perishable products must be handled and transported by highly efficient distribution channels that can retain the integrity of the produce. Perishability (Y) = Independent variables (x1 to x9): Perishability of the fresh produce will influence with the operational variables such as care during transportation, use of plastic crates, removal of foreign bodies, condition of road, safety packaging, cleaning and washing, and foreign bodies. X1- Damaged during the harvest by the farm men (PR_farm_men). X2- Road conditions causes the physical damage to the fresh produce (PR_physical_damage), X3- Lack of effective packaging (PR_lack_ packaging), X4- Non saperation of living organism like Bacteria, Fungus, insects etc. (PR_living_organism), X5- Non-removal of foreign bodies causes perishability (PR_foreign_bodies), X6- Lack of plastic crates during the transportation (PR_plastic_crates), 291 X7 - Lack of cleaning and Washing (PR_

3. Rationale of the Study

The present study is aimed to identify the various factors that contribute to the perishability of fresh produce which are caused during logistic operations in fresh produce distribution. These activities are mostly human and material oriented and gives a scope for damage to fresh produce. However many other factors contributes to the perishability of fresh produce, the existing activities taken for the study are purely concern with the logistic and supply chain related. The study reveals most contributing factors to perishability using regression model so that the spoilage of fresh produce can be minimized using appropriate mechanism and hence the overall supply chain is strengthened.

4. Methodology
This study is causal in nature and relies on survey method. Andhra Pradesh is chosen for this purpose based on the contribution its share in terms of production and growing area to the national agriculture sector in last ten years and it is also one among the top five produces of banana and tomato states in the country. The study examined the banana and tomato chains which are more susceptible to the spoilage in distribution operations. The study is conducted in three districts for each produce namely, Krishna, Chittoor and Ranga Reddy for tomato and East Godavari, West Godavari and Chittoor for banana. These districts are selected on the basis of Area and production of tomato and banana during 19992009. A total sample size of 305 farmers, 62 traders and 120 retailers are drawn from the population. Different questionnaires are designed for data collection from the target respondents such as farmers, traders and retailers to obtain views and level of agreement on the factors pertaining to fresh produce spoilage during the supply chain operations on Likerts five-point scale.

washing),

X8- Lack of enough care while the loading and loading (PR_care_load_unload), X9- Lack of effective care during road transport (PR_packing_perishability),

exists positively with the coefficient value ranging from 0.6 to 1.0 among independent variables. It indicates that there is no multi-collinearity among the variables. Consequently, a multivariate statistical technique, multiple regression method is applied to analyze the data. The enter method is adopted for the running of Regression model. From multiple regression analysis it is observed that Eigen values in the multi-colinearity diagnostic matrix found to be more than 1.0 for all the variables hence no independent variable is dropped from the multiple regression model.

Prior to the carrying out of regression model, the Pearsons correlation statistic has been run to determine the variability among the independent variables. The following correlation matrix table (Table 1) has been generated. The Pearson correlation co-efficient indicates that there is no incidence of strong correlation

Table 1: Correlation
Perishability Farm_ men Physical_ damage Lack_ packaging Living_ organism Foreign_ bodies Plastic_ crates Washing Care_ load_ unload Packing_ perishability

Perishability

Farm_men Physical_ damage Lack_ packaging Living_ organism Foreign_ bodies Plastic_crates

.623* .732*

1 .346**

.639*

.299**

.124*

.783* .682* .823*

.118* .145* .328**

-0.08 0.098 0.086

0.04 0.013 .167**

1 .168** .234**

1 0.04

Washing Care_load_ unload Packing_ perishability

.648*

0.091

0.09

0.03

.181**

.247**

0.007

.776*

0.035

0.075

0.063

0.02

-0.025

0.059

-0.103

.603*

0.056

-0.015

0.004

.120*

0.042

0.003

0.085

-.212**

The model summary table indicates what predictors are relevant for the R and R2. The word constant in parentheses refers to the intercept. The coefficient of multiple determinations is 0.883; therefore, about 78 percent of the variation in the perishability is explained by its quadratic relationship with the predictors which 292

cause perishability. The regression equation appears to be very useful for making predictions since the value of R2 is close to 1. From the table 2, DurbinWatson value of 1.841 indicates there is no autocorrelation among the independent variables.

Table 2: Model Summeryb

Model 1 R .773a R Square .659 Adjusted R Square .635 Std. Error of the Estimate .286 Durbin-Watson 2.058

a. Predictors: (Constant), PR_packing_perishability, PR_lack_packaging, PR_farm_men, PR_plastic_crates, PR_ care_load_unload, PR_physical_damage, PR_living_organism, PR_foreign_bodies, PR_washing b. Dependent Variable: Perishability The table 3 below shows the ANOVA table for the regression. ANOVA stands for Analysis Of Variance specifically the analysis of variation in the Y scores. At this point we observe the two sums of squares introduced in class the regression and residual (or error) sums of squares. The variance of the residuals (or errors) is the value of the mean square error here it is .085. Also in this table we find the F test. This tests the hypothesis that the predictor (here our only predictor) shows no relationship to Y. The F test has two numbers for its degrees of freedom. These are called the numerator and denominator degrees of freedom of df1 and df2. Here the numerator df (df1) tells us how many predictors we have (it is 9) and the denominator degrees of freedom are n - 1- df1 or n-2 for bivariate regression. The table provides us with the data that need to compute R2. If we compute SS-regression divided by SS-Total, we should get R2. SS (Sum of the squares)-regression / SS (Sum of the squares)-Total = 88.745/ 113.751 = .780

Table 3: ANOVAb
Model Regression 1 Residual Total Sum of Squares 6.337 4.260 10.597 df 9 52 61 Mean Square .704 .082 F 8.595 Sig. .000a

a. Predictors: (Constant), PR_packing_perishability, PR_lack_packaging, PR_farm_men, PR_plastic_ crates, PR_care_load_unload, PR_physical_damage, PR_living_organism, PR_foreign_bodies, PR_ washing b. Dependent Variable: Perishability The table 4 provide a full of information about the model. In which we find the slope (or slopes, in multiple regressions). The values of Constant and Predictors are listed as unstandardized values, and their standard errors (Std. Error) and SE (Beta) are in the second column. The standardized coefficient for the predictor in a multiple regression is simple the correlation. Since neither of the predictor variables has a variance inflation factor (VIF) greater than 10 (All VIFs are less than 2), there are no apparent multi-collinearity problems; in 293 other words, there is no variable in the model that is measuring the same relationship/quantity as is measured by another variable or group of variables. From the table 4, the multiple-regression model is depicted as:

y = .473 + 0.136 x1 + 0.054 x2 + 0.100 x3 + 0.122 x4 + 0.055 x5 + 0.141 x6 + 0.118 x7 + 0.046 x8+ 0.073 x9

Table 4: Coefficients
Unstandardized Coefficients B .473 .136 .054 .100 .122 .055 .141 .118 .046 .073 Std. Error .306 .037 .037 .037 .036 .045 .033 .044 .042 .042 Standardized Coefficients Beta .336 .136 .271 .318 .129 .414 .285 .103 .174 1.547 3.688 1.451 2.742 3.381 1.212 4.290 2.679 1.095 1.715 .128 .001 .153 .008 .001 .231 .000 .010 .278 .092 Collinearity Statistics Tolerance .932 .884 .793 .873 .687 .830 .685 .873 .752 VIF 1.073 1.131 1.261 1.146 1.455 1.205 1.460 1.146 1.330

Model (Constant) PR_farm_men PR_physical_damage PR_lack_packaging PR_living_organism 1 PR_foreign_bodies PR_plastic_crates PR_washing PR_care_load_unload PR_packing_perishability a. Dependent Variable: Perishability

Sig.

It is clear that Road conditions causes the physical damage to the fresh produce (PR_physical_damage), Non-removal of foreign bodies causes perishability (PR_foreign_bodies), Lack of enough care is not taken while the loading and loading (PR_care_load_unload) and Lack of effective care during road transport (PR_packing_perishability) are showing insignificant effect on the perishability of the fresh produce as their probability value are higher than the acceptable limit of 0.05. It is concluded that from the table 4, which indicates the significant values of predictors that affect the dependent variable. It is found that Damaged during the harvest by the farm men (PR_farm_men), Lack of effective packaging (PR_lack_packaging), Non saperation of living organism like Bacteria, Fungus, insects etc. (PR_living_organism), Lack of plastic crates during the transportation (PR_plastic_crates), and Lack of cleaning and Washing (PR_washing) variables falls under the impacting as their probability values .001, .008, .001, .000 and .010 respectively

of these issues by optimizing quality, safety and by reducing waste. Effective post-harvest management requires adequate and appropriate cooling and packing facilities, hygienic and speedy transportation, careful handling and adequate environment control. This includes aspects such as appropriate temperature, relative humidity, ventilation and sanitation. Difference in prices between the farmer and the retailer is highest in India when compared with other countries.

7. References
1. Acharya S.S (2005), Agriculture marketing and rural credit: Status, Issues and reform agenda, Area, Production and Yield of Principal Crops in India, Directorate of Economics and Statistics, Ministry of Agriculture 2. CII- Cold Chain Summit 2007, organized jointly by Ministries of Agriculture and Food Processing Industries and the CII, March 2021, 2007, CII, New Delhi 3. Indian Horticulture Database (2009). National Horticultural Board. Ministry of Agriculture, Government of India. 4. Kumar, Praduman and Promod Kumar (2003), Demand, Supply and Trade Perspective of Vegetables and Fruits in India, Indian Journal of Agricultural Marketing, Vol 17(3): 121-130. 294

6. Conclusion
The proper integration of post-harvest technology into marketing supply-chain is critical. Post-harvest management not only means reducing waste but also maintaining the quality but also aim to address some

5. Kumar, P. and Donato B. Antiporta. (2001). Expenditure and price elasticities of food and non-food consumption by income groups: region-wise analysis of India. Working Paper.

FAO/RAPP. Bangkok. 6. Surabhi Mittal (2007). Can horticulture be a success story for India? Indian Council for Research on International Economic Relations

295

Panorama of a Strategic Alliance on Arbitrator Logistics A Peep Into The Chennai Porttrust
Mr.R. Venkatajalapathy, MBA, (Ph.D)
Lecturer, Hallmark Business School, Tiruchirapalli &

Dr. B. Balamurugan

Director, Hallmark Business School, Tiruchirapalli

I. Introduction
There are several instances where the logistics system has become the cause of bottlenecks in the firms overall management. The potential for reducing total cost and for improving the quality of services provided to customers can be increased through the elimination of these bottlenecks. Also, from the social standpoint, an efficient logistics system could offer possibilities to reduce road congestion and environmental pollution, which could result in increased macroscopic economic productivity.

2. 3PL and its functions

Originally, 3PL means outsourcing logistics activities including transportation and warehousing to outside firms, which are not a consignor or a consignee. However, it is not common 3PL practice to outsource a single activity of logistics independently, but to outsource multiple activities from the firms strategic point of view. 3PL (or 3PL provider) has the following features at present: 1. Integrated (or multi-modal) logistics service provider 2. Contract-based service provider 3. Consulting service provider First, a 3PL provider is regarded as an integrated logistics service provider. IT-related activities for controlling goods flow such as order processing, and inventory management, among others are also included in the function of the 3PL provider. However, the 3PL provider need not provide all the services solely. The 3PL provider can outsource some activities to subcontractors. A 3PL provider can be classified into the asset-based and the non-asset-based. The asset-based 3PL provider owns some assets, particularly transport-related assets such as trucks, warehouses, etc., while the non-asset296

based 3PL provider does not own such assets, and usually relies on sub-contractors assets. Examples of non-asset 3PL providers include forwarders, brokers, marketing companies, and information system management companies. Second, the service of 3PL is contract-based. Recently, a contract was written about the way to share responsibilities assuming various situations in detail. Such strict contract would make reliable relationship between the parties, and strengthen the alliance. Third, offering consulting-serv ices to the firms is an important feature of the 3PL. The 3PL provider can make various advises to answer customers requirements concerned with marketing strategy, information system configuration, cooperative transportation, etc.

3. Theoretical Framework
Earlier literatures based on third part party logistics, consider IT as a key factor in the selection of a logistics provider, as it enables coordination across organizational boundaries, integrate suppliers and customers existing to achieve newer levels of effectiveness, efficiency and productivity. (Aghazadeh, 2003; Colson & Dorgio, 2004; Moberg & Speh, 2004; Anderson & Norman, 2002, Lynch, 2000; Langley et al., 2002; Babban & Prasad, 1998). On Time Delivery is another key aspect a prospective logistics user needs to analyse before making the selection. (Mc Ginnis., et al.,1995 & Menon et al., 1998; Effendgil et al., 2008; International Warehouse Logistics Association survey, 2003; Stock et al.,1998; Galtorma & Walters, 1996). Reliability of the firm on the basis of its duration in the logistics business is past performance are key indicators in its selection. (Murphy & Daley, 1997; Effendgil et al., 2008; International Warehouse Logistics Association survey, 2003; Simchi & Levi et al., 2000)

Performance standards and the quality level of service provided by the 3PL provider are key elements that are taken into key consideration(Mc Ginnis., et al.,1995 & Menon et al., 1998; Meade & Sarkis (2002); International Warehouse Logistics Association survey, 2003; Razzaque & Sheng (1999), Thompson(1996), Langley et al., (2002). Geographical Reach of the logistics provider helps in providing to services to various parts of the world in the most effective way. (Colson & Dorgio, 2004; Lieb & Maltz, 1999; Boyson et al., 1999.Also the 3PLs ability to provide assistance with the customs helps 3PLs clients in easy shipment of goods. (Simichi Levi et al., 2000) Unit Operation Cost is another key factor in the selection of 3PL as

that helps in achieving competitive edge in the market. (Effendgil et al., International Warehouse Logistics Association survey, 2003; Stock et al.,1998; Tam & Tummala (2001). Financial Stability of the 3PL is a key factor that goes in its favour; if the firm is financially strong it can weather the hard economic downturns with ease. (Mc Ginnis., et al., 1995, Burt et al., (2004), Anderson & Norman (2002) Boyson et al., (1999). Finally the level of customer satisfaction provided by the 3PL provider in the past is another key factor thats considered before making the final selection of the 3PL provider. (Effendgil et al., Murphy & Daley, 1997; Leahy et al., (1995).

Table 1: Reliability Coefficients for the constructs ( value)

Sr.no 1 2 3 Sr.no 5 6 7 Dimensions Reliability Strategic Partnership Reliability Performance Standards Dimensions Reliability Inventory IT Customer Satisfaction 297 Coefficients 0.841 0.874 0.835 Coefficients 0.843 0.765 0.884

4. Methodology
For the purpose of studying the objectives and to test the hypothesis, a questionnaire was used as an instrument to collect the data. The questionnaire had two parts: the first part to measure the profile of the company, second part to measure the constructs designed. The constructs in the second part captured the factors that part a key role in the selection of a third part logistic provider. Strategic Alliance/Partnership is the key objective of the project, they are analysed against the independent factors. The population for the study was taken from the state of Tamil Nadu. The sample was selected using systematic sampling technique. The total number of respondents to the questionnaire distributed to the various logistics service providers was seventy five. The reason for selecting the state Tamil Nadu for the purpose of research were, (1) it had large number of logistics companies with high expertise in the field, (2) Since the investigator is in Tamil Nadu it is convenient to collect the data in these regions, (3) More significantly the cities in Tamil Nadu have a distinction of being Alpha. Traditionally, the Cronbach coefficient (Cronbach, 1951) has been used to evaluate reliability. The alpha values for the various dimensions are shown in the Table 1. So the items constituting each variable under the study have reasonable internal consistency.

5. Analysis and Discussion

The data collected from the respondents was tabulated and analysed using appropriate statistical techniques in the research methodology. The summary statistics such as average score and standard deviation are performed for the relevant variables to find the level of opinion/ agreement of the respondents on various issues related to the study. The opinion was put under the five points scaling similar to Likert scaling. The results are represented in the following tables with suitable interpretation. The table 2 describes the level of agreeability of the respondents on the various factors that play a key role in setting up a strategic partnership between a firms looking for a 3PL service provider for the purpose of gaining a key competitive edge. It is found that the 3PL providers lay high importance on providing service of the highest quality to their clients (4.27), also they do give due importance in passing on information about the whereabouts any irregularities at the earliest t their clients (4.08), also most of the 3PLs strive for a long term relationship with their clients(4.00). The other important results from the research are that most believe in value based business transactions with their partners (3.99).

Table 2: Summary Statistics- Key for Strategic Partnership S.no Factors Considered Strategic Alliance 1 You strive for a long term relationship with your customers 4 0.637 Average Standard Score Deviation

You believe in value based business transactions with your 3.99 partners You believe in providing service to your partners of highest 4.27 levels You lay high importance for your clients growth
298

0.923

0.92

3.8

1.115

5 6

You play an active role in planning and goal setting of your 2.71 partners You are willing to share the risk associated with the 3 transportation of our goods In case of any irregularities in delivery of goods, in situations like this information would be passed on to your clients on 4.08 high priority basis Valuable inputs would be constantly given by you to improve 3.39 your clients business You help client to increase, just in time capabilities 3.41

0.653 0.637

0.712

8 9

0.914 0.807

They do lay high importance on clients growth (3.8) and they have started incorporating practices such as just in time capabilities (3.41) thus providing their clients strategic edge. The least role the 3PLs play are in the planning and goal setting of their clients ( 2.71). Thus we conclude that the basis for a strategic partnership is providing service of the highest quality level to their clients The table 3 shows the agreeability of the respondents on the various factors that influence strategic partnership between the firms and 3PL service provider.

Table no.3: Summary Statistics- Factors affecting strategic partnership S.no Factors Considered Av e r a g e S t a n d a r d Score Deviation
On Time Delivery 10 11 12 13 You deliver goods as per the set time limit The top management of your firm place high importance on delivering the goods on time You have adequate measures to come up with alternatives to meet our business requirements in case of any accidents In the past one year how many times have you missed in meeting the delivery target? Reliability 14 15 You make constant technological changes to provide the competitive edge through your clients You have constantly provided services of the highest level to your clients in adverse condition 299 3.57 3.77 1.232 1.088 4.07 3.99 3.77 3.17 0.844 1.02 0.764 1.083

Performance Standards 16 17 18 TQM is in practise in your organization, for focusing on meeting all your clients meets Your firm is ISO Certified You have the capacity to provide services to a stateless enterprise Geographical Reach 20 21 22 You have a global presence in all parts of the world You have local offices in international countries You have facilities for allowing cross docking Inventory 26 27 28 You are ready to provide insurance cover for the goods that you transport You have perpetual review of the inventory present in the warehouse You provide quick response to replenish inventory Information Technology Systems You have advanced planning and scheduling (APS) systems for logistics application You use electronic product code (EPC) for product identification You use EDI Transaction sets for the purpose of communication You have a well developed ERP system in place in your firm 3.88 3.51 3.69 0.716 0.828 1.139 3.79 3.89 3.91 0.89 1.047 0.947 3.29 3.4 2.99 0.653 0.944 1.3

29 30 31 32

3.77 3.89 3.68 3.99

0.894 0.847 0.918 1.133

Customer Satisfaction 38 39 40 You have a proper system of handling customer complaints Your firm gives high preference in resolving customer grievances 3.92 4.23 0.693 0.606 0.815

You bring in necessary changes based on the suggestion given by 4.11 the customer
300

On Time Delivery is one of the key factors that goes in the selection of a 3PL, the respondents agree majorly to this (4.07). Also the Services in adverse condition to clients acts an important factor in the selection of 3PL, the respondents agree majorly to this (3.77), ISO certification plays a key factor in determining the standards. The respondents agree majorly to this (3.4), Facilities for cross docking is a key factor in the selection of a 3PL. The respondents majorly agree to this (3.91), Insurance cover for the goods is a key factor in the selection of a 3PL. The respondents agree to this

(3.88), ERP system in IT is a key factor in the selection of a 3PL. The respondents agree to this (3.99) AND Resolving customer grievances is a key factor in the selection of a 3PL. The respondents majorly agree to this (4.23) The Table 4 below shows the factors influencing strategic partnership significantly that need to be considered before selecting the 3PL. The R- square value is .996 and the adjusted R- square value is .995 with the standard error estimate at .03767.

Table 4: Summary Statistics- Influence of Factors on Strategic Partnership Standardized t-value Coefficients 0.661 -4.89 0.444 44.323 -19.229 27.778 -31.367 0.395 17.924 52.313 Significant/Not Significant S S S S NS S S

Sr.no Factor 1 2 3 4 5 6 7 On Time delivery Reliability Performance Standards

P-value 2.26 E-51 5.60 E-29 1.73 E-38 8.95 E-42 0.6939 2.91 E-27 4.65 E-56

P-value 0.001 0.002 0.000 0.000 0.694 0.001 0.000

Geographical Reach -5.24 Inventory ITs Customer Satisfaction 0.012 0.771 0.535

S- Significant (p-value 0.05; NS- Not Significant (pvalue >0.05) It is found from the table 4 that it is significant in six factors and in case of inventory it is significant. It is concluded that strategic partnership is greatly influenced by on time delivery (.001), reliability of the 3PL firm (.002), performance standards (.000), geographical reach of the 3PL (.000), ITs (.001) and customer satisfaction of the 3PL service (.000). The F- value of the regression test is 2238.878, and the significance value i.e. p- value 8.24e-077. 301

Thus we conclude that the six factors: On time delivery, reliability of the 3PL, performance standards, geographical reach, ITs and customer satisfaction affects the strategic partnership between the 3PL provider and its client. 6. Major Findings The findings of the research bring to light the key factors that play a key base in the selection criteria of the 3PL. The main reason a firm opts for a 3PL is set up a partnership, a partnership that will provide it with a real competitive edge over its competitors. The research

tested several factors before concluding on major six factors that are important in the selection of a third party logistics provider. The data collected through the questionnaire was tested using regression analysis that showed the significant amount of influence that the six factors have on strategic partnership between two parties. If a firm wants to achieve its organisational goals that aim at high profits year after year they need to start by having a proper system in place and select the best logistics service provider for their needs, this research has laid down the key to their selection and they include: on time delivery, reliability of the 3PL firm, performance standards, geographical reach of the 3PL, ITs and customer satisfaction of the 3PL service. 7. Conclusion: The issues that challenge businesses today are Rapidly rising fuel costs, the globalization of the supply chain, new security threats, and pressure to be both dynamic and environmentally and socially responsible are forcing companies to be innovative and strategic in their supply chain design and execution. Outsourcing of logistics can be considered as a great option. It has become clear that the combination of a willing company and a capable 3PL can result in outcomes far beyond what are initially perceived as the benefits of outsourcing. A well-run 3PL brings a multi-company, cross-industry perspective and array of skill sets and systems to the table, which can be leveraged by customers with a collaborative mindset and an understanding of how to best complement their own capabilities with those of a 3PL.

References: (1) Aghazadeh S.M. (2003), How to choose an effective third party logistics provider?, Management Research News, Vol. 26, No. 7, pp. 50-58. (2) Aissaoui N., Haouari M., Hassini E. (2007), Supplier selection and order lot sizing modelling: a review, Computers & Operations Research, Vol. 34, No. 12, pp. 3516-3540. (3) Colson G., Dorigo F. (2004), A public warehouse selection support system, European Journal of Operational Research, Vol. 153, No. 2, pp. 332-349. (4) Efendigil T., nt S., Kongar E. (2008), A holistic approach for selecting a third-party reverse logistics provider in the presence of vagueness, Computers & Industrial Engineering, Vol. 54, No. 2, pp. 269-287. (5) Hertz S., Alfredsson M. (2003), Strategic development of third party logistics providers, Industrial Marketing Management, Vol. 32, No. 2, pp. 139-149. (6) Leahy S., Murphy P., Poist R. (1995), Determinants of successful logistical relationships: a third-party provider perspective, Transportation Journal, Vol. 35, No. 2, pp. 5-13. (7) Weber C., Current J., Benton W. (1991), Vendor selection criteria and methods, European Journal of Operational Research, Vol. 50, No. 1, pp. 2-18

302

Analysis of Quality of Work Life (QWL) and perceived public image among the Teachers of Dindigul, Tamil Nadu
A.Sabarirajan, N.Geethanjali, D.Lavanya

1. Introduction
The value of knowledge is different in every culture but good basic education is important in every culture. The role of teachers in the students life is very crucial as they lay the foundation for developing their nature and personality. Today in the fast moving world more and more children are living in the household where both the parents are working, these children rely on their teachers for help, advice and guidance therefore a visionary teacher can play a prominent role in making the future of their students. Teachers are one of the main pillars of a sound and progressive society (Campion College, 2009).A teacher transcends the act of merely passing knowledge and disciplining the student. A proactive teacher can direct a student to lead a fulfilling life beyond the successful career. The teachers must provide a wonderful learning environment for the children, teach them how to interact with others and help them with their daily needs. A teacher will instruct them in basic educational programs, teach them to be creative and provide them with a safe and caring environment to learn and grow. A teacher must also prepare creative activities for the children to complete each day. It is important that creativity is a big part of the school experience and the teachers will prepare various activities for the children to engage in. A teacher must also monitor their development. It is important to know which children are doing fine and which ones may need a little extra help. This will be done by monitoring progress and making notes of the progress of each child. A teacher must be professional yet sympathetic to the student needs. He\ She should Posses an in-depth knowledge on the subject. A good teacher transmits their passion for the subject onto their students in an interesting, clear and concise manner. They must 303

promote and instigate easy communication amongst their students, promoting good class rapport. Effective teachers make purpose and content explicit, plan carefully, use systematic assessment and feedback, make connections, encourage students to think about thinking and model what they want the students to do, in addition to giving clear instructions. A teacher also should look outside the box in an effort to teach her students. She should look for unconventional ways to reach a student who for some reason is not learning the conventional way. Due to these high expectations teachers are subject to high stress level which has been supported by various studies. In a survey assessing the stress levels of various jobs by the Health and Safety Executive, teaching came out top. The report, The Scale of Occupational Stress: further analysis of the impact of demographic factors and type of job, published in 2000, found that 41.5% of teachers reported themselves highly stressed, while 58.5% came into a low stress category, while 36% of teachers felt the effects of stress all or most of the time. This is indeed an alarming state and visibly also the biggest reason for school teachers quitting at a very high percentage or seeking professional help to fight back stress. Quality of work life (QWL), and employee job satisfaction, are increasingly being identified as progressive indicators related to the function and sustainability of business organizations. The rising complexity of the competitive business world and the cumbersome process of implementing effective social laws make ethics a suggested strategic factor in protecting companies from unwanted disasters (Beauchamp & Bowie, 2004; Carroll & Buchholtz, 2006; Ferrell, Fraedrich, & Ferrell, 2008). In parallel to the importance of ethics; QWL and job-related outcomes such as job satisfaction or organizational commitment have been issues associated with human

resource (HR) and organizational development (OD) since the beginning of 1960s (Cummings & Worley, 2005; Leopold, 2005). Writings and research works in management, HR, and OD often link QWL and job-related outcomes to ethics, productivity, corporate social responsibility, or organizational performance (Cascio, 1998; Cummings & Worley, 2005; Dess, Lumpkin, & Eisner, 2007; Lau & May, 1998; Leopold, 2005; Walker, 1992; Wheelan & Hunger, 2006; Yorks, 2005). Brenner (1992) suggested the explicit parts to be a code of ethics, policy manuals, employee training programs/materials, ethics seminars, management speeches, internal control systems, and ethics staff. Regarding quality of work life of teaching profession, it is difficult to best conceptualize the QWL elements (Seashore, S.E., 1975.). (Walton, R.E.,1975.) proposed eight major conceptual categories relating to QWL as (1) adequate and fair compensation, (2) safe and healthy working conditions, (3) immediate opportunity to use and develop human capacities, (4) opportunity for continued growth and security, (5) social integration in the work organization, (6) constitutionalism in the work organization, (7) work and total life space and (8) social relevance of work life. Several published works have addressed the constructs that make up the QWL domain and key elements of QWL programs, Others such as (Pelsma et al.) and (Hart, P.M., 1994.) found that psychological distress and morale contributed equally to teachers QWL. They determined that in the work climate of an occupation, QWL can be assessed by combining the amount and the degree of stress and the degree of satisfaction experienced by the individual within his/her occupational role. (Winter, R., 2000.) Viewed QWL for academicians as an attitudinal response to the prevailing work environment and posited five work environment domains that include role stress, job characteristics, and supervisory, structural and sectoral characteristics to directly and indirectly shape academicians experiences, attitudes and behavior. Based on our review of literature, the following hypothesis was formulated. H1; there is a significant difference in the perception of male and female teachers in their self image in the society 304

H2: There is a significant difference between the expectations and QWL attributes in work environment for both male and female teachers H3: there is a significant difference between the perceptions of male and female teachers about QWL

2. Research Methodology
The samples consisted of 100 teachers from various schools located in Dindigul city comprising of 75 male and 25 female teachers. All of them were graduates. A structured questionnaire was prepared and it consists of attributes checklist to measure their perceptions about public image, a scale measuring their quality of work life. The detailed description of the study is given below. The respondents were presented with 12 attributes having equal number of positive and negative components. The positive attributes were responsible, intelligent, helpful, honest, trustworthy, and dedicative. The negative attributes were selfish, lazy, money minded, inefficient, corrupt, and argumentative. The respondents were asked to describe their public image through a five point Lickert scale. Score 1 given for the opinion never perceived. Score 5 given for the opinion always perceived.

3. Measurement of quality of work life

To measure the quality of work life QWL survey questionnaire of Dhaval and Uyas (1997) which consists of 21 dimensions, was used. The respondents were asked to respond for all the dimensions regarding its importance and its availability in their work life by using licker 5 point scale. A brief descriptive about the 21 dimensions are given below. 1) Acknowledgment: performance. 2) Challenge: An opportunity to achieve more and more in work environment. 3) Dialogue: Transparency in discussion about work related problems. 4) Direction: Awareness of relationship of activities with the organizational vision. 5) Equality: Equal opportunity to everyone in work environment. Recognition for the

6) Fit: The alignment between expectation and its fulfillment at work place. 7) Flexibility: No fixed rules, different approaches can be introduced. 8) Informality: Less emphasis on prescribed form, structure, relationship or established outcome. 9) Invention: An opportunity to do something creatively. 10) Oneness: collaboration and cooperation among the employees of the organization. 11) Ownership: employees can shape their work place as they want. This will maximize the involvement of the employees. 12) Personal development: An opportunity for the workers to develop themselves. It may be a knowledge development or promotions. 13) Purpose: The object toward which one strives or for which something exists; an aim or a goal of an employee. 14) Relationship building: An opportunity for the employee to develop better relationship with superiors and subordinates.

15) Relevance: the relevance of the work compared with the personal goals of the employees. 16) Respect: A perceived image regarding the respect received from superiors and subordinates. 17) Self identity: Awareness and identification with oneself. 18) Service: The perception of the employees regarding the services provided. 19) Support: The assistance provided by the organization for the employees. 20) Validation: Opportunities to see the results of ones work. 21) Worth: Perception of being valued by the organization. The respondents were contacted through their respective principals and the opinions were collected from them. Each of them filled up the questions separately.

4. Results and Discussions

The mean score of male and female teachers regarding their opinion on public image measured through attributes checklists are presented below

Table-I
Mean and standard deviation values of perceived public image across male and female teachers in positive attributes Male Positive attributes Responsibility Intelligent Helpful Honest Trust worthy Dedicative Mean 3.68 3.11 3.01 3.42 309 3.65 Standard deviation 1.35 1.52 1.57 1.34 1.54 1.37 Mean 3.88 3.34 3.23 3.43 3.41 3.84 Male = 3.326 Female = 3.521 305 Female Standard deviation 1.39 1.33 1.37 1.34 1.35 1.36

Average mean value of positive attributes

Table-II
Mean and standard deviation values of perceived public image across male and female teachers in negative attributes

Male Negative attributes Selfish Lazy Money minded Inefficient Corrupt Argumentative Mean 2.13 2.05 1.05 1.02 1.11 1.15 Standard deviation 1.33 1.35 1.3 1.4 1.35 1.4 Mean 2.06 2.01 1.02 1.01 1.03 1.06

Female Standard deviation 1.4 1.33 1.35 1.33 1.32 1.35

Average mean value of positive attributes We compared the mean scores of male and female teachers on all the attributes related to perceived public image. The mean score on positive attributes of both male and female teachers were significantly higher than the negative attributes. The average mean values of positive attributes of male and female teachers are 3.326 and 3.521 respectively. Similarly the average mean score of negative attributes of male and female teachers are 1.418 and 1.365 respectively. There was no significant difference between the perceived opinions of male and female teachers regarding their positive attributes like responsible, intelligence, honest, and dedication. Regarding trustworthy and helpfulness, female teachers mean value is more than the male

Male =1.418 Female =1.365 teachers. There was no significant difference between the perceived opinion of male and female teachers regarding their negative attributes. The findings suggest that the teachers of Dindigul area have an accurate perception about their public image on the whole. Female teachers have more belief in their helpfulness and trustworthy than the male teachers. In the same way the opinions collected from male and female teachers regarding their expectations in quality of work life components and availability of those components in their work atmosphere shows the following results.

Table III
Mean values of male and female teachers regarding their expectations in QWL components and availability of the components Male Components Acknowledgment Challenge Dialogue Direction Expectations 4.04 3.6 3.51 3.6 Availability 4.03 3.51 3.49 3.48 Female Expectations 3.62 3.52 3.48 3.51 Availability 3.71 3.61 3.51 3.49

306

Equality Fit Flexibility Informality Invention Oneness Ownership Personal development Purpose Relationship building Relevance Respect Self identity Service Support Validation Worth

3.7 3.39 3.35 3.48 3.40 3.65 3.01 3.8 3.61 3.65 3.41 3.52 3.6 3.48 3.61 3.58 3.34

3.67 3.4 3.29 3.41 3.38 3.49 3.05 3.31 3.58 3.59 3.38 3.48 3.49 3.39 3.48 3.50 3.39

3.6 3.35 3.42 3.33 3.90 3.48 3.11 3.6 3.48 3.33 3.38 3.58 3.49 3.33 3.41 3.31 3.68

3.58 3.61 3.38 3.31 3.71 3.39 3.02 3.42 3.43 3.41 3.35 3.60 3.20 3.1 3.38 3.03 3.38

In most of the dimensions the expectation of both male and female teachers is significantly more than the availability of the concerned dimensions in their work place. In some dimensions the availability is more than the expectations. There is no significant difference among the opinions of male and female teachers in many of the components. There is significant different in the opinion between male and female teachers in few components like acknowledgement, flexibility, invention, oneness, relationship building. The average mean value of the expectation of male teachers is 3.539 and this is greater than the average mean value of the expectation of male teachers 3.472.

quality of work life of the teachers should be considered as primary factor in schools since they are producing the future generation of India.

6. References
1) Dhaval R & Vyas R Quality of worklife questionare. Tata institue of social sciences. (1997). 2) Urmi Nanda Biswas, Perceived quality of life and public image among police personal:A Study of Gujarat police. 3) Beauchamp, T. L., & Bowie, N. E. (2004). Ethical theory and business. Upper Saddle River, NJ: Pearson Prentice Hall. 4) Carroll, A. B., & Buchholtz, A. K. (2006). Business and society. Mason, OH: SouthWestern, Thomson. 5) Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2008). Business ethics: Ethical decision making and cases. Boston, MA: Houghton Mifflin. 6) Cummings, T. G., & Worley, C. G. (2005). Organizational development and change. Cincinnati, OH: Thomson, South-Western College Publishing. 7) Cascio, W. F. (1998). Managing human 307

5. Conclusion
The management of various schools and institutions should understand the expectations of male and female teachers. Since in most of the dimensions their opinion regarding their expectation and their perception about public image are similar, they dont need separate regulations on gender basis. Common set of rules are enough for administration. Concentration should be given for the areas where male and female teachers have difference of opinion regarding their expectations. The senior officials should interact with the teachers frequently to understand their expectation precisely so that they can provide a better quality environment. The

resources: Productivity, quality of work life, profits. Boston, MA: Irwin, McGraw-Hill. 8) Dess, G. G., Lumpkin, G. T., & Eisner, A. B. (2007). Strategic management. Boston, MA: McGraw-Hill, Irwin. 9) Lau, R. S. M., & May, B. E. (1998). A win-win paradigm for quality of work life and business performance. Human Resource Development Quarterly, 9(3), pp. 211-226. 10) Leopold, J. (2005). Employee participation, involvement, and communications (Chapter 15). In J. Leopold, L. Harris, & T. Watson (Eds.), The strategic managing of human resource (pp. 434-460). Essex, England: Prentice Hall, Pearson Education. 11) Walker, J. W. (1992). Human resource strategy. New York: McGraw-Hill. 12) Wheelan, T. L., & Hunger, J. D. (2006). Strategic management and business policy. Upper Saddle River, NJ: Pearson Prentice Hall. 13) Yorks, L. (2005). Strategic human resource development. Mason, OH: South-Western, Thomson. 14) Brenner, S. N. (1992, May). Ethics programs and their dimensions. Journal of Business Ethics, 11 (5-6), 391-399. 15) Kalayanee Koonmee, Busaya Virakul3, 2007, December, Ethics, Quality of Work life, and Employee job-related outcomes: A survey of HR and Marketing managers in Thai business,

International Society for Quality-of-Life Studies, California, USA, pp: 2-3. 16) Seashore, S.E., 1975. Defining and Measuring the Quality of Working Life. In Davis L.E. and Cherns, A.B. (Eds.), The Quality of Working Life, The Free Press, New York, NY, pp: 10518. 17) Walton, R.E., 1975. Criteria for Quality of Working Life. In Davis, L.E., Cherns, A.B. and Associates (Eds.) The Quality of Working Life, The Free Press, New York, NY, 1: 91-104. 18) Pelsma, D.M., G.V. Richard, R.G. Harrington and J.M. Burry, 1989. The quality of teacher work life survey: A measure of teacher stress and job satisfaction. Measurement and Evaluation in Counseling and Development, 21: 165-76. 19) Hart, P.M., 1994. Teacher quality of work life: integrating work experiences, psychological distress and morale. J. Occupat. Organ. Psychol.,67: 109-32. 20) Winter, R., T. Taylor and J. Sarros, 2000. Trouble at mill: quality of academic work life issues within a comprehensive Australian university. Studies in Higher Education, 25: 279-94. 21) spotlight. http://campioncollege.com. Campion College , 25 02 2009. Web. 13 Jul 2010. http://campioncollege.com/college/ index.php?option=com_content&task=blogse ction&id=8&Itemid=

308

Creating Ecological Value: An Evolutionary Approach From Business to Business

Dr. G. Vijaya Kumar, M.Com. M.B.A., M.Phil., Ph.D
Assistant Professor, Department of Commerce, Sir Theagaraya College, Chennai

S.G. Balaji, M.B.A., PGDIB. M.Phil. (Ph.D), Assistant Professor, Department of Management Studies
Aalim Muhammed Salegh College of Engineering, Muthapudupet, Avadi IAF, Chennai

1. Introduction
The ecological impact of industrial activities already was much debated and acted upon topic in the second half of the 19th century. During this period commonly known as the second industrial revolution monumental changes took place. Innovations such as electricity and the first chemical products reshaped society. Scientific knowledge most notably chemical engineering, was more systematically applied to industrial production, railroads were build that effectively enlarged the markets that a firm could serve. Perhaps most important from an eco-logical perspective this period marked a shift towards a carbon-based economy, as coal and later oil became major inputs as energy sources as well as raw materials for newly developed products. Another major innovation was not technical but organizational. Before 1850 production was predominantly organized in craft shops where craftsmen produced complete products single handedly, or through the putting out system in which home workers would produce products with raw materials provided by merchants who also sold the finished products. In the later part of the 19th century businessmen increasingly brought workers together in factories in order to make use of larger technical equipment. This required the management of a concentrated workforce and as a result new organizational structures emerged which eventually resulted in the shape of the modern firm. This development is of considerable importance as the firm constituted an institutional form in which organizational and technological change interacted to produce new products and more efficient methods of production.

the form of either forward integration or backward integration or both in order to make sure market share is well protected. The Bata India limited makes foot ware and it has a total of five manufacturing facilities across the country and sell the wares through 1250 company owned outlets all over India. Batas stated value as far as customers are concerned is Superior customer service and own retail out let solely to care customers in todays world of virtual business model. 1` The public sector organization Neyveli Lignite Corporation does the opposite of what Bata does. It mines the lignite and uses it for thermal power generation and connects it to main grid and the same in turn is used by state electricity boards that in turn supply to households and the phenomenon is known as backward integration. The vision of the firm is as follows To emerge as a leading Mining and Power Company, continue to be a socially responsible company and strive for operational excellence in Mining and Exploration. 2 Dhirubhai Ambani promoted Reliance Industry progressed by systematic backward and forward integration and became the largest home grown company in a span of 25 years. Vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of vertical integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. 3 The motive behind this form of business model might be due to easy capital mobilization, not wanting to risk business for supply of Original Equipments (OE), for fear of suppliers getting into main stream activity in due course and reduction in profit margin. The old firms focus was one of smooth production since demand existed for most of the goods and cost assumed less significance. For fear of capital flight and 309

2. Business in the Past

Business in the yesteryears was self reliant and inward looking. Growth manifestation for firms often in

home grown firms protection, market remained well protected through licensing and other trade barriers. In the absence of globalization, market size remained small and few players run the industry with cartelization albeit to a very low degree, innovation was seen as luxury and process patent for nation like India stood in the way all the time for new research. Now the product patent is in place for India, firms invest in research and development (R&D). Customers side too was not empowered as it is today due to low literacy and no worthwhile legislation to protect consumer interest. Investors activism was also not significant as the culture of investment in the share trade was with few affluent people in the system. The culmination of it, shaped most firms as an island of operation and no network worth mentioning.

best use of technical competence globally. (Karlsson, 2009)123TCOUnp035aIrtiJ.05iyee1egB078rlg0lion0Sen8r1a0uApa 0t5aNl@i/ The benefit of core competency idea is another reason, firms create a network of suppliers and assemble components and sell in the market. To be more competitive, they need to operate more in an outward/ strategy driven way and develop a strategic architecture to enable their organization to develop the necessary core competencies. It is not easy. It takes a long time and many resources to build exchange relationships that last in our integrated markets. Many resources and skills will be needed to handle relationships, once established. The auto majors in US now confine their operation to assembly, styling and design and both GM and Toyota have a supply chain of components exclusively and now the competition is Toyota supply chain and GM supply chain instead of competition between Toyota and General Motors. The idea of Just-in-time (JIT) is of Japan origin, the inventor Toyota came up with it to reduce work in progress (WIP) and it called for suppliers plant located around the Toyota plant to supply components on a daily basis. JIT is a very effective manufacturing philosophy which is universal in nature encompassing all aspects of manufacturing. (A.Z.Keller, 1993) The result is formation of business ecosystem for Toyota with large supplier network. What came along globalization desire is cashing on the scale advantage and inevitably the size of the denominator rise resulting in cost advantage. Economies of Scale (EOS) remain an essential determinant for cost-efficient production, and that without sufficient EOS; high levels of flexibility cannot alone translate into world competitive production. (Husan,1997). Cost concern, a phenomenon world witnessing from late 80s onwards due to crumbling of tariff and non- trade barriers. It can become a critical factor if they create prohibitive costs or difficulties. (Allan Zimmerman , 1999)

3. Business Today
Marketing model has evolved from more for more in uni-polar world to more for same in the bi- polar world and now in more for less in tri- polar world. Now US is one single market, European union is another market and it is kept in equilibrium by Asia dominated by India and China and in this borderless world. Empowered customers want more features for less sum and there is no reversal of the sellers market that world saw just before World War I and II. In the current buyers market, product differentiation has reached a point of no return and still to stay viable, companies expand the scope of service and forced to have a network of service providers. The expanding nature of service around the product is one reason for the concept of network set to grow. The market now can be called superpoly. Superpoly is a development of the concept of monopoly to accommodate market structures in networked and knowledge-intensive economies characterized by a high underlying level of consumer choice. (Rowley, 2009) There the economy benefits the customers. The network industry under unregulated monopoly would yield more social welfare than in the case of several producers in the industry, and would therefore be socially preferred. (Spiegel, 2008) Net works is developed as a major operating unit and are taking over as the managed unit from the firms themselves. The firms and the networks which they are operating in are building hierarchies of technology for 310

4. The Underpinnings of Business Ecosystem

The understanding of existence of business ecosystem came in the year 1993 by James F. Moore by his award winning article in Harvard Business review

(HBR). It is a system with group of organizations crossing many industries working co- operatively and competitively in production, customer service and innovation. Academically, the study of economic ecosystem has traditionally been the province of economic geographers themselves a complementary combination of economist, urban and regional planners and development experts, and geographers. Now it is in the domain of management due to the growing status of business ecosystems. Organizations like in biological ecosystem are characterized by a large number of loosely interconnected participants who depend on each other for their mutual effectiveness and survival. (Iansiti, 2004) The need for co- operation arises because OE supply for example to do well, both the buyer and the seller have to dovetail perfectly; else the outcome suffers. Components design is sent from the buyer and the capital goods are made by the seller accordingly and as firms do not rely on one single source and thus multiple players supply the same parts at a competitive price to match the others. As all end products keep adding feature after feature to induce consumer to buy, it calls for innovation both at the back end and front end. The rise of personal computer is a revealing example of ecological business development. In the 70s , a new technology the microprocessor emerged with a potential to spawn vast new applications and dramatically reduce the cost of computing. Yet this innovation sat dormant for several years. But Apple and Tandy Corporation used the microprocessor which changed the fate of microprocessor and co- evolved better and better. Similarly a tire company may switch over to steel redial as innovation and the OE supplier steel is forced to innovate rust free steel for more tire durability. Each industry to safe guard its interest , has its own trade association and bound by its rule and yet co-operate as a buyer or supplier and this independence is what keep them as loosely interconnected. It may sound ironical due to being interconnected and yet not tightly. Firms in the system strive for competitiveness and thus seek innovation constantly resulting in co evolving over a period of time. (Moore, 1993). Technology convergent products to seek a business eco system and work for creation of it. Todays computers hold calculators, typewriters, e mails, printers and all technology into one product. This calls for industry 311

collaboration. Mobile phones to hold camera, FM radio and camera and they also have their own network for customer services. Technology has become a synthetic term for a number of techno-socioeconomic forces at play in our material world (John Thackray, 1983). This appears to be the trend in the future as products on their own have reached optimal differentiation and for customer appeal, technology convergence is the only option. Generally the business eco systems are the result of cost containment, technology sharing, and globalization of brand. Given the growing increase in size, power and dominance of the MNCs, the locus of sovereignty is currently being questioned. (Richard L. Brinkman, 2002)

5. The Metaphor of Biological Ecosystem

The nature as in business, have many species live cooperatively and competitively in production. The players have a shared fate meaning one players prosperity is contingent upon the prosperity of the biological eco system. For example some lichens are cyanolichens and they contain N-fix ing cyanobacteria (blue algae). The cyanobacteria releases 50-90% of the nitrogen fixed, as ammonia, to the fungus; it also releases glucose. It in turn receives shelter, water and nutrients. The process is mutual and co-evolving. Similarly a large number of animals depend on the Prairie dogs for food and shelter. Their burrowing activity churns up the soil to enhance nutrient cycling and reptiles, mammals and even birds use their as home. The biological ecosystem is a self regulated one and is done through resource-sharing, co-evolution and optimization as happening in business eco system. In the case of former, it happens where spittle bugs in tropical rain forest suck water containing nitrogen and sugars and spit out the excess water with sugars, thereby keep the dry litter at the base moist and sugar rich that in turn enhance decomposition and nutrient cycling. Business ecosystem is also regulated, co- evolve and seek optimization of shared resources. The health of the ecosystem is sustained by the presence of the crucial hub that assumes the key stone function of maintaining the ecosystem health. For example sea otter by consuming large numbers of sea urchins, left unchecked, sea urchins overgraze a variety of invertebrates and plants,

including kelp, which in turn support a food web that is the engine for near-shore productivity. Microsoft market capitalization range between 20 to 40 percent of the combined market capitalization of soft providers yet it is singly responsible for the value creation for its ecosystem by playing the role of keystone as it happen in biological ecosystems.(Marco Lansiti and Roy Levien,2004) The established ecological system is a self-contained system, stable, active within itself, moderate diversity, well defined boundaries ,low exchange of species and change is driven within and the standard business has similar attributes as found in the established ecosystems. E- Commerce and new natural ecosystem both have imperceptible boundaries, in a state of flux, highly diverse and interactive. They are open to outside influence and system interaction drive change. There are three characteristic types of species behavior and roles in eco systems depending on (a) on the relative size or abundance of the species in the whole system and (b) on the particular strength of interaction of the species has on productivity , diversity and sustainability of the entire system. They distinguish Dominator species Keystone species

other species that originally populated the habitat. The key stone actions are defeating of dominants and competitors i.e. the protection of niche players mutualism i.e. the direct support of niche players System enabling i.e. enabling energy flows or the exchange between community members. The stability of the eco system hinges on resistance and resilience. The first concept refers to the system ability to fend of external disturbances and invasions into the system. The second concept refers to the degree to which an ecosystem will return to its original position after an exogenous shock occurs and the speed of adaptation. Indian Railways that began in the year 1832 now has 63,028 route kilometers, transporting just under five billion passengers and moves 650 million tons of freight annually. It has employee strength of 1.6 million. The Rail road business is state owned and nation economy heavily depends on it. No external disturbance what so ever can alter its monopoly today and to have one similarly by a rival, the cost is prohibitively expensive. A person in 1990 when wants to buy a Ford car, would typically read a magazine or journal about the type of vehicle desired, visit a number of dealerships to look at various models; visit one dealer to test drive the car; discuss; purchase options such as price, color and financing with the dealer; review consumer reports on the car; visit banks to establish a line of credit; and make a purchase. The same person would approach the purchase of a car differently now. This time he goes on line to research the car and investigate the dealer invoice price and manufacturers suggested retail price (MSRP) for the base car and options. After selecting his options and determining the price he is willing to pay, he would go back on line to advertise the required loan and gets bids. Then he would go to a dealership to inspect the engine and test drive the car. Online again, he would advertise details about his chosen car and how much he would pay, asking dealers to bid for business. Based on the responses, he would make his final decision on the vehicle, dealership and the loan source. This is the resilience of the auto business in the net worked world. ( Sanjiv Gossain, 1998) 312

Niche species Dominators strive to disperse over major parts of the eco system and occupy maximum nodes in the systems network and in doing so reducing species diversity. Key stone in architecture parlance in the top stone on the arch and its removal let instant collapse of the structure as the consolidation is held at the helm. While in biological systems keystone let enough space for other species to grow and proliferate, the control is held by the key stone species; in the end it reduces the competitive stress on the niche species. Due to this a higher diversity is ensured. Niche players are small and impact the eco system minimal. The keystone concept is introduced by Paine, a biologist who carried out studies in aquatic ecosystems. In the study by him, he artificially removed starfishes that preyed on mussels from a marine community. As a result the mussels proliferated heavily and aggressively covered the available living space there by simultaneously repelling

6. Business Ecosystem
In a business eco system, companys co evolves capabilities around a new innovation: they work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next around of innovation. For instance, Apple computer is the leader of an eco- system that crosses at least four major industries: Personal computers, consumer electronics, information and communications. The Apple ecosystem encompasses an extended web of suppliers that includes Motorola and Sony and a large number of customers in various market segments. A business ecosystems scope is the set of positive sum relationships (symbiosis) between actors who work together around a core technology platform. Irrespective of an organizations individual strength, all actors in a business ecosystem are connected and share the success or failure of the network as a whole. Take the case of reverse osmosis whose water treatment technology has an eco system of companies involved membranes, pumps, filters, piping and services after the sale. The business is collective task and growth or decline affects all the players.

in fierce competition with in it, which obliges the firms to elevate their standards of performance. Aggressive rivalry is induced by the bargaining power of customers who may be in contact with several firms within the cluster. These connections also encourage the flow of information and diffusion of innovation.

8. Marketing and Business Ecosystem

Ravi S. Arhrol and Philip Kotlers Marketing in the network economy Written in the year 1999 in Journal of Marketing special issue is important in the business circle as the shift is paradigm in nature. According to them, marketing half a century represented the manufacturer but now they represent the customer instead. The hierarchal organizations are disaggregating into a variety of network forms. The twenty- first century is shaping up to be a knowledge driven society in which the basic economic resources is not materials, labor, or capital but knowledge. . Firms in the past built a strong center of control, unity of purpose and many layers of management. AT&T in the past had 16 layers to have a good control of the activity and Ford once had a sheep farm for its car seat fur requirement. For fear of profit erosion and technology secrecy, all the activities were carried out by the brand owners. Now with the focus of core competency let a creation of network around them for supplies. Without a strong network, it is not possible to practice Just-in-time by the inventory conscious firms at all. Now the competition in the auto industry is not between the leader Toyota and General Motors but between supply chain networks of these two firms. Nike or Galoob Toys are gone one step further and they do no manufacturing and concentrate marketing alone. The information highway since make paperless transaction possible and the optical fiber enabling data transfer speed faster than sound, response time of business too have gone many fold. The network phenomenon is in four ways as internal, vertical, inter market and opportunity network. In a knowledge society with dynamic industries, the task is to create organizations that are maximally open to the environment and can seek a state of more or less continuous adaptation to the non-static environment. These knowledge firms have weak hierarchies, dense lateral connections, low departmental walls and 313

7. The Concept of Value Network

According to Mariotti (2002) a value network is an interactive combination of information machines and people. It is a co-operative structure and members tasks are strictly defined and generally not expected to compete with other members. The whole idea of value network arises from a notion that a single firm cannot produce the whole product by itself and needs other firms with different capabilities to complement the product. Here shared knowledge is central to relationship. The value chain refers to sequential flow while network implies multidimensional connectedness. (Turati and Ruta, 2002). This connectedness help in transferring order quantities, economical figures, design specifications, supply time line and quality measurements. It is operational information and all members get the information. However there should not be any confusion with similar firms in a particular location. Bangalore in India is having an Information Technology Enabled Services (ITES) cluster, Silicon Valley in U.S has a cluster of e commerce firms, Detroit has an auto components concentration and its power lies

openness to environment. In the case of vertical network model, the focal organization does the integrator role and manufactures only few components. Nike and Cisco follow this model and energy is rather diverted to co ordination and customer relationship. The third one inter market synergy aims to have business that can help each other and benefit. In India ITC a sole cigarette seller three decades back, now sells biscuits taking advantage of the selling network created over years. The hair care division sells Vival shampoo again thro the same retail network. It sells classmate brand note books again through the same sales network. The internet revolution has changed the way we do business. It is paperless, networked, collaborative and operational oriented.

development through its network of exchange Relationships. Journal of Business and Industrial Marketing , 16 (7), 574-599. 3. Husan, R. (1997). The continuing importance of economies of scale in automotive industry. European Business Review , 9(1), 38-42. 4. Iansiti, M. .. (2004). The keystone advantage. Massachuates : Harvard Business School Press. 5. Karlsson, C. (2009). International journal of operations and production management , 2(7). 6. Mariotti, J. (2002). The value network . Executive Excellence , 19. 7. Moore, J. F. (1993). Predators and Prey: A new ecology of competition . Harvard Business Review , 77. 8. Richard L. Brinkman, J. E. (2002). Corporate power and the globalization process. Corporate power and the globalization process , International journal of Social Economics , 29( 9), 30-752. 9. Rowley, J. (2009). Superpoly: monopoly in the twenty-first century. Management Research News , 32(8),751-761. 10. Sanjiv Gossain, G. K. (1998). Reinventing the value: The new business eco system. Strategy and leadership , 26 (5), 28. http://www.bata.in,

9. Conclusion
Nature seems to be a good teacher even today and the biological eco system that work for stability all the time, has a valuable tact for business too. As progress is attractive to all, the value of trust and collaboration. The transformations that are taken place in business leads to the ultimate benefit for the business, customers and other stakeholders. This situation helps to grow business and service industries and leading to grow your GDP.

10. References
1. A.Z.Keller., A. (1993). Just-in-time manufacturing system: A literature review. Journal of Industrial Management and Data system , 93 (7), 22-32. 2. Awuah, G. B. (2001). A firms competence

http://www.nlcindia.co.in , http://www.ril.com,

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Exit Interviews & Their Empanelment: The Current Scenario

Dr. M. Sureesh Baabu Professor, Department of Management Studies, Sri Venkateswara University, Tirupati (Ap) Radha Mohan Chebolu
Senior Faculty Member, Icfai Business School (Ibs), Mumbai-4000 76 (India)

S.G.Balaji Assistant Professor, Department of Management Studies, Aalim Muthmmed Salegh College of Engineering, Avadi Iaf, Chennai 1. Introduction
Exit interviews are interviews conducted with departing employees, just before they leave. From the employers perspective, the primary aim of the exit interview is to learn reasons for the persons departure, on the basis that criticism is a helpful driver for organizational improvement. Exit interviews (and prior) are also an opportunity for the organization to enable transfer of knowledge and experience from the departing employee to a successor or replacement, or even to brief a team on current projects, issues and contacts. Good exit interviews should also yield useful information about the employer organization, to assess and improve all aspects of the working environment, culture, processes and systems, management and development, etc.; in fact anything that determines the quality of the organization, both in terms of its relationship with its staff, customers, suppliers, third-parties and the general public. Many employers ignore the opportunity that exit interviews offer, chiefly because exit interviews have not been practiced in the past, and starting them is a difficult initiative to undertake, given the potentially subjective and fuzzy nature of the results; the time involved; and the unspoken corporate urge to avoid exposure to criticism. Exit interviews are nevertheless a unique chance to survey and analyze the opinions of departing employees, who generally are more forthcoming, constructive and objective than staff still in their jobs. In leaving an organization, departing employees are liberated, and as such provide a richer source of objective feedback than employed staff do when responding to normal staff attitude surveys. As ever, corporate insecurity and defensiveness can be an obstacle to implementing exit interview processes, 315 so if the organization finds it difficult to begin the practice as a matter of general policy, managers can still undertake their own exit interviews locally with their own staff as and when they leave. From the departing employee interviewee perspective, an exit interview is a chance to give some constructive feedback, and to leave on a positive note, with good relations and mutual respect. Recrimination, blame, revenge and spite are destructive feelings and behaviors, so any temptation they might have to go out all guns blazing. Departing employees should be calm, fair, objective and as helpful as possible. In the future departing employees may wish to return to the organization (situations and people change..) and may cross the paths of your ex-colleagues, managers in the future. The adage about treating people well on their way up because they might meet them on the way down applies just as well on their way out. The exit interview is an opportunity to shake hands and leave friends, not enemies.

2. Exit Interviews: Aims and Outcomes

They provide an opportunity to make peace with disgruntled employees, who might otherwise leave with vengeful intentions.

Exit interviews are seen by existing employees as a sign of positive culture. They are regarded as caring and compassionate - a sign that the organization is big enough to expose itself to criticism.

Exit of

interviews managing

accelerate and and

participating experience organizations.

managers understanding people

Hearing and handling feedback is a powerful

development process. Exit interviews help to support an organizations proper HR practices. They are seen as positive and necessary for quality and effective peoplemanagement by most professional institutes and accrediting bodies concerned with quality management of people, organizations and service. The results and analysis of exit interviews provide relevant and useful data directly into training needs analysis and training planning processes. Exit interviews provide valuable information as to how to improve recruitment and induction of new employees. Exit interviews provide direct indications as to how to improve staff retention. Sometimes an exit interview provides the chance to retain a valuable employee who would otherwise have left (organizations often accept resignations far too readily without discussion or testing the firmness of feeling the exit interview provides a final safety net). A significant proportion of employee leavers will be people that the organization is actually very sorry to leave (despite the postrationalization and sour grapes reactions of many senior executives to the departure of their best people). The exit interview therefore provides an excellent source of comment and opportunity relating to management succession planning. Good people leave often because they are denied opportunity to grow and advance. Wherever this is happening organizations need to know about it and respond accordingly. Every organization has at any point in time several good people on the verge of leaving because they are not given the opportunity to grow and develop, at the same time, ironically, that most of the management and executives are overworked and stretched, some to the point of leaving too. Doesnt it therefore make good sense to raise the importance of marrying these two situations to provide 316

advantage both ways - ie, facilitate greater delegation of responsibility to those who want it? Exit interviews are an excellent catalyst for identifying specific mistakes and improvement opportunities in this vital area of management development and succession. Exit interviews, and a properly organized, positive exit process also greatly improve the chances of successfully obtaining and transferring useful knowledge, contacts, insights, tips and experience, from the departing employee to all those needing to know it, especially successors and replacements. Most leavers are happy to help if you have the courage and decency to ask and provide a suitable method for the knowledge transfer, be it a briefing meeting, a one-to-one meeting between the replacement and the leaver, or during the exit interview itself. Actions resulting from exit interview feedback analysis fall into two categories: 1. Remedial and preventative (improving health and safety issues, stress, harassment, discrimination etc. 2. Strategic improvement opportunities, (improved induction, management or supervisory training, empowerment or team building initiatives, process improvement, wastage and efficiencies improvements, customer service initiatives etc)

3. How Exit Interviews Should Be Conducted?

Exit interviews should, where possible, be conducted face-to-face, in private and by Line Managers, who have attended the Universitys Recruitment and Selection Training Course in order that they understand good practice regarding interview techniques. Face-to-face interviews enable better communication, understanding and interpretation and provides a better opportunity to probe and get to the root of any sensitive matters. The style of exit interview is different for someone who is being asked to leave, retiring, being made redundant, dismissed etc, compared to an employee leaving to

move on to another employer. However everyone who leaves should be given the opportunity of an exit interview, as the University can learn something from every situation. In terms of managing the interview the following tips may assist to get the most from the interview. Participation in exit interviews by the employee leaving is voluntary. They cant be compelled to attend exit interviews. Offering a questionnaire form can be an alternative, which again must be voluntary. Organization cannot compel a departing employee to give knowledge that is in their head, although the return of files, paperwork and material is normally something that an employer rightfully can insist happens. In any event, a positive constructive, grownup approach is the best assurance of a happy outcome and an optimal transfer of knowledge and contact names, etc., should this be helpful, which often it will be. Ideally the organization should have a documented policy stating how exit interviews happen, when, and by whom. Some organizations hand the responsibility to a skilled interviewer in the HR or Personnel department. Alternatively line-managers or even supervisors can conduct the interviews. Interviewers need to be trained to interview, just as for normal job interviews. All types of interviews are sensitive emotional situations which require ability and maturity to manage properly, especially if interviewees are anxious or volatile. In large organizations HR or Personnel department should be responsible for designing the process, issuing guidelines and documentation, collecting results data, analyzing and reporting findings, trends, opportunities and recommendations, especially including anything relating to health and safety, or employment law and liability. If a questionnaire is designed or either exit interview form which will be used as an input document towards central analysis it is a good idea to convert questions wherever practicable into a score able and/ or multiple-choice format, which makes analysis far easier than lots of written opinions.

3. Interpret, reflect and understand (interviewers can understand someone without necessarily agreeing) 4. Keep calm, resist the urge to defend or argue - their aim is to elicit views, feedback and answers 5. Ask open questions, unless they require specific confirmation about a point

5. Important tips for Interviewee

When employee decides to leave their current employer they may also have to face such an interview. So here are some tips that should help employees in handle their exit interview. 1. Prepare before appearing: Employees should prepare yourself for an exit interview like you would for a recruitment interview. They should take small notes about the things they would like to say, issues they would like to raise. 2. Avoid derogatory remarks: They should avoid making derogatory remarks about their boss and colleagues. If they think providing feedback about certain things is important, focus on the situation, what they expected, what actually happened and how it could have been made better. Employees should not go on a rant. 3. Knowledge transfer: One of the basic purposes of the exit interview is to make knowledge transfer easier. This becomes more important if a long-time employee decides to leave the company. So, they should help their employer by transferring whatever knowledge they have gained during their employment with them and information that could be critical for them. This makes it easy for their replacement to take over their responsibilities and will leave their employer appreciative of your effort. 4. Provide feedback only if it will be used: Many of departing employees might harbor a lot of ill feeling towards their employer but if they think that your feedback is not going to change anything, they should rather avoid it. They will have to judge the situation and talk accordingly. 317

4. Important tips for Interviewers

1. Listen rather than talk 2. Give the interviewee time and space to answer

5. Legal cases: If employees decide to leave their employer for a legal reason such as harassment or discrimination, they should talk to their lawyer and ask them how to handle the interview.

6. Exit Interviews an Eye Opener for Organizations

Exit interviews are not merely a formality but can be proved as an eye opener for organizations. There are many examples to justify this fact which are as below. 1. In 2007, an Indian automotive firm had recruited a US-based expat as their R&D head. However , he soon found out that he was expected to work on their idea of rolling out a hybrid car and not on the overall R&D platform. He tried to convince them that India was not ready for such a car but to no avail. He left within a few months but made it clear in his exit interview that the companys plans for a hybrid car would go kaput. The auto major soon conducted a survey , which according to an industry expert, was triggered by the exit interview and found out that the hybrid car would indeed be ahead of its times. The plan for the car was postponed by three years. Although exit interviews figure in almost every firms list of protocols, they have always been regarded as an outlet to release pent-up feelings towards the company. Most think these grievances would join a pile of closed files. 2. Retail giant Titan- Its chief human resource officer (CHRO) S Ramadoss says, Some of the exit interviews in our retail sector have shown that working women find it difficult to stay back after 7 pm, so we will make our timings more flexible from next year. This is not the first time that Titan has made policy changes triggered off by exit interviews. Last year, they introduced an education policy under which employees could pursue an MS/ MBA degree with BITS-Pillani. 318

3. NET APP -Their exit interviews are outsourced to a Canadian firm Exit Check. A couple of years back, the firm realized that most exit interviews stated the need for internal role changes which may lead to better career growth for an individual. It decided to sensitize the managers and ensured that no matter how good an employee was in a current role, he needed to be rotated. Now, out of the overall recruitments, around 25% are done internally vis-a-vis the earlier 18%,. 4. Exit interviews helped IT solutions company MindTree realise two years back that many women quit their job after the birth of the second child. MindTree decided to make its policy more flexible. Head of people function at MindTree, Babuji Abraham , says, We decided to come up with a policy where women employees can take a year off. And now, we are extending the same to men too. There are cases where employees have to go and look after their ailing parents and this allows them to do so. 5. Sameer Karayi, a consultant with Stanton Chase International, worked with MphasiS as a team manager till 2002. During his exit interview, he told his reporting head that the lackadaisical approach of employees resulted in an unprofessional work atmosphere. MphasiS managed to retain him for six months during which he was pleasantly surprised to see that some of his pointers got implemented. For Karayi, these efforts spoke a lot about the firm and his exit interview.

7. Exit Interviews & Knowledge Transfer

The period between the decision of the employee to leave, and the actual departure date offers a crucial opportunity for the University to gather important information and knowledge from the employee. This is especially relevant in roles where the employee has accumulated a significant amount of knowledge and personal connections. The knowledge of the departing

employee has immense value, and the recovery of it is often overlooked altogether until the employee has departed although much depends on the atmosphere surrounding the departure. When any employee resigns, or a decision is made for a person to leave for any reason, always ask: Should we spend some time thinking about how to enable knowledge transfer? The leaver could be encouraged and enabled to hold a briefing meeting, which all interested parties, including the persons replacement if possible, can attend and learn what they need to know.

employee attitudes and behavior, has the potential to become a valuable tool to help reduce turnover and increase employee satisfaction and commitment. In turn, an effective reduction in turnover has clear economic and organizational benefits that can more than pay back the investment made in an exit survey system.

10. References
Exit Interviews: Revealing Stories of Why People Are Leaving Church, William D. Hendricks 1. How Effective Executives Interview by Walter Robert Mahler (Paperback -Jan 1976) 2. When its time to say goodbye: how to conduct effective exit interviews.: An article from: Hardware Retailing by Claire Sykes (Digital -Oct 31, 2007) -HTML 3. Exit interviews as a tool for examining turnover. (Managing): An article from: Security Management by Lin Grensing-Pophal (Digital -Jul 28, 2005) HTML 4. Baker, B. Alan Moores Exit Interview. 5. exit interview. (n.d.). Retrieved august 2010, from www.jobsearchtech.about.com: http:// jobsearchtech.about.com/cs/interviewtips/a/exit_ interview.htm 6. exit interview. (n.d.). Retrieved august 2010, from www.en.wikipedia.org: http://en.wikipedia.org/ wiki/Exit_interview 7. Exit Interview Policy . (n.d.). Retrieved august 2010, from www.oaktraining.com: http://www. oaktraining.com/Policies/Exit-Interview.html 8. Exit Interview Policy and guidance notes for managers. (n.d.). Retrieved august 2010, from www.sheffield.nhs.uk: http://www.sheffield.nhs. uk/policies/resources/exitinterview.pdf 9. exit interviews and knowledge transfer - tips for employees and employers, sample questions and answers. (n.d.). Retrieved august 2010, from www.businessballs.com: http://www. businessballs.com/exitinterviews.htm 319

8. Knowledge Transfer Questions

In advance of the exit interview, start thinking about asking these questions. How might we benefit from your knowledge, experience, introductions to your contacts, etc., prior to your departure? Would you be happy to take part in a briefing meeting with managers/replacements/successor/ colleagues so that we can benefit from your knowledge and experience, prior to you leaving? What can we do to assist you to pass on as much of your knowledge and experience as possible to your colleagues prior to your departure? How and when would you prefer to pass on your knowledge?

9. Conclusion
Exit is just as important as the procedures one uses while hiring. Handled in a professional way, exit practices can be constructive, useful and improve your work environment and above all add to retention. Exit Interviews have not been practiced in past. It is a difficult initiative to undertake as corporate are still resistant towards exposure to criticism. Corporate insecurity and defensiveness acts as an obstacle. According to a survey only 4% of Organizations are following a structured pattern of conducting exit interviews. A well-structured plan of exit interviews, in combination with other HR initiatives related to maximizing

Mental health among private and public sector employees A comparative study
R. Narayanan
Assistant Professor of Business Administration, Management Wing, Directorate of Distance Education, Annamalai University, Annamalainagar 608 002, Tamil Nadu, INDIA.

Dr. M. Syed Zafar

Professor and Head, Management Wing, Directorate of Distance Education, Annamalai University, Annamalainagar 608 002. Tamil Nadu, INDIA.

1. Introduction
Mental health refers to adjustment of one individual to oneself with a view of attaining maximum effectiveness, satisfaction and cheerfulness. Also this term refers to the ability to face and accept the relatives of ones life. This will prove the study is needed in the present context. In short, mental health refers to a positive state and it is related to quality state and it is related to quality of life. According to psychologists, mental health refers to capacity of an individual to what extent one can make personal and social adjustments. The mental health is related to both social life and personal life. In Sutherland et al. (1953) reported that the joint goal of all types of education is mental health. It aims at developing the growth of both intellectual and emotional potentialities of an individual in an intricate and complex culture. According to Stevenson et al., (1999) the ability of a mentally healthy person is to use his or her talents to satisfy his or her fruitful and purposeful objectives is termed as personal goal. Principles of mental health are discussed below:-

4. Characteristics of a mentally healthy person

A mentally healthy person must know well about his motives, desires, strong points and weakness. He must be capable of accepting his shortcomings. He must have self-respect. He must also feel secure in a group and have cent percent self-confidence. He must have sense of personal security. He must realize and understand peoples motives, objectives and problems. He must be capable of facing relations rationally and effectively. He must show emotional maturity. He must have rational attitude towards his health problems. He must be capable of thinking clearly and constructively in solving his problems.

5. Dimensions of Mental Health

Marie Jahada (1958) has described the various dimensions of mental health while discussing the importance of positive mental health. He has suggested the following categories with a view to understand the nature of mental health. An attitude towards ones self in which introspection leads to acceptance of weaknesses and egoism. One must be motivated towards his or her inner ability. One must develop growth in self-realization.

2. Maintenance of sound physical health

It is well known that strong mind provides a sound body. This can be achieved by adopting several aspects, including suitable diet, enough rest, good recreation and proper exercise. Replacement of worries by plans :-Worry plays a vital role in a mentally poor health person. It can be removed by replacing it with a workable successful plan.

6. Conceptual frame work

Dutt (1966) studied the psychological and educational implications on mental health. Studies were made to relate self surrender mechanism with mental health and strength. Mathew (1975) did research in order to find out the 320

3. Self-acceptance

One must realize the importance of self-acceptance. He must also realize his own and others limitations.

relation between the factors such as anxiety and the multiple roles of the working women. These working women were found to possess anxiety depression mania and inferiority complex and they were also found to be more anxious and more depressed than non-working women. These working women experience less inferiority complex than those who have single and dual roles. Hence, it is inferred that the working womens performance had some definite impact on their mental health. The influence of various factors, including interest, mental health and attitudinal variables on the three levels of academic achievement was examined and analyzed by Barreti Fuches and Meadow (1976). They selected 239 university students for their investigation and found that the two factors, viz., interest and mental health could be related successfully and positively to their academic achievements. Bhan (1983), contrarily did research on a group consisting of 293 male engineering and 254 male nonengineering students and compared their mental health characteristics. The results reveal that the engineering students were found to possess superior mental health than the non-engineering students. Sinha and Bhan (1983) carried out a research study of mental health with a view of assessing their mental health and to determine the characteristics of psychosocial dynamics.

comprised of mostly men with varying level of years of experience in the same organization in both private and public. Some were married and some were yet to enter the bond. 10. Tool used for the study :Trier Personality Inventory (TPI) for mental health. Peter Backer (1989) discovered this method Trier Personality Inventory was used with a view to assess mental health of different types of people. This instrument contains 120 statements. These 120 statements are grouped into nine sub-statements. Among these nine sub-statements, one is mental health. In this instrument, 20 statements are provided in order to assess mental health. These 20 statements are given in jumbled order. Some of these are positive and some are negative. Procedure followed to score the response :The mental health tool contains twenty items. For each item, four ratings are given as :i) ii) iii) iv) Always Often Sometimes and Never

For a positive statement, the respondent who answered Always got four marks, Often got three marks, Sometimes got two marks and Never got one mark. However, for a negative statement the respondent who answered always got one mark, often got two marks, sometimes got three marks never got four marks. The questionnaires were given to individual employees who come under the sample and oral instruction was given clearly. The respondents took few days to answer the questionnaire. The filled in questionnaire were collected back from their work spot and processed further. (Questionnaire administered is given in the Appendix)

7. Objective

This study aims to find out the mental health among private and public sector employees

8. Hypothesis

Private and public sector employees do not differ significantly in their mental health.

9. Methodology

Sample :This is an empirical study and primary data were collected from a sample of 100 employees (50 from private and 50 from public sector employees). Stratified random sampling method was used. The sample 321

11. Statistics used

t-test was used to interpret the obtained data.

13. Result and Discussion Table - I t-test for mental health between private and public sector employees Group Private Public N 50 50 Mean 15.41 11.37 SD 3.17 1.98 t-value 2.17 LS 0.05

Hypothesis : Private and Public Sector employees do not differ in their mental health
From the obtained result it is noted that private sector employees scored higher mean values (15.41) than public sector employees (11.37). This mean difference is statistically proved by the obtained t-test (2.17) which is significant at 0.05 level. Hence the null hypothesis is rejected. In fine the analysis leads to the conclusion that private sector employees have better mental health than public sector employees. Both private and public sector employees must try to focus on their accomplishment rather than on your short-comings. By discarding the negative beliefs and should have positive thinking. Both private and public sector employees can reduce their tension by becoming more organized both at work and family. They shall adopt methods for keeping track of commitments due dates and events. Both private and public sector employees shall have proper planning and effective time management. They may allot some specific time to their family members and household commitments. Both private and public sector employees can manage their stress well by adopting interaction and interpersonal communication. Both private and public sector employees can have involvement and enjoyment in their work. Sense of humour and mental equanimity them ahead in their personal relationship. Both private and public sector employees can develop problem solving skills and explore a variety of alternatives. The best way for both private and public sector employees to reduce their stress is learn to accept disappointments. Both private and public sector employees are needed to be more flexible so that they can reduce employees tension to a greater extent. 322

14. Reasons
In private sector, the employees are getting better Recognization, Respect and Reward (ie 3R) for their excellency. Because in those organizations the employees are promoted on the basis of their performance. Once they get recognization for their work, they are satisfied they have better mental health. But in public sectors the employees are more secured in their job and they are promoted on the basis of tenure. These are the reasons which the researcher has observed from the study.

15 Suggestions
Both private and public sector employees can manage their stress well by adopting regular practice of spiritual methods such as yoga and meditation etc. Both private and public sector employees must invest in their health. Good nutritional habits such as balanced diet and checking of overweight will certainly yield a stress-free life.

By keeping these employees can maintain better mental health and they perform well in their job. 16. Conclusion The present study attempted to compare of mental health among private and public sector employees. Total estimated sample size is 100 (private sector 50 and public sector 50). Questionnaire method of survey was used to collect the sample. Stratified random sampling technique was used to collect the data. After collecting the data, they were coded. To test the hypothesis, statistical tool t-test analysis was used. The result revealed that private sector employees have better mental health than public sector. Mental health is very important for employees to perform well in their job. So, organization should do something towards in this aspect. It is also imperative that proper balancing of work-family relationship is essential.

a view of assessing their mental health. Experiments in Education, vol.XXIII No.5 (83-87). 8. Sutherland et al., (1953) Survey of mental health of foreign students. Scandinavian Journal of Psychology, 32, I 22-30 Appendix Questionnaire Often Sometimes Never X

Example Always

I ................... have an inferiority complex. (If your answer is Never) (TPIMH) 1. Ifeel that I am well matched for life and its difficulties. 2. When something important has to be decided, I know exactly what I want. 3. I .feel interior to other people. 4. I am .well able to represent my own interest. 5. I .allow myself to be easily influenced by others. 6. I .have a feeling of passivity and inner emptiness. 7. I .view the future with complete confidence. 8. When I encounter a difficult situation I trust my ability to master it. 9. I ..feel full of energy and enterprise. 10. My mood is ..good. 11. I .have an inferiority complex. 12. I feel some what awkward among others. 13. I am..in good physical and mental condition. 14. It is .true that I cant stand myself. 15. Ihave the feeling that things are too much for me. 16. I am successful in satisfying my needs. 17. I act by motto that I am responsible for my own happiness. 18. It is .hard for me to keep my mind on a task or a job. 19. I.let myself be easily intimated by others. 20. I amvery worried. 323

17. References
1. Barreti Fuches and Meadow (1976) Survey of mental health of students. Scandinavian Journal of Psychology, 32, I 22-30. 2. Bhan (1983) Engineering and nonengineering students and compared their mental health characteristics. Dissertation obstruct international A 56/10. P.41-49. 3. Dutt (1966) Mental Health in University Students Third survey of Research in Education, New Delhi: NCERT 424-425 4. Marie Jahada (1958) Various dimensions of mental health while discussing the importance of positive mental health. Fourth Survey of Research in Education. 5. Mathew (1975) A study on relation between the factors such as anxiety and the multiplied roles of the working women. Fourth survey of research education. 6. Peter Backer (1989), Trier Personality Inventory (TPI) standardized scale, to assessing mental health of different types of people. 7. Sinha and Bhan (1983). Mental health with

An empirical study on impact of demographics on buying behavior of food and grocery consumers in Punjab
Anupama Prashar

1. Introduction
Food and grocery is the second-largest segment of the retail industry and is the least organized. According to a recent report by Ernst & Young, food and grocery accounts for almost 54% (USD 152 billion) of the total Indian annual retail business . However, food retail continues to be dominated by small local stores in the unorganized sector. Fuelled by the large disposable incomes, the food sector is now witnessing a remarkable change in consumption

patterns, especially in case of food. Food retailing is undergoing a transformation from selling of food items in grocery shops & mandis, haats and bazzars to selling of processed food and grocery in supermarkets where consumers inspect and select the products in a comfortable ambience and still pay a fair price for the product and the merchandise. Sometimes it happens that one pays less than the price one would pay at the nearest food store. Shopping for groceries is no longer a strenuous and uncomfortable affair. Instead, it has become a pleasant experience. Figure 1 shows the formats for food retailing in India.

Food retailing is now an industry in itself. According to one of the recent reports on Food Retailing Scenario in India by Technopak, food & beverages is the major segment, worth Rs 8,97,000 crore. This is contrary to the belief that fashion is the largest segment of organized retail in India. Indias food retail industry has been the main focus of MNCs looking to grow with the economy. The industry has been rated as the fifth most attractive emerging market for retail by the International Council 324

of Shopping Centers (ICSC). Currently, the food retail sector is valued at US $70 billion and the valuation is expected to rise to US $150 billion by 2025.

2. Food and Grocery (F&G) Retail in India

Unlike in the past, the debate today is no longer whether food and grocery retail in India would grow but rather how fast can it grow and what challenges need to be overcome. The Indian consumers do visit about eight

to ten outlets to purchase various food products, which make up the daily consumption basket. These outlets include neighborhood kirana stores, bakeries, fruit and vegetable outlets, dairy booths and chakkies (small flour mills), which offer very time-consuming and unproductive way of shopping for food. With changing lifestyle there is growing scarcity of time, and convenience in food shopping is emerging as an important driver for the growth of one-stop retail formats that can offer consumer value for time in addition to value for money. Modern state of the food retailing is not a demand led but the supply led one. Major spending on food and increasing out of home food consumption represent a significant opportunity for food retailers and food service companies. The organised food retailers deploy a number of formats ranging from gigantic hypermarkets at one end of the spectrum to the no-frills discount stores at the other end. They are distinguished by size, number of items carried, strategic pricing and customer segments targeted among others. In India about 90% of food purchases are made within a distance of 1.5 km from the customers home. This means that an organised retailer would need to have a neighbourhood store close to customers in order to capture the share of wallet that is spent on food. These stores would cater to the consumers daily and weekly needs. The outlets closest to a neighbourhood store in India are Safal outlets operated by Mother Dairy in Delhi, Margin Free in Kerala and Subhiksha. Another popular format

in Food retailing is supermarkets. This format caters to the consumers need for choice and variety. These needs translate into more width and more depth in each category. These stores cater to the consumers in a catchment area with a radius of 3 to 4 km and therefore need to be destination stores. A supermarket can cater to the consumers weekly, monthly and occasional needs. Examples of supermarkets already in India are Reliance fresh, Food World, Trinetra and Nilgiris .Hypermarket is another popular format. Hypermarkets are essentially destination stores catering to the consumers bulk shopping needs in both food and non-food categories. The key added values for the customer are choice and value for money because products are sold at a discounted price. The hypermarkets model of food retailing is new to India. Spencers (RPG), Big Bazaar (Pantaloons), Star India Bazaar are some examples. Cash & Carry (C & C) Stores sell their products to their members only. The typical area of a C & C store is 70,000 to 100,000 sq. ft. and both food and nonfood products are stocked. The members are typically retailers and institutions. The key added value is a wide range of products under one roof, available at wholesale prices. So far, only four (three foreign and one domestic) companies operate in this space: Metro (German), Shoprite (South African), and SPAR (Dutch) are the foreign players while Wal-Mart has recently set up a joint venture with Bharti retail with the first cash and carry store in Amritsar under the brand name of Best Price .Table 1 summarizes the various companies operating in different retail formats.

FORMAT

KEY COMPANIES

SIZE

TARGET POPULATION

PRICING

ITEMS CARRIED

Hypermarket

RPGs Giant, Pantaloons, Big bazaar, Vishal,Amartex

25,00050,000 sq ft

Middle income group

Lower than MRP

Most categories

325

Supermarkets

Reliance fresh, More stores, Easy day, Food world, Food bazaar

30005000 ft

Everyone

MRP

Processed foods and groceries

Discount stores

Subhiksha, Margin free,Apna Bazaar

Varies but less than 3,000 sq ft

Middle income group

Everyday lowest price

Processed foods and groceries

Convenience stores

6-Ten, Spencers

Varies

Everyone

MRP

Varies but specialized in each store

Table1: Organised Retail formats in food segment 3. Key Challenges in Food Retailing
Demand Side Penchant for fresh/home-made and value consciousness The Indian consumer, unlike his western counterpart, has a penchant for freshly cooked food over packaged food. This is a result of dietary patterns, poor electricity supply, low penetration of refrigerators and a family structure where one of the primary roles of the housewife is feeding the family. The Indian consumer is extremely value conscious. A TSMG study indicates that packaged food players need to drive down prices by almost 35-40% to be comparable on cost with home made food. Diversity of tastes and preferences Multiple cultures, languages and religions have a huge bearing on the tastes and preferences of the Indian consumer. This will pose a challenge for players aspiring to develop a pan Indian presence. Willingness to travel Given the current density of retail outlets in India, retailers will have to motivate the consumer to trade convenience with price, range and ambience. 326 Supply Side Sourcing base and efficiency The fragmented agri supply base coupled with an inadequate legal framework make it difficult for retailers and food processors to procure quality produce at competitive costs directly from farmers. The small size of the food processing industry further limits the supply options. Real estate availability and cost Rentals account for 7-7.5% of the total costs for organized retail in India against global benchmarks of less than 3%. Real estate availability and costs will continue to remain achallenge in the retail industry with factors like adequate parking, ambience and proximity being the key drivers of footfalls. Manpower availability

As organized retail expands, there is expected to be a dearth of skilled manpower. The lack of institutions and courses for different aspects of retail management will have an impact on the overall supply of quality manpower.

4. Review of literature
Ali, Kapoor,and Moorthy(2009),conduced a study to to develop a marketing strategy for a modern food/grocery market based on consumer preferences and behaviour. A total of 101 households having sufficient purchasing power were personally surveyed with a structured questionnaire. These households are spread across the well-developed Gomtinagar area of Lucknow city. Simple statistical analysis such as descriptive statistical analysis, frequency distribution, cross tabulation, analysis of variance, and factor analysis to assess the consumers preferences for food and grocery products and market attributes were carried out. The results shows that the preferences of the consumers clearly indicate their priority for cleanliness/freshness of food products followed by price, quality, variety, packaging, and non-seasonal availability. The consumers preference of marketplace largely depends on the convenience in purchasing at the marketplace along with the availability of additional services, attraction for children, basic amenities and affordability. Results suggest that most of the food and grocery items are purchased in loose form from the nearby outlets. Fruits and vegetables are mostly purchased daily or twice a week due to their perishable nature, whereas grocery items are less frequently purchased. Hemalatha, Sivakumar, Jayakumar, (2009) suggested that different groups of consumers believe that different store attributes are important. Therefore, store attributes appears to be a promising market segmentation criterion. In this sense, their work focused on store attributes as a possible criterion to segment the shoppers. They started by analysing the importance of consumer segmentation to the retailers. After reviewing the literature of market segmentation, a segmentation analysis of clothing and apparel shoppers in India was performed. First, a hierarchical cluster analysis was carried out, and then k-means cluster analysis identified three meaningfully differentiated customer groups. Further, a classification tree analysis was performed to identify the store attributes that differentiated the clustered groups. Finally, three clusters of Indian shoppers, namely, 327

economic shoppers, convenient shoppers and elegant shoppers were identified. Main conclusions and its implications for retailing management were pointed out. Erdem, Oumlil, Tuncalp, (1999) proposed that retailing business is greatly affected by the patronage behavioral orientations of shoppers. Understanding these orientations can assist retailers in developing appropriate marketing strategies toward meeting the needs and wants of consumers. One important factor explaining consumer behavioral orientations is their values. Another important factor affecting consumer behavioral orientations is the store image, an image shaped by store attributes. They examined the linkage between consumer values and the importance of some salient store attributes. Omar and Abisoye (2008) examined the role price as a determining factor in consumer patronage of grocery retail stores in the United Kingdom. A cross-section of grocery consumers (n = 250) constituted the sample for the study. Grocery stores were grouped and stores were selected for the study on the basis of the variety of grocery stores offers the consumers. A mail survey was used to investigate price perceptions and store choice across three different retail formats. Respondents were grouped into high and low groups for each of the price cue factors. The groups were compared using analysis of variance (ANOVA) for each price construct at each level of the dependent variable for store choice. Findings suggested that price cues affect consumer store choice. Price awareness positively impact patronage of retail stores that implement low cost strategies, while status sensitivity and price/quality plan tend to positively impact patronage of retail stores that implement higher price strategies. As the UK grocery market becomes saturated consumers tend to take advantage of price competition. This is particularly important when communicating store pricing policy to the target consumers. Mittal (2009) compared the consumer evaluation of store attributes for grocery and apparel retail segment.. The retail format- which

represents the right mix of various store dimensionswill eventually depend upon the interplay between various store attributes. This study used a research instrument developed by the author in an earlier study for the comparative analysis. A very significant pointer from this research is that while there is some commonality of attributes between retail sectors, the precise importance and mix was, arguably, determined more by the motivation of the customer behind each specific shopping excursion. The grocery and apparel store attributes dimensions that have emerged from this study prove that the factors are different in terms of their composition and importance. Alhemoud, (,(2008), studied the product selection processes from Kuwaiti nationals based on their shopping habits in the Co-Operative Supermarkets (A government owned grocery stores. The literature on consumer behavior and store choice presented in the study suggests that consumers make decisions to patronize a particular store on the basis of a set of attributes that they view as important. This study attempts to explore the determinant attributes that influence the patronage decisions of supermarket consumers in Kuwait. Based on a descriptive analysis of data collected via an accidental sampling procedure, fourteen store attributes were identified. These attributes were factor analyzed, generating four image dimensions intuitively labeled merchandise, personnel, accessibility and promotion. A stepwise regression showed that merchandise image was the most salient in determining the frequency of supermarket shopping. None of the demographic characteristics of consumers did seem to have an impact on the perceived importance of the promotion image. Most of the differences among the categories of the consumers demographic characteristics were found in the accessibility image, providing possible explanation for why the rank of the importance of accessibility elements varies considerably from one study to another. Goswami & Mishra (2009) studied Indian consumers move from kirana stores to organized retailers when shopping for groceries. The study was carried out 328

across four Indian cities- two major and two smaller cities with around 100 respondents from each city. Stratified systematic sampling design with a sample size of 409 was used for the study. Multivariate statistical techniques were used to analyze the data collected with the help of a structured questionnaire. it was found that Customer patronage to grocery stores positively related to location, helpful, trustworthy salespeople, home shopping, cleanliness, offers, quality and negatively related to travel convenience. Kiranas do well on location but poorly on cleanliness, offers, quality, and helpful trustworthy salespeople. The converse is true for organized retailers. Carpenter and Moore, (2006) provided a general understanding of grocery consumers retail format choice in the US marketplace. A random sample of US grocery consumers (N=454) was surveyed using a selfadministered questionnaire. Descriptive and inferential statistical techniques (regression, ANOVA) were used to evaluate the data. Identifies demographic groups who frequent specific formats (specialty grocers, traditional supermarkets, supercenters, warehouse clubs, internet grocers) and examines store attributes (e.g. price competitiveness, product selection, and atmosphere) as drivers of format choice.

4. Objective of study
(a) To analyze the buying behavior of consumers with respect to food and grocery products. (b) To explore how respondents actually differ in terms of their demographic characteristics across the preference of shopping food and grocery. (c) To find out the shopping patterns and spread of the monthly basket across different formats.

5. Research methodology
The methodology adopted for the study is as follows: Research Design The research design chosen for conducting the study was Descriptive Cross Sectional. A cross-sectional

study is the simplest variety of descriptive study that can be conducted on representative samples of a population.

travelled to purchase the items and packaged versus loose purchasing. The second part of the questionnaire included sociodemographic information of the respondents such as age, gender, family size, education level and household income.

6. Source of data
Primary data was collected using questionnaire method of data collection.

7. Sample selection
The target population of the study included customers who prefer to shop at organised retail stores in Punjab. A sampling frame from which a random sample could be drawn was unavailable. However, an accidental sampling method was chosen to serve the purpose of data collection. This method seemed acceptable and appropriate taken into account the exploratory nature of the study and the lack of a sampling frame. 50 organized retail stores were selected in five selected cities for data collection. A total of 101 consumers were interviewed personally to know their buying patterns for food and grocery items. The product categories under the study included fruits, vegetables and grocery products such as processed and unprocessed rice, wheat flour, pulses, edible oil and spices. These cities were selected since the respondents in this locality are considered to be progressive; health, hygiene and quality conscious and have sufficient purchasing power to go for organized retail shopping.

10. Data analysis

The collected data were digitized in an SPSS spreadsheet and a simple statistical analysis to assess the buying behaviour which included descriptive statistical analysis, cross-tabulation and frequency distribution was carried out. Analysis of variance (ANOVA) was used to assess whether socio-demographic factors play a significant role in food purchase decisions. To assess the mean rank difference and the importance of product and market attributes, the Friedman test was conducted. Factor analysis was conducted to identify the underlying dimensions among a set of food product and market attributes. The Principal Component Analysis was done using Varimax rotation criterion. The Kaiser criterion was used to retain factors with eigen values only greater than one.

11. Results and Discussion Demographic profile of respondents

Out of the 101 respondents surveyed, 70 per cent were male. Age composition of the sampled respondents indicate that the surveyed group is matured enough to respond on various food consumption issues. Out of the total surveyed consumers, more than 65 per cent of the respondents were between 20 to 40 years of age. Educational profile of the respondents shows that most of them have graduate level or higher qualifications. Only 10 per cent of the respondents are from the intermediate (higher secondary) level and below. Sample households falling between the monthly income group of Rs 10,00015,000 dominated, with a 40.6 per cent share. Table 1 lists the demographic profile of respondents.

8. Data Collection Technique

Data was collected by doing survey at 50 retail stores in five selected cities viz. Ludhiana, Patiala, Amritsar, Jalandhar, and Mohali.

9. Data Collection Tool

The survey questionnaire was structured with two parts. The first part included questions related to consumers purchase behaviour in terms of frequency of purchase, monthly expenditure, place of purchase, distance

329

Demographics Gender Male Female Family size <=2 adults 3 adults >3 adults 25.8 <= 2 children 3 children >3 children Age of respondent <=20 years 21-30 years 31-40 years 41-60 years Educational background Intermediate and below 9.9 Graduate Post graduate Doctoral and professional Monthly income (%) <Rs 10,000 Rs 10,000-Rs 15,000 >Rs 15,000 Impact of demographics on buying behavior The survey results show that vegetables are the most frequently purchased products with a mean value of 1.59 and a mode value of 1 which indicates that most of the consumers shop for vegetables on a daily basis. Similarly, fruits are generally purchased twice a week 330

Response(%)

70.3 29.7

45.6 28.7 25.8 73.3 21.8 5.0

3.0 21.8 44.6 26.8

9.9 37.6 38.6 3.9

34.6 40.6 24.8 with a mean value of 2.29 and a mode value of 2. On the other hand, grocery products, which are less perishable, are less frequently purchased. The analysis reveals that most of the respondents buy grocery products on a monthly or fortnightly basis. Table 2 details the buying behavior of respondents.

Table 2: Buying behavior of respondents

Buying decision Standard deviation

Products

Mean

Mode

Friedman test

Grocery

94

4.02

1.31

Chisquare=114:78

Frequency of purchase

Fruits

98

2.29

1.04

Significance= 0.000 Degree of freedom=2 Chisquare=76:74 Significance= 0.000 Degree of freedom=2 Chisquare=36:53 Significance= 0.000 Degree of freedom=2 Chisquare=36:53 Significance= 0.000 Degree of freedom=2

Vegetables Grocery

100 91 94 96

1.59 3.18 2.18 2.08

1 3 2 2

0.84 1.07 0.79 0.71

Monthly expenditure

Fruits Vegetables Grocery

93 95

2.35

0.97

Preferred market distance

Fruits

1.79

1.07

Vegetables Grocery

96 92 96

2.07 1.52 1.28

1 1 1

1.28 0.72 0.54

Preference on food packaging

Fruits

Vegetables

97

1.24

0.45

Note: Frequency of purchase: Daily 1, twice a week 2, Weekly 3, Twice a month 4, Monthly 5

Monthly expenditure: Rs 100 1, Rs 100-500 2, Rs 500-1000 3, Rs 1000-2000 4, . Rs 2000 5 Preferred marketplace: Roadside shops 1, nearby vendor/shop 2, Supermarket 3, Wholesale market 4 Preferred market distance: , 1 km 1, One to 3 km 2, 3 to 5 km 3, 5-10 km 4, . 10 km 5; Preference on food packaging: In loose form 1, Vendor packaged 2, Branded (packaged) 3 331

Table 2 indicates that most of the consumers prefer nearby marketplaces to meet their food consumption requirements. Grocery food items are generally purchased from nearby grocery shops situated in the residential localities, whereas fruits and vegetables are purchased from roadside shops. With rapid changes in the preferences of the consumer towards convenient purchasing, the supermarket culture is coming up very fast. These supermarkets offer conveniently packaged food items with choose and pick facilities. About 10 per cent of the respondents prefer supermarkets for grocery food purchasing. Food purchasing is distance sensitive and most of the respondents desire for availability of food products within one kilometre radius. A comparative study of consumer responses on the five aspects of food purchase behaviour with the

demographic profile of the respondents was done by analyzing the variance (ANOVA) to assess if there are any significant differences in the individual responses for grocery, fruits and vegetables (Results indicate that out of the five aspects, the responses of males and females differ significantly on the frequency of purchase and preferred market distance for grocery items and monthly expenditure and preference on packaging for vegetables. Males generally prefer to purchase grocery once a month; while some of the female respondents prefer a weekly purchase.On the other hand, male respondents may travel more distance for purchasing grocery while females prefer a neighbourhood marketplace. Table 3 gives the details of analysis of variance between buying behavior and demographic characteristics.

Table 3: AVONA between buying behavior and demographic characteristics

Buying behavior

Products Grocery

Gender 6.742 0.11 0.67 0.561 0.247 4.161 1.492 0.717 1.25 7.909 0.214 1.063 0.2 0.479 5.591

Age 0.692 1.897 2.598 1.043 0.625 0.613 0.849 1.096 0.941 2.057 3.655 0.981 0.752 0.608 0.875

Education 1.13 0.506 0.961 0.453 0.7 2.872 0.732 1.445 1.28 2.869 1.253 0.968 0.625 0.747 1.103

Income 0.318 3.824 5.731 1.153 3.003 4.283 0.39 1.335 0.781 1.085 1.412 1.358 1.634 3.882 1.938

Frequency of purchase

Fruits Vegetables Grocery

Monthly expenditure

Fruits Vegetables Grocery

Preferred market distance

Fruits Vegetables Grocery Fruits Vegetables Grocery Fruits Vegetables

Preference on food packaging

Frequency of purchase

332

In case of monthly expenditure, males spend more on vegetables as compared to female respondents; while in case of packaging, females are more inclined towards purchasing vendor packaged vegetables. Consumers belonging to the young and middle age groups of less than 40 years prefer frequent purchase of vegetables as compared to consumers belonging to the older age groups. Likewise, consumers of the young and middle age groups may travel more to purchase grocery and fruits as compared to those belonging to the older age groups. Consumers of the higher income groups purchase fruits and vegetables frequently and also spend more on these items. These findings clearly indicate that H2 is only partially true and the income level of a consumer is an important factor which affects most of the food purchase decisions. Conclusion Food consumption patterns in India are rapidly changing from cereal-based food products to high-value food products and slowly from fresh, unprocessed, unbranded food products to processed, packaged and branded products. A strong economic growth has brought with it a new set of consumers with sufficient disposable income, who are more conscious of the latest trends in health and hygiene, particularly in the fast growing cities. To reap the benefits of the changing buying behaviour of the consumers and their capability for buying quality food and grocery items, modern organized retail formats are growing at a phenomenal pace throughout the country. This has induced big national and multi-national corporations to invest into organized retailing. In the emerging Indian retail environment, this study provides insights on consumers preferences of food and grocery products in terms of product and market characteristics with the help of primary survey data. Findings of the study clearly indicate that vegetables and fruits are most frequently purchased from nearby markets as compared to grocery products. References Jabir Ali, Sanjeev Kapoor, Janakiraman Moorthy (2009), Buying behaviour of consumers for food products in an emerging 333

economy, British Food Journal, Vol. 112 Iss: 2, pp.109 - 124 M. Hemalatha, V.J. Sivakumar, G.S. David Sam Jayakumar, (2009) Segmentation of Indian shoppers based on store attributes, International Journal of Business Innovation and Research, Iss: Volume 3, number 6 / 2009, pp: 651 669 Orhan Erdem, A. Ben Oumlil, Secil Tuncalp, (1999) Consumer values and the importance of store attributes, International Journal of Retail & Distribution Management, Vol. 27 Iss: 4, pp.137 144 Professor Ogenyi Omar and Kareem O. Abisoye, (2008).The Role of Price as a Determining Factor in Grocery Retail Store Patronage Journal of Business & Retail Management Research Vol.2, Issue.2, April 2008. ISSN 1751-8202 Dr Amit Mittal, (2009). Store Attribute Salience - A comparison of Grocery & Apparel shopping scenario. Article No: 178, ISSN 0974 9497.Volume 3, Issue 4/4. November 2009 Abdulla M. Alhemoud,(2008), Shopping Behavior Of Supermarket Consumers In Kuwait Journal of Business & Economics Research Volume 6, Number 3, March 2008 Paromita Goswami, Mridula S. Mishra, (2009) Would Indian consumers move from kirana stores to organized retailers when shopping for groceries? Asia Pacific Journal of Marketing and Logistics, Vol. 21 Iss: 1, pp.127 143 Jason M. Carpenter, Marguerite Moore, (2006) Consumer demographics, store attributes, and retail format choice in the US grocery market, International Journal of Retail & Distribution Management, Vol. 34 Iss: 6, pp.434 452 Food Retailing in India(2009)-Technopak adviser McKinsey & Co in Food Forum 2009 The Great Indian Retail Story- Ernst & Young(2009)

Brand Valuation: An Empirical Study With Special Reference to Indian Car Industry
Professor of Commerce, School of Management, Pondicherry University Doctoral Scholar of Commerce, School of Management, Pondicherry University 1. Introduction In the dynamic scenario of competitive market and with the increasing concern for quality, brand and brand management have become a core element of the corporate policy. Brand, which is a distinguishing name and a symbol, logo, trademark, package, and design intended to identify the goods or services of either one seller or a group of sellers and to differentiate these goods and services from those of competitors and brand loyalty psychic allegiance to the combination of attribute of a branded product focusing on the valuation of brand1. Brand evaluation has become an important measure of valuing a product in the current business environment. A brand is an index of how strong and successful a firm is. There are various methods developed for valuing brand equity. They are cost based approaches, market based approaches, royalty method, discounted cash flow method and Interbrand method. Interbrand has been adjudged as widely used method to ascertain brand strength and to arrive at brand value. A build presentation about valuing brand equity of selected car brands is given in this paper. Maruti Suzuki India Limited is the premier car company in India. Maruti Udyog Limited (MUL) was established in Feb 1981. The company entered into collaboration with Suzuki Motor Corporation of Japan to manufacture cars. Maruti is the highest volume car manufacturer in Asia, outside Japan and Korea. Despite there being 19 companies now in the passenger car market in India, Maruti holds about 50% of the total market share. Maruti Udyog Limited has many unique service advantages for the customers. On 17th September 2007, Maruti Udyog was renamed as Suzuki India Limited. Both in terms of volume of vehicles sold and revenue earned, the company is Indias leading automobile manufacturer and the market leader in the car segment. It has bagged the First Position in JD Power Customer Satisfaction Index for the last consecutive ten years. The company has also ranked highest in the India Sales Satisfaction Study. The models of Maruti Udyog Limited cars are Maruti 800, Maruti Alto, Maruti Zen, Maruti Zen Classic, Maruti Esteem, Maruti Gypsy, Omni, Wagon R, Versa, Baleno, Swift and Grand Vitara. Tata Motors Limited is Indias largest automobile company with large revenues. It ranks first in the category of commercial vehicles and the second largest in the passenger vehicles, mid size car and utility vehicle segments. The company is the worlds fifth largest medium and heavy commercial vehicle manufacturer. Over 3.5 million Tata vehicles are moving on Indian roads, since 1954. The models of the company are Tata Indigo, Tata Indica, Tata Sumo, Tata Safari and Tata Indigo Marina. Hyundai Motor India Limited (HMIL) was established in 1996 and is a wholly owned subsidiary of South Korean multi national, Hyundai Motor Company. 334

Dr. P. Natarajan

U. Thiripurasundari

2. Major Car Manufacturers in India

There are many companies producing cars such as Maruti, Tata, Hyundai, Ford, Honda, Toyota, Chevrolet etc. in the Indian Market. The top leaders in this domain are Maruti, Tata and Hyundai as these companies have high market share of 75 percent and provide acknowledgement confidence, tangible values and status of the society to the customers and to the value, utility, life, pride which proceeds towards giving a brand name to its product. This study focuses only three companies such as Maruti Suzuki Indian Limited, Tata Motors India Limited and Hyundai Motors India Limited. A brief description about the selected car manufacturers are given below:

HMIL is the fastest growing and the second largest car manufacturer in India and presently selling 30 variants of passenger cars in six segments. The Company has set up more than 70 dealer workshops that are equipped with the latest technology, machinery and international quality press, body and paint shops, across the country, thereby providing a one-stop shop for a Hyundai customer. Hyundai also has a fleet of 78 emergency road service cars that can provide emergency service to all its customers anytime, anywhere. The models of Hyundai are Santro, Getz, Accent, Elantra, Sonata, Tucson and Terracan. The new models of Hyundai Motors are Verna, Getz next generation and Santa Fe.

not forward looking. Rather, they look backwards into history. The cost-based method is conceptually the least defensible. It is perhaps the weakest. In order to arrive at the value of all costs including advertising, promotions, research and development, that have gone into brand creation are added and converted into current prices. For instance, for an imaginary brand like Rootsa Rs.50 Crores was spent in brand building. According to cost based method, the brands value would be Rs.50 Crores. 3.2. Market Based Method Consider how various things are traded on the basis of market price. For instance, if a Maruti 800 car is available for sale, how does one calculate its price? The immediate point of reference that is taken for arriving at its value is the year of its purchase and the price at which other cars are sold or bought with the same characteristics. The price which is generally quoted is above, equal to or less than the average price of similar goods or articles. Here, the value is determined by making a reference to the market price of comparable brands in recent transactions.

3. Brand Valuation
In todays business arena, brand valuation plays a key role. The intellectual properties of the business like patents, copyrights, design, trademarks are getting greater importance. The valuation of such intangible assets processes towards the brand valuation. It is most frequently used in some sort of transaction including balance sheet. Brand valuation is the process of assigning financial value of brand. As the brand value is the net present value (NPV) of the forecast brand earnings, discounted by the brand discount rate (Interbrand). The value of the brand depends both on a good and a strong financial performance and the result of owing powerful brand is the increased shareholders value2. The brand value does not depend only on the consumers behaviour, therefore, it is crucial to conceptualize brand value creation process and develop adequate quantitative methods of measuring brand value. A brand is an index of how strong a firm is. There are various methods which have been proposed for valuating a brand. These include cost based method, market-based method, royalty method, discounted cash flow method and interbrand method. Interbrand has also proposed a procedure. It has based brand strength to arrive at brand valuation.

3.3. Royalty Method

In this method, the brand value is estimated by the royalty income that a brand would generate if it is licensed out to another party 5. For instance, what would be the brand value of Nescafe brand for Nestle? Or in other words, how much royalty would Nestle have to pay to a third party if it did not have its own coffee brand and desired to use Nescafe? The royalties in this method are added for a specific period in future and then added and discounted to arrive at the net present value. This method of brand valuation is quite popular among accounting firms. There are two important dimensions of these methods: the expected future sales or forecast sale and the royalty rate. Both these numbers need extreme caution in its calculation. A wrong sales projection or incorrect royalty rate that is applied to the sales may through the whole brand valuation exercise out of gear. Therefore, while calculating the royalty rate applicable to brand sales, a reference has to be made with reference to the industry scenario, characteristics of comparative licensing arrangement, nature of business, speculative or established, etc., 335

3.1. Cost Based Method

Typically, cost-based brand valuation methods take into consideration the costs that have been incurred by the company to create the brand. These methods are

3.4. Discounted Cash Flow Method

This method takes the brand as an asset. An asset is something which is useful to the business because of its unique capability to generate revenues or profits in future. The economic value of an asset to a great extent depends on the revenue or profit stream which is associated with it. Greater the more will be its valuation, and vice versa. The discounted cash flow method of brand valuation takes the brand as an asset
6

cost synergies, second demand generation and third secure future demand (thereby reduce operative and financial risk). The brand evaluation process consists of the following five steps: Segmentation: Markets are generally made up of different segments. Consumer behaviour and attitudes vary towards brand. This calls for separate assessments for individual segments for arriving at correct valuation of the brand. Financial Analysis: The brand valuation process

. It is to be observed that the brand ownership brings

cash flows or returns. The estimation of the returns from brand ownership is what is aimed at in this technique of brand valuation. starts with assessment of company value and then the contribution made by the brand is determined. This requires isolation of brands contribution from total income. Accordingly, economic value added is calculated. This facilitates to find out whether the firm is able to generate returns that exceed cost of capital. Demand Analysis: A brands value is influenced by how it is positioned in the minds of customers. Interbrand valuation takes into account the factors that influence consumer demand and motivate purchase. The factors The Interbrand procedure includes the following steps: Firstly, the percentage of revenues which could be accounted for by the brand from the total earnings of the business is figured out. Secondly, with the help of experts, projections are made about the net earnings of that business. Thirdly, earning due to intangible factors is found out. This is done by deducting a charge for the ownership of tangible assets. Their contribution to the earnings is deducted. The residual is earnings generated by intangible assets like patents brand, etc., The fourth step is to identify the earnings of intangible assets. The issue is something like this: when we buy groceries from a store, is the earning to the store due to brand name or its physical location which provides convenience to customers? Net Present Value: The economic value of future earnings of a brand is inversely correlated with estimated risk (and risk has direct relation with brand strength). The brands strength is transformed into brand risk through S-curve. Depending upon the brand strength, the discount rate is applied (risk free rate fro strongest brands). 336 Brand Strength Analysis: Brand strength is inversely related with risk. Low risk implies greater certainty of future earnings. The brands strength is analyzed in comparison with its competitors on the basis of seven facts. These include market, stability, brand leadership, support, trend, internationality and protection. This measure diagnoses the brands competitive position. so identified are weighed in terms of their influence on demand. The contribution of brands association is statistically calculated and expressed as Role of Brand Index (ROBI)

3.5. Inter Brand Method

This method of valuation is a kind of discounted cash flow method. Historical earnings are not sufficient for valuing the brand, because past earnings may not provide authentic and reliable indication of a brands future performance. Therefore, this method relies on future cash flows which could be associated with the brand .
8

3.6. Brand Equity Evaluation

Brand value is the net present value of future earnings generated by the brand alone. The Interbrand method is based on three economic functions of the brand: first,

Some brands are strong and some brands are weak. Strong brands signify strength and certainty in future earnings. In weak brands, future earnings tend to be shrouded with uncertainties. The final step in the Interbrand valuation method is to calculate the brand strength. These brand strength factors are: 1. Market Characteristics: Brands in growing markets are better and stronger than declining or trend based markets. 2. Stability: Established and familiar brands tend to be stronger and enjoy customer loyalty. 3. Leadership: Leading brands in the product category are stronger. They are better positioned to influence the market they operate in. 4. Internationality: This signifies a brands acceptance in other markets. Widely accepted brands can always offset misfortune in one market with gains in the other markets. 5. Trend: What is brands performance over time? Consistent brands exhibit their relevance to customers. 6. Support: How consistently has the brand been supported by the company? It is not a matter of one time investment in the brand, rather quality and consistency of investments made in the brand matter? 7. Protection: Protected brands are stronger. Brand protection is brand strength. These seven dimensions of brand strength criteria are not equally weighted. Rather, a total score is divided amongst these dimensions on the basis of their importance.

several models of competing Brand Equity, Interbrand method is widely adopted. Hence, the researchers also have used the Interbrand method for computing Brand Equity of the selected car manufacturing units. It is based up on the application of brand strength assessment because they require a complete and comprehensive brand analysis and then to balance that valuation against the other less comprehensive methods to set final brand value. The study period was considered from 2006 -2010. The researcher has modified this method on the following line. Financial performance measures an organizations raw financial return to the investors. But for brand equity valuation the researchers have used the concept of economic profit which is a concept akin to EVA. To determine economic profit, taxes from net operating profit to get to net operating profit after tax (NOPAT) is removed. From NOPAT, a capital charge is subtracted to account for the capital used to generate the brands revenues; this provides the economic profit for each analyzed year. For the purpose of rankings, the capital charge rate is set by the industry weighted average cost of capital (WACC). The financial performance is analyzed for a five-year forecast and for a terminal value. The terminal value represents the brands expected performance beyond the forecast period. The economic profit that is calculated is then multiplied against the role of brand to determine the branded earnings that contribute to the valuation total as noted earlier.

6. Analysis & Discussion

Brand Equity has been valued by adding Discount Brand earning and Terminal Brand Value. The basic assumptions laid down for adopting this model are: 1. The average annual growth rate of the car industry 2.5% 2. The Weighted average cost of capital 15% 337

4. Objectives of the Study

The main objective of the study is to evaluate brand equity of selected car manufacturer in India.

5. Methodology of the Study

It is an analytical study based on secondary information given by the selected car manufacturing units. Among the

EXHIBIT 1 MARUTI SUZUKI BRAND VALUE Rs.Crore PARTICULARS NOPAT CAPITAL EMPLOYED CAPITAL CHARGED @ 8% INTANGIBLE EARNINGS ROLE OF BRANDING INDEX @79% BRAND EARNING BRAND DISCOUNT RATE @ 15% DISCOUNTED BRAND EARNINGS NPV OF DISCOUNTED BRAND EARNINGS NPV OF TERMINAL BRAND VALUE BRAND VALUE Source: www.marutisuzuki.com 590.2532 88.53799 501.7153 760.631 114.0946 646.5363 778.5861 116.7879 661.7982 328.0048 49.20073 278.8041 1173.213 175.982 997.2312 3086.085 10971.46 14057.54 2006 1189.1 5524.3 441.944 747.156 2007 1561.6 7484.7 598.776 962.824 2008 1730.8 9315.6 745.248 985.552 2009 1218.7 10043.8 803.504 415.196 2010 2497.6 12656.5 1012.52 1485.08

EXHIBIT 2 HYUNDAI MOTORS BRAND VALUE Rs.Crore Particulars NOPAT CAPITAL EMPLOYED CAPITAL CHARGED @ 8% INTANGIBLE EARNINGS ROLE OF BRANDING INDEX @79% BRAND EARNING BRAND DISCOUNT RATE @ 15% DISCOUNTED BRAND EARNINGS NPV OF DISCOUNTED BRAND EARNINGS NPV OF TERMINAL BRAND VALUE BRAND VALUE Source: www.hyundaimotors.com 338 198.73 29.8095 168.9205 251.96 37.794 214.166 89.93 13.4895 76.4405 18.29 2.7435 15.5465 -305.2 -45.78 -259.42 215.6535 2019.12 2234.774 2006 406.92 1948.01 155.8408 251.0792 2007 525.1 2576.97 206.1576 318.9424 2008 466.75 4411.43 352.9144 113.8356 2009 514.12 6137.11 490.9688 23.1512 2010 195.64 7274.59 581.9672 -386.327

EXHIBIT 3 TATA MOTORS BRAND VALUE Rs.Crore Particulars NOPAT CAPITAL EMPLOYED CAPITAL CHARGED @ 8% INTANGIBLE EARNINGS ROLE OF BRANDING INDEX @79% BRAND EARNING BRAND DISCOUNT RATE @ 15% DISCOUNTED BRAND EARNINGS NPV OF DISCOUNTED BRAND EARNINGS NPV OF TERMINAL BRAND VALUE BRAND VALUE Source: www.tatamotors.com Further, this model helps the management to review the brand decisions on a return-on-assets basis which tries to link investment made on a brand to the increments in brand value over a reasonable period of time. Brand Equity valuation using the Interbrand model, reveals the management the disparities between its assumptions and the market realities pertaining to the brand, and also brings the management closer to its consumers and helps them more responsive to market needs. The cumulative effect of brand value over the period of last five years has been computed and shows as brand equity of the car unit. When comparing the results of Brand Equity value of three car units, Maruti has got the highest value followed by Hyundai and Tata Motors. 673.93 101.0895 572.8405 825.67 123.8505 701.8195 712.08 106.812 605.268 -810.72 -121.608 -689.112 -226.9 -34.035 -192.865 997.951 956.95 1954.901 2006 1528.88 8447.52 675.8016 853.0784 2007 1913.39 10852.94 868.2352 1045.155 2008 2028.92 14094.51 1127.561 901.3592 2009 1016.55 25534.76 2042.781 -1026.23 2010 2240.08 31591.38 2527.31 -287.23

8. References
1. A. Aakar, Managing Brand Equity, New York: Free Press,1991 2. Bir Kin, Michael, Brand Valuation in Don Cowley, Understanding brands, NY, Kogan Page 1996, p185 3. Business week, the 100 Top Brands, Interbrand citigroup, August 6, 2005, p 52. 4. Doyle, Peter Value Based Marketing NY, Wiley 2000. 5. Harsh & Verma, Brand management Excel Books Publication , New Delhi, 2008. 6. Kevin Lane Keller, Strategic Brand Management NJ, Prentice Hall, 2005 7. Murphy, John M, Brand Strategy Camb, England, Director Books, 1990 8. Interbrand, brand valuation, April 2004, p.8. 9. Woodward Caroline, Intangible assets, Brand Valuation, Headlines Price Waterhouse Coopers, October 2004. 10. www.interbrand.com 11. www.marutisuzuki.com 12. www.hyundaimotors.com 13. www.tatamotors.com 339

7. Conclusion
In a nutshell, this article highlights the emerging need for gaining brand equity is the sinquonun for all types of industries to thrive in the competitive environment. Car Industry is not an exception to this competitive strategy. The continuous promotion of brand value will for formulate the unit to capitalize its brand and gain Brand Equity. The result of this paper clearly shows that MUL is able to maintain Brand Equity consistently.

Online Perfpormance Appraisal System: An Emprical Study at Bhel Piping Centre, Chennai
Prof. V.M. Ponniah, School of Management, SRM University, Chennai Ms Bala.R & Ms Jonisha S. Jones, MBA Final Year students School Of Management, SRM University, Chennai

Human Resource management is one of the most important functional areas of any organization. And one of the major components of Human Resource Management is Performance Appraisal. Performance Appraisal helps us to identify the ability of each individual and relatively merit them in the organization. In general there are many types and methods involved in evaluating an employee using performance appraisal. The contents of the paper include:

salary increases. With the introduction of Information Technology, Performance Appraisal has gone to the next level. Online Performance Appraisal is the latest trend in Performance Appraisal process. This research has focused on the Online Performance Appraisal system in existence at Bharat Heavy Electricals Ltd (BHEL), a company which is one among the Navaratnas of India. BHEL is one of the Largest Engineering and Manufacturing Enterprise in India in the energy related infrastructure sector today. The research aims to find out the effectiveness of the Online Appraisal which was introduced for appraising the performance of the Executive level employees of BHEL.

1. 2. 3. 4. 5. 6. 7.

Introduction Company Profile-BHEL On Line Performance Appraisal Research Methodology Data Analysis and Interpretation Findings Conclusion

2. Company Profile - Bhel

Bharat Heavy Electricals Limited (BHEL) is one of the largest engineering and manufacturing enterprise in India in the energy-related/infrastructure sector. BHEL is one of the nine large Public Sector Undertakings known as Navratnas or nine jewels. BHEL was founded in 1950s. Its operations are organized around three business sectors: Power, Industry - including Transmission, Transportation, and Telecommunication & Renewable Energy - and Overseas Business. Today, BHEL has a wide-spread network comprising 14 manufacturing divisions, 8 service centers, 4 power sector regional centers, 18 regional offices, and a large number of project sites spread all over India and abroad. BHEL is one of the largest exporters of engineering products & services from India. BHEL has established its references in around 60 countries of the world, ranging from the United States in the West to New Zealand in the Far East. BHELs vision is to become a world-class engineering enterprise, committed 340

1. Introduction
People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Performance appraisals of Employeesare necessary to understand each employees abilities, competencies and relative merit and worth for the organization.Performance appraisalrates the employees in terms of their performance. Performance appraisals are widely used in the society. Performance Appraisal is one of the most important functions of the Human Resources Department. The formal performance appraisal has been called a tool of management, a control process, an activity and a critical element in human resources allocation. Applications of performance appraisal include equal employment opportunity considerations, promotions, transfer and

to enhancing stakeholder value. The company is striving to give shape to its aspirations and fulfill the expectations of the country to become a global player. The greatest strength of BHEL is its highly skilled and committed 42,600employees. Every employee is given an equal opportunity to develop himself and grow in his career. Continuous training and retraining, career planning, positive work culture and participative style of management all these have engendered development of a committed and motivated workforce setting new benchmarks in terms of productivity, quality and responsiveness.

industrial customers all over the country. Export orders have also been executed successfully. Table 2 - Key Customers Segment Utilities Private Utilities Nuclear Industries Key customers SEBs/NTPC/DVC/NLC TEC/BSES/Jindal/ TISCO NPCIL,Bhavini TISCO/NALCO/ HZL/IOCL/VSTP Koniambo,Syria,Kosti Sudan,Senegal Sister units

2.2 Profile of The Unit Chosen For Research: Piping Center

Piping center was set up at Chennai in June 1979 to develop Piping business for the utilities and process sectors like the refineries, petrochemicals etc. The location advantage in Chennai is attributed to better coordination and interaction with customers, consultants, regulatory authorities and the institutions like IIT etc. From a turnover of Rs.90 crores in 1993-94 the unit has posted a turnover of Rs.730 crores in 2008-09, crossing the Rs.3 crore turnover/employee and achieving Rs.1.6 crores value-added per employee milestone. A General Manager reporting to the Executive Director at Trichy heads Piping Center. The organizational structure is as follows: Table 1 - Functions GM/PC GM/E&Q Head of product/unit Engineering, Quality, Management services Purchase, Matl. Planning Stores Ancillary Development OP&CE, BP co-ordination, PC cell, Personnel, training and development Contracts,marketing, computer services Finance & accounts Vigilance

Export of piping/Hangers Piping/Hangers

2.3 Human Resources Department At Bhel The core strength of piping center also includes Human resources who are a committed, devoted and dedicated force of employees. They believe that their contribution in all spheres would enable the company to scale up to further heights. This is reflected by way of healthy trends in terms of growth. Table 3 - Respondents Executives ( E1- E 9) Supervisors Others Total 122 46 68 236

GM/Operations

3. Online Performance Appraisal System The online performance appraisal system has been introduced at the executive level in BHEL from the year 2002. Online Performance Appraisal captures many inputs which help to identify the ability of each individual and to assign responsibilities to executives based on individuals potentiality. While assigning job responsibilities, Key Result Areas (KRA) are identified by the top management in discussion with subordinate 341

AGM/C&CS DGM/Finance DGM/vigilance

The customer profile encompasses SEBs, NTPC, Government utilities, private utilities and other

executives considering the potentially and requirement of the company in various functional domains. After the discussions, targets are planned. KRAs are also known as key work outputs (KWOs).It also enables them to set goals and to prioritize them. This leads to better communication of their roles purpose. After the review period, individual executives actual performance is evaluated based on the key result areas / targets already planned and agreed by both. In view of this, there is likelihood of improved performance by every individual executives thereby resulting in companys overall performance.

in a sample. It is a definite plan for obtaining a sample from a given population. The sampling technique used was the convenience sampling. The executive level employees were filtered through a computer-generated report .This method ensured that only those employees of BHEL to whom the Online Performance Appraisal system is applicable were selected for the research survey. Sample size was taken to be 120 respondents, who were selected based on their designation of being Executives under various categories ( E1 E9)

5. Data Analysis And Interpretation

Data analysis consist of descriptive analysis and inferential analysis.

4. Research Methodology
The type of research design used in this project was the descriptive research. The opinion of the employees was to be ascertained to find out the effectiveness of Online Performance Appraisal system. The opinion of the executives may differ in many ways in different companies. The opinion varies from one executive to another in the company. The descriptive study was carried out to seek the opinion of the employees on the various parameters of Online Performance Appraisal system. Careful design of descriptive studies was necessary to ensure the complete interpretation of the situation and to ensure minimum bias in the collection of data. It is necessary for every research to have both primary data and secondary data, without which the research would be inefficient. A pilot study was conducted with an initial questionnaire which was later modified according to the suggestions of the Executives. In this research the primary data was collected by means of a structured questionnaire. The questionnaire consisted of thirty-six questions inquiring into the process of Online Performance Appraisal system at BHEL. The secondary data was collected through company profile, journals, websites and other databases of the company. All these data were helpful in carrying out the analysis. Primary data collection. Secondary data collection. Sample design lays down all the details to be included 342

5.1. Descriptive Analysis

The respondents profile in terms of age-wise break up, gender-wise breakup, marital status, designation is tabulated below: Table 4-Age-wise classification of the respondents Age Below 30 years 31-40 years 41-50 years 51-60 years Total No. of respondents 16 8 30 66 120 Percentage 13.3% 6.67% 25% 55% 100%

Source- primary data 55% the respondents are in the age group of 51-60 years and 25 % are between 41-50years. Table 5 - Gender of the respondents Gender Male Female Total Source- Primary Data No. of respondents 102 18 120 Percentage 85% 15% 100%

85% of the respondents are male and 15% of them are female. Table 6 - Marital status Status Married Unmarried Total No. of respondents 106 14 120 Percentage 88.3% 16.67% 100%

system. Options Highly influential Influential to an extent Not changed Not Influential Cant say Total Respondents 10 72 26 8 4 120 Percentage 8.33% 60% 21.67% 6.67% 3.33% 100%

Source- Primary Data 88.3% of the respondents are married and only 16.67% are unmarried. Table 7 Designation of the respondents No. of Designation Percentage respondents E1-E3 50 41.67% E4-E6 E6A-E7 E8-E9 Total 50 20 0 120 100% 41.67% 16.67%

Source- Primary Data The statistical tool used in the analysis is one sample kolmogorov smirnov test and the results are given as below:
Sample size 120 Mean 2.37 Std. Deviation .859 Kolmo grovSmirnovZ 3.818 Asymp. Sig (2-Tailed) .000

Source- Primary Data Out of the 120 respondents 41.67% belong to the category E1-E3 and another 41.67% to E4- E6 and the remaining 16.67% belongs to E6A E7. 5.2. Inferential Analyses In this section following two objectives are examined, hypotheses are framed, tested and conclusions are obtained: To determine whether Online Performance appraisal system influences the individual performance of Executives in BHEL-Piping Center To determine the relationship between the Key Result Area pertaining to executives at the time of finalization during scheduling process and executives ability to achieve within the deadline 5.2.1. Objective 1 To determine whether Online Performance appraisal system influences the individual performance of Executives in BHEL-Piping Center Null hypothesis Ho: There is no influence in individual

Since the value is 0.000, the null hypothesis is rejected. Hence it is concluded that there is a relationship between individual performances because of online performance appraisal. 5.2.2 Objective 2 To determine the relationship between the Key Result Area pertaining to executives at the time of finalization during scheduling process and executives ability to achieve within the deadline Null hypothesis (Ho): There is no relationship between KRA scheduling and meeting of the deadlines. The following table shows the number of KRA usually set: Number Less than 5 5-7 7-9 More than 9 Total No. of respondents 14 60 18 28 120 Percentage 11.67% 50% 15% 23.33% 100%

The details regarding the Achievement of KRAs within deadlines are as shown below No. of Options Percentage respondents Always 42 35% Mostly 343 78 65%

performance because of online performance appraisal

Sometimes Rarely Never Total

0 0 0 120

0% 0% 0% 100%

Chi square test is done in order to determine the number of KRAs set usually compared with meeting of KRAs within deadlines and the values are shown below Asymp. Sig. (2-sided) .000 .000 .000

Value Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases 54.359(a) 72.476 46.840 120

df 3 3 1

fall in the category of 41-50 years. Out of 120 employees 85% are male. Out of the total respondents, 88% of the employees are married. Maximum percentage, being 42% is observed to be executives with designation E1-E3. Also designation and another 42% belong to the E4E6 designation. There is a relationship between the Key Result Area pertaining to executives at the time of finalization during scheduling process and executives ability to achieve within the deadline. There is a relationship between individual

performances because of online performance appraisal. 7. Conclusion The study examines the Online Performance appraisal system being followed in BHEL, Pipeline system, Chennai. It is found that Online Performance appraisal system influence the employees performance. This is a win win situation because it has merits over other appraisal systems viz employer (top management) can plan key result areas in tune with requirement and executives performance is improving, which acts as a motivating factor. Further being an Online Appraisal system, it has inherent advantages like transparency, accuracy, quickness. . It is likely that Online Performance appraisal system will be in the agenda of corporate in a big way in the immediate future.

Since the value is 0.000, null hypothesis is rejected. Hence it is concluded that there is a relationship between the Key Result Area pertaining to executives at the time of finalization during scheduling process and executives ability to achieve within the deadline. 6. FINDINGS Major findings are listed below: 55% of the employees fall in the category of below 51-60 years and 25% of the employees

344

Knowledge Management in ICICI Bank and Bank of Baroda

Dr. Pulidindi Venugopal Professor, VIT Business School, VIT University, Vellore. Dr. P. Vijayakumar Professor, Dean and Director, School of Management Studies, JNT University, Kakinada R. Gangadhar, Research Scholar, JNT University, Kakinada

1. Introduction
A little knowledge that acts is worth more than much knowledge that is idle. - Kahlil Gibran, The Prophet Knowledge management is difficult in practice unless there is strategic leadership. Without the system of belief on knowledge management it is not successful in any organization, often it is not just a strategy to implement. The requirements of knowledge management are culture of collective work, sharing and thinking and so on. Besides organizational culture innovation, responsiveness and collective wisdom will be vital in the success of knowledge management. One renowned Management Guru revealed that it as an application with manifold experiences. It always moulds itself basing on the contingencies and conditions. Knowledge Management is the set of processes that seeks to change the organizations present pattern of knowledge processing to enhance both it and its outcomes. It always used to contribute some processes by showing its force on various aspects of equipped processes. But it is not directly relevant to manage, integrate or create outcomes but only impacts. The changing rules and regulations by knowledge manager will affect the production quality. With the intervention of knowledge management there are more chances of bringing new technology with more analysis. The mode shows how KM is managed in an organization and more importantly how it does helps business processes. This framework self explains the process of knowledge being carried forward to the next level for business decision making. 345

2. Knowledge Management Process

3. Need of the Study

A study like this is needed to be informed by the need and benefits of Knowledge Management in todays organizations. What role does it plays in organizations such as banks in an Indian perspective. This will give us an opportunity to be educated about current trend of applying Knowledge Management for the growth of organization. It always existed but now when it is being concentrated upon as separate field many newer scenarios have come into picture. And new ways to manage knowledge effectively came into light. Thus to be enlightened we should explore the world of Knowledge Management and its applications.

4. Scope of the study

This study concentrates on how the Knowledge Management is used in an organization for its growth and development. Banking organizations could be benefited to replicate this study and evolve their own Knowledge Management approach. This study echoes

to influence as far as corporate culture goes and as close as development of organization by existing information is considered.

5. Methodology Used
This study is basically done on secondary data analysis on data provided in magazines, newspapers, published papers, projects, websites and forums. A comprehensive conclusion of these data is presented in this paper.

Products and services: There is will be so many problems to the customers regarding their products and services but the banks didnt have updated information regarding. This is a threat for the development of bank by offering mismatch products and services to the customers. Knowledge management helps the organization to offer the products and services as per the requirements of the customers. Process knowledge: There should be competency in the processes. If the employees dont have the full knowledge about the processes and procedures it causes threat to customer services. It is the duty of employees to respond adequately and quickly to the customers. Knowledge management gives lively ground for getting required information. It supports continuous up gradation of various issues to offer better services to the consumers. It helps in reducing cost by removing unwanted processes. Imparting required skills: The introduction of new technology has given rise in the banking sector with enormous growth in all its services. It initiated the skill set development in its employees. Almost all the organizations are giving importance and spending high amounts in gaining superiority in the knowledge. So many incentives are introduced to stimulate the employees in sharing their experiences and knowledge. Knowledge of people: There will be implicit knowledge in so many persons which is acquired because of experience is having great significance. But there is no proper way to maintain record of such people but it is will be there personally. Even so many organizations dont know about their knowledge people. It is always true that experience and expertise within the employees is always an added advantage to every organization. The experiences shared by the seniors in handling the difficult situations will be shared knowledge to the present and future generations. Knowledge management provides opportunity to have information of the people they have with their field of experience and expertise. 346

6. Banking Application

Knowledge

Management

In the present scale of financial services banking is also a part. By virtue of its process it is just involved with routine and unthinking reduced the innovative thinking of the employees. But it is true that unless and until one possess unique selling proportion it is difficult to succeed in the present global immense competition. Every bank has to change itself internal and externally to make them fit to the current perceptions of the customers. Almost all the banks are trying to offer new set of services to the end users. Even the public banks are trying their level best in all aspects. But every bank has to satisfy the financial needs of customers by understanding the lifetime needs of the customers by using all means of marketing activities. In its unstable environment banks are trying to provide better services by using knowledge management by understanding customer fully, by bringing awareness about their products and services, by increasing the knowledge processes, by improving the skill set of employees, by having the market intelligence and by customer relationship management. Understanding the customer: Every business is successful if they are customer centric. If an organization has the full knowledge about their customer it automatically makes the firm to be a leader in all aspects. In this immense competition it is the duty of every firm to identify the needs and wants of the customers and to formulate marketing strategies as per the change in the trends. Knowledge management provides scope to tune the services as per customers and helps in getting the customers, retaining the customers, increasing the sales and revenues and so on.

Market Aptitude: The external environment of the business is always uncontrollable. In other words it is not static and it is dynamic in its nature. It is the duty of every organization to have current information of all its influencing factors. In this present global scenario every one is competing to get the customer by delivering value hence, it is essential to have complete business aptitude. Sharing of best practices and Customer service: When we look at the trend projection and extrapolation method of demand forecasting it is clearly known that we can estimate future basing on the past history or trends. Even though past is uncertain we use to take as an example to solve our present problems and also to estimate the future. If we are given with effective knowledge about failure and success reasons of the past there is possibility of taking right decisions in the present. Knowledge management is one of the sources where we will get an arena to contribute our views, ideas and innovations to reduce the cost, repeated mistakes and increases customer service. Avoidance of knowledge walkouts: Banks used to recruit intellectuals but the banking system failed in using them because of the routine activities. Today even the banks became learners organizations. But so many surveys revealed that their strength is their people. Knowledge is that which we can not get simply on one day and it is a continuous process linked with learning through so many sources. Even VRS caused scarcity of essential knowledge hence it is denoted as high lose to the organizations. Till the implementation of VRS banks fail to recognize the importance of knowledge. They came to realize that the downsizing has given chance to knowledge walkout. All the service organizations depend on patrons and workforce. All the organizers are trying to get the customer loyalty in the same way banks too, for which they initiated knowledge management in gaining customer loyalty. It is the way to understand the customer needs, wants, etc. to satisfy and treating all the customers as more valuable no matter how small the transaction is. Banks started using the concepts of data base and data mining in its process. Implementing the technology in banks enabled reducing cost and improving the quality of 347

services. The data base should be available when ever there is need. The technology using in the banks should be friendly to both the customers and employees.

7. KM AT ICICI BANK
Whatever may be the business, it should change itself as per the current trends of the market if not its survival becomes question. Hence every organization changes its activities by acquiring knowledge. It thinks that it is quite difficult to meet the consumers expectations in this competitive world. In order to inculcate knowledge sharing it started a portal with the name Wise Guy. It found that when employees go away from the organization he will not give the information about the potential customers but it will be difficult to the new comer to know about his job and to get started. Hence it felt the need for introducing the concept of knowledge management. All over the country it has branches where employees used to through emails without seeing. They used to work as a community by using web services. 8. INITIATING KM AT ICICI ICICI influenced by the knowledge management and it want to implement. As it has strong harmonization team the idea being sold to the entire workforce. In the Intranet Wise Guy was also included. Once the features are known by the workforce, interested staff got their login password from the system administrator. With the efforts of its software engineers the first version started on 15th June, 2000. We know that every once intellectual quotient retains in brain like that it also started keeping all database of field experiences, expertise, skills etc, in its system. The knowledge management provides an opportunity to utilize the implicit intellectuals of one employee to be accessed by other employees. In the knowledge management there are two problems one is with the owner and the other is with the recipient. Some times owner is not willing to share and in some cases recipient is not willing to take up. The portal at ICICI consists of lectures, presentations, authors contributions, reports, deliberations and so on. in this portal all the experts contributions are praised and offered with cash prizes and their photos are placed in the portal. There will be few confidential and secret intellectuals of the employees such things by will be kept in the control of administrator. Industry analysis

and company research are provided by the corporate information bank. It also maintains alliance in sharing knowledge with knowledge data base, Banking rules, ICRA data base etc. Knowledge management is no where submissive to IT. Knowledge management arranges events by which it facilitates to interact with superiors and experts in the meetings. 9. KM IN BANK OF BARODA It had massive renovation agenda to construct itself as a best bank by initiating knowledge management. It forced its manpower in bringing their skills and experiences of their fields to make other to do in a better way. Knowledge management headed for smooth progress of the operations by sharing views with higher authorities. It is using knowledge management in designing new products and services. In order to face the contemporary competition it is taking feedback from the customers and it is considering all the ideas, views and suggestions of customers. It also introduced intranet to make the job easy. It believes in sharing and using of knowledge by revealing that having system will not differ the organization but proper implementation makes the difference and it is implementing in the proper way. 10. Findings Implementation of Knowledge Management is critical to have: Better customer knowledge Better knowledge of products and services Better knowledge of processes Skill development Better knowledge of people Better Market Intelligence Sharing of best practices Better customer service Prevention of knowledge walkouts Overall growth Creation of data warehouse and knowledge base for strategic decision making Proper implementation is a challenge Better forecasting

11. Suggestions Every growing organization should implement KM to avail its benefits. People should be trained to disseminate information for better KM. KM should be understood and focused for strategic decision making. Technology should focus to develop KM Direct and fresh data should be stored with priority KM should be done at all levels of hierarchy

12. References
Goswami Chandana, (2004), Managing the Technical, Professional Workforce: Can Knowledge Management be the answer?; In: Managing Trade, Technology and Environment (M. Mallikarjun and Pawan K. Chugan Ed.) , pp 362-372, Excel Books, India Prahlad C.K. and Gary Hamel, (1990), The core competence of the Corporation; Harvard Business Review, May-June, pp79-91 Firestone Joseph M. & McElroy Mark W., 2005, Doing Knowledge Management, Emerald Group Publishing, Ltd., pp 2-3 Grant Robert M., (1996), Prospering in DynamicallyCompetitive Environments: Organizational Capability as Knowledge Integration; Organization Science, Vol.7, No.4, pp375-387 Grant Robert M., (1991), The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation ; California Management Review, Vol.33, Spring , pp114-135 Quinn James Brian, Philip Anderson, and Sydney Finklestein, (1996), Leveraging Intellect; Academy of Management Executive, Vol.10, No.3, pp727 Firestone, J. M. (2000) Knowledge Management: A Framework for Analysis and Measurement, White Paper No. 17, Executive Information Systems, Inc.,Wilmington, DE, October 1, 2000. Sangameshwaran Prasad,(2003),Knowledge Management; Indian Management, May, pp31-35 Goswami, Dr. Chandana,(2005) Knowledge Management In India : A Case Study Of An Indian Bank

348

An empirical Analysis on e-Procurement for Construction Projects using e-RAs

T.Baladhandayutham Dr. Shanthi Venkatesh
PhD Research Scholar, School of Management Studies, SRM University, India Asst.Professor, School of Management Studies, SRM University, India

1. Introduction
Faced with a challenging economy and a fiercely competitive market environment, corporations around the globe are hard pressed to explore newer and sustainable approaches of attaining Competitive advantage. The global economy has changed dramatically from an industrial society to an information society. Business has turned into e-business. The new world of business with business pressures and increasing business needs forms the driving force for the organizations to take competitive advantage using E-commerce. The organizations respond to these business pressures to fulfil their business needs by Adopting strategic systems, Continuous improvement efforts, Business process reengineering (BPR), Business Alliances, and Electronic commerce. E-Commerce is a fairly new concept that has recently taken off. Electronic commerce is driving fundamental changes in the way in which organizations buy and sell. Traditionally, high operation and transaction costs and limited information flows forced most enterprises to adopt one of two procurement operating models: centralized command and control or highly decentralized operations. Each of these organizational models offered benefits and challenges. However, transforming procurement into a centre for value creation will require companies to overhaul both how they organize the procurement function and how they align supply management operations with overall business activities and goals. Many procurement organizations continue to transform their procurement organizations to maximize their scale and drive spend control.

tracking inventory, managing production and handling logistics, customer support services, supply chain management and collaborative engineering. Electronic Commerce, or e-commerce, is buying and selling on-line. It is part of the broader term e-business and involves transactions. In simple words B2B commerce can be defined as doing business electronically or business that is conducted over the Internet.

1.2. E-Marketplace
In economics, a market is defined as a virtual meeting-place of supply and demand. E-marketplaces fulfil the same purpose. E-marketplaces are a Business to Business relationship model (B2B) in which multiple organizations, both sellers and buyers, can communicate, collaborate, and perform commercial transactions by means of a Web platform which is common to all those participating in the market. The main advantage of the e-marketplace compared with other B2B models is that it allows a purchasing company access to multiple selling companies and to selling companies access to multiple purchasing companies.

1.3. Procurement in Construction Project

The construction industry is faced with the ongoing challenge to enhance current work practices and become more client-oriented. This trend is influenced by a number of factors, including greater performance expectations by clients, globalization of the economy, increased competitions between contractors, continued restructuring of work practices, industrial relations, and industrys need to implement information and communication technologies. Despite the unique and individual nature of any construction project, it requires involvement by many participants, such as clients, designers, consultants, contractors, subcontractors, and suppliers, as an entity to perform various roles and responsibilities. Sharing up-to-date information 349

1.1. E-Commerce and E-Business

In general, e-business is used in the broadest sense. It includes buying and selling on-line, but also other aspects of on-line business activity, such as purchasing,

between participants leads to reduction of errors and time delays and consequently facilitates more effective and efficient productivity and ultimately improves collaboration and teamwork. However, current construction industry is facing costly progress delays due to inaccurate and untimely communications amongst project team members. Often vital information is lost to the degree that information needs to be re-entered, or hardcopy manuals and drawing documents need be re-produced to have rapid access to the required information to perform some of their tasks. In this era of escalated demand for growth, the construction industry across the globe faces issues of constant material price fluctuation and shortage of skilled resources. Today, enterprises are increasingly in need of sustainable, faster and safer methods of construction, innovative project delivery modes and procurement practices, as well as interoperable standards within the construction industry, which is really a big challenge to their existing supply chain to improve the efficiency and effectiveness. The aim of supply is to deliver the correct quantity of a quality product, at the correct time, in the correct place, and at the best price. Purchasing is seen as a great opportunity for savings since it takes quite a large part in the turnover. At all junctions of construction project there has been continuous encouragement to consolidate, innovate, improve quality, improve safety, make partnerships, reduce wastages, deliver on time, meet / save the budget. Service, cost and time are the measures of Procurement excellence in any construction project and the amount saved on cost of the materials directly adds up to the profit of the project.

the fact that a great amount of demand uncertainty exists between the supply houses and contractors. Supply houses are challenged to base production and materials management decision-making on orders received from a large number of disparate contractors from diverse trades. The aforementioned demand distortion and uncertainty causes construction supply chain distribution channels to be crowded with unnecessary inventory. According to the existing literature, e-Procurement is likely to increase firms competitiveness through cost reduction and increased efficiency on the inbound logistics. However, even though some construction companies are adopting and using such systems, other firms are not intending to do so. In such circumstances, we intend to understand what makes a difference on what regards to e-Procurement adoption, which leads us to the following research questions: (i) What are the factors that foster the intention of Construction companies to adopt e-Procurement? What is their relative relevance? (ii) What are the barriers in construction project for the adoption of e-Procurement using B2B e-markets? (iii) How likely is a specific Construction Project to adopt e-RAs? (iv) What is the degree of readiness of construction project supply chain partners for participating in the e-RA? (v) How to adopt suppliers for construction supply chain e-partnerships? (vi) What should be the right mix of strategies for the different types of commodities purchased by construction companies? In order to ascertain the answers for the questions above, a detailed literature review was conducted to develop a research model containing a set of factors for explaining the construction companies likelihood to adopt e-Procurement using e-RAs on a B2B e-Marketplace.

2. The Problem and research questions

Construction material supply chains have evolved over time to base production and materials management decision-making on demand information from the immediate downstream node in the supply chain. This myopic view leads to demand signal amplification as individual upstream nodes attempt to forecast and fulfill orders. Further compounding this demand distortion is 350

3. literature review
A detailed literature survey was conducted on the Procurement process for construction projects,

various e-Business models, e-business applications in construction industry. The sources of literature review includes books, management journals, survey reports, research reports and contemporary articles on the e-business applications in supply chain management. Summary of observations made out of the detailed literature survey is given below:

shareholders. The development of e-business is upon us, now affecting the short and medium term but it is also the way business will develop over the long term. (Chimay J. Anumba and Kirti Ruikar, 2008). A construction project is a complex activity involving several participants; for example, the client, architect, structural engineer, fabricator and the contractor. It is team efforts, involving several, inter organizational activities and dialogue. Traditional communication and document exchange models were often manual and hence slow. The traditional means of communication involves producing numerous paper copies of documents and drawings. Management of these loose documents is often very time-consuming and tedious. Libraries of documents need to be maintained to effectively access data as and when required by the user. A lack of a clear audit trail causes delays in communicating with other members of the team (Needleman, 2000). E-business provides mechanisms for cross-enterprise coordination in name of construction supply chain integration. In order to optimize the entire supply chain system cross-enterprise coordination and special business relationship must be established among the organizations along the supply chain (Francisco Loforte Ribeiro and Jorge Lopes, 2001).

1.1 E-Commerce in Relation to Construction

E-commerce can be defined as the conducting of buying and selling of goods and services as well as business communication and transactions over computer networks and through individual computers linked to the World Wide Web (Key IT Solutions, 2005). The potentials of e-commerce technologies applications in the construction industry include: E-marketing; E-selling/e-procurement of goods and services; E-collaboration; E-finance; and E-customer services and relations (Veeramani et al., 2002). The necessary technological solutions for e-supply chain systems are readily available in the current market. Some of the fundamental issues for successful ecommerce in construction, such as signature exchange (Pederson, 1999; Asokan et al., 2000), secure payment (Shamir et al, 1998; Bellare et al., 2000), and fair contracting models (Coscia et al., 2000; Rohm & Pernul 2000; Liu et al., 2001) have already been addressed in broader business-to-business (B2B) projects. E-commerce applications have enhanced the development process operations of a project, and promoted integration and operation through the shared information network system to diverse participants in the construction supply chain (Jones & Saad 2003). e-Business has much to offer the construction sector, as it directly addresses the issues that a disseminated industry has to deal with distributed collaboration, electronic sourcing and purchasing of products and services that meet well-defined requirements, globalization, need for improved efficiency and timely delivery. It is widely accepted that e-business is the way to conduct construction business in the 21st century. It is the means available to companies to continuously improve efficiency and effectiveness in serving their clients needs and in delivering a return to their 351

1.2 E-Procurement Process

E-Procurement can be defined as the electronic integration and management of all procurement activities including purchase request, authorization, ordering, delivery and payment between a purchaser and a supplier (Chaffey, 2002). The more general classifications of the procurement process have been created by authors such as Kalakota and Robinson (2000), Lysons (1996), Fogarty et al (1991), and Whitely (2000). These classifications contain three to four stages of procurement and put the order or sale as the central phase of the process. In a more recent classification, Archer and Yuan (2000) detail a seven-phase procurement process. The phases include (1) information gathering,(2) supplier contact, (3) background review, (4) negotiation (5) fulfilment, (6) consumption, maintenance and disposal, and (7) renewal.

Six forms of e-Procurement are described by de Boer et al.(2002); (i) electronic-Maintenance Repair and Operations (e-MRO), (ii) web-based Enterprise Resource Planning (ERP), (iii) electronic-sourcing (e-sourcing), (iv) electronic-tendering (e-tendering) (v) electronic-reverse auctioning (e-reverse auctioning) and (vi) electronic-informing (e-informing). Both e-MRO and web-based ERP are built on a webintegrated enterprise resource planning system. The difference between the two is that e-MRO focuses on the procurement of MRO items whereas web-based ERP focuses on direct materials (de Boer et al, 2002). B2B relationships have most effect on the sourcing, fulfilment, and consumption phases of the procurement cycle (Nagle T, Finnegan P, Hayes J, 2006). Research of enterprises experiences with Internetbased procurement automation technologies indicates that companies have been able to achieve significant cost and process benefits by automating key procurement activities (Aberdeen, 2001). As a result of their e-procurement initiative, enterprises, on average, displayed a 35% improvement in spend under management, with a 41% reduction in maverick spend. Additionally, enterprises reduced their requisitionto-order cost by approximately 100%, and more than halved their transaction cycle time. In addition to improvement in various performance areas, enterprises reported negotiating, on average, a 4.75% incremental discount with suppliers after implementing their e-procurement solution (Aberdeen, 2007).

Dimitri P. Bertsekas, David A. Castanon, and Haralampos Tsaknakis (1993) have conducted detailed research and developed reverse auction algorithms for Symmetric Assignment Problems. Auction-based mechanisms are extremely relevant in modern day electronic procurement systems since they enable a promising way of automating negotiations with suppliers and achieve the ideal goals of procurement efficiency and cost minimization (T. S. Chandrashekar, Y. Narahari, Charles H. Rosa, Devadatta M. Kulkarni, Jeffrey D. Tew, and Pankaj Dayama, 2007). Despite the benefits of e-commerce technologies to the construction industry, there are many challenges in its applications. In many instances, the potential of e-commerce technologies has yet been fully and properly utilized, as many companies are simply utilizing various technologies to automate existing processes without analyzing the companys objectives and realistic needs. In addition, significant people and culture issues need to be addressed to overcome resistance to change and achieve radical revision (Elliman & Orange 2003).

4. research gaps identified

It has been noted from the above detailed literature survey that, until now, not much evident research has been conducted to pursue successful applications of ecommerce technologies to the construction supply chain. Furthermore, there is very little empirical research available that investigates the implementation of e-Procurement initiative for construction project procurement. Also it has been noted that the available exploratory research does not provide detailed analysis on the various procurement organizational structures (i.e. De-centralized Vs Centralized Vs Center-led) and does not proposes a hybrid form of procurement organization coupled with e-Procurement application. For this reason, this research will focus on developing a methodology for implementation of e-Procurement using e-RA on a B2B e-market platform in construction supply chain. The specific issues which will be investigated include the objectives, reasons/benefits, barriers of using e-commerce technologies. This research will also investigate the encouraging factors and 352

1.3 e-Reverse Auctions

In the mid-1990s, a new electronic sourcing tool emerged that has had, and is continuing to have, a profound impact on the way in which firms source goods and services from current and potential external suppliers. This tool, while known by other names (e.g., online negotiation) is the electronic reverse auction (e-RA). For a growing number of buying firms, e-RAs have found an appropriate niche in their strategic sourcing toolkit, allowing them to efficiently source goods and services that are highly standardized, have sufficient spend volume, can be replicated by a reasonable number of qualified competitors, and have insignificant switching costs (CAPS Research, 2002).

the need for learning, training, and knowledge sharing for better applications of e-commerce technologies and provide suggestions for better utilization of such modern communication and management tools.

5. Objectives of Research
The objective of this research is to conduct a detailed study on the procurement process of a construction project, develop a practical e-Procurement model and empirically investigate the benefits/limitations of applying B2B e-RA for construction material procurement.

6. Research Hypothesis
Based on previous studies and institutional theory the proposed e-Procurement model can be defined with the following hypothesis: Null Hypothesis (H0): The awareness level of E-commerce is low. Buyers and suppliers do not perceive any tangible benefits on adopting e-business. Alternate Hypothesis (H1): The awareness level of E-commerce is high. Buyers and suppliers do perceive tangible benefits on adopting e-business. Factor analysis to identify the main barrier for adoption of e-marketplace and most important benefits perceived by the suppliers.

Scope this research is limited to the development of a e-Procurement model for Procurement processes of construction projects related to the Commercial and Industrial buildings considering the high complexity / value of materials being procured. The following aspects have been covered in the scope of study: (i) Procurement Process Analysis (ii) Commodity spend analysis (iii) Supplier Spend Analysis (iv) Analysis on e-Procurement models (v) Online negotiations (vi) Auctions (vii) e-Procurement Integration

8. Collection of Primary Data

For the purpose of this study, a pilot survey has been conducted among the Supplier community in Kuwait using a close-ended questionnaire based on multiple choice questions and 5-point attitude measurement scale. According to Kuwait online business directory www.kuwait-toplist.com, there are more than 5000 companies operating in Kuwait dealing in 500 different commodities. For the purpose of this study, 165 active companies have been selected for conducting the survey. 23% of the respondents were from the top management, 40% from middle management, 20% from the lower management and 17% were from the staff category. 43% of the respondents belonged to high turnover category (assumed to be those having US$ 35 million and above), 29% belonged to, medium turnover category (between USD 3.5 million and 35 million) and 20% belonged to low turnover category ( less than US$ 3.5 million).

7. Scope of this Research

In order to have a comparison of the buyer/supplier behaviours, it is proposed to analyse the markets in a developed economy (Middle East) considering the high business potential in the construction sector. MEED.com is a renowned Middle East business intelligence online portal and data base which tracks the projects related to various business lines in Middle East and North African regions. It has been noted from the MEEDs Gulf Project Index that the total value of major projects planned or under way in the Gulf stood at US$2.937 trillion as on 29th September 2010 in which GCC countries accounts for 78% @ US$2.29 trillion. Kuwait was considered as a representative market in the Gulf region as it contains bulk of the upcoming construction projects potential among gulf region. 353

9. Collection of Secondary Data

Procurement data based on the following procurement spend of the Major Contracting companies from Kuwait has been collected for conducting high level spend analysis. Every contracting company procures materials and services from various suppliers. Suppliers spend analysis was conducted and the suppliers were classified in to following categories:

Vital Suppliers Critical Suppliers One time Suppliers

10. Analysis of primary data

Detailed analysis was conducted on the data collected and the survey data indicated the following: 57% of the respondents (buyers and suppliers) are not aware of e-commerce / e-marketplace and 43% are aware e-commerce as indicated in Figure-1.

identify products/potential suppliers frequently and occasionally respectively. 42% use the internet for posting quotes/proposals frequently and 33% occasionally.

11. Future e-Commerce Usage Distribution

Further analysis of the 66% of the respondents not using e-commerce currently showed the following for each of the intended use: As less as 4% each only said that they will use e-commerce/e-marketplace definitely and very probably in the near future for purchasing/ selling online. 39% may probably use for the same purpose. As much as 82% are likely to use the web catalogues to identify products/potential suppliers and 43% is likely to use the internet for posting requests for quotes/proposals. A majority of them (83%) are likely to use the internet for posting quotes/proposals and as much as 65% are likely to use the internet for identifying potential buyers.

60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Aware 42.86%

57.14%

Not Aware

Fig. 1. Awareness Distribution of B2B e-commerce in Kuwait 34% of the respondents use e-commerce/marketplace for conducting their business and the rest do not as indicated in Figure-2.

12. Benefits Perceived by the Respondents

With regard to the benefits perceived by the respondents who are aware of e-marketplace (43%) the following are the inferences. The percentages represent the level of agreement of the participants for each benefit outlined by the author. 60% agreed that there is material cost reduction. A whopping 73% affirmed that e-marketplace will result in process cost reduction and 54% expressed their agreement for cycle time reduction. 40% of the respondents indicated agreement with increased transparency in purchasing/ selling process. As much as 53% saw comparability of products, prices and suppliers as an important benefit and 40% agreed that they will benefit from access to new suppliers/buyers. 67% considered that it is easy to make analytical and historical reports. 80% were in agreement for the benefit 354

100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Using 34.29%

65.71%

Not Using

Fig. 2. Usage of E-Commerce for Business in Kuwait Out of the above 34%, further analysis was carried out and the results are as summarized below: Only 25% use the internet for purchasing/selling online and posting request for quotes / proposals. 58% use the internet occasionally for purchasing/ selling online. As much as 58% and 25% use web catalogues to

automation leads to more focus on strategic issues. 13. Barriers perceived by respondents With regard to the barriers perceived by the respondents who are aware of e-marketplace (43%) the following are the inferences. The percentages represent the level of agreement of the participants for each barrier outlined by the author. 40% agreed that technical standards not developed is a barrier. 60% of the respondents were in agreement of online crime. 67% considered resistance to change as one of the important barriers for e-marketplace adoption. Reduction in loyalty toward the suppliers was considered as a barrier by 60% of the respondents. 53% considered the high cost of switching over to online procurement as barrier.

14.2 Relation between awareness and use of B2B e-Commerce among the Suppliers
Null hypothesis: There is no relationship between awareness of e-marketplace and use in Company business. TABLE 2 CHI SQUARE TEST - B2B COMMERCE USAGE
Aware of e-Markets Yes No Companies use e-market Yes No Row Total 12 3 15 (5.1) (9.9) (42.9) 0 20 20 (6.9) (13.1) 57.1) 12 23 35 (34.3) (65.7) (1 00) Chi-square 24.347

Column Total

14. Chi-Square Test

14.1. Awareness of e-Marketplace Null hypothesis (Ho): The awareness level of E-marketplace is low and buyer and sellers do not perceive any tangible benefits on adoption of the same. TABLE 1 CHI SQUARE TEST AWARENSS OF B2B e-COMMERCE
Cases Observed 15 20 35 Expected 17.5 17.5 Residual -2.5 , 2.5 Chisquare 0.714 Degree of freedom 1

Note: 1. values within bracket refer to Expected Frequency. Since calculated chi-square value is more than the table value of 2.706, the null hypothesis is rejected at 10% level of significance. Hence we conclude that there is relationship between awareness of e-marketplace and use of the same for business. 7.4. Factor Analysis 8.4.1. Benefits Perceived Factor analyses are extracted by Principal Components Model, in which variables are assumed to be exact linear combinations of factors. The communality, Eigen values, % of Variance and cumulative % are given below: TABLE 3 FACTOR ANALYSIS BENEFITS PERCEIVED
Variable Q5_1 Q5_2 Q5_3 Q5_4 Q5_5 Q5_6 Q5_7 Q5_8 Q5_9 Q5_10 Communality .85586 * .37500* .89727 * .88924 * .58312 * .90564 * .70722 * .82771 * .52256 * .72890 * Factor 1 2 3 Eigen value 3.78563 2.04059 1.46630 Pct of Var 37.9 20.4 14.7 Cum Pct 37.9 58.3 72.9

Yes No Total

1 2

Since calculated chi-square value is less than the table value of 2.706, the null hypothesis is accepted at 10% level of significance. Hence we conclude that the sample represents the population and the awareness of e-market place is low among the buyers and sellers.

The entire variables are grouped into 3 factors. These variables are related items in one factor. Eigenvalue of factor 1 indicates the standardized variance associated with a particular factor and factor-1 shows nearly 37.9 % of variance. 355

VARIMAX rotation 1 for extraction 1 in analysis 1 Kaiser Normalization. VARIMAX converged in 5 iterations. TABLE 4 ROTATED FACTOR MATRIX
Q5_6 Q5_8 Q5_10 Q5_9 Q5_2 Q5_4 Q5_7 Q5_5 Q5_1 Q5_3 Factor 1 -0.92416 0.90836 0.78596 0.54506 0.45682 -0.00007 0.17569 0.25065 0.10394 0.06198 Factor 2 -0.07185 0.04892 0.2491 0.40903 0.14694 0.93727 0.82173 0.56671 -0.28533 0.64365 Factor 3 0.21539 -0.01415 0.22161 -0.24116 0.38042 -0.10377 -0.03331 0.44625 0.87387 0.6922

requirement of Technical Standards and government regulations and Factor-2 represents the resistance to change from the traditional methods. TABLE 6 FACTOR ANALYSIS BARRIERS PERCEIVED
Variable Q6_1 Q6_2 Q6_3 Q6_4 Q6_5 Communality 0.72123 0.84422 0.82985 0.61426 0.46651 Factor 1 2 Eiqenvalue 1.78699 1.68908 % of Var 35.7 33.8 Pct 35.7 69.5

VARIMAX rotation 1 for extraction 1 in analysis 1 Kaiser Normalization. VARIMAX converged in 3 iterations. TABLE 7 ROTATED FACTOR MATRIX
Variable Q6_3 Q6_4 Q6_5 Q6_2 Q6_1 Factor 1 0.91096 0.74632 0.58103 0.15259 -0.19806 Factor 2 -0.00293 -0.23928 0.35905 0.90606 0.82583

TABLE 5 FACTOR TRANSFORMATION MATRIX

Factor 1 Factor 2 Factor 3 Factor 1 0.74538 0.52144 -0.41534 Factor 2 0.58084 -0.81375 0.02078 Factor 3 0.32715 0.25674 0.90943

The analysis shows that Buyers and suppliers through e-Marketplace utilization perceive the following as significant benefits. Process cost reduction Comparability of products, prices, suppliers By automating daily tasks, the Internet can allow greater focus on strategic issues. Hence, it can be concluded from the analysis that the Buyers and suppliers look at e-Marketplace as a solution for automation. By automating the procurement of Low strategic and low complex materials, more focus can be given on the high strategic and high complex items, which constitute bulk value of the annual procurement.

TABLE 8 FACTOR TRANSFORMATION MATRIX

Factor 1 Factor1 0.99978 Factor 2 -0.02101 Factor 2 0.02101 0.99978

8.4.2. Barriers Perceived All the variables are grouped into two factors. These variables are related items in one factor. Eigen-value of factor 1 and factor 2 indicates the standardized variance associated with a particular factor. Factor-1 and factor-2 show nearly 35.7% and 33.8 % of variance respectively and almost equal to each other. The variables in both the factors are closely related. Factor-1 represents the 356

From the analysis the significant barriers can be summarized as follows. Lack of technical Standards and government regulations Resistance to change from the traditional methods and process. An interesting point to be noted that buyers and suppliers feel that e-marketplace will reduce the loyalty and close relationship. Considering the market conditions prevailing in Kuwait this is understandable and this is related to the traditional thinking required to be changed by the e-Marketplace service provider.

7.5. Supplier Readiness Assessment Suppliers will generally fall into four distinct categories as indicated in Table-10 based on their readiness to adopt e-Procurement: Performance Retention of existing suppliers and selection of new suppliers is an important part of gaining compliance and improving procurement. Currently assessment of suppliers, except for the largest contracts, is seldom done on the basis of an objective, auditable and consistently applied set of criteria. Pre-qualification accreditation of suppliers is a valuable means to ensure quality or supply and essential for higher value transactions. At present, approved supplier lists are often maintained by departments or a central contacts or procurement function. TABLE 9 SUPPLIER B2B E-COMMERCE READINESS MATRIX

Put in place an e-content strategy Collaborate with strategic partners

A clearly scoped Supplier Relationship programme is vital to the success of e-procurement project. The suppliers are businesses and they need time to evaluate the impact these changes will have on their own processes, staff skills, training needs and IT. However experience shows that giving them too much time (e.g. more than 6 months) is not particularly beneficial, especially for the smaller companies which do not plan that far ahead. 8.6. Procurement Process Analysis Every construction Project generally requires two types of materials namely Direct Material (also called as Permanent Materials) which will form part of Project Permanent installation and In-Direct Materials/ Services which are supporting items requires for the day to day site execution of the Projects. As a thumb rule 50 to 70% of the Project Cost is contributed from the Project Permanent Materials. 8.6.1 De-Centralized Procurement Process: Traditionally construction companies are adopting De-Centralized Procurement Process in which Project procurement begins with the award of the Project and issuance of RFQ to the suppliers. In De-centralized process, Procurement Department will play only a meagre role of Processing the Purchase Orders based on the Request received from the Project Offices, where the core Procurement activity is handled by the site Project Team. This type of De-centralized Purchase leads to maverick purchasing even the Procurement Departments ensures checks & balances as indicated in Figure-1. 8.6.2 Centralized Procurement Process: In order to improve the procurement efficiency Construction companies must centralize the Procurement activities. In the centralized Procurement Process, Procurement Department plays a pivotal role in the sourcing and negotiations. The modified process flow of Centralized Procurement process is indicated Figure-2. According to the modified process flow, Procurement Department 357

8.5.1 Practical Steps to Successful Supplier Adoption Develop a supplier strategy Carry out an assessment of supplier value and readiness Communicate with suppliers; Put in place a supplier development programme Carry out an impact assessment of local suppliers; Encourage local suppliers where they add real value

will issue Request for Quotations (RFQ) to suppliers and commercial evaluation / negotiations with suppliers will be conducted by Procurement Department. Projects will be notified upon finalization of the successful supplier for obtaining the Client / Consultant approval. The Centralized Procurement has the following advantages:
Better prices due to volume discounts. Greater bargaining power with suppliers. Avoids price anomalies and competition for scarce

Depending on the complexity and price of the materials, Construction companies have to adopt Suitable strategy as indicated in the Kraljic Procurement Portfolio Matrix (Marjolein C.J. Canils and Cees J. Gelderman, 2005) in Figure-3 to deal with the suppliers to minimize the Procurement Risks.
High
STRATEGIC SECURITY

Cr eat e VMI and ensur e t he st ock availabilit y

STRATEGIC CRITICAL High Value High Risk

Complexity

Aut omat ion, Use Online Cat alogues, e- Pr ocur ement

8.7. Commodity Spend Analysis Spend analysis is the examination of the volume and value of purchasing transactions at an organization makes. Corporate purchases can be classified along many dimensions that are relevant for the potential use of B2B e-markets for procurement. Two questions should be kept in mind: Given the characteristics, is it possible to use e-markets? Given the characteristics, is it economically reasonable to use e-markets, i.e. are e-markets better than any other form of procurement? The various commodities procured by Contracting Companies for their construction projects can be broadly grouped in to Engineered Materials with a unique assigned number (or tag) such that they can be uniquely identified throughout the entire life of the Project, Bulk items that are manufactured to industry standards and purchased in bulk quantity. (e.g., pipes, cables, fittings, conduits, etc) and Pre-Fabricated Items that are typically fabricated as per engineered specifications at a fabrication shop or shop site separate from the Project site. Depending on the Project, these items are quantified, procured and delivered by the subcontractor. (e.g., process modules, pre-assemblies, pipes spools, control stations, equipment skids, etc.). Complexity, Strategic Importance, Price and Repeat Purchase are the important dimensions of Procurement Spend for conducting a Commodity Spend Analysis (Report for OGC by Europe Economics, 2002).

TACTICAL ACQUISITION Low Value Low Risk

TACTICAL PROFIT High Value Low Risk

Low Low

VALUE

High

Fig. 3. KRLJIC Procurement Portfolio Matrix

High Value High Risk: Ensure availability of

Supply with Close Price Management. Low Value High Risk: Ensure availability even if price premium is necessary. High Value Low Risk: Opportunities to Cut Cost, Improve Savings using competition. Low Value Low Risk: Ensure Automation & Minimize the time spent. 8.8. B2B Reverse Auctions B2B e-Markets offer following trading functions, which can be adopted for the Procurement Requirements of Construction Companies. Reverse Auction Exchange (RFQ/RFP/RFB) Catalogue In a reverse auction buyers list a product or service they would like to buy. Sellers submit offers, lowering the selling price for each submitted bid. Online bidding is used also for reverse auctions. Online auctions effectively allow for an infinite number of bid resubmissions by suppliers in an open and competitive environment, at a relatively low overhead cost. This turns the concept of a true market price into a reality, providing significant benefits to purchasing organizations. Types of web based Auctions: Negotiations using EDI: B2B EDI Web-based (Sales) Forward Auctions : eBay, 358

Aggr egat e t he Demand, Cr eat e Rever se Auct ions and Cr eat e Hyper Compet it ion

commodities between jobs. Standardized procedures.

Low Value High Risk

Develop Par t ner ships, Ensur e long t er m Supplier Relat ionships

Auction.co.kr Web-based (Procurement) Reverse Auctions : Priceline.com Web-based Double Auctions : Stock Exchanges

TABLE 12 Auction combination matrix

Auction Control Auction Style Open Blind Sealed Open for all A C E By Invitation only B D F

The reverse auction consists of two important components i.e. Auction style and auction control (Table-10 & 11). Companies can launch their auctions in the following auctions styles depending on their need. TABLE 10 Auction style
Open Blind Sealed Suppliers can see the active bid Prices and attachments (Optional), the supplier identity is concealed. Only the buyer can see bids. Neither buyer nor supplier can see the bids until the bids are unlocked.

Combinations: A Open and Open to all B Open and By Invitation only C Blind and Open to all D Blind and By Invitation only E Sealed and Open to all F Sealed and By Invitation only The success of an auction, in terms of the savings obtained by the purchaser, depends on two key factors: the ability to define the good with clear and unambiguous specifications (high specifiability) and a market with supply-side liquidity where there are plentiful suppliers that compete among each other to get the business (highly competitive). It is therefore preferable for the Buyer Organization to plan and pool requirements together for a specific period of time and to auction its business together, rather than use various auctions. In conclusion, if a product can be perfectly defined, competition between suppliers is high and the value is sufficient, the better suited it will be to an online auction for the purchaser. Experience shows that substantial savings can be made and the risk that the purchaser incurs is minimized if the auction is carried out between approved suppliers. 7.6. B2B Reverse Auction Process The reverse auction process (Figure-4) involves intensive work on behalf of the buyer and market maker to structure the bidding process and prepare suppliers for qualification. The process is represented below: 1. 2. 3. 4. 5. 359 Make Market (specs) Identify Suppliers Pre-Award Review Approved Suppliers Listing Identify Specific Terms & Conditions

TABLE 11 Auction control

Open for all By Invitation only All e-market registered Suppliers can quote for the auctions. But still specific suppliers can be invited. Only specific invited suppliers can quote for the auctions.

Auction style and auction control are the two important functionalities of online auctions. Buyer need to manipulate the combination of auction style and control depending on the commodity and nature of the item to be auctioned. Right combination will reap a potential savings to Buyers. The Buyers can do a spot purchase using the auctions or they can enter in to a long term agreement with the suppliers. Buyers can also create a Request for quotations. RFQ and Auctions are similar in functionality, the main difference is an Auction can be of Open Style where suppliers are allowed to see each others price and can re-bid for the same item, but RFQs are either Blind or sealed and suppliers can not re-bid.

IV

High

Low

Low

Low

> 0.5%

Create Competition"

"Hyper

High

Low

High

Low

4.90%

6. 7. 8. 9.

Invite Suppliers Set Up Auction Conduct Auction Contract Write-up

VI

Low

Low

High

Low

> 0.5%

Create RFQ & Prequalify suppliers and make them technically equal. Create Open auction by inviting only prequalified suppliers. Create reverse auction with clear item attributes and negotiate online. Create reverse auction with clear item attributes and negotiate online. Create reverse auction with clear item attributes and negotiate online. Create reverse auction with clear item attributes and negotiate online. Create reverse auction with clear item attributes and negotiate online. The successful supplier will maintain their online catalogue for repeat purchase to reduce the transaction cost.

VII

High

High

High

Low

> 0.5%

VIII

Low

High

High

Low

> 0.5%

IX

High

Low

High

High

75%

Low

High

High

High

1%

The following are the essential steps to streamline the procurement process through e-marketplace.
Create online Supplier Invitation lists Create Auction / RFQ templates for each

Fig. 4. Reverse Auction Process 7.7. B2B e-Procurement Methodology Based on the above supplier & commodity spends analysis, it has been noted that procurement spend of Construction Companies generally covered under the following combinations (Table-13) and the appropriate B2B e-Procurement strategy has been indicated against the each commodity spend criteria. Based on the detailed analysis conducted on the various functionalities of the B2B e-Market online procurement tools, each of the above procurement strategy has been mapped with the most suitable e-Procurement tool as given in Table-14. TABLE 13 commodity spend criteria & e-procurement strategy

commodity Consolidate the requirements of similar commodity Select appropriate negotiation tool based on the type of the material. TABLE 14 COMMODITY SPEND MAPPED WITH B2B E-PROCUREMENT TOOL
TYPE OF B2B e-PROCUREMENT TOOL Type Online Supplier Catalogue Request for Quotation (RFQ) RFQ Style Blind Sealed RFQ Control Open Invitation Open Yes Blind Reverse Auction Auction Style Sealed Auction Control Open Yes Invitation

Yes

II

Yes

Yes

III

Yes

Yes

Yes

IV

Yes

Yes

Yes

Yes

VI
Commodity Spend Criteria Type Price Repeat Purchase Strategic Importance Complexity Average Annual spend B2B e-Procurement Strategy Develop long term agreement with Suppliers and maintain B2B online supplier catalogues to reduce Transaction cost Create Competition" "Hyper

Yes

Yes

VII

Yes

Yes

Low

High

Low

Low

8%

VIII

Yes

Yes

II

High

High

Low

Low

8%

IX

Yes

Yes

Yes

III

Low

Low

Low

Low

2%

Develop long term agreement with Suppliers and maintain B2B online supplier catalogues to reduce Transaction cost Create Competition" "Hyper

Yes

Yes

Yes

IV

High

Low

Low

Low

> 0.5%

High

Low

High

Low

4.90%

VI

Low

Low

High

Low

> 0.5%

Create RFQ & Prequalify suppliers and make them technically equal. Create Open auction by inviting only prequalified suppliers. Create reverse auction with clear item attributes and negotiate online. Create reverse auction with clear item attributes and negotiate online. Create reverse auction with clear item attributes and negotiate online. Create reverse auction with clear item attributes and negotiate online. Create reverse auction with clear item attributes and negotiate online. The successful supplier will maintain their online

In order to improve the efficiency and to achieve the Procurement Process automation, the Construction Companies having a back end ERP system have to integrate their ERP system with the e-marketplace portal as indicated in Figure-5.

VII

High

High

High

Low

> 0.5%

VIII

Low

High

High

Low

> 0.5%

IX

High

Low

High

High

75%

360

Low

High

High

High

1%

Fire Wall

E-Market Fire Wall

final minute of an auction as shown below in Figure-6. Late bidding deprives rivals of the ability of seeing ones bid and undercutting it.
Result of a Sample Buyer's Auction
24,000

Inspection, Shipping Notice, Payment

Quotation / PO

SUPPLIER-A

21,429

Quotation / PO RFQ

TOTAL BID VALUE (US$)

21,000 18,000 15,000 12,000 9,000 6,000 3,000 14-082003 18:46 15-082003 08:40 15-082003 10:18 15-082003 12:14 15-082003 12:27 15-082003 12:28 15-082003 12:29 15,306 14,456 13,946

SUPPLIER-B

13,605

13,265

BACKEND ERP SYSTEM

PO

Quotation

E-Marketplace
(RFQ, Auctions, Reverse Auctions)

13,180

Quotation / PO

SUPPLIER-C

Quotation / PO

SUPPLIER-D

Quotation / PO Inspection, Shipping Notice, Payment

SUPPLIER-E

DATE & TIME OF BID

Fig. 5. Basic Framework of ERP eMarket Integration 7.8. Reverse Auction: Supplier Price Dynamics The online reverse auction process typically begins with the buyer posting a request for purchase (RFP) to a website and inviting specific suppliers to view the RFP. In a sealed-bid auction, suppliers are asked to submit their bids a few days or weeks later, and a winner is subsequently selected. Only the buyer views the bids. In the open-bid auction, suppliers bid sequentially through a series of product lots or sub-groups and can view their competitors bids and respond in real time. A moving end-time (a soft close) is used for each lot, meaning that any bid within the last minute of the closing time will automatically extend the close time for a few minutes to allow other bidders to respond. One auction characteristic that may influence auction success is auction time or the auto-extension of the bidding period. Most auctions are initiated with advanced notice of a specific closing time. The fixed end time poses an incentive problemthe early bid serves no benefit to the bidder but reveals information to her rivals. The typical model of the English auction would project that bidders would quickly bid their valuations and the auction would end with the highest valuation bidder receiving the price of the valuation of the secondto-last bidder. Yet many auctions with fixed-end times are experiencing sniping or submission of bids in the 361

Fig. 6. Reverse Auction Price Dynamics 7.9. Reverse Auction Tips: To conduct successful reverse auctions, buyers must do their homework. To keep the process simple: Have a clear and concise requirement (recurring need commodities are best). Be certain a significant number of suppliers will compete (through substantial market research). Have a dollar amount great enough to offset the cost of conducting the reverse auction.

8. Conclusions
In conclusion, if a product can be perfectly defined, competition between suppliers is high and the value is sufficient, the better suited it will be to an online auction for the purchaser. Experience shows that substantial savings can be made and the risk that the purchaser incurs is minimized if the auction is carried out between approved suppliers. Empirically, there is a direct relationship between the order amount and the savings achieved, with larger volumes achieving greater percentage savings. It is therefore preferable for the Buyer Organization to plan and pool requirements together for a specific period of time and to auction its business together, rather than use various auctions. A well planned implementation of B2B e-Procurement for contracting companies will result in several benefits

and some of the benefits are listed below: Cost savings and price reductions Reduction or elimination of the role of intermediaries Shortening supply chain response and transaction times Gaining a wider presence and increased visibility for companies Greater choices and more information for end users. Improved service as a result of instant accessibility to services Collection and analysis of voluminous amounts of data and preferences Creation of virtual companies and Levelling playing field for small companies Gaining global access to markets, suppliers, and distribution channels.

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366

Chaotic Behaviour of Financial Time Series An Empirical Assessment

Ravindran Ramasamy Faculty of Business Administration, University Tun Abdul Razak, Malaysia Mohd Hanif Mohd Helmi Faculty of Business Administration, University Tun Abdul Razak, Malaysia 1. Introduction
The financing function which started in late fifties with net income and net operating income theories underwent several changes. Borrowing and value of firm, tested by researchers in the last few decades has gone to the background giving way for structured financial products and non linear exotic options whose pay offs are not at all linear. The financial engineers now design methodologies to price these products based on some expectations of return distributions. These engineers apply very strong assumptions while modeling returns for forecasting. One of the major assumptions is that the returns generated by any financial time series (FTS) whether share prices, exchange rates or market indices are normally distributed and they move at random. This assumption is disputed by many researchers (Aparicio et al., 1999, Gilmore 1993, Kyrtsou et al., 2004, Muckley 2004, Sewell et al., 1996, Varson et al., 1995). Risk management requires an accurate forecasting model to quantify the future price path of shares and other FTS. The forecasted price path is efficiently applied in managing the risks. Risk management involves managing the risk at minimum cost by choosing right risk mitigating instrument which include an array of financial instruments like forward contracts, futures contracts, option contracts and swaps. These instruments price movements are cointegrated with the prices of underlyings on which they issued and they closely follow the price path of the underlyings. Any deviation is quickly corrected and mostly they derive their prices from their underlying. The risks in financial instruments arise due to the ever fluctuating nature of their prices. Till last decade the loan interest rate was fixed over time but at present this has become variable. Good 367 forecasting models are needed to forecast and plan these instruments cash flows. Linear forecasting models like regression etc are out of pace. Modern models like ARIMA, GARCH and exponential models rely on normality and stationary assumptions. Many research studies point out deficiencies in forecasting models due to the strong assumptions on which they are built (Urrutia et al., 2002, 2006, Schittenkopf et al., 2000). Empirical studies which use the distributive models frequently fail due to the presence of various forms of distributions like normal, lognormal, t, exponential etc. There is no consensus among researchers regarding the character, structure and distributions these returns generate. Two popular distributions are applied as of date are the normal (also known as Gaussian or Weinar) and fat tail t distribution to model returns. Lognormal distribution has become highly popular over the other distributions in modern financial engineering as the returns show non normality, nonlinearity and geometric growth characters (Baillie, 1989). After the arrival of Black Scholes model of option pricing the lognormal distribution has taken a center stage in financial engineering. Modeling of random movements in pollen particles started in 1820s by Brown and followed by Einstein and established by Weiner.

2. Brownian Motion
Brown a botanist studied the pollen particles movement suspended on water. He came to the conclusion that the pollen particles move randomly due to the innumerable bombardment of water molecules on it. Similar analogy is given for financial time series returns. Innumerable small trading transactions hit the prices constantly and hence the prices move randomly (Mouck, 1998). Brownian motion is purely random and any movement in time is purely stochastic and it does not depend on the previous motions or directions (Kyrtsou, 2004, Small, 2003). It is like dice throw in snake ladder game

where the second throws outcome does not depend on the first throws result. The spaces are identically distributed in the dice. The distribution is Gaussian (normal) and the outcomes are purely random and there is no pattern. Similar analogy is applied in financial time series (FTS). The share prices, share market indices, interest rates and the exchange rates generate returns which move at random and any movement in time is purely stochastic and it does not depend on the previous motions and there is no memory. Whatever oscillations noticed is pure white noise and no property, pattern or trend could be observed. According to Markove process the past FTS returns cannot be used to predict the future returns or prices in any meaningful way as the FTS returns have no memory (Barkoulas, 1999, Cheung, Y.W. 1993, Lo A.W. 1991). The next price or return depends only on the previous value and not on earlier values. The above opinions are disputed by several researchers and they point out the FTS returns are not exactly Gaussian. These FTS returns show persistence behaviour (meaning that an increase in return is followed by a series of increases in return and vice versa). Some FTS returns show anti persistence or mean reversing behaviour (an increase in return will be followed by a series of decrease in returns). Many earlier research studies have pointed out that the FTS returns exhibit fat tails through serial correlations and run tests. The skewness and kurtosis measures are also utilised to support their view (Claire 2001, Fox 1986, Robinson 1995). They argue since the FTS returns are not exactly Gaussian therefore the prediction and forecasting models are relevant. They point out chartist approach and the derivative pricing etc to strengthen their argument. The Black and Scholes model and most of the modern financial asset price forecasting models assume Brownian motion and Weiner process in FTS returns and the returns of these FTS returns are normally distributed. Based on these strong assumptions the option premiums are calculated and the hedging decisions are made by the financial analysts, speculators and arbitrageurs.

and exchange rates etc. The objective of this paper is to assess whether the FTS returns are purely white noise or any property or pattern exist. If shocks are pure white noise all forecasting models will become useless. We have attempted to assess whether the FTS returns show randomness or otherwise. Our argument goes in the following lines. The FTS returns will exhibit some pattern in the past and the same pattern or behavior will tend to continue in the future. All of a sudden FTS returns will not show altogether a new pattern unless there is an external random exogenous natural event or a disaster. The process of change will be gradual and mostly dependent on the nature of information which is disseminated. These patterns were assessed in the past by serial autocorrelations and run tests. The chaotic exponent (CE) is a new arrival in this domain to quantify the randomness or otherwise present in FTS returns (Kang 2004). The remaining part of this paper is organized into four sections. Section two explains the statistical background and section three explains the methodology adopted in this paper. The final section interprets the results and concludes the paper.

4. Chaotic Exponent (CE)

CE was originally applied in studying the river Niles water flow pattern and now the same technique is applied in many branches of science including finance. The stochastic process (Brownian motion / Weiner process) present in FTS returns is quantified in CE. This exponent is computed by rescaled range (RSR) technique (Booth 1982). This method applies the natural log-time as independent variable and natural log-FTS returns as dependent variable in power law framework to compute the CE either through regression or through loglog plot. The CE value lies in the range of 0 < C < 1. An exponent in the range of 0.45 to 0.55 is interpreted as a pure stochastic random movement and whatever fluctuations noticed in FTS returns are a pure white noise and there is no trend or pattern. In other words it is a pure Brownian motion and exhibits a Gaussian distribution. Planning, forecasting, hedging and controlling are meaningless when the FTS returns are a pure white noise. If the CE is 368

3. Significance
It is therefore interesting to test what is the real position of FTS returns generated by shares, indices

less than 0.45, it is interpreted as anti-persistence which means a price fall will be in all probabilities will follow price increases for sometime in the future. Technically it is described as mean reversing process. CE of more than 0.55 indicates persistence behaviour meaning a price increase will be followed by a few price increases in all probabilities and vice versa for sometime in the near future.

From the vector of share returns the mean and standard deviation are computed as follows.

1 n ri n i =1 (4)

1 n (ri ) 2 n(5) i =1
where

5. Methodology
The prices pertaining to share, indices and exchange rates are provided in the column vector form, Pi to calculate the CE where i = 1, 2 . . . N. N is the length of the vector. Financial literature is skeptical about the above vector of FTS because the FTS prices are non stationary meaning that they have no stable mean and variance. Hence the FTS prices are detrended to get returns as these returns are stable in mean and variance. Therefore the returns are important than the FTS prices in modeling. The change in prices is the returns and they are computed in several ways but all show almost similar results.

= mean returns = standard deviation of returns n = number of returns FTS return deviations are computed with the above mean di = ri- (6) Where d = deviation (shock)

r =p p t 1, t t t 1
(1) rt-1,t = pure returns

p t 1 r = t 1, t p (2) t 1
rt-1,t = relative returns

The individual deviations (shocks) are added consecutively to get cumulative deviations vector whose values will show the cumulative noise present in FTS at every stage. Both positive and negative shocks are added to get cumulative vector of deviations. cd1 = d1 cd2 = cd1+d2 cd3 = cd2+d3
* * *

rt 1,t = l n pt l n pt 1
(3)

cdn = cdn-1+dn

(7)

rt-1,t = geometric returns where p = Price t = Time in days ln = Natural logarithm

where cdn = cumulative deviations The cumulative return vector will not grow continuously as there are positive and negative returns. In the case of more positive returns the cumulative returns will grow and vice versa. If the returns are distributed evenly between positive and negative then the cumulative returns will be stagnant. 369

6. Rescaled Range (RSR)

From the vector of cumulative deviations, a range is computed by subtracting the minimum of the cumulative deviation from the maximum. Then this range is divided by the standard deviation to get the rescaled range.
Column Vector 1 RSR (dependent variable) RSR1 * * * RSRn Ln log RSR Ln log (RSRi) * * * Ln log (RSRn) Column Vector 2 Days included in every segment (independent variable) t * * * *

Ln log Days Ln log (ti) * * * Ln log (tn)

RSR1 =

[c d

max

c d

(8) 1 where RSR = rescaled range

min

Several values are required to fit a straight line by the method of least squares and to compute the slope of a line through regression. Therefore to get more data the same cumulative deviation vector is divided into two equal halves and applying the same rescaled range procedure applied above another two rescaled ranges are computed. The average is taken as the second rescaled range.

With the natural logarithmic vectors (RSR and t), regression coefficient is computed taking ln log rescaled range returns as the dependent variable and the ln log number of days as independent variable. The resultant regression slope coefficient is the Chaotic Exponent.

[c d RSR2 =

max

c d

1/ 2

[c d min ] +
(9)

max

c d

1/ 2

min ]

y = t
Ln log Y = + ln log t (12) Ln log (RSR) = + ln log (t) (13) CE = (14)

(11)

RSR2 = (rescaled range of first half + rescaled range of the second half)/2 If the number of returns is in 2n then the rescaled range could be applied efficiently as the returns could be recursively scaled in equal halves. If not after some iterations it will go out of proportion. Recursively several non-overlapping segments of equal length of cumulative returns are taken and their average rescaled ranges are computed.

E r = *tC

(15)

d [c RSRn =

max

d c

1/ n

min

+ *** + n

d [c

max

d c

1/ n

min

]
7. Data

(16)

(10) After several iterations two vectors of values emerge. The first vector is the dependent variable, the rescaled range of returns and the second vector is the number of days whose returns are included in every segment. Then the logarithms of both vectors are computed. 370

Nine shares traded in Kuala Lumpur Stock Exchange (KLSE) were selected at random and their closing prices were downloaded from Yahoo finance website, for ten years from January 2000 to December 2009. There were 2450 closing prices excluding the holidays for this period of ten years. The prices relating to the last four

years i.e. from January 2006 to December 2009 were considered for short-term (one year) CE calculations. For long term CE, out of 2450 prices recent 2048 prices were considered and the remaining data were discarded. This is to satisfy the 2n rule of power law. The CE could be effectively calculated if the data is in the powers of two as the rescale range requires the data to be recursively divided into two equal halves.

8. Share market Indices

The stock market index is another FTS which is a weighted average price of all shares traded in a stock exchange. The unique feature of this index is that it combines all positive price movements and negative price movements in a day and hence there is a smoothing effect. The principal difference between the share price and the stock index is that the stock index is the weighted average of all shares. It represents all macro economic variables and hence there will be no company specific factor could influence it. But the individual company share price will be influenced by company specific factors. The indices of KLSE, Germany, Australia, UK, Singapore, NIKKE and US indices Dow Jones, NASDAQ and Std & Poor were downloaded from Yahoo finance and the same procedure applied for share prices is applied to calculate CE of indices. 9. Exchange rates

Exchange rates of nine currencies in relation to Ringgit Malaysia were downloaded from Pacific Exchange rate services web site. The currencies chosen are stronger than Ringgit meaning that for one unit of foreign currency we have to pay more than one Ringgit. The soft currencies were left out due to their larger volatility and instability. The US dollar was omitted because the US dollar was pegged to Ringgit at RM 3.80 till July 2005 and after depegged. The USD exchange rate therefore gives non continuous extreme data is an outlier hence omitted from analysis. To calculate CE for exchange rates the same procedure adopted in shares and indices is applied here. The main difference between share price and the exchange rates is the countries involved. Share price movements are influenced by company specific factors and country specific factors, the indices are influenced only by macro economic factors pertaining to the specific country but foreign exchange rates are sensitive to the relative macro economic variables of host and home countries (Diebold 1990). Therefore the CEs of indices and exchange rates will be more consistent and normally distributed when compared with share prices. 10. Results and Discussion The long-term CEs and short-term CEs have been computed by using the specific years closing prices data. The selected shares CEs are given below. Table 1. Chaotic Exponents of selected shares
2007 0.677* 0.601* 0.569* 0.674* 0.332** 0.442** 0.521 0.580* 0.344** 2008 0.390** 0.538 0.497 0.512 0.412** 0.183** 0.416** 0.233** 0.629* 2009 0.527 0.272** 0.376** 0.404** 0.587* 0.597* 0.781* 0.201** 0.743* 10 years 0.723* 0.686* 0.613* 0.560* 0.543 0.503 0.471 0.431** 0.425**

Company OSK BERJAYA TOTO IOIPROP OYL YTLPOWER IOI PROP ANN JOO TYLCORP JASA TIASA

2006 0.443** 0.558* 0.345** 0.489 0.594* 0.284** 0.263** 0.418** 0.290**

* CEs more than 0.55 indicate persistent behaviour ** CEs less than 0.45 indicate anti-persistent behaviour CEs between 0.45 and 0.55 indicate stochastic behaviour 371

The long-term CEs for different companies are sorted in descending order. Four companies show persistent behaviour, three companies show stochastic behaviour and two companies exhibit anti-persistent behaviour. Among the share CEs there is no uniformity in the long run. If we look short-term CEs same mixed pattern is observed. In 2006 six companies show anti-persistent behaviour, two companies show persistent behaviour. Only one company show random behaviour. Similar mixed pattern could be seen in 2007, 2008 and 2009. When we compare the results company-wise the same inconsistent behaviour is observed. None of the companies show uniform behaviour. IOI properties and TYL corporation show anti-persistent behaviour in Table 2. Chaotic Exponents of selected indices
Indices KLSE Australia Germany NASDAQ Singapore NIKKE Std & Poor UK Dow Jones 2006 0.439** 0.639* 0.614* 0.574* 0.392** 0.738* 0.449** 0.563* 0.318** 2007 0.726* 0.596* 0.421** 0.428** 0.524 0.336** 0.331** 0.344** 0.294**

three years. All other companies show mixed patterns over the years. These results imply two things. Firstly, the share returns are not truly random as they do not show any consistency either in the short-run or in the long-run. As pointed out by earlier researchers through different statistical tests that the share returns do not exhibit pure normality. There is fat tail, skewness and kurtosis which make the forecasting relevant. The chartist approach also advocates that the share returns are not absolutely normally distributed. Secondly, the market is not so efficient because most of the company share prices either show persistent or anti-persistent behaviour. Hence forecasting and hedging are relevant in KLSE.

2008 0.724* 0.575* 0.553* 0.48 0.412** 0.400** 0.533 0.435** 0.532

2009 0.548 0.196** 0.429** 0.445** 0.606* 0.493 0.414** 0.236** 0.414**

10 years 0.605* 0.567* 0.530 0.515 0.494 0.472 0.446** 0.409** 0.402**

* CEs more than 0.55 indicate persistent behaviour ** CEs less than 0.45 indicate anti-persistent behaviour CEs between 0.45 and 0.55 indicate stochastic behaviour The long term CEs for different indices have been sorted in the descending order and reported. KLSE and Australian indices show persistent behaviour, Std & poor, UK and Dow Jones indices show anti-persistent behaviour and the remaining indices exhibit stochastic behaviour. Short term indices also show inconsistency. Out of 36 short-term CEs calculated over a four year period 11 times the indices show persistent behaviour, 19 times anti-persistent behaviour and six times stochastic behaviour. Short-term country wise analysis show anti persistent behaviour for Dow, UK and Std & Poor. Even in these indices one year index is not anti 372 persistent. KLSE, Germany, Singapore NASDAQ and NIKKE show mixed CEs. Australia shows persistent behaviour. Contrary to our expectations even the indices show mixed pattern. It implies that even weighted average of prices (indices) in the stock market do not remove the random behaviour. Even the advanced countries stock market indices do not show consistent behaviour. The indices also behave like shares and there is no uniqueness in indices.

Table 3. Chaotic Exponents of selected exchange rates

Currency KRW NZD GBP EUR JPY CHF CAD AUD MXN 2006 0.642* 0.634* 0.455 0.562* 0.454 0.538 0.310** 0.437** 0.602* 2007 0.605* 0.612* 0.617* 0.530 0.358** 0.513 0.491 0.598* 0.417** 2008 0.483 0.363** 0.416** 0.376** 0.444** 0.371** 0.455 0.427** 0.174** 2009 0.503 0.415** 0.522 0.283** 0.454 0.345** 0.456 0.205** 0.455 10 years 0.582* 0.544 0.501 0.460 0.458 0.430** 0.428** 0.411** 0.365**

* CEs more than 0.55 indicate persistent behaviour ** CEs less than 0.45 indicate anti-persistent behaviour CEs between 0.45 and 0.55 indicate stochastic behaviour The CEs of exchange rates also behave similar to shares and indices. More anti persistent behaviour could be seen over the years. Out of 36 indices in total 15 indices show anti persistent behaviour in the study period. Eight indices show persistent behaviour and 13 exchange rates show stochastic behaviour. The long-run CEs results are also mixed. Four exchange rates show anti-persistent behaviour, one persistent behaviour and another four currencies show stochastic behaviour. Currency wise analysis results also show anti-persistent behaviour by Australian Dollar, stochastic behaviour by Canadian Dollar and the other currencies show a mixed pattern. Since 23 CEs are not stochastic we could confirm even the exchange rate market is not purely Brownian meaning that the distributions are not purely normal. It may be somewhat skewed and may be with fat tails. is non randomness and fat tails in FTS and hence the forecasting and hedging decisions are relevant. The Markovian principle advocates that there is no memory in FTS returns and the current prices dependent only on the previous price. No one can predict the future returns with the help of past data are effectively nullified from our results. The time series analysed above are not purely Brownian (Weiner process) motions, there is some sort of non normality. Our findings are important which support the chartist approach of forecasting of time series as appropriate. The Gaussian distribution assumption widely applied in Value at Risk (VaR) calculations, ARIMA and GARCH modeling and pricing of derivatives under Black and Scholes model are approximations and are not accurate. This approximation may lead to mispricing of derivatives.

11. Conclusion
The financial time series of different categories show different chaotic exponents and they are not consistent. Both the short-term and long-term chaotic exponents show mixed pattern and they are not consistently close to 0.5 as expected by efficient market theory. Majority of FTS returns show either persistent or antipersistent behaviour, only a few FTS returns show stochastic behaviour. This clearly shows that there 373

12. References
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stochastic trends in a system of exchange rates, Journal of Finance, 44, 167-181 Barkoulas, J., W. Labys, and J. Onochie (1999), Long memory in futures prices, Financial Review, 34, 91-100 Booth, G. G., F. R. Kaen and P. E. Koveos (1982), RSR analysis of foreign exchange markets under two international monetary regimes, Journal of Monetary Economics, 10, 407-415. Cheung, Y. W. (1993), Long memory in foreign-exchange rates, Journal of Business and Economic Statistics, 11, 93-101 Claire G. Gilmore, (2001), An examination of nonlinear dependence in exchange rates, using recent methods from chaos theory, Global Finance Journal, Vol. 12 Issue 1, p139 Diebold, F. and J. Nason (1990), Nonparametric exchange rate prediction?, Journal of International Economics, 28, 315332 Einstein, A. (1956), Investigations on the Theory of Brownian Movement. New York: Dover Fox, R. and M. S. Taqqu (1986), Largesample properties of parameter estimates for strongly dependent stationary Gaussian time series, Annals of Statistics, 14, 517- 532 Gilmore, Claire G, (1993), A new test for chaos, Journal of Economic Behavior & Organization, Vol. 22 Issue 2, p209 Kang-Lin Peng; Chib-Hung Wu; Yeong-Jia James Goo, (2004), The Development of a New Statistical Technique for Relating Financial Information to Stock Market Returns, International Journal of Management, Vol. 21 Issue 4, p492-505 374

Kyrtsou, Catherine; Labys, Walter C.; Terraza, Michel, (2004), Noisy chaotic dynamics in commodity markets, Empirical Economics, Vol. 29 Issue 3, p489-502 Lo, A. W. (1991), Long-term memory in stock market prices, Econometrica, 59, 1279-1313. Mouck, T, (1998), Capitl markets research and real world complexity: the emerging challenge of chaos theory, Accounting, Organizations & Society, Vol. 23 Issue 2, p189-215 Muckley, Cal, (2004), Empirical asset return distributions: is chaos the culprit?, Applied Economics Letters, Vol. 11 Issue 2, p81-86 Norbert Wiener, 1942, Extrapolation, Interpolation and Smoothing of Stationary Time Series. Published postwar 1949 MIT Press Robinson, P. (1995), Gaussian semiparametric estimation of long range dependence, Annals of Statistics, 13, 1630-1661 Schittenkopf, Christian; Dorffner, Georg; Dockner, Engelbert J, (2000), On Nonlinear, Stochastic Dynamics in Economic and Financial Time Series, Studies in Nonlinear Dynamics & Econometrics, Vol. 4 Issue 3, p101-121 Sewell, Susan P.; Stansell, Stanley R.; Lee, Insup; Below, Scott D., (1996), Using chaos measures to examine international capital market integration, Applied Financial Economics, Vol. 6 Issue 2, p91-101 Small, Michael; Chi K. Tse, (2003), Determinism in Financial Time Series, Studies in Nonlinear Dynamics & Econometrics, Vol. 7 Issue 3, p1-29 Urrutia, Jorge L.; Vu, Joseph, (2006), Empirical Evidence of Nonlinearity and

Chaos in the Returns of American Depository Receipts, Quarterly Journal of Business & Economics, Vol. 45 Issue 1, p15-30 Urrutia, Jorge L.; Vu, Joseph; Gronewoller, Paul; Hoque, Monzurul, (2002), Nonlinearity and low deterministic chaotic behavior in

insurance portfolio stock returns, Journal of Risk & Insurance, Vol. 69 Issue 4, p537 Varson, Paula L.; Doran, Paul, (1995), The search for evidence of chaos in FTSE-100 daily returns, European Financial Management, Vol. 1 Issue 2, p201

375

Eco System Impacting Entrepreneurial Youth

Mr. R.Ramaraj
Senior Advisor, Sequoia Capital India Advisors Pvt. Ltd., Bangalore

Mr. D. Raghava Simha

Research Associate

1. Introduction
The initial inspiration for this paper comes from the extensive work done by authors in putting together a book that is a compilation of the 101 success stories of entrepreneurs in Tamil Nadu, Star Trek-The fascinating journey of the spirit of entrepreneurship in Tamil Nadu. The phenomenal impact of this spirit on social and economic landscape can never be overstated. Therefore it is easy to imagine the resolve of the researchers to do whatever it takes to preserve, nourish and grow this spark of entrepreneurship. This necessitates a holistic approach, to identify all the contributory factors that enable entrepreneurial success. Personal qualities like intelligence, lifestyle, personality traits, and talents of entrepreneurs are extensively researched. These qualities may be advantageous or disadvantageous. It is not enough to ask what successful people are like but one must also understand their environment. Gladwell highlights this approach to understanding success in his book outliers, (Gladwell, 2008) . Therefore identifying the factors that makeup an entrepreneurial ecosystem is a very important first step. More so because it is India is striving to become a global economic powerhouse and this will be possible only if we enable new generation entrepreneurs to grow and succeed.

social actors, often with different traditions and motivations, and of different sizes and areas of influence to act together and create wealth in a symbiotic relationship (Prahlad 2005) Entrepreneurial ecosystems can not only act as catalysts in speeding up the economic progress of stable economies but also can act as the prime mover when it comes to rescuing economies that have faced a sharp decline. Bernardez (2009) shows how Entrepreneurial ecosystems have created significant economic upturn in Argentina, United States, Israel, India, China and Mexico in spite of adverse economic and social conditions. Bernardez shows how each entrepreneurial ecosystem grows around a specific competency. While exploring the applicability of the entrepreneurial ecosystems in creating a sustainable valley, Cohen elaborates on the nine principle factors (Cohen 2005) that are the key components. Informal Network, Formal network, University, Government, Professional and support services, Capital services and Talent pool. Van De Ven (2002) avers that industrial infrastructure that facilitates and constrains entrepreneurship includes institutional arrangements to legitimate, regulate, and standardize a new technology, public resource endowments of basic scientific knowledge, financing mechanisms to name a few. The cultural impact on developing entrepreneurial ecosystems can hardly be ignored. There is a need for a model, which acknowledges the individual without discounting on the social factors that are beyond the control of the individual. The single framework is necessitated because the individuals personality and behavior, political and legal system, social mores are intertwined with the national culture from which they originate (Lee & Peterson 2000) 376

2. Literature Review
The primary objective of this literature review is to identify and understand the relevance of the factors that make up the ecosystem model. In the words of the management guru Mr. C.K. Prahlad an entrepreneurial ecosystem Is a framework that allows private sector and

Clusters have a positive effect on venture creation because of their unique character, the co-existence of competition and cooperation. (Ana Mara Romero & ngeles Montoro 2008). In clusters, a balance is reached between cooperation and competition, which becomes evident in the higher productivity of the companies because of their increased access to inputs, information, technology and institutions; or in greater innovation and venture creation. The cluster provides incentive to the entry of new companies or start-ups. Daniel Isenberg in a recent paper in HBR spoke extensively about starting an Entrepreneurial Revolution (Isenberg 2010). He has proposed a model for ecosystem consisting of thirteen factors. Leadership, Government, Culture, Success stories, Human Capital, Financial capital, entrepreneurship organizations, education, Infrastructure, Economic clusters, Networks, Support services, early customers. The Entrepreneurial Revolution, according to Isenberg is not the heroics of one person or even one idea but the collective vision of a group of stake holders committed to the promotion of entrepreneurship, creating an ecosystem to actualize their vision. The stakeholders include Government, Educational Institutions, Financial Institutions, Media and Network. In fact Isenberg has outlined a total of thirteen stakeholders, the pillars on which the edifice of entrepreneurship stands. Isenbergs study encompasses several countries across the globe, from Peurto rico to China, from Iceland to India, firmly establishing the idea of entrepreneurial ecosystem.

Case 1 The primary focus of its founder, Hemu Ramaiah was books, today after two decades of efforts; Landmark is a leading multi-product store in the country. Family played their part through out the journey; the all-important financial support came from a sibling when conventional financial institutions failed and so did government bodies. There was clearly a need for support from the technology sector, which went missing. The biggest plus is definitely the support provided by the loyal customers. (Table1. Findings of the in-depth interviews) Case 2 Murugavel Janikiraman has literally revolutionized the institution of marriage. By launching BaharatMatrimoney.com he used Internet technologies to facilitate marriages. The main trigger was a clearly perceived need in the market and ready availability of technical know how needed. The founder himself had the necessary technology skills to start his venture, later added local help. Major institutional investors and network played their part but only in the later stage. The support roles from government and media were clearly missing. Case 3 A successful serial entrepreneur, Raju is currently the CEO of Medall, a company that provides radiology imaging services and other endeavors for its customers. The family contributing towards entrepreneurial motivation and the significant positive role the government can play in shaping a venture and for that matter an entire industry was observed. The best brains in our country are of very little use when it comes to monetizing the ideas and growing the economy further. Case 4 Jef Techno solutions (JTS) are an organization founded in 1994 by a team of qualified electrical engineers providing technology products / solutions in the electrical industry. For a venture like JTS there is very little help from the ecosystem. They survive primarily on the strength of customers and their ability to constantly adopt newer technologies in their areas. 377

3. In depth Interviews
As a part of this research initiative, it was decided to include four in depth interviews with entrepreneurs who have made it to the top. The observations brought out provide valuable insight in to the impact of ecosystem factors that motivates/constraints the entrepreneur. Further it also throws light on the lacuna in the current system, for policy makers to take note.

3. Eco system Model

So far the key point that has emerged out of this research is that we do need a model for entrepreneurship that captures holistically all the factors that contribute towards entrepreneurship success or failure. Although one may readily accept the fact that the components by themselves are obvious factors contributing to making an entrepreneurial effort a success or failure, the study of their influence in a single framework facilitates our systematic understanding towards the factors that facilitate and constrain entrepreneurship. (Figure 1 A conceptual Framework of Entrepreneurial Ecosystem) The eco system model can be understood as a framework of seven systems of support and several factors contributing to the structure of a single support system. Moral support consists of the role played by the entrepreneurs father, mother, sibling, spouse, In-laws, relatives, friends and society at large. Financial support could come from the immediate family, Banks, Venture Capitalists, friends, relatives, in-laws, educational institutions, angel investors, and small investors from the capital market, foreign financial institutions, government bodies and credit from suppliers. Network support refers to organizations like TiE, NEN, and CII etc. Also it refers to specific industry associations, alumni associations, online social networking sites like Face Book, linkedIn etc, friends, network of suppliers and distributors. Government support usually comes from clusters like SIDCO, educational programs from MSME, incentives, incubation centers, infrastructure facilities, awards and legal procedures. Technology support comes from government funded incubation centers, new technology developed in educational institutions, imported 378

technology know- how, talent pool available locally. Market support refers to the opportunities in the market, reports from government and trade associations, support of suppliers, loyal customers. Acceptance of the product on consignment by the intermediaries, trade shows and exhibitions. Social support could come in the form of awards from trade associations, acceptance of venture failure, and exposure by media. Social respect bestowed on the entrepreneur also counts as social support. It includes, the exposure by mass media Availability of natural resources and climatic conditions constitute environmental support.

4. Pilot study
It is essential to understand the factors that will positively or negatively influence the decision to venture out on ones own. To understand this phenomenon in the context of the aforementioned ecosystem, the authors did a pilot study. A group of thirty respondents were selected and data collected using a questionnaire containing fifty-nine statements. Five point Likert scale was used to measure the perception towards the support system. A proportionate scale in the form of distribution of hundred points was used for the eight support variables. Within each of the support variables a proportionate scale was used. With respect to financial support sources of funding also a proportionate scale was used. The resulting data was statistically analyzed using average, sum of weights, ranking and factor analysis methods.

5. Findings
The responses obtained through the pilot study were analysed using the average scores. All the statements were categorized on the basis of average into three categories, High, Medium and Low. (Table 2). It shows that out of fourteen variables in the high category four were from Market support, three from Government,

three from Network, two each from Moral and Social support. For the Low category, the six variables, three belong to moral, two from finance and one from technology. Thirty-nine variables were found in the medium category. The proportionate scale analysis was done by weightage method. On the basis of the sum of the weights, the nine support systems were ranked, (Table 3). Further analysis of each of the support systems using weighted sum was done to identify the most important variable within the various support systems. (Table 4) In Moral support Mother was found to be the important source, In financial support Schedule Banks was selected as the source, In Government support, Financial loans was the primary source, In Network support NEN, TiE etc were the main source, In Society support Mass media was the principal factor, In Technology support Imported Technology was the main source and in Market support Customers were on the top. In the support from the society, Mass Media, respect from society (111,1.97sd), awards (104 1.46 sd) all the three got more than 100 weights. A Factor analysis was done to identify the group of factors. In factor analysis eighteen factors emerged in nine groups. (Table 5). These variables are extracted using VARIMAX rotation and with principal component method. . The first factor is a combination of moral and finance support from in-laws and friends. The second factor is related to support from the government and technology. Government should offer educational programs from Micro and Small, Medium enterprises MSME and the incubation centers should be promoted by educational institutes and government. The purpose will be to develop and disseminate new Illustrations and tables

technology. The third factor is a combination of network and moral support from father. Fourth factor is about government not to have strict controls and moral support from mother. Fifth factor is moral and market support from customers. Sixth is about government and market. Seventh factor is about network of friends and manpower. Eight factor is about the society and the government infrastructure. The last are the descriptive statistics. The major support that is emerging from factor analysis is government support (4), Network support (4), Moral support (3), Technology (2) and one each of market, society and financial support.

6. Conclusion
To conclude we found that network support from NEN, TiE that did not emerge in in-depth interviews found a significant role in the pilot study. Government support did not emerge significantly in the in-depth interviews whereas in the pilot study loans from the government emerged. Market support from customers and distributors was found to be significant in both the sources. Moral support was another factor that was found to be significant in both the sources. Moral support does not have any place in the model proposed by Isenberg. (ET - CD 2010)

Implications
The research shows that NEN, SIFE, TiE, CII, EDII and other organizations can play an important role in support of fostering the entrepreneurial climate. The potential entrepreneurs are looking forward to support from the Government agencies in the form of funding, incubation, and awards. Most important, the customers, distributors and suppliers have to accept the products and services introduced by the entrepreneurs. These supports will encourage grass root entrepreneurship.

Entrepreneur Entrepreneurial Ecosystem Technology Natural resources Financial Network Market

Moral

Social

Figure1. A conceptual Framework of Entrepreneurial Ecosystem 379

Govt.

Table1. Findings of the in-depth interviews

Type of Support Case 1 Case 2 Case 3 Case 4 Findings Case 1 there was a positive influence and in case 2 it was neutral. Case 3 significant positive influence. Case 4 was neutral. In case 2 & 3 VC funding came into play at a later stage. In case 4 throughout self supported. In case 1 it was found that trained manpower was not easily available locally. Case 3 technology transfer from educational institutions was a challenge. Case 4 consultants helped obtain technology know-how. In all cases the business was customer driven. In case 1 initial resistance from suppliers. Media has not done enough but can play a positive role.

Moral

Parents, spouse and sibling.

Not significantly seen

Parents

Not significantly seen

Financial

Initial funding -Sibling, parents

Initial funding - Self

Initial funding Self. VC at a later stage.

Self

Technology

Significant role

Significant role

Significant role

Significant role

Market

Significant role No Significant role

Significant role No Significant role Social network, Association like TiE played a Significant role

Significant role No Significant role Supplier and customer network. Association like TiE played a Significant role

Significant role No Significant role

Social

Network

Customer network

Supplier and customer network

In case 1 customer played the role of network support.. In case 2 associations like TiE helped. In cases 3 & 4 suppliers

Goverment

No Significant role

No Significant role No Significant role

Significant role.

Significant role.

In case 1 Govt. was a deterrent factor. In case 2 Govt. was indifferent. Case 3 Govt. played a crucial positive role. Case 4 Govt. played positive and negative role.

Natural resources

No Significant role

No Significant role

No Significant role

380

Table 2 Analysis of Average

Classification Value

Average

No. of Variables (Total 59)

Statements

High

>=4

14

Opportunities in the market play a vital role to start a venture. (4.53) (SD 0.68) Society should give respect to Entrepreneurs (4.53) (SD 0.73) Loyal customers will help the start up. (4.37) (SD 0.93) Acceptance from the market is essential to start a venture (4.33) (SD 0.80) Subsidized loan from the Government will help to start a venture (4.27) (SD 0.64) Moral support from Father is required for taking the first step in decision to start the venture. (4.17) (SD 1.17) Network of distributors is essential to start business (4.17) (SD 0.70) Support from NEN, TiE, SIFE, CII etc. is required to start venture (4.1) (SD 0.71) Simple procedure will help the entrepreneur to start. (4.1) (SD 1.03) Friends play an important role for taking the first step to start the venture. (4.07) (SD 0.83) Friends network is very much needed to start a venture. (4.07) (SD 1.01) Awards from the government encourage the entrepreneurs. (4.03) (SD 0.72) Market reports of the trade associations help in obtaining market information for the start up. (4) (SD 1.11) Society plays an important role for taking the first step to start the venture. (4) (SD 0.74)

Medium

3.9 3

39

Low

<3

381

Friends cannot help in providing the technical support. (2.47) (SD 1.22) Financial support from relatives is very much needed to start a venture. (2.6) (SD 1.28) Investments from Foreign Institution are very essential to start a venture. (2.67) (SD 1.03) Relatives play an important role for taking the first step to start the venture. (2.73) (SD 1.14) Siblings play an important role for taking the first step to start the venture. (2.77) (SD 1.07) Support from In-laws/ sambandhis is essential to start the venture. (2.9) (SD 1.09)

Table 3 Weightage Analysis Source of support Family support Government support Financial support Market support Technology support Climate and natural resources Network support Society support Any other support Sum of Weights 123 98 80 52 48 46 45 42 31 Ranks 1 2 3 4 5 6 7 8 9 SD 2.28 2.27 1.79 0.83 0.77 1.2 0.77 0.62 0.18

Table 4 Top most variable within each of the support system.

S.no 1. 2. 3. 4. 5. 6. 7.

Source of support Family support Financial support Government support Network support Society support Technology support Market support

Top most variable Mother (102) Schedule Banks (134) Financial Loans (126) NEN, TiE etc (149) Mass media (161) Imported Technology (114) Customers (198)

SD 2.28 2.1 2.91 3.64 2.3 2.17 2.58

Table 5 Factor Analysis

Variables extracted from the correlation matrix using VARIMAX rotation and with principal component method

The following variables are extracted from the correlation matrix. Group Factor

382

1 2

1. Support from in-laws/sambandhi essential 2. Finance from friends 3. Educational programs 4. New Technology 5. Industry association 6. Moral support from father 7. Control by Govt agency 8. Moral support from mother 9. Loyal customers 10. Siblings 11. Suppliers 12. Development of clusters 13. Trained manpower 14. Friends network 15. Infrastructure 16. Social respect of entrepreneurs 17. Family Business 18. Industry sector

5 6 7

References 1. Ana Mara Romero , ngeles Montoro 2008 How clusters can encourage entrepreneurship:Reasons and advantages Int Entrep Manag J (2008) 4:315329 2. Bernardez, Mariano 2009 The power ofentrepreneurial ecosystems-extracting booms from busts www.expert2business. com/itson/Articles/Ecosystems.pdf 3. Cohen. B 2005 Sustainable valley Entrepreneurial Ecosystems Business Strategy and the Environment. (in
383

press). Published online in Wiley InterScience 4. Economic Times, High Flier 12 Oct 2010. Pg 14 5. Economic Times, CD 1 Oct 2010. Pg 2 6. Gladwell. 2008. Outliers: The Story of Success Little, Brown and Company 7. Isenberg.D 2010. The Big Idea: How to Start an Entrepreneurial Revolution. Harvard Business Review June 2010 8. Lee, Sang M, Peterson, Suzanne J., Culture, Entrepreneurial orientation and

global competitiveness Journal of World Business, 35 (4), p.401, Jan 2000 9. Prahalad, C. K. 2005. The fortune at the bottom of the pyramid: eradicating poverty through profits. Saddle River, NJ: Wharton School Publishing. P65

Van De Ven 2002 The development of an infrastructure for entrepreneurship http://www.sciencedirect.com/science/ article/B6VDH-45P0CPF-20/2/ f4da073374b223d3a326b05f94e0c94f

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Effect of Emotional Intelligence Intervention Among Software Professionals

Nithya Sankar Research Scholar, Sathyabama University, Chennai 119. Dr. S.S. Rau Research Guide & Registrar, Sathyabama University, Chennai 119. 1. Introduction
Emotions are one that are disruptive and had to be ruined in, bottomed up and locked away are the older versions, whereas now the organizations have started to realize that emotions are one that has to be dealt seriously and carefully among the individuals. Hence organizations have started to recognize the power of emotions in their workplace. The reason behind this is, they are all aware that when emotions are unbalanced it leads to various problems and conflicts and when emotions are balanced it leads to success both in their work and personal life. As Software industry contributes more than 50% towards the growth of Indian economy, there exist strong needs for making the software professionals more effective both physically and psychologically. Software professionals are those people who face so many problems both physically and psychologically in their workplace though they are paid high salaries and provided more facilities in their workplace. Thereby it becomes necessary to make these software professionals to know about Emotional intelligence (EI), its importance and contributions towards their well-being as a whole. Research also illustrates that emotional capabilities need to be taken seriously in order to be a star performer. Hence the present study focuses on the effect of Emotional Intelligence intervention on Emotional Intelligence level of software professional working in Software Company in Chennai.

3. Reviews of Past Studeis

Richburg, Melanie (2008), saw that the intrigue of why some people become successful while others fail despite natural talents, gifts, or intelligence has provoked inquiry into qualities that determine success. While some people possess varying degrees of ability, oftentimes the most talented are not always the most successful, happy, or wealthy, which goes against our rational way of thinking. Although it is premature to conclude that emotional intelligence plays a key role in determining life success, it is proposed that there may be a significant relationship. Mayer et.al. (2008) have proposed that emotions are fundamentally social in nature, blurring the conceptual distinction between emotional and social intelligence. In the applied context, as we shall discuss further below, many of the educational programs that claim to enhance emotional awareness and functioning may in fact target social behaviors for change. Research by the Hay Group, Daniel Goleman and Richard Boyatzis (2006), has found thatSoftware developers with high levels of Emotional Intelligence can develop effective software three times faster than others. A national furniture retailer found that sales people hired based on Emotional Intelligence had half the dropout rate during their first year. Experienced partners in a multi-national consulting firm who were assessed on their levels of Emotional Intelligence delivered $1.2 million more profit from their accounts than did other partners - a 139% in Hay Acquisition Company I, Inc (2005), Twenty-eight out of the onehundred-thirty-six managers submitted the ECI-U Rater. The response rate was 26%. (88 out of 336). Each employee who completed the ECI-U was measured on four emotional intelligence competencies: selfawareness, self-management, social awareness, and 385

2. Objectives

The present study was made by keeping the objectives of studying the effect of EI intervention among experimental group before and after EI intervention, exploring the influence of gender and income among experimental group before and after EI intervention. Finally based on the results, the researcher has presented some suggestions for further improvement of EI skills and its application in the workplace among software professionals and software industry.

relationship management. It was found that those who were classified outstanding performers scored higher in all four. Shuhei Hiroi et.al. (2005), conducted an investigation at an IT company in order to confirm the effectiveness for management and evaluated the Competence and Emotional Intelligence of members in a software development project, found that the standard deviation of the project manager is higher than that of the programmer. It is supposed that the EI scores of project managers tend to be more variable than those of programmers. A project manager has a strong correlation in all items and an excellent project manager must have a high ability in all categories of EI scores.

respondents were evaluated and compared with pre intervention EQ scores. Using t-test statistical tool, prepost EQ scores were compared and tested to know the effect of EI intervention among software professionals.

5. Results And Discussions

In pre Emotional Intelligence Intervention, majority 52% of the respondents possessed low level of emotional intelligence and only very few respondents possessed moderate level of emotional intelligence and there were no one who has possessed extremely high level of emotional intelligence. Whereas, in post Emotional Intelligence Intervention, majority 65% and 32% of the respondents possessed extremely high level & high level range of emotional intelligence after the training period, which shows that they were all possessing high level of emotional intelligence after the training program. Hence it implies that, emotional intelligence training program have influenced the software professionals to a great extent. t-test was applied to test the association of emotional intelligence among experimental group before and after EI intervention. NULL HYPOTHESIS (H0): There is no significant difference on Emotional Intelligence among experimental group before and after EI intervention. ALTERNATE HYPOTHESIS (H1): There is significant difference on Emotional Intelligence among experimental group before and after EI intervention.

4. Methodology

In the present study the Quasi-experimental research design was adopted to conduct and conclude the research. With this design, experimental group is tested to know the effect of EI intervention over software professionals. Purposive sampling technique was adopted for the present study. The targeted samples are software professionals working in Software Company in Chennai and 60 samples were chosen and their EQ scores before EI intervention were collected using wellstructured questionnaire filled by the respondents. After the pre intervention evaluation, out of 60 respondents only 30 respondents with low EQ scores were chosen and they were given EI training. Once EI training program is over, post intervention EQ scores of the

Table 1 t-test Emotional Intelligence among experimental group

Variable EI

Test Pre-test Post-test

No. of Respondents 30 30

Mean 333.17 372.67

Standard deviation 27.683 17.207

t value

9.563*

Source: Primary data * Highly Significant at .05 Level

386

RESULT: It is observed from the table 1 that, the mean values in pre-test and post-test are 333.17 and 372.67 respectively. The calculated t value 9.563 is greater when compared to the table value at .05 level. Thereby null hypothesis is rejected, and alternate hypothesis is accepted. Hence there is significant difference on Emotional Intelligence level among experimental group before and after EI intervention. This shows that Emotional Intelligence intervention has its effect among experimental group which infers that EI training has made software professionals to acquire and learn about Emotional intelligence skill to great extent and also the way to apply the EI skill at any point of time both in

their work life and personal life. It is assured that these effects among software professionals will make them to attain success both in their work life and personal life. t-test for significant difference on EI among experimental group based on Gender before and after EI intervention. NULL HYPOTHESIS (H0): There is no significant difference on EI among experimental group based on Gender before and after EI intervention. ALTERNATE HYPOTHESIS (H1): There is significant difference on EI among experimental group based on Gender before and after EI intervention.

Table 2 t-test Emotional Intelligence among experimental group based on Gender

Variable

Test

Gender Male Female Male Female

No. of Respondents 15 15 15 15

Mean 327 339.33 375 370.33

Standard deviation t value 28.145 26.717 17.423 17.265

Pre-test EI Post-test

1.231* .737*

based on income before and after EI intervention. Source: Primary data * Not Significant at .05 Level RESULT: It is revealed from the table 2 that, the mean values of male and female in pre-test are 327 and 339.33 respectively and post-test are 375 and 370.33 respectively. The calculated t values in the pre-test 1.231 and in post-test .737 are less when compared to the table value at .05 level. Thereby null hypothesis is accepted. Hence there is no significant difference on EI among experimental group based on Gender before and after EI intervention. That is, it is inferred that Gender doesnt influence Emotional Intelligence of software professionals and it is explored that only EI intervention has its effect on Emotional Intelligence of software professionals t-test for significant difference on Emotional Intelligence among experimental group 387 NULL HYPOTHESIS (H0): There is no Emotional Intelligence among experimental group based on income before and after EI intervention. ALTERNATE HYPOTHESIS (H1): There is Emotional Intelligence among experimental group based on income before and after EI intervention. RESULT: From the table 3, it is revealed that, the mean values for the income range of Rs.3lakhs&below and Rs.300001&above in pre-test are 331.56 and 335 respectively and in post-test are 370 and 375.71 respectively. And the calculated t value for the income range of Rs.3lakhs&below and Rs.300001&above in pre-test is .334 and in post-test is .905 which are lesser when compared to the table values at .05 level. Thereby null hypothesis is accepted. Hence there is no significant difference on EI among experimental group based on Annual Income before and after EI

Table 3 t-test Emotional Intelligence among experimental group based on Income

Variable

Test

Annual Income 3 lakhs & below

No. of Respondents 16 14 16 14

Mean 331.56 335 370 375.71

Standard deviation 28.209 28.011 15.706 18.898

t value

Pre-test

EI Post-test
Source: Primary data * Not Significant at .05 Level

300001 & above 3 lakhs & below 300001 & above

.334*

.905*

intervention. This implies that Income doesnt influence Emotional Intelligence of software professionals which in turn disclose that EI intervention alone has its effect on software professionals Emotional intelligence.

6. Suggestions & Conclusion

Based on the research results, it has been proved that Emotional Intelligence training has enhanced the level of Emotional Intelligence skill among the software professionals. It is also found that Emotional intelligence training alone has its effect on software professionals Emotional intelligence level whereas gender and income variables do not have any influence on software professionals Emotional intelligence. From these results, it is concluded that Emotional intelligence is the skill that can be acquired and learned at any point of time when they are provided EI training which in turn helps them to obtain success both in their work life and personal life. Hence it is suggested that Emotional Intelligence training should be given to software professionals not just once but continuously because of the reason that it should be refreshed frequently due to variations in their emotions as they take up different projects at different times.

RESULT: From the table 3, it is revealed that, the mean values for the income range of Rs.3lakhs&below and Rs.300001&above in pre-test are 331.56 and 335 respectively and in post-test are 370 and 375.71 respectively. And the calculated t value for the income range of Rs.3lakhs&below and Rs.300001&above in pre-test is .334 and in post-test is .905 which are lesser when compared to the table values at .05 level. Thereby null hypothesis is accepted. Hence there is no significant difference on EI among experimental group based on Annual Income before and after EI intervention. This implies that Income doesnt influence Emotional Intelligence of software professionals which in turn disclose that EI intervention alone has its effect on software professionals Emotional intelligence.

7. References
Richburg, Melanie (2008) Emotional intelligence: directing a childs emotional education., Child Study Journal, Vol. 29, pp. 888-890. Mayer, J., Salovey, P., Caruso, D.R., and Sitarenios, G. (2008), Emotional intelligence as a standard intelligence, American Psychologist, Vol.63, pp. 503-517.

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Hay/McBer Research and Innovation Group, Daniel Goleman and Richard Boyatzis (2006), Working with Emotional Intelligence, New York: Bantam Books. Shuhei Hiroi, Masakazu Miyazaki, Yoshihiko Koizumi and Tsutomu Konosu (2005),

Evaluating the Competence and Emotional Intelligence of Members in a Software Development Project, Journal of Managerial Psychology, Vol. 20, pp. 178-187. www.eiindia.org www.eiconsortium.org

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Emerging HR Competencies with reference to Manufacturing industries

Dr. Mu.Subrahmanian Assistant Professor, School of Management, SRM University, Chennai, India, O.Sivaramakrishnan Research Scholar, School of Management, SRM University Chennai, India, 1. Introduction
Ongoing and unrelenting economic, social and technological changes have spurred the need for flexible, skilled workers who can help their organizations succeed and sustain a competitive advantage. To be relevant within organizations and indispensable to clients and customers alike, workplace learning and performance professionals must continually reassess their competencies, update their skills and have the courage to make necessary changes. Businesses and managing business has and will always be complex. There is no denying the need to perform through a combination of utilizing predictive or forecasting tools, techniques and methods, yet without trivializing the need to sustain and drive a motivated high performing workforce. The companys need to sustain in a competitive environment, gave rise to the need to understand and learn to establish the context of competency mapping. Knowledge Skills Attitude

4. Need for Competency.

Competency Mapping has to be designed for consistently measure and assess individual and group performance as it relates to the expectations of the organization and its customers. It is used to identify key attributes (knowledge, skills, and behavior attributes) that are required to perform effectively in a job or an identified process. Competency Mapping has two sets of data. One set is based on organizational workflow and processes. It starts with the clear articulation of workflow and processes, including all quality and quantity requirements, inputs and outputs, decision criteria, and most important, internal and external customer requirements. The other set of data is based on individual and group performance capabilities which can be collected through the utilization of a variety of assessment tools and procedures to assess the extent to which individuals and groups can consistently demonstrate over time the competencies required to meet the expectations. Where the output from the organizational maps meet the individual and group performance capabilities, an overall trend line can be created to identify where in the process specific developmental opportunities exists, and with what specific population. Competency mapping process can be the foundation for aligning workflow and process outputs with critical customer requirements with a foundation of required employee attributes and competencies. In addition to the above it, Increased costs of Manpower. Downsizing and the consequent need to get 390

2. Competency Definition
A combination of knowledge, skills, attitude and personality of an individual as applied to a role or job in the context of the present and future environment that accounts for sustained success within the framework of Organizational Values.Competencies include the collection of success factors necessary for achieving important results in a specific job or work role in a particular organization. Success factors are combinations of knowledge, skills, and attributes that are described in terms of specific behaviors, and are demonstrated by superior performers in those jobs or work roles.

3. Components of Competency
Competency has three major components which are as follows:

a lot of things done with fewer people and thus reduce manpower costs and pass on the advantage to the customer.

5. Who Indentifies Competencies?

Competencies can be identified by one of more of the following category of people: Experts, HR Specialists, Job analysts, Psychologists, Industrial Engineers etc. in consultation with: Line Managers, Current and Past Role holders, Supervising Seniors, Reporting and Reviewing Officers, Internal Customers, Subordinates of the role holders and other role set members of the role (those who have expectations from the role holder and who interact with him/her).

o Should be able to differentiate knowledge, attitude, and skills. Ability to differentiate motives, values, self concept and traits is an additional competence. o Should be able to differentiate a task from an activity. o Should be able to list a set of activities and tasks for a given role with the help of role holder. o Should able to classify a given competency into technological arena managerial arena, behavioral arena and a conceptual arena. This is a very simple competency which is useful but not essential. o Should be able to document and communicate to others through documentation. o Should be familiar with the nature of business done by the firm, its products, and markets, processes etc. or at least would be able to understand and grasp the basics of technology and processes used by the firm. This can be developed through a quick induction program by the firm.

6. Who can do it?

Competency mapping is a task which can be done by many people. Now a days all Management schools and definitely those specializing HR, train the students in Competency Mapping. Recently when the author taught a course on Management of Talent at the Indian School of Business within two hours or introduction to the process of competency mapping the students (all with experience of more than two years) have done a great job of competency mapping for a set of roles. The person who facilitates Competency Mapping should have the following competencies: o Should have some familiarity with competencies and the nature of competencies. This includes knowledge of the terms used commonly in competency identifications (social ability, activity level, monitoring, vision, communication skills, analytical skills, planning, organizing, team building, imitative, strategic thinker etc.) and meaning of most common terms. o Should know the meaning of Knowledge, attitude and skill.

7. HR Competencies: The competing principles and Paradoxes.

To map the history of the concept of HR competencies, we have to go back to the 1950 where the conceptualization and measurement of competencies in behavioral terms was conducted when training of managers and supervisors was the main focus (Flanagan, 1954; Fleischman, 1953). Later McClelland (1973) raised the issue to testing for competence rather than intelligence to guide decisions on recruitment and career for other personnel categories (Nybo, 2004).Much later Mc lagen (Valkeavaara 1998) acknowledged four clusters of competencies for HR. These were interpersonal competencies, business

391

competencies, technical competencies (knowledge and delivery of traditional personnel and HRD management) and intellectual competencies. Recently, Ulrich and Brockbank (2005) noted the HR competency set for developing a distinct employer value propositions. This is depicted below.

Source: Hr competencies that make a difference (Ulrich Brockbank, 2005) Currently, there is much discussion in the practitioner and academic world about the individual competencies of HR Professional, especially in the recession torn economies, Ulrich, Brockbank, Hohson, Sandholz and Younger (2208) argue that the human resources function should add value and make a meaningful contribution to employees and line managers inside the company and to customers, communities partners and investors outside it. ASTD has captured this though into a matrix. Refer Table for the western context of emerging HR competencies. Justifiably, most of the discussion and supporting research to date has focused on widely generalize able, core HR competencies. While some efforts have been made to differentiate the critical HR competencies needed in various settings (e.g, Lawler, 119:165), there is a need for more research that fives recognition to the job characteristics and contextual factors likely to influence both the relative importance of the 392

various competencies and the ease with which they can be applied (Roehling et al, 2005) Business Competencies Analysing needs and proposing solutions Applying business acumen Driving results Planning and implementing assignments Thinking Strategically Interpersonal Competencies Building Trust Communicating effectively Influencing stake holders Leveraging Diversity Networking and Partnering Personal Competencies Demonstrating adaptability Modeling personal development Source: www.astd.org Based on the Gallup Organizations research many competencies may not be trainable or cannot be developed by an individual, no matter their level of personal effort. Suffice it to say here that a good career coach will do a great service to individual career clients by seriously focusing on the idea of position or career field, fit in light of their current competencies, while advising them to be cautious about attempting to develop competencies that might not be developable.

8. The Current and Emerging HR Competency Framework.

The weight age between functional and behavioral competency set in an HR profile is dependent on the business need and synchronized business need and synchronized business and HR strategy. It also depends on top management and the influence and voice of HR within the board and top management. Some organizations have equal weight age at the entry level and as the manager grow up the ladder and unequal weight age between functional competencies of the HR competency profiles and behavioral competency of the HR profile. The HR leader profile of behavioral competencies and of functional competencies, with

fit and value congruence appearing as important differentiators in high performing work organizations. Holistic Business sense Competency sets for this function for excellence are essentially that of a well rounded holistic business manager. A Person who has the competency to understand the language of business strategy and holistic impact of Hr decisions on business strategy and vice versa. He ought to have deep understanding of finance, know return of investment on every HR/OD intervention design with an eye on cost benefit analysis. He is also a strategic planner and a system innovator. Possesses harp business intelligence and a sharp nose of gleaning the ground reality. He must be a Strategist Jugaat Chanakya and Chess Player. He must be able to see the game even before it is played. He is solution oriented and has a flexible Jugat Competency Michales,et al (2001) support these findings, when they state corporate officers also suggested that the Strategically focused Hr professionals Should: Help to forge the link between business strategy and talent development. Only 7% of the corporate officers agreed that their companies link business strategy to specific talent pool (i.e Human Resources requirements) Serve as the though leader in understanding what it takes to attract great talent or be the barometer of the organization, understanding morale, recruiting and retention trends as well as other key people issues. Facilitate the talent review process and action plans by having a nose for weak spots (people, structures, processes and culture) and being comfortable in pushing( i.e. effectively influencing senior leadership to deal proactively with those weak spots. Become the architect of the Development strategy for the top 50-100 senior leadership group. This requires good assessment competence, good listening competence, candour and insight

9. HR Functional Competency
A person who has the functional competence to understand the language of business, stragegy and holistic impact of HR decisions on business strategy and vice versa. He must possess deep rooted understanding of the HR systems and processes, a fundamental functional competence, which is honed by living the through HR processes. He ought to have deep understanding of finance, knows Return of investment on every HR/OD intervention design with an eye on cost benefit analysis. Functional HR expertise Fundamental HR knowledge of Compensation and Benefits, Talent Pipeline Identification and development; Merger and acquisitions management competence. Manages Resources in all kinds of contexts using the Jugaadu and Jugat competence. Data analytics Possesses number crunching competence. A competence which helps an HR expert to understand data, its patterns and research analytics, so that critical, agile decisions are arrived on precise data analytics. A competence which helps a HR person to understand data, its patterns and research analytics, so that critical, agile decisions are arrived on precise data analytics. Has deep rooted understanding of the HR systems and processes, a fundamental functional competence, which is honed by living the through HR processes. Need for robust analytical competence with high level of personal awareness and understands behavioral measurement techniques in objective and subjective manner. Diverse competency of managing the entire life cycle of employees when at the workplace. These include upgrading and managing Talent pipeline development and employee engagement and having a passion for excellence and a bias for action and reflection.

10. Behavioral Competency

Behavioral competency of a visionary leader, who knows how to stand tall, even in the light of controversy, for his /her values and ethics.

393

Case in point is the Tatas exemplary story with 26/11 context. Line, HR managers and the CEO Rattan Tata exhibited personal credibility and humane face of HRM. Competency set of a humble service provider execution of these services. HR professionals need the competence of ruthless compassion which may help to connect with people, when needed for delivering service, and ruthless in taking tough stands and decisions which support the business. Change Agent Manages Change, Analyses underlying patterns

Increase in the effectiveness of training and professional development programs because of their link to success criteria. Provides a common understanding of scope and requirements of a specific role.

13. Hurdle in executing Competency exercise:

Hurdle with competency mapping, especially when conducted by an organization is that there may be no room for an individual to work in a field that would best make use of his or her competencies. If the company does not respond to competency mapping by reorganizing its employees, then it can be of little short-term benefit and may actually result in greater unhappiness on the part of individual employees. A person identified as needing to learn new things in order to remain happy might find himself or herself in a position where no new training is ever required. If the employer cannot provide a position for an employee that fits him or her better, competency mapping may be of little use. If too much emphasis is placed on inputs at the expense of outputs, there is a risk that it will favor employees who are good in theory but not in practice and will fail to achieve the results that make a business successful. They can become out of date very quickly due to the fast pace of change in organizations and it can therefore be expensive and time consuming to keep them up-to-date. .

11. Interpersonal competency

Sharp communication, conflict management and negotiation competence, which may be honed at a strategic leadership level. Is IT savvy and can comprehend use of e architecture for HR. Is a team player and has enough ambiguity tolerance and is highly emotionally intelligent. Relationship oriented person, who is keenly observant and emotionally intelligent. These are the other emerging competencies, desirable, yet a little uncommon at the entry level. Becomes a differentiating competence for an HR leader and Expert.

12. HR leader competence

Passionate curiosity Lifelong learner Smooth negotiator and navigator Innovative out of box Emotionally intelligent and highly self aware of strengths and weaknesses

14. Why Should Individual Employees wants Map Their Competencies?

Gains a clearer sense of true marketability in todays job market; once the individual knows how his/ her competencies compare to those that are asked for by the job market in key positions of interest. Projects an appearance as a cutting-edge and wellprepared candidate, who has taken the time to learn about competencies, investigate those in demand, and map his/her own competencies prior to interviewing. Demonstrates self-confidence that comes from knowing ones competitive advantages 394

Advantages of understanding Competency For the company Establishes expectations for performance excellence Improved job satisfaction and better employee retention

more convincingly, and from being able to articulate those advantages in specific language. Secures essential input to resume development - a set of important terms to use in describing expertise derived from prior career experience. Gains advanced preparation for interviews, many of which may be delivered using a competency-based approach called structured behavioral interviewing or behavioral event interviewing. Develops the capability to compare ones actual competencies to an organization or positions required/ preferred competencies, in order to create an Individual Development Plan.

measured in behavioral terms, but more accurately there are behaviors associated with these competencies. Thus, assessments of such competencies are not objective, rather they are based on faulty or interpretable assumptions about behaviors that constitute maturity, flexibility, cooperation, autonomy, and independence, among others. For these competencies, measurements that meet professional standards are needed. If an organization chooses to integrate competency models throughout their human resources practices (i.e., training and development, selection, and performance and assessment activities), the competency model frameworks developed to describe jobs or occupations and promotional opportunities should be shared with all managers and staff; employee participation in development of a competency model can assist with providing awareness of the model as well as create acceptance. Resistance to change may be lessened with buy-in from staff and managers. By having the entire organization involved in the development of competency models and defining what certain competencies mean for that particular organization, there will be an organizational expectation of what makes the company succeed. For the gaps in competency acquisition, further training and development can be offered and provided to aid in acquisition of the desired skill, knowledge, behavior, trait, etc. Allowance for some less needed or desired competencies should be considered as well to perhaps enrich the talent pool. For occasions when these competencies are not developed, it is likely that inaction or an ineffective behavior may prevent the worker from accomplishing job tasks and organizational goals. While not usually the most cost-effective option for businesses after investing in an employee, it may be most appropriate for the company to re-evaluate the current competencies of an individual and his or her acquisition for learning new and desired competencies based on those competencies required of the organization. With the results of this analysis, the organization and individual can determine the individuals future within that organization. The employee might benefit far greater in the long run knowing that other organizations within that industry or across industries would be a better career fit. 395

15. Challenges with Using Competency Models

Competency models have their place in human resources practices and their use can be a method of speaking a similar language among various audiences when discussing work requirements. However, competency models are not the sole solution for every hiring and selection decision or other managerial functions nor should they be the only tool utilized in meeting education and training needs, explain that framing competencies as an outcome can ignore the mental and personal processes that are utilized in developing and exhibiting skills and utilizing knowledge. Some idiosyncratic competencies that can assist a person in being successful in their job or contributing to the competitiveness of an organization may be overlooked if the competency model solely is used to strategically select only staff that fit this model and do not rely on developmental resources to facilitate acquisition of competencies where a gap exists. Several authors also caution against using competency models for measuring or appraising certain areas of performance and providing developmental feedback based on these assessments. Despite the efforts to assess the competencies associated with personal characteristics, traits and motivation, such competencies are difficult to define and therefore difficult to assess. Such competencies cannot be directly

16. Wider Scope for Competency Research

One of the fundamental challenges of the competency approach is the risk of restricting the diversity in the organization, because all the members are obliged to apply the same corporate wide competency standards. This may limit innovation and diversity of ideas in the organization. An implication for scope for research is to conduct an industry wide analysis in competency based HR practices in manufacturing industry to determine differences in competency model design and or implementation. The benefits and challenges of the competency applications in specific industries could be examined accordingly. Research in depth could also identify difference in a competency model design and or implementation by organization size and structure. The competency approach should also be further analyzed and studied by human resources advocates and academicians for its performance contributions, calculated return on investment and potential challenges so that the future emerging competences practices will be conducted purposefully and effectively. To understand the competency of every individual the following are the few steps that can be initiated for the understanding and also there is a wider scope for creating a new Competency Model. Steps that can be involved in designing and developing the competency model: Strategize understanding the business needs. Initiate identify methodologies, , review existing data, benchmark competencies, and collect competency data. Model analyze and synthesize data, identify competencies and develop models, and validate models. Pilot develop implementation and evaluation plans, develop and initiate competency applications, and continuously 396

communicate activities. Link link to all human resources system components, Evaluate establish and evaluate measures, and continuously improve the system.

16. References Cockerill, T., Hunt, J., & Schroder, H. (1995). Managerial competencies: Fact or fiction? Business Strategy Review Dalton, M. (1997). Are competency models a waste? Training and Development, Ashworth, P.D., & Saxton, J. (1990). On competence. Journal of Further and Higher Education, Boyatzis, R. E. (1982). The competent manager: A model for effective performance New York: Wiley. cappelli, P.Singh, H.Singh, J and Useem, M.(2010) the India Way.Boston, Massachuseets:Harvard Business School Publishing. Mi hales, E. Hamsfield jones, Axelford, B(2001) war for Talent Harward Business School Press, Boston:Mckinsey and Co. Inc. Pareek, Udai and Rao, T.V; Designing and Managing Human Resource System, New Delhi:Oxford and IBH, 2003 Flanagan, J. (1954) The Critical incident Technique Psychological Bulletin,51: 327 -59 Fleischman.E (1953) The Description of supervisory Behaviour Journal of applied psychology 37: 1-6 McClelland, D.1973 Testing for competence rather than intelliengceAmerican Psychologist 28: 1-14 Nybo.G (2004) Personnel development for dissolving jobs:towards a competency based approach? Int.J.of Human Resources Management 15:3 May 2004 549 -564 Valkeavaara, T.1998, Human resources development roles and competencies in five European countries, international journal of Training and Development 2 (3):177-179. Ulrich D and Brockbank, W (2005). The HR value

Proposition. Boston, Massachusetts; Harvard Business School Publishing. Ulrich D. Brockbank, W.Hohnson, D, Sandholtz, K & Younger, H. 2008. Hr Competenices: Mastery at the intersection of people and business Michigan: Society for HRM, Baill, B. (1999) The changing requirements of the HR professional _ Implications for the development of HR professionals . Human Resource Management, Vol.38 92) P.171-176 Boyatzis, R E (1982) The competent Manager, Johan Wiley and Sons inc. Manjunath VS; Competency Based Compensation System - As a strategic HR technique Available at: http://www.iitk.ac.in/infocell/announce/convention/ papers/Context%20and%20Hu man%20Resource-07-Manjunath%20V%20S,%20 C%20N%20B%20Rajesh%20Final.pdf T.V.Rao, Performance management and appraisal

systems: HR tools for global competencies, Sage publications. Sudipta, Competency mapping, Express Computer, 10 Jan 2005. The Art and Science of Competency Models: Pinpointing Critical Success Factors in Organizationsby Richard Lepsinger, Anntoinette D. Lucia- ebook Building Robust Competencies: Linking Human Resource Systems to Organizational Strategies- by Paul C. Green The Handbook of Competency Mapping: Understanding, Designing and Implementing Competency Models in Organizations- by Seema Sanghi by Sage Publications Pvt. Ltd; Second Edition edition (November 5, 2007) Article -The Art and Science of Competency Mapping- by T.V. Rao, WEB SOURCES: www.tvrls.com www.hinduonnet.com www.citehr.com

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Impact of Activity Based Learning in Chennai City Schools

Ms. Nandhini Nagarajan Asst.Professor, SRM B School, SRM University Dr. R.Krishnaraj Asst. Professor, School of Management, SRM University 1. Introduction
Activity based learning is an important area of concern in todays world. One of the main reasons that can be seen by the educationalists is that even though all the students go through the same pattern of education. The students are given the dosage of knowledge at the same time, but still it is clearly seen that not all the students are able to comprehend what is being dealt with in the class and then apply the same thing in their life. Only some of the students are able to succeed in their life professionally, personally, and socially as well. What could be the reason behind this impact? Has any one pondered over this? This is really a serious issue to be taken at task immediately. If the situation is closely being monitored it will be very clear that the students with good academic background, great exposure to things related in their field will be shining well. Those with average educational background and without any support from the family or something of that sort will be finding it difficult to make through the current education system even at a graduate and the post graduate level. What happens in schools is the teacher teaches the lesson, give notes and the exam paper is set based on notes, the questions are being repeated and the children learn them by heart and then vomit them in the exam. But when the same students enter in to the college and higher education, they find it difficult to manage it. The lecturer explains the concepts and walks away without providing notes. The questions are to be answered with the help of the common sense; they are supposed to relate to what they have learnt in the class to the questions being asked in the exam. Here the student is unable to come out of the conventional way of learning and they suffer a lot. This lowers their self confidence and makes them frightened towards the life and ends up with failure after failure. Students are not being trained to face their challenges from the childhood. 398

One good example can be quoted here is the life cycle of the butterfly. The worm comes out of the egg, eats lots and lots of leaves and arrests itself in the pupa, after some time it pushes itself out of the pupa to be a beautiful butterfly. If by any chance, any external support extends it to come out of the pupa, then its body is swollen and its wings are too short and thin for it to fly. Learning by the experience and overcoming the hurdles make that worm into a beautiful butterfly. Same way when a child is walking for the first time, the child would be falling down thousands of times, it is after the thousandth time the child will learn to walk, if a child is being pampered and not allowed to fall down it will never learn to walk. So is the importance of the primary education in every childs life. It is going to be the base. It is rightly said that maximum learning occurs till the age of five. If the foundation is strong then the building will be strong. If the foundation is weak the building and the future of the child will also be weak. To achieve a strong foundation, the activity based learning is a strategy that can be implemented. The Activity based learning is based on the funda that a picture of an animal is worth 1000 words explaining about an animal. Seeing an animal in real is worth of 1 lakhs words about the animal. It is also proving the fact as rightly said by a renowned scholar I Hear, I forget.. I see, I remember.. I do, I understand. The concept of Activity based learning has been taken from the Rishi Valley Practices. It was introduced in the Corporation schools of Chennai from the year 2007. This method has been implemented with slight modifications, when compared to the original method. After enjoying the success, this methodology of learning has been implemented in the Panchayat Union Schools as well as in the private schools.

The teachers who are involved in implementing ABL method have developed activities for each learning unit which facilitated readiness for learning, instruction, reinforcement and evaluation. ABL has transformed the classrooms into hubs of activities and meaningful learning. Conventional process of teaching has lot of limitations, such as Teacher dominates the classroom. Rare use of teaching learning materials. Most of the time the lecture method was followed. Importance was given to rote learning. Teachers are under the assumption that they know everything and children do not know anything. Teacher assumes uniform learning pace and uniform level of achievement among children. The communication gap is more between teacher and children. Focus is given on teaching rather than learning. No scope to cover the loss of learning during the period of absence of children. Multigrade and multi level is not addressed. Traditional way of evaluation. Absence of joyous based extra activities. Absence of play way and learning by doing activities. Less chance for mutual and self learning. Coverage of syllabus by the teacher and not by the children. Classroom with fewer facilities for learning activities. Instructional materials neither intensive nor attractive. Lack of learning freedom - more of time restricted environment. 399

To overcome the various deficiencies found in the conventional learning process in the schools the system known as the Activity Based Learning (ABL) came to the rescue to the Nations future. To make sure that this system which was going to be implemented is a good system of education a survey was conducted under the investigation of experienced practitioners. The team members had rich exposure in the field of primary education. They had strong faith on children, parents, teachers and the government that they would not be responsible for low achievement of children. Then, after close study in some of the schools in the corporation area, the team identified the above mentioned reasons for failure of various students due to the conventional educational system.

2. Benefits of ABL approach

Children learn on better pace. Provision of more time for self-directed learning and teacher directed learning is reduced considerably. Group learning, mutual learning and self learning are promoted. Teachers teaching time is judiciously distributed among children. Only needy children are addressed by teachers. Childrens participation in every step is ensured in the process of learning. Evaluation is inbuilt in the system it is done without the child knowing it. Rote learning is discouraged and almost no scope for rote learning. Periodical absence of child from school is properly addressed. Classroom transaction is based on childs needs and interests. Freedom to child in learning as he chooses his activity. Multigrade and multilevel in learning is

effectively addressed. No child can move to the next higher step of learning unless attains the previous one. Sense of achievement boosts childs confidence and morale. Attractive cards and activity create interest among children. Scope for childs development in creative and communicative skills. Children will have a feel of security as they sit in rounds in the groups. Children are allowed to move in the classroom as they choose their activity. Moreover the distance between the teacher and the child is largely reduced and the teacher acts as a facilitator rather than teacher.

situated in Chennai city. Teachers were selected from every school from the list of teachers, by simple random sampling method.

6. Sample Size
The Sample size of this study is 30 teachers.

7. Data Collection Method

Data has been collected by administering questionnaires among thirty teachers in primary schools. Data were tabulated and analysed for the findings of the study.

8. Scope of the Study

This study has been confined to primary schools situated in Chennai city. The same findings may or may not be match with other geographical locations and with other samples of different characteristics.

9. Limitations of the Study

Due to time constraints the number of respondents was restricted to 30. The opinion of the respondents may vary from place to place, based on the implementation of the ABL scheme in various primary schools.

The Directorate of Teacher Education, Research and Training and Directorate of Elementary Education have been involved in implementing this programme including imparting training for the same. This is yet another silent revolution in Innovative way of Education. I hear; I forgetI see, I remember. I do, I understand.

10. Findings
Almost 65 per cent of the respondents reported that attitude of the students is a deciding factor in improving their caliber than their knowledge. Almost 70 per cent of the respondents reported that there was always a huge gap in the class between the smartest student and the dullest student; this is evident from the fact that the same strategy would not suitable for all students. Segmentation should be done based on screening test and appropriate grouping should be formed. After segmenting them with identical caliber, these students should be exposed to various activity learning based on their understanding. Additional care should be given to weak students to achieve the bench marking level. After attaining the uniformity, the best identified strategy can be implemented for a whole group of students with related activity based learning. This segmentation can be carried out mainly with activity based learning by measuring time and caliber, related to particular activity. Conventional educational 400

3. bjective
To analyse the impact created by activity based learning among Chennai school students by administering questionnaire with school teachers

4. Research Design
The research design is descriptive in nature. Questionnaires were administered among Chennai city school teachers to examine the impact created by activity based learning with reference to students performance in schools.

5. Sample Design
Samples were selected from the list of primary schools

method does not possess the system of classification of students, based on various parameters. They were seeing a silver lining at the existence of the activity based learning being introduced it the primary education. Almost 70 per cent of the respondents expressed their satisfaction towards the outcome of activity based learning introduced in the schools. Almost 65 per cent of the respondents expressed their feeling that the students would learn to think and do things better in their life. It is not just confined to professional life alone; it is applicable for overall grooming. When the students get an opportunity to do something and when they learn out of their own experiences it becomes really hard for them to forget the learnt thing in their life. Majority of 65 per cent of respondents had a strong feeling that the students will really benefit from the activity based learning. Conclusion It is crystal clear that introduction of the Activity Based Learning in the primary education will improve the quality of students. The students would gain activity based knowledge, which will be beneficial to shape up their life. This means that they will lead a happy professional life which in turn makes them to lead a happy personal life and enjoy a healthy life. Suggestions It is clear that the impact of the activity based learning in primary schools is very high. It would be good to the society if all the schools dealing with the primary education introduces the activity based learning. Teachers those who have been involved in the activity based learning, should be trained well and provided with constant encouragements to perform better. Proper implementation of this method will bring better prosperity to the students community. Government should allocate more resources for this activity based

learning programme to improve the productivity of students in better manner.

11. References
1. http://www.ssa.tn.nic.in/Docu/ABL-Reportby-Dr.Anandhalakshmi.pdf Accessed on 18th November 2010. 2. http://www.ssa.tn.nic.in/CurrActivities-A.htm Accessed on 18th November 2010. 3. http://eric.ed.gov/ERICWebPortal/ search/detailmini.jsp?_ nfpb=true&_&ERICExtSearch_Searc hValue_0=ED144840&ERICExtSear ch_SearchType_0=no&accno=ED144840 Accessed on 18th November 2010. 4. http://onlinelibrary.wiley.com/ doi/10.1111/1467-8535.00295/abstract Accessed on 20th November 2010. 5. http://books.google.co.in/books?hl=en&lr= &id=mpsHa5f712wC&oi=fnd&pg=PA135 &dq=activity+based+learning&ots=sWidB ic-Ij&sig=Lp4BoJHghhhj_ GzYbHxWLiw 8cVI#v=onepage&q=activity%20based%20 learning&f=false Accessed on 18th November 2010. 6. http://www.latikaroy.org/projects/projects_kv/ kv_actbl.html Accessed on 18th November 2010. 7. http://en.wikipedia.org/wiki/Activity-based_ learning Accessed on 18th November 2010. 8. http://www.kpmapproach.org/activity-based Accessed on 18th November 2010. 9. http://wikieducator.org/Activity-Based_ Learning Accessed on 18th November 2010. 10. http://www.learnerstogether.net/PDF/ Effective-Design-Principles.pdf Accessed on 18th November 2010.

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Kpo As An Emerging Sector in India - Challenges, Opportunities and the way out
Mr. Satheesh Babu Dr.Y.Lokeswara Choudary Asst.Professor& Research Supervisor, SRM B-School, SRM University, Vadapalani, Chennai- 600026. 1. Introduction
India is soon going to see the rise of KPOs, a glimpse of which has already been shown by the BPO sector. The BPO sector and the KPO sector are closely related to each other in terms of outsourcing of the processes. The major difference is in the work force employed and the type of processes being outsourced. In BPOs low level skills are required whereas in KPOs knowledge is the key point. Knowledge Process Outsourcing (KPO) is one step ahead of Business Process Outsourcing (BPO). It started emerging in India around the turn of the century, when the global industries realized that apart from software development and technical support, knowledge work could also be outsourced. It involves transfer of business processes to other geographic locations; specialized domain specific knowledge and business expertise of a higher level rather than just process expertise. A KPO can provide quality work and on- time delivery with uninterrupted services. KPOs are the next big thing in the outsourcing sector. Initially, KPOs focused on data collection, updating financial models, patent searches and basic data mining. But now KPOs have also started focusing on sector insights, equity research, patent analytics, high end data mining, analysis and recommendation. 4.Telecom R&D: Qualcomm, Nokia, Lucent Technologies, Alcatel, Ericsson. 5. Software R&D: Phillips, Microsoft, Baan, Adobe, SAP Labs, BMC Software, IBM, Yahoo, HP, Sun MicrosysteAuto/Engineeringms, Google. 6. Auto/Engineering: Neilsoft, Delphi, General Motors, DaimlerChrysler, Plexion, Quest, Whirlpool. 402 3. Engineering and R&D: These include finite analysis, 3D conversion and modeling, technical specifications for tenders, value engineering, computational fluid dynamics analysis, etc. Some of the areas and KPOs working in these areas are: 2. Financial Services: These include financial data mining, insurance, risk assessment, equity research, underwriting, fund management, actuarial analytics, debt collection and recovery, corporate & market research, etc. Some of the KPOs working in this area are Smart Analyst, Office Tiger, The Smart Cube. other than process expertise, KPO provides domain knowledge and business expertise, which, in turn, require analytical and highly specialized skills. India is the hottest destination for KPOs.

3. KPO Sector- An Overview

1. Legal Services: These include drafting contracts, reviewing transactional & litigation documents, research memoranda & due diligence reports, negotiations, prosecuting patents, etc. Some of the KPOs working in this area are Wipro, Pangea3, Atlas Legal, Manthan Services, etc.

2. Scope of the Industry

Indian companies are good for BPO only. The companies in KPO sector are proving this statement to be wrong. They are showing the world that Indian companies can handle complex work also. India has highly qualified workers in many sectors like Engineering, Pharmacy, R&D, Biotechnology, etc. KPO jobs are more challenging than BPO jobs because

7. Market Research and Analytics: These include services like writing & editing, secondary & primary research, formatting client reports, conversion of findings to knowledge, etc. Some of the KPOs working in this area are marketRx, Pipal Research, Evalueserve, Inductis, OfficeTiger, Copal Partners, CRISIL, etc. 8. Writing and Content Development: These include services like content delivery, digitization of content, data enrichment & warehousing, prepress work, proofreading, template designing, text composition, etc.

9. Pharmaceutical and Biotech R&D: These include clinical research, research & development, drug discovery, etc. Some of the KPOs working in this area are Bayer, GlaxoSmithKline, Biocon, Eli Lilly, AstraZeneca, Dr. Path Labs, etc. 10. Healthcare Services: These include diagnostic, genetic profiling, oncology tests, HIV & allergy, etc. Some of the KPOs working in this area are Clingene, Avesthagen, Ranbaxy . 11. Education and Training: These include private tutorials, curriculum design, K-12, teaching, content development, etc.

4. Difference between KPOs and BPOs: We can say that KPOs emerged from BPOs:

BPO

KPO

KPO provides in-depth knowledge, expertise and analysis It provides services like customer care, technical on complex areas like Legal Services, Business & Market support through voice processes, tele-marketing, sales, etc. Research, etc. Low end services High end services Process expertise Knowledge expertise Pre-defined processes Requires application, understanding of business and It employees not- so- qualified workers as it focuses on analytical bent of mind communication skills It involves skill and expertise of knowledge workers with excellent educational background. 403

5. Kpo Sector- Future Outlook

The share of Indian KPO sector was 56 percent of the global KPO sector in 2003. By 2010, Indian KPO sector will have 71 percent share of the global KPO sector. Russia, Ireland, Philippines, China, Czech Republic and Israel are also entering the KPO industry.

In 2003, USD 0.72 billion revenue was generated by the Indian KPO industry, contributing around 0.24 % to the Indian service sector. This figure is expected to reach 1.78 % by 2010. A CAGR of 49.5 % is expected by Indian KPO sector between 2003 and 2010.

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As estimated, the BPO exports will be $20 billion and KPO exports will be $12 billion by 2010. The BPO industry will grow globally at a CAGR of 26% and the KPO industry will grow globally at a CAGR of 44.5% till 2010.

6. Employment potential of KPOs in India:

The industry presently employees 25,000 people and is expected to grow to 250,000 employees by 2010, as estimated by NASSCOM. But different research companies have different views about the number of employees in this sector.

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7. SWOT Analysis of KPOs in India:

Strengths Weaknesses Immoral and unethical practices related to handling Large talented pool of crucial data Quality IT training Low labour costs Rising wages Success of BPOs The inability to uniformly develop and provide Good knowledge of project management skills infrastructural requirements as real estate prices are rising in major cities. Supportive government policies Many new areas of specialization are being covered Inadequate Intellectual Property Rights (IPR) making KPO sector spreading its wings protection regime in India Consideration to quality standards like ISO 900x and Billing rates are higher as compared to billing rates Six Sigma in BPOs Billing rates are lower as compared to billing rates in other countries

Opportunities Increasing domain expertise More areas of specialization can be added to KPOs Ample opportunities for SMEs

Threats Non retention of talent Expected labour supply gap as jobs grow faster than the workforce.

WHAT MAKES INDIA AS AN EMERGING KPO HUB: Well established IT services and BPO sector Excellent project management skills Highly qualified professionals Proficiency in English Supporting government policies. Some challenges which KPO industry: Expected dearth of domain expert professionals High attrition rates Talent retention Data security and confidentiality Growth drivers of KPO sector: Shortage of knowledge professionals in countries like USA, UK, etc. Low wages labour BPOs moving up the value chain Single vendor services Talented workforce. After the success of BPOs, India will be a key player in this sector. India is all set to face challenges and become a global KPO leader. 406

Future Scenario: The future of KPOs in India is bright. Along with creating job opportunities for talented engineers, MBAs, doctors, lawyers and other professionals, the sector is spreading its wings into different directions which will finally lead to the development of India. Billing rates for KPOs are higher as compared to BPOs. But billing rates in India are much less than those in UK or US for KPOs. This makes India save more money and generate more revenue. Continuous growth is expected in KPO sector in the future as new areas are being added to the existing list of areas of specialization.

In 2003, the market share of Indian KPO sector in global KPO market was 56%. And it is expected to reach 71% in 2010, which shows a decent growth of the sector in the coming years. According to NASSCOM, KPO sector worldwide is expected to reach USD 17 billion by 2010. Out of this, India will account for USD 12 billion. According to Evalueserve, KPO sector is expected to grow at a CAGR of 46 per cent globally. This is possible as India has the potential to provide cost-effective and quality workforce.

its already developed IT services and BPO sector and qualified professionals. It has tremendous opportunities for growth because of scarcity of knowledge professionals in countries like USA and UK, low wages labour available in India and talented workforce. By 2010, Indian KPO sector will have 71 percent share of the global KPO sector. KPO exports are expected to reach $12 billion by 2010. Currently, the industry has 25,000 professionals and is expected to have 250,000 employees by 2010.

8. Hurdles in Growth

1.Low employability despite high graduate turnout because it requires high level skills. 2.Job opportunities in other sectors are also increasing, thereby further reducing the supply of skilled people to the KPO sector. 3.Supply gap: According to Rocsearch, a UK based Research Company, the KPO sector may only reach $5 billion by 2010 and 100,000 employees instead of projections of $12 billion market and 250,000 employees. 4.In the near future, India will experience a higher rate of growth in KPOs as compared to BPOs. KPO sector will heavily contribute to the revenue generation and job creation due to its increasing size. Therefore it has a promising future. EMERGING TRENDS IN KPO SECTOR: India is emerging as a leader in KPO market because of 407

9. References
1. Drucker, P. (1954) The Practice of Management, HarperBusiness, Reissue edition 1993, ISBN 0-88730613-6 2.Fort, Timothy (2001) Ethics and Governance: Business as Mediating Institution, Oxford University Press USA, New York. 3. Friedman, M (1962) Capitalism and Freedom, University of Chicago Press, Chicago, 1962 4.Hutcheson, F. (1729) An Inquiry Concerning Morall Good and Evil, 1729. 5.Kalin, J. (1968) In defence of egoism, in Morality and Rational Self-interest, edited by David Gauthier, Prentice Hall, New York, 1970. 6.Mandeville, B. (1715) The Fable of the Bees.

7.Rawls, J. (1971) A Theory of Justice, Harvard University Press, Cambridge Mass. 1971. 8.Renesch, John, OVERCOMING FUNDAMENTALISM IN BUSINESS- Repossessing Enterprise from Perverse Absolutism, Philosophy for Business, Issue #30, 17th June 2006.[2] 9. T. Marshall, VKE Engineers, Towards an Innovative Management Information System to Assist in the Strategic Management 10.Leon Pretorius, Rand Afrikaans University, Towards an Innovative Management Information System to Assist in the Strategic Management 11.H. P. Langenhoven, SA Federation of Civil Engineering Contractors, Towards an Innovative Management Information System to Assist in the Strategic Management

12.Alwyn Strauss, Rand Afrikaans University, Towards an Innovative Management Information System to Assist in the Strategic Management. 13.Jeanke van der Haar, Stork N.V. SBU Aerospace Ron G.M. Kemp, University of Groningen Onno W. F. Omta, University of Groningen, Creating Customer Value in New Technology-based 14.Ghaleb Abbasi, University of Jordan, a Model for Integrating the Industrial Sector with Universities 15.Nicolaas Piquito, Rand Afrikaans University, Financial Product Innovation 16.Leon Pretorius, Rand Afrikaans University, Financial Product Innovation 17.Alwyn Strauss, Rand Afrikaans University, Financial Product Innovation.

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CLOUD COMPUTING TENDS TO ECO-FRIENDLY BUSINESS

S.VIJAYKUMAR, Thiagarajar School of Management, Thirupparankundram, Madurai , S.G.SARAVANAKUMAR, Sastra University, Kumbakonam, & K.KARNAN, A.R.J. College of engineering and technology, Mannargudi

1.

Induction

Cloud computing is becoming a buzzword. It refers to a computing system in which tasks are assigned through a combination of connections, service and software over a network. This collective of connections is known as the cloud. Computing at this level allows users to sort through a vast amount of data. For example, Google is currently the forerunner of cloud computing due to its need to produce accurate and instant results for the millions of search queries it receives every day. And Gmail is another successful service from cloud computing, the most important thing is seasonal servers like amazon give their servers for rent instead of putting idle. And it provides amazing service and scope for the business from that we had lots of business opportunities most important thing behind in its development is.it is the important Green computing technology.

1.1 Objective of the paper

The main objective of the paper is to explore the significant need by business to move towards cloud computing and we explain how the cloud computing helps to run eco-friendly business that are essential in this current situation. 2. Cloud Computing

We see Cloud Computing as a computing model, not a technology. In this model customers plug into the cloud to access IT resources which are priced and provided on-demand. Essentially, IT resources are rented and shared among multiple tenants much as office space, apartments, or storage spaces are used by tenants. Delivered over an Internet connection, the cloud replaces the company data center or server providing the same service. Thus, Cloud Computing is simply IT services sold and delivered over the Internet. Cloud Computing vendors combine virtualization (one computer hosting several virtual servers), automated provisioning (servers have software installed automatically), and Internet connectivity technologies to provide the service. These are not new technologies but a new name applied to a collection of older (albeit updated) technologies that are packaged, sold and delivered in a new way. A key point to remember is that, at the most basic level, your data resides on someone elses server(s). This means that most concerns (and there are potentially hundreds) really come down to trust and control issues so this moment we needs a trustful vendors.

3.

The Economics

Figure 1 : System model of Cloud computing

Economies of scale and skill drive Cloud Computing economics. As with rented Real Estate, the costs of ownership are pooled and spread among all tenants of the multi-tenant Cloud Computing solution. Consequentially, acquisition costs are low but tenants never own the technology asset and might face challenges if they need to move or end the service for any reason. Something that is often overlooked when evaluating Cloud Computing costs is the continued need to provide LAN services that are robust enough to support the Cloud solution. These costs are not always small. For example, if you have 6 or more workstation computers, you will probably need to continue to

409

maintain a server in a domain controller role (to ensure name resolution), at least one switch (to connect all of the computers to each other and the router), one or more networked printers, and the router for the Internet connection.

some innovative application better than other service provider so marketing executives where key person can able to explain about that. 4.5 Providers

4.

Cloud Computing Opportunities

4.1 Scope of vendors Nowadays small scale business is emerging around the world. Cloud computing gives a great support to the small scale business and for the new business openers. The vendors are playing major role in cloud computing they act like a bridge between the users and the providers. Because vendors are the trustful person in the user aspect so, who really satisfies the customers needs that vendor will succeed and from that vendor side you have an opportunities like as fallows. 4.2 Technical supporters

There are many providers giving cloud features some of the example of providers like Google, Amazon etc. Google provides many apps like docs, reader, analyst, notebook, finance etc. So the small scale business people can invest their money in providing cloud features. The providers need to construct large datacenters, want to buy big multicore processors etc. The providers investment are one time investment only then they need to invest some cost for maintenance remaining all the operations are done by vendors so the benefit get by the providers are high when compare to the others.

5.

Eco friendly cloud computing:

The technical supports will be give support 24X7, they will take care of connection failures, database issues, sever failure, breakage in connections, error in flow of connections, node failure, linkage failures etc. They will respond the technical queries send by the users, if the queries are difficult to analyze they will forward the queries to the higher supporting team. The higher Supporting team consists of experienced persons in that field and for that we need reasonable human power for facing those problems. 4.3 Account officials

The data centers can be shift to the hill stations so that the cooling mechanism like cooling fans and generators are reduced. It reduces the global warming. If the user wants to use particular software for one day use they want to purchase that software no other chance is possible but in the case of cloud computing it provides cheap accessing this kind of softwares. Coming out of todays processors trends new processors are coming out day by day, the user finds difficulty to upgrading the systems but the cloud features provide the users can get the feel of getting work with the current technologies with low system requirements.

They will maintain the users profiles and calculate the usage of users. The accounts are maintained in daily basis the monthly bills are billed depending upon the usage limit. In future it may change into our mobile prepaid Schema and sometimes the situation may occur we want to make payment to the user regarding to its innovative application usage in the cloud. 4.4 Marketing executives

6. Cloud Computing Opportunities For Various Level

1.1 Beginners in business

Business

Marketing executives will market their services provide by them. They will attract the users by explaining the offers to them. They may introduce usage offers or

When the people like to running with own business they can use this cloud features because at first they need lot of investment to buy official things like system, recruiting people, database, servers, licensed softwares, internet etc, by using this cloud features we get the greater accessing speed with the help of low system requirements, without buying the licensed softwares we can use licensed softwares and without buying the database server we can store the records by using cloud effectively.

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1.2

Students

Nowadays the educational institution highly focuses on current technologies because the industry standards need such a quality among the students. The students also need to update their knowledge with current trends so they want to use the latest softwares, due to the various release of software packages every student cant buy new softwares and cant move with current technologies, to solve this problem cloud computing provides the new updated softwares at low cost. 1.3 Researchers

6 REAL-TIME SUCCESSIVE CLOUD COMPUTING SERVICE GMAIL Nearly 2000 -2003 Gmail turns in the path of cloud computing afterwards its develop and provide various cloud computing services from Google apps and apps engine we can able to deploy our own research tool or program. From that user depend upon on our software usage or time of usage we can earn money for that from that you can understand Google is the vendor for that but we cant able to say from where that server works and its Google own server or not because sometimes yahoo can also get server for rental basic from amazon instead of investing huge amount on that.

The research scholars need to experiments their thought into new innovations. For doing research works they need lot of softwares and high system requirements to take the reading and measurements. With the help of those reading and measurements they will come out with the some new conclusions in such cases they need a software for hourly basis to calculated those measurements so it is best way to approach through cloud computing. 1.4 Educational institution

7. Roll Of Cloud Computing In Green Computing

When the matter comes to the mind before that you must know when your PC becomes e-waste? Two important reason our PC become an e-waste. 1. Not able to upgrade and update. 2. Not able to repair. Here we had a solution for this problem in terms of cloud computing. From this cloud computing how we can able to save this world from global warming? Yes it gives an unexpected and invaluable solution. Here our term for cloud computing is an encapsulated computing. It is an abstract computing depends on user need. E.g. I have an camcorder with an 500Gb of content from that I have an 100gb of required content after editing it. But my computer memory is very small nearly 80GB only, for that editing purpose only. I buy an HDD of 500 GB its waste because after that I doesnt need it. Think if that scenario comes in olden days it is very serious because we have to buy one HDD, but today from that cloud computing we can able to get an required memory for rental via online if need comes to extend it also possible by this cloud computing. How it consumes global warming? If we go with an first way we have to buy an new hard disc it is an e-waste after some time it doesnt use for us and it required power when it is need or not need

Nowadays the educational institution approaching cloud computing for doing the reviews, conducting the experiments, for conference, meetings, to share the materials. If they want another 50pc like that they simply go there and purchasing that. From the cloud in holidays just you resale that systems no need to spend rent for that. If in future you can once again give that thing in rental basics like webhost reseller option. 1.5 Business officials

Business officials need this cloud computing rapidly because concerns need software updates regularly. Take an very small example you want to update antivirus update for every pc please think how much bandwidth you need and how much you spend for that but when the matter comes to cloud computing just you simply update your cloud source you can automatically get that update when you call that software. This is small scenario but the real issues are huge in size we can solve it by cloud computing.

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and these two hard disc produce much amount of heat because of two separate hardwares and processor wants to control these two and for home purpose in India we mostly go with an lignite power it produce large amount of carbon. On that way it is a chain reaction of global warming. Else if we go with a second choice cloud computing we have an n number of option to consume global warming. First thing we dont want to buy an HDD we go with an rental option or to buy online you may ask if you buy it in online whats difference between the choice one and these but in this cloud computing you can able to sell it also. From that we have e-waste consumption, power consumption, carbon consumption, much more global warming consumption 6.1 HOW WE EFFICIENT ONE CHECK ABOVE IS AN

6.4 EE And here we have propose an concept called EE E-Eco-friendly E-Economic friendly 6.5 EE concept on cloud computing Eco-Friendly: Because of e-waste consumption, energy consumption. Reuse use concept, heat consumption, time consumption. We can called it is an Eco-friendly. Economic Friend: Cloud computing allow you to use resources in rental basics and after using it we can able to retain it. And it gives lot of opportunity to consume money. 7 CONCLUSION This paper will show you a way of the emerging trend cloud computing. I hope you all can able to know about the scopes and business opportunities of this cloud computing. We feel this is the right time to utilize it and give this technology for this world as our valuable duty. In future this technology plays a vital role to decrease global warming as well as it have potential to reduce e-waste. This technology is the source of creating very big business opportunity the world never ever seen. So get ready for this technology as well as technical change. REFERENCES [1] Bernard Golden, Defining PrivateClouds, Part One, CIO. Available at http://www.cio.com.au/ article/304190/defining_private_clouds_part_ one [2] AMAZON CLOUD WATCH. Available at http://aws.amazon.com/ cloudwatch/ [3] ITS Service Management. Available at http://www.itsm.info/ITSM.htm [4] Gartner Names Hyperic Cool Vendorin Latest Research Report. Available at http://www.hyperic.com/news/ releases/hyperic-named-cool-vendorbygartner.html [5] http://www.nagios.org/about/features/ [6] http://www.zenoss.com/product/networkmanagement

We all are known about RRR .if we satisfy it. it becomes somewhat good one .but here we go to next level and form an new rule because one R is recycle but e-waste recycle is an complicated and for that we cant avoid new plastic product production because plastic takes major roll in e-waste. 6.2 OUR NEW RULE IS RRD

R - Reduce R - Reuse D Degradation 6.3 HOW OUR SOLUTION SATISFIES REDUCE: From that we can able to reduce the number of HDD as well as that HDDs heat emission. From that we can able to consume electricity and a massive thing e-waste. REUSE: Cloud computing is especially for the reuse concept. Yes, now your old computer can able to get a new life from this cloud computing. And this gives an option to use that space for various persons depends on their needs DEGRADATION: This is our current major research to degrade a 70% concentrated plastic when we reach it we can also Satisfies this important term degradation of e-waste.

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ROLE OF EBUSINESS IN BUSINESS

Asha Mathew, Lecturer, XIME, Bangalore.

Information technology has revolutionized the way business is conducted. IT plays a major role in the effective running of business. Mobile commerce and Cloud Computing are the buzz words now. Mobile commerce allows business transactions and collaborations on the move and Cloud Computing helps the business to utilize IT resources based on subscription. Here we discuss about the way these technologies have transformed the business.

misconception that it is restricted to commerce over cell phones. Mobile Commerce refers to wireless electronic commerce used for conducting commerce or business through a handy device like cellular phone or Personal Digital Assistant (PDAs). In essence, M-Commerce offers personalization and real time transactions while on the move. Globally, consumers are expected to spend $119 billion by 2015 through their mobile phones, accounting for about 8% of all e-commerce activity, according to ABI Research. From point of sale offerings, to mobile shopping apps and enhanced mobile web experiences, it seems like companies both big and small are trying to capitalize on what mobile commerce promises consumers. Mobile penetration is considerably increasing and this rapid adoption rate means customers are starting to expect that their favorite retailers will have a mobile presence, making mobile commerce both an opportunity and an imperative for merchants. Mobile commerce and mobile browsing are not the same, the latter talks about opening Web Pages and browsing through and the former give the customers opportunity to choose, buy and pay for the purchase through Mobile devices. Apart from mobile presence business are trying to move some of the core activities on portable devices and hence the employees can update the sales/business details on the move.

IT bring value to Business?

Information Technology has a great influence in the way we do business. It gives an opportunity to sell to consumers and collaborate with partners without being physically present. eBusiness is much more than buying and selling online. Every business is looking forward to use Information Communication Technology in their inter and intra business activities. The use of right technology has the potential to revolutionize business processes and organizations, make them more efficient and boost overall competitiveness. Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers. Out of the new emerging technologies M-Commerce and cloud computing has the capability to modernize the business.

Key features of M-Commerce.

a. Mobility: implies that users can carry cell phones or other mobile devices to transact from anywhere in mobile network area b. Broad reach: The wireless devices makes it possible for people to be contacted anytime and anywhere

M-Commerce a new revolution in business:

The term m-commerce was coined by Kevin Duffy, the director of Group Telecom of Logica, in February 1997. M-Commerce (Mobile commerce) sometimes is considered as next generation wireless ecommerce. When people talk about M-Commerce there is always a

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c. Ubiquity: easier information access in real-time d. Convenience: devices that store data and have Internet, intranet, extranet connections e. Localization of products and services: knowing where the user is located at any given time and match service to them. f. Fast Processing: One important characteristic of mobile commerce is that it allows the user to process a transaction fast. g. Little maintenance required : Another characteristic of mobile commerce is that it requires very little maintenance from the seller

Communication technology. The City bank launched its Tap & Pay system which is based on NFC (Near Field Communication) technology in Bangalore in 2009 which will allow customers the convenience of using their mobile phone as credit card. Customers can tap their mobile phones on a contactless reader at the point of sale to pay for the purchase. While in the stock market, the user can access the stock market quotes and get in live touch with current trading status on its mobile in two forms either voice (customer assistance) or non-voice (sms alerts) or both. The share broker sends market trends and tips of trading on their clients mobile. Also broker can suggest the appropriate stock for intra-day trading to their users. Now many firms are using mobile devices to get employee status. Companies like Onida introduced status updates of sales executives through SMSs ,the SMS contains the information of product wise sales for the day and it gets routed to Onidas server in Mumbai . The very next morning people concerned with sales will get auto generated emails about the sales updates. Some companies use GPS based mobile devices to tract their employees especially the field executives. Personal care product firm CavinKare has partnered with Nokia to use mobile phone based supply chain management solution. The solution is called as Nokia Tej. This application is used for recording and transmitting information from the point of interaction with the retailer which is at the shop. This information will be transmitted to the point where the data can be recorded or transaction can happen, which is the distributor point where the billing software resides. This application drastically increased the efficiency and also resulted in reduced time and reduced paperwork, speed and accuracy. Bill collections from mobile and credit card customers are more secure and nearly fool-proof . Agents enter payment details into their handset, send a confirmation to the supervisor and generate a receipt instantly from a hand help Bluetooth enabled printer. GPS (Global Positioning Systems) can be used to tract the materials and hence can the exact location of the goods can be

Why should M-Commerce?

Business

think

about

Mobile Commerce has an edge over traditional method of Business because of the above mentioned characteristics. M- Commerce has a personal touch compared to e-commerce. M-commerce has entered different sectors and its growing day by day. In many sectors mobile commerce is being accepted widely and is also a popular way of commerce. Mobile Commerce works vastly in finance sector including all big and major financial institutes, banks, and stock market and share brokers. Now almost all banks provide mobile banking facility, where you can do all transactions over your mobile device. In October 2010 Infosys launched finacle mobile banking solutions which supports multi-host, multi lingual, multi channel multi currency banking. It has many functions like money transfer, new account opening, ATM / branch locating based on GPS (Global Positioning Systems) User can transact money or transfer money, or pay the bill from its bank account using mobile commerce facilities. Banks also provide round the clock customer care services, which can be used any time through voice calling. Some customer care services are also provides non-voice services on mobile that is known as insta-alert facility. Contactless payment system is another feature of mobile commerce, which is based on revolutionary Near Field

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traced. Application of m- commerce is also there telemetry services, which include the monitoring of space flights, meteorological data transmission, videoconference. The much talked technology 3G services is expected to be in Indian Market by end of 2010 or early next year which facilitates better internet capabilities, video conferencing facility on the move, .apart from these lots of applications will be available in navigational services also.

business to use applications without installing and access their personal files at any computer with Internet access. A simple example of cloud computing is the way you access your email. You dont need a software or a server to use them. All a consumer would need is just an internet connection and you can start sending emails. The server and email management software is all on the cloud (internet) and is totally managed by the cloud service provider. The consumer gets to use the software alone and enjoy the benefits. In simple terms cloud computing allows organizations to utilize computing power and storage services from third party infrastructure, apart from this cloud computing paves the way to increase the capability and capacity without a huge investment, without training employees, or buying new software.

Teething Troubles with Mobile Commerce:

Most important challenge in the implementation of M-Commerce is lack of standard Security measures and there are no standardized and simple payment systems available. On the Internet, any provider who conforms to the Nets standards can put an application online without anyones permission; on mobile networks, providers have to work with private network operators. Mobile commerce is currently a huge growth channel, providing business with a significant opportunity for growth. In todays economy, companies that optimize their mobile commerce customer experience strategies stand to benefit enormously by minimizing expenses associated with brick and mortar sales. Cloud computing is another aspect in eBusiness which gives business a lot of advantages. Its a metaphor to represent computation done through internet. Cloud computing has the potential to change how organizations manage IT and transform the economics of hardware and software at the same time. A Gartner report says the Cloud computing represents the fusion of trends such as global class architecture, Web platforms, massively scalable processing and the Internet. Here this technology brings out a new class of entrepreneurs who does not have to build offices, distribution centres, data centres or infrastructure of any kind, as everything could be managed in the cloud. The cost of developing, distributing and supporting application would decrease. Cloud computing can be a single solution for many IT Challenges- high cost, ongoing support and maintenance. This new concept has the added advantage which allows consumers and

Characteristics of cloud computing.

(a) On demand: It is sold on demand, typically by the minute or the hour. (b) Subscription based model: a user can have as much or as little of a service as they want at any point of time. (c) Zero Maintenance: Service is fully managed and maintained by the provider. (d) Saves Cost: On demand computing power will increase the utilization power and will result in cost savings. (e) Zero Capital Expenditure: Capital expenses can be turned into variable expenses, it a huge advantage for companies that either do not have lot of capital and those do not want to invest for infrastructure. (f) Shift in skill set required: Cloud computing will see a shift in the skill sets required by IT workers. IT professionals will focus on extracting business value from new technologies and cloud computing helps business shed the burden of technological implementation and concentrate on business processes. (g) Results in Innovation: It will release huge pool of innovation around the world, since the cost of

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developing, distributing and supporting application would decrease. (h) Elastic Load balancing: One of the characteristics that the services over the cloud provide is its ability for Elastic Load balancing that is it auto distributes application based on the incoming traffic using multiple instances. (i) Availability: Most of the application over the cloud promises availability. They provide this by means of Service Level Agreements

down the capital expenditure. Some of the Iaas Providers are: Amazon web services, Rackspace, Sungard, CloudScaling etc Platform-as-a-service (Paas): PaaS offers a faster, more cost-effective model for application development and delivery. It provides all infrastructures needed to run an application over the internet. With Paas independent software vendors and corporate IT department can concentrate on innovation rather than a platform to run the application. This cloud computing model focuses on the delivery of computing platform and solution stack. This facilitates the deployment of application without much complexity. The services provided over the platform-as-a-service include facilities for application design, application deployment, testing etc. In short we can say Paas sets up the environment to develop an application. This helps Software developers to concentrate on application building, as developers only require a computer and internet connection to start the development. The PaaS provider manages upgrades, patches, and other routine system maintenance. Organizations have the greatest advantage of PaaS by migrating traditional data centre operations to lessexpensive, Web- centric computing environments. The choice of platform for an organization depends on its existing system, the kind of application they want to develop. Major providers of PaaS services are Google, Amazon, sales force, Windows Azure Services Platform.

Different forms of Cloud Computing

Software-as-a-Service (Saas): This term first appeared in an article called Strategic Backgrounder: Software as a Service. It was published in February 2001 by the Software & Information Industrys (SIIA) eBusiness Division. (Courtesy: Wikipedia).For many years companies used to purchase software or software licenses and stores it in their internal networks and uses it. Software budget will always be very high and this used to be an un answered issue in many organization. Saas can be the solution to this problem. The service provider accredits users certain applications on demand over a network, mostly internet. Infrastructure-as-a-Service (IaaS): Infrastructure as a service is sometimes referred to as Hardware as a service. This provides on demand storage on the cloud. It primarily focuses on providing IT resources, processing power, storage, data centre space, services and compliance on demand, enabling IT to pay for these services as a variable fixed cost. This service also gives the opportunity to choose a range of operating systems, required size of hardware i.e., the number of CPUs or CPU power, and an amount of storage and also paves a way for systematic data backup .The key word out here is Virtualization. Organisations can use IaaS to quickly build new versions of applications or environments without having to order new hardware then wait for it to arrive and be configured. The greatest challenge of any business is the initial investment required to get started. IaaS keeps a check on the capital investment .When adopting IaaS business will get required hardware infrastructure and can scale

Life before Cloud

IT infrastructure for business application was always complex and expensive. The IT business solutions were very complicated and skilled Information Technology professionals was a must in all organizations as all these business solutions required expert skills to install, configure, and run the application. Only well established companies could afford this. Small and medium size companies never had a chance to use any of these expensive software applications for their business applications. The emergence of cloud computing changed this traditional concept.

Who should move to Cloud?

The decision to switch over to the cloud depends on the organization and the requirement of IT services

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in your company. The decision may vary from industry to industry. Adopting cloud depends a lot on the type, level and cost of IT skills, budget for IT investments in your organization. IT savvy sectors will embrace cloud to a great extend as they may find it cost effective as cloud provides the option of data storage, platform for development and also software licenses . Cloud computing paves the way for best services at the best rates. Today the companies are focussing to move non core activities to the cloud for example applications like e-mails.

Issues and Concerns

Lots of concerns are there regarding cloud computing and it needs to be addressed. The major concern includes data privacy and security .There is always a fear of data security when data is transmitted and stored by the provider, Business may reluctant to move towards cloud because of the scare of data being lost or stolen. Users always wonder about service providers security measures and practices. In short the major areas regarding security and privacy that needs to be answered are the following. 1. Data storage location. 2. The secure physical infrastructure the providers are using. 3. Data security and privacy when the data travels within the cloud itself. Other major concerns apart from security and privacy are about data availability. This is considered as another great challenge .There are concerns about the availability of data when the cloud is down and data availability in the absence of internet. Possibility of creating replica of data is another apprehension. In case of any disaster, data retrieval will be an issue. How much data can be retrieved and how fast it can be done needed to be answered. As and when the challenges around security, availability and reliability is resolved more and more adoptions of cloud computing will happen. Cloud computing will be a turning point in the way the organizations work.

Cloud computing and benefits to business.

When organizations move to the cloud they have many added advantages other than cost savings. Organization will be able to concentrate on their core activities rather than worrying about their IT infrastructure. Man power can be properly utilized for institution building and other high priority activities and initiatives. Organizations will not have to worry about the maintenance or down time. Cloud computing is the synonym that increases the capacity and capability of the organization on the move without the need for investment in infrastructure, training new personnel or licensing the software and there will not be any recurring charges as such. This concept will be widely accepted by budding entrepreneurs as it allows them to start off with limited investments.

Adoption of Cloud Computing in India and expectations

India Inc finally seems to be accepting the idea, according to a Springboard Research survey unveiled at Cloud 2010. The report suggests that around 42% of Indian organizations use or plan to adopt cloud computing at the moment. Interestingly, one year back, only 18% of Indian organizations were interested in cloud computing adoption as per the report. The segments like BFSI and telecom are deploying internal clouds. But still cloud computing is in nascent stage and significant deployment is not happening in great extends. Businesses are taking time to understand the technologies and hence may take some more time for wider adoption.

References
1. http://www.businesslink.gov.uk/bdotg/action/ layer?topicId=1075386889 2. http://mashable.com/2010/09/09/mobile-commercestrategy/ 3. http://smallbusiness.chron.com/characteristicsmobile-commerce-2197.html 4.http://www.roseindia.net/services/m-commerce/ mobile-commerce.shtml

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5 .htt p: // www.aspeninstitute.org/ po licy -wo rk/ communications-society-26 6. http://www.ecommercetimes.com/story/66795.html 7. Business Adoption of AberdeenGroup (Sept 9, 2009). Cloud Computing.

10. www.techstartups.com 11. www.mimecast.com 12. www.expresscomputeronline.com 13. www.salesforce.com 14. searchcloudcomputing.techtarget.com 15. www.ibm.com/ibm/cloud

8. PC Quest September 2010 issue 9.http://www.scribd.com/doc/18172802/CloudComputing-Use-Cases-Whitepaper

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ERP SOLUTIONS AND HOSPITALITY INDUSTRY

Prof.Dr. S. Govindarajan and Sandeep Mohanty ( MBA & Research scholar) SRM University

Hospitality industry is an extremely competitive area. Hospital companies that experience ERP failure needs to analyze the reasons properly. It is important to have an extra edge and constantly update in order to thrive in the Industry. ERP has gone a long way in helping this industry to give the impetus for better functioning. ERP has undoubtedly become an important business application to all industries. It has almost become a must for all organizations irrespective of the type of business manufacturing or service .If companies feel that coordination and enterprise communication are their only problems they dont have any other alternative but to go for ERP, provided they want to make profits and remove the existing setbacks. Formerly ERP was purely restricted to fortune 500 companies, in the sense only they could afford to invest on them. This put the small and Medium Industries at a large disadvantage. They were not able to make use of the application to gain the necessary benefits. ERP has thrown open opportunities for many companies to trade with foreign counter parts in the name of outsourcing, implementation and deployment of the existing ones. It has contributed lot to the economy .Academics also boast its own share of ERP relations. It has promoted lot of employment and educational opportunities. India happens to be a key beneficiary in this aspect. The future of ERP holds an undisputed demand not only in the national level but also at the global level.

following sectors:

ERP Solutions and Industries

ERP calls for different operations and applications in different industries. Each industry has their own plus points in dealing with the enterprise applications. A comparative study will help in analyzing them precisely. Some of the well known beneficiaries include the following important sectors:

Software
The manufacturing sector has been rated as the largest beneficiary. This sector can be rated as the one who uses ERP easily because it is a product from their species. This does not undermine ERPS use in Software sector because it becomes easy to manage projects with acute deadlines. ERP industry paper will also reveal that it is easy to train and make people work in this sector than anywhere else.

Healthcare
The sharing of databases among hospitals seemed to be a great advantage for doctors and patients. This even makes one to exaggerate that a person need not maintain a collection of his medical problems provided that his/ her choice of hospital/hospitals has a database of patient records(or commonly shares them by any other means). Even though it is not practical to follow those practices ERP has been a lifesaving measure to patients who are admitted in a hospital in an emergency condition irrespective of the fact that the doctor in charge is aware of his medical history as ERP provides everything. ERP industry analysis here will reveal that confidentiality is affected but the life of a person is to be given the utmost priority.

ERP Industry
ERP calls for different operations and applications in different industries. Each industry has their own drawbacks and plus points in dealing with the enterprise applications. A comparative study will help in analyzing them precisely. Some of the well known beneficiaries include the

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Hospitality
ERP has helped a lot in bringing down the operational costs and coordinating the acts of individual departments. Hotels are well known for the segregation of functions. One can find many small departments like house keeping beverage supply room service etc. Even though these segregations sound small they have a large impact on the organizational structure. ERP offers a common medium to coordinate their actions. The entire action can be controlled in the reception desk. ERP industry paper points the exact benefit as per ERP industry analysis. Besides this textile ERP insurance is equally famous. This (Hospitality-ERP) being an extremely competitive and a new emerging area with higher degree of scope for growth, we shall explore some of the important expectation in terms of features from the field.

differentiates it from the companies that experience ERP failure.

Doing away with obsolete process and information

Enterprise Resource planning systems helped the industries to do away with age old practices and information. For EG in the case of room booking the reception of a hotel has to enter the data in a computer and it has to be followed in every separate departments namely house keeping, restaurant, beauty parlor. The charges of each service will then be communicated to the reception and the final bill will be prepared after verification from all the departments. Enterprise Resource planning has done away with this practice and information as well. The details of the customer will be entered in the common database. This will be updated as and when he makes use of a particular service. ERP solutions are not easy as downloading word files.

How has ERP been received in Hospitality business?

Hospital companies that experience ERP failure needs to analyze the reasons properly. It is important to have an extra edge and constantly update in order to thrive in the Industry. ERP has gone a long way in helping this industry to give the impetus for better functioning. Some of the issues that have made it possible for the industry to go into full fledged ERP are as follows:

Helps to obtain concrete decide on performances:

information and

Prior to the intervention of ERP, there was lot of confusions among departments in a hotel when it came to final billing. The ultimate beneficiary was the customer in the case of wrong billing. Since ERP helped to maintain a common database these troubles have been removed. ERP has been instrumental in analyzing the contribution of a particular department or enterprise. Prior to ERP it was very difficult to make assessments on the basis of performance. ERP has helped the hoteliers and tourist agents to know individual or organizational contribution by referring the particular parameter in the functional database.

Facilitating communication
Even though there were facilities like intercom telephone and computer reservation in hotels and travel agency respectively their operations were eased with the intervention of enterprise resource planning. This tool helped them to get the needed information at the right time and at the right place. Flowchart and ERP have a close resemblance. The added advantage of enterprise resource planning is that they enabled individual departments to take the required actions independently. Even if they had to consult some other department it was not necessary as the information were available by a click of mouse. This

Helps greatly in designing expansions

Enterprise resource planning is the one phrase answer for organizations willing to modernize and expand their operations. This helps not only in carrying out the operations but right from planning them. When an organization goes for revamping it becomes necessary

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to disturb the existing business process. This will not be a condition once enterprise resource planning is implemented and run in a company. The business process can go on a normal course uninterruptedly. The restructuring process can take place simultaneously so that it does not get included in the companies that experience ERP failure. ERP is a vast subject and its scope of study extends to diverse areas. In order to have a good understanding one needs to keep abreast of issues ranging from implementation and deployment of ERP to the areas like ERP outsourcing, technical advancements, impact on international business, jobs consultation opportunities education and so on. It is therefore not possible to know them in one ERP article. Some relevant issues of ERP drawing attention are as follows:

choice of many companies around the world. It helps companies to redefine their business operations. Some of the features and advantages of this software program are at par with industry standards though some others require to be improved in order to make it compatible to the end user.

Other business applications

Enterprise applications have been in existence for a very long time. The advancements of enterprise applications are none other than the popular Manufacturing resource planning, material resource plans and the latest throb enterprise resource planning.

ERP in countries(India,US and UK)

The IT sector has thrown great opportunities to the nation and continues to help them in making a mark at the global level. The Y2 K problem itself paved way for ERP to penetrate in the Indian market. Some other factors deserving attention are the increasing awareness among Indian companies and the increase in spending level in tune with the world market standards. ERP is bound to contribute significantly to the economy of the nation. The market is a promising one whose impact is felt in the international scenario as well. The competition is immense and only the best can survive. The prospects are great in terms of business and employment opportunities. Some of the famous ERP software programs in the nation happen to be Net suite, American Software INC, Exact Software and EPICOR. UK also occupies a prominent position in the ERP market. They dont have any ERP giants like Microsoft or SAP like US. However some of their software have demonstrated path breaking results and command a respectable place in U.K., Europe and the whole of world. Some of the well known software programs in United Kingdom include EXCEL ERP, IFS and Mapics UK. ERP is an industry that always shows bright prospects. There needs to be no apprehension regarding outsourcing or other technological advancements. Whatsoever be the case ERP will flourish and penetrate one segment after the other.

Leading ERP giants

This is a niche market where only the best gets to thrive. Needless to mention the money involved and other factors ensure a tug of war between the players. Some of the leading ERP giants are as follows:

Microsoft
This software major holds a promising segment in the Small and medium enterprises market. They have been constantly upgrading the versions and are expert in manufacturing the products from the vendors point of view (who knows all the practical difficulties of the stakeholders).

Oracle
They have been in the limelight ever since they have purchased People soft ERP software. Another encouraging fact for them is the mass campaign carried by UNDP (United Nations Development Program) to create an awareness of their products. SAP ERP A specialized ERP product meant to solve technical and managerial issues SAP ERP continues to be the

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Latest trends in ERP

ERP calls for constant modifications and up gradations. ERP developers are facing tremendous pressure both from vendors and companies. In this context it becomes important to analyze the ERPs trends and modalities. Some of the relevant issues are as follows: Organizations had to implement ERP through their systems irrespective of the fact whether they help in all the functions or in one particular function. This was proving to be a big hurdle to the firms. In addition this remained as the main disadvantage or setback of ERP. They had to purchase the whole applications even if it meant that most of them would be idle except for the core function. The latest ERP software programs have overcome this menace. They offer need based applications. The firms need not be worried even if these Software Programs were not available. They were given the liberty to purchase and install Software Programs pertaining to that particular function. This advantage has helped to increase the scope of ERP not only among large firms but also small and medium business as well.

Motors, Kirloskar, Knoll Pharmaceuticals, and Glaxo. First tier companies (those with a turnover greater than Rs.10 billion) implement ERP to increase internal efficiency and external competitiveness. Once ERP is established at this level, these large companies begin to desire similarly increased efficiency from their suppliers. Hence, second tier companies are pressured to implement ERP, and a trickle-down effect ensues. Powered by the axiom that a chain is only as strong as its weakest link, Indian industry quickly has recognized that in order to work at maximum efficiency, ERP must be implemented at all levels. Initially, the majority of ERP solutions have been marketed to companies with greater than Rs. 2 billion, and generally, according to industry reports, the total cost of deploying ERP has ranged between 1 and 2 percent of companies gross sales. Lower cost solutions are available for comparatively smaller sized companies. Though the market seems to be very encouraging for ERP implementation, the time-frame for deployment may be an issue. However, since many companies that have not yet implemented ERP are leaders in their markets, it reasonably can be assumed that they will go for it within next five years. In fact, the ERP market should grow at a rate somewhere near the industrial growth rate. The current day ERP applications are less complex to install and train. This has reduced the amount of time spent on ERP. Companies are thereby assured of spending lesser time for ERP.

Open Source, Web enabled and wireless technologies

These are three important elements that have rejuvenated the functioning of ERP. Open Source ERP has done away with the hassles of paying license fees not only during installation but also whenever a modification is made. The company is relieved from depending even for mince matters. Web enabled ERP helps in making the enterprise operations go online. Any stakeholder or third party can access the required information very easily and that too by sitting anywhere in the world. This proves to be of great help especially during emergencies when the details are to be sourced with immediate effect. Some of the first Indian companies to have adopted ERP practices are HLL, ONGC, ESSAR, Godrej Soaps, Cadburys, BASF, Telco, Maruti Udyog Ltd., Century Rayon, Citibank, ACC, ANZ Grindlays, German Remedies, Blue Star, Mahindra & Mahindra, Rallis India, Sony India Pvt. Ltd., Ceat Ltd., Indal, Ford

Survey of Industry ERP Implementations

ERP implementations completed between 1995 and 1998 in India can give a sense of specific hurdles that companies may encounter in ERP deployment. Several companies were surveyed, and numerous ERP professionals were interviewed in order to assess the state of ERP in India. The results indicate that Indian companies are moving forward with ERP implementation primarily in response to thrusts from parent collaborators, to revamp in order to meet increased load, or to reduce lead times and inventory levels, and improve customer satisfaction. Resistance to

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India is developing its infrastructure, ERP manpower requirements can be met, and the Indian mindset is changing with the times. Certainly, if the national railways could computerize operations, ERP does not seem an insurmountable challenge. In fact, the Indian ERP market looks very much like a $7.5 billion change - in the form of fear of the unknown, reluctance to learn new techniques, or IT department reluctance to change due to attachment to its product - was a major hurdle faced during many ERP implementations. This problem is diminishing due to advances in the software facility models. Cost overruns also proved to be a pervasive problem with ERP implementations. Since most consultants charge on a man-hour basis, project time overruns substantially inflate incurred costs. opportunity that has decided to take the plunge.

Hospitality Software Differentiators for ERP Implementations

Average implementation time of 22 months, compared to 20 months for all other industries $22.5 million total cost of ownership, compared to $8.5 million for all other industries Total implementation costs of 8.9% of annual revenue, compared to 9.0% for all other industries Higher likelihood of requiring some type of

customization to the software General expectations from the Hospitality industry from ERP:

Front Office Management

In the hospitality industry, expectations mean a great deal. Feedback in the form of guest surveys is one of the absolute best methods of insuring that expectations are being met. In the hospitality industry, expectations mean a great deal. In fact, when customers have expectations regarding their vacation or business trip, the hospitality industry will either reap the rewards concerning those expectations or bear the brunt of the blame for expectations not met. So just what do you expect your employees to do to make sure that guest expectations are met? And how will you go about insuring that your employees realize the importance of meeting-and exceeding guest expectations? You must be able to find out what exactly those expectations are. One of the best ways to realize the importance of what guests expect is through analyzing customer feedback. Feedback in the form of guest surveys is one of the absolute best methods of insuring that expectations are being met.

Assessment
The Indian economy has reached a level of maturity that demands advanced technology. Although the Indian agricultural sector has not yet mechanized and there is little potential need for agriculture-based ERP in the foreseeable future, the services sector offers a largely untapped potential. With the pace of developments in the services sector continuing at 7 percent, there is a large scope for ERP in these markets. Many Indian industries already have realized the need for ERP solutions, and the industry-related market growth should match the expansion of the sector as a whole. The maximum potential growth of the ERP market rests with companies that have a greater than Rs. 2 billion turnover, with smaller companies positioned to follow directly.

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When a guest takes the time to fill out a guest survey, they usually have something to say-and either wants to praise good service, applaud a great experience or complain about a problem where expectations were not met. Whatever the case, as a manager or supervisor, you need to know where the problems lie as well as who and where to give credit for a job well-done. At an upscale Indian hotel, for example, we have seen guests rate their overall satisfaction with their stay as very high, while still for instance, having a problem with the quality of their internet connections at the hotel. This can be a problem where the guest might never think of not staying in the hotel just because of the computer glitch, but this doesnt mean that the guests expectations about the internet shouldnt be addressed. On the other hand, many times guests will look to stay at another hotel just because of one bad experience. Entering their room upon arrival when the room is not yet ready can make a bad start to a visit. When guest surveys are found to have more than a few that mentions a problem like this, management should be able to pinpoint the cause, whether its with housekeeping, the front desk or the communication between the two departments. Alleviating this problem can be done quickly, whereas without the use of guest surveys, management might never be aware of the reason for losing the loyalty of certain guests. In short, you have the ability to turn your guests anticipation into reality by using a time-tested tool-the guest survey.

stands basically on the Hospitality Industry. We could have seen a Live Forecast of what has happened in Taj Hotel in the year November, 2008. These occur mainly because of Security Issues. So Every Hospitality industry must have proper Security to ensure the Protection of each and every life. Such type of security can be attained by using the Biometric Device wherein you catch the thumb impressions or at the higher end, their faces when ever the guests checks in.

Smart Card Integration

As we could see, Smart cards are introduced in almost all the departments including Railways, Hospitals, etc. The Smart Cards are to be issued to the guests where the Guests as well as his/her dependents information are stored. These smart cards help to track the guests and his usage all over India. For example, the guests issued with the Smart card in Delhi can use the same card while his visit to the branch Hotel at Chennai. The billing can be integrated along with his/her dependents usage and delivered finally.

Wireless ERP
Wireless technology has helped enterprise operations in many ways .Firstly it has facilitated the stakeholders in getting up-to-date information on enterprise operations as and when required through the use of modern communication devices like mobile phones laptops (all connected to the internet).

Restaurants
There are also other features expected from ERP apart from Guest reception including integrating the Sales with PDA/Handheld devices. These devices can help guests to place an order irrespective of kitchen or Food Items ordered and get their bills delivered without commotion.

Privacy issues
Privacy is a burning issue that occupies significance whenever there is a technological explosion and ERP is no exception to this principle. These calls for more attention due to the (further) improvement namely wireless ERP (from ERP). Privacy always becomes a subject matter of conflict whenever things are brought under public domain. The company is poised to lose valuable information or prospective businesses when things are exposed unnecessarily .In those cases wireless ERP will be a disaster to the company (and not a boon). Wireless ERP should be provided with

Security
The major issues with Hospitality industry is Security. Indias foreign exchange reserves stood $252 Billion in the year 2008-2009 and $283.5 Billion in the year 2009-2010. So, Indian Foreign exchange revenue

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maximum security. The scrutiny should prevent third party access without prior permission and approval from the company. This might look impossible practically but it is strongly advocated to have them in force in order to safeguard the interests of the company. The security system will be successful if a department in the company is able to have a track of the details communicated. The viability of the company is also to be taken into account in this regard. Conclusion: ERP evolved from manufacturing

the direction in which ERP is geared to progress References: 1.Millenium Long term Vision India 2020 (2002) Dr. APJ Abdul Khalam pp 219-227. 2.Project Procedures based on IEEE Software Standards (2004) HCL Technologies-pp 72-78. 3.Requirements Specifications of Tollygunge Club, Kolkata-(2007) 4. www.erpwire.com

resource planning (which originated from material resource planning).The functioning of ERP has gained much prominence and utility with the intervention of web enabled and open source technologies. ERP II the latest advancement in ERP software deserves special mention. In this context it becomes important to analyze

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HGRID: AN ECONOMICAL MODEL FOR MASS-HEALTH CARE SYSTEM USING LATEST TECHNOLOGY (GRID COMPUTING)
S.Kanchana Devi , Dr.S.Govindarajan K.M.Uma Maheswari Department of Computer Applications, SRM University

1.0. Introduction
The large Hospitals and healthcare institutions consist of different Medical equipments and computers hardware software resources scattered across their campus. Rarely these resources are totally utilized to their fullest capacities and most of the times they remain idle. This situation seems to be alright for the rich and developed countries. Definitely for developing countries like India, we cannot afford huge investments in Computer Hardwares, embedded equipments (which are generally costilier), system software (including proprietary systems) and Application software based on expert systems. In order to efficiently and enormously utilize the resources across the health centres/hospitals/medical universities, the grid computing technology deployed in massive health care maintenance requirements.

lacking as per most of the users. Moreover, the internet based systems are more vulnerable to spam and viruses. Therefore, the requirement boils down to find out a system of making optimal usage of these resources to different patients by deploying appropriate current state of our technology. The vast requirements are confined to not only to multi speciality hospitals, but also to various major healthcare institutions attached to medical colleges, private banking centres and universities too.

3.0 Objectives

2.0. Need for the Study

Most of the Health centres and medical institutions have powerful collection of computing resources and health related instruments on their campus for use in areas from high performance computing to general access medical laboratories(in the form of image processing, preserving health parameters of individuals, availability of drugs, blood banks and other treatment related facilities). However, these resources are rarely used to their fullest potential. Due to paucity of funds and exponential increase in patient registrations, most often it is required to ensure the minimum facilities to reach the needy patients. Therefore, it is mandatory to search and find out the right technology to ensure the full utilization of the computing resources to be passed on to the needy and poor patient by exploiting the computing power to the maximum possible extent. Though the telemedicine system through internet emerges now, the important aspects of secured access & Information are

Keeping the above needs in mind, the objective of this paper is to device an Architectural framework for Health care system to utilize the human knowledge power and other hospital resources effectively. The term Health grids means that encompassing the Grid Computing technology on the Internet based health care system. Grid infrastructure comprises applications, services or middleware components that deal with the specific problems arising in the processing of biomedical data.

4.0 Hypotheses
The large Hospitals and medical institutions has limited computing resources, but are scattered at different departments at different places. To achieve our stated objectives, the possible hypotheses is to frame optimal usage of all these resources (Including massive storages intermittently required by different departments surgeons)through the latest cutting edge technology of grid computing.

5.0 Scope of research

This framework provides resource utilization in a proper way across multiple industries including health enters& Engineering industries. Researchers can use

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grid computing processing power to hunt for new viruses, search for new drugs, model disease outbreaks, image the bodys organs and determine treatments for patients. Doctors can gain access to relevant health data regardless of where it is stored. Patients can receive a more individualized form of healthcare. Healthcare workers are better able to collaborate and share large amounts of information.

monitors certain infectious diseases and has to trigger an alert in case of a suspected epidemic. The identification of unusual patterns would in many cases be the critical step to halting the problem. 3) Consider a surgical simulation prior to maxillofacial surgery, to determine how the patients face may appear after one manoeuvre versus another, the presence of sufficient tissue to allow the operation or to demand transplantation, and even to involve the patient in the decision. 4) Consider a neglected disease like malaria. Malaria is neglected by the pharmaceutical industry because there is no prospect of profit in it. Relatively little progress has been made towards the eradication of this well understood disease, notwithstanding substantial investments of public funds in research projects. In silico lead generation may possibly be coupled with investment in plant by the poorer nations that suffer from it to lead to a locally sustainable solution. 5) Consider the possibility of linking genomic information to imaging in diseases like juvenile idiopathic arthritis. The genome will indicate susceptibility long before the disease is expressed, but equally, signs picked up from imaging may obviate the need for genetic screening, thus avoiding some of the most acute problems associated with it. 6) Consider more abstractly the nature of evidence based practice, the volume of scientific literature that provides the evidence base and the accumulation of evidence from practice that occurs as a matter of routine healthcare. How can these be integrated?. How can they be used without violating any ethical restrictions on use of data, confidentiality, privacy, security? How can they be shared without violating any data protection laws? These are simple examples of foreseeable beneficial advances within the next generation of developments. For the radiologist or the maxillofacial surgeon, the

5.1 For a healthcare Professional/Biomedical Researcher

From the individualised care point of view, for the clinicians to make the best diagnosis and decide on treatment all the relevant health information of the patient needs to be available and transparently accessible to them regardless of the location where it is stored. Moreover, computer-aided tools are now essential for interpreting patient-specific data in order to determine the most suitable therapy from the diagnosis. To store and process medical images, genetic information and other patient data, a large amount of computing power is needed. Large computing resources are also needed for keeping statistics of patient records, for knowledge extraction using data mining, and for the simulation of organisms and diseases using complex biomedical models. Grid technology has undoubtedly much to offer medical professionals, as illustrated by the following examples. The delivery of medical information and certain services through the internet is familiar. In health grid computing, we seek an extension of the concept to consider how to provide large scale services to the user on demand. Some case study quoted by SHARE PROJECT Supporting and Structuring Health grid activities & Research in Europe, Developing a Roadmap [3]. 1) Consider a radiologist who needs to manipulate an image: we want to provide a set of services, some of which may require heavy processing, making them available on her desktop transparently, as if they were programs simply running on her computer. 2) Consider a public health service which

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services described would be important new tools, while for the provider of such services the underlying grid would be an ideal e-market place. For the public health service concerned with infectious diseases or the academic unit concerned with neglected diseases, health grids would provide power and flexibility beyond what could be achieved using traditional approaches. For a group of physicians seeking to improved treatment through research, grid offers a completely new concept.

7.0 . Architectural Model

This section describes the logical representation of the architectural model. The Grid System designed for the health centre is campus grid which is one of the types of grid. Health grid architectural framework designed consists of several sub systems. The sub systems are described as grid layers such as application (Higher) layer, Management (Middle) Layer, Computing (Low) layer. Highest layer is application layer deals with clinical applications and consists of user interfaces, next is management that and routing requests and responses, manages job queue along with job scheduling algorithms and methodologies, allocating resources for the job queue. The Third layer is Computing layer which is responsible for mapping the resources to the jobs and controls the execution. The groups are virtual nodes of health grid system.

5.2. Socio-Economic benefits

Modern healthcare services are expected to be available around the clock, seven days a week, so that systems with pervasive access and near-absolute fault tolerance are indispensable. However, it is difficult for these applications to run non-stop with a high quality of service. Grids could help by providing a platform of collaboration, allowing the linking centres which co-operate to achieve better continuity and quality of service. Medical staff will then be able to share experience, knowledge and second opinion with other internal and external staff. The distributed architecture of grids with the availability of high-bandwidth networks responds well to the requirements of healthcare provision. There are also optimistic stakeholders views towards medical research, healthcare and computing capabilities combined to better satisfy the patient Health grids promise many benefits to mobile patients as well as citizens. It could help a travelling individual to receive the right treatment in an emergency situation, thanks to the ability of the grid to facilitate communication between the local hospital of the patient and the admitting hospital far away in order to exchange necessary heath related information.

6.0 . Research Questions

What is the nature of implementation of Grid computing technology over the healthcare maintenance? , What are the technologies trade off the architectural components? [3], what are the Socio economical benefits of the health grid system?

The Grid is connected to the three layer architecture through Globus Toolkit which provides the grid Environment. The group could be able to complete the jobs adjusted run automatically according to the users need and return the result to users. Integrations are intended to be transparent and seamless to the developer. The group is mainly responsible for two functions: the management function of works and the management function of system adjustment. The work management function include shading over interface, management interface and the parallel work management; the system management function includes system supervision, the allotment strategy, the management of works PRI and SLA management.

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The Overall architecture is bounded by the Grid Management and criterion component that enables Grid authentication, resource authorization, and security concerns.

7.1 Technologies to build the architecture

Based on the architectural model the grid topology is defined as specified in figure.2.This section specifies the physical structure of campus grid and the table provides various technologies can be used to build the model for healthcare system.

7.2 Architectural Tradeoffs for Health grid resources

The following table list the technologies available to enable the activity of each Component in the physical topological structure specified at figure 2. Component in the Architecture of campus grid

S.No

Technology Cluster Installation- At head node.

Grid Management Centre (Resource Management, job scheduling, files management

1.Rocks is based on Red hat Linux, Provides less flexibility, easy to install [9] 2.Alternate is OSCAR(Open Source Cluster Application Resource) gives more flexible management but complex to install[5] 1.PBS[8]

Local Scheduler- Load balancing, file staging, and other administrative task

2. LSF 3.Condor 4.Computing centre software(CCS)

Grid Architecture, Resource Identification, Authorization, Authentication and security

1.Globus Toolkit 4.0, 2.latest Globus Toolkit 5.0[10], 3.Gridshib[25] 1.Jetspear is a IBM product, provides out-of-box web portal for enterprise settings[6]

Grid Portal

2.Jetspeed is an open source Apache product built as an enterprise information portal 3.Gridspear is an open source project that is part of grid lab[35] 1.Gridportlets are JSR-168 complaint are compatible with all portlets

Portlets

2. The Open Grid Computing Environment (OGCE) [39] develops open source portlets with the intention for them to be used under multiple portal frameworks.

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The Globus Toolkit [10] has become widely accepted as the standard tool for building a grid architecture and boasts success stories including GriPhyN [11], Open Science Grid [12], TeraGrid [13], and NEES grid [14]. The Globus Toolkit provides identification, authentication, authorization, and security for connecting the resources of the grid, as shown in Figure 2. The infrastructure allows for strict local control of a given resource but still allows users from anywhere to perform a variety of tasks related to resource and service discovery, file management, system and job monitoring, and job submission.

8.1 Trust and Acceptance from society.

Trust is a very important element in any interaction between the different members of a society. In the market context, trust is crucial for successful business to business collaborations. Similarly, in a health grid domain a good collaboration will not be achieved unless a trust relationship exists between the different users and stakeholders. Pilot projects and prototype applications, which are an inherent part of the technology health grid, need to be future oriented in the sense that the ultimate routine operation users have to be persuaded both of their value and their applicability, i.e. their ability to fit into real clinical or research workflows. This has to be taken seriously from the very beginning, even in proofof-technology demonstrators: the goal should always be to give users, especially clinicians, tools that they would consider using with patients in real healthcare situations. Trust and acceptance can be greatly enhanced by the establishment of appropriate ethics committee structures to advice on the observance of ethical principles.

7.3. Health grid physical structure

Geographically the Hospitals, health centres and the medical institutions are situated at different places. This paper designed a topological structure to establish and to show the communication manner in between the layers. There is a control node which logically controls the grid environment to which the other health nodes are connected by network structure. Web portal for the Health grid is enabling the raw and processed information. The grid network is connected to internet provided with grid security. The network routers are routing the requests and responses in between the nodes.

8.2 Cross-Organisational Interoperability.

The effective deployment of knowledge grids will crucially depend on collaboration between institutions, meaning more than simple access to each others data and computing resources. This collaboration requires the utilization of human resources and in some cases a significant strategic re-orientation and re-organisation of working processes and even management structures. Particular attention should be given to flexibility of government regulated budgets and reimbursement schemes.

9. Future work and Conclusion

In this paper, the architectural model has been designed and the technologies can be used to deploy the system are stated. The security establishment for campus grid is analysed from distributed systems security and developed for this system. Implementing the campus grid for the hospitals helps to utilize the man power and other computational and medical devices effectively across the country and across the universe through different exclusive architectures. The future work of this paper could be actual implementation in such a way that generating clusters , development of forms, reports

Figure 2: Campus Grid Topology Structure

8.0 Socio-economic recommendations

This section discusses the socio economic requirement for the successful development and implementation of campus grid for health centres and medical institutions across Kattankulathur region and in future across the country.

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along with the data and establish resource security. United Kingdom [3] started the development of health grid on 2002 itself. Though the noise of health grid echoes in India, there is no architectural model available for health grid as of now. The main advantage of this model is the cost effectiveness. The latest generation of grid computing is cloud computing, which provides resource sharing.

[8] IBM LoadLeveler, October 2005, http://www-03.ibm.com/servers/eserver/clusters/ software/loadleveler.html. [9] Computing Center Software, October 2005, http:// wwwcs.upb.de/pc2/projects/ccs. [10] The Globus Toolkit, October 2005, http://globus. org/toolkit/about.html. [11] Grid Physics Network, October 2005, http://www. griphyn.org. [12] Open Science Grid, October 2005, http://www. opensciencegrid.org. [13] TeraGrid, October 2005, http://www.teragrid.org. [14] NEESgrid, October 2005, http://www.neesgrid. org. [15] V. Welch, T. Barton, K. Keahey, and F. Siebenlist, Attributes, Anonymity, and Access: Shibboleth and Globus Integration to Facilitate Grid Collaboration, presented at 4th Annual PKI R&D Workshop, Gaithersburg, MD, 2005. [16] Condor-C, October 2005, http://cs.wisc.edu/ condor/manual/v6.7.8/5_4Condor_C.html. [17] GridLab: A Grid Application Toolkit and Testbed, October 2005, http://gridlab.org. [18] Sun ONE Portal Server, November 2005, http:// docs.sun.com/app/docs/coll/S1_PortalServer_61. [19] Research and technology development on telematics systems in health care. Annual technical report on RTD in health care. CEC DG XIII. Brussels: AIM, 1993. [20] e-Science talk project www.gridtalk.org/ Documents/ehealth.pdf

References
[1] Jing Wang 1, Zhimin Yang1, Weili Kou11 Department of Computing, Shandong University, Weihai, P.R China, A Solution for Building Campus Grid, IEEE Transactions. [2] Krishna Nadiminti and Rajkumar Buyya, The University of Melbourne, Enterprise Grid computing: State-of-the-Art, 2009, Computer Science-Technology and Applications, 2009. Proceedings of IFCSTA 09. V1,PP160 - 163 [3] Mark Olive, Hanene Rahmouni and Tony Solomonides, A European Healthgrid ,Journal of Medical Internet research, European Commission, Information Society and Media. [4] OpenPBS, October 2005, http://www.openpbs.org. [5] T. Naughton and S. L. Scott, The Penguin in the Pail - OSCAR Cluster Installation Tool, presented at 6th World Multi Conference on Systemic, Cybernetics and Informatics, Or-lando, Florida, 2002. [6] The GridPort Toolkit, October 2005, http://gridport. net. [7] Altair PBS Professional, October 2005, http://www. altair.com/software/pbspro.htm

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THE INFLUENCE OF FACTORS AFFECTING REPEAT BUYING INTENTION: A STUDY WITH REFERENCE TO SUPERMARKET
Joseph Mary Rahila Assistant Professor, Department of Management Sciences, Velammal Engineering College, Chennai. Ms. Vaishnavi II yr Department of Management Sciences, Velammal Engineering College, Chennai I Introduction
The Indian retail industry Comprises of organized and unorganized sectors. In India, retail industry is one of the fastest growing industries, especially over the last few years. Though initially, the retail industry in India was mostly unorganized, however with the change of tastes and preferences of the consumers. The retail formats in India such as Hypermarts/supermarkets are large self-servicing outlets offering products from a variety of categories. The urban Indian retail sector has traditionally been structured around three small retail entities -- the grocer, the general store and the chemist. Alongside the three retail outfits, exists a large segment of smaller, unorganised players - paan-beedi stores (or cigarette kiosks) which stock products in sachets, batteries, confectionery and soaps; bakeries and confectioners; fruit juice/tea stalls; ice-cream parlours; electrical and hardware stores; and non-food boutiques. These retail outfits stock branded FMCGs that gel with their businesses. These apart, there are the hawkers, carts and stalls that dot sidewalks and street corners, and several door-to-door sellers such as vegetable vendors. However, the attitudes and practices are changing, especially among the upwardly-mobile, urban nuclear families. Disposable incomes among them are rising. There is a high degree of exposure to mass media, especially television and the World Wide Web. This segment of customers trusts brands and has no qualms about trying out processed/convenience foods. Supermarkets are yet to get The Great Indian Middle Class and Rural India in their fold. That may take a very long time to happen because it is extremely

difficult to break cultural and demographic barriers. Until then, small retailers will be the most-soughtafter retail entities, especially by those marketers who are keenly looking at penetrating semi-urban and rural areas.

Ii

Statement Of The Problem

In the recent scenario, customers tend to switch over from one supermarket to other supermarkets due to various reasons. So, the main reasons why customers normally do not shift loyalties from the small retailer to supermarkets, include - proximity of the small retailer, added service provided such as credit facility, ordering on the phone and home delivery, stockouts at supermarkets, high prices at supermarkets, personal attention of the small retailer, parking space problems at supermarkets, operating systems of the supermarket such as long queues at checkouts, poor air-conditioning facility etc., Thus, there is a need for the study which has to be made in this particular area so that it helps the management to improvise on this context.

Iii Objectives Of The Study

To analyze customers perception on factors influencing repeat purchase at the more supermarket. To examine the product availability. To suggest improving customer service. To enhance the in-store promotions made available at the store.

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Iv Scope of The Study

Scope of this study is to find the customers perception on the various factors that influence repeat purchasing at the supermarket. Later the same study may be expanded to different retail segment other than grocers category.

Dagmar Recklies, Understanding and Managing Customer Perception, focuses the efforts of maintaining a stong customer relationship management on issues like customer satisfaction and targeted marketing activities like event marketing, direct marketing or advertising. It proves to be a significant opportunity for competitive advantage.

V Research Methodology
Descriptive design is employed to get first hand information through designing questionnaire with single, multiple and ranking, rating questions. The statistical techniques used were anova, chi-square, weighted average method etc.,

Miguel I. Gmez, Edward W. McLaughlin and Dick R. Wittink, Customer satisfaction and retail sales performance: an empirical investigation, reviews that retailers recognize that customer satisfaction (CS) plays a key role in a successful business strategy.

Vi Research Review
Doreen Chze Lin Thang and Benjamin Lin Boon Tan, Linking consumer perception to preference of retail stores: an empirical assessment of the multi-attributes of store image, in his paper reviews the concept of using a stimulus-organismresponse (SOR) framework, this study examines the SR relationship of consumer retail behavior. Amy Wong and Amrik Sohal, Assessing customersalesperson interactions in a retail chain: differences between city and country retail districts, reviews the study of that attempts to examine the relationship between the dimensions of service quality and customer loyalty in a retail chain departmental store setting in Victoria, Australia. Toyin A. Clottey and David A. Collier, Drivers Of Customer Loyalty In A Retail Store Environment, reviews that the determinants of customer loyalty are identified for a large U.S. retailer based on a survey of 972 customers. An ordered logistic regression is used to estimate the proportion of a retailers customers who are willing to recommend the retailers products to others based on survey results. Statistical results document that service quality, product quality and brand image drive customer loyalty as measured by a customers willingness to recommend the retailers products to other people.

Lance P. Jarvis and James B. Wilcox, True vendor loyalty or simply repeat purchase behavior, the purpose of this article is to underscore the importance of the loyal customer, to distinguish between simple repeat purchasing and true loyalty, and to examine the reasons for such consistent

purchase behavior. J. Douglas McConnell conducted a study on Repeat-Purchase Estimation and the Linear Learning Model, reviews that the linear learning method thus proved to be a successful tool for modeling customer choice phenomena using experimentally generated data and a method of estimating parameters developed by Massy, the linear learning model was tested as a predictor of brand repeat purchasing. Byron Sharp and Anne Sharp, Loyalty programs and their impact on repeat-purchase loyalty patterns, International Journal of Research in Marketing, Volume 14, Issue 5, December 1997, Pages 473-486, the study evaluated the effect of a loyalty program in terms of its ability to alter normal repeat purchase patterns and move a brand into an excess loyalty position. Patricia Huddleston, Judith Whipple, Rachel Nye Mattick and So Jung Lee, Customer satisfaction in food retailing: comparing specialty and conventional grocery stores, the study examines store attributes of product assortment, price, quality, and service in order to determine which attributes

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have the greatest impact on store satisfaction for each store format. Key finding of the study was Perception of satisfaction were higher among specialty grocery store customers compared to conventional grocery store customers. Michael Paul, Thorsten Hennig-Thurau, Dwayne D. Gremler, Kevin P. Gwinner and Caroline Wiertz, Toward a Theory of Repeat Purchase Drivers for Services: Developing a Coherent Framework and Assessing Driver Importance, stated the marketing disciplines knowledge about the drivers of service customers repeat purchase behavior is highly fragmented, with conceptual overlap existing between different drivers and unclear relations among them.

S.no 1. 2. 3. 4. 5.

Product category Stapels Fruits & Vegetables Food products Home & Personal care products Others

Weightage 450 490 580 469 366

Ranking IV II I III V

Source-Primary Data Table showing weighted average calculation on factors influencing Customer Service S. No. 1. 2. 3. Factors Staffs attitude Packing services Free Home delivery services Cleanliness of the Store Products kept in Hygienic Place Proper Storage Facilities Error-Free Billing Proper Queuing Issue Of Free Gifts Without Hesitation Fast Billing Total Weighted average Weighted Average 4.09 4.12 3.66

Vii Presentation And Analysis

Ho: There is no significant difference between Monthly income & Frequency of visit H1: There is significant difference between Monthly income & Frequency of visit Chi square table showing the relationship between monthly income & frequency of visit With degree of freedom as 10, the Calculated value of 2 < Table value of 2 at 5% level of significance. Therefore, the null hypothesis is accepted i.e. there is no significant difference between monthly income & Frequency of visit. Ho: There is no significant difference between Product availability & Satisfaction level H1: There is significant difference between Product availability & Satisfaction level Chi square table showing the relationship between Product availability & Satisfaction level With degree of freedom as 6, the Calculated value of 2 > Table value of 2 at 5% level of significance. Therefore, the null hypothesis is rejected i.e. there is significant difference between Product availability & Satisfaction level. Ranking based on Frequency of purchase for various product categories available at More

4.

4.07

5.

4.09

6. 7. 8. 9. 10.

3.97 4.06 3.77 3.83 3.36 39.02 3.90

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From the above table it is inferred that, the customers are satisfied with all the factors that influence the customer service. The customers are more satisfied with the Staffs attitude & least satisfied with the Fast billing process. Ho: There is no significant difference between In store promotions & Satisfaction level H1: There is significant difference between In store promotions & Satisfaction level One way anova table showing the relationship between the In-store promotions & Satisfaction level ANOVA Table
Source of varia tion
Between sample Within sample Total

Ix Emerging Trends
Supermarkets - the advantages of doing business in India are

Ranks 5th on global retail development index ,It is the second fastest growing economy of the world ,Going to be the third largest economy in terms of GDP in next few years

It ranks high amongst the top 10 FDI destinations of the world ,Fastest growing tourist market in Asia ,World bank states, India to be worlds second largest economy after

China by the year 2050 Stable and investor

friendly

Central

Sum of squares (SS)

22040.68

d.f.

Mean square (MS)

11020.34

Fratio

5% F-limit (Table value)

1946 23986.68

9 11

216.22

50.97

4.26

Inference With degree of freedom as F (2,9), the Calculated value > Table value at 5% level of significance. Therefore, the null hypothesis is rejected i.e. there is significant difference between In store promotion & Satisfaction level.

Viii Findings
The highest of 22 customers, out of 122 customers, who fall under the income group of 10001-30000 visit the store once a month. The customers are very much satisfied with the quality of product offered at more supermarket. In this study, out of 157 respondents, the highest of 136 respondents are satisfied with the display/arrangement of the product at the store.

Government at the helm of affairs Introduction of Value Added Tax or VAT and tax reforms ,High degree of professionalism and corporate ethics To invest US $130 billion for the development of infrastructure, by year 2010 To attract US $ 10 billion FDI for infrastructure development by the end of year 2008 Bullish stock markets ,Hordes of foreign investors are thronging in to invest in Indian retail markets, highly educated English speaking young workforce ,Vibrant and multi cultured cities, huge opportunity exists, especially in semi-rural and rural areas Till date the second largest employer after agriculture sector, for the huge semi-skilled Indian population , Offers highest shop density in the whole world Having almost 1,20,000 shops, across the length and breadth of the country

Conclusion
Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and high returns on investments. Purchase behavior of Indian consumers shows high transformation due to the changes in attitude, opinion, perception, expectation because of their disposable income

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EMERGING TRENDS IN IT/ITES MARKETS

Prof.Dr.S.Govindarajan and Mrs. F.Ezhil Mary Arasi

(A.P, MCA Dept, SRM University)

1. BOOMING IT/ ITeS MARKETS GLOBAL TRENDS: There is very bright scope for IT-ITES industry as it is strongest industry sector in India. Today the exports for the IT-ITES sectors are growing with increasing rate and the overall global market is very healthy. If one needs to know what the scope of IT-ITES sector is, just have a look at the quarter end financial results of the ITITES sector. The reports are outstanding and it seems that the rise of the IT industry is not going to stop so easily. Recently, economic survey revealed that IT-ITES sector created almost three million additional jobs this year and number will go on in the immediate future. The main reason behind this is that, the requirement is far more than the current supply of the technical manpower. Thus, the scope for the sector is enormous in India. As the requirement is huge, more and more colleges and courses are offered to meet the manpower needs of the industry. Because of this, more and more students in India are opting for a career in IT-ITES Sector. However, according to some of the top industry experts, the attrition rate is high making jobs in the IT-ITES sector vacant. Moreover, the gap between demand and supply of skilled employees is cause of concern. 1.1 Overview of Indias IT and ITES Industry The Indian IT and ITES Industry recorded a turnover of US $ 60 billion in 2009, with exports accounting for about US $ 47 billion and contributing to over 70% of industry revenues. The industry has grown at a CAGR of close to 30% between 2004 and 2009. The major segments of the Industry are IT Services, BPO, and Engineering Services, R&D, and Products. Much of the activity is centred on service offerings in

Banking, Financial Services, and Insurance (BFSI), HiTech and Telecom, Manufacturing, and Retail. These are also referred to as various industry verticals in common parlance.The major market for software and services remains the Americas (primarily USA), accounting for about 60% of revenues. However, recognising the need to diversify their client base, companies in this industry have increase the share of revenues outside of USA from about 30% in 2004 to about 40% currently. Continental Europe and APAC are likely to see increase in their share of revenues.

1.2.

Emerging Opportunities in India

ITeS, which started with basic data entry tasks over a decade ago, is witnessing an expansion in its scope of services. It now offers services such as knowledge process outsourcing (KPO), legal process outsourcing (LPO), games process outsourcing (GPO) and design outsourcing, among others. The Indian BPO sector has not only added scale in the last nine years, but has also matured significantly in terms of scope of service offerings, buyer segments served and service delivery models. Apart from achieving maturity in the horizontal segment, providers are increasingly developing vertical/domain specialization to capture greater value.

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According to the DIT, among the verticals serviced by Indias IT/ITeS-BPO industry those that account for the largest share of revenue are banking, financial services and insurance (BFSI)-41 per cent, Hi-Tech/Telecom (20 per cent), manufacturing (17 per cent), retail (8 per cent), with smaller contributions coming from media, publishing and entertainment, construction and utilities, healthcare and airlines and transportation. Important industry verticals being serviced by the BPO segment are insurance, retail banking, travel and hospitality, auto manufacturing, telecom and pharmaceuticals. Horizontals such as Customer Interaction and Support (CIS), Finance and Accounting (F&A) and Human Resource Management (HRM) are important areas in the BPO segment.

2009 is expected to reach US$ 703.14 million by 2014, to grow at a CAGR of 32 per cent. As per a report, Globalization of Engineering Services, published by NASSCOM and Booz Allen Hamilton, India may garner 20 to 25 per cent of the global market for offshore engineering services by 2010. Further, the country may capture 25 to 30 per cent of projected US$ 150 billion to US$ 225 billion market, i.e. around US$ 50 billion by 2020. According to a report by consultancy firm Value Note, the legal process outsourcing (LPO) revenues in India is estimated to reach US$ 1.1 billion in 2014 from US$ 146 million in 2006. 1.1 Current Employment in the IT and ITES industry The Indian IT and ITES industry currently employs about 2.2 million persons in comparison to 0.8million in 2004. The productivity (as measured by revenue per employee has been witnessing steady growth). Employment in the Indian IT and ITES industry

The Indian animation market is estimated to touch US$ 1.02 billion by 2014, to grow at a CAGR of 18.7 per cent on the back of increase in consumption of animated content and growth of 3D formats, according to a report by an industry body and KPMG published in March 2010.

According to the same report, the Indian gaming industry that grew by 22 per cent in

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From the above table, it is very obvious that the export oriented software units are not only employing more professionals (i.e. more than 66%), but also generates more revenue (around 26%) in dollars per person. In the context of growth forecasted for the industry, availability of skilled human resource supported by appropriate skill building initiatives will be key to this growth. In the near term, it is expected that the IT and ITES industry can achieve an export target of USD 60-62 billion by FY 2011, employing 2.5-3 million professionals directly in the export segment and contributing substantially to the socio-economic development of the country. From the above table, it is very obvious that the export oriented software units are not only employing more professionals (i.e. more than 66%), but also generates more revenue (around 26%) in dollars per person. In the context of growth forecasted for the industry, availability of skilled human resource supported by appropriate skill building initiatives will be key to this growth. In the near term, it is expected that the IT and ITES industry can achieve an export target of USD 60-62 billion by FY 2011, employing 2.5-3 million professionals directly in the export segment and contributing substantially to the socio-economic development of the country.

2. SOURCES OF DATA ON EMPLOYMENT SITUATION IN INDIA Of all the data sources available, surveys conducted by the NSSO are the main data source on employment and unemployment in the country. Beginning with the 27th round survey and based on the concepts, definitions and procedures as recommended by the Dantwala Committee (1970), NSSO has been conducting quinquennial surveys on employment and unemployment in the country. So far eight quinquennial surveys on employment and unemployment have been conducted by the NSSO.Based on the data available from the 61st round, the employment (Current daily status) growth accelerated during 1999-2000 to 2004-05 as compared to the previous period of 1993-94 to 19992000. During 1999-2000 to 2004-05, about 47 million work opportunities were created as compared to 24 million during the period 1993-94 to 1999-2000. Employment growth accelerated from 1.25 per cent per annum during 1993-94 to 1999-2000 to 2.62 per cent per annum during 1999-2000 to 2004-05. However, a higher labour force growth of 2.84 per cent per annum during 1999-2000 to 2004-05, which exceeded the growth in workforce of 2.62 per cent per annum, resulted in an increase in unemployment rate from 7.3 per cent in 1999-2000 to 8.3 per cent in 2004-05. Long term trends in employment situation emerge when comparisons are made over two relatively longer periods, that is, 1983 to 1993-94 (Period I) and 199394 to 2004-05 (Period II). Long term trend analysis suggests that, employment grew more slowly than the labour force in period II which raised the unemployment rate from 6.1 per cent in 1993-94 to 8.3 per cent in 2004-05. In absolute terms, the average annual increase in employment opportunities during period II was 6.45 million, which is lower than the annual increase of 7.09 million in period I (Eleventh Plan, Planning Commission). Assessment of employment situation based on the UPSS over the same periods i.e. 1983-1994 and 1993-94 to 2004-05, suggests that employment growth in period I was 2.06 per cent per annum as against 1.87 per cent in the period II (DGET Report, 2010).

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At present, the main challenges on the employment front, therefore, are not only to ensure a rapid growth of employment creation but also improvement in the quality of employment created. 3. SKILLS UPGRADATION IS THE NEED OF THE HOUR: 3.1 Skills Forecasted by the IT / ITeS Market

Modularized skill building in these areas is required to ensure constant up gradation of skills in the projected workforce of 7.5 million persons by 2022. 3.2 Recent trends in IT / ITeS Industry It has been hardcore fact that India has emerged as the most preferred destination and outsourcing hub for various IT Software Development Services, ITES (BPO, Call Centre, eCRM, Back Office Operations, R&D), Bio-technology, ERP, Data Warehousing, Knowledge Management and other IT related customer care services. Web Technologies: In the application development two web technologies lead the field. They are Java / J2EE and Microsoft NET technologies. The Java has been in existence for 10 Years. And since then it has become more popular. It has remained one of the topmost web technologies. The spaces of development and fast

turnaround time have made .NET very popular. After the release of Windows Longhorn in 2006 - 2007, .NET is set to gather further momentum. Scripting Languages: In programming domain scripting languages play a very important role. There are a number of scripting languages capable enough to scale down the traditional programming languages. Some of the scripting languages like Linux, Apache, MySQL, Pearl / PHP / Python, LAMP are becoming more popular and as a result more number of vacancies are opening up. Traditional Programming Languages: Whatever be the case, the traditional programming languages will always be there. Though the number of vacancies in such languages is less compared to others but when they are coming they are economically more rewarding and also provide for job security. Also the competition

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in such vacancies is less as few opt for such option due to toughness of the languages. Languages such as C, C++, Visual C++, COBOL will always be in existence. In recent years, cloud computing has emerged as an important trend in information technology. 3.3 Recommended Methods In the current business scenario, Change has become an inevitable part of most of the professional careers. Alfin Tafler (1971) in future Shock states Change is the process which pervades over life and it is important to look at it closely, not merely from the grand prospective of history but also from the vantage point of the living, breathing individuals who experience it.

in their current curriculum and practical requirement in the software-industries. In fact the Vice Chancellors from number of universities started emphasizing the immediate need to address this HUGE-GAP through proper industry-Alignment-Programs as a part of curriculum. For a developing economy, India has a relatively skilled population. For example, a high % are fluent in English. However, there are still a significant % of the population who lack basic education and skills (especially women). Therefore, to reduce structural unemployment, it is necessary for us to improve the quality of education and training, especially in rural areas along with the following recommended measures: Induction Training: In most organisations, immediately after an employee joins the organisation, he or she is sent for an induction which involves rotation through various departments and familiarization with the normal practices of the department and method of work. On The Job Training: This is the most popular method in the informal sector, wherein workers join as unskilled or semi-skilled workers and learn specific skills in the course of their employment. Larger industrial units also impart on the job training in a more structured manner through in-house training facilities. Vocational Training In Specialized Institutions: Vocational skills are also acquired through formal vocational training in specialized institutions. There are 4274 Industrial Training Institutes (ITIs) in India, which impart training in 43 engineering and 24 nonengineering trades. Of these 1654 are in the government sector and the remaining 2620 institutes are in the private sector. The total seating capacity in these ITIs is 6.28 lakhs. Further, there are 6 Advanced Training Institutes (ATI) which are managed by the Central Government that provide training for instructors Formal Apprenticeship: Historically, apprenticeship was the principal means of training semi-skilled workers. At its simplest, it is by far the predominant

The current system of education does not seem to provide some of the necessary skills for ITES/IT, even at the graduate/post-graduate level. Resources produced may have a strong conceptual/theoretical background, but often lack communication and vocation-specific skills and the creative drive or specific regulatory certifications required by clients in foreign countries. This could be addressed through specific modules integrated into the current system of education, right from the primary/secondary education level. For example, a strong focus on Computer literacy could be established at the primary/secondary level, followed by a focus on customer service related skills (teamwork, time management) at the higher secondary levels. Moreover in today scenario, there is a phenomenal growth in number of engineering institutions. One of the states in South India (Tamilnadu), which has around 12 colleges 15 years ago, today has over 450 colleges. Most of these colleges offer computer courses in B.E computer science, info tech,.hardware engineering and post graduate courses including M.S.,M.E.,M. Tech,MBA(Sys) and M.S.C.(IT) and therefore more than 5,00,000 engineering graduates per year are produced from a single state like TN OR A.P. One of the major reasons for unemployment among the fresh graduates in software industries is huge-gap prevailing

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mode of acquisition of trades, crafts and occupations. The most famous is the German dual system where apprenticeship is combined with school based education. The Indian Apprenticeship Act, 1961, requires employers in notified industries to engage apprentices in specified ratios in relation to the workforce. Apprentices get trained for periods ranging from 6 months to 4 years and at the end of the period they are trade-tested by the National Council for Vocational Training. The Apprenticeship Act thus serves two purposes: A) to regulate the programme of training apprentices in industry so as to conform to the prescribed syllabi, period of training etc. and B) to fully utilize the facilities available in industry for imparting practical training with a view to meeting the requirement of skilled workers.

REFERENCES Computing professionals in e-governance: policy implications. Proceedings of the 2nd International Conference on Theory and Practice of Electronic Governance (ICEGOV 2008), pp:239-244.2008. (Jointly with Malish, C.M) (ACM Press) 2008. Indian software workforce: A labour process view:2008. In C. Upadhya and A. R. Vasavi (Eds.) In an outpost of the Global Economy: Work and Workers in the Indias Information Technology Industry, Routledge, New Delhi, p.162-189. Exclusivity of the ICT direct employment: A case of Indian software workforce. Proceedings of the IEEE/ACM International Conference on Information and Communication Technologies and Development,2007, Bangalore, pp:15-16, December, p. 273-278. (IEEE Press) Center-for-global or local-forglobal? An examination of FDI in R&D centers of IT MNEs in India. Technology Information, Forecasting & Assessment Council (TIFAC), Department of Science & Technology. 2010. Costlow, T., Globalization Drives Changes in Software Careers, IEEE Software, November/December 2003, pp. 14-16.

5. CONCLUSION Today the exports for the IT-ITeS sectors are rising with increasing rate and the overall worldwide market seems to be accelerating with higher degree of progress. By adopting the above stated methods, India can easily grab more oppurtunities.India can accelerate its economic growth and mitigate the unemployment problem that is forecast for the coming decades by seizing a huge opportunity provided to it by a combination of global developments in industry, trade, and demographics. There has been broad agreement that all young people need a set of skills that will prepare them for both employment and further learning.

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A STUDY ON WORK LIFE BALANCE AMONG SERVICE SECTOR

Mrs.D.Maria Angelin Jayanthi Assistant Professor, Department of Management Sciences, Velammal Engineering College. Dr.N.Santhi Professor, Department of Management Sciences, Velammal Engineering College

Introduction:
HAPPINESS DEPENDS ON HOW YOU BALANCE YOUR LIFES EQUATION BETWEEN POSITIVE & NEGATIVE EXPERIENCES AND ATTITUDIES Work life balance is about being able to maintain a balance between work and personal responsibilities on all fronts, Work &Family, Work & Personal Fulfillment and Work & Social & Community Responsibilities Work-life balance is about adjusting working patterns. Regardless of age, race or gender, everyone can find a rhythm to help them combine work with their other responsibilities or aspirations Work-Life Balance does not mean an equal balance. Trying to schedule an equal number of hours for each of our various work and personal activities is usually unrewarding and unrealistic. An individual work-life balance will vary over time, often on a daily basis. The right balance for today will probably be different for tomorrow. The right balance for an individual when he is single will be different when he gets married or when he have children, when he start a new career versus when he is nearing retirement. There is no perfect, one-size fits all, The best work-life balance is different for each of us because we all have different priorities and different lives. However, at the core of an effective work-life balance definition are two key everyday concepts that are relevant to each of us. They are daily Achievement and Enjoyment.

Ask yourself now, when was the last time you Achieved AND Enjoyed something at work? What about Achieved AND Enjoyed with your family; your friends? And how recently have you Achieved AND Enjoyed something just for you?

Objectives of The Study

The primary objective is to study the issues of Work Life Balancing of the Employees Working in Service Sector in Chennai City . To study the general opinion and problems relating to work life balance To study who plays an important role in attaining work life balance To study the caring responsibilities of an individual To study about major interest outside the employment To study the solutions to achieve work life balance as self, from employer, from family and from community To give suggestion for an individual to achieve work life balance

Research Methodology:
The primary data was collected from the respondents working in service sector in Chennai (employees of

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Banks, IT companies, Air Force, TNEB and Educational Institutes) using questionnaire. The secondary data was collected from Books, Journals, magazines and websites. The sample size was 200 using convenient sampling. The statistical tools like chi-square, Rank correlation were used to check the validity of the collected data. Data Analysis and Interpretation: 1. Null Hypothesis (Ho) : There is no significant relationship between Gender & opinion on work life Balance. Gender / Opinion on work life Balance Male Female Total Enables to work Better 44 38 82 Puts you into pressure 22 08 30 Attitude varies Based on the situation 50 38 88 Total 116 84 200

Chi-Square table
S.No. 1 2. 3. 4. 5. 6. Oi 44 38 22 08 50 38 Ei 47.56 34.44 17.40 12.60 51.04 36.96 (Oi-Ei) -3.56 3.56 4.60 -4.60 -1.04 1.04 (Oi-Ei)2 12.6736 12.6736 21.1600 21.1600 1.0816 1.0816 (Oi-Ei)2/Ei 0.266 0.368 1.216 1.679 0.021 0.029

S (Oi-Ei)2/Ei = 3.579 Calculated value of x2 = 3.579 and Table value of x2 for 2 degree of freedom at 5% level = 5.991. It is concluded that there is no significant relationship between Gender & opinion on work life Balance. 2. Null Hypothesis (Ho) : There is no significant relationship between Sector & opinion on work life Balance. Sector / Opinion on work life Balance Educational Banking IT Communication Total Enables to work Better 14 26 25 17 82 Puts you into pressure 11 05 09 05 30 Attitude varies Based on the situation 25 19 16 28 88 Total 50 50 50 50 200

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Inference: According to Chi-Square analysis: S (Oi-Ei)2/Ei = 12.812 Calculated value of x2 = 12.812 and Table value of x2 for 6 degree of freedom at 5% level = 12.6. It is concluded that there is no significant relationship between sector & opinion on work life Balance. 3. Null Hypothesis (Ho) : There is no significant relationship between Gender & Major Interest Outside Organisation. Course Training 50 29 38 67 17 06 23

Gender / Major Interest Outside organisation Male Female Total

Voluntary work 21 08 29

Political activism 06 05 11

Religious activity 16 19 35

Sports

Combination 27 08 35

Total 116 84 200

Inference: According to Chi-Square analysis: S (Oi-Ei)2/Ei = 18.5118 Calculated value of x2 = 18.5118 and Table value of x2 for 5 degree of freedom at 5% level = 11.1. It is concluded that there is significant relationship between gender & major interest outside the organization. 4. Null Hypothesis (Ho) : There is no significant relationship between Gender & Sharing level responsibilities.

Gender / Sharing level responsibilities Male Female Total

I take most of the responsibility 41 32 73

Share of equally 50 32 82

Most of the time is done by others 18 09 27

No responsibilities 07 11 18

Total 116 84 200

Inference: According to Chi-Square analysis: S (Oi-Ei)2/Ei = 2.608 Calculated value of x2 = 2.608 and Table value of x2 for 3 degree of freedom at 5% level = 7.81. It is concluded that there is no significant relationship between gender & sharing level of responsibilities. SPEARMANS RANK CORRELATION 1. Following are the ranking given by Male & Female of Educational , communication, Banking and Information with regard to who plays an Important role in attaining work life Balance for an Individual.

a. Banking Sector

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Players A - Spouse B- Children C- Relatives D- Friends E- Employer F- Colleague Conclusion: Perfectly correlated b. Educational Sector Players A - Spouse B- Children C- Relatives D- Friends E- Employer F- Colleague Ranks Female(R2) Male(R1) 1 1 4 3 2 5 3 6 5 2 6 4

Ranks Male 1 2 4 6 3 5 Female 1 2 4 6 3 5

(R1-R2) D 0 1 -3 -3 3 2

D2 0 1 9 9 9 4 2 SD = 32

(6 SD2

6 x 32

R = 1 - ---------- = 1 - --------- = 1 0.9143 = 0.0857 N3-N 63-6

Conclusion : Very less positively correlated c. Information Technology Players A - Spouse B- Children C- Relatives D- Friends E- Employer F- Colleague Male (R1) 1 6 5 3 2 4 Ranks Female (R2) 3 4 3 2 1 3 (R1-R2) D -2 2 2 1 1 1 D2 4 4 4 1 1 1 SD2 = 15

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6 SD2

6 x 15

R = 1 - ---------- = 1 - --------- = 1 0.4286 = 0.5714 N3-N 210

Conclusion : Positively correlated d. Communication Players A - Spouse B- Children C- Relatives D- Friends E- Employer F- Colleague 6 SD2 6 x 15 Ranks Female(R2) Male (R1) 1 1 2 5 4 3 6 5 6 4 3 2 (R1-R2) D 0 -3 -1 0 0 4 D2 0 9 1 0 0 16 SD2 = 26

R = 1 - ---------- = 1 - --------- = 1 0.74249 = 0.2571 N3-N 210

Conclusion: Very Less Positively correlated Inference: Since the correlation is perfect in the ranking given by male and female in Banking sector. We conclude that they have the exactly same approach towards who plays an Important role in attaining work life Balance for an Individual. While in case of other sectors, Information Technology has positive correlation, Educational and communication they are very less positively correlated.

Findings
Out of the total respondents 82 (41%) feel work life balance enable to work better while 30(15%) feel it put them in to pressure while 88(44%) feels that attitude varies based on the situation. It was found that majority of respondents both male and female have ranked difficulty to deal with emergencies relating to children or other dependents as NO.1. It was also found that both male and female have ranked spouse as first who plays an important role in attaining work life balance for an individual. Out of 200 respondents 99(49.5%) have child care responsibility, 50(25%) have adult care responsibility while 25(12.5%) have both child and adult care while 26 (13%) have no caring responsibilities. Out of 200 respondents 153(76.5%) are care takers while 47(23.5%) do not have caring responsibilities Out of the total 200 respondents 78(29%) sharing their responsibilities with their spouse while 21(10.5%),

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13(6.5%), 15(7.5%), 42(21%), 31(15.5.%) the responsibility is shared with servant maid, relatives, friends, others and combination of spouse, servant maid, relatives and friends respectively. It can be inferred that 73(36.5%) take most of the responsibility while 82(41%) share the responsibilities equally, while 27(13.5%) most of the work is done by the other person and 18(9%) has no caring responsibilities. Out of the 200 respondents 29(14.5%) have voluntary work as their major interest apart from their work while 11(5.5%), 35(17.5%), 67(33.50%), 23(11.5%), 35(17.5%) have interest in political activities, religious activity, training/course study, sports activities, others and combination of all respectively. Out of 200 respondents 31(15.5%) said they get support from employer with regard to work life balance issue always, while 102(51.5%) said they get support some time, while 67(33.5%) said that they do not get any support. Out of 200 respondents, 4.49 rating (agree) have been given for to achieve a balance between work and personal life is important for an individual, while 3.54 (agree) rating has been given for needs vary based on stages in life while 3.43 (neither agree nor disagree) with regard to work life balance as entirely individual responsibility, While 2.55 (disagree) rating has been given for work balance entirely an employers responsibility, while 3.74 (agree) rating has been given for sharing responsibilities equally by employers and employee for work life balance. Out of the total respondents, it can be inferred that time management have been rated 4.74 as a very important solution for achieving work life balance followed by determining boundaries (4.23), being flexible(3.90) & getting support(3.89).

Out of the total respondents 4.19 rated flexible work arrangement as a solution for achieving work from employer, followed by 4.18 for job sharing, 3.52 for paid parental & maternity leave and 3.50 for confidential counseling services. Out of the total respondents 4.71 rating has been given for understanding as solution for work life balance from family and community followed by 4.63 for cooperation, 4.29 for emotional support and 4.21 for sharing work. According to chi-square analysis their no significant relationship between gender and opinion on work life balance, sector and work life balance, gender and sharing level of responsibilities whereas there is significant relationship between the gender and major interest outside the organization. According to rank correlation there is a perfect correlation between male and female of educational and communication sector towards the problems related to work life balance and it is also found that there is a perfect correlation between male and female of banking sector towards who plays an important role in attaining work life balance for an individual

Suggestions
1) It is highly required for the Indian companies to provide extensive nursery facilities inside its premises as it is done in foreign countries. Fun and learn programs like yoga, swimming, in door games, library for children and parenting guide tips for parents can be by the organization. 2) Companies should encourage its employees to attend various courses that will improve the individual in turn the organization it may include personality development courses, competency mapping, any other course relevant to their area of interest and job. 3) An individual has to find ways to relax relieve

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tension and minimize stress, avoid feeling guilty, establish limits, determine own standards, taking some time off for himself will not only benefit him, but it will benefit his family and organization tremendously. 4) Flexible work arrangements: Flexi work arrangement means it gives people the choice about their actual working hours, (This means staff can vary their starting and finishing times each day at work and sometimes also their break times during the day.) 5) The organization can introduce schemes like confidential counseling service for employees and their families. This will improve the morale of the employees. 6) An individual has to spend quality/focused time with their family members gain better understanding, same the family members should give them full attention. Develop rituals like relatives and friends get together that you can all look forward to meet. Create relationships with your spouse and children that are not incidental but rather instrumental to your success.

Life Balance Task Force, Examine current practices in the organization, Hold joint discussions with employees to evolve policies, while also identifying possible barriers Communicate policies through handbooks, newsletters, Intranet and other forms of communication Hold workshops to help Managers implement and manage policies Begin with a few quick win policies Monitor implementation and put feedback systems into place. In India, there is a starting point is that organizations have recognized the need for and value of Work-Life Balance policies. But the debate has to now move into implementation and the Government could play a critical role in being a catalyst of change. An advantage that Indian industry will however have is learnings from the experiences of other countries in what has worked and what has not. Theres no one size that fits all and Indian companies will have to adapt policies to fit in with not just the nature of industry, profile of workforce and other such factors but also with the local culture and environment.

Bibliography
1. C.R.Kothari , Research Methodology(Methods & Techniques), Second Edition, Wishwa Prakashan Harvard Business Review Paper Back Series, Harvard Business Review on Work Life Balance, Seventh Edition , Harvard Business School Press Seema Shukla, The Work Life Balance, Business Today, Anniversary Issue, Jan.2007 Dr.Reetha Dinesh, Balancing Work & Family An Overview, Business Mandate, March.2002 Parmanand Benedict, Are Indian Companies Striking a Work-Life Balance, Management Next. Vol 1, Issue-3. July, 2008.

Conclusion
Employers who have responded to the changing social and business environment and built Work-Life Balance policies into their culture have benefited tremendously. Recent research has further validated the value of flexible work options for example with 46% of over 4000 job seekers in the UK admitting that they would choose flexible work hours as the benefit they would most look for in their next job, and 60% saying that they would view Work-Life Balance as an important factor in assessing a potential new job. Organizations that do not introduce Work-Life Balance policies are at a distinct disadvantage. Identify the key need or reason for introducing WorkLife Balance policies in the your organizations, Build the commitment to Work-Life Balance Policies into the organizations vision or value statement, Set up a Work2.

3.

4.

5.

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ECONOMIC ANALYSIS OF HIGHWAY PROJECTS IN INDIA

T.Sivakumar Research Scholar, School of Management, SRM University, Kattankulathure.

Introduction
A proposed road project is expected to have various alternatives in terms of its way of implementation. The overall expenditure involved, and the expenditure required at various stages of project execution would be different for different alternatives. A judicious selection of the best possible strategy, among various alternatives, necessitates understanding in economics of highway projects. Though this holds good in all the major highway projects, this can not be taken in the case of considering a rural road. India is overwhelmingly an agricultural country with about six lakh villages. The rural population accounts for three fourth of the total population and generates more than half of the national income. Rural roads are the backbone of rural economy and for the overall development of the rural areas; it is one of the most important sectors to be taken care. And the conventional methods of economic analysis will not be suitable for these cases. A judicious selection of the best possible strategy, among various alternatives, necessitates understanding in economics of highway projects.

financing strategies for highway projects with reference to Indian context. The objective of economic analysis is to provide economic justification of the proposed investment interventions, to measure the economic choice between mutually exclusive features of design, to measure the relative cost or tax responsibility of the user and to measure the relative justification of highway projects with other public work projects. Economic analysis is not concerned about past events and investments. It is essentially a study of the future. All the possible alternatives are considered in this study of economic analysis.

1. Indian Roads and Present Scenario

India has a large road network of over 3.314 million kilometers of roadways (2.1 million miles), making it the third largest network in the world. At 0.66 km of highway per square kilometer of land the density of Indias highway network is higher than that of the United States (0.65) and far higher than that of Chinas (0.16) or Brazils (0.20). ROAD NETWORK OF INDIA Category of road Total road network National Highways State Highways Major Dist. Road, Rural road and Urban road Length in Km 3.34 million 65,569 1,30,000 3.14 million

Objectives
The main objective of this paper is to analyse the conventional methods of economic evaluation and financing of a highway project and then discuss why this will not be suitable for all the cases and the major disadvantages of these methods in detail. This discusses briefly the present road scenario, its future growth and

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India having 3.34 million kilometers of road network is the second largest in the world. As per present estimate, road network carry nearly 65% of freight and 85% of passenger traffic. Traffic on roads is growing at a rate of 7 to 10% per annum while the vehicle population growth is of the order of 12% per annum.

It has also been decided to levy additional cess of 50 paise per litre on petrol and diesel for the year 2005-06 which will be exclusively used for National Highways.

Funding for road projects The revenue generated from the cess would be used to finance all categories of roads. This fund has been given a statutory status by Central Road Fund Act enacted in December 2000.

2. Some Basic Concepts and parameters of Economic Analysis.

2.1 National View Point In the Highway sector, the construction and maintenance of the highways are financed from Government funds, whereas the highway user is the general public. This implies that costs of construction and maintenance are borne by the Government whereas the benefits are reaped by the general public. The construction of a highway will also have an impact on other modes of transport. Hence economic analysis of a highway project is done from a national view point rather than one of its wings. 2.2 Difference between Economic Analysis and Financial Analysis In financial analysis, one is concerned with the ways and means of financing a project and the financial profitability of a project. Economic analysis concerns the economic viability of a project with the consequences to all segments of the society. 2.3 All possible alternatives should be considered The very basic of economic analysis is being the selection of most beneficial option by evaluating all the possible alternatives the basic alternative being the do nothing or the continuation of the present situation. 2.4. Time Horizon The investment for highway projects construction, maintenance and its benefits are spread over a time span and is called the time horizon of economic assessment. 2.5. All Future Cash Flows to be brought to a

Allocations from this fund are being made in the following manner. Category of road Share of fund 50% of cess on HSD 50% of cess on HSD + entire cess on petrol

i) ii)

Rural roads National Highways and other roads

50% of the cess on high speed diesel oil for development of rural roads. 50% of cess on HSD sand the entire cess collected on petrol are being allocated as per the following:-

Distribution of Central Road Fund earmarked for all roads Other than Rural roads for the development and maintenance of 57.5% National Highways. for construction of road under or over 12.5% bridges and safety works at unmanned railway crossing Development and maintenance of State Roads. Out of this amount, 10% shall be kept as reserved by the Central Govt. for 30% allocation to States for implementation of State Road Schemes of Inter-state and economic importance to be approved by the Central Government.

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Common Time Datum The present and future costs and benefits occur at different points of time .In order to evaluate them on a common basis, they should be reduced to equivalent values at a common date. Is this is known as discounted cash flow and is based on time value of money.

rate of return (MARR) is that rate of return which must be ensured in any project if it has to be selected for implementation.

4. Cost Component of Highway Projects

In all the Highway Projects for the economic analysis total transportation cost is to be considered. This consists of 1.Cost of Construction,2. Maintenance Cost, 3. Road user cost (Vehicle Operating Cost (VOC), Time Cost and Accident Cost.) 5.1. Road User Benefits (i)Vehicle operating costs: Savings in vehicle operating costs ,components of which are Fuel, Lubricants, Tyres, Spare parts, Maintenance Labour, Depreciation, Wages of crew and Fixed Costs ,including overheads ,administration, interest on borrowed capital etc., (ii)Travel Time Savings: Savings in travel time are enjoyed by all the passengers. They are also realized by the commodity in transit. This is known as Passenger Cost and Commodity Cost. (iii)Savings in terms of accident cost (iv) Savings in cost of maintenance etc.,

3. Time value of money

3.1. Concept of Time value of Money Money appreciates in value in course of time due to interest it earns. This concept helps the analyst in reducing all future costs and benefits to a common date and thus to evaluate in a common basis. The concept is thus the foundation on which the entire structure of economy analysis is built. 3.2. Interest Rate Money earns its interest intrinsically .Interest rate is the return obtained after the end of the year as percentage of the capital invested at the beginning of the year. 3.3. Inflation Construction of major highway project takes a number of years, and mean while the cost of material .labour and equipment etc., undergoes price escalation due to inflation . 3.4. Present Worth The present worth is the present value of a future payment or a series of future payments, at the given interest rate. 3.4. Discount Rate Discount rate is the interest rate at which future payments are reduced to a common time. 3.5. Rate of return Rate of return is the term commonly used in economic analysis for the rate at which economic benefits are obtained by a project. Minimum attractive

6. Different Methods of Economic Evaluation

The common methods of Economic Evaluation are (1) Net Present Value Method, (2) Benefits /Cost Ratio Method and (3) Internal Rate of Return Method. 7. Need for the change of way in evaluating the rural roads. In April 1988, the World Bank President Mr. Wolfensohn made a speech to a World economists conference in Washington, in which he said World Bank and world economists must find ways to address the ways to evaluate the rural roads which are put on the table of most development conferences attended by Bank Presidents and country Presidents. This clearly emphasis to change the way we evaluated roads so as to truly reflect their immense social and other non-quantifiable benefits in promoting development

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and reducing rural poverty. In order to translate the vision of the Bank President and world leaders into reality: (1) there should be clear acceptance that rural roads produce major social benefits which should be given weight in the evaluation , though they are difficult to quantify. Spending huge amounts in estimating such social benefits in each case would be wasteful. (2) to simplify procedures and to capture their significant non-quantifiablebenefits, include a correction factor in economic evaluation. One way is to give an arbitrary weight for social impacts ( say 50%) , requiring the minimum threshold of Economic return to be , say, half of what is currently required. This method would substantially correct the present anomaly, and would be better than ignoring these valuable benefits, leading to wrong investment priorities.

Public Investment and Poverty Reduction:

A comparison of the impact of various public investments on poverty reduction indicates that roads have an important contribution. Studies in various Asian countries indicate a variable correlation between roads and poverty reduction (Table 2). In India, this correlation between roads and poverty reduction is ranked at the top of the scale.

Public Investment and Poverty Reduction

Sector for Public Investment Agricultural R&D Irrigation Education Roads Telecommunications Electricity Soil and Water Conservation Anti Poverty Programs Ranking of Returns in Poverty Reduction China 2 6 1 3 5 4 7 India 2 7 3 1 8 6 5 4 Thailand 2 5 4 3 1 Vietnam 3 4 1 2

So many studies have been conducted to analyze the socio economic benefits of rural roads for example, a study (Fan et al.1999) carried out by International Food Policy Research Institute on linkage between government expenditure and poverty reduction revealed that an investment of Rs.1 crore in rural roads lifts 1650 poor person above the poverty line,living standard survey in Vietnam in 2001 showed that population living within 2 km of all weather roads have lower poverty rates as noted in the draft Vision Document for Rural roads,2006(MoRD,2006). A study conducted by Asian Development Bank Socio Economic Impact Assessment Report Rural Road Project in Chhattisgarh in April 2009 clearly reveals the savings in average journey distance ,savings in fare per km and average monthly expenditure on transport. This also reveals the changes in transport service facilities health service, education, micro enterprises and Government programs and services.Statistical evidence apart ,the link between poverty and lack of accessibility is quiet apparent. Nearer home ,a house hold survey(APERP,1997) conducted in the state of Andhra Pradesh indicated that rural road improvements leads to substantial reduction in freight charges increase in house hold income, more employment opportunities and expansion of cultivation land.

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Annual Income and Expenditure per House hold

Comparison of Average Annual Income and Expenditure of Connected and Unconnected Villages.

Goods Transport Cost on Different Types of Roads

Impact on Standard of Living from Improvement on Roads

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Though all these studies reveal the benefits of rural roads no clear cut way to appraise the economic benefits is available. For accessing this clear cut strategy acceptable to everyone need to be formed. Some methods need to be formed to convert the social benefits to economic benefits and this should be suitable to all types of rural roads irrespective of the State or region. This is a separate area which is to be concentrated and more research need to be done.

area. The primary basic of a highway project may be a societal or environmental rather than economic one. If the decision is based on only the economic factors, an incorrect decision may result from the confusion of original primary purpose of a project with its secondary consequences ,simply because the less important secondary consequences are measurable in money terms. The methods are more suitable for comparing highway proposals designed to meet a given transport objective, rather than evaluating the absolute desirability of project in isolation. The purpose of economic analysis is to determine whether an activity is a worthwhile investment for the country, i.e., whether the results from an activity are sufficiently valuable as to warrant the expenditure of scarce resources. Traditional economic analysis tools explained above are not appropriate for low volume roads, as the traffic volumes are low; the benefits from savings in VOC and Travel time are too small. But these projects lead to the development of people in those areas. It is more difficult to estimate the social benefits in like better education, improved health and higher average income enjoyed by the beneficiaries etc. This leads to a separate research area to evolve suitable procedure to qualify the monetary and non monetary benefits.

Conclusion
Highway economic analysis is a technique whereby costs and benefits from a scheme are quantified over a selected time horizon and evaluated in a common yard stick. All the details for calculating are arrived by detailed field studies by the group of experts and given in the code book. All the calculations are done only based on the field study. The method for arriving the costs and benefits are common for all the cases irrespective of the region. Due to the above said reasons and as theses are scientific methods, no element of bias is involved. But these methods will not hold good for all the cases and have some constraints in it. All the methods only speak about the quantifiable benefits. But there are so many benefits which are very difficult to be quantified in terms of money. For example a new approach road laid to a remote area may give very good reach to medical facilities, say this leads to saving of some human lives. Can this be calculated in terms of money? We say human life in invaluable. These calculations are done only based on traffic volume studies conducted at the required places. Take a case of two highway projects assuming the project costs are same, one near Ariyalur and another one near Coimbatore which is industrially well developed. If we conduct a traffic survey, and follow the above said methods for arriving cost and benefits which naturally support the project near Coimbatore. This leads to a new project being awarded to a place already well developed .This itself leads to bias on the people living in the other

References
1. NHAI, http://www.nhai.org/roadnetwork.htm, last accessed January2011. 2. IRC:SP-30, Special Publication 30, Manual for Economic Evaluation of Highway projects in India, The Indian Roads Congress, New Delhi, 1993. 3. Traffic and highway Engineering, Nicolas J. Garber, Lester A.Goel. 4. Highway Engineering, Paul.H.Wright, Radnor Joseph Paquette. 5. Kadiyali, L. R., Updating Road User Cost Data in India, Final Report, Ministry of Surface Transport and the Asian Development Bank, L.

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R. Kadiyali and Associates, New Delhi, 1991. 6. PMGSY 2005, http://www.pmgsy.org/, last accessed January2011. 7. MORT&H 2005, http://morth.nic.in/rthmain. htm, last accessed January2011. 8. Benefit Cost Analysis, Nathaniel D. Coley Jr. Economic Analysis Program FHWA Office Of Asset Management 9. Transportation economics, nptel.iitm.ac.in/ courses/IIT/transportation%20economics.doc, last accessed January2011. 10. The Economics of road investment,siteresources.

worldbank.org/.../04HineRoadAppraisal08.ppt, last accessed January2011. 11. pmgsy.nic.in/downloads/ARCG.pdf last accessed December 2010. 12. www.planningcommission.nic.in/aboutus/committee/.../wg11_rroa-last accessed December10 13. http://www.fanrpan.org/documents/d00240/ 14. Rural Roads-J.K.Mohapatra and B.P.Chandrasekhar. 15. APERP(1997)-Andhrapradesh Economic Restructuring Project,World Bank,Washington.D.C.

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THE STRATEGIC ROLE OF CORPORATE BOARDS IN ORGANISATIONAL DECISION MAKING

Hanoku Bathula Senior Lecturer, International Business Programme, AIS St Helens, Auckland 1025, New Zealand Sanjaya S Gaur Associate Professor of Sales, Faculty of Business, AUT University, Auckland 1142, New Zealand

Introduction
Corporate boards perform a number of critical functions to improve organisational performance. These are: monitoring of management to mitigate agency costs (Eisenhardt, 1989; Shleifer & Vishny, 1997; Roberts, McNulty & Stiles, 2005), hiring and firing of management (Hermalin & Weisbach, 1998), providing and giving access to resources (Hillman, Canella & Paetzold, 2000; Hendry & Kiel, 2004), grooming CEOs (Vancil, 1987) and providing strategic direction for the firm (Tricker, 1984; Kemp, 2006). These boards also have a responsibility to initiate organisational change and facilitate processes that support the organisational mission (Hill, Green & Eckel, 2001; Bart & Bontis, 2003). In an increasingly competitive world, corporate boards seek to protect the shareholders interests while maintaining managerial professionalism and accountability in pursuit of good organisational performance (Hillman & Dalziel, 2003; Hendry & Kiel, 2004; McIntyre, Murphy & Mitchell, 2007). They can provide a link between the organisation and its environment, secure critical resources (Williamson, 1996; Hillman et al., 2000), and also act as a mechanism of internal governance and monitoring of management (Barnhart, Marr & Rosenstein, 1994; Shleifer & Vishny, 1997). They not only prevent negative management practices that may lead to corporate failures or scandals, but also ensure that organisations act on opportunities that enhance the value to all stakeholders. By performing these roles, an effective corporate board is likely to help the organisation achieve superior performance (Hawkins, 1997; Gompers, Ishii, & Metrick, 2003). Unfortunately, the causes of many financial scandals are linked to ineffective corporate boards, whether it

is Enron in the US or Satyam Computers in India. On the whole, the role of corporate boards is quite daunting as they seek to discharge diverse and challenging responsibilities. This paper examines critical dimensions of the strategic role of corporate boards. The paper is presented in six sections: section one introduces the topic and section two discusses the importance of corporate boards; section three examines the shift in the strategic role of corporate boards during the last few decades; section four presents the typology of boards based on their involvement in strategic decision making; section five discusses the implications and the last section concludes the paper.

Corporate boards, governance and leverage

The essence of corporate boards: The importance of corporate boards in corporate governance studies has been underscored by Monks and Minnow (1995), who refer to corporate governance as the relationship amongst shareholders, the board of directors and senior management, and how strategic decisions that are critical for the success of a business are arrived at. Corporate boards are also the focus of attention by different corporate governance codes issued as a guide to practitioners. According to Carlsson (2001), the central issue of all corporate governance codes is the importance of an independent and competent corporate board. Monks and Minnow (2004), observe that in essence, corporate governance is the structure that is intended to make sure that the right questions get asked and that checks and balances are in place to make sure that the answers reflect what is best for the creation of long-term, sustainable value (p.2). A vital component of this structure is the corporate board membership, its constitution and its function, with a significant impact on the organisations performance.

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Leverage from the corporate boards composition: From an organisational perspective, the corporate board can be reckoned as a team brought together to work towards achieving organisational goals (Langton & Robbins, 2007). Being placed in a hierarchy above the chief executive and other managers, the corporate board plays a strategic role in the organisations decision making. The composition of a corporate board and the competencies it possesses are important organisational resources (Ljungquist, 2007). Such resources become a source of competitive advantage for organisations and help them achieve superior performance (Prahalad & Hamel, 1990; Barney 1991; Hunt, 2000).

active role of corporate boards in strategy. While Boulton argued that the strategic role of corporate boards was evolving, Andrews (1980) recommended that directors should work with management in devising strategic plans based on their experience. Rindova (1999) supported this view by arguing that directors possess valuable problem solving expertise that can be used along with management for strategic decisions. Others scholars (Tricker, 1984; Garrett, 1993; Coulson-Thomas; 1993) have suggested a wider role for corporate boards in strategy formulation. Tricker (1984) described the function of corporate boards in terms of establishing strategic direction, overseeing the organisations strategy, assessing and monitoring performance, and also becoming involved in action to ensure implementation. Bart and Bontis (2003) called for corporate boards to be involved in developing the mission, while Walker (1999) and Rhodes (1999) argued for an active role for corporate boards in establishing and reviewing an organisations mission and for implementation of strategic initiatives to meet the organisations objectives. Garrett (1993) argued that a director should be concerned with developing and communicating the corporate vision, mission, strategy and structure to ensure the organisations survival and sustained success. According to these scholars, the achievement of excellence by corporate boards requires more than minimal legal compliance; instead, they should assume active guardianship of the shareholders interests whilst also providing independent oversight of top management. In addition to taking an active role in strategy formulation, corporate boards have also been expected to examine business alternatives. Coulson-Thomas (1993) suggests that corporate boards should play an active role in looking for business opportunities and determining the organisations purpose. Donaldson (1995) suggests that while management is expected to turn strategic vision into operational reality, a corporate board must evaluate strategy based on how the firms returns compare with those of other investments. Other practitioners have focused on strategic thinking (Garrett, 1996) and strategic leadership (Davies, 1999).

The changing role of corporate boards in strategic decision making

Passive role: Early researchers (Mace, 1971; Norburn & Grinyer, 1974; Rosenstein, 1987; Monks & Minnow, 1991) argued that corporate boards made little contribution to strategy and the role of strategy making was performed mainly by the chief executive. The management, led by the chief executive, played a dominant role, often leading to a power imbalance between management and the corporate board. Lorsch and MacIver (1989) also suggested an advisory role to the corporate boards in providing counsel on the evaluation of options, rather than initiating strategy. Further, board members are nominated on the basis of the managements comfort in working with them (Monks & Minnow, 1991). Corporate boards were therefore dubbed Creatures of the CEO (Mace, 1971) who are available for rubber stamping functions (Herman, 1981). The function of corporate boards has been mainly viewed in terms of overseeing management, reviewing performance, and ensuring that the various activities of an organisation are socially responsible and in compliance with the law. These studies, while recognising the importance of corporate boards, assumed a relatively limited role for corporate boards in strategy making. Active and dynamic role: Researchers such as Boulton (1978) and Andrews (1980) have recognised a more

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According to Garrett (1996), strategic thinking is related to long-term organisational effectiveness, and involves strategic analysis, strategy formulation and corporate direction. Davies (1999) describes the strategic leadership of a corporate board as a balance of strategic skills and experience relative to the needs of the firm, with a shared strategic direction and commitment to pursue it, and strong processes to ensure strategic management. Kemps study (2006) of Australian boards finds that directors have a clear role in strategy formulation, strategic decision-making and strategic control. These studies indicate the importance of deeper involvement of the corporate board in strategy formulation and implementation. A typology of a boards involvement in strategic decision making While it is clear that corporate boards have a crucial responsibility towards strategy, not every corporate board participates equally in strategic decision making. Some corporate boards are considered passive while others are considered active, based on their involvement in strategic decision making processes (Golden & Zajac, 2001). Hendry and Kiel (2004) observe that literature demonstrates a swing from the passive school of the 1970s and 1980s to the active school prevalent over the last ten years (p.509). Proponents of the active school suggest several roles for the corporate boards. Wheelen and Hunger (2004) summarised the basic tasks of corporate boards as follows: Monitor: A board should keep itself abreast of developments, both inside and outside the corporation. In addition to using the information in its decision-making, it can also bring to managements attention developments it might have overlooked. Evaluate and influence: A board can examine managements proposals, decisions, and actions; agree or disagree with them; give advice and offer suggestions; and outline alternatives. More active boards do this in addition to monitoring management activities. Initiate and determine: A board can delineate a corporations mission and specify strategic options to its management. Only the most active boards take on this task in addition to the previous two. Wheelen and Hunger (2004) proposed the board of directors involvement as being a continuum from low to high in the strategic management process. Figure 1 shows the possible degree of the boards involvement from being a passive observant to an active participant.

Low High (Passive) (Active) Phantom

DEGREE OF INVOLVEMENT IN STRATEGIC MANAGEMENT

Rubber Stamp
Permits officers to make all decisions. It votes as the officers recommend on action issues.

Minimal Review

Nominal Participation

Active Participation

Catalyst

Never knows what to do, if anything; no degree of involvement

Formally reviews selected issues that officers bring to its attention.

Involved to a degree in the performance or review of selected key decisions, indicators, or programmes of management.

Approves, questions, and makes final decisions on mission, strategy, policies and objectives. Performs fiscal and management audits.

Takes the leading role in establishing and modifying the mission, objectives, strategy, and policies. It has a very active strategy committee.

Figure 1: Board of Directors involvement in strategic management

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Source: Wheelen and Hunger (2004, p.28)

Conclusion While the involvement of boards in strategy has demonstrably increased (McNulty & Pettigrew, 1999; Stiles, 2001), the distinction between strategy formulation, monitoring, and execution at an operational level has become increasingly blurred (Ingley & van der Walt, 2001). In this process, corporate boards also run the risk of taking over managerial responsibilities (Helmer, 1996). As the competitive environment evolves to meet the challenges of globalisation, corporate boards should not only play the strategic role of creating value, but also take care of all stakeholders. Further understanding of the relationship between the composition and competencies of the boards will enable appropriate board formation and allocation of resources. Such insights into corporate boards can be gained by recognising the contextual factors of each country in which the organisations operate.

Implications
The literature on corporate boards suggests that their involvement in strategy ranges from being very low (Mace, 1971) to high (Garrett, 1996; Davies, 1999). However, in recent years, there has been a clear shift towards a more active role of boards in strategy (Hendry & Kiel, 2004). Support for this active role also comes from the principles of corporate governance proposed by the OECD (1999), which state that The corporate governance framework should ensure the strategic guidance of the company (p.9). A corporate boards main role is to govern the firm; board members are solely responsible for the firms affairs, and this responsibility cannot be delegated (Vint, Gould & Recaldin, 1998). Therefore, the primary responsibility of the board is owed to value creation in the firm, while due consideration is given to the interests of shareholders and other parties, including employees, customers, suppliers and society. In the last decade, the scope of board activities has gained newer dimensions. A corporate board is responsible not only for the organisations strategy, but is also accountable in case the organisation does not function in the best interests of the various stakeholders. In the US, the Sarbanes Oxley Act of 2002 was enacted to improve transparency and accountability of top management, including corporate boards (Moeller, 2004). This emphasis on the need for information and reporting systems implies that corporate boards need to anticipate and ensure that minor matters do not become major problems. Shortcomings in this area of adequate reporting systems and transparency were some of the causes for corporate scandals such as Enron, WorldCom, Parmalat, HIH and Satyam Computers. These scandals in different parts of the world also led to the issuance of codes of conduct and guidelines to ensure compliance and accountability (Cadbury, 1992; CalPERS, 1997; Hampel, 1998), which required an increased strategic role that corporate boards should play in improving the organisation performance.

References
Andrews, K. R. (1980). Directors responsibility for corporate strategy. Harvard Business Review, 58(6). 2842. Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99120. Barnhart, S. W., Marr, M. W., & Rosenstein, S. (1994). Firm performance and board composition: Some new evidence. Managerial and Decision Economics, 15(4), 329340. Bart, C., & Bontis, N. (2003). Distinguishing between the board and management in company mission: Implications for corporate governance. Journal of Intellectual Capital, 4(3), 361381. Boulton, W. R. (1978). The evolving board: A look at the boards changing roles and information needs. Academy of Management Review, 3(4). 827836.

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prices. The Quarterly Journal of Economics, 118(1), 107155. Hampel. R. (1998). Committee on Corporate Governance. Final Report. London: Gee Publishing Ltd. Hawkins, J. A. (1997). Why investors push for strong corporate boards. McKinsey Quarterly, 3, 144-148. Helmer, H. W. (1996). A directors role in strategy. Directors and Boards, 20(3), 2225. Hendry, K., & Kiel, G. C. (2004). The role of the board in firm strategy: Integrating agency and organisational control perspectives. Corporate Governance: An International Review, 12(4), 500520. Hermalin, B. E., & Weisbach, M. S. (1998). Endogenously chosen boards of directors and their monitoring of the CEO. American Economic Review, 88(1), 96118. Herman, E. S. (1981). Corporate control, corporate power. New York: Cambridge University Press. Hill, B. Green, M., & Eckel, P. (2001, September/October). Navigating the currents of change. Trusteeship, 9(5), 2832. Hillman, A. J., Canella, A. A., & Paetzold, R. L. (2000). The resource dependency role of corporate directors: Strategic adaptation of board composition in response to environmental change. Journal of Management Studies, 37(2), 235255. Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependency perspectives. Academy of Management Review, 28(3), 383 396.

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Hunt, S. D. (2000). A general theory of competition. London: Sage Publications. Ingley, C. B., & van der Walt, N. T. (2001). The strategic board: The changing role of directors in developing and maintaining corporate capability. Corporate Governance: An International Review, 9(3), 174-185. Kemp, S. (2006). In the drivers seat or rubber stamp? The role of the board in providing strategic guidance in Australian boardrooms. Management Decision, 44(1), 5673. Langton, N., & Robbins, S. P. (2007). Organisational behaviour: Concepts, controversies, applications. Toronto: Prentice Hall. Ljungquist, U. (2007). Core competency beyond identification: presentation of a model. Management Decision, 45(3), 393402. Lorsch, J. W., & MacIver, E. (1989). Pawns or potentates: The reality of Americas corporate boards. Boston: Harvard University Press. Mace, M. L. G. (1971). Directors: Myth and reality. Boston: Harvard Business School Press. McIntyre, M. L., Murphy, S. A., & Mitchell, P. (2007). The top team: Examining board composition and firm performance. Corporate Governance, 7(5), 547561. McNulty, T., & Pettigrew, A. (1999). Strategists on the board. Organization Studies, 20(1), 4774. Moeller, (2004). Sarbanes-Oxley and the new internal auditing rules. New Jersey: John Wiley & sons, Inc. Monks, R. A. G., & Minnow, N. (1991). Power and accountability. New York: HarperBusiness. Monks, R. A. G., & Minnow N. (1995).

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board: Know thyself - Self Assessment is the basis for high performance. Trustee, 52(8), 1419. Wheelen, J. D., & Hunger, T. L. (2004). Strategic management and business policy. (9th ed.). Upper Saddle River, NJ: PearsonPrentice Hall. Williamson, O. E. (1996). The mechanisms of governance. New York: Oxford University Press.

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NPA MANAGEMENT IN PUBLIC SECTOR BANKS A CASE STUDY WITH REFERENCE TO STATE BANK OF TRAVANCORE
R.BALAJI Assistant Professor(OG) in MBA, SRM University, Ramapuram,
Bank lending is very crucial for it makes possible the financing of agricultural, industrial and commercial activities of the country. The strengths and soundness of banking system primarily depends upon the health of advances. In other words, improvement in asset quality is essential to strengthen the working of banks and improving their financial viability. This is a study intended to evaluate the management of Non performing assets of State Bank of Travancore. For this purpose, the loan assets have been classified into performing assets and Non performing Assets. Performing assets are those, which generate income and do not cause any worry. The non performing assets are those, which has ceased to generate income and cause problems to the banks. So the management of the non performing asset is very important for any bank as it affects its profits.

Chennai- 600089

understand the causes of non performing asset and find ways to reduce them to a minimum level so as to improve the income capacity of banks, particularly public sector banks. The State Bank of Travancore (SBT) came into existence as Travancore Bank Ltd. in 1945. It was sponsored by the former Princely State of Travancore, Kerala. Apart from conducting general banking business, the Bank undertook government treasury work and foreign exchange business. Travancore Bank Ltd. was made as a subsidiary of the State Bank of India in 1960 and a member of the State Bank Group, under the SBI subsidiary Banks Act 1959, under the special statute of the Parliament of India. SBT is now one of the most prominent nationalized banks of India. State Bank of Travancore continues to provide dedicated services to its customers, since 60 years of its establishment. The Bank boasts of using world class technology through the implementation of 100% Core Banking Solution (CBS). The 24 hours working exchange bureau of the Bank is located in Calicut, while its 8am-8pm branches are established in Kesavadasapuram (Trivandrum), Thrissur, Kaloor (Ernakulam) and Alwarpet (Chennai). According to the recent records, the total business of SBT, recorded is Rs. 66644 Crores and its NRI business of Rs.8755 Crores. Apart from commercial banking, SBT has also shown its active participation in social development, by offering credit to the priority sectors and the special schemes announced by the Government. SBT has lent as much as 40% of net bank credit to the priority sectors. The Bank plays a developmental role, by meeting the need-based requirements of the small scale industry, agriculture and small business. The branches of SBT located in the rural and semi-urban areas of the country have been catering to the needs of farmers.

Objectives of the Study

The objectives of this study are To study the NPA position and management of the NPA in the SBT To study the actual performance of the bank in its financial perspective. To identify and suggest the cause of NPA. To propose viable and sustainable measures for improving their quality of NPA to a performing status.

Scope of the Present Study

This study is related to the cause of non performing asset in the context of NPA and prudential norms. The findings of this study are helpful to

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Concept of NPA
The risk is an avoidable factor in every business. Banks are also like any other business and have some inherent risk. But they are different from other business organizations because almost in all business is run by the borrowed money from the depositors. If bank conducts its business without experiencing the required prudence, not only bank suffers. The losses and the owners capital are wiped out, but it is also detrimental to the interest and suitability of the financial sector as a whole thus affecting adversely the potential economic growth of the country. It is therefore necessary for the regulator of the financial sector to ensure that the banks run on the prudent lines. The spit of the prudence lies in the fact that no bank should expose to the risks which it cannot manage or handle and for which it does not have the capacity to absorb the losses. For this purpose the regulator has to prescribe certain prudential measures for the banks to observe. If a balance sheet is to reflect a banks actual financial health a paper system for recognition of income and provisioning for bad assets on a prudential basis is necessary. An asset becomes an NPA when it ceases to generate income for the bank. A non performing asset may be defined as a credit facility in respect of which installments/interest has remained past due for specified period. With a view to moving towards international best practices and to ensure great transparency, it has been decided to adopt the 90 days overdue norms for identification of NPAs from the year ending 31st March 2004. Accordingly a non-performing asset shall be a loan or an advance where i) Interest and/or installment of principal remain overdue for a period of more than 90 days in respect of a terms loan. The amount remains out of order for a period of more than 90 days in respect of overdraft/cash credit (OD/CC) The bill remains overdue for a period iv)

of more than 90 days in the case of bills purchased and discounted Any amount to be received remains overdue for a period of more than 90 days in respect of other accounts.

Gold loans and small loans up to 1 lakh are exempted from the 90 days norms for recognition of impairment. These loans would continue to be governed by the 180 days norm for classification as NPA even after March 31st 2004. The system should ensure that identification of NPAs should be done on an ongoing basis and doubts in asset classification due to any reason are settled through specified internal channels within one month from the date on which the account would have been classified as NPA as per prescribed norms. Non performing assets are an inevitable burden on the banking industry. Bank incurs big loss due to NPAs and it also adversely effects the profitability of the bank. Management of NPA would have the following three objectives. a) Improving the quality of NPA to a performing status so that income on such assets is recognized. b) Upgrading the status of the assets so as to reduce the provisioning requirement. c) Cleansing the balance sheet of loss assets and also unsecured portion of the doubtful assets, ultimately leading to improvement in capital adequacy ratio. The committee on financial system (Narasimha Committee) has defined NPA, as an asset becomes NPA when it ceased to generate income for the bank. RBI has defined NPA as an advance where payment of interest or repayment of installment of principal (in case of term loans) or both remains unpaid for a period of 2 quarters or more. An amount under any of the credit facilities is to be treated as past due when it remains unpaid for 30 days beyond due date.

ii)

iii)

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Underlying Reason for NPAs

Broadly there are two factors which contribute to NPAs. They are internal and external factors which prevails in the around the bank.

Funding mismatch- There are said to be many cases were loans granted for short terms were used to fund long term transactions. High cost of funds Willful defaulters.

Internal factors
Diversion of fund for Expansion/diversification/modernization Taking up new projects Helping/promoting associate concerns Time/cost over run implementation stage. during the project

Existing Systems and Practices for Early Identification and Reduction of Npas
Internal checks and controls

Business (product, marketing etc) failure. Inefficiency in management Slackness in credit management and monitoring Inappropriate technology/technical problems Lack of co-ordination among lenders Without a clear understanding about the nature and the purpose for which the loan is granted.

Early warning system is one of the most popular checks found in the banks for identification of potential NPAs. EWS includes the following Designating relationship manager/credit officer. He s the one who is responsible for monitoring a corporate account in responsible for monitoring a corporate account in the process of credit monitoring. He is a person who is expected to have complete knowledge about borrower,business,his future plans etc. He has to keep in constant touch with the borrower and report all developments impacting the borrowal account. Preparation of Know Your Client profile. According to this a profile/credit is prepared by the bank and as a part of this bank keeps in constant touch with their client. Credit rating system By this method banks are able to assess the credit,risk of individual proposal. The exercise is generally done at the time of sanctioning of new borrowal account at the time of renewal of existing credit facilities.Watch list/special mention category The grading of the banks risk asset is an important internal control tool. Most of the banks have a system to put certain borrowal account under watch list or special mention category if performing advances operating under adverse business or economic

External factors
Recession Input/power shortage Price escalation Exchange rate fluctuation Accidents and natural calamities Change in govt. policies in excise/import duties, pollution control order etc. A part from the above mentioned reasons following also contribute towards becoming an NPA Failure to monitor the credits and to recognize early warning signals. Over optimistic promoters. Directed lending-loans to some segments were dictated by Govt.s policies rather than commercial imperatives. Highly leveraged borrowers.

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conditions are exhibiting certain distress signals. The categorization of such accounts in watch list enables the credit deterioration and take preventive steps to avoid slipping into NPA. Early warning signals A host of early warning signals are used by different banks for identification of potential of NPAs. With this system a bank is able to identify, persistent irregularly in the accounts, default in repayment of obligation using levels of bad debt losses and many more. Management of NPAs by Indian banks Several measures are being taken by government, RBI and by the banks and other financial

institutions to reduce the level of NPAs in the Indian banking system. Both the absolute value of NPAs and the NPA ratio (both gross and net) have been declining over the last few years. In the year ended March 31st 2005, the absolute values of gross NPA have decreased to 58300 crore compared to that of the previous year i.e., 64780 crores. The net NPA have decreased to 21441 crore as on 31-3-2005 compared to that of the previous year. The Indian systems are moving towards international practices which utilize significant quantitative measures in addition to qualitative measures. Such a change may contribute to standard loans being granted, as NPAs in the future. With the introduction of stronger foreclosure laws (SARFAESI) under which the lenders are empowered to seize collateral and change management. Table below summarizes size of NPA portfolio of Indian Financial Sector.

GROSS AND NET NPAS OF SCHEDULED COMMERCIAL BANKS (Amount in crores) Commercial banks Public sector New private sector New private sector Foreign banks Gross NPAs on 31-3-2004 51538 Net NPAs on 31-3-2004 18860 Gross NPAs on 31-3-2005 47325 Net NPAs on 31-3-2005 16642 G r o s s NPAs on 31-3-2009 G r o s s NPAs on 31-3-2010

4393

2140

4206

1859

5961

2717

4576

2292

2894

898

2192

648

Total

64786

24615

58300

21441

19920

25137

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The date of the scheduled commercial banks clearly suggests a reduction in gross NPAs. In 2004-2005 the reduction took place not just in terms of the ratio but also in terms of the absolute value (from 64786 crores to 58300 crores). Borrowers seek to resolve their NPA rather than risking the loss of assets presently held by lenders as collateral. Asset Quality Bench Marking Gross NPAs

Percentage of net NPA to net advance 9.84 7.89 4.65 3.79 2.77

The % of net NPAs to net advances have decreased to 2.77% as on 31-3-2006 compared to that of previous year. Amount of net NPA The net NPAS of the bank show a decreasing sign. Table 22 given below reveals the net NPA of the bank from the year 2002 to 2006. Amount of Net NPA Year Net NPA (in crores) 2002 119.89 2003 116.1 2004 88.23 2005 86.85 2006 74.79

Gross NPAs as a percentage of gross advances for scheduled commercial banks was 7.2% for financial year 2004 and 5.2% for financial year 2005. Net NPAs The NPA ratio of scheduled commercial bank was 2% as on 31-3-2005 which was decreased when compared to that of the previous year i.e.2.9%. Analysis of NPA For summation and condensation the data collected were tabulated. Simple statistics like percentage ratio were used for analyzing and interpreting the data. Graphs are also used for analyzing the data. As far as SBT is concerned the amount of net NPA as on 31-32006 stood at 74.79 crore. The net NPA as on 31-32005 is 86.85 crore. It shows a positive sign for the improvement in the NPA position of the bank. This result can be mainly attributed to the strategies adopted by the bank for reducing the NPAs. Percentage of net NPAs to net advances. This ratio reveals the asset quality and is also an operation parameter in order to benchmark the performance of the bank. The net NPA ratio is found out by dividing net NPA by net advance. Table 21 shows the net NPA ratio of the bank from the bank 202 to 2006. It shows a decreasing tendency. It is a good sign of performance. Net NPAS to Net Advances Year 2002 2003 2004 2005 2006

From the figure it is clear that amount of NPA have decreased to 74.79 crore compared to that of the previous year. It is a good sign of performance. Net NPA provision and percentage change Given below shows the NPA provision made by the bank from the year 2002 to 2006. It also shows the % increase/ decrease in the provision during those years. Measures have to be taken to reduce the provision as it affects the profitability of the bank Net NPA Provision And Percentage Change Year NPA provision % increase/ decrease 2002 68.87 2003 84.53 2004 85.18 2005 81.22 2006 80.68

24.7

22.73

0.76

4.6

0.66

Net advance Vs net NPA

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As we look into the net advances and net NPAs of the bank during each year we are very well able to determine, what proportion of the total/net advances are turning out to be NPAs. Table 24 below show the net advances and net NPAs of the bank from the year 2002 to 2006. It also reveals the % increase/decrease in the net advances as well as the NPAs. Net Advance Vs Net NPA Year Net advances (Rs.in crores) % increase/decrease Net NPA (Rs.in crores) % increase/decrease 2002 1209.33 3.23 119.98 2003 1469.02 3.23 116.1 21.47 2004 1896.41 24.01 88.23 29.03 2005 2287.65 1.56 86.85 20.63 2006 2690.42 13.86 74.79 17.6

There is an increasing tendency for net advances for the past few years. But he NPA shows a decreasing pattern. This can be mainly due to the measures adopted by the bank for reducing the NPAs.

Percentage of NPA provision to the net NPA

This ratio reveals the proportion of NPA provision made out of the net NPA. This ratio is found out by dividing NPA provision made during the year by the net amount of NPA.This ratio has increased to 107.87% as on 31.3.2006 when compared to that of the previous year i.e. 93.51%.Table below shows this ratio of the bank from the year 2002 to 2006.

Percentage of Provision to Net NPA

Year Percentage of NPA provision to net NPA

2002

2003

2004

2005

2006

57.4

72.8

96.54

93.51

107.87

Provision and profit

The gross profit and net profit of the bank as on 30-3-2006 stood at 36.99 crores and 37.12 crore respectively when compared to that of the previous year ie.78.38 and 45.16. Table below compares the NPA provision and the profits of the bank from the year 2002 to 2006. It also reveals the proportion of the NPA provision made before arriving at the net profit.

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Net Provision and Profit

Year Gross profit (Rs. in crores) NPA provision(Rs.in crores) Net profit (Rs.In crores) 2002 90.44 2003 111.17 2004 123.27 2005 78.58 2006 36.99

68.87

84.53

85.18

84.22

80.68

37.12

45.16

56.51

10.65

6.14

As we look in to the figures of the gross profit and net profit of the bank as on 31-3-2006 it has decreased considerably. It may be due to the large NPA provision. The details of gross profit, NPA provision and net profit are given diagrammatically as follows. Gross Profit, NPA Provision and Net Profit Percentage of NPA provision to gross profit and to total provision The banks NPA provision to gross profit is widely fluctuating for the years ranging from 2002 to 2006. The ratio of NPA provision to gross profit stood at 218.1% on 31-3-2006 as against the last years i.e. 103.36%. The NPA provision to total provision stood at 261.5% on 31-3-2006 as against previous years 119.5%. Table below show this ratio of the bank and also total provision from the year 2002 to 2006. Percentage Of Npa Provision To Gross Profit And To Total Provision Year % of NPA provision to gross profit % of NPA provision to total provision Total provision 2002 76.14 129.19 53.22 2003 75.63 126.88 66.62 2004 69.1 127.57 66.77 2005 103.36 119.5 67.92 2006 218.1 261.5 30.85

Study on gross NPA movements Table given below shows the gross NPA opening balances, deductions and additions made during the year and closing balances from the year 2002 to 2006.

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Gross NPA Movement

Year Opening balance (Rs.in crores Addition Reduction due to recovery Closing balance 2002 188.51 49.85 47.91 190.45 2003 190.45 68.72 56.77 202.3 2004 202.3 65.05 37.99 175.24 2005 175.24 43.65 49.14 169.75 2006 169.75 42.84 52.67 159.9

Study on NPA Recoveries

The banks close and effective monitoring of advance portfolio, to prevent further slippages in toNPAs has resulted in cash recoveries of Rs.86.13 crore during the year ended 31-3-2006. Table below shows the cash recoveries and write off made during the period 2002 to 2006.

Percentage of Recoveries And Write offs to Gross NPA

Year % recovery to gross NPA % write off to gross NPA 2002 2003 2004 2005 2006

23.22

32.1

32.64

43.1

53.84

NPA Recovery
Year Recovery (Rs.in crores) Write off 2002 42.52 40.53 2003 64.91 33.78 2004 57.18 59.26 2005 73.14 16.25 2006 86.13 29.02

21.33

16.7

33.8

9.5

18.2

The diagrammatic presentation of NPA recovery is as follows. NPA Recovery The write offs have increased to 29.02 as on 31-3-2006 compared to that of the previous year i.e.16.25 crore. Study on percentage of recoveries and write offs to gross NPAs. Table given below shows the % recoveries and write off to gross NPA from the year 2002 to 2006.

Percentage of recovery of gross NPA as on 31-3-2006 has increased to 53.84% from 43.1% of the previous year. This shows a positive sign in the reduction of gross NPAs. As far as the write offs are concerned it has increased to 18.2% at the close of 2006 from 9.5% of the previous year. FINDINGS, SUGGESTIONS & CONCLUSION NPAs are inevitable burden on banking industry. Hence the success of the bank depends upon methods of managing NPAs and keeping them within tolerance level. Of late, several institutional mechanisms have been developed in India to deal with NPAs and there has been tightening of legal provision Perhaps more importantly, effective management of NPAs requires appropriate internal checks and balances system in the bank.

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Findings
The findings of my study in SBT Ltd.are: 1. The banks aggregate capital funds have crossed Rs.300 crore as on 31-3-2006. 2. Capital adequacy ratio of the bank is maintained at above 11% level for the third consecutive year. 3. Net NPA to net advances of the bank has been brought down to 2.78% which is lowest in the history of the bank. 4. During the last financial bank had launched VISA branded Debit cards and SBT customers now swipe the global support card to get the cash or pay for purchases from any VISA enabled location around the globe. 5. The banks total deposits have increased to 4288.83 crores as on 31-3-2006 compared to that of the previous year i.e., 4021.12 crore. 6. The banks advances have increased to 2694.87 crore as on 31-3-2006 compared to that of the previous year i.e., 2289.3 crore. 7. Business per employee have increased to 247 lakhs as on 31-3-2006 compared to that of the previous year i.e., 215.97 lakhs. 8. Investment deposit ratios have increased to 33.38% compared to that of the previous year i.e.12.9%. 9. Net NPA have decreased to 74.79 crore as on 31-3-2006 compared to that of the previous year i.e., 86.85 crore. 10. Recovery of the bank have increased to 86.13 crore as on 31-3-2006 compared to that of the previous year i.e.73.14 crore. 11. Interest incomes to working fund have decreased to 7.73% as on 31-3-2006 compared to that of the previous year i.e., 8.14%. 12. Non interest income to working fund have been

decreased to 0.88% as on 31-3-2006 compared to that of the previous year 1.02%. 13. Operating profit to working fund have decreased to 0.78% as of 31-3-2006 compared to that of the previous year i.e.,1.74% 14. Returns on asset have decreased to 0.13% as on 31-3-2006 compared to that of the previous year i.e., 0.24%. 15. Profit per employee has decreased to 0.22 lakhs as on 31-3-2006 compared to that of the previous year i.e., 0.37%. 16. Percentage of NPA provision to net NPA have increased to 107.87% as on 31-32006 compared to that of the previous year i.e.,93.51%. 17. Net profit have decreased to 6.14 crore as on 31-03-2006 compared to that of the previous year i.e., 10.65 crore. 18. Write off have increased to 29.02 crore as on 31-3-2006 compared to that of the previous year i.e., 16.25 crore. 19. The bank is not able to declare any dividend as on 31-3-2006.

Suggestions
Following suggestions are formulated on the basis of my interaction with many knowledgeable persons including bank officers of various bank and the SBT Ltd.in particular. 1) A part from the usual credit appraisal methods employed by the banks the peculiar characteristics of the borrower should be taken into account. 2) Delay in sanctioning loans should be avoided. Delay may result in denying a favorable market opportunity to the borrower .This may ultimately result in the reduction of earning capacity of their business and non repayment of loans in addition to loss of good customers or borrowers.

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3) The purpose for which the loan is extended should be thoroughly defined and stayed by the borrower. Thus a good understanding of the purpose of loan by the bank will reduce the chance of slipping the loan in to NPA. 4) The financial status of the borrower i.e. credit worthiness should be analyzed before sanctioning the loan. 5) The future prospects of the projects for which loan is granted is to be taken in to consideration because the rapid change in the nature of product may result in loss of market and ultimately becoming NPA. 6) Measures should be taken for motivating employees for the purpose of attaining maximum reduction to NPAs. They may be provided with some monetary fund non monetary benefits in appropriate cases. The services of retired employees can also be utilized by providing them attractive remuneration. 7) Provisions of Securitisation Act may be used to fullest possible extent 8) Many international practices may be adopted in our banking history like setting up of Asset Management Companies to tackle NPAs, out of court restructuring which helps to minimize court intervention and speed up restructuring of potentially viable entities etc. to reduce the level of NPAs. 9) Good relationship should be maintained with borrowers by the lending manager. This is because they may not repay the loan because of some difference of opinion with the manager. As far as the bank is concerned this effects the repayment of loan to some extent. 10) The methods of recovery of NPA differ from the account to account. The measures should be taken based on peculiarities of the situation. At this juncture, officers who have a lot of experience and excellent record in NPA recovery may be identified and their services

can be utilized to the fullest extent. 11) Employees should be appointed on contract basis for the recovery of NPAs. 12) Credit camps should be arranged to have an interaction between the board and directors and defaulters to find out possible solution for the early settlement. 13) Regular training needs to be imparted to staff at appropriate levels on an ongoing basis.

Conclusion
Through significant progress has been made in NPA management by SBT much still needs to be done in areas such as credit risk management, identification and correction of NPA problem etc. in a time bound manner. By comparing the figures of net NPA and gross NPA of scheduled commercial bank and SBT, it is not up to the mark. In my point of view bank should introduce some of the practices followed internationally for NPA resolution which may be relevant in the Indian conditions. The bank is neither a topper nor a lower performer in NPA management. Yet it is trying to achieve the top position. I hope SBT would try hard to overcome the NPAs as well as other hindrances that stands as a hurdle for its growth and development and would become one of the most efficiently functioning bank in the whole nation. In short, lay a clear road map reducing the NPA level to zero units within is stipulated time frame is essential for the bank to meet the challenges of globalization and to achieve the profitability. It is hoped that this study may be helpful in evaluating suitable strategies for satisfactory resolution of the problem.

References
1. Annual Reports of State Bank of Travancore 2. Report of Indian Banks Association, 20052010 3. Thunman G.C., Corporate Banking, Services and Relationship, Uppsala University, Reprint series,(2009/30)

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4. Sen Kunal, Rajendra R Vaidya., The Process of Financial Liberalization in India, Oxford University Press, New Delhi(2009), p.19 5. Turnbull W.P, Corporate Attitudes towards Bank Services, in P.Turnbull and B.Lewis (ed);,The Marketing of Bank Services, MCB Publications Ltd, England, (2009)

6. RBI statistical report,2000-2010. 7. Jyotsna Sethi and Nishwan Bhatia,Elements of Banking and Insurance, Prentice Hall of India, New Delhi, 2009 8. K.C.Shekhar and Lekshmy Shekhar, Banking Theory and Practice, Vikas Publishing House Pvt.Ltd, New Delhi, 2009

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MSMEs IN HOSPITALITY SECTOR A STUDY ON PROBLEMS AND PROSPECTS OF RURAL TOURISM

Dr.Y.Lokeswara Choudary Asst.Professor, School of Management, SRM University, Kattankulathur-603203. S.Chitra & Malarvizhi Research Scholars, School of Management, SRM University, Chennai.

Introduction:
Hospitality is all about offering warmth to someone who looks for help at a strange or unfriendly place. It refers to the process of receiving and entertaining a guest with goodwill. Hospitality in the commercial context refers to the activity of hotels, restaurants, catering, inn, resorts or clubs who make a vocation of treating tourists. With unique efforts by government and all other stakeholders, including hotel owners, resort managers, tour and travel operators and employees who work in the sector, Indian hospitality industry has gained a level of acceptance world over. It has yet to go miles for recognition as a world leader of hospitality. Many take Indian hospitality service not for its quality of service but India being a cheap destination for leisure tourism. With unlimited tourism and untapped business prospects, in the coming years Indian hospitality is seeing green pastures of growth. Availability of qualified human resources and untapped geographical resources give great prospects to the hospitality industry. The number of tourists coming to India is growing year after year. Likewise, internal tourism is another area with great potentials. Today hospitality sector is one of the fastest growing sectors in India. It is expected to grow at the rate of 8% between 2007 and 2016. Many international hotels including Sheraton, Hyatt, Radisson, Meridien, Four Seasons Regent, and Marriott International are already established in the Indian markets and are still expanding. Some of the main features of the Indian hotel industry include the following: 1. The industry is more dependent on metropolitan cities as they account for 75% to 80% of the revenues, with Delhi and Mumbai being on top.

2. The average room rate (ARR) and occupancy rate (OC) are the two most critical factors that determine profitability. ARR depends on location, brand image, star rating, quality of facilities and services offered. The occupancy rate depends on other seasonal factors. 3. India is an ideal destination for tourists. Approximately 4.4 million tourists visit India every year. Thus the growth prospects are very high. 4. In the hotel sector, a number of multinationals have strengthened their presence. Players like Four Seasons are also likely to enter the Indian market in the near future. Moreover, Indian hotel chains are also expanding internationally. A combination of all these factors could result in a strong emergence of budget hotels, which could potentially lower the cost of travel and related costs.

The industry can be classified into four segments:

1. 5 Star and 5 Star Deluxe. These are mainly situated in the business districts of metro cities and cater to business travelers and foreign tourists. These are considered to be very expensive. These account for about 30% of the industry. 2. Heritage Hotels. These are characterized by less capital expenditure and greater affordability and include running hotels in palaces, castles, forts, hunting lodges, etc. 3. Budget Hotels: Budget hotels cater mainly to domestic travelers who favor reasonably priced accommodations with limited luxury. These are characterized by special seasonal offers and good services.

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1. Unclassified: These are low-priced motels spread throughout the country. A low-pricing policy is their only selling point. This segment accounts for about 19 % of the industry. Suitability matrix for the hospitality sector: Particulars 5 Star and Deluxe Heritage Hotels Budget Hotels Medical Tour Centres Eco-Tel Tour Spiritual Tourism Adventure Tourism Wild life Safari Ethnic Tourism Metro *** NS NS ** *** NS * NS * *** *** ** * NS * Urban ** *** Semi-Urban * ** *** *** *** *** *** ** ** Rural NS * *** *** *** *** *** *** ***

***- indicates Highly Suitable; **- Suitable; *- Average; NS-indicates Not suitable. Swot Analysis of Hospitality Sector Strengths: 1. Natural and cultural diversity: India has a rich cultural heritage. The unity in diversity tag attracts most tourists. The coastlines, sunny beaches, backwaters of Kerala, snow capped Himalayas and the quiescent lakes are incredible. 2. Demand-supply gap: Indian hotel industry is facing a mismatch between the demand and supply of rooms leading to higher room rates and occupancy levels. With the privilege of hosting Commonwealth Games 2010 there is more demand of rooms in five star hotels. This has led to the rapid expansion of the sector. 3. Government support: The government has realized the importance of tourism and has proposed a budget of Rs. 540 crore for the development of the industry. The priority is being given to the development of the infrastructure and of new tourist destinations and circuits. The Department of Tourism (DOT) has already started the Incredible India campaign for the promotion of tourism in India. 4. Increase in the market share: Indias share in international tourism and hospitality market is expected to increase over the long-term. New budget and star hotels are being established. Moreover, foreign hospitality players are heading towards Indian markets.

Weaknesses
1. Poor support infrastructure: Though the government is taking necessary steps, many more things need to be done to improve the infrastructure. In 2003, the total expenditure made in this regard was US $150 billion in China compared to US$ 21 billion in India. 2. Slow implementation: The lack of adequate

475

recognition for the tourism industry has been hampering its growth prospects. Whatever steps are being taken by the government are implemented at a slower pace. 3. Susceptible to political events: The internal security scenario and social unrest also hamper the foreign tourist arrival rates.

Opportunities
1.Rising income: Owing to the rise in income levels, Indians have more spare money to spend, which is expected to enhance leisure tourism. 2.Open sky benefits: With the open sky policy, the travel and tourism industry has seen an increase in business. Increased airline activity has stimulated demand and has helped improve the infrastructure. It has benefited both international and domestic travels.

tourism for many years to come. Apart from international tourists, the domestic tourist market, including business and leisure travelers, is also flourishing. This market is estimated at around 300 millions tourists per year. The industry also expects a boom in spiritual and medical tourism in the domestic sector at a growth rate of 10% to 15% over the next few years. Growth in tourism will definitely lead to a boom in hotels and restaurants. Though there is a shortage of rooms at present, it is going to be over soon enough, as top international players are heading towards India to establish themselves here. A steady growth of about 10% in new hotel projects is expected for the next few years

Emerging dimensions of tourism

Medical Tourism: Indian tourism is aiming to promote its allopathic treatment as a tourist attraction. Medical tourism tends to provide world-class treatment at low price and is gaining worldwide acceptance. Doctors and other medical experts are organizing health camps and other general awareness programs. The vast array of health care services includes ayurveda, yoga, naturopathy, meditation, spas and many more. Spiritual Tourism: India has a rich heritage of cultures and religions. Hinduism, Buddhism, Christianity, Islam, Jainism have lived here for centuries. There is so much mental pressure and disturbance all over the world that people are looking forward to find solace. India is being represented as a destination for spiritual tourism. Spiritual tourism includes all the religions, religious places associated with them, and emotional attachment and beliefs attached to these centers. Thus, through religious tourism there is a sincere effort to bring better understanding among various communities, nations and thus foster global unity. Rural Tourism: Real India is rural India. Almost 74% of the population is in rural areas. For the development of rural India, government is promoting rural tourism. Rural tourism showcases the rural life in India, the art, culture and heritage, the nature and wild life and various other aspects of rural India. The rural India has a great potential to attract foreign tourists. The rural tourism helps in improving lives of rural people and maintaining the quality of environment.

Threats
1. Fluctuations in international tourist arrivals: The total dependency on foreign tourists can be risky, as there are wide fluctuations in international tourism. Domestic tourism needs to be given equal importance and measures should be taken to promote it. 2. Increasing competition: Several international majors like the Four Seasons, Shangri-La and Aman Resorts are entering the Indian markets. Two other groups - the Carlson Group and the Marriott chain - are also looking forward to join this race. This will increase the competition for the existing Indian hotel majors.

Future of tourism and hospitality

The number of tourists visiting India is estimated to touch the figure of 4.4 million. With this huge figure, India is fast becoming the hottest tourist destination in the region. The visitors include business travelers, leisure travelers and persons of Indian origin with foreign passports. Growth is expected to continue over the next few years. It is being predicted that India may achieve an average growth of 12% per annum in

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Adventurous Tourism: India is an incredible destination for adventures. The snow capped Himalayas, erratic streams, safaris, etc all add to its natural glory. Water sports, elephant safari, mountaineering, skiing, gliding, trekking, river rafting, etc are breath-taking opportunities for adventurous people. Ladakh, the Garwal hills, the Himachal hills, Darjeeling, Goa, Lakshadweep, Andaman and Nicobar Islands, are some of the places that offer adventure tourism. MICE Tourism: MICE (meetings, incentives, conferences and exhibitions) is associated with business travelers. It caters to various forms of business meetings, international conferences and conventions, events and exhibitions. India is gaining pace to become an ideal MICE destination due to the flourishing business here. The MICE industry converts the annual business meetings and conferences into a glamorous and enjoyable event for the delegates and attendants. To develop business tourism in India, some renowned MICE centres are already established. The Ashok (New Delhi), Hyderabad International Convention Centre (Hyderabad), Le Meridien (Cochin), Delhi International Expo Centre (Noida) are some of them. Eco Tourism: People are visiting India to unravel the secrets of nature. Eco tourism (also known as nature tourism) relates to nature and its attractiveness so that the visitors experience it in its pristine settings. Eco tourism attracts domestic as well as international tourists towards the magnificent ancient cities, hill stations, remote villages, desert areas and wildlife centuries and parks in India. It is the fastest growing sector of Indian tourism comprising 40 to 60 per cent of all international tourism. Trends In Hospitality Sector: Low cost carriers: Travelers in general are more price sensitive to airfare than the are to hotel room rates. Often a low airfare will stimulate demand for travel even if hotel prices are increasing. LCCs are a good option for business travelers, as they have advantages like low costs, more options and connectivity. Budget hotels: More than 50 per cent of occupancy of a majority of hotels comes from the business

travel segment. The average room rate (ARR) realized from business travelers is normally higher than from leisure travelers. Heightened demand and the healthy occupancy rates have resulted in an increase in the number of budget hotels. Some of the new players entering into this category of hotels include Hometel, Kamfotel, Courtyard by Marriott, Country Inns & Suites, Ibis and Fairfield Inn. Service apartments: The concept of service apartments, though a recent phenomenon in India, is an established global concept. Villas in Spain, flats in the UK and apartment complexes in the US have all created a viable market for those who want more than just a room in a hotel. Service apartments are the latest trend in accommodation, offering the comfort and convenience of a home without the hassles of having to maintain or look after it. Ideally suited for medium-to-long staying guests, service apartments are a natural choice for corporate employees or expatriates relocating to a particular city, non-resident Indians visiting the country for long spells and foreigners visiting the city for long durations. Technology: Travel and technology have become inseparable. Technology is making its own advances with high-tech video conferencing facilities, web cameras and virtual reality mode of conferencing. On-line bookings, e-ticketing, Wi-Fi Internet connectivity, easy access to information, etc. are just a few areas where technology has completely changed the the way we travel. Loyalty travel:Today, airline-credit card company tie-ups have brought a whole range of benefits to the travelers. These include insurance cover, upgrades, free tickets, access to executive lounges, and a host of other goodies.

Challenges For Hospitality Industry 1. Shortage of skilled employees: One of the greatest challenges plaguing the hospitality

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industry is the unavailability of quality workforce in different skill levels. The hospitality industry has failed to retain good professionals. 2. Retaining quality workforce: Retention of the workforce through training and development in the hotel industry is a problem and attrition levels are too high. One of the reasons for this is unattractive wage packages. Though there is boom in the service sector, most of the hotel management graduates are joining other sectors like retail and aviation. 3. Shortage of rooms: The hotel industry is facing heavy shortage of rooms. It is estimated that the current requirement is of 1,50,000 rooms. Though the new investment plan would add 53,000 rooms by 2011, the shortage will still persist. 4. Intense competition and image of India: The industry is witnessing heightened competition with the arrival of new players, new products and new systems. The competition from neighboring countries and negative perceptions about Indian tourism product constrains the growth of tourism. The image of India as a country overrun by poverty, political instability, safety concerns and diseases also harms the tourism industry. 5. Customer expectations: As India is emerging as a destination on the global travel map, expectations of customers are rising. The companies have to focus on customer loyalty and repeat purchases.

6. Manual back-end: Though most reputed chains have IT enabled systems for property management, reservations, etc., almost all the data which actually make the company work are filled in manual log books or are simply not tracked. 7. Human resource development: Some of the services required in the tourism and hotel industries are highly personalized, and no amount of automation can substitute for personal service providers. India is focusing more on white collar jobs than blue collar jobs. The shortage of blue collar employees will pose various threats to the industry

Potential For Growth and Development:

In 2003-04 the hospitality industry contributed only 2% of the GDP. However, it is projected to grow at a rate of 8.8% between 2007-16, which would place India as the second-fastest growing tourism market in the world. This year the number of tourists visiting India is estimated to have touched the figure of 4.4 million. With this huge figure, India is becoming the hottest tourist destination. The arrival of foreign tourists has shown a compounded annual growth of 6 per cent over the past 10 years. Besides, travel and tourism is the second highest foreign exchange earner for India. Moreover, it is also estimated that the tourism sector will account for nearly 5.3 per cent of GDP and 5.4 per cent of total employment. Table 1.1: Showing contribution of Hospitality sector and potential :(in Percentages)

Particulars Outlook for 2006 Outlook for 2007-16*

GDP 7.80 6.60

Employment 1.40 1.00

Visitor Export 10.90 7.80

Personal T&T 6.90 6.70

Capital Investment 8.30 7.80

Govt. Expenditure 7.70 6.60

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Conclusion
To boost up the growth of tourism in India, the government has proposed to invest Rs. 520 crore in 2007-2008. Tourism in expected to grow further over the next few years due to the changes taking place on the demand and supply sides. The factors that will account for the further growth of tourism will include the following: 1. Change in standards of living. 2. 3. 4. 5. More disposable income; Better education; Long leisure time , Aging population

Owing to growth of tourism sector, infrastructure will improve, competition will increase, new products will come into markets and better services will be provided. Due to the rapid growth in tourism, the hotel industry is also booming. Many international players like Le Meridian and Accord are heading towards Indian markets to expand their business. With governments full support in developing infrastructure, increase in demand, open sky policies and increased competition, the hospitality industry is getting consolidated and has many more opportunities to grow further. Let us pray for the same to be happening at the earliest.

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A STUDY ON SUPPLY CHAIN OPERATIONAL PERFORMANCE OF COCONUT OIL INDUSTRY

S.Jacob Pratabaraj Research Scholar, Karunya University, (Assistant Profesor, SRM University, Chennai) J. Reeeves Wesley Professor, VIT University, Chennai

Introduction
Work on value chains stems from original work by Porter [1] who described the value system as the sum of value chains of suppliers, manufacturers, distributors and end customers, i.e. he used the phrase value chain to refer to the internal chain and the value system to be a string of these internal chains. Few authors have viewed supply chains more holistically as the total chain of exchange from original source of raw material, through the various firms involved in extracting and processing raw materials, manufacturing, assembling, distributing and retailing to ultimate end customers. Studies of large, high performing focal firm networks include those of Toyota[2,3], Nike[4], Benetton[5], Corning[4], Nissan[8], SweFork[6], McDonalds[7], and Apple[24,27]. The next section examines more closely the nature of the research to date on external supply chains.

chains have been examined in the body of work on industrial dynamics, stemming from original work by Forrester[15] and Burbidge[16]. Towill[17,18], Edghill et al.[19], Burbidge[20], Stalk and Hout[21] and Coyle[22] have applied systems control theory of amplification to supply chains, examining distortions of logistics information as it is interpreted, processed and passed up and down supply chains, providing substantial empirical support for theory in this area. The effect of amplification of information distortion the Forrester Effect raised awareness of the possible effect of position in the supply chain. The effect of position in the supply chain has been a subject of interest but of little empirical research attention beyond the work on industrial dynamics identified. In addition to demand volatility, highlighted by the Forrester Effect, Hayes and Wheelwright[23] identified implications of a manufacturers position in the supply chain relating to product range, asset intensity, profitability, technological change and scale and balance. They proposed that an upstream manufacturer is likely to

Research on external supply chains

Most of the work on value chains takes a strategic management perspective, examining the extent of vertical integration in the chains [7,9], with particular industrial case examinations in consumer electronics[10], drugs and health-care products[12], telecommunications and banking[13] and commodity chemicals and speciality chemicals[14]. However, much of this work is more anecdotal than empirically rigorous research. The logistical dynamics of supply

provide more standardized product lines using more automated, connected machinery than downstream manufacturers, mainly due to the requirement for economies of scale for upstream processes. These scale economies adversely affect profitability as demand takes a downturn upstream manufacturers are not able to reduce volume so they respond to falling demand by cutting prices. Hayes and Wheelwright proposed that manufacturers seeking to gain technological advantage are likely to integrate backwards in the supply chain

480

as upstream processes are more technology oriented than downstream. This causes chains to become out of balance, in that the output of one link in the chain will not necessarily be wholly consumed by the next link. However, little empirically supported evidence was offered to support these propositions on the implications of position in the chain. Empirical research by Harland[24] showed that upstream players in supply chains were more dissatisfied with supplier performance than downstream players. This dissatisfaction was significantly correlated to the amount of misperception between the parties in the relationships about what was being performed, i.e. there was greater misperception in upstream relationships and this was related to how dissatisfied customers were in those relationships. In addition to the lack of more behavioural oriented work on supply chains, there is little evidence of empirical research making international comparisons of supply chains. Therefore, this research sought to be both behavioural in its orientation and international in its field research. It was designed, therefore, to examine perceptions in supply chains about customers views of what they required in terms of operational performance, and to make international comparisons of these views. One of the objectives was to clarify the role of each player in the chain in terms of responsibility for providing operational performance.

following objectives: To identify important chains or routes to important customer groups; To identify the requirements of the end customers of those chains; To trace back the consequential requirements in each dyadic relationship in the chain; To identify each links role in satisfying the end customer. The field research was carried out in the coconut oil producers which supplies coconut for oil and other purpose. An example of an oil industry network is provided in Figure 2. As indicated in Figure 2, manufacturers of components typically supply the oil, as well as supplying coconut to market, or aftermarket. The aftermarket comprises various channels of distribution to a range of customers who make coir from the fibre and shell to put in fire or other by-product services. Additionally coconuts are also supplied to retailers for sale to the oil industry and to the market. Initial examination of different coconut production networks revealed some differences between (areas) territories. For example, the presence of certain types of oil market player varied; X did not have as many different types of service and factory outlet. There were other structural differences of note; for example, X showed evidence of stronger consortium purchasing groups than the Y. Therefore the empirical research had to be designed in such a way as to remove bias caused through structural differences between the two networks. Therefore, it was decided to examine four supply chains in the oil market, two in the X and two in Y, but to select supply chains which were similar in structure, containing similar types of players. Each supply chain contained a component manufacturer, an area distributor, a local distributor and a set of producers, as shown in Figure 3. The chains did not extend into coconut owners as the producers were the last link to make product differentiation decisions.

Methodology
The empirical research used field research with Semistructured interviews ( as farmers were also included) and methodology design used for the study encompasses various case studies and focused group interviews with different personnel from various companies and two companies fell under the purview of the study.

The empirical research used a methodology designed to analyse supply chains [25], which established the

481

Figure 1

Figure 2

482

Semi-structured interviews were used to identify what each customer in the chain required from its dyadic relationship. Questions were asked about requirements in terms of operations competitive priority dimensions of quality, delivery, service, range and price. These were initially broad, for example, what delivery speed do you require? and what quality do you require for usage? and then more specific, for example, what delivery speed do you require for urgent requirements when a customer is off the area without the any product in hand? and do you accept brands other than original brands for distribution? As the interviews were semistructured, requirements particular to each interviewee were explored in more detail. It was important to identify customer requirements in terms of their context; therefore a formal structure for interview would have been overly restrictive. Templates for each operational performance factor were used within which the replies were recorded. Additionally each interview was recorded and transcripts were used to supplement

the data gathered in the templates. Comparison of Y and X requirements Summary tables grouping the findings for each chain into the operations competitive priority dimension were formed; examples of the summary tables are provided below in Tables I and II. The contents of each box in the Table were derived from interviews with the customers of that link in the chain, e.g. the required quality role of a manufacturer was derived by asking the area distributors it supplied what they required from that manufacturer in terms of quality. Comparing Tables I and II, it can be seen that in certain operations priority dimensions, the required roles were quite different whereas in others they were similar. These differences and similarities are explored under the operational priority roles of quality, delivery, service, range and price/cost.

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Quality roles
In both of the example supply chains examined in Tables I and II, there were common requirements in all links for good quality known brands but the X local and area distributors were less concerned than their Y equivalents that OE specification products were supplied. There was demand in the X market for a range of cheaper, lower quality items to satisfy customers with cheaper or older product which was not indicated in the Y market. The interviews in the Y chains revealed a greater concern about the level of warranty returns than was evident in the Supply chains. A common underlying requirement that is a feature of distress purchase distribution chains such as these is that the end customers require very quick delivery speed, sometimes as quick as 5-10 minute delivery(Nearby market). However, the entire supply chain does not operate to the same degree of urgency. The problems of the Y area distributor were evident in that it was sandwiched between component manufacturers quoting up to six months lead time for oil supply, and local distributors who required 95 per cent plus availability and weekly deliveries. On further investigation of why the manufacturers were so slow in their delivery speed, it

transpired that this was because of their focus on supply to the industry[26]. The oil manufacturer had a schizophrenic role of trying to satisfy two very different markets in terms of operational priorities. Despite the high margins made on aftermarket business, they still appeared to be treating aftermarket area distributors as less important customers than the large oil distributors.

Service roles
This category of questions related to requirements for sales order processing, technical support, interpersonal relations and other services. The cultural differences of business relationships between the two territories were very evident during the interviews. Stark differences in requirements occurred at the end of the supply chain; the Y buyers did not require any interpersonal for them, possibly from a competitor. However, many of the Y buyers would ring round local distributors until they found one with the distributors stock, thereby performing their own sourcing service. This again highlighted some of the business cultural differences between the territories. Relationships with the local distributor and instead demanded a more distant, though efficient relationship. By contrast the majority of X buyers wanted trust, friendship, intimate relationships and loy-

484

alty. These differences were also evident in some of the upstream links. A further interesting difference was that if a X local distributor did not have a oil in stock, the oil distributors expected them to source it for them, possibly from a competitor. However, many of the Y distributors would ring round local distributors until they found one with the oil stock, thereby performing their own oil sourcing service. This again highlighted some of the business cultural differences between the territories.

aspects of product quality, such as durability, ease of usage and reliability are also largely the responsibility of the oil manufacturer, although product quality of some items such as coconut, coopra and fibre may be impaired through poor storage further down the supply chain. However, distributors receive quick delivery and good service largely through the performance of the local distributor supplying them. For example, the input to the manufacturer is delivery speed of minutes or hours, which is the output of the local distributor. The input to the local distributor is delivery speed of once a week. Therefore, the role or value added by the local distributor is to buffer the supply chain requirement for very fast delivery by holding adequate inventory that will suffice until their next weekly delivery. Range availability is determined more by the area distributor who typically offers an all-makes programme. This involves those purchasing parts from many coconut oil manufacturers. Interestingly, recommended prices and discounts from these are typically set by the area distributor who, therefore, largely determines what a manufacturer and a oil manufacturer owner pays for the part in the final bill. Figure 3 shows, using shaded areas, where the operational performance transformation, or value add, occurs in a supply chain. This can provide customers with particular operational performance; this duty to end customers can be assigned to each link in the chain and performance of those duties can be measured.

Implications of position in the supply chain

The role of the operation varies according to its position in the supply chain. The total set of operational performance requirements of the end customers was traced back up the supply chain using input/output analysis of each link in order to rationalize why each link required what they did from the next link up in the supply chain. Some links input and output the same amount of an operational variable, thereby not adding any value to the chain on that dimension. For example, there is no added quality value at a local distributor, other than ensuring that oil are kept in a reasonable state while in his or her care. The requirement for product quality at the local distributor is therefore largely the same as that at the initial. Distributors in aftermarket chains do not usually inspect the quality of oil; therefore product failure is usually caused by failure of the oil manufacturer. Other

Figure 3 485

Conclusions

The managerial implications of this research can be summarized at two levels: (1) the implications for managing individual chains; and (2) generic implications relating to position in the supply chain. There are managerial implications for firms and chains operating in different territories in this research demonstrates differences in requirements between territories. These differences may be due to a set of territory level variables, including cultural, societal and economic factors, a set of industry level variables and stage of development in each territory, and also a set of firm level variables, including size of firm and type of customers in each territory. The causal links of these system level variables were not explored here. However, this research does indicate appropriate differences between territories. Therefore research in firms attempting to explore beyond their firm boundary are advised to explore these differences prior decisions relating to the design of processes in the supply chain. The different operational requirements are served by the same design and style of operation hence, a possible solution to focus and, possibly, segment different chains by operational criteria is effective. Generic implications relating to position in the chain the firms and dyadic relationships, or quasi organizations, differed in operational terms depending on their position in the supply chain. Upstream operations tended to provide a harder, more tangible package to customers than the downstream operations where intangible service elements. The interaction and contact degree of customer participation was a more significant aspect of the operation in downstream relationships than in those upstream. It can be concluded that each firm and each organization has its own role to play in the supply chain. The satisfaction of the customer depends not only on the performance of the firm with which it has a relationship, but also on the performance of the other firms and organizations in the supply chain. As supply chains become leaner, containing less operational slack, there is a reduced ability for downstream operations to buffer. Therefore, the move towards supply makes the identification of role and the measurement of performance in terms of contribution to customer satisfaction more important. This empirical research has identified the importance of

position in the supply chain and also international factors in the role that operations have to perform. More research is required in exploring how roles of chain players differ between different types of supply chains in different industry and territory contexts. To do this, conceptual characterization of supply chain types is required in future research. *Note : The manufactures name is not revealed as per their terms and conditions.

Reference

1 Porter, M.E., Competitive Strategy, Free Press,New York, NY, 1980. 2 Womack, J.P., Jones, D.T. and Roos, D., TheMachine that Changed the World, MacmillanInternational, New York, NY, 1990. 3 Fruin, M., The Japanese Enterprise System,Clarendon Press, Oxford, 1992. 4 Lorenzoni, G. and Baden-Fuller, C., Creating a strategic centre to manage a web of partners, working paper, School of Management, University of Bath. 5 Jarillo, J.C. and Stevenson, H.H., Co-operative strategies: the payoffs and the pitfalls, Long Range Planning, Vol. 24 No. 1, 1991. 6 Dubios, A., Organizing Industrial Activities: An Analytical Framework, Department of Industrial Marketing, Chalmers University of Technology, Goteborg, Sweden. 7 Jarillo, J.C., Strategic Networks: Creating the Borderless Organisation, Butterworth Heinemann, Oxford, 1993. 8 Nishiguchi, T., Strategic Industrial Purchasing, Oxford University Press, New York, NY, 1994. 9 Kogut, B., Designing global strategies: comparative and competitive value added chains, Sloan Management Review, Vol. 26 No. 4, 1985,pp. 1528. 10 Ebeling, H. and Doorley, L., A strategic approach to acquisitions, Journal of Business Strategy, 3, 1983, pp. 44-55. 11 Ebeling, H. and Doorley, L., A strategic approach to acquisitions, Journal of Business Strategy, 3, 1983, pp. 44-55.

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TOTAL QUALITY MANAGEMENT IN SINGLE SAMPLING FOR SEQUENTIALLY INSPECTED MANUFACTURING PROCESSES THAT EXHIBIT MARKOVIAN CHARACTER
Dr. V.NAGAJOTHI, SRM B SCHOOL, SRM University, Vadapalani,Chennai Krishnakumar, Research Scholar, SRM University

1.A Sequnential Sampling Plan For TQM In several situations Walds (Inverse Normal or Inverse Gaussian) distribution is used. It is applied in the theory of generalized linear models and accelerated life testing Edgeman (1989a, 1989b) applied this distribution to the theory of control charts. Edgeman and Salzberg (1991) have also developed a sequential sampling plan for the mean value of Walds distribution. Walds (Inverse Normal) distribution has the probability density function (pdf) with mean and variance 33/l is given by f (x ; m , l) = (l / 2px ) exp{- l (z - m) (2xm ) }
3 2 2 -1

a sequential probability ratio plan, as it leads to considerable saving in the amount of inspection. Let Z = loge { f( X; ; 1/ f( X; ; 0) } Then Z = (0.5) log e( 1/ 0) 2 X ) -1 }
Let / (1 B=) and A = (1 - ) / so that, 0 < B < 1 < A.

-{ (X-)2 ( 1 - 0 ) (2 (1.1)

where each of x, m and l are positive and l is the shape parameter as well as a reciprocal measure of dispersion. Occasionally, the quality characteristic of a material that is of interest is not its average value but the variability around the average. Here, a sampling inspection plan for the scale parameter l is suggested. We will be concerned with a decrease in the process level of l from l0 to a level l1 and decide to tes t the null hypothesis H0: l = l0 against the alternative hypothesis H1: l = l1 (l1 < l0) at level a. Further we are willing to allow a shift from l0 to l1 to go undetected with probability b. We may recall that a and b are the producers risk and the consumers risk respectively. We now proceed to construct a sequential plan based on the sequential probability ratio test (SPRT) of strength (a, b) originally proposed by Wald[7] for testing H0 : l = l0 versus H1 : l = l1(l1 < l0). When sequential sampling is practicable it may be profitable to use

After each observation is obtainednthe SPRT will decide about H0 and accept the lot if Zi B. Similarly, n i=1 SPRT will conclude H1 and reject the lot if Zi A. n i=1 If B < Zi < A, then sampling continues and a lot i=1 disposition decision will be postponed.

After some simplification we obtain the following results. Accept the lot if Y h0 + Sn. Reject the lot if Y h1 + Sn. Continue Sampling if
h1 ) +( Sn < Y < h 0 + Sn , where Y =

(x
i=1

2 -1 x 2 )i -,1 h = 0 ( - 0 ) 1 log B, e

(1.2)

-1 -1 h1 - =( ) 0 log1 A and e S = ( - ) 0 log 1 ( / e ). 0

2. A Refined Sequential Sampling Plan: Sequential sampling involves deciding between two hypotheses (i.e., the acceptable and the unacceptable fraction defectives denoted by p1 and p2 respectively). The decision is made by using the Sequential Probability Ratio Test (SPRT) developed by Wald [7]. Sequential charts based on the SPRT permit deciding after each

487

unit is inspected whether to accept or reject the p1 hypothesis or to continue sampling. To set up a chart using Connollys[2] sequential approach to continuous sampling, the following quantities need to be specified: the random sampling frequency (1/g), the producers risk ( ) and consumers risk ( ) as well as the acceptable fraction of non-defective units ( p1 ) and unacceptable fraction of defective units ( p 2 ). This plan differs from the conventional SPRT in which it specifies a re-qualification number (r) in the event of poor quality and also allows an Average Outgoing Quality Linit(AOQL )to be determined. The formula used for calculating r and AOQL were developed by Albrecht [1] and shown in Connolly [2]. The following is the procedure for the Sequential Approach to Continuous Sampling: 1. Start sampling by inspecting every gth unit and begin to plot the results on the sequential chart. Continue sampling until either the chart crosses the line of acceptance (La) or the line of rejection (Lr). If the chart crosses La, proceed to paragraph 2. If the chart crosses Lr, proceed to paragraph 3.

p 2 ) and use the computer to list the equations for the

line of rejection and the line of acceptance to construct the sequential chart. Also, the values of r and AOQL are listed by following the above procedure. Then the sequential sampling tables are listed to show partially the cumulative number of defectives for the cumulative sample number corresponding to the sequential chart. 2.1 AN EXAMPLE: For example, let us start by inspecting every 10 unit (i.e., the sampling frequency is 1/10) and the
th

results are plotted on the corresponding sequential chart. Sampling continues until the plot crosses either Lr or La. For example, if no defective unit is found in the first 100 units sampled, the hypothesis (p1 = 0.001) is accepted and the quality of units is considered to be acceptable. If one defective unit is found in the first 50 units sampled, the hypothesis is rejected (i.e., the quality of units of considered to be unacceptable) and r = 250 units have to be inspected 100% and found to be free of defectives before recommencing sampling at the specified rate (i.e., every 10th unit). If one defective unit is found after sampling 50 units, sampling continues. If no other defective unit is found after sampling 250 units, the hypothesis is accepted. If a second defective unit is found before sampling 180 units, the hypothesis is rejected. REMARK - 2.1: This procedure is useful to rapidly designing a sampling inspection plan based on a sequential approach to continuous sampling in a process control application. The plan measures the AOQL and specifies a re-qualification number r. When a serious quality problem is found with a known or unknown cause, quickly implemented sampling inspection can protect the consumer. 3. A REFINED SSP FOR SEQUENTIALLY INSPECTED MARKOVIAN MANUFACTURING PROCESSES FOR TQM

2. If La is crossed, the hypothesis for p1 is accepted with probability at least (1- ) and the quality of the units is considered to be acceptable. Proceed to paragraph 1 to start a new sequential chart. 3. If Lr is crossed, the hypothesis for p1 is rejected. The hypothesis for p 2 is accepted with probability at least (1 - ) and the quality of the units is considered to be unacceptable. Sampling is stopped and proceed to paragraph 4. 4. In the production line, a success run of length r of conforming units should be observed before inspecting every gth unit under fractional sampling. Then proceed to paragraph 1. One may develop a computer program and , p1 and p2 whereby enter the quantities for g-1, , the value for p1 constraints the value for p2 (i.e., p1 <

488

Dodges [3] Single sampling plans used for lot acceptance have been modified for use in monitoring production processes which exhibit Markov dependence in quality attributes. An augmented Markov Chain (MC) model is employed for the determination of OC, AOQ and ASN. Often in a production process, the quality of units is serially dependent. With this in mind, a simple sequential inspection procedure is proposed which has the additional time saving features of sequential sampling plans. The inspection procedure can also be used for acceptance sampling after production if the units are serially identifiable. We assume that the quality of an item is an attribute which can be classified as defective or non-defective with the Markov dependence structure as follows. The continuously produced units are indexed by n. Let the sequence of random variables {X n , n 1} be defined by

distribution for (3.1). The parameter (0, 2) may be viewed as the dependence parameter of the process. The permanent is the serial correlation coefficient of the MC {X n , n 0} provided the stationary distribution is taken as the initial distribution. The k-step transition probabilities for (4.1) are given by pk

p -p q p k q1 p + -q p (3.4)
~

(k) = k (p ij ) , =

(k)

(See Feller (1968)), so that the departure of p ij s from the corresponding Bernoulli probabilities with the same incoming quality p is measured by . In particular, = 0 gives the Bernoulli model (i.e., the model with statistical control). The parameter used in specifying it is the long run fraction of defective and is the serial correlation coefficient or permanent of the MC. After allowing some time for the process to attain stability, inspect a maximum of n (> 2) items sequentially from a production run. If, at any time, the total number of defective units exceeds d (> 0), the production is stopped for re-adjustment. Otherwise, the process is continued until the run is complete. This procedure is repeated for every production run. We assume that the sizes are large compared to n so that sufficient gap is maintained between the termination of one inspection and the commencement of the next. Further, we assume that after re-adjustment the process returns to stability. In the acceptance sampling vocabulary, a single production run is a lot, stopping the process is the rejection of the lot and continuing the process is acceptance. Let {Xn, n > 0} be a two state MC with states 0 and 1 with transition probabilities as defined in (3.1) along with the initial state X0. We know that , the serial correlation coefficient of the MC is 1- ( + ). Corresponding to p = / ( + ), the fraction of defectives in a production process with sequential units independent of each other which may be called an independent production process in a Markov dependent process, we may identify , the probability that a unit

X n = 0 if the nth unit produced is non - defective

= 1 otherwise.

P00P= 1 , =-, P 01= and 10 P = 1 - 11

(3.1) where (0, 1), (0, 1). It is convenient to introduce the following reparametrisation of (3.1)

p= / ( + ), q = (1 - p)

=+ and = 1 -

(3.2) so that = p and = q . Thus, we see that max {0, (1 1 / )} < p < min (1 / , 1}
or/ (1 max - )} {0, <p - < min { 1, 1 / (1 )}.

(3.3) The parameter p is the long-run proportion of defective units. In fact, (p, q) is the stationary

489

is defective in the long run. Thus a Markov dependent production process can be identified by two parameters, the fraction of defectives p = ( + ) -1 and the serial correlation coefficient with the admissible range for p as given in (3.3). Using p and the transition probabilities can be represented as

structure of the matrix. We now give the procedures for the determination of probabilities of acceptance and rejection, average outgoing quality and the average sample size.
th Let ij,s m be the (ij, sm) element of the k power of the transition probability matrix given in (5.4.6). Using the properties of MCs, the probability of rejection of the process with a sample size < k + 1 is obtained from the last elements of the first two rows of k. Note that for acceptance (continuing production), all n items will have to be inspected whereas rejection can occur earlier when the number of defectives exceed d.

(k)

p 00 = 1-p (1- ), p 01 = p (1- ), p10 = (1-p) (1- ) and p11 = p+(1-p) . (3.5)
Since inspection is to begin after the process has attained stability. We may assume the initial state distribution to be [(1-p), p]. The plan calls for inspecting a maximum of n ( > 2) items sequentially and stopping when defectives > d ( > 0). For the probability of acceptance (of the operating characteristic curve) therefore, we need the probability of finding d or less defectives in a sample of n Markov dependent observations. We know proceed to determine the distribution of the number of successes in a sequence of dependent trials as follows: Define a MC with the state vector (of two elements): cumulative number of defectives, present state. Thus, when d defectives are allowed, the states are {00, 11, 10, 21, 20, . . . . d1, d0, (d + 1, 1)}. The state (d + 1, 1) is absorbing and the production will be stopped (rejected) if the process enters this state. Note that the total number of states is 2d + 2. Then, transition probability matrix for this process is given by = [ p00,00 =1- , p00,11 = p11,10 = p1121 =1- , p10,10= 1- , p10,21= P21,20 = p21,31=1- pd1 d0 = pd1,d+1,1 =1- , pd0,d0=1- pd0,d+1,1 = and pd+1, 1 d+1 +1 =1] (3.6)

Using the initial distribution [(1-p), p], the (n) probability of acceptance Pa (p) when n items are inspected is obtained as
(n) (n-1) P = (1+ p) p 00,sm a s,md+1,1 (n -1) 11,sm s,md+1,1

(3.7)

Consequently

Pr (p) = Pa

(e)

( e 1 )

(p) Pa (p)

(e)

Since the production is stopped (lot rejected) whenever the number of defectives reaches d +1, ASN is of interest. This can be obtained as
ASN = P e
n (e) r

e = d +1

(3.8)

( p) + n P

(n) a

( p) = ( d + 1)Pa(d) (p) +

e = d +1

n 1

(e) a

( p)

REMARK - 3.1: Since inspection is to begin after the process has attained stability. We may assume the initial state distribution to be [(1-p), p]. The plan calls for inspecting a maximum of n ( > 2) items sequentially with a lot size N and stopping when defectives > d ( > 0). For the probability of acceptance (of the operating characteristic curve) therefore, we need the probability of finding d or less defectives in a sample of n observations which have Markovian character. It may be remarked further that, for a given plan and a fraction of defectives p, the acceptance probability

This transition probability matrix plays a key role in the determination of the operating characteristics of the inspection plan. Probabilities of power of which can be either determined by simple matrix multiplication or explicitly on account of the triangular

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is convex in . It is remarked further that the larger the sample size, the better will be the discriminating power of the plan. The smaller the value of , the better will be the discriminating power of the plan. This property will be for different acceptance number also. Note that when is negative, the range of admissible value of p will be restricted. This property is preserved for different acceptance numbers also. For some range of value of p, negative values result

likely to manage and achieve considerable gain over the empirical independence rule if = ( + ) is near 0 or 2 and is not likely to lose much if ( + ) is near 1 (Bernoullian Process). REFERENCES [1] ALBRECHT, et al. (1955): Continuous Sampling at Minneapolis - Honeywell, Industrial Quality Control, Vol. 12, No. 3, pp. 4 - 9. [2] CONNOLLY, C. (1991): A sequential approach to continuous Sampling, Quality Engineering, Vol. 3(4). [3] DODGE, H.F. (1969): Notes on the Evolution of Acceptance Sampling Plans, Part I, Journal of Quality Technology, Vol. 1, No. 2, pp. 77 - 88. [4] EDGEMAN, R.L. (1989a): Inverse Gaussian Control Charts. Australian Journal of Statistics Vol. 31, pp. 78 - 84. [5] EDGEMAN, R.L. (1989b): Control of Inverse Gaussian Processes, Quality Engineering Vol. 2, pp. 265 - 270. [6] EDGEMAN, R.L. and SALZBERG (1991): A sequential sampling plan for the Inverse Gaussian Mean, Statistical Papers Vol. 32, pp. 45 - 53. [7] WALD, A. (1947): Sequential Analysis, John Wiley, New York.

in smaller average sample sizes. When is positive, whether sample size is depends on the range of values. For smaller p values, independent production process gives larger sample sizes whereas for larger p values, it gives smaller sample sizes. 4. SUGGESTIONS TO TQM CIRCLE AND QUALITY ASSURANCE PRACTITIONERS: When the production is continuous and the process is not under statistical control (i.e., p is constant) and at the same time it does not follow a scheme of total control it is pointed out strongly to TQM circle or the quality assurance practitioners that the Markovian model is more realistic than the Bernoullian model to manage the continuously manufactured production processes It is suggested that when one carries out the data analysis to assess he validity of the Markovian model, estimate of the serial correlation coefficient would be automatically available. If and are unknown and no reliable estimates are available, the two step movement empirical Bayes rule may still

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IMPACT OF EMOTIONAL INTELLIGENCE (EI) ON INDIVIDUAL JOB PERFORMANCE:AN EMPERICAL STUDY AT SELECTIVE BPO
Dr. M. Ramakrishnan Vice President (Hr), Loyaltextile Mills Limited Group Of Companies, Chennai
INTRODUCTION The rapid, far reaching and continuing changes of recent years have brought about a situation where understanding emotional intelligence of individuals is of prime importance in work setting. Organizational structures have shifted radically to the point where individual Professional managers have far greater autonomy, responsibility and accountability. Organizations seek to reduce central control and to empower individual employees. Those employees combine in teams that are frequently cross-functional and project based. The capacity of employees to cope with the scale and speed of these changes has become a major issue and the literature on emotional intelligence impacting work place performance bears testimony to this. DEVELOPMENT OF EI CONCEPT The term emotional intelligence appears to have originated with Charles Darwin in 1872. He theorized about a broader emotional social intelligence necessary for human survival and adaptation. Research on emotional intelligence has been extensive since its introduction close to twenty-five years. In the year 1985, Wayne Leon Payne in his doctoral dissertation included term Emotional Intelligence. The study of Emotional Intelligence has evolved from the works of theorist such as Garden (1983) and Williams and Sternberg (1988) proposed broader approach to understanding intelligence. Mayer, Salovery (1990) coined the term Emotional Intelligence and included Gardners interpersonal components in this construct. In 1990, Goleman authored a book focusing on emotional literacy. Well before release of his work, he sought permission of Mayer and Salovery to use the term emotional intelligence in his work.. It appears from the article of Annie Paul that the permission was granted with a condition that the origin of term should specifically be disclosed in the book. Goleman (1995) released his book titled Emotional Intelligence covering four major skills viz Self awareness, Self management, Social awareness and Relationship management. Goleman was severally criticized by Mayer and Salovery for including traits as a part of its Emotional Intelligence Model. However, Goleman (1996, 1998, and 2004) popularized the concept of Emotional Intelligence in the corporate business world by describing its importance as an ingredient for successful business careers and as a crucial component for effective individual and group Job performance. MODELS OF EI An extensive literature review reveals that the construct has five common facets viz., 1) Emotional Self Awareness 2) Emotional Awareness of others 3) Emotional Reasoning 4) Emotional Self management 5) Emotional management of others Mayer and Salovey (1990) proposed three factor model and the said model constituted by three variables viz, 1) Emotional Recognition and Expression 2) Utilization of emotion 3) Emotional management Two factor variance model emerged on the basis of methods of measuring EI either by using self report measures or ability being measured by appraiser. Among three factor models of EI, Dulip Singh (Sensitivity, Maturity, Competency), Reuven Baron (Intrapersonal, Inter-Personal adaptability). Ester Oriole (Sense, Understand, aptly) are worth reviewing.

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EI and JOB PERFORMANCE Murphy (1990) defined performance as the set of behavior that are relevant to the goals of the organization or the organizational unit in which a person works. Mohr man (1989) considers as engaging in behavior in a situation to achieve results. It is well settled in literature that behavior is caused by several factors. One of the key factors causing behaviors is emotion that emerges in each work situation. Emotions are responses to the world around us and they are created by the combination of thoughts, feeling and actions. Watlan (2000) acknowledged that EI accounts for 85% of outstanding performance in top leaders in the Industry and EI not IQ- predicts top performance. Caroll (1993) described intelligence as a single general mental ability factor, allow for existence of more specific ability factor. Intelligence may be memory dependent (crystallized) or situation dependent (fluid). The capacity to manage emotion is construed as a skill. Mayer and solvey (1997) expressed hierarchy of emotion in four branches. a) Perceive emotions in one self and others accurately. b) Use emotions in one self and others accurately. c) Understand emotion, emotional language and the signals conveyed by emotions. d) Manage emotion so as to attain specific goals. Review of works of Mayer solvey, Murphy and Watkins confirms the existence of stronger association between EI and Job performance and by scholars using different fields, analytical methods to conclude relationship between EI and Job performance.

Boyatzirs (1999) studied the relationship between EI scores with that of profits delivered in a multinational firm. He found that those partners who scored above the medians on 9 or more of the 20 competencies achieved $ 1.2 millions more profit than others.

Spencer L.M (1997) conducted study in 15 global companies using 300 top level executives as samples with a view to find out influence of emotional competencies on performance. He found that six emotional competencies (Influence, team leadership, Organizational awareness, self-confidence, Achievement dive and leadership) made distinction between star performer and average performer.

Goleman (1998) concluded on this basis of competency research conducted over 200 companies that about 1/3 of performance difference is due to technical and cognitive ability while 2/3 is due to emotional competence. This Conclusion is further confirmed by several studies including Hay MC Ber research and Innovation group. (1997) and MC Cleland (1999).

REVIEW OF LITERATURE - Richard Handley and Reuven Bar-on (1998) reported that U.S.Airforce improved the success rates in recruiting right candidates by three fourth through usage of EI as one of the tools of recruitment.

Mathur D.M (2000) confirmed that usage of EQ critical for induction of officers in three Defense services of India for more than five decades and further added that happenings in the Kargil Conflict presented fine example and vindicate the emphasis put by armed forces on EQ.

Krishnamurthy R (2008) studies indicate that although IQ levels of Indian youth are on the rise, EI is on the decline. Youth are often found lonely, depressed, angry, nervous and inclined to worry and impassive and aggressive. He concurs with Chermiss

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and Goleman (1998) that EI can be improved through structured training. Foregoing notable research work reveals that there is a stronger business case to study EI and its impact on the job performance of the individuals. Further it is deduced from literature review that there is neglected context of investigation especially sun raise Industries like IT,ITES, BPO and KPO. Moreover, this is rationale behind for the present research work as well. OBJECTIVES OF THE STUDY The literature review and rationale of the study highlights the relationship that might exist between the respondents perception of the Emotional intelligence facets and individual job performance. In order to investigate the patterns of relationship between these variables, the present study was conducted with the following objectives: 1. To study the impact of selective Demographical variables on Emotional Intelligence To examine the relationship between Emotional Intelligence and individual job performance

variables have any effects organizational performance?

on

2. What is an impact of Emotional Intelligence on individual job performance? HYPOTHESES The second component of research design is the set of propositions relating to the research problems. To elaborate, Yin (1994) identified two general analytical strategies that can be employed in developing propositions: 1. The use of theoretical proposition 2. Developing and using case descriptions. According to Yin (1994) the first strategy is the more commonly used and preferred, wherein, one or more propositions are put forward which encapsulate the objectives of research and influence the data collection. The second strategy relies on the development of a descriptive frame work from the case research. Yin (1994) recommended the use of propositions/hypothesis as an analytic lens that enables the research more clearly states the problem at hand and thus facilitates the development of research design. Applying the foregoing logic, from research questions and based on the review of literature, the hypotheses were formulated. Based on literature reviewed, the objectives and research questions set out for this study, the following hypotheses were formulated. Ha 1.0 The dimensions of Emotional Intelligence will serve as significant predictors and explain variance in the individual job performance. Ha 2.0 There is no significant perceptual differences that exist with respect to Emotional Intelligence on the basis of selective demographic variables. SAMPLE It is the normal practice that if a population from which a sample is to be drawn does not constitute

2.

RESEARCH DESIGN Research design includes plans that guide the arrangement of condition and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure (Sellitz et.al, (1965). It is the design and planned nature of observations that distinguishes research from other forms of observation. The researcher has no concrete guidelines from the existing research works on the design to be adopted to undertake the present study. Hence this study adopted exploratory research design. RESEARCH QUESTIONS The first component of a practical research design is the statement of the research questions. The basic question that this research sought to address was: 1. Whether a set of selective demographic

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homogeneous group, stratified random sampling technique is generally applied in order to obtain a representative sample. The present study being the nature of finding relationship between the impact of Emotional Intelligence and individual job performance, it was decided to treat all four locations as strata. The units are individually more homogeneous than the total population. The method of proportional allocation was followed to get the desired size of the sample from each stratum and Simple random sampling was used for selection of study items from each stratum. PROCEDURE Out of 338 intended respondents, only 326 of them returned the filled-in questionnaire. A caption in each page of questionnaire doesnt leave any item blank enabled to get responses for all the items. Actual numbers of respondents used for this study was 326. DEFINITIONS OF STUDY VARIABLES As far as definition of Emotional Intelligence Is concerned, Daniel Goleman definition is adopted, since the study followed mixed model of Emotional Intelligence. Emotional intelligence is the capacity for recognizing our own feelings and those of others, for motivating ourselves, and for managing emotions well in ourselves and in our relationships. Emotional intelligence describes abilities distinct from, but complementary to academic intelligence. Job Performance means and includes performance appraisal data as furnished by the study units. MEASUREMENT The existing research work shows that there are different measures adopted by Scholars. Some measures of the construct were based on self report ( Schutte etal.,1998), whereas others attempted to develop the scale with correct and incorrect responses (Mayer etal., 1999).Even Emotional Intelligence model is same, different approaches to measure the construct would lead to different results. Mayers scale of

MSCEIT,Bar-on EQi (133 items) and Petridess scale (153items) and Golemans scale of ECI have all been in usage for measuring Emotional Intelligence. For measuring Emotional intelligence, this study has adopted its own scale using six different facets/ dimensions. The psychometric properties, reliability, and validity were established using Pilot study data. While designing questionnaire, the work face validity is kept in perspective. As regard Job performance, performance appraisal data from the secondary sources were collected. The questionnaire response format was used as a 5 point Likert type scale ( 1 = strongly disagree 2 = Disagree 3 = Neither agree Nor disagree 4 = agree 5 = strongly agree ). The responses were slightly modified in line with words like effective, importance depending upon the nature of responses solicited from the respondents. A consistent response format of 1 and 2 being negative ( bottom box) and 4and 5 being positive (Top box ) was used for all sections of the questionnaire to reduce respondent confusion, yet provide adequate variability for the various scales as explained. RESULTS AND DISCUSSION Factor analysis using PCA with varimax methods was performed on all the 40 items on EI.Out of 40 items, thirty four items had loadings above 0.40 and emerged as six factors with eigen value greater than one. All these factors were named as Self Awareness, Expression, Awareness of others, Reasoning, Self Mangement and management of others. Internal consistency of a set of items refers to homogeneity of the items in a particular scale. Internal consistency is estimated using a reliability coefficient called Cronbaths alpha. All the six facets had cronbatch alpha value exceeding 0.60 and thereby the reliability and validity of instrument were ensured.

495

The profile of the respondents was revealed by Table I and descriptive statistics for the study variable was presented in Table II.Table III exhibits the result of ANOVA for significant difference in EI based on demographic variables like hierarchy levels, tenure, age, teamsize and location. It is noted from the table that there is significant difference in EI on the basis of demographic variable like tenure, age and team size. These demographic variables showed significant differences at p= < 0.01.It is interesting to note that there was no significant perceptual differences exist with other demographic variables. This makes us to infer that individual specific issues like tenure, age and team size have a greater influence on the state of emotional intelligence. Table IV explains the correlation between EI and individual job performance. All the six facets of EI were significantly correlated with job performance (p= <0.01). Emotion Intelligence facets like Self awareness(r = 0.595 <0.01), Awareness of others (r = 0.0480 <0.01), Self management ( r = 0.766 <0.01) and Management of others (r = 0.452 <0.01) have exhibited higher order correlation with job performance. The results, therefore, support hypothesis 1 that EI positively predicts and explains variance in individual performance. Table V shows linear regression analysis of EI facets on job performance. For the purpose of finer understanding, dependent variable Job performance is stratified in to three broader categories on the basis of performance appraisal analysis data provided by study units. The beta values of all EI facets with job performance levels were found significantly associated. Out of total variance in performance levels, six facets of EI explained 13.7% to 37.1% as predictor variable of job performance. On the basis of R square (p = < 0.01), hypothesis one was accepted and accordingly it is established that EI facets had significant predictive ability as criterion variable in relation to job performance. Findings emerged in this study are in line with analysis of research reported by Jennings and Palmer (2007).In

their study, they found scores of emotional intelligence related to job performance of Pharmaceutical sales professionals.Furthe this study findings show that the EI as predictor explained one-forth or one-third variance in job performance. It should be pertinent to mention that the area of EI has attracted a non-negligible amount of criticism in academic circles. EI should not be viewed as capable of singly predicting success in the job performance. EI may be considered in useful assessment of individual performance in conjunction with additional input like Intellectual intelligence, motivation, Performance management and the like. This research succeeded in finding empirical explanation for the direct relationship between EI and job performance. Most of the facets of EI explained greater variance in the investigated samples. The future EI research may explore possibility of any mediating variables in the relationship between EI and job performance. LIMITATIONS OF THIS RESEARCH: 1. This research was an exploratory research study and hence there is need, in future, to further investigate and understand the constituent variables.

2. The study considered only cross sectional data as far as individual job performance issues were concerned. A longitudinal study data would present larger causal connectivity. CONCULUSION Despite the limitations of this study, this research produced consistent and reliable results which led to the overall conclusion that this research was able to achieve its key objective of assessing the impact of Emotional Intelligence on individual job performance and in the process, all variables of this mixed EI model got statistically tested and the same will ultimately facilitate and foster a better understanding of the relationship between EI and individual job performance.

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REFERENCES Ban- On R (1997), Emotional Quotient Inventory, Technical manual, Toronoto, Multi Health System. Mayer J.D., Peter Salovey and David (2008), Emotional Intelligence New ability or Eclectric traits?, American Psychologist, September 2008,p-502-517 Petrides and Adrian furnham (2001), Trait Emotional Intelligence: Psychometric Investigation with reference to established trait taxonomies, European Journal of Personality, p-425-428. Petrides and Adrian furnham (2001), Trait Emotional Intelligence: Behavourial validation in two studies of emotion recognition and reactivity to mood induction, European Journal of Personality, p-39-57.

TABLE I : Profile of Respondents Demographic variable Age Group < 25 25 - 30 30 - 35 35 - 40 > 40 Tenure Upto 5 5 - 10 > 15 Team Size (Members) 10 - 25 25 - 50 Hierarchy Level Level 1 Level 2 Level 3 Location Location 1 Location 2 Location 3 Location 4 130 90 75 31 39 193 94 39.88 27.61 23.01 9.50 118 208 11.96 59.20 28.84 145 106 85 35.20 64.80 Frequency 34 52 103 108 29 42.43 32.52 25.05 10.43 15.95 31.60 33.12 8.90 Percentage n = 326

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TABLE II : Descriptive Statistics of Study Variables 1 2 3 4 5 6 E I Facets Self Awareness Expression Awareness of Others Reasoning Self Management Management of Others Mean 54.5736 23.0982 15.5307 12.0736 19.5552 15.6909 Std Deviation 9.3772 5.8148 3.6649 2.2778 7.314 2.2556

TABLE III : ANOVA of Demographic Variables with Facets Of EI

Demographic Variable Hierarchy Level Tenure Age Team Size Location *** p = 0.01

F Ratio 0.310 *** 8.303 *** 7.146 *** 5.036 *** 0.205 ***

TABLE IV: Results of Correlation Analysis of EI Facets with Job Performance E I Facets Self Awareness Expression Awareness of Others Reasoning Self Management Management of Others *** p = 0.01 r 0.595 *** 0.325 *** 0.480 *** 0.290 *** 0.766 *** 0.452 ***

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TABLE V : Hierarchical Linear Regression Analysis of EI Facets with Job Performance EI Facets Self Awareness Expression Reasoning Awareness Of Others Self Management Management Others *** p = 0.01 0.235 *** 0.315 *** 0.117 *** 0.134 *** 0.325 *** 0.379 *** *BETA ALUES High * Performance Moderate* Performance 0.245 *** 0.317 *** 0.082 *** 0.145 *** 0.192 *** 0.348 *** 0.227 *** 0.328 *** 0.073 *** 0.099 *** - 0.202 *** 0.209 *** Low* Performance 0.255 *** 0.137 *** 0.336 *** 0.287 *** 0.268 *** 0.371 *** R2 Adjusted R2 0.248 *** 0.130 *** 0.329 *** 0.272 *** 0.262 *** 0.361 *** 8.341 *** 3.185 *** 6.182 *** 8.092 *** 7.356 *** 9.850 *** F

TABLE V : Hierarchical Linear Regression Analysis of EI Facets with Job Performance EI Facets Self Awareness Expression Reasoning Awareness Of Others Self Management Management Others *** p = 0.01 0.235 *** 0.315 *** 0.117 *** 0.134 *** 0.325 *** 0.379 *** *BETA ALUES High * Performance Moderate* Performance 0.245 *** 0.317 *** 0.082 *** 0.145 *** 0.192 *** 0.348 *** 0.227 *** 0.328 *** 0.073 *** 0.099 *** - 0.202 *** 0.209 *** Low* Performance 0.255 *** 0.137 *** 0.336 *** 0.287 *** 0.268 *** 0.371 *** R2 Adjusted R2 0.248 *** 0.130 *** 0.329 *** 0.272 *** 0.262 *** 0.361 *** 8.341 *** 3.185 *** 6.182 *** 8.092 *** 7.356 *** 9.850 *** F

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A STUDY ON CULTURAL KNOWLEDGE NEEDED IN CROSSCULTURAL ENVIRONMENT

Research Scholar, Bharathiar University New college Institute of Management, Chennai

L.Savitha

Dr.Sheela Rani

Introduction
Culture is a constantly changing, learning pattern of customs, beliefs, values, and behaviors, which are socially acquired and transmitted through symbols, rituals, and events and which convey widely shared meanings among its members. Culture includes gender, age, sexual orientation, geographic location, ethnicity, values, personality, ability status, marital status, and job position.

backgrounds, sexual orientations, ability statuses, and faiths or religions, in a manner that recognizes, affirms, and values the worth of individuals, families, tribes, and communities, and protects and preserves the dignity of each.Cross-cultural competence refers to the capability to communicate proficiently with people from various cross-cultural communities. Cultural competence is a continuous process of learning about the differences of others and integrating their unique strengths and perspectives into our lives. The first step to cross-cultural competency is to rid oneself of assumptions, prejudices and stereotypes. Modern business calls for modern thinking; thinking where no one is at fault and where people have differing priorities and values. Accepting that we do things in different ways and adapting behaviours to this is 80% of the battle won. The businesses nowadays not prioritise cross-cultural competency training a part because it is considered as a soft-skill and not as important as hardskills like engineering or IT. Whereas one can quantify whether they have learnt IT skills but cannot quantify if an employee has become more culturally competent. Businesses favour measurable results, and in the case of cross-cultural competency the true value may not get quantified until too late, such as when two of their sales people walk away from an important meeting. Companies that incorporate cross-cultural competency into their core values always come out on top. Not only do they lower their risk of lost revenue, but they also gain a new set of strategies and a clear perspective of what is offered by other cultures. Globalization has completely reshaped the flow of information, goods and services and it is crucial to view the business world differently. Rather than view

Fig 1: iceberg of culture

Culture is a shared pattern of ideas, emotions, and behaviors. Culture operates on both a conscious and subconscious level; at both a group and individual level. It is useful to think of culture as an iceberg (Fig. 1). The tip of the iceberg symbolizes the level of behavior and other observables/tangibles (i.e., the world of manifestations). Beneath the level of our daily awareness, this behavior is linked to a world of values that is shared by a group. This internal world, which consists of ideas and their emotional value, is symbolically expressed as the bottom of the iceberg. Cultural Competence is defined as the ability of individuals and systems to respond respectfully and effectively to people of all cultures, classes, races, ethnic

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successful cultural skills only as a means to prevent lost revenue, smart decision makers and employers emphasize the personal benefits of cross-cultural competency.

the distinction, a skillful manager may possibly help a staff to communicate any issues as soon as possible, providing clear expectations, and follow up with the employee on a regular basis.

Five Building blocks to achieve cultural competence

1. Cultural knowledge 2. Cultural relativism 3. Mindful observation 4. Empathy

Cultural relativism
Cultural relativism holds that cultures are different but equal; they exist because of their relevance to the individuals of their cultural group. Cultural relativism counterbalances ethnocentrism. Some sense that being culturally sensitive may possibly need us to give up ethical principles. This is often a misconception. The reason is that: we might not agree, but we need to be aware that there are other sets of ethical or moral principles (Jane Suderman, Understanding Intercultural Communication).A line should be drawn between cultural relativism and extreme cultural relativism. The latter may allow violent behaviors that are illegal

Organization leaders and HR specialists

They are well-positioned to study, develop, and Fig 2: Five-step skill building process implement long term cross-cultural competence strategies, guidelines, practices, and education. As communication is two way, cross-cultural training of both employers and staff is important.

Cultural knowledge
It is not just concerned with learning about different cultures; it also calls for a good evaluation of ones personal values and upbringings. This leads to an understanding of cultural differences. In the workplace, understanding variations in cultural beliefs and communication styles will help engender better choices. If a staff new to Canada delays until the last minute to tell his manager that he cant complete the assignment on time, he might possibly be thought of as being dishonest or derelict in his work. The true reason may be that the new employee is afraid of losing face. Many people from China, India, and Mexico put a lot more value on face. There is a Chinese saying, do not ever hit a person in the face. Harmony is usually more valued in these ethnicities than in North America; to refuse a request by saying no could also be difficult. Knowing

Cross-cultural competence
Cross-cultural competence can find its ideal building ground in shared respect, understanding, and inclusiveness. The principle of justice and fairness should be applied to everyone. There must also be a balance between diversity and unity.

Cultural competency training

Intercultural and cross cultural awareness training is slowly moving towards a behavior centered approach. Businesses and organisations have realized that their personnel need more than facts and figures or dos and donts about people from different cultures.

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Cross-cultural competency is now the term being used to describe the ability to work across cultures through an instilled understanding of cultures on a general level in terms of communication and working styles. This occurs in tandem with behavioral and attitudinal changes. Cross cultural competency seeks to provide participants with an insight into how cultures differ. Once this foundation has been set a facilitator then explores manifestations of culture in a number of settings, whether work or personal. Through greater selfawareness participants are encouraged to develop personal strategies that can be implemented when working across cultures.

Develops Listening Skills

By becoming good listeners, people become good communicators.

Using Common Ground

Rather than focus on differences participants move towards creating a shared space.

Career Development

Cross cultural competence training enhances peoples skills and therefore future employment opportunities.

Conclusion
Cultural knowledge is essential for maintaining competitiveness in a market that becomes more diverse and more international. It is needed to manage and lead people with various cultural backgrounds. The global workplace requires the ability to adapt constantly to different people from diverse cultures. The individuals should be sensitive to different cultures, to interact appropriately with people from different cultures, and to analyze new cultures as they are encountered. To do all this, individuals need cultural intelligence. It is needed to manage the stress of culture shock and the consequent frustration and confusion that typically result from clashes of cultural differences. It is essential in facilitating effective cross-cultural adjustment. Culture is persuasive. Everyone, every organisation, every region, and every country has a culture. Understanding cultural beliefs, values, and perceptions of other is a key to success, and vice versa. Learning diverse cultural heritage is rewarding, inspiring and empowering. Exploiting cultural diversity is the key to unlimited innovation and growth.

The Benefits of Intercultural Competence Self-Awareness

The benefits of cross cultural competency training.

People learn about their own strengths, weaknesses, prejudices and preconceptions.

Builds Confidence

Cultural competency training promotes self-confidence in individuals and teams through empowerment.

Breaks down Barriers

Cultural training demystifies the other and creates awareness.

Builds Trust

Awareness leads to dialogue which understanding which results in trust.

leads

to

Motivates

Through self-analysis people begin to recognize areas in which they need to improve and become motivated to develop.

References
1. Jhon H. Velasco, M.A.Montclair State University, Culturally competent communication 2. Jerome H.Hanley, Cultural Competence 3. Cindy king , Cross-cultural differences. 4. Carl Lindquist, competence: The workplace Developing cultural Indian and American

Opens Horizons

Cultural competency training helps people think outside the box. Participants develop better people skills - they begin to deal with people with sensitivity and empathy.

Develops Skills

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5. Linda M. Hunt, Beyond Cultural Competence

A CASE STUDY ON BEST PRACTICES IN MANAGEMENT EDUCATION

Dr.B.Sudhakar, Dean School of Management, Karpagam University, Coimbatore, Tamilnadu, D.Mahesh, Assistant Professor - School of Management, Karpagam University, Coimbatore, Tamilnadu, India M. Vetriselvi, Assistant Professor (Sr. Grade) School of Management, SRM University, Chennai, Tamilnadu, India

1.

Introduction

Learning taxonomies help us to understand about understanding. 2. Blooms Taxonomy It is the authors belief that the use of Blooms taxonomy could improve the understanding of the pedagogical, or learning, objectives that should be considered in any educational program, amongst teachers. The rest of this paper will briefly examine this taxonomy, before discussing its possible use in technical education. Blooms taxonomy of the cognitive domain Blooms taxonomy is possibly one of the best known and most widely used models of human cognitive processes. Blooms model was originally developed in the 1950s and remained in use more or less unchanged until fairly recently (Van Niekerk, 2008, p. 249). A revised version of the taxonomy was published in 2001. This revised taxonomy has become accepted as more appropriate in terms of current educational thinking (Van Niekerk, 2008, pp. 249-260). Both versions of Blooms taxonomy consist of six levels which increase in complexity as the learner moves up through these levels. There are two main differences between the original and the revised versions of the taxonomy. Firstly, the revised version uses descriptive verbs for each level that more accurately describes the intended meaning of each level. Secondly, the revised version has swapped the last two levels of the original version around. This was done because recent studies have suggested that generating, planning, and producing an original product demands

The reasoned aspect of teaching relates to what objectives teachers select for their students. The intentional aspect of teaching concerns how teachers help students achieve the teachers objectives, that is, learning environments the teachers create and the activities and experiences they provide. The learning environments, activities, and experiences should be aligned with, or be consistent with, the selected objectives. When teachers are confronted with exceedingly large number of vague objectives, we need to organize and to make the objectives more precise. In a nutshell, then teachers need an organizing framework that increases precision and, most important, promotes understanding. This paper shows how the use of Blooms revised taxonomy (Anderson et al. 2001) , as a pedagogical framework, can help teachers to address the issues and concerns pertaining to education. The best practices include Planning that is objective driven begins with specifying instructional objectives from University syllabus in terms of the classification of the Taxonomy table followed by activity driven, which gives initial emphasis to the instructional activities and then, operating from a test-driven perspective starts with concerns for assessment finally mapping of all the above in the taxonomy table. In order to ensure successful learning amongst all students, it is extremely important to fully understand the educational needs of individual students.

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more complex thinking than making judgments based on accepted criteria. The hierarchy of complexity in the revised taxonomy is also less rigid than in the original in that it recognizes that an individual may move among the levels during extended cognitive processes. This paper will focus on the revised version of the taxonomy. Wherever this paper mentions Blooms taxonomy, it should be assumed that the revised version is intended, unless otherwise stated. The following is a brief explanation of each of the six levels of this revised taxonomy. Activities at these six levels of the cognitive domain are usually combined with the one or more of the four types of knowledge in a collection of statements outlining the learning objectives of an educational program. Usually a learning objective statement will be used to create a set of learning activities. Learning activities are activities which help learners to attain the learning objectives. A Learning activity consist of a verb that relates to an activity at one of the levels of the cognitive domain, and a noun providing additional insight into the relationship of the specific learning objective to a category of knowledge (Anderson et al. 2001, pp. 93-109). The uses of taxonomy often assist educators in gaining better understanding of learning objectives, and activities. However, it is not always clear how this increased understanding can help the educators. 1. Best Practices

clearly articulated performance objectives that have been developed based on an assessment of the target audiences needs and requirements (Fuller et al 2007, p. 96). Correct usage of an educational taxonomy not only helps to articulate such performance objectives but, more importantly, helps the educator to correctly gauge the needs and requirements of the audience. The following are the best practices followed at School of Management, Karpagam University in the teaching learning process. a. b. c. d. Identifying the pre-requisite knowledge for a particular subject. Mapping of five units of subject content for that subject Mapping of that subject with other subjects of a progrmme Delivering the knowledge content of pre- requisite knowledge at the beginning of the

semester. e. f. g. h. Preparing the specific instructional objectives from the syllabus in accordance with Blooms revised taxonomy Preparing the lesson plan Teaching learning process in accordance with Blooms revised taxonomy Continual evaluation at the end of the semester in accordance with Blooms revised

Teachers often attempt to address needs of students without adequately studying and understanding the underlying factors that contribute to those needs (Fuller et al 2007, pp. 27-36). It has been argued before that educational material should ideally be tailored to the learning needs and learning styles of individual learners (Roper, 2005, p. 19). The reference point for any educational program should be a set of

taxonomy i. 2. METHODS Mapping of objectives, teaching learning process and assessment in the Blooms revised taxonomy table.

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The best practices is illustrated for 60 students

fifth unit dealt with International Marketing, Market selection, barriers, globalization and internal reforms process. Mapping of these five units illustrated after the pre-requisite knowledge delivered before the actual content delivered as per the lesson plan. 2.1 Example

of final year (Third semester) post graduate programme in management during 2009 2010 for International Business Management subject at Karpagam University, Coimbatore, Tamil Nadu, India. Planning that is objective driven begins with specifying instructional objectives from University syllabus in terms of the classification of the Taxonomy table followed by activity driven, which gives initial emphasis to the instructional activities and finally, operating from a test-driven perspective starts with concerns for assessment. The traditional learning objectives (Linda.V et al., 2009) of engineering curricula have focused on fundamental knowledge, computational skills and their application. Objectives exist in many forms, ranging from highly specific to global and from explicit to implicit. The most commonly used model of educational objectives is based on the work of Ralph Tyler (1949). Tyler suggested that the most useful form for stating objectives is to express them in terms which identify both the kind of behavior to be developed in the student and the content. Working knowledge of International business

Illustration of One sample objective is given below; Subject content given in the second unit of syllabus: International HRM Objective: To explain the concept of IHRM and various types of international organizational structures Procedural knowledge Globalization and HRM and Apply Various activities in the context of global business. Activities: Globalization and HRM, IHRM, Domestic vs. International HRM, structure Factual knowledge global functional division structure and Remember global matrix structure. Activities: Explain the activities of HR globally, styles, compensation systems and training methods Conceptual knowledge Operations and structures of IHRM Understand Impact of globalization and various types of international organizational structures. Assessment: Apply the model of IHRM concepts to create students into activity based - Procedural knowledge Functional activities and Apply global structure, forms of assignments etc.,

environment and globalization have been identified as pre- requisite knowledge and delivered the same to the students at the beginning of the semester. There are five units in the syllabus. First unit dealt with introduction of International Business, second unit dealt with country risk analysis factors, third unit dealt with the trade laws, dispute settlement under WTO etc., fourth unit dealt with International financial management, EXIM finance, Methods of payment and

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Table1: Mapping of To apply the key components of International Compensation system Objective, Teaching Learning Process (activities) and Assessment
THE COGNITIVE PROCESS DIMENSION

KNOWLEDGE DIMENSION 1. REMEMBER UNDERSTAND 2. 3. APPLY 4. ANALYZE 5. EVALUATE

6. CREATE

A. FACTUAL KNOWLEDGE

10 activities

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B. CONCEPTUAL KNOWLEDGE

4 activities 1.To explain how to manage the IHR activities 2. To explain HR international styles, 3. To explain the managing expatriates, 4. To explain training and performance appraisal system To apply the key components of international compensation system

C. PROCEDURAL KNOWLEDGE

D. METACOGNITIVE KNOWLEDGE

For each activity, the teacher can derive a lot of useful information about the coverage provided by the activities. The teacher could choose to focus on the learning objective itself, and thus, only use assessment methods that require the learner to apply procedural knowledge. Or the assessor might decide to focus on one or more learning activities and thus have a wider range of assessment coverage. By noting assessment activities on the same taxonomy table, the teacher can ensure that the chosen assessments correspond directly to what he/she intend to assess. In the given example, a clear disconnect between the learning objective, activities and disconnect between activities and assessment and the alignment between objective and assessment is observed. Instead of focusing on the application, or use, of designing concepts, the activities focus on factual and conceptual knowledge. If the Table 2: Table of specifications
No. of objectives pertaining to Factual Knowledge/ Remember No. of objectives pertaining Conceptual Knowledge/ Understand

teacher directly focuses on application, then this factual and conceptual knowledge have become pre-requisite knowledge for that objective. Similarly, other missalignments can be identified with the help of this taxonomy table. Seventy five learning objectives were established for International Business Management subject in accordance with Blooms revised taxonomy. All the seventy five learning activities are delivered to the students over the period of 52 hours as per the lesson plan prepared before beginning of the semester. The following table illustrates unit wise the number of objectives classified in accordance with Blooms revised taxonomy and the representative sample of learning objectives is selected as questions to evaluate the students achievements of learning objectives.

UNIT

No. of Questions

No. of Questions

No. of objectives pertaining Procedural Knowledge/ Apply

No. of Questions

1 2 3 4 5 Total

3 10 6 4 3 26

2 2 2 2 4 12

7 11 8 8 6 40

2 2 1 2 1 8

0 0 4 0 5 9

0 0 1 0 1 2

Total No.of Objectives in Interface Design subject

10 21 18 12 14 75

Total No.of Questions selected for End semester exam.

4 4 4 6 22

3. Findings and discussions Linda.V et al., (2009) considered what has traditionally been the focus of professional subjects curricula: mastery of the core competencies. Empirical data show that a greater degree of engagement or active learning results in higher mastery. There are 26 objectives pertaining to Factual Knowledge, out which 12 objectives are used for evaluation of students at the end of the semester. 11 out of 60 students (remembered) i.e. 18.30% of students correctly answered all the 12 objectives, and 21 out of 60 students (remembered) i.e., 35% of students correctly answered 50 % of the objectives. There are 40 objectives pertaining to Conceptual l Knowledge, out which 8 objectives

are used for evaluation of students at the end of the semester. 8 out of 60 students (understood) i.e., 13% of students correctly answered these objectives and 24 out of 60 students (understood) i.e., 40 % of students correctly answered 50 % of the objectives. There are 9 objectives pertaining to Procedural Knowledge, out which 2 objectives are used for evaluation of students at the end of the semester. 5 out of 60 students (able to apply the factual and conceptual knowledge in a given situation) i.e., 8% of students correctly answered these objectives, and 11 out of 60 students (able to apply the factual and conceptual knowledge in a given situation) i.e., 18.30% of students correctly answered 50 % of the objectives.

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Table 3: Mapping of Objectives, Teaching Learning Process (activities) and

Assessment for User Interface Design Subject

THE COGNITIVE PROCESS DIMENSION 2. UNDERSTAND 3. APPLY 4. ANALYZE 5. EVALUATE 6. CREATE

KNOWLEDGE DIMENSION

1. REMEMBER

A. FACTUAL KNOWLEDGE

26 Objectives 26 Activities 12 Questions 18.3% mastered

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9 Objectives 9Activities 2 Questions 8% mastered

B. CONCEPTUAL KNOWLEDGE

40 Objectives 40 Activities 8 Questions 13% mastered

C. PROCEDURAL KNOWLEDGE

D. METACOGNITIVE KNOWLEDGE

These learning activities are most important activities receiving the larger share of the available resources. In order to design activities that will result in maximum learning, one can look for activities that involve more than just one type of knowledge. Conclusion An example of how Blooms revised taxonomy might be applied to learning objectives, activities and assessment in a International Business Management subject was provided. The paper used this brief example, to show how a taxonomy table based on this example, could assist educators to address the issues and concerns pertaining to education as best practices. If all the objectives, activities and assessment are placed in the taxonomy table, then it helps us to understand about understanding. By examining the taxonomy table the teacher can easily identify areas of knowledge, or levels of the cognitive domain, that has not been covered by the learning activities. Similarly, areas where multiple activities cover the same levels of cognition and categories of knowledge can be identified. Through the use of such taxonomy certain common weaknesses in educational programs might be addressed. The miss-alignments can be identified with the help of this taxonomy table This paper suggested that management educational programs would be more effective if they adhered to pedagogical principles. Curriculum developers should use taxonomy, like Blooms taxonomy, before compiling the content category of the educational programme. The use of such a taxonomy could help to understand the learning needs of the target audience better.

References Anderson, L., Krathwohl, D., Airasian, P., Cruikshank, K., Mayer, R., Pintrich, P., Raths, J., Wittrock, M.: A Taxonomy for Learning, Teaching, and Assessing: A Revision of Blooms Taxonomy of Educational Objectives, Complete Edition. Longman (2001) Bloom, B.S. (Ed.), Engelhart, M.D., Furst, E.j., Hill, W.H., & Krathwohl, D.R. Taxonomy of educational objectives : Handbook I : Congintive domain. New York : David Mckay, 1956. Linda.V, Jonathan .S, Roberta J.H. The Four-Domain Development Diagram: A Guide for Holistic Design of Effective Learning Experiences For the Twenty-first Century Engineer. Journal of Engineering Education January 2009, Vol.98 No.1:67-78. Fuller, U., Johnson, C.G., Ahoniemi, T., Cukierman, D. Hernan-Losada, I., Jack-ova, J., Lahtinen, E., Lewis, T.L., Thompson, D.M., Riedesel, C., Thompson, E.: Developing a computer science-specific learning taxonomy. SIGCSE Bull. 39(4) (2007) 152{170). Roper, C., Grau, J., Fischer, L.: Security Education, Awareness and Training: From Theory to Practice. Elsevier Butterworth Heinemann (2005). Tyler, R.W. Basic principles of curriculum and instruction. Chicago: University of Chicago press, 1949. Van Niekerk, J., Von Solms, R.: Blooms taxonomy for information security education. Information Security South Africa (ISSA), Johannesburg, South Africa (2008).

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BACK TO BASICS
Prof. Dr. K. Jeyaraman, SRM University, Chennai & D.Ponnusamy, Programme Director, Anna Institute of Management, Chennai & Research Scholar, TamilNadu Institute of Labour Studies, Chennai
Digital and Cyber revolution have today compressed the world into a global village. Change is the only thing that does not change is the widely propagated popular belief of the day. But a deep thinking can prove that this concept has been oversold. There is one more thing that does not change, which remains unshaken by time is BASICS, which are fundamental concepts. The above saying about Change is one of such fundamental concepts and not the only concept. For example, there is a Chinese proverb that No man can dip in the river twice as neither the man nor the river is same. But the fundamental concept of River flowing due to gravity will not change. If that happens to change it will be the end of the world. Similarly, Earth revolves around Sun is a statement. In course of time the words Earth & Sun may get changed due to linguistic changes or the orbit may vary or even the speed of rotation of earth may change. But the concept of Earth revolving around the Sun will never change. The moment it changes, it is the end of our earth; may be the end of our solar system also. It is imperative that we realize that the only way to survive and to create success st stories in 21 Century is by making management education concentrate on basics. BASIC are the very fundamental concepts that we learnt in our early years of life; the concepts that our ancestors proclaimed for human development. But these simple fundamental concepts have failed to find their way into the complex strategies manifested through management training. Why is it so? Probably because we did not take the initiative or have the wisdom to apply it to our industrial / management problems. The most likely reason for this could be the simplicity of these concepts. They were lost amidst the arrogance of multilevel complex theories and philosophies of management. Had our Management strategies been derived from these basics, highly simple but very effective solutions to the most contemporary complex Management problems could have been got. HISTORY OF MANAGEMENT The genesis of Scientific Management can be traced th back to the early 19 Century. Though it became th popular and much talked about in the 19 Century, the ideas and practices of Management are in actuality much older. They can be traced back through the works of Aristotle and Plato to the Biblical times to the Cradles of civilization right to the puranic / vedic period. The Industrial Revolution did not merely bring about technological changes, it also had an impact on values, beliefs, social customs and society at large. The Modern Scientific Management Movement originally started in Europe with the contributions of Charles Babbage in England and Henry Fayol in France. The 14 principles of Administration presented by Fayol are still widely used by Management experts. The United States of America, F.W. Taylor initiated the philosophy of Management through his practically demonstrated experiments. After that, there was no looking back. USA has now become the Mecca of Management. All principles put forth by Management experts of USA

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have dominated the world - right from the good old principles of Statistical Quality Control to Management by Objectives to Business Process Re-engineering to E- Commerce to E-Business to Supply Change Management to Customer Relations Management and so on. The list seems to be never ending. INDIAN SCENARIO While these processes were revolutionizing the world, in India the scenario th was totally different. The 16 Century brought with it foreign rulers into the country. Till then India was a flourishing country, dominating the International market in the trade of spices, pearls, peacock feathers, silk, diamonds and other precious stones. To the intellectual world India gave the concept of zero, the concept of infinity, the decimal system, the architectural wonders and a religious philosophy that are unmatched by any country of the world, till date. But when the country came under foreign rule, progress came to a grinding halt. The administrative machinery designed by the foreign rulers did not incline towards the development of the country or its people. The foreign rulers were more concerned with spreading their culture and ethos which were not well received by the people of India who had been practicing much more sophisticated philosophies and concepts. As a result India was left behind while the western world equipped itself with strategies to counter the problems of the Industrial revolution. INDEPENDENT INDIA After independence, India realized the importance of management and started copying the west, the USA in particular. Nearly half a century later, India realized that not much had been achieved after all this time. Industrial growth and in turn growth of society was almost negligible proving that American philosophies have not had any phenomenal success in India. The Indian Management experts started realizing this gradually.

JAPANESE STYLE OF MANAGEMENT In the 80s, Japan started conquering the Industrial world with its own philosophies and strategies. The Indian experts felt that Japan being an Asian Country, their philosophies might be better suited to Indian needs. But now two decades later, Japanese principles like Kanban, Kaizen, TPM or even simple concepts like group discussions / quality circles have failed to yield quantifiable results in India. But they work in Japan extremely well. If we analyse and understand the dynamics of the growth of Japan, it is evident that all their techniques are based on their culture. For instance, though the concept of quality circle evolved from statistical quality control, there is scarcely any resemblance between the two. Japanese had the wisdom to discard the principles of SQC although they spent millions of dollars in getting trained by American quality experts W.E. Deming & J .M. Juran on it. They never considered the lectures on SQC a waste, but considered them as an investment for coining their new strategy namely Quality Circles which they developed based on their culture and values. Japan is a group oriented society which is held together by certain values rather than by strong leaders. There is a feeling of social closeness and strong patriotism with a sense of duty to the nation that transcends life itself. In India our system is leader centered. INDIAN STYLE OF MANAGEMENT Western culture is essentially individualistic, democratic, enterprising, competitive and egalitarian. Indian culture, on the other hand, is authoritarian, family-centred, caste affiliated, noncompetitive and hierarchical. The values and attitudes germance to once culture often become incongruous with another culture. And the experiences drawn from one do not often hold good in another. Therefore, there

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is no substance in blindly imitating the international management practices in the Indian context. None can underestimate the potential of Western / Japanese Philosophies / concepts / strategies. They are perfect in every aspect and achieved remarkable success in the respective countries. But now it is time to question the applicability of them in India, when they are just copied. One should realize that even the Western philosophies are not successful in Japan and vice versa. Hence for any strategy to be successful in India, it has to possess the Indian cultural flavour. Our literature, in all Indian languages is enriched with management

concepts/techniques which have proved to be a grand success in the past. AVVAIYARS DIAMOND RING IPR MODEL But the question is how far those concepts are relevant in todays business world which is dominated by cyber space, digital equipment, globalization, etc. But an indepth analysis will prove that we can develop a lot of basic concept from our literature. In this paper, a model for Inter Personnel Relations based on a few Tamil verses of Avvaiyar and others is highlighted as an illustration.

KEY TERMINOLOGIES Bilateral Relationship (BR) : Bilateral Relationship is said to be existent, if we extend a good gesture to anybody and if we are confident of getting back positive gestures. In spite of good gestures if we constantly get back only negative gestures leading to troubles then BR is non existent. Indicator (IR) : If people are open to say what they do and to do what they say then IR is in existence. If words are not synchronized with deeds then IR is said to be non existent.

QUADRANTS AND STRATEGIES In the first quadrant both BR and IR are existing as exhibited by animals like Cow or Ox. The more you take care of the needs of these animals the more they yield benefits. Horns are the indicators. With such personalities we can maintain relationship on a long term basis; but should cautiously approach them with a factor of safety of five units. For the second quadrant BR exists while IR does not. This is manifested by the Horse which does not have horns as Indicator. But BR wise it is equivalent of Cow/Ox. With similar personalities we can have long

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term relationship; but we have to approach very slowly, systematically and double cautiously since the factor of safety is ten units. In the third quadrant BR does not exist, whereas IR exists. The size of the Elephant is the Indicator. But BR is absent as the care and support extended by the mahout is not remembered by the elephant when it gets angry. The Elephant goes to the extent of even taking the life of the mahout. With such personalities we are advised to approach with a factor of safety of one thousand units i.e. 200 times more cautiously than a Cow. This means, for all practical purposes it is advised not to have any kind of relationship. Only a minimum possible interaction will safeguard us. Both BR & IR are non existent in the fourth quadrant. This is manifested by the Tiger which will not hesitate to even kill the doctor who has treated it when its sick. The Tiger does not have horns or any other indicator. Such people should be kept out of sight, i.e. even the minimum interaction like the third quadrant is not advisable. IDEAL RELATIONSHIP Then what could be the best possible relationship? This is manifested by the animal Dog. A Dog will never hesitate to exhibit its friendliness even if the master has beaten it when in a foul mood. But this is two way relationship. If we keep on hitting the other person, he may fix us in the fourth quadrant and keep us out of sight. In the above IPR model of Avvaiyar, the fundamental basic concepts are evolved from the verses given in the Annexure. These concepts which are eternal in nature will overcome the tests of time. However the factor of safety values in the IPR model and the strategies will have to be changed from time to time depending upon the changes occurring in the Business / Social System and Environment. ACTION PLAN FOR EDUCATION INSTITUTES MANAGEMENT

the same, the following stages are suggested. I : Research of Literature First of all, we should study the literature of Indian languages and Indian Cultural System to bring out the various fundamental concepts of management which are relevant even today. We should also draw parallels from management concepts / philosophies that has been successful in the rest of the world and indigenise the same. tage II : Build Indian Business Cases The strategies put forth by leading business schools are based on the cases developed by respective institutions reflecting the scenario prevailing in their countries. This is the main reason for the success of western business schools and make their philosophies / strategies relevant to Business Systems. Similarly, we have to build cases and document them based on the success / failure stories of Indian business. It could be Nirma Vs Surf, Consolidation of Hindustan Lever Limited, building of Reliance Industries Ltd., The Media Giant - Sun TV, Indian Multi Nationals in IT Industry, Debacles of Share Market, Finance Companies, the lessons of recession, etc. State III : Evolve Strategies Indian cases with success / failure stories will have to be synchronized with the theories developed through research to evolve concepts / strategies suitable for Indian conditions. Stage IV : Improve the Strategies These concepts / strategies may have to be put into tests under simulated conditions. Stage V : Incorporate in Management Education The improved strategies are to be incorporated into the management training programmes after making them perfect for a particular scenario. Stage VI : Continue the Improvement The philosophies manifested through management training programmes will undergo continuous improvement based on the implementation problems

If our Management Education Institutes derive the business concepts, lessons, strategies from our ancient literature which are rich in basic fundamental concepts, we are sure to reach the top of Industrial World. For

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faced during real life applications. For this a close interaction between educational institutes and industries is essential. This is a never ending cycle as Basics do not change with time while techniques/strategies do. Stage VII : Strategies for the rest of the world From the well developed strategies, after a few cycles of

improvement, the training institutions should redesign the strategies under simulated foreign conditions. These could be then propagated to the respective foreign countries. This transfer of knowledge will only lead of Self Actualisation of Indian Human Resources. This will only attempt to regain our glory and make history repeat itself.

CONCLUSION India is a rich country where poor people live due to mismanagement of resources. This evolution of Indian Style of Management developed by going Back to Basics is sure to regain our glory. But it is easily said than done. We need management experts, linguistic experts, academicians, industrialists and

practicing professionals to work in a synchronised manner to reap the full benefits. It needs untoiled work which will surely reward. This is the only way left to the management educational institutes, management experts and industrialists to leap into the 21st Century with pride to create success stories. After all, though difficult, BACK TO BASICS is no impossibility.

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OPTIMIZED MULTI CRITERIA DECISIONS IN SUPPLY CHAIN ORGANIZATIONS USING AHP MODEL- A REVIEW
N. Balaji, Research scholar, School of Management , SRM University & Dr. Lokeshwar Choudhary Research Supervisor , SRM `B School, Vadapalani,
1.1 Introduction In many industries, the alignment of organizational operations establish different structures. To ensure success in supply chain operations, an important factor is to consider organizational alignment. When the right organizational model is matched, for example, to the business model, strategy, culture, and governance, operational benefits will be realized. This Paper presents the different models with the empirical data to make decisions about supply chain organization using AHP model and highlights key factors to ensure success in choosing. package and the ranks were obtained. The weights are assigned on the basis of supply chain observation and the factors influencing the optimization in supply chains. The same criteria are followed in all the methods. The assigned weights are changed in accordance with the changes in the observation and level of influence of variables in each of the models. To process the variables weights through Analytical hierarchy process (AHP), Met Labs package is used. Based on the rankings obtained through eh model, key element is identified to make the supply chain more effective and optimized.

1.3.2: Uses: 1.2. Factors influencing supply chain success Based on interviews with practitioners in a variety of industries, as well as best practices and research findings, the following factors were found to support the success of a supply chain organization. Success of a supply chain organization is defined as the ability to create and sustain a corporate advantage and foster a collaborative environment for procurement and purchasing related functions. These factors remain the same whether an existing group is being restructured or a new organization is being assembled for the first time. Uses both rating method and pair wise comparison method. A numerical scale 1-9 (1-equal importance; 9 most important) is used. Uses pair-wise comparison of alternatives with respect to each criterion (sub-criterion) and gets a numerical score for each alternative on every criterion (sub-criterion). Compute total weighted score for each alternative and rank the alternatives accordingly. Determine the normalized criteria weights W = W1,W2,.Wn). Using the (n x n) pair wise comparison matrix. Check for consistency of the pair wise comparison matrix using eigenvalue / eigenvector theory. Normalized scores for all alternatives with respect to each criterion. Here an (m x n) matrix is obtained where Sij = normalized score for alternative `t with respect to criterion `j. i) Sij = 1 for j= 1, 2 n ii) This is where scaling of criteria values takes place iii) The actual criteria values are never used in AHP

1.3: Multi criteria decision Process: AHP Model Application: 1.3.1: Methodology: AHP Process (Analytic Hierarchy process). The weights assigned to the various factors namely Process Control, Cost benefits, Time saving, Material consumption, and customer satisfaction are normalized using the Met labs

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MCDM: 1. Consists of constructing a global preference relation for a set of alternatives evaluated using several criteria. 2. Selection of the best actions from a set of alternatives, each of which is evaluated against multiple, and often conflicting criteria. 3. Identify the alternatives. 4. Identify the criteria (attributes) that are relevant to the decision problem.

b) Decentralized c) Center-led d) Corporate e) Governance Structure 1.3.4: Five Alternatives: 1. Process Control 2. Cost Benefits 3. Time saving 4. Material Consumption & Transportation cost 5. Customer Satisfaction

1.3.3: Five Criterias: a) Centralized Criteria Weighted matrix

A=

CL CP G C D 2 3 1/4 Centralized 1 1 1/5 4 1/6 Decentralized 2 1/2 5 1 5 1/3 Center led 1/3 1/5 1 6 Corporate 4 6 3 1/6 1 Governance

A2=

4.9999 6.1000 13.9997 25.2666 21.5556

13.2500 5.4500 18.0417 19.2499 5.0002 13.4998 37.6666 29.0417 5.7001 15.0278 4.9999 31.5556 19.1166 5.0001 15.2333 51.3334 24.9001 31.6251 12.1917 5.0003

60.9915 0.1403 56.7282 0.1305 95.6801 0.2201 99.2416 0.2282 122.1643 0.281

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Normalized Value

Centralized 0.1403 Decentralized 0.1305 Center-led 0.2201 Corporate 0.2282(Rank 2) Governance Structure 0.2810 (Rank 1)

and knowledge sharing. Other benefits include a streamlined purchasing organization, corporate purchasing expertise, and a consolidation of the supplier base. However, in complex, distributed enterprises, complete centralization is not always practical or even desirable. Organizational politics, tax considerations or regulatory requirements often require local procurement of some categories of spend that logically could be centrally purchased. In addition, centralized procurement groups often report high incidences of unapproved (maverick) spending, process and policy circumvention, and uneven supply measurement and performance. A centralized supply chain organization is best suited for organizations with very similar business units where most of the requirements are common across business units.

a) Centralized Organization Model: In a centralized supply chain organization, a corporate-level purchasing department makes decisions and exercises control over purchasing throughout the organization. Centralized organizations are able to leverage corporate spend and drive standard sourcing, process, and technology decisions, resulting in economies of scale that improve spending power and enhance operational efficiencies

B=

PC Pr ocess control 1 1/3 Cost Benefit Time Saving 1/7 Material Consumption 1/2 Customer satisfaction 1/4
5.0002 3.8811 3.1025 2.7143 0.6675

CB T S MC CS 3 7 2 4 1 5 2 6 1/5 1 3 5 1/3 1 6 1/6 1/5 1/6 1

B2 =

9.0668 30.4666 31.6668 73.0000 149.2004 0.4371 5.0001 14.1997 20.6668 50.3332 94.0809 0.2756 3.1622 5.0002 7.5193 29.7716 48.5558 0.1423 3.5669 7.8666 5.0001 18.6665 37.8144 0.1108 1.2068 3.0391 1.7668 5.0004 11.6806 0.0342
least variable. The order of the ranks is indicated in the above table. Hence, the centralized organization model firms needs to be focused on process control to optimize the supply chain efficiency b) Decentralized Organization Model: In a decentralized supply chain organization, sourcing decisions and procurement activities are executed at the business unit or local level. Spending is rarely leveraged companywide and procurement personnel usually report to a plant or business unit manager. Decentralized organizations empower business units and sites with autonomy and control over supply, process, and technology decisions. This structure improves satisfaction at the site-

Normalized Value Process Control 0.4371 Cost Benefit 0.2756 Time saving 0.1423 Material Consumption 0.1108 Customer satisfaction 0.0342 It is identified that the factors influencing the supply chain optimization is identified using the centralized organization model. On the basis of the weights assigned, the rankings were given. The factor having highest score loading is the key variable and vice versa. Process control is the key factor in the centralized organization method and the customer satisfaction is recorded as

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and business-unit level and speeds process and issue resolution by avoiding much of the bureaucracy and red tape that comes with centralized procurement models. The decentralized organizational model does have negative side effects. Decentralized models optimize to the

individual site level, yet neither fully leverage corporate spend nor support the supply or business objectives of the organization. In such environments, there is little coordination or information sharing between divisions and sites. This model is often best suited for multiple function organizations that operate as independent entities with a high degree of autonomy.

C =

PC CB Pr ocess control 1 2 1/2 1 Cost Benefit Time Saving 3 1/2 Material Consumption 1/2 Customer satisfaction 2 1/4

T S MC CS 1/3 2 1/2 2 2 4 1 3 3 1/3 1 6 1/3 1/6 1

C2 =

4.9999 5.2916 5.4999 9.0832 21.9999 16.0000 5.0000 6.1665 11.6668 26.2500 13.7500 9.2500 4.9997 13.5001 27.5000 14.2499 3.6666 3.8331 5.0001 15.2499 5.2082 4.7500 1.8888 5.8333 5.0001
Normalized Value

41.9996 65.0833 68.9998 41.9996 22.6804

Process Control = 46.8745 = 0.1908 Cost Benefits = 65.0833 = 0.2650 Time saving = 68.9998 = 0.2809 Material Consumption = 41.9996 = 0.1710 Customer Satisfaction = 22.6804 = 0.0923 245.6376 It is found from the above table that the time sharing is the key factor in the supply chain optimization according to the decentralized environment. It is due to the decentralized supply chain activities needs to be co-ordinate well. It requires time. Optimization of time consumption for moving supply from point to point can help in optimizing the supply chain. The order of the factor identified with the score loadings are: Time saving as primary factor, cost benefits as secondary and Process control, material cost and customer satisfaction in the ranks of three, four and five respectively. Hence, decentralization model focused on time saving. c) Center-led Organization Model: A center-led supply chain organization focuses on corporate supply

chain strategies and strategic commodities, best practices, and knowledge sharing while leaving tactical execution to the individual business units. This model provides the best of both worlds--the advantages of the centralized and decentralized models with fewer disadvantages. In a center-led structure, corporate spend can be fully leveraged on strategic commodity categories well suited for centralized sourcing and non-strategic categories not suited to centralized sourcing can be handled by the individual business units. Operational efficiencies are increased and overall procurement costs are decreased and the organization maintains the ability to react quickly to unexpected changes in supply or demand. Best practices can be shared easily throughout the enterprise, maverick buying significantly reduced, and performance maintained at consistent level. A center-led structure relies on cross-functional and divisional teams, flexible process and policy standards that can be tailored at the local level, coordinated metrics and incentives, and an integrated procurement information systems infrastructure that automates and aligns source-to-settle processes across the enterprise.

518

D =

PC CB Pr ocess control 1 1/2 2 1 Cost Benefit Time Saving 1/3 1/4 Material Consumption 1/2 1/3 Customer satisfaction 3

T S MC CS 3 2 1/3 4 3 4 1 3 3 1/3 1 5 1/3 1/5 1

D2 =

4.9998 2.4999 8.7777 14.5667 21.6666 18.8332 4.9999 16.3331 22.8000 35.6666 11.6666 2.4166 4.9997 8.0166 22.1111 16.7777 2.2499 5.1663 4.9998 12.4997 6.7111 2.1500 10.7333 8.1499 4.9998

52.5107 98.6328 49.2106 41.6394 32.7441

NormaliZed - score Process Control = 52.5107 = 0.1911 Cost Benefits = 98.6328 = 0.3590 Time saving = 49.2106 = 0.1791 Material Consumption = 41.6394 =0.1516 Customer Satisfaction =32.7441 = 0.1192 274.7376 It is observed from the matrix that in the central led organization supply chain organizations, cost benefits needs to be focused at all point of time. The secondary factor needs to be focused is process control, and time saving, material cost reduction, customer satisfaction are in the order of three, four and five ranks respectively. In case of centre led supply chain organizations, cost benefits are to be measures for all the events irrespective of the value and volume of the transaction. This can make the supply chain efficient. d) The Organization Model Fits the Corporate Strategy: Supply chain organizations that are universally successful are those that are designed specifically to best address where strategic decisions are made and where the knowledge needed for those decisions resides. The degree of centralization is a deliberate financial decision

of where it is most cost effective to process transactional business vs. strategic business. However, successful supply chain organizations meet the corporations financial and operational strategies by empowering groups with the knowledge needed to make strategic procurement decisions. Leading companies are also bold in either heavily centralizing procurement or in decentralizing key categories in search of efficiency gains. The important point is that the strategy to manage these functions/ categories is supported by the right level of resources and attention. Successful supply chain organizations are those that best fit the actual corporate culture--not the desired corporate culture. Corporate culture includes elements such as the degree of autonomy of business units and the degree of influence that the business units have in comparison with corporate leadership. Successful supply chain organizations match their structure to their level of autonomy and influence. Another aspect of culture that has a significant impact on supply chain organization effectiveness and choice is the willingness of executive management to mandate a policy or a process. A corporate culture of mandates en-

519

hances supply chain effectiveness in enforcing compliance for various business units or regions. Without the culture of mandates, a centralized or center-led supply chains policy enforcement role may become conten-

tious and ineffective. Leading companies in this situation empower their supply chain organization by making them equal partners in the financial and operating strategies development with the business units.

E=

PC Pr ocess control 1 1/5 Cost Benefit Time Saving 1/2 Material Consumption 1/2 Customer satisfaction 1/4

CB T S MC CS 5 2 2 4 1 4 2 5 1/4 1 3 2 1/3 1 6 1/5 1/2 1/6 1

E2 =

= = = = =

5.0000 8.2500 3.5000 3.6666 1.2334

3.3000 5.0000 2.6500 2.5333 0.7333

8.6666 15.1666 4.9999 6.6666 2.3556

11.6668 26.5000 20.8335 38.0000 7.8334 25.2500 5.0001 17.1666 2.7334 5.0002

Normali- Zed - score Process Control Cost Benefits Time saving Material Consumption Customer Satisfaction

55.1334 = 0.2359 87.25 = 0.3733 44.2333 =0.1893 35.0332 =0.1499 12.0559 =0.0516 233.7058

The supply chain which follows, the organization model fits with the corporate strategy, is set to be keen in cost benefits, process control, time saving, material cost and customer satisfaction in the order of priority of one to five respectively. Here once more the more focused thing is that the values of resources needs to be utilized in an optimistic way to ripe the benefits of optimized supply chains. The matrix explains the ranks on the experimental observed data. e) The Governance Structure Elevates the Supply Chain Function: Leaders of successful supply chain organizations have a seat at the executive table when strategic decisions are made. This is especially true of centralized, center-led or hybrid type organization structures

where procurement of strategic materials and services is centralized. The financial success of the operations/ business units is closely linked with the performance of the supply chain procurement initiatives and elevation of the procurement function in leading companies emphasizes this connection. There is a positive relationship between the achievement of supply chain objectives and the reporting level of the highest supply officer. Regular strategy/performance presentations by the CPO to the president/CEO and formal procurement and supply strategy coordination and review sessions with business units are especially effective. Companies whose supply offices report to levels closer to the highest executive are more likely to believe their organization design is effective. It is not the formal supply position, rather the visibility and resources associated with such a position in the corporate hierarchy, on par with other functional executives, that make this position important. Where mandates are not the norm, successful supply chain organizations prepare a document describing the value proposition of supply chain to executive management using financial and accounting metrics. Moreover,

520

a collaborative environment is fostered by rotations of business unit and operations staff in supply chain functions that exposes procurement processes and policies

to the eventual customers of this service. Customer involvement is also incorporated in all aspects of new organizational developments; savings target setting, and achievement of these savings targets.

F=

PC Pr ocess control 1 1/2 Cost Benefit Time Saving 1/3 Material Consumption 4 Customer satisfaction 4

CB T S MC CS 2 3 1/4 1/4 1 3 2 1/2 1/3 1 3 5 1/3 1 4 2 1/5 1/4 1

F 2=

= = = = =

5.0000 8.2500 3.5000 3.6666 1.2334

3.3000 5.0000 2.6500 2.5333 0.7333

8.6666 15.1666 4.9999 6.6666 2.3556

11.6668 26.5000 20.8335 38.0000 7.8334 25.2500 5.0001 17.1666 2.7334 5.0002

Process Control Cost Benefits Time saving Material Consumption Customer Satisfaction

48.49 = 0.173 34.2 = 0.122 80.03 = 0.285 71.02 = 0.2534 46.51 = 0.166 280.24 It is found that in case of the supply chains following the governance structure elevating the supply chains, the success depends on the following factors in the order of priority. The primary factor which determine the success is time saving and the secondary factor is Material cost. The other factors in the order of priority is processcontrol with rank III, Customer satisfaction with rank IV and finally cost benefits with rank five respectively.

Fig(i) 521

fig(ii)

Fig(iii) Fig(iv)

1.Centralized Organization 2.Decentralized Organization 3.Center led Organization 4.Corporate Culture 5.Governance Structure Fig(v)
Conclusion: Choosing the most appropriate supply chain organization model is critical for effectiveness in managing the procurement of the vast amount of direct and indirect materials needed to operate and sell products. Many of the points discussed in this paper are often overlooked, and yet each has an impact on the level of supply chain management excellence achieved. To make a change of this magnitude, will require almost as much planning time as transition time. In a merger, this is required planning and management that must take place. On the other hand, its an excellent opportunity to make changes that matter. If the change can be effectively managed, the outcome of a truly aligned organization will benefit the company for years. REFERENCES: 1. Iyengar, G Krishna Kumar, M and Godse, A 1999, Supply chain management - A Conceptual Framework, in Supply Chain Management ed BSSahay, Macmillan India Ltd. Naik, M 2000, Cost effective supply chain management for Indian Companies through the Internet, Materials Management Review, May-June; IIMM, India. Ayers, James B ed 2001, Handbook of supply chain Management, The St Lucie Press / APICS Series on Resource Management. Gopal, J and Iyengar, G 2000, Integrating the R&D chain in supply chain management A Conceptual Framework, paper accepted at

2.

3.

4.

522

the R&D Management Conference, Dec 2000, New Delhi. 5. Iyengar, G and Krishna Kumar, M 1998, Logistics in India - Has it come of Age?, Conference Compendium NATCOM 98, National Convention of Indian Institute of Materials Management Convention, Mumbai, INDIA. Gourdin, Kent N 9 2001, Global Logistics Management: Competitive Advantage for the New Millennium, Blackwell Publishers Ltd, UK. Simchi-Levy, D Kaminsky, P and SimchiLevy, E 2000, Designing and managing the supply chain, McGraw-Hill International Edition.

8.

Chan HK, Chan FTS(2010) Compartive study of adaptability and flexibility In distributed manufacturing supply chains. Decision support system48(2)-331-341 Saaty TL(1980) The analytic hierarchy process. McGraw-Hill, New York

9.

6.

10. Shafaei R(2009) An analytical approach to assessing the competitiveness in the textile industry. J Fash Mark Manag 13(1);m20-36 11. Cheng EWL, Li H(2001) Analytic hieracrchy process : an approach to determing measures for business performance; Meas Bus Excell 5(3):30-26

7.

523

A STUDY ON FACTORS INFLUENCING CONSUMER BEHAVIOUR IN RETAIL INDUSTRY A Study on Consumer towards Automatic Coffee Vending Machines with special reference to Chennai city only

TR.KALAI LAKSHMI (Research Scholar) Senior Lecturer , Department of Management Studies, Sathyabama University, Chennai DR S.S.RAU (Research Guide) Registrar, Sathyabama University , Chennai.

This Empirical paper discusses Consumer Behaviour of customers, consuming Coffee through Automatic Coffee Vending Machines. Key words: Consumer, Vending Machines, Consumer - Behaviour, Customer Satisfaction, Demographical Factors, Product attributes. The revolution in Indian coffee industry after the introduction of coffee vending machines has brought many changes and also opened door for many Indian as well as foreign players. In a market like India there is a constant clash between challenges and opportunities but chances favour those companies that are trying to establish themselves. So to sustain in a market like India companies have to bring innovative solutions with the care for the market needs of the consumer. Buyer behaviour can be defined as all psychological, social and physical behaviour of potential customer A consumers chooses the product of his choice and this choosing ability is influenced by the psychological factors, social factors and physical factors and as they become aware of they evaluate, purchase, consume and tell other people about products and services. Consumer always prefers new products which are able to meet their demands. It is the product attributes which attracts the customer . In the extension of the same, we can say consumer needs also depends on factors like demographic factors , social factors , geographical factors and psychological factors. It is well known that in India, the major coffee consumers reside in southern parts. Coffee vending machines are the new innovation which have been introduced in Chennai in the recent years and have lead to more sophistication and change in the life style of coffee consumers. The market for coffee vending machines is growing because of the quality, comfort, hygiene provided by the coffee vending machines but there is no doubt that the marketers have initiated to bring the taste of the traditional filter coffee mostly preferred by consumers for years in Chennai city. Consumer Behaviour is the process where by individuals interacts with his environment for the purpose of making market decisions on products and services. This study reveals the influence of the various demographical factors on consumers buyer behaviour with the help of the study conducted on consumers of coffee through coffee vending machines in Chennai city. Consumer behaviour is largely influenced by two factors say demographical factors such as their age ,gender, martial status, education, income etc., and the product attributes.

524

Hence this study on 250 consumers of coffee through coffee vending machines has also tried to reveal the fact that though there are many new types of development in the field of marketing and many new innovative products. This study is an effort made to understand the factors which influence consumer behaviour in the market. The report is also supported by the hypothesis tests conducted for the same.

Vending machine Vending machines are automated self dispensing machines, generally used for selling snacks and beverages automatically.A vending machine offers a variety of beverage options in the pantry either hot or cold. There are different sizes of vending machines free- standing and table top models dispensing products like tea, hot chocolate, soda, soups, milk and coffee etc., Cash and cards are usually the modes of payment. The machine is built with the consideration of the number of people it can serve and refill is dependent on this factor. MAJOR PLAYERS IN THE AUTOMATIC COFFEE VENDING MACHINE IN INDIA. NESCAFE, BRU, SUNRISE, COFFEE DAY AND FRESH & HONEST DATA ANALYSIS Brands considered for the study: The survey was conducted on 250 respondents who were regular coffee drinkers and consume coffee of all the five leading brands, Nescafe, Bru , Sunrise, Coffee Day and Fresh and Honest .The study was made to analyze the factors which influence the consumers to prefer coffee through coffee vending machines. The factors studied are broadly classified into three major categories OBJECTIVES OF THE STUDY:

Primary objective of the study: To study the impact of innovative products on consumer behavior.

Secondary objective of the study: To study the influence of demographical factors on consumer behaviour of coffee drinkers, consuming coffee through coffee vending machines. To study the influence of product attributes on consumer behaviour of coffee drinkers, consuming coffee through coffee vending machines.

525

To draw the necessary conclusion for clear understanding consumer behaviour towards Automated Coffee vending machines.

RESEARCH METHODOLOGY Type of Research: Type of research adopted for the purpose of study is Descriptive research design which is an attempt in bringing out the need for the innovation of coffee vending and the relationship between the satisfaction of customers and the factors influencing the same. Sampling Techniques: As the respondents have been chosen for study from the study area according to the convenience of the researcher, convenience sampling technique is used.

Sample Size: The sample size considered for the study is 250. Data is collected in vending machines which are installed in limited places like Corporate Offices, Railway Stations, Shopping Centers and Theatres and Airport. The researcher has taken the respondents for the study from the stalls installed in all these 5 places in disproportionate numbers.

Questionnaire Framed: The questionnaire contains of bi-variant questions, multiple choice questions and open ended questions.

Tools Used To Analyze the Data Percentage Analysis Bar diagrams Rank Analysis Chi square

526

ANALYSIS OF THE DATA COLLECTED THROUGH QUESTIONNAIRE TABLE-1 SHOWING RESPONDENTS FREQUENCY OF CONSUMPTION OF COFFEE BASED ON THEIR AGE WISE CLASSIFICATION

Consumption (Per day) Age of respondents Below 30 yrs 30yrs - 39yrs 40yrs - 49yrs 50yrs & above Total

Once

Twice

Thrice

More 3times % 21.10 28.56 18.49 27.58 24.4 No. 20 28 30 3 81

than

Total

No. 7 5 13 11 36

% 18.41 5.95 18.49 18.98 14.4

No. 3 27 14 28 72

% 7.89 32.15 20.12 48.22 28.8

No. 8 24 13 16 61

% 52.6 33.34 42.9 5.22 32.4

No. 38 84 70 58 250

% 100 100 100 100 100

Source: Primary Data, 2008

Inference It is inferred that 52.6% respondents in the age category of below 30yrs consume more than thrice a day, 33.34 % respondents in the age category 30yrs to 39yrs consume more than thrice a day, 42.9% in the age category of 40yrs to 49yrs consume thrice a day and 32.4% of respondents in the age category of 50yrs & above consume twice a day

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % Once % Twice % Thrice % More than 3times

Below 30 yrs

30yrs - 39yrs

40yrs - 49yrs

50yrs & above

527

TABLE-1 (CHI-SQUARE TEST) Null Hypothesis: There is no relationship in the respondents frequency of consumption of coffee per day and their age. Alternate Hypothesis: There is relationship in the respondents frequency of consumption of coffee per day and their age. Calculated value of chi square is 73.51 Table value: D.F = (R-1) (C-1) = (4-1) (4-1 )= 3x3=9 At 5% level significance the tabulated value is 23.58 As Calculated value is greater than the tabulated value alternate hypothesis is accepted.

Result: There is relationship in the respondents frequency of consumption of coffee per day and their age. TABLE 2 - SHOWING RESPONDENT S FREQUENCY OF CONSUMPTION OFCOFFEE BASED ON THEIR OCCUPATION

Consumption (Per day) Occupation of respondents Government Employees Private Employees Business Men Others Total

Once No. 12 7 9 8 36 % 20.3 9 14 16.6 14.4

Twice No. 22 31 13 6 72 % 37.3 39 20.2 12.4 28.8

Thrice No. 15 12 23 11 61 % 25.4 15 35.8 23 24.4

More 3times No. 10 29 19 23 81

than % 17 37 30 48 32.4

Total No. 59 79 64 48 250 % 100 100 100 100 100

Source: Primary Data, 2008

Inference: Out of the respondents, 14.4% of the government employees consume coffee twice a day ,39 % of the private employees consume coffee twice a day , 35.8 % of business people consume coffee thrice a day . Hence consumption pattern is based on their occupation

528

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Government Private Employees Employees Business Men Others

ONCE %

TWICE %

THRICE %

MORE THAN 3 TIMES %

CHI-SQUARE TEST Null Hypothesis: Null hypothesis is set that respondents frequency of consumption of coffee per day is not based on their occupation. Alternate Hypothesis: Alternate hypothesis is set that respondents frequency of consumption of coffee per day is based on their occupation. Calculated value of chi square is 56.70 Table value : D.F = (R-1) (C-1) = (4-1) (4-1) = 3x3=9 At 5% level significance the tabulated value is 23.58 As calculated value is greater than the tabulated value alternate hypothesis is accepted.

Result: There is relationship in the respondents frequency of consumption of coffee per day and their occupation.

529

TABLE-3 SHOWING CONSUMPTION OF COFFEE OF RESPONDENTS BASED ON THEIR GENDER. Consumption Per day More Than 3times No. 55 26 % 37.33 25.49

Once

Twice

Thrice

Total

Gender Male Female

No. 10 26

% 6.92 25.49

No 39 33

% 26.52 32.35

No. 43 18

% 29.22 17.64

No. 148 102

% 59.2 40.8

Total

36

90

72

28.8

61

24.4

81

32.4

250

100

Source: Primary Data, 2008 Inference: Majority of the male respondents 37.3% , consume more than three times per day and out of 40.8% and majority of female respondents 32.35% , consume twice a day.

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ONCE TWICE THRICE MORE THAN THRICE

PERCENTAGE

FEMALE MALE

CONSUMPTION FREQUENCY

CHI-SQUARE TEST -TABLE-3 Null Hypothesis: There is no relationship in the respondents gender and their frequency of consumption of coffee per day.

530

Alternate Hypothesis: There is relationship in the respondents gender and their frequency of consumption of coffee per day Calculated value of chi square is 35.63 Table value: D.F = (R-1) (C-1) = (2-1) (4-1) = 1x3=3 At 5% level significance the tabulated value is 12.83 As the calculated value is greater than the tabulated value alternate hypothesis is accepted

Result: There is relationship in the respondents gender and their frequency of consumption of coffee per day.

TABLE- 4 SHOWING CONSUMPTION OF RESPONDENTS BASED ON THEIR MARITAL STATUS.

Consumption (Per day) Marital Status

ONCE % 19.14 7.08 90

TWICE % 15.84 48.48 28.8

THRICE % 28..38 18.18 24.4

MORE THAN 3TIMES No . 55 26 81 % 36.5 26.26 32.4

TOTAL %

No. 29 7 36

No 24 48 72

No . 43 18 61

No.

Married Unmarried Total

151 99 250

60.4 39.6 100

Source: Primary Data, 2008 Inference: Majority of the married respondents (60.4%) consume coffee more than three times per day and majority of the unmarried respondents (39.6%) consume coffee only twice a day.

70 60 50 40 30 20 10 0
PERCENTAGE

once

twice

thrice FREQUENCY More than CONSUMTION

Married

Unmarried

three times

531

CHI-SQUARE TEST Null Hypothesis: There is no relationship between consumption of coffee per day. Alternate Hypothesis: There is relationship between respondents marital status and their frequency of consumption of coffee per day. Calculated value of chi square is 31.54 Table value: D.F = (R-1) (C-1)= (2-1) (4-1) = 1x3=3 At 5% level significance the tabulated value is 12.83 As the calculated value is greater than the tabulated value null hypothesis is rejected and Alternate hypothesis is accepted marital status and their frequency of consumption of respondents marital status and their frequency of

Result : There is relationship in the respondents coffee per day.

TABLE-5 SHOWING AGE WISE CLASSIFICATION OF RESPONDENTS AND THEIR PLACE OF CONSUMPTION OF COFFEE

Place of Consumption Age Below 30 yrs 30yrs - 39yrs 40yrs - 49yrs 50yrs& above Total

Corporate office No. 3 31 21 20 75 % 7.9 36.9 30 34.4 30

Railway station No. 13 10 23 18 64 % 34.2 11.9 25.9 30.96 25.6

Airport

Shopping Malls No. 8 14 7 8 38 % 21.0 16.7 7.91 13.7 6 15.2

Theatres TOTAL No. 2 7 4 2 15 % 5.25 8.35 4.53 3.44 6 No. 38 84 70 58 250 % 15.2 33.6 28 23.2 100

No. 12 22 15 9 58

% 31.6 26.18 16.9 15.48 23.2

Source: Primary Data, 2007

532

Inference: It is inferred that majority (30%) of the respondents preferred place is corporate offices and the second majority 37.6% of the respondents preferred place is railway station

120 100 80 60 40 20 0 1 1 3 1 2 2 2 3 3 4 5 4 4
PLA C E

5 5

6 6 6

7 7 7

Below 30 yrs

30yrs - 39yrs

40yrs - 49yrs

50yrs & above

CHI-SQUARE TEST -TABLE- 5 Null Hypothesis: There is no relationship between respondents place of consumption of coffee and their age. Alternate Hypothesis: There is relationship between respondents place of consumption of coffee per day and their age. Calculated value of chi square is 128.8 Table value: D.F = (R-1) (C-1) = (4-1) (5-1) = 3x4=12 At 5% level significance the tabulated value is 28.29 As the calculated value is greater than the tabulated value the null hypothesis is rejected and alternate hypothesis is accepted. Result: There is relationship in the respondents place of consumption of coffee per day and their age.

533

TABLE-6 SHOWING CLASSIFICATIONS OF RESPONDENTS BASED ON THEIR OCCUPATION AND PLACE OF CONSUMPTION OF OFFEE.

Place of Consumption Occupation Government Employees Private Employees Business Men Others Total

office No. 20 24 14 17 75 % 11.8 30.24 8.96 35.36 30

Railway station No. 19 23 8 14 64 % 11.21 29.98 5.12 29.12 25.6

Airport No. 9 18 23 8 58 % 5.31 22.68 14.72 16.64 23.2

Shopping Malls No. 7 10 13 8 38 % 4.13 12.6 8.32 16.64 15.2

Theatres TOTAL No. 4 4 6 1 15 % 2.36 5.04 3.84 2.08 6 No. 59 79 64 48 250 % 23.6 31.6 25.6 19.2 100

Source: Primary Data, 2008 Inference: It is inferred that government employees drink more coffee at railway stations (11.21) and offices (11.8), private employees consume more coffee at their offices (30.24) and Business men (14.72) at airports .

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% office railway station airport shoppingmalls theatres

Government Employees

Private Employees

Business Men

Others

534

CHI-SQUARE TEST -TABLE-6 Null Hypothesis:There is no relationship in the respondents occupation and the place of consumption of coffee. Alternate Hypothesis: There is relationship in the respondents occupation and the place of consumption of coffee. Calculated value of chi square is 216.65 Table value D.F = (R-1) (C-1) = (4-1) (5-1) = 3x4=12 At 5% level significance the tabulated value is 28.29. Result: There is relationship in the respondents occupation and the place of Fresh & Honest coffee.

TABLE-7 SHOWING RESPONDENTS PLACE OF CONSUMPTION OF COFFEE BASED ON THEIR GENDER Place of consumption Age Male Female Total 44 31 75 31.4 31..3 30 45 19 64 30.40 12.8 25.6 34 24 58 13.6 16.21 23.2 17 21 38 11.4 20.5 15.2 8 7 15 5.40 6.8 11.49 148 102 250 59.2 40.8 100 Corporate office No. % Railway station No. % Airport No. % Shopping Malls No. % Theatres TOTAL No. % No. %

Source: Primary Data,2007 Inference: Majority of the respondents both male (31.40%)and female (31.3%) consume coffee at their work place or offices.

80 70 60 50 40 30 20 10 0 Corporate officeRailway station Airport Shopping malls Theatres

Female Male

535

CHI-SQUARE TEST Null Hypothesis: There is no relationship in the respondents gender and frequent place of consumption. Alternate Hypothesis: There is relationship in the respondents gender and frequent place of consumption. Calculated value of chi square is 60.65 Table value D.F = (R-1) (C-1) = (2-1) (5-1) = 1x4=4 =14.86 At 5% level significance the tabulated value is 14.86 As the calculated value is greater than the tabulated value alternate hypothesis is accepted.

Result:There is relationship in the respondents gender and frequent place of consumption TABLE 8 SHOWING PLACE OF CONSUMPTION OF FRESH & HONEST COFFEE OF RESPONDENTS BASED ON THEIR MARITAL STATUS Place of Consumption MaritalStatus Married 28 Unmarried 75 30 Total Source: Primary Data, 2007 Inference: 64 25.6 58 23.2 38 15.2 15 6 250 100 70 21 52.5 22 55 18 45 10 25 99 39.6

Corporate office No. 47 % 18.8

Railway station No. 43 % 17.2

Airport No. 36 % 14.4

Shopping Malls No. 20 % 8 5

Theatres No. % 2

TOTAL % 151 60.4

536

Major
90

of

80

70

60 P E R C E N T A G E

50

40

30

20

10

office Corporate Railway station Airport

PLACE

Malls Shopping Theatres

r ts who are married, consume coffee more at their office.

esponden

CHI-SQUARE TEST -TABLE-8 Null Hypothesis: There is no relationship in the respondents place of consumption of coffee per day and their marital status. Alternate Hypothesis:There is relationship in the respondents place of consumption of coffee per day and their marital status. Calculated value of chi square is 47.28 Table value D.F = (R-1) (C-1) = (2-1) (5-1) = 1x4 =4=14.86 At 5% level significance the tabulated value is 14.86 As the calculated value is greater than the tabulated value, null hypothesis is rejected and he alternate hypothesis is accepted Result: There is relationship in the respondents place of consumption of coffee per day and their marital status.

537

TABLE 9 RESPONDENTS OPINION REGARDING THE PRODUCT ATTRRIBUTES OF COFFEE FROM COFFEE VENDING MACHINES.

Attributes Aroma Taste Temperature Colour Stimulation

Highly influential No. 90 69 54 35 64 % 36 25.8 21.6 14 25.6

Influential

Neutral

Not Influential No. 7 13 20 64 3 % 2.8 7 8 25.6 1.2

Highly not Influential No. 0 2 1 5 2 % 0 0.8 0.4 2 0.8

Total No. 250 250 250 250 250

% % 100 100 100 100 100

No. 105 87 82 92 96

% 42 34.8 32.8 36.8 38.4

No. 48 79 93 54 85

% 19.2 31.6 37.2 21.6 34

Source: Primary Data, December 2007 Inference From the above statistical analysis it is derived that . Majority of 42 % of respondents say aroma of the coffee highly influences them to prefer the coffee from coffee vending machines Majority of 34.8 % of respondents say the taste of the coffee influences them to prefer the coffee from coffee vending machines Majority of 37.2% of respondents say that they are neutral towards temperature of the coffee Majority of 36.8 % of respondents say that they are influenced by the colour and Majority of 38.4 % say that they are influenced by the stimulation acquired from the coffee from coffee vending machines

538

100% 80% 60% 40% 20% 0%

ma Aro te Tas t ure pera Te m ur Colo tio n ul a Sti m

Excellent

Very good

good

fair

poor

RANK ANALYSIS 5 Attributes Aroma Taste Temperature Colour & Thickness Stimulation 90 69 54 35 64 105 87 82 92 96 48 79 93 54 85 7 13 20 64 3 0 2 1 5 2 4 3 2 1 Total Score 1029 958 1018 838 967 Weighted Score 4.12 3.83 4.07 3.35 3.86 Rank 1 4 2 5 3

CALCULATION 450+420+144+14+1=1029/250 345+348+237+26+2=958/250 =4.12 =3.83

270+328+279+140+1=1018/250 =4.07 175+368+162+128+5=838/250 =3.35 320+384+255+6+2=967/250 =3.86

RANK GIVEN TO VARIOUS ATTRIBUTS OF COFFEE CONSUMED MACHINES BY RESPONDENTS Rank 1 AROMA Rank 2 Rank 3 TASTE\ STIMULATION

FROM THE VENDIGN

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Rank 4 Rank 5

TEMPERATURE COLOUR

TABLE 10 PRODUCT PHYSICAL ATTRIBUTES WHICH HAVE INFLUENCED THE RESPONDENTS TO CONSUME COFFEE THROUGH COFFEE VENDING MACHINES

Physical Attributes Quality Quantity Quality of cup Availability Price Hygiene HP 79 94 59 34 73 73 % 31.6 37.6 23.6 13.6 29.2 29.2 P 82 105 92 93 111 108 % 32.8 42 36.8 22 44.4 43.2 N 68 39 79 55 62 61 % 27.2 15.6 31.6 37.2 24.8 24.4 NP 20 9 18 64 4 4 % 8 3.6 7.2 25.6 1.6 1.6 HN P 1 3 2 4 1 4 0.4 1.2 0.8 0.8 0.4 1.6 250 250 250 250 250 250 100 100 100 100 100 100 % Total %

Source: Primary Data, December 2007

Inference From the above statistical analysis it is derived that 32.8 % of respondents are highly prefer the quality of coffee provided through coffee vending machines. 42 %of respondents prefer the quantity of coffee provided through coffee vending machines. 36.8% of respondents prefer the quality of cup provided. 37.2% of respondents prefer the availability of coffee vending machines. 44.4% of respondents prefer the price 43.2 % of respondents prefer the hygiene provided in the stalls.

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120 100

PERCENTAGE

80 60 40 20 0
Av ail ab i lity Qu alit y Qu an t ity up Pri c yo fc Hy g ie ne e

PHYSICAL VARIABLES

FINDINGS OF THE STUDY 1. It is inferred that 52.6% respondents in the age category of below 30yrs consume more than thrice a day, 33.34 %respondents in the age category 30yrs to 39yrs consume more than thrice a day, 42.9% in the age category of 40yrs to 49yrs consume thrice a day and 32.4% of respondents in the age category of 50yrs & above consume twice a day 2. Out of the respondents, 14.4% of the government employees consume coffee twice a day , 39 % of the private employees consume coffee twice a day , 35.8 % of business people consume coffee thrice a day . Hence consumption pattern is based on their occupation 3. Majority of the male respondents 37.3% , consume more than three times per day and out of 40.8% and majority of female respondents 32.35% , consume twice a day. 4. Majority of the married respondents (60.4%) consume coffee more than three times per day and majority of the unmarried respondents (39.6%) consume coffee only twice a day. 5. Majority (30%) of the respondents preferred place is corporate offices and the second majority 37.6% of the respondents preferred place is railway station 6. It is inferred that government employees drink more coffee at railway stations (11.21) and offices (11.8), private employees consume more coffee at their offices (30.24) and Business men (14.72) at airports. 7. Majority of the respondents both married (18.8%) and unmarried (70%) consume coffee at their offices. 8. Major of respondents who are married, both male (31.40%)and female (31.3%) consume coffee at their offices.

Qu alit

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9. Majority of the respondents are highly influenced by the aroma (42%) of the coffee, 34,8%are influenced by the taste, 37.2% are neutral towards the temperature, 36.8% are influenced by the colour and 38.4 % are influenced by the stimulation acquired by the coffee from coffee vending machines. 10. Majority of the respondents highly prefer the quantity (42%) of the coffee, quality (31.8%)of the coffee , prefer the quality of cup(36.8%) provided, price (44.4%)of the coffee and also the hygiene (43.2%)provided in the coffee vending stall. 11. LIMITATIONS: The study is conducted in Chennai city only. The coffee machines are installed in only few places in Chennai city. The researcher has limited the sample size to 250 respondents only. The respondents may give biased answers for the questions asked in the questionnaire

CONCLUSION The study emphasizes that it is essential for a successful marketer to have knowledge on the consumer behaviour. The need of a consumer largely depends on the demographic factors like his age, gender , marital status , education ,salary ,occupation etc. ,and is also highly influenced by the product attributes like aroma ,taste, temperature, colour, stimulation provided , quality, price, service, quantity and availability which influences their consumption pattern.. From the Study conducted on the coffee consumers consuming coffee though coffee vending machines in Chennai city, it has been proved that the consumption pattern depends on their demographical factors and product attributes. It also reveals that any innovative technique of marketing the products would be accepted and will be successful if it satisfies the consumer Hence it is concluded that an organization to be successful should be able to understand consumer behaviour to satisfy his/her needs.

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ATTRITITION IN BPO INDUSTRY S. Muthumani, Faculty, Sathyabama University, Chennai. M.L. Gnanadasan , Faculty, Sathyabama University, Chennai. ABSTRACT Attrition is considered to be one of the biggest challenges faced by the Human Resource Personnel in any industry. All companies are working day and night to find out a long term solution for this critical issue. However, very few of them are in a position to face this challenge successfully till date. The study is to investigate the causes for Employees attrition in BPOs. The Study focuses its attention towards finding the causes of attrition and how an Human Resource (HR) personnel can make Attrition under control. The Researcher has chosen Descriptive Research Design to place the fact as such. Key Words: Life style, Employee turnover, job security, work-life balance, Fringe benefits.

INTRODUCTION

BUSINESS PROCESS OUTSOURCHING IN INDIA Business process outsourcing (BPO) is a broad term referring to outsourcing in all fields. A BPO differentiates itself by either putting in new technology or applying existing technology in a new way to improve a process. Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external provider that in turn owns administers and manages the selected process based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry. India is all set to register the highest growth rate in call center services industry in Asia pacific Region. According to the National Association of Software and Service companies, Indias call center industry accounts for a quarter of the software and service exports from the country. BPO are specialized service where agents remotely provide information, deliver services and/or conduct sales, using some combination of integrated telephone and information technologies, typically with an aim to enhancing customer task complexity, variety and autonomy.

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IMPORTANCE OF BPO IN INDIA The importance of this industry can be gauged by its contribution to the countrys GDP. The industry has grown manifold with the inclusion of newer verticals such as knowledge process outsourcing and legal process outsourcing. Presently, even third party and relatively smaller captive service providers are considering expanding operations to previously unexplored regions. The big BPO companies in India are WNS group, Wipro Spectra mind, Daksh e-Services, HCL technologies, Zenta, ICICI One Source, MphasiS, EXL, Trac mail, GTL Ltd and Sutherland Technologies.IBM, WIPRO, HCL Technologies, HTMT Global solutions Ltd., Infosys BPO Limited.The gowth of BPO industry has been growting at an impressive pace over the past few years and the trend is expected to continue.

ATTRITION - DEFINITION Employee Attrition is defined as effective Employee Attrition is a systematic effort by employers to create hard costs of time spent in screening, verifying credentials, references, interviewing, hiring, and training the new employee just to get back to where you started.

CAUSES FOR ATTRITION INBPO INDUSTRY CAUSES OF EMPLOYEE TURNOVER The reason for high attrition can be categorized into two broad classifications. They are: Push type causes, Pull-type causes and Unavoidable Causes. 1. Push-type causes: In the case of push factors, the major underlying cause of resignation is the perception that, something is wrong with the existing employer. The person concerned may move in order to secure a better job, but he or she is as likely to join another organization without knowing a great deal about it just because he or she no longer enjoys the current one.

2. Pull-type causes: Drag attrition occurs when the major cause is the positive attraction of alternative employment. The employee concerned may be wholly satisfied with his/her existing organization and happy in the job, but none the less decides to move on in search of something even better. It may be higher rate of pay, a more valued benefit package, more job security, better long term career opportunities, a less pressurized existence, the opportunity to work overseas, shorter journey to commute or convenient hours of work.

3. Unavoidable causes:

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It consists of reasons for leaving which are wholly or mainly outside the control of the organization. The resignation does not occur because of dissatisfaction with the job or the perceived opportunities provided elsewhere, but for reasons that are inter connected to work in any direct sense. The most common is retirement, illness and accidents causing physical disabilities, unsuitability for the job or gross inefficiency, misconduct. Maternity leave is another- women often preferring not to return to the same job after their leave, either to take a break from work all together or in order to secure a job that makes it career for them to combine work with child care arrangement. Another common reason is relocation- usually in order to follow or join up with a spouse or partner. Finally there is a desire to take a career break for a period in order to travel, re-enter full time education or pursue some other interest.

LITERATURE FROM THE PREVIOUS STUDIES Ravi Teja (2009) Managing attrition in BPOs has become a strategic priority for CEOs as it is affecting the bottom line. "Though the BPO sector is booming, attrition is creating enough headaches for the CEOs. It can be better served if they focus on the cost of attrition, rather than attrition per se and alter the attrition mix to increase planned and desired exits". Rathi (2009) on her survey indicated that more than 60 percent of the employees join a BPO after seeing job advertisements in newspapers or through manpower consultant references. The study found that the communication pattern of advertisements positioned the BPO job at a level much higher than its real delivery. Salmond (2008) The staff attrition or turnover rate is the best measure of the success of a call center or contact center. Every agent who leaves the center takes with him or her all of the expenses incurred in training the agent to that point. Even for a center that spends little on training or professional development, the soft costs of workforce attrition can still be significant. The most effective way of enhancing customer service while reducing workforce attrition is by an improvement cycle of professional development followed by performance measurement (quality monitoring and call statistics) and subsequently followed by precise and immediate feedback to agents. Reducing workforce attrition will directly affect the bottom line of any call center's profitability. Donaldson and Bond (2007), Attrition is not bad always if it happens in a controlled manner. Some attrition is always desirable and necessary for organizational growth and development. The only concern is how organizations differentiate good attrition from bad attrition. The term healthy attrition or good attrition signifies the importance of less productive employees voluntarily leaving the organization. This means if the ones who have left fall in the category of low performers, the attrition in considered being healthy.

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RESEARCH METHODOLOGY

Research design A research design is the arrangement of conditions for the collection and analysis of data from the employee in a manner which aims to combine relevance to the research purpose with economy in procedure. The study is to investigate the causes for Employees attrition in BPOs. The Study focuses its attention towards finding the causes of attrition and how an Human Resource (HR) personnel can make Attrition under control. The Researcher has chosen Descriptive Research Design to place the fact as such.

Research Objectives The research was conducted to achieve the objectives of studying employee turnover in BPOs Chennai and identifying the main reasons for employment turnover in BPO industry. It further aims to suggest Human Resource Interventions that can positively affect turnover.

Data Collection method The Researcher collects this data for the first time and it does not exist already. The tool used to collect these data is Questionnaire Method. The Questionnaire was distributed among employees working in BPO Chennai. The data are collected during the last quarter of 2010.

Sample Profile The Number of BPO employees in Chennai is more than 1Lakh .It is not possible to get the required information from all the employees within a short period of time, so the Convenient sampling method is used by the researcher an a simple basis, which helped in collecting the data easily. The sample size is fixed as 100 employees. The employees working in BPOs in Chennai were became respondents.

Statistical Tools Applied The appropriate statistical tools were used for doing the analysis and drafting the interpretations. For this study purpose Percentage analysis, Weighted Average analysis and Chi Square test are used for analysis.

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DESCRIPTIVE STATISTICAL ANALYSIS: Table 1: Age Group Age Group of employees 20-25 26-30 31-35 Above 35 No: of Employees 68 22 10 0 Percentage 68 22 10 0

Table 2: Gender Gender No. of Employees Percentage

Male

34

34

Female

66

66

Table 3: Marital Status

Table 4: Job security Employees Opinion No. of employees Strongly agree 86 14 Agree Neutral Disagree Strongly disagree 20 42 16 10 12 20 42 16 10 12 Percentage

Marital status Single Married

No. of Employees 86 14

Percentage

Descriptive analysis was used to study the demographic factors of the employees. The Table 1 reveals that age profile of the respondents. Out of 100 respondents 68% of the respondents belong to the age group of 20-25 years, 22% of respondents belong to the age group of 26-30 years and 10% of them are in the age group of 31-35 years. This shows that the industry was fully attracted by youth. Table 2 shows the gender profile of the respondents in the industry. From the table it has been observed as most of the employees working in BPO are females. This shows from the responses. 66% of the respondents are females and 34% of them are males. Table 3 shows that most of the respondents are single (not married) and married respondents are 14% out of 100 respondents. Table 4 reveals the respondents opinion on job security with their employer. 42% of the respondents holding the opinion as agreeing as their job is secured, 20% among them are strongly agreed. Only 12% of them are strongly disagree with their job security.

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INFERENTIAL STATISTICS To find out the relationship between employer related causes of attrition and unavoidable causes of attrition with the attrition chi square test was used with the formulation of Null hypothesis and Alternate hypothesis. H(O) H(1) : : There is no significant difference of relationship between employer- related causes of attrition and Attrition. There is a significant difference of relationship between employer-related causes of attrition and Attrition. For analysis purpose culture of the organisation, carreer development needs, proper redressal of grievances, training and development activities, performance appraisal, rewards are taken as independent variables and Attrition taken as dependent variable. The workings are made on data collected and the result were shown: (O-E)2
-------------

O 14 58 10 4 14 4 30 22 28 16 8 44 14 26 8 6 48 18 18 10 10 24 24 26 16 6 32 26 26

E 7 39.25 18.25 24 11.5 7 39.25 18.25 24 11.5 7 39.25 18.25 24 11.5 7 39.25 18.25 24 11.5 7 39.25 18.25 24 11.5 7 39.25 18.25 24

(O-E)2 49 351.5625 68.0625 400 6.25 9 85.5625 14.0625 16 20.25 1 22.5625 18.0625 4 12.25 1 76.5625 0.0625 36 2.25 9 232.5625 33.0625 4 20.25 1 52.5625 60.0625 4

E 7 8.957006 3.729452 16.66667 0.543478 1.285714 2.179936 0.770548 0.666667 1.76087 0.142857 0.574841 0.989726 0.166667 1.065217 0.142857 1.950637 0.003425 1.5 0.195652 1.285714 5.925159 1.811644 0.166667 1.76087 0.142857 1.339172 3.291096 0.166667

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10 6 34 14 36 10 2 44 18 28 8 Calculated value of 2 = 80.28976. Degrees of freedom = (n-1) = 40-1 = 39

11.5 7 39.25 18.25 24 11.5 7 39.25 18.25 24 11.5 Total

2.25 1 27.5625 18.0625 144 2.25 25 22.5625 0.0625 16 12.25

0.195652 0.142857 0.702229 0.989726 6 0.195652 3.571429 0.574841 0.003425 0.666667 1.065217 80.28976

Tabulated value of 2 at 5% level of significance and at 39 degrees of freedom = 66.76. Since the Calculated value of 2 is more than Tabulated value, the null hypothesis is rejected. i.e. there is significant relationship between employer-related causes of attrition and Attrition. Hence the employee related causes of attrition are influenced by the independent variables.

Chi-Square Test : 2 For analysis purpose rate of pay, job security, working opportunities, shift timings, working hours are treated as independent variables and Attrition taken as dependent variable. The workings are made on data collected and the result was shown: H(O): H(1): There is no significant relationship between employee- related causes of attrition and Attrition. There is significant relationship between employee-related causes of attrition and Attrition.

(O-E)2
------------

O 64 26 4 6 0 40 46 14

E 43 37.5 10 8.5 1 43 37.5 10

(O-E) 441 132.25 36 6.25 1 9 72.25 16

E 10.25581 3.526667 3.6 0.735294 1 0.209302 1.926667 1.6

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0 0 40 36 10 14 0 40 32 12 16 0 36 40 10 8 6 60 36 2 2 0 22 38 18 20 2 42 46 10 2 0

8.5 1 43 37.5 10 8.5 1 43 37.5 10 8.5 1 43 37.5 10 8.5 1 43 37.5 10 8.5 1 43 37.5 10 8.5 1 43 37.5 10 8.5 1

72.25 1 9 2.25 0 30.25 1 9 30.25 4 56.25 1 49 6.25 0 0.25 25 289 2.25 64 42.25 1 441 0.25 64 132.25 1 1 72.25 0 42.25 1 Total

8.5 1 0.209302 0.06 0 3.558824 1 0.209302 0.806667 0.4 6.617647 1 1.139535 0.166667 0 0.029412 25 6.72093 0.06 6.4 4.970588 1 10.25581 0.006667 6.4 15.55882 1 0.023256 1.926667 0 4.970588 1 132.8444

Calculated value of 2 = 132.8444 Degrees of freedom = (n-1) = 40-1=39 Tabulated value of 2 at 5% level of significance and at 39 degrees of freedom = 66.76 Since the Calculated value of 2 is more than Tabulated value, the null hypothesis is rejected. i.e. there is significant relationship between employee-related causes of attrition and Attrition. Hence the employee related causes of attrition largely influence attrition in BPO industry. Chi-Square Test: 3 H(O): H(1) There is no significant relationship between Unavoidable causes of attrition and Attrition. There is significant relationship between Unavoidable causes of attrition and Attrition.

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For analysis purpose personal reasons such as illness, relocation of spouse and other Opportunities were taken as independent variable and attrition was taken dependent variable. After analysis the result was drafted. (O-E)2 --------E 2.930240312 4.517897279 0.117244779 0.181258581 1.875564788 2.894708874 12.51691461

O 74 26 58 42 50 50

E 60.667 39.33 60.667 39.33 60.667 39.33

(O-E)2 177.768889 177.6889 7.112889 7.1289 113.784889 113.8489 Total

Calculated value of 2 = 12.5169, Degrees of freedom = (n-1) = 6-1 = 5 Tabulated value of 2 at 5% level of significance and at 5 degrees of freedom = 16.75 Since the Calculated value of 2 is less than Tabulated value, the null hypothesis is accepted. i.e. there is no significant relationship between Unavoidable causes of attrition and Attrition.

WEIGHTED AVERAGE METHOD ON CAUSES OF EMPLOYEE ATTRITION Serial No: Particulars Response Strongly agree Agree Neutral Disagree Career development Opportunities Strongly disagree Strongly agree Agree Neutral Disagree Job matching to the Skill Strongly disagree Strongly agree Agree Neutral Disagree Pay matching to the Job Strongly disagree Strongly agree Agree Better relationship between the Neutral colleagues and superiors Disagree No of Score for Respondents Response 54 46 0 2 42 46 10 2 0 40 44 12 4 34 38 16 6 Total Score 270 184 0 4 210 184 30 4 0 200 176 36 8 170 152 48 12

5 4 3 2 5 4 3 2 1 5 4 3 2 5 4 3 2

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Strongly disagree Strongly agree Agree Neutral Disagree Work-life balance Strongly disagree Strongly agree Agree Neutral Disagree Less pressurized environment Strongly disagree Strongly agree Agree Neutral Disagree Better Fringe Benefits and others Strongly disagree Strongly agree Agree Neutral Disagree Better Rewards and Recognition Strongly disagree Strongly agree Agree Neutral Disagree Flexible working Hours Strongly disagree

2 36 44 20 0 0 38 42 18 2 0 34 42 20 4 0 44 44 10 2 0 32 46 20 2 0

1 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1

2 180 176 60 0 0 190 168 54 4 0 170 168 60 8 0 220 176 30 4 0 160 184 60 4 0

Let us Tabulate the scores earned by the variables.

Serial No: 1 2 3 4 5 6 7 8

Variables Career development Opportunities Better Rewards and recognitions Job matching to the Skill Pay matching to the Job Work-life balance Less pressurized environment Better Fringe Benefits and others Better relationship between the colleagues and superiors

Total Scores 458 430 428 421 416 416 406 384

Rank 1 2 3 4 5 5 7 8

As per the weighted average method analysis, we can understand that main reason for attrition is lack of career development opportunities in BPOs. Second cause is Lack of Rewards and recognitions. The ranks of other reasons can be understood from the above table.

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Major Findings of the Study 68% of the employees working in BPO s comes under the age group 20-25 66% of employees are female and 34% comes under Male category. 86% of the employees working in BPOs are not married. Most of the employees felt their job in BPO is secured. There is significant relationship between employer-related causes of attrition and Attrition There is no significant relationship between Unavoidable causes of attrition and Attrition. The employee related causes of attrition largely influence attrition in BPO industry. As per the weighted average method analysis, it is observed that main reason for attrition is lack of career development opportunities in BPOs. Second cause is Lack of Rewards and recognitions. The ranks of other reasons can be understood from the above table.

Recommendations Providing opportunities for the employees to learn and create them for further career development is need of the hour in BPO industry to control the attrition. The firms can reimburse the expenses for CE courses, Management courses, Seminars and Professional meetings. Investment on training for employees is essential for retaining the employees and encourages them to stay. A failure to train, or at least to offer training opportunities will lead career-minded people to look for an alternative employer who will provide training. Implementing flextime policy is to provide opportunity to employees to work with flexible work schedules and set out conditions for availing this provision. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs .The factors on which Flexi time is allowed to an employee include: Child or Parent care, Health situation, Maternity, Formal education program From the study its observed the employees of BPO are expecting better rewards and they should be encouraged for their performance. In turn the management has to implement better and effective way of performance appraisal system as per the requirements.

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CONCLUSION Every employee comes to his organization with some aspiration, An organization is viewed as a place where employees meet their aspirations of growth and development, values of trust, teamwork and transparency. If a company respects them and their skills, realize their potential and provide them with a healthy environment to learn and grow with flexible compensation, employees take that as a strong reason to stay on. In today scenario retaining employees is a vital task, so organization should concentrate more on the retention techniques. There can not be a single cure for the present scenario of attrition due to the various factors that may or may not be present in causing employee turnover in a BPO. The HR personnel should develop retention strategies by considering the below mentioned factors. Drive factors (Employer related causes) Drag factors (Employee related causes) Unavoidable factors (retirement, illness etc) So we can conclude saying that any organization can control its attrition rate by giving first preference to the employees and to the work life connected to them, They should treat the employees as an asset and not as a cost to the company. This will enhance the motivational level of the employees towards their work. Once employees are satisfied to a greater extent, nothing can stop any organization to achieve greater heights in terms of better satisfied customers and good business results.

REFERENCES 1. Ravi Teja (2009),Challenges ahead attrition in BPO industry, The Journal of Human Resource, Vol.12, Issue 3, pp.23-26. 2. Rathi(2009), An empirical study of Employee Turnover, International Journal of Human Resources Development and Management, Vol.7, Issue 1, pp.45-52. 3. Salmond (2008), Is workforce attrition eating away at your profitability?, International Journal of Psychological studies, Vol.3 Issue 2. Pp-34-41. 4. Donaldson and Bond (2007), Understanding self-report bias in organizational behavior research, Journal of Business and Psychology, Vol.17, pp.56-61.

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