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ISSN 2156-7506
VOLUME 3 NUMBER 4 April, 2012
International Journal of Contemporary Business Studies

Impact of Leverage on Stock Returns Empirical Evidence from Karachi Stock Exchange (KSE)-Pakistan Sumayya Chughtai,Farah Zamir,Ayesha Riaz,Farah Khan The Role of Human Resource Practitioners Maintaining Sustainability In Organisations: Some Empirical Evidence Of Expectations, Challenges And Trends Dr A J du Plessis, Ms S Paine, Dr C J Botha In Financial Meltdown Are Countrys Stability Factors of More Interest to Foreign Investors? A Critical Examination Wajid Shakeel Ahmed, Muhammad Tahir Masood, Ph.D., P.E., Dr. Husnain A. Naqvi, Jibran Sheikh Is Outward Bound Training (OBT) An Effective Tool for Human Resource Development (HRD)? A Case Study from Sri Lanka Dr. Mohamed Esham, Krishanthi Ganga Vithana Literature Review: Service Quality in Higher Education Institutions in Malaysia Anantha Raj A. Arokiasamy Adversity Quotient: A new paradigm to explore Er. Shivinder Phoolka, Dr. Navjot Kaur A study on the international diversification in the emerging equity market and its effect on the Indian capital market Sk Samim Ferdows , Abhijit Roy
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E n r i c h K n o w l e d g e t h r o u g h Q u a l i2 ty Research
Copyright 2012. Academy of Knowledge Process
International journal of Contemporary Business Studies

A journal of Academy of Knowledge Process
Saddal H.A Editor-in-Chief
Editorial Board
E n r i c h K n o w l e d g e t h r o u g h Q u a3 lity Research
E n r i c h K n o w l e d g e t h r o u g h Q u a l4 ity Research
Contents:
VOLUME 3, NUMBER 4 April, 2012
Impact of Leverage on Stock Returns Empirical Evidence from Karachi Stock Exchange (KSE)-Pakistan The Role of Human Resource Practitioners Maintaining Sustainability In Organisations: Some Empirical Evidence Of Expectations, Challenges And Trends
Sumayya Chughtai,Farah Zamir,Ayesha Riaz,Farah Khan.6
Dr A J du Plessis, Ms S Paine, Dr C J Botha... 16
In Financial Meltdown Are Countrys Stability Factors of More Interest to Foreign Investors? A Critical Examination Is Outward Bound Training (OBT) An Effective Tool for Human Resource Development (HRD)? A Case Study from Sri Lanka
Wajid Shakeel Ahmed, Muhammad Tahir Masood, Ph.D., P.E., Dr. Husnain A. Naqvi, Jibran Sheikh.35
Dr. Mohamed Esham, Krishanthi Ganga Vithana.427
Anantha Raj A. Arokiasamy 51
Literature Review: Service Quality in Higher Education Institutions in Malaysia Adversity Quotient: A new paradigm to explore
Er. Shivinder Phoolka, Dr. Navjot Kaur67
A study on the international diversification in the emerging equity market and its effect on the Indian capital market
Sk Samim Ferdows , Abhijit Roy,,79
E n r i c h K n o w l e d g e t h r o u g h Q u a l5 ity Research
Impact of Leverage on Stock Returns Empirical Evidence from Karachi Stock Exchange (KSE)-Pakistan
Sumayya Chughtai PhD scholar, Mohammad Ali Jinnah University Lecturer, International Islamic University Islamabad, Pakistan Farah Zamir Lecturer, International Islamic University Islamabad, Pakistan Ayesha Riaz International Islamic University Islamabad, Pakistan Farah Khan International Islamic University, Islamabad, Pakistan
ABSTRACT
This study is aimed to determine the impact of leverage on stock returns. The basic objective is to identify whether the capital structure of a firm impacts the returns of its stock being traded in the stock exchange market.The approach used to conduct the study is based on Fama and French (1993) three-factor model. We have basically extended their model by including a fourth factor of leverage. The basic methodology used to identify the impact of leverage on stock returns is same as used in three-factor model to identify the impact of size premium and value premium on equity market returns. The study is basically conducted on 36 non-financial leading firms of Pakistan listed on Karachi Stock Exchange (KSE)-100. Time horizon that this study covers ranges from January 2007 till December 2010. The results indicate that leverage has no significant impact in explaining the stock returns of a company. Hence, capital structure of firm proves to be of no value in determining excess stock returns. In addition to that it also reveals that for the said time period there is no size effect as well as value effect present in KSE market. Only the market premium has been given by KSE during 2007-2010 period. This study provides important implications for Pakistani investors who are willing to invest in KSE because it provides an insight to investors regarding capital structure and stock return relation as well as regarding two important market anomalies (value premium and size premium). The study highlights the impact of firm specific factors like market capitalization, Book Value-to-Market value ratio (BV/MV) and Debt to Equity ratio (D/E) on stock returns apart from the impact of market specific factors like return of market portfolio. Key Words: KSE, CAMP, Size, Value, leverage
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INTRODUCTION
Markowitz (1952) did one of the major advancements in finance; which is the recognition that the creation of an optimum investment portfolio is not simply a matter of combining numerous securities, but the investors must consider the relation between the investments to have an optimum portfolio.He proposed that investors must consider a balance between the risk and return. Markowitz Portfolio theory (1952) tells us that how the investor should minimize the risk and maximize his return. The capital market theory extended portfolio theory and a model for pricing all risky assets was developed by Lintner (1965), Sharpe (1964), Black (1972)andMossin (1966) independently. The resultant model was the Capital Asset Pricing Model (CAPM), which allowed the investors to determine the required rate of return for the risky investments. CAPM linked the excess return with market return. Ri = Rf + (Rm Rf ) Merton (1973) gave Intertemporal Capital Asset Pricing Model (ICAPM) which further linked the excess return to the market return along with other several variables like wealth as well as state factors; which opened ways to multifactor models.Then Ross (1976) proposed the Arbitrage Pricing Theory (APT), this theory is often considered to be the alternative to CAPM. APT tells us that an assets returns can be predicted using the relationship between that same asset and many common risk factors. APT uses the risky assets expected return and the risk premium of a number of macro-economic factors. Unfortunately, APT failed to tell that what common risk factors must be included to calculate the return of the security. Then finally Famaand French (1993) gave another multifactor approach in response to serious criticism on CAPM in explaining realized stock returns. They discovered that 2 classes of stocks have tendency to do better than the market as a whole: (1) Stock with small market capitalization (small capitalization firms outperform high capitalization firms also known as size premium) (2) Stocks with high book to market ratio (value stocks outperform growth stocks also known as value premium). As a result of these two things they added two new factors to the CAPM. The model says that the expected return on a portfolio in excess of the risk-free rate [E(Ri)- Rf] is explained by the sensitivity of its return to three factors: (1) Excess returns being given by market (Rm Rf) (2) Return on portfolio with small capitalization stocks minus return on a portfolio with large capitalization stocks (SMB; small minus big) (3) Return on portfolio with low B/M stocks minus return on portfolio of high B/M stocks (HML; high minus low). Specifically, the expected excess return on portfolio i is; E(Ri)-Rf= 1[(Rm)-Rf] + 2(SMB) + 3(HML) +alpha Where [(Rm) Rf], (SMB) and (HML) are expected premiums (market, size and value premiums respectively) and the factor loadings, 1,2 and 3 are the slopes in the time series regression. The size premium is measured by SMB and value premium is measured by HML. is effective return.Fama and French (1993) find that the three-factor risk return relation is a good model for measuring the returns of portfolios formed on size and book-to-market-equity ratio basis. 7
In this paper we have introduced a 4th factor in existing Fama and French (1993) three-factor model to make it a four-factor model. This 4th factor is leverage or LMU [emphasis added] (Leveraged minusUnleveraged portfolio of stocks). Hence in this four-factor model we assume: (1) High Cap stocks outperform low Cap stocks (2) Value stocks outperform growth stocks (3) High Leveraged stocks outperform Low leveraged stocks known as Leverage Premium [emphasis added]. This Leverage premium is measured by an additional 4th factor in three-factor equation called LMU [emphasis added]. This LMU is return on portfolio with leveraged stocks minus return on portfolio with unleveraged stocks (or low leveraged stocks).This factor determines whether the leverage has any impact on stock returns of a company or not. The equation comes out to be in the following form finally. E(Ri)-Rf= 1[(Rm)-Rf] + 2(SMB) + 3(HML) +4(LMU) + alpha
RESEARCH OBJECTIVES
We have attempted to study whether the capital structure of a firm has any impact on the risk premium given by its stocks. The objectives of the research can be outlined as follows: To determine the impact of leverage on stock returns To identify whether there is any kind of size premium given by KSE To identify whether there is any kind of value premium given by KSE To determine that what impact market premium has on stock returns To determine the validity of Fama and French three factor model in Pakistans market
SIGNIFICANCE OF RESEARCH
This study provides important implications for Pakistani investors who are willing to invest in KSE because it provides an insight to investors regarding capital structure and stock return relation as well as regarding two important market anomalies (value premium and size premium). The study highlights the impact of firm specific factors like market capitalization, Book Value-to-Market value ratio (BV/MV) and Debt to Equity ratio (D/E) on stock returns apart from the impact of market specific factors like return of market portfolio. The paper provides evidence against CAPM as well as Fama and French (1993) three factor model validity in context of Pakistans market. It would help investors to identify which factor actuallyexplanatory in determining the returns of stocks held by them.
LITERATURE REVIEW
When there was a lot of empirically supported evidence against the validity of CAPM; Fama and French (1992) examined the combined impact of market beta, size, E/P ratio, B/M ratio and Leverage upon the cross section of avg. stock returns during the time horizon ranging from 1936 to 1990, for three stock markets namely NASDAQ, NYSE and Amex. Their study found insignificant. On the contrary when the authors studied individually size, Earning/Price ratio, B/M ratio and leverage were found significant for average cross-section stock returns. However when tested in combination size and B/M remained significant and nullified the impacts of E/P and Leverage upon average returns.Fama and French (1992) therefore concluded that in a rational market there are multiple factors associated with risk rather a single factor like CAPM(Black, 1972; Sharpe 1964; Linter, 1965).
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Fama and French (1993) three-factor-model was basically an extension to Fama and French (1992) study for stocks as well as bonds through time-series regression analysis. In total five factors were studied; for stocks 3 factors were found significant 1) Return on market portfolio, 2) firm size and 3) book to market value; however for bonds the two factors 4) term premium and 5) default premium were found insignificant. As a consequent of these findings Fama and French (1993) developed an asset pricing model known today as Fama and French Three-Factor Model which includes one old risk factor called market beta identified by Sharpe (1964) and Linter (1965) in addition to two new factors identified by Fama and French (1992) called size and value (so three factor model is an enhancement of CAPM). According to Fama and French (1993) three-factor model; expected return of a portfolio in addition to risk-free-rate is caused by its sensitivity to three factors. (a) Excess return being given by market (Rm Rf); (b) return on small capitalization minus large capitalization (SMB) (c) High Book-to-market minus Low Book-to-market (HML). Fama and French (1995) study argues that returns for high book to market equity stocks are greater than stocks with low B/M equity. They explained the reasoning behind it through understanding the properties of high and low B/M equity firms. Their study concluded that companies with high book to market equity normally remain in distress on regular basis and the companies with low book-to-market normally earn profits on a regular basis. Therefore the high return for high book-to-market stocks is justified as those investors are compensated for carrying risky and non-profitable securities. Malin and Veeraraghavan (2004) suggest that size premium is found in France and Germany as these markets exhibit the quality of outperforming small stocks by big stocks; however the researcher found an opposite behavior of stocks in UK market because in UK market large stocks produce larger returns as compared to small stocks. As far as the second factor in three-factor model known as value premium is considered their results show that low book to market value firms (growth stocks) guarantee higher returns as compared to high book to market stocks (value stocks) for France, Germany and UK markets by rejecting three factor model. Doan,Lin, and Zurbruegg (2010) studied returns of stocks being traded on US and Australian indices. They found that Australian stock returns are sensitive to co-skewnesswhereas US stock returns are more sensitive to co-kurtosis. The reason of this discrepancy in two markets is explained by the size-effect because Australian firms are small in size as compared to US firms listed on the indice that is in-line with three-factor model. Javid and Ahmad (2009) examined the macroeconomic sources of variation in returns of stocksfor Karachi Stock Exchange for the period of 1993-2004. They discovered that some factors had significant impact in determining the returns of stocks like consumption growth, inflation risk, call money rate and term structure whereas market return, exchange risk and oil prices risk had minimal role in pricing of a stock.Hanif and Bhatti (2010)realized that validity of CAPM needs to be tested in context of Pakistani market. Therefore they conducted the study on KSE for the period of 2003-2008 and their results argue that CAPM measured the returns of securities with accuracy only for a limited number of companies. For majority of the companies CAPM fails to measure the expected returns; as actual returns deviate from model based returns. The basic assumption of CAPM that high risk entails high return fails when it is tested on Greek stock market for the period of 1998-2002. The research indicates that securities with high beta does not entail a high return as compared to stocks with low beta. (Michailidis, Tsopoglou, Papanastasiou&Mariola, 2006)
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METHODOLOGY Data
The sample used in this study consists of 36 non financial-companies, listed on Pakistans KSE 100 indice. The companies included in this sample cover a variety of industry sectors (like cement, food, oil and gas, tobacco, electricity, textile and automobile) and are Pakistans leading firms. Firms belonging to financial sector are excluded from the sample to enhance reliability. However as we required market portfolio returns as well in our study, therefore as proxy for market portfolio of Pakistan we used all 100 companies (both from financial and non-financial sectors) listed on KSE 100 indice. The daily returns of stocks in sample have been obtained from business recorder1. The study is conducted on market data of past 4 years. The sample period ranges from January-2007 till December-2010. We use 12 months Treasury bill rate of Pakistans t-bills as proxy for the risk-free rates obtained from Pakistan State Bank website2. KSE-100 indice values are used for proxy of market return; that are available at official website of KSE3.
Portfolio formation and formulas for measurement

The methodology of portfolio formation on basis of size (market capitalization) and value (BV/MV) is same as followed by Fama and French (1993). The 36 raw companies were sorted on the basis of Avg. yearly market capitalization initially from smallest to largest (A to Z) or such that firms sort in ascending order of size (small size firms on top and big size on bottom). Two portfolios with 18 companies each were selected from size based sorting. Then each of these 2 portfolios (containing 18 firms in each) was further sorted on the basis of avg. yearly Book value-to-market value ratio from largest to smallest (Z to A). The firms sort in descending order of their BV/MV ratio (firms with high BV/MV on top and low BV/MV on bottom). Then each 18 firms portfolio was further divided into 3 portfolios of 6 companies each after sorting BV/MV basis. This resulted in total 6 portfolios of 6 companies each on BV/MV basis for a single year. Each of these 6 portfolios was then ultimately sorted on the basis of Debt-to-equity ratios of each firm from largest to smallest (Z to A). The firms sort in descending order of their D/E ratio (firms with high debt on top and low debt or equity financing on bottom). Then each of six BV/MV based portfolio is further divided into two portfolios of 3 companies each. This resulted in 12 portfolios of 3 companies each on D/E basis for a single year. BV/MV ratio is calculated by using the following formula: Book to market ratio = Book value of share/market Value of Share D/E ratio is calculated by using the following formula: Debt to equity ratio= total long term debt/total equity For the firms D/E ratio is given in their annual reports, we used the figures without any further modifications. From daily prices the daily returns are calculated by using following formula: Return of stock=Ln (Pt/ Pt-1) Where, Ln = Natural log Pt= Closing price of share on day t Pt-1 = Closing price of share on day t-1 Average monthly returns of stocks are calculated by taking averages of daily returns.
1 2
www.brecorder.com/ www.sbp.org.pk/ 3 www.kse.com.pk/
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DATA ANALYSIS Correlation analysis Avg. Portfolio Rm-RFR SML HML LMU Returns 0.273529 0.087574 0.140171 0.078406 (Rp-RFR) or Rp1 0.435032 -0.23971 -0.19262 0.122217 (Rp-RFR) or Rp2 0.396407 -0.28146 -0.16232 0.109738 Rp-RFR) or Rp3 0.438067 -0.25205 -0.14818 0.087692 (Rp-RFR) or Rp4 0.299346 -0.27094 -0.15706 0.117759 (Rp-RFR) or Rp5 0.290547 -0.26827 -0.195 0.14102 (Rp-RFR) or Rp6 0.566286 -0.13278 -0.11436 0.021451 (Rp-RFR) or Rp7 0.531538 -0.13876 -0.11296 0.02585 (Rp-RFR) or Rp8 0.459219 -0.23491 -0.17589 0.118758 (Rp-RFR) or Rp9 0.532182 -0.22559 -0.17161 0.114838 (Rp-RFR) or Rp10 0.398499 -0.24651 -0.18377 0.119466 (Rp-RFR) or Rp11 0.402536 -0.20532 -0.20039 0.11849 (Rp-RFR) or Rp12 Table 4.1: Correlation of Avg. portfolio returns with market, size, value and leverage premium for the period of 2007-2010
Table 4.1depicts the correlation between average portfolio returns in excess of risk free rate (Rp-EFR) and market premium (Rm-RFR), size premium (SMB), value premium (HML), and finally leverage premium (LMU) for all twelve portfolios during the period 2007-2010. It can be seen that average portfolio returns are positively correlated with market premium for all twelve portfolios during the time horizon of 2007-2010. However as the correlation values are no where greater than 0.5 so we can say that the correlation is positive but not very strong. This is true for all portfolios except Rp7, Rp8 and Rp10 where values are almost 0.5. The highest positive correlation is observed for portfolio Rp7 that comes out to be 32 % i.e. [(0.566286*0.566286)*100]; which means that 32% variability in average portfolio return is caused by market premium. Size premium (SMB) and value premium (HML) have a weak negative correlation with average portfolio returns except for portfolio return Rp1, whereas leverage premium has a weak positive correlation with average portfolio returns for all the twelve portfolios.
Regression Analysis Table 4.2: Regression statistics for portfolio 1 through portfolio 3 during time period 2007-2010 Portfolio 1 Coefficients t Stat -0.04338 -2.77784 0.003006 2.018366 0.011912 0.840668 0.110575 1.236105 0.083665 0.677863 Portfolio 2 Coefficients t Stat -0.11403 -48.3951 0.000746 3.321757 -0.00436 -2.03994 -0.02137 -1.58337 0.017928 0.962779 Portfolio 3 Coefficients t Stat -0.11389 -45.1786 0.000715 2.975899 -0.00528 -2.30758 -0.02014 -1.3951 0.0166 0.833256
Intercept Rm- RFR SML HML LMU
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Table 4.3: Regression statistics for portfolio 4 through portfolio 6 during time period 2007-2010 Portfolio 4 Intercept Rm- RFR SML HML LMU Coefficients -0.11452 0.000827 -0.0049 -0.01851 0.01426 t Stat -43.8906 3.322456 -2.07178 -1.23866 0.69153 Portfolio 5 Coefficients -0.11345 0.00053 -0.00504 -0.01981 0.017168 t Stat -43.4162 2.126675 -2.12745 -1.32357 0.831331 Portfolio 6 Coefficients -0.11357 0.000456 -0.00454 -0.0214 0.018288 t Stat -49.1823 2.068966 -2.16628 -1.61813 1.002125
Table 4.4: Regression statistics for portfolio 7 through portfolio 9 during time period 2007-2010 Portfolio 7 Coefficients t Stat -0.12008 -23.5214 0.002208 4.53563 -0.00529 -1.14166 -0.02365 -0.80882 0.011009 0.272861 Portfolio 8 Coefficients t Stat -0.12071 -23.3895 0.002038 4.141026 -0.00544 -1.1616 -0.02367 -0.80064 0.011766 0.288474 Portfolio 9 Coefficients t Stat -0.1137 -46.4744 0.000828 3.549436 -0.00443 -1.99412 -0.02024 -1.4441 0.018485 0.956083
Intercept Rm- RFR SML HML LMU
Table 4.5: Regression statistics for portfolio 10 through portfolio 12 during time period 2007-2010 Portfolio 10 Portfolio 11 Portfolio 12 Coefficients t Stat Coefficients t Stat Coefficients t Stat -0.1137 -48.8806 -0.11396 -46.3617 -0.11346 -46.6352 Intercept 0.000962 4.337809 0.000697 2.973042 0.000691 2.979673 Rm- RFR -0.00422 -1.99879 -0.00456 -2.04567 -0.00382 -1.73211 SML -0.01904 -1.42911 -0.02124 -1.5085 -0.02193 -1.57385 HML 0.018354 0.998465 0.01769 0.910657 0.017443 0.907211 LMU
Table 4.2, 4.3, 4.4 and 4.5 depict the regression statistics for the twelve portfolios under research. The results indicate that only market premium is significant for the study undertaken as only for this variable the value of t stat is greater than 2 (t stat>2). All other independent variables i.e. SMB, HML and LMU are found to be insignificant for Karachi Stock Exchange for the period of 2007-2010. The results are consistent for all twelve portfolios under discussion. KSE market is found to be giving only market premium and market is not giving any kind of size or value premium. Similarly the capital structure of the firms is also not very explanatory in determining the returns of stocks. Other than market premium SMB, HML and LMU are not determining the average portfolio returns. Also the confidence interval for all portfolios ranging from Portfolio 1 through Portfolio 12 is found to be 95% that is highly significant for all variables.
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Descriptive statistics Table 4.6:Descriptive statistics for portfolio 1 through portfolio 6 during time period 2007-2010 Descriptive Portfolio 1 Portfolio 2 Portfolio 3 Portfolio 4 Portfolio 5 Portfolio 6 Stats -0.05088 -0.1121510 -0.11183 -0.11257 -0.11152 -0.11173 Mean Standard 0.014907 0.0025221 0.002656 0.002764 0.002625 0.002341 Error -0.09392 -0.11711 -0.11659 -0.11841 -0.11993 -0.11869 Median Standard 0.103278 0.0174734 0.018401 0.019152 0.018188 0.016222 Deviation Sample 0.010666 0.0003053 0.000339 0.000367 0.000331 0.000263 Variance -0.66043 -0.654259 -0.86723 -0.53793 -0.64298 -1.13165 Kurtosis 1.109715 0.0100711 0.113714 0.070343 0.14179 0.388219 Skewness 0.289902 0.0719213 0.071459 0.080385 0.075934 0.057285 Range -0.1526 -0.157416 -0.15358 -0.15727 -0.15674 -0.13935 Minimum 0.1373 -0.085495 -0.08212 -0.07688 -0.0808 -0.08207 Maximum -2.44211 -5.383249 -5.36807 -5.40327 -5.35299 -5.36295 Sum 48 48 48 48 48 48 Count Confidence 0.029989 0.0050737 0.005343 0.005561 0.005281 0.00471 Level(95.0%) Table 4.7: Descriptive statistics for portfolio 7 through portfolio 12 during time period 2007-2010 Descriptive Portfolio 7 Portfolio 8 Portfolio 9 Portfolio 10 Portfolio 11 Portfolio 12 Stats -0.11743 -0.11808 -0.11183 -0.11189 -0.11205 -0.11169 Mean Standard 0.005654 0.005565 0.00264 0.002636 0.002576 0.00253 Error -0.1177 -0.11894 -0.1177 -0.11712 -0.11749 -0.11809 Median 0.039175 0.038553 0.01829 0.01826 0.017845 0.017532 Standard Deviation Sample 0.001535 0.001486 0.000335 0.000333 0.000318 0.000307 Variance 13.9224 13.99063 -0.24407 1.058871 -0.63588 -0.7935 Kurtosis -3.44949 -3.46392 -0.05748 -0.39299 0.021972 0.090435 Skewness 0.214954 0.212461 0.081381 0.089578 0.074926 0.068026 Range -0.29539 -0.2921 -0.16234 -0.17294 -0.15457 -0.15074 Minimum -0.08044 -0.07964 -0.08095 -0.08337 -0.07964 -0.08272 Maximum -5.63687 -5.66776 -5.3679 -5.37091 -5.37831 -5.36096 Sum 48 48 48 48 48 48 Count 0.011375 0.011195 0.005311 0.005302 0.005182 0.005091 Confidence
Table 4.6 and 4.7 displays the descriptive statistics for all twelve portfolios. Standard deviation statistics indicate that variation from mean values of return is high. We can see that except portfolio 1 all portfolios indicate a negative return or loss.Skewness values of returns are also positively skewed except 13
for portfolios P7-P10. P7 through P10 are negatively skewed. The value of Kurtosis is less than 3(Kurtosis <3) which indicate the data is flat and does not contain high peaks. However for P7 and P8 the value of Kurtosis exceeds 13.
CONCLUSION
Lintner (1965), Sharpe (1964), Black (1972) and Mossin (1966) independently developed a model called CAPM which allowed the investors to determine the required rate of return for the risky investments and linked the excess return with market return. Then Ross (1976) proposed APT as an alternative to CAPM which says that assets returns can be predicted using the relationship between that same asset and many common risk factors. Unfortunately, APT failed to tell that what common risk factors must be included to calculate the return of the security. Therefore by considering this short coming of APT and in response of increasing criticism on CAPM Fama and French (1993) gave another multifactor approach to explain realized stock returns. The model says that the expected return on a portfolio in excess of the risk-free rate [E(Ri)- Rf] is explained by the sensitivity of its return to three factors: 1) (Rm Rf) 2) SMB 3) HML. In this paper we have introduced a 4th factor in existing Fama and French (1993) three-factor model to make it a four-factor model. This 4th factor is leverage or LMU (Leveraged minus Unleveraged portfolio of stocks). We have attempted to study whether the capital structure of a firm has any impact on the risk premium given by its stocks. This study provides important implications for Pakistani investors who are willing to invest in KSE because it provides an insight to investors regarding capital structure and stock return relation as well as regarding two important market anomalies (value premium and size premium). The study is basically conducted on 36 non-financial leading firms of Pakistan listed on Karachi Stock Exchange (KSE)-100 indice. Time horizon that this study covers ranges from January 2007 till December 2010. The results indicate that leverage has no significant impact in explaining the stock returns of a company. Hence, capital structure of firm proves to be of no value in determining excess stock returns. In addition to that it also reveals that for the said time period there is no size effect as well as value effect present in KSE market. Only the market premium has been given by KSE during 2007-2010 period. In addition to that it has also been observed that average portfolio returns are positively correlated with market premium. The study is however conducted on a limited sample of 36 companies for a limited time period therefore we can infer that results are not very generalized.
REFERENCES
Black, F. (1972).Capital market equilibrium with restricted borrowing.The Journal of Business,45(3), 444-454. Doan, P., Lin, C. T., &Zurbruegg, R. (2010). Pricing assets with higher moments: Evidence from the Australian and US stock markets. Journal of International Financial Markets, Institutions & Money, 20(1), 51-67. Fama, E. F.,& French, K. R. (1993). Common risk factors in the returns on stocks and bonds.Journal of Financial Economics, 33, 3-56. Fama, E. F.,& French, K. R. (1995).Size and book-to-market factors in earnings and returns. The Journal of Finance 50(1), 131155.
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Fama, E. F.,&French, K. R. (1992). The cross-section of expected stock returns. Journal of Finance, 47(2), 427465. Hanif, M. &Bhatti, U. (2010). Validity of capital assets pricing model: Evidence from KSE-Pakistan. European Journal of Economics, Finance and Administrative Sciences, 120,140-153.Retrieved fromwww.eurojournals.com/ejefas_20_13.pdf Javid, A. Y. &Ahmad, E. (2009).Testing multifactor capital asset pricing model in case of Pakistani market.International Research Journal of Finance and Economics, 25, 114-138. Retrieved from www.eurojournals.com/irjfe_25_10.pdf Lintner, J. (1965). The valuation of risk assets and the selection of risky investments in stock portfolios and capital budgets.TheReview of Economics and Statistics, 47(1), 13-37. Malin, M., &Veeraraghavan, M. (2004). On the robustness of the Fama and French multifactor model: Evidence from France, Germany, and the United Kingdom. International Journal of Business and Economics, 3(2), 155-176. Markowitz, H. (1952). Portfolio selection.Journal of Finance, 7(1), 77-91. Merton, R. C. (1973). An intertemporal capital asset pricing model.Econometrica, 41(5), 867 - 887. Michailidis, G., Tsopoglou, S., Papanastasiou, D., &Mariola, E. (2006).Testing the Capital Asset Pricing Model (CAPM): The case of the emerging Greek securities market.International Research Journal of Finance and Economics, 4, 78-91. Retrieved from <www.eurojournals.com/IRJFE4%207%20grigoris.pdf> Mossin, J.(1966). Equilibrium in a capital asset market.Econometrica, 34(4), 768-783. Ross, S. A. (1976). The arbitrage theory of capital asset pricing.Journal of Economic Theory, 13, 341 360. Sharpe, W. F. (1964). Capital asset prices: A theory of market equilibrium under conditions of risk.Journal of Finance,19(3), 425-442.
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The Role of Human Resource Practitioners Maintaining Sustainability In Organisations: Some Empirical Evidence Of Expectations, Challenges And Trends
Dr A J du Plessis Department of Management and Marketing, Unitec New Zealand, New Zealand Ms S Paine Department of Management and Marketing, Unitec New Zealand, New Zealand Dr C J Botha School Human Resource Sciences, North-West University, Potchefstroom, South Africa
ABSTRACT
To sustain competitive advantage, organisations rely on technology, patents or strategic positions and on how their workforce is managed. Emphasis on people to compete effectively in global economies requires HR practitioners to live up to the challenges, expectations and trends in HR functions. The aim was to establish if HR practitioners are equipped with the capabilities for the challenges, expectations and trends of HR effectiveness. Data was collected via an e-survey questionnaire, from 364 members of the Human Resource Institute of New Zealand. The response rate was 41%. Five closely related HR themes were focused on: the first two on the HR practitioners role as change agent and strategic partner. The three remaining themes focused on HR practitioners responsibility of improving relations in the organisation. Findings show high positive results in self-identified HR capabilities. This signifies that HR practitioners in New Zealand possess capabilities that can increase HR effectiveness. Key words: Expectations, challenges, trends, themes, value add
INTRODUCTION
A companys workforce is the lifeblood of organisations and they represent one of its most potent and valuable resources according to Du Plessis (2009). Consequently, the extent to which a workforce is managed is a critical element in enhancing internal effectiveness and improving the organisations competitiveness. Human Resource (HR) practitioners play an increasingly vital role in maximising the efficiency of the organisations human resources since HR practices support employee behaviour that is critical for accomplishing key organisational processes, thus advancing organisational success (Nel, Werner, Poisat, Sono, Du Plessis, & Nqalo, 2011; Stone 2008; Rennie 2003; Wright & Boswell, 2002). It
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becomes evident that individuals performing in those HR roles need to be equipped with distinct capabilities that support the expectations, challenges and requirements of their roles and responsibilities. HR practitioners in New Zealand (NZ) have been exposed to challenges and opportunities initiated by the increasing change and complexity of the business environment. The emergence of globalisation, development in technology and telecommunications; the shift towards a knowledge-based workforce, labour legislation and intensifying competition for skilled labour create new competitive realities for organisations. Increasing tightening of competition implies that, regardless of the country in which they operate, organisations are all under pressure to react to these changing conditions by cultivating a competence in human resource management (HRM) (Du Plessis, 2009; Horgan, 2003). Organisations are now looking to the HR function to go beyond the delivery of cost effective administrative services and provide expertise on how to leverage human capital (Jamrog & Overholt, 2004). Simultaneously the role of HR practitioners as strategic business partners and leaders of change has also received considerable attention (Du Plessis, 2009; Rennie, 2003; Walker & Stopper, 2000). Ultimately, the competitive forces that organisations face today create a new mandate for HR and this necessitates changes to the structure and role of the HR function. In todays global economy HR practitioners must be prepared to meet the considerable challenges and expectations posed by the continuing evolution of their role and show how their function is creating and adding value to the organisation. As recognised by Ulrich and Brockbank (2005, 134) HR should not be defined by what it does but by its contribution to achieve organisational excellence.
PROBLEM STATEMENT
From the research problem, taking into account the broader focus on key HR activities and functions, one realises that there is a need to consider to what extent HR practitioners in NZ organisations are equipped with the capabilities that can fulfil the expectations, challenges and trends in HR effectiveness.
OBJECTIVES OF THIS STUDY

Several studies were done over the past years in NZ among HR practitioners future, capabilities challenges and expectations. The ultimate objective of this study is to determine the extent to which the current levels of capabilities of HR practitioners in New Zealand organisations match the challenges, expectations and trends of their current roles and responsibilities. By comparing this study with NZ organisations from previous studies add more value and it informs the reader of how changes have taken place over the past ten years in NZ.
METHODOLOGY
The quantitative methodology adopted was an e-survey; a questionnaire containing structured closed questions. This involved the selection of a sample of people from the HR practitioner population in NZ to ascertain how factors differ, and to make inferences about the population, or in other words generalising from sample to population. Reliability of this study was seen as high (41% responded) as previous leading HRM studies conducted in NZ were successful with a response rate of 11% and 34 % respectively.
Sample selection
The study focused on HR practitioners in NZ organisations who are registered as members of the Human Resources Institute of New Zealand (HRINZ). HRINZ have 3600+ individual members who are involved in the management and development of HR in private and public sector organisations throughout NZ. The
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target population was limited to HRINZ members that had registered to participate in HR research requests that HRINZ provided links to; the total number of HRINZ members in this category was 364.
Data collection
The data was collected via the e-survey, which was specifically designed for this study. The invitation to participate in this study went to 364 members of HRINZ. A total of 179 participants responded to the survey questionnaire, giving a response rate of 41%.
Questionnaire
The questionnaire consisted of six sections with 40 questions (this number was made up of main questions and sub-questions). Several sub-questions were formed to adequately explore each of the five HR themes researched in this study. All the questions in the questionnaire were closed questions. All five themes are covered in this article but due to the size of the study and length limitation for this article not all the information could be discussed. The Tables reflect the research questions used in this article, and the rationale for using the five specific themes is discussed later.
LITERATURE REVIEW Background

For decades HR practitioners have been tagged as administrators, however organisations are now looking to the HR function to go beyond the delivery of cost effective administrative services and provide expertise on how to leverage human capital (Jamrog & Overholt, 2004). Simultaneously the role of HR practitioners as strategic business partners and leaders of change has also received considerable attention (Rennie, 2003; Walker & Stopper, 2000). Ultimately, the competitive forces that organisations face today create a new mandate for HR and this necessitates changes to the structure and role of the HR function. The HR profession has been continuously evolving and changing over the past hundred years, adding more and different roles and responsibilities. When one traces the HR profession one finds that out of the Industrial Revolution, labour unions and the industrial welfare movement arose as well as groundbreaking research in scientific management and industrial psychology. In the 1980s climate of anxiety over prospects for economic growth, it became apparent that there was a need for the HR function to become more proactive and human resource problems needed to be anticipated and prevented or at least minimised (Gilbertson, 1984). This decade also saw the HR profession faced with criticism and questions regarding its validity, which subsequently resulted in a significant body of research that linked HR practices to organisational performance (Stewart, 1996). From the 1970s to the 1990s NZ experienced major developments in legislation impacting on employment relations, along with more economic restructuring and radical shifts in the labour demand and supply, enforced a growing awareness of the importance of the human asset (Gilbert & Jones, 2000). A generally harsher business environment and increasing competitive pressures caused the HR function to be increasingly seen as a specialist role (Macky, 2008). This made it necessary for HR practitioners to recognise that they had the potential to play a key part in maximising the efficiency of the organisations human resources. At the same time the role of HR practitioners in NZ organisations was becoming more strategic in orientation (Du Plessis, 2010; Du Plessis, 2009; Macky, 2008; Boxall, 1995; Stablein & Geare, 1993). HR practitioners started to depict themselves as strategic HR professionals who divided their roles into operations and strategy.
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The profile of the New Zealand HR practitioner had also changed dramatically. By the late 1990s the majority of HR professionals (60%) were well educated women with a degree or postgraduate qualification and a previous career in HR (Institute of Personnel Management New Zealand, 1997). Authors have taken different stances when referring to HR practices, but there was a consistent focus on the contribution of HR practices to enhancing human capital. Shared assumptions of a number of authors result in the definition that HR practices are a set of activities that actively contribute to achieving organisational objectives (Macky, 2008) and have the ability to gain competitive advantage over other firms (Barney & Hesterly, 2006). HR practices, i.e. the programmes, processes and techniques that direct the management of an organisations human resources can complement, substitute for, or even conflict with other organisational practices and at times arise from reactive and ad hoc choices made by HR practitioners in response to circumstances ( Wright & Boswell, 2002, Macky, 2008). HR practitioners are an active element in the implementation of HR practices because of their command of professional and business acumen. Their quality, extent of knowledge and experience, level of training and education, combined with a belief in their ability to achieve set objectives has a significant impact on the successful implementation of HR practices (Murphy & Southey, 2003).The five closest related themes focussed on in this article are: change management, recruitment and retention, work-life balance, diversity management, and HR as a strategic partner. These five themes are closely related and will be compared with earlier studies done in NZ on the same topics.
Change Management
Organisations that effectively manage change by continuously adapting their bureaucracies, strategies, systems, products and cultures in response to the impact of the complex, dynamic, uncertain and turbulent environment of the twenty-first century, are identified as masters of renewal according to Nel, Werner, Poisat, Sono, Du Plessis, & Nqalo, (2011). New Zealand businesses are not exempt from this trend and for the past decade organisations have been facing the need to change in order to remain competitive in the global market (Du Plessis, 2006). Consequently the HR function has become more multifaceted over the years as the pace of change quickens, requiring a transition towards more value-added roles, such as the role of a change agent (Holbeche, 2006). Unquestionably HR practitioners have a critical role to play to ensure that the change process runs smoothly, as change in itself causes a high level of turmoil in organisations (Nel et al., 2011). In the new economy HR practitioners, as organisational facilitators to change, have to have the capacity and discipline to make change happen and need to be skilled in the management of employee resistance to change (Macky & Johnson, 2003). The focus on the behaviour of employees is important as change has a way of scaring individuals into inaction, hence change facilitators need to possess the skills and tactics to modify employees perceptions and replace any resistance with motivation and excitement to make change more appealing and seemingly more likely (Dibella, 2007). Managed change is proactive, intentional and goal-oriented behaviour and in order to reduce the likelihood of failure, HR practitioners, in change agent roles, need to develop competencies that enable them to identify and anticipate possible problems that may arise (Cleland, Pajo & Toulson, 2000; Macky & Johnson, 2003; Ulrich & Brockbank, 2005; Ulrich & Smallwood, 2003). Overall, there is clear indication that change happens and the need to change is inevitable. Therefore HR practitioners need to facilitate organisational change and implement the necessary HR practices to ensure success (Joerres, 2006). This requires them to develop change management skills which include the capability to think strategically, engage employees, facilitate change and exceed expectations (Hayward, 2006). The need for change becomes evident when there is a gap between organisation, division, function or individual performance objectives and actual performance in the organisation. 19
Du Plessis, Beaver and Nel (2006) refer to the research of Beckhard and Harris, more than two decades ago (1987) that the world in which organisations exist, and will be operating in future, is continuously changing. It changes in relationships among nations, institutions, business partners and organisations; changes in the makeup of the haves and the have nots; changes in dominant values and norms governing societies. It also changes in the character and culture of business or wealth-producing organisations; changes in how work is done and changes in priorities. The core dilemma for leaders and managers is to maintain stability and at the same time provide creative adaptation to outside forces, change assumptions, technology, working methods, roles, relationships and the culture of the organisation. The pressures of change threaten many traditional and long-held ways of managing and working. Dealing with change is among the greatest challenges facing managers in NZ and other countries, now and in the future in modern day business management. Managers as change agents planning to implement change must predict resistance to these changes as well. Resistance to change is a common human behaviour. Usually they misunderstand the changes and its implications; they do not want to lose something valuable and the fear for the unknown.According to Nel et al (2011) one key to managing resistance is to plan for it and to be ready for it with a variety of strategies to help employees to negotiate the transition. HR managers should therefore treat resistance as an opportunity to re-evaluate a proposed change and to identify and deal with the real barriers to change.
Recruitment and Retention

Organisations promote the idea that employees are their biggest source of competitive advantage. Yet, interestingly enough, too many organisations are unprepared for the challenge of finding, motivating and retaining skilled and talented individuals in todays labour market (Hrtel, & Fujimoto 2010). Attention has been drawn to an imminent shortage of capable workers by a number of global studies. According to two global surveys, conducted by McKinsey Quarterly in 2006 and 2007, finding talented people is the single most important challenge for organisations worldwide (Guthridge, Komm, & Lawson, 2008). The 2007 global Web survey, conducted by the Boston Consulting Group (BCG), established that managing talent, which involves attracting, developing and retaining all individuals with high potential, was one of the HR challenges demanding the most immediate action and greatest attention (Strack, Dyer, Caye, Minto, Leicht, Francoeur, 2008). The intensifying competition for talent and the increasingly global nature of the competition, makes recruitment and retention a strategic priority and it becomes vital for HR practitioners to rethink the way their organisations plan to attract, motivate and retain employees (Guthridge et al., 2008). HR practitioners have a key role to play in ensuring that organisations have a continuous supply of suitably qualified and trained employees. Reaching the best candidates in the market requires an advanced approach to sourcing talents. There is a need to renovate current recruiting and staffing processes and HR practitioners need to work closely with other departments and pay special attention to staffing issues (Strack et al., 2008). Despite the abundance of researchers offering a variety of techniques for the recruitment and selection of employees it is found that HR practitioners are often overwhelmed by the literature and fail to adopt the most appropriate methods (Heneman, Judge, & Heneman, 2006). Regardless of the fact that New Zealanders pride themselves on being early adopters of technology in the area of e.g. recruitment, NZ organisations are way behind US and UK trends (Kendrick, 2007). If, as alleged by Kendrick (2007,6), Human capital is a key resource for most companies, it is vital to recruit and select the right people. It also makes business sense to make recruitment an ongoing process and not just an event (Banks, 2007). This requires the skill to build a system whereby talent can be tapped into at any time rather than starting from scratch each time a vacancy arises (Jacobs, 2007).
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While organisations seek to identify, appoint and select quality people in a labour market where particular skills are sought after and personal commitment to organisational life is decreasing in favour of life-style needs, non-standard forms of recruitment (e.g. using recruitment agencies to locate the most appropriate individual) are on the increase (Fish & Macklin, 2004). This trend, on the one hand, gives HR practitioners additional time to deal with the variety of other HR activities that are inherent in their role. Nevertheless, it also has the potential to have negative implications such as loss of control of the recruitment process and extra costs associated with recruitment agencies. From a strategic HRM perspective HR practitioners can help to support the sustainability of an organisation through identification of capabilities specific to sustainability and by seeking to align recruitment and selection practices to these capabilities (Gloet, 2006). An important issue in the new economy is staff retention because without employees who are well integrated into the organisation and contributing to their best ability, success is short-term (Losey, Meisinger & Ulrich, 2005; Rennie, 2003). Problems, particularly with employees, have incidental effects causing further issues with training, planning and strategic decision-making. When set in a global context, this becomes even more complex and the selection and retention of a stable and committed pool of talent takes careful consideration (Rennie, 2003). As a result this requires more effort in implementing HR practices that can attract, maintain and motivate these employees (Drucker, 2006). The central conclusion of the Fortune Magazines survey of the worlds most admired companies summarised the expressed views of the CEOs stating: The ability to attract and hold on to talented employees is the single most reliable predictor of overall excellence (Storey, 2007, 9). On the other hand McKeown (2002, 152) recognises the link between retention and the employee and manager relationship by saying: Get it right and acceptable retention is almost assured; get it wrong and everything else will count for naught.
Work-Life Balance
Finding the balance between work and non-work, with neither of them intruding into the other in terms of time, resources and emotional energy (Macky, 2008) could be an elusive goal for more and more employees as the twenty-four hour, seven day working week gains ascendancy (Taylor, 2002). From an HR perspective, this issue causes significant concerns for organisations. The difficulty for employees to maintain a balanced life between the paid work they perform and increased responsibilities, such as looking after the elderly or dealing with financial pressures, can cause stress which can translate into decreased productivity and retention issues as employees will look for better working conditions (Hrtel & Fujimoto 2010). According to Barratt (2007, 5) employers will need to get serious about work-life balance and go beyond lip-service because: While organisations talk the talk of work-life balance, the majority are struggling to make it a reality. The organisations response to employees needs may range from family responsive programmes, which may include components such as leave programmes, dependent care and health/wellness programmes (Macky, 2008; Stone, 2008). Offering flexible work arrangements, which are the cornerstone of almost all work-life balance initiatives, can have significant beneficial results (Strack et al., 2008). One of the reasons for this may well be the fact that the one factor that helped employees achieve balance was something in the control of every employer -- that the company was actively helping to achieve a worklife balance for their employees (Campel, 2002). Many younger employees tend to have new and non-traditional expectations about work. A particular demographic challenge comes from generation Y (people born after 1980). As observed by Guthridge et al. (2008) these individuals demand, among other things, a better work-life balance. It becomes evident that these employees, who operate in positions based on their perception of the organisations commitment to work-life balance, need to be managed differently. Ultimately employees are interested in having both 21
a good job and a life beyond work and there is a need for HR practitioners to implement policies and practices that will increase employee commitment (Du Plessis, 2006). This is also noted by Johnson (2000), who states that offering employees work-family balance appears to symbolise an employers concern for employees, leading to greater commitment to the organisation.
Diversity Management
Managing people from different cultures and backgrounds has become the norm for HR practitioners in NZ organisations because the face of the country is changing continuously. NZ is becoming an increasingly multi-cultural society (Du Plessis, 2009; Jones, Pringle, & Shepherd, 2000). According to Ulrich and Brockbank (2005) worldwide immigration patterns have sharply internationalised the labour force and there is a need for organisations to move beyond intellectual diversity and formally ingrain diversity into their culture. HR as a profession therefore has to recognise and espouse the value of diversity because diversity management has been identified as an emerging strategic necessity for survival in a globally diverse environment (Nel et al., 2011). Hrtel et al. (2010) believe it is the responsibility of HR practitioners to manage diversity and to teach other managers and employees what their role in diversity is. This is especially important for organisations in NZ because, like many other developed countries, NZ is experiencing skill shortages; in this context, valuing diversity management takes on a new urgency. Immigrants want to retain their cultural and linguistic identity even though they live in NZ (Rudman, 2010). This is creating further challenges to the HR practitioners ability to manage a diverse workforce. The challenge is to overcome stereotypes and prejudices and to welcome dissimilarities and differences because diversity management should view employees as unique individuals. It also needs to be noted that NZ has the unique existence of biculturalism, which refers to the influence that both Maori and European culture are meant to have on society and in workplaces (Jones et al 2000). Introducing Maori cultural aspects, such as whanau (support) interviews, which is a cultural sensitive selection and promotion method, enables individuals to stay true to their heritage and culture (Macky, 2008). In addition to this biculturalism, there is also a growing number of Pacific Island people, Asians, Indians and many other ethnic groups that can have implications on workplace diversity. Different interests, backgrounds, competencies, skills and talents, if harnessed properly, can be beneficial to productivity and successful teamwork. This is recognised by Ely and Thomas (2001) who say that diverse groups and organisations have performance advantages and the recurrent aspect among high performing groups or teams is the integration of that diversity. Diversity management also involves conscious efforts to actively recruit members from ethnic minorities (Cleland, Pajo, & Toulson, 2000). Demographic trends in NZ clearly indicate that diversity is here to stay; HR practitioners need to recognise the uniqueness of each individual and the varied perspective and approach to work that they bring to the organisation (Rijamampianina & Carmichael, 2005).
Strategic role of HR practitioners

The current normative view of a strategic HR practitioner is depicted as a professional who is able to develop, plan and implement a wide range of organisational activities which are directly linked to organisational performance (Murphy & Southey, 2003). HR practices and policies have strategic implications on organisational performance and in making decisions about any employment related structures HR practitioners must be able to make strategic choices (Boxall & Purcell, 2000). To be seen as truly strategic, important decisions have to be made with a long term perspective (in contrast to day-today operational decisions) as changing business conditions, and the organisations response to those conditions, influence organisational success (Barney & Hesterly, 2006).
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This view fits well with the suggestion by Raich (2002) that there is a clear shift in HRM from a service provider to a business partner. Some companies have even re-titled their HR generalist as Business Partner (Jamrog & Overholt, 2004). As pointed out by Ulrich and Brockbank (2005) the capability of providing direct support and to add value to the organisation through the knowledge of the business, will allow the HR professional to join the management team. This increases expectations, new responsibilities, possibilities and opportunities for the HR function. Consequently if HR practitioners want to become key players in the management team they need to have the relevant capabilities to do so (Raich, 2006). Morley, Gunnigle, OSullivan and Collings (2006) refer to the HRM functions changing characteristics from that of the traditional operational role of personnel specialists, to the strategic role of the HR practitioner. This new approach to design HR practices which develop the strategic value of the organisations human capital is termed strategic human resource management (SHRM) (Stone 2008; Boxall, 1995; Kane, Crawford, & Grant, 1999). In this role HR practitioners must be able to provide the expertise on how to leverage human capital to create true marketplace differentiation and able to determine how the companys current culture, competencies, and structure must change in order to support the organisations strategy (Cabrera, 2003).
ANALYSIS OF THE RESULTS Comparison of the profile of the respondents with a previous study (2000) in NZ
An HRM questionnaire covering 358 items to identify HRM and management trends was jointly compiled in New Zealand and Australia in 1994; the same questionnaire was modified and refined and used again in 2000 by Burchell (2001) in association with HRINZ to determine a future perspective on HR in 2010 in NZ. Results were recorded to reflect the percentage of all respondents selecting a particular alternative for a particular organisation size or occupation. The profile of the respondents is spread over a wide spectrum (refer Table 1 below) and each respondent has some relation to HR. The profile of the respondents is important to add value to their opinions. In the current (being 2008) study in NZ, the most frequent title was HR Manager (37%), and the next most common title was HR Advisor (27%). Those two titles accounted for 64% of the reported titles. The remaining titles were HR Director (9%), HR Generalist (6%), HR Consultant (3%), and Employment Relations Manager (3%). The category others (15%) included titles such as HR Coordinator, HR Administrator, Recruitment Consultant, Research Officer, People Development Manager, Chief Human Resources Officer, Sales & Marketing Capability Leader, Talent Management Consultant and Senior Lecturer HRM (Table 1, below).
Table 1: Profile of respondents by profession in New Zealand in 2000 and 2008

Profession HR (officer to director) Business (line managers to CEO) Consultants Academic (all tertiary institutions) Other TOTAL New Zealand profile 2000 72,00% 10,00% 14,00% 4,00% 0% 100% New Zealand profile 2008 73.00% 9.00% 3.00% (see other) 15.00% 100%
It is significant that there is not much difference between the respondents profile of the 2000 study and the 2008 in this regard in Table 1 above
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Table 2: Profile of respondents by organisation size in New Zealand in 2000 and 2008
Number of employees in organization Fewer than 10 10 49 50 99 100 499 500 or more TOTAL New Zealand profile 2000 1,00% 4,00% 9,00% 40% 46% 100% New Zealand profile 2008 _ _ 13.2% 34.5% 52.3% 100%
In NZ most organisations (83%) have fewer than 10 employees. In this study, the participants are from different sized organisations (Table 2 above); the following groupings were compiled for analysis: small organisations with fewer than 100 employees (0-99); medium 100 to 499 employees, large is 500 or more employees. It should be noted that NZ is predominantly a country of small businesses, with 93.3% of enterprises employing 19 or fewer people ("SMEs in New Zealand: Structure and Dynamics," 2006)In Table 2 above, the profile of the respondents organisation size for 2008 is very similar to the 2000 study.
Change management
In question five of the survey questionnaire, respondents were asked to give an overview of their selfidentified capabilities in the area of change management. A total of 86.1% of respondents are capable of anticipating the effect of internal/external changes. Only 2.5% disagreed and 11.3% gave a neutral response. Similar positive results were received for the other statements for which respondents were asked to hypothesize whether they are equipped with the capabilities that can improve HR effectiveness in change management. A total of 84.7% have the capability to facilitate support to those affected by the changes, 87.4% have the ability to have a proactive role in change management initiatives, 80.1% have the ability to align HR systems with the expected reorganisation and 86.5% have the ability to motivate others through the application of professional credibility & reciprocal trust respectively. Neutral responses were almost identical in the statements referring to capacity to facilitate support (13.2%), proactive role in change management initiatives (11.2%) and the ability to motivate others (10.6%), thus, 16.5% giving a neutral response for the ability to align HR systems with the expected reorganisation. Negative responses were very low (1.9%, 1.2%, 3.3%, and 2.6%). It can be deduced that HR practitioners regard themselves to be able to live up to the expectations and challenges in the change management area. Table 3: Self-identified capabilities in the area of Change Management
Please hypothesize on the following statements indicating the extent to which YOU are currently equipped with the capabilities that can imprGEMENT Capable of anticipating the effect of internal/external changes Capacity to facilitate support to those affected by the changes Ability to have a proactive role in change-management initiatives Ability to align HR systems with the expected reorganisation Ability to motivate others through the application of professional credibility & reciprocal trust Strongly agree 29.1% 37.0% 47.0% 35.7% 31.9% Agree Neither agree nor disagree 11.3% 13.2% 11.2% 16.5% 10.6% Disagree Strongly disagree 0.6% 0.0% 0.6% 0.0% 0.0%
57.0% 47.7% 40.4% 44.4% 54.6%
1.9% 1.9% 0.6% 3.3% 2.6%
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In comparison to a similar study in South Africa, executed in 2002, only 12% of the respondents indicated that HR is capable of anticipating the effect of internal and external changes on the organisation. This figure grew to 71% who agreed that HR should require this capability for 2010, which is close to the current figure in NZ of 86.1% (Du Plessis, Beaver, Nel, 2006).It is one thing to recognise the need for change, however it is quite another thing to have the ability and discipline to implement and communicate changes in the organisation in such a way that they meet the expectations and challenges of the organisation and support all the employees through the change process. The radical changes in the contemporary business environment increase the need for HR practitioners to support the change process. Nevertheless, managing organisational and cultural change requires HR practitioners to have distinct capabilities in order to address expectations and challenges in both operational and organisational changes. The focus on the behaviour of employees is vital in the change process as they are predominantly affected by the changes. HR practitioners may get into difficulties if they try to project their own perceptions of the desirability of change to others because a change perceived desirable by some participants or set of stakeholders is often perceived as undesirable by others. Essentially anyone who views change as undesirable is unlikely to help bring it about, or worse may even sabotage the effort of those trying to do so. HR practitioners therefore should posses the capabilities to manage or shape participants perceptions because as established by Dibella (2007) participants perceptions of change are more critical to successful change implementation than the nature of the change itself. For the purpose of this study the researchers established that the following capabilities are expected with successful achievement and implementation of change initiatives and for the HR practitioner to be a key driver for the change: Capable of anticipating the effect of internal/external changes Capacity to facilitate support to those affected by change Ability to have proactive role in change management initiatives Ability to align HR systems with the expected reorganisation Ability to motivate others through the application of professional credibility & reciprocal trust
The results of the survey showed that the majority of the respondents reported their level of capabilities in the area of change management at a positive level. In addition, correlations were done among all of the demographic data and each of the HR capabilities used as measures to increase HR effectiveness in the area of change management. Based on these correlations, the ability to manage change had the most significant relationship with the number of years of experience in the profession. This result is not surprising as experience has long been considered as a possible determinant of the level of technical and professional skills an individual holds, the level of understanding of organisational context or industry characteristics, as well as the level of business related capabilities (Murphy & Southey, 2003). The level of experience possessed by HR practitioners will also influence their choices on which HR activities are to be adopted. It can therefore be deduced that the extent and quality of a HR practitioners experience, combined with a belief to have high levels of capabilities to achieve set objectives has a significant impact on their ability to increase HR effectiveness in the area of change management.
Recruitment and Retention

A total of 63.6% of the respondents viewed their ability to align recruitment and retention practices to support the sustainability of the organisation as strength/major strength. In contrast 8.6% considered themselves as needing improvement/significant need of improvement in the area of recruitment and retention practices and 23.8% were not sure and gave a neutral response. For 46.9% of the respondents, 25
identifying, analysing, forecasting and interpreting trends for organisational HR needs in the recruitment and retention area were seen as strength/major strength. At the other end of the spectrum, 20.4% viewed this capability in need of improvement. Almost a third (32.4%) of the respondents indicated neither a need for improvement nor strength. The last statement had almost identical results in the neutral answer option (33.1%). Nevertheless a higher percentage of respondents (54.9%) identified the ability to ensure that the organisation has the skilled and engaged workforce it needs as a strength/major strength and 11.9% indicated a need for improvement/major need for improvement. It can be deduced that the majority of the respondents (63.6%) regard themselves as well prepared and capable to retain their skilled employees and to recruit the right people should they need to recruit. In comparison, the South African study of 2002, the respondents were asked what are their view on retaining skilled employees and 61.9% regarded it as important and interestingly a downwards trend to 2010 was recorded to 53.9%. A similar trend was recorded for attracting skilled people. A total of 55.1% for 2002 and only 44.4% for 2010 were forecasted by the respondents.
Table 4: Self-identified capabilities in the area of Recruitment & Retention

RECRUITMENT & RETENTION 1 Align recruitment & retention practices to support sustainability of the organisation Identify, analyse, forecast & interpret trends in organisational needs for human resources Ensures that the organisation has the skilled, committed and engaged workforce it needs 3.9% 5.2% 2.6% 2 8.6% 15.2% 9.3% 3 23.8% 32.4% 33.1% 4 52.3% 39.0% 45.0% 5 11.3% 7.9% 9.9%
The most commonly cited priority in the HR function was to recruit and retain key staff (91.6%). Clearly, HR practitioners in this survey (being 2008) are preoccupied with this activity. The intensifying competition for talent makes recruitment and retention a key priority for organisations and it is imperative for HR practitioners to rethink their organisations plan to attract and retain employees. While it is not clear from this survey whether routine HR activities in the recruitment process are being automated by for example self-service technology, it can be presumed that HR practitioners are using a range of methods to align planning needs, to market the employer and to handle hiring and integration processes effectively and efficiently to address skill gaps. A precise understanding of recruiting needs and a strong monitoring programme also helps HR practitioners to identify areas requiring further improvement. Some of the capabilities were identified as being associated with increasing HR effectiveness in the area of recruitment and retention and they are challenges for the HR practitioner: Align recruitment and retention practices to support sustainability of the organisation Identify, analyse, forecast and interpret trends in organisational needs for HR Ensures that the organisation has the skilled, committed and engaged workforce it needs
The results of the survey showed that in all of the three areas participants viewed their capabilities to increase HR effectiveness in the area of recruitment and retention as strength or major strength. In addition, correlations were done among all of the demographic data and each of the HR capabilities and the most significant relationship was identified with the number of years of experience in the profession.
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The above results indicate that HR practitioners have the ability to attract, develop and retain individuals who can drive organisations that are responsive to both, their customers and future opportunities. Nevertheless in order to move forward HR practitioners need to ensure that organisations have fully automated and flexible systems in place to improve the efficiency of both, their own function and the entire organisation. This will increase the quality of HR, reduce the cycle time for hiring new candidates, lower costs and generally facilitate them to move closer to becoming the organisations administrative expert in the area of recruitment and retention.
Work-life Balance
The respondents were asked to state what the developing and implementing policies are in response to changing demographic trends. A total of 54.9% of the respondents regarded it as a strength/ major strength. The next question was about the capability to be proactive in the approach to overcoming barriers to implement work-life initiatives and 53.6% of the respondents regarded it as a strength/ major strength. An unexpected high percentage (29.1%) gave a neutral response in each of the two statements and negative results were indicated by 15.9%. Statement three i.e. successful in benchmarking and measuring the effectiveness of work-life initiatives, was self-perceived as being a strength/ major strength by only 23.8% of respondents (see Table 5 below). Employees have changing needs and organisations are required to respond to these flexible work styles. Many employees are now looking for more than just remuneration and organisations need to understand this quest in order to assist their staff to have a better balance. Organisations responses to employees needs may range from providing flexible work arrangements to addressing employees growing desire to have more family-friendly working environments.
Table 5: Self- identified capabilities in the area of Work-Life Balance

WORK/LIFE BALANCE 1 for 'significant need for improvement' 3 neutral - 5 for 'major strength' Develop & implement policies in response to changing demographic trends Proactive in the approach to overcoming barriers to implement work-life initiatives Successful in benchmarking & measuring the effectiveness of work-life initiatives 1 3.3% 5.9% 7.2% 2 12.6% 11.2% 26.4% 3 29.1% 29.1% 42.4% 4 41.0% 39.7% 17.9% 5 13.9% 13.9% 5.9%
More flexible time-off arrangements can also encourage more education and training, which ultimately addresses the issue of skill shortages. If organisations accept that HR practices are potentially going to produce beneficial outcomes for the organisation and the employee, then the areas of practice that are more likely to contribute positively should be identified. HR practitioners need to be significantly more proactive in their approach towards improving work-life policies.
Diversity Management
Due to increasing diverse workforces in NZ, the last opinion was related to the area of diversity management. Results are illustrated in Table 6 below. When asked to self-identify the capacity to effectively implement diversity management programmes 28.4% gave a positive result and 28.5% gave a negative result. Almost half of the respondents (43%) indicated a neutral view regarding this capability. Competency in the ability to deal with the application of legislative issues of diversity management and the ability to effectively use the talents of people from various backgrounds were identified by 54.3% and 54.2% of respondents as strength/major strength. 27
Valuing diversity is still not seen as a key priority for the HR function in NZ organisations. Managing diversity is the practice of understanding and embracing social differences for the mutual benefit of both employees and organisations (Wilson, Gahlout, Liu, & Mouly, 2005). Unquestionably, organisations need an action plan for moving diversity initiatives forward. HR practitioners need to be able to have the capabilities to articulate the changes required, make them explicit and to lead the process (Du Plessis, Beaver & Nel, 2006). It can be deduced that even though HR practitioners in NZ organisations have a moderate level of capabilities in diversity management they must invest time and effort to formally ingrain diversity into the culture if they want to maximise the potential of all available talent.
Table 6: Self-identified capabilities in the area of Diversity Management

DIVERSITY MANAGEMENT 1 for 'significant need for improvement' 3 neutral - 5 for 'major strength' Capacity to effectively implement diversity management programmes Competent to deal with the application of legislative issues of diversity management Ability to effectively use the talents of people from various backgrounds, experiences and cultures 1 5.3% 4.6% 2.6% 2 23.2% 12.6% 13.9% 3 43.0% 28.5% 29.1% 4 23.8% 38.4% 41.0% 5 4.6% 15.9% 13.2%
Strategic role of HR practitioners

This question was designed to establish the extent to which HR practitioners possess capabilities that can improve effectiveness in the area of strategic HRM. When queried on the ability to take part in framing business strategies and making key decisions, two thirds (66.2%) of respondents agreed, 17.8% showed a negative result. When asked to indicate their ability to implement coherent HR strategies which are aligned to the business strategy, 78.9% agreed. Developing an achievable vision for the future, whilst envisaging its probable consequences was positively agreed upon by well over half of the respondents (64.2%), and only 10.6% disagreed. The capability of providing direct support to the organisation via strategic input got the highest percentage of agreed responses, 81.4%. The last statement had 73.5% of respondents agreeing. It can be deduced that the respondents do understand the importance of being a strategic partner, to provide support via strategic input (81.4%), and to align HR strategies with the organisations strategies (see Table 7 below). The increasing global nature of competition requires that organisations use all of their available resources to survive and to succeed (Sheehan, 2005). The emphasis on the alignment of all functional activities of an organisation toward the achievement of strategic objectives calls for a strategic role of the HR function. Most discussions of a strategic role focus on two major aspects. Firstly, that the HR practitioner should be able to align people with strategies to enable strategy implementation and secondly the HR function needs to ensure that the HR activities and practices are in place to effectively implement the strategy.
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Table 7: Self- identified capabilities in the area of Strategic HRM

Indicate the extent to which YOU are currently equipped with the capabilities that can improve effectiveness in STRATEGIC HRM Able to successfully take part in framing business strategies & making key business decisions Ability to develop & implement coherent HR strategies which are aligned to the business strategy Capacity to develop an achievable vision for the future and envisage its probable consequences Capable of providing direct support to the organisation via strategic HRM inputs Ability to develop the relevant portfolio of competencies in order to achieve business objectives Strongly agree Agree Neither agree nor disagree 15.9% 14.0% Disagree Strongly disagree
23.2% 31.2%
43.0% 47.7%
17.2% 6.6%
0.6% 0.6%
20.5% 39.0% 20.5%
43.7% 42.4% 53.0%
25.1% 12.6% 19.9%
9.3% 4.6% 6.0%
1.3% 1.3% 0.7%
Given this requirement, it is evident that HR practitioners must have the capabilities to be competent in strategy development, implementation and evaluation. Findings are inconclusive as several factors that emerged from this survey make the researchers question whether the perceived degree of strategic orientation actually reflects reality; HR practitioners only spent 24.2% of their time on strategic input. It can be deduced that HR practitioners lack of strategic input is not the result of their incompetence but more likely the result of having to spend most of their time on transactional activities.
Respondents level of involvement

To establish the degree of specialisation taking place in HR, question four asked participants to specify their level of involvement in a number of HR activities. A 5-point Likert scale was used to determine survey participants level of involvement. The ratings were converted to numerical values where one equals solely responsible and five equals no involvement. The mean scores identified (Table 8, below) ranged between 2.28 and 2.95 (where 2 equals great deal of involvement, 3 moderate level of involvement, 4 little involvement).The standard deviation in conjunction with the mean provides a more accurate picture of HR practitioners level of involvement. As the values in Table 8 reveal, responses in fact sit between 1.45 and 4.16, establishing that there was large disparity among responses.
Table 8: Level of involvement in HR activities

Respondents level* of involvement in the following HR activities: Mean Change management Strategic planning Staffing & retention Managing work-life balance Managing diversity 2.51 2.71 2.28 2.77 2.95 StD 1.012 1.087 0.836 1.048 1.202
Value1** 1.50 1.62 1.45 1.72 1.75
Value2*** 3.52 3.80 3.12 3.82 4.16
* 1 = 'solely responsible', 5 = 'no involvement'
Value1**= Mean - Std, Value2***= Mean + StD
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Cross-tabulation with all of the demographic variables (gender, position classification, occupational category, number of years of experience, highest educational attainment, industry sector and size classification) and chi-square test results found that two of the variables i.e. position classification/job title (Test statistics A) and number of years of experience in profession/occupation (Test statistics B) show a significance level which is less than 0.05 (Test statistics A and B, Table 8). Findings therefore indicate that the variables are indeed related. All other test results showed values above the significant level of 5 percent (0.05) verifying that the level of involvement in specific HR activities is not associated with any other demographic variable.
Test statistics A
Participants level of involvement in HR activities: Cross-tabulation with position classification/job tile Change management Strategic planning Staffing & retention Managing work-life balance Managing diversity Significant level p = < 0.05 Pearson Chi-Square Asymp. Sig. (2-sided) 0.000 0.000 0.003 0.016 0.024
Test statistics B
Participants level of involvement in HR activities: Cross-tabulation with number of years experience in profession/occupation Change management Strategic planning Staffing & retention Managing work-life balance Managing diversity Significant level p = < 0.05 Pearson Chi-Square Asymp. Sig. (2-sided) 0.000 0.000 0.191 0.059 0.015
The data associated with the above cross tabulations also enabled the researcher to look at the representation of individual job classification in relation to a great deal of involvement in the specific HR activities. As established in the findings HR managers consider themselves having a great deal of involvement in all of the HR activities equally. This is in contrast to other categories such as HR administrators, who only have a great deal of involvement in the area of staffing and retention and HR consultants who indicated a great deal of involvement mainly in change management activities.
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Figure 1: Areas of great deal of involvement by job classification

100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%
di re c ge tor ne ra H lis R t m an a H ge R r ad H vi R co so H ns r R ad ulta nt m in H is R tra co to -o r rd in at ER or M an ag er O th er
Diversity Work-lif e balance Staf f ing/Retention Strategic Planing Change Management
H R
The Cronbachs Alpha coefficient for the five constructs or HR themes is illustrated in Table 9. The intercorrelations among the items were considered good by the researcher.
H R
Table 9: Internal reliability test

Construct *Cronbach's Alpha Change Management Strategic HRM Recruitment & Retention Work-Life Balance Diversity Management *0-1, with 0 indicating no correlation among items, and 1 indicating very high reliability
0.777 0.873 0.804 0.862 0.827
RECOMMENDATIONS FOR HR PRACTITIONERS

Concrete recommendations addressing the problems identified are proposed in this section. Even though a high level of capabilities is evident in the results in this study (2008), it is recommended for HR practitioners in NZ organisations to increase their exposure to different practices, methods and systems; this can result in a greater ability to identify potential areas for improvement, as well as the identification of previously unconsidered solutions. HR practitioners will have to be the change agents and leaders with the implementation of all the programmes and practices for these changes. NZ businesses employ thousands of foreign citizens and it becomes a very difficult task for any manager to accommodate all cultures. HR managers will have to learn new skills and, amongst others, to become 31
competent leaders who will have the capacity to lead their team to outgrow their rivals domestically, internationally and globally. A major challenge for HR practitioners in the future will be coordinating work efforts of diverse organisational members in accomplishing the organisational goals to retain their workers. To manage work-life balance: Develop and implement policies in response to changing demographic trends Proactive in the approach to overcoming barriers to implement work-life initiatives
The following capabilities are necessary in the area of diversity management: Effectively implement diversity management programmes Deal with the application of legislative issues of diversity management Use the talents of people from various backgrounds, experiences and cultures The following capabilities are required to provide significant input into the organisations strategy: To successfully take part in framing business strategies and making key business decisions To develop and implement coherent HR strategies which are aligned to the business strategy Develop an achievable vision for the future and envisage its probable consequences
CONCLUSIONS
Findings indicate that the influx of women into HR has gained great momentum in NZ. In 1978 only 22 percent of women represented personnel managers then. Similarly, in 1990, Stablein and Geare (1993) reported that women comprised 31 percent of HR personnel surveyed. However not less than a decade later, women consisted of 59 percent of HR practitioners (Cleland et al., 2000). Consistent with this increasing trend this study established that 76 percent of HR practitioners in NZ organisations in 2008 are female. A comparison of the highest rated results reveals significant changes in some areas from the study done in 2000 and the 2008 study in NZ. The five themes show very similar change management, recruitment and retention, work-life programmes, diversity management philosophies, and strategic roles for HR practitioners in NZ. The most significant one is the expectations and challenges for the HR practitioner in aligning HR strategies with business strategies. Previous studies show an increase in the strategic role from 2000 and 2002 respectively (25% to 2010) and the current study (2008) reflects 81.4%. The researchers trust that HR practitioners will use the information gained in this study about the capabilities of HR professionals, and the recommendations to build on this knowledge base to create additional new knowledge on HRs current capabilities and the impact on organisational performance. A new kind of HR practitioner as well as a business manager and employee can be expected in successful organisations in the future adding sustainable value.
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In Financial Meltdown Are Countrys Stability Factors of More Interest to Foreign Investors?
A Critical Examination
Wajid Shakeel Ahmed Department of Management Sciences COMSATS University of Information Technology Islamabad, Pakistan Muhammad Tahir Masood, Ph.D., P.E. (Corresponding author) Professor, Department of Management Sciences COMSATS University of Information Technology Islamabad, Pakistan Dr. Husnain A. Naqvi Assistant Professor, Department of Management Sciences COMSATS University of Information Technology Islamabad, Pakistan Jibran Sheikh Department of Management Sciences COMSATS University of Information Technology Islamabad, Pakistan
ABSTRACT
Investment business is nothing more than an adult game of capital. This paper critically reviews the countrys stability factors, needed to be considered by the foreign investors, to reduce the element of investment risk, in the country that possesses the right aptitude. The research comprises of empirical information in order to confirm the smooth process of prudent investment with only one intension to rescue the minds of the investors from the vicious cycle of financial meltdown. There also confirmed a positive correlation between the prudent investment and the wealth accretion process, which should be the core objective of the foreign investors. Key Words: Capital inflow, Investment Risks, Financial Meltdown.
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INTRODUCTION
International business is a well established term which means to execute the wide range of operations in countries which appear to be qualified enough on the standard criteria of Investment drawn by that internationally acclaimed establishment. International business is a program in itself as this colossal expression seems to submerge the most intense vicinity of wealth creation & accretion. In international business, the operations could either be carried out by private corporations or public corporations by trade, venture and logistics or even by haulage or shipping which essentially takes place beyond the geographical borders between two nations, states or different localities. One of the chief objectives behind international trade carried by a private entity is to expand capital and secure expansion whereas, a public or government entity does international trade with the added value phenomenon such as, bilateral pleasant relations. As a result of healthy trade among two nations will eventually help to boost their Gross domestic production level. The highlight feature of international trade is to conveniently exchange services and goods in a way that people around the globe not only gain the benefit from it but also, formulate a healthier network with respective nations and regions. The most promising difference between international trade and domestic trade is; an increasing risk factor, in terms of losing capital, which can be witnessed in international trade more often and more costly too. Empirically it has been argued the importance of world business cycle and found out that there is said pair wise correlated pattern amoung both the developing & developed industrialized economies for example see, Backus, D., et al. (1995); Baxter, M., (1995); Mendoza, E. G., (1995); and Kose (2002). One of the most important factors of international business is globalization and the large scale exchange of industry and trade. As we know that without globalization, the world will suffer great loss of socialization and fusion; similarly the world without international business will be nothing more than an isolated entity with no technology, development or expertise. The acknowledgement of globalization can only be proved by the flow of goods and services, which are most demanded in all over the globe. As it is a world of competition, so the customer needs and wants are suppose to be the priority of any foreign or local corporation, as this is the key to success. International trade results in evolution & exploration of industrialization; engineering; increase production; and intensifies in the field of commerce. International business is one of the most recognized industries in the field of commerce and trade. The process of investment isnt that easy as it sounds, rather there are crucial dimensions which cannot be neglected, and it is highly needed too to critically judge whether or not the country under consideration is good enough for their investment or not. It has been evident from the recent past that the capital inflows correlated behavior with the expected level of changes in profitability figures; expected rise in the level of real exchange rates; effects the domestic policy making strategies; and entice the world financial investors (Guillermo, et al., 1993). The chief purpose behind any international investment is none other than fulfilling the set promised goals through increase the annual capital profit, so for that reason, the enterprise will take into account every tiny detail which might affect their companys objectives in future. But in order to understand globalization as well as international businesses, one should consider the complex menace of geographical boundaries as well as importance and magnitude of installing industries and manufacturing in stable countries, states or regions across the border. One should get enlighten about the significance of rupturing the stiffness of the border line and challenge the globalization of business, the technology, growth, development or progression which would be on our door steps after we have a clearer view of these complex terms (Stopford & Turner, 1985).
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LITERATURE REVIEW a. Financial meltdown

One cannot overlook the vicious impact of Global crisis in almost every part of the region, and the present one seemed to be the worst, since 1929 market crash. Empirically it is evident that due to the rapid declining movement in the financial markets, it has opened debates; on the credibility level of secure investment venues; new window of opportunities for the domestic foreign investors and; and bringing boundary politics and resulting disputes into to the lime light, Lamb (1964); Woodman (1969); Razvi (19710; Prescott (1975, 1987); Embree (1979); Graver (1981); and Kreutzmann (1993a). Due to the rising chances of distress economic and financial distress in the past years, it has taken the world to the catastrophic vintage point, where it seems to be a point of no return. More over, under this, so called never ended global crisis, where the financial meltdown makes the recession into the state of depression, causes non neglectable damage to the investment world, Roubini, (2008). Since, there found the worst effects of world food and debt crisis during the recent decade (see, Robertson, 1992), efforts has been made to reduce the gap between the developed and developing countries. This depression has fallen down the gross domestic product figure up to 70% and disturbed the credit environment of the United States, i.e., housing pricing eventually falls 20 30%. This can also be evident from the sharp drop in the equity markets and arises capital and liquidity problems for the under writers, Roubini, (2008). On the contrary, one can never forego the vicious impact of economic distress which never seems to be faded out in the coming time and it creates problem for the countries which lacks stability in terms of weak legal protections, Johnson et al. (2000). Also, under the distress economic conditions there arises issues in the performance level of the business where there have been seen imbalance of rights shifts more to controlling managers than ownership rights, for example, Mitton (2002); Lemmon & Lins (2002).
b. Political & socio-economic conditions under financial meltdown

There are a lot of factors which should be kept in mind before installing a massive foreign operating machine in any stable country. A stable country - a region, district, area or a state which is resistant of any change or resistance from deterioration to the condition of its socio economic, political, educational or cultural needs as well as cant grow weaker, decline or fade away from its present secure as well as established state. Once business is settled, one thing which should be kept in mind is Protection - Protection of the property, either inside the country or even in some other foreign country; protection of goods and services; protection of the name of the company; protection of the rights; and most importantly, protection of human rights - rights of employees, labor, worker etc. Developing, but stable nations, can attract the foreign investors by exhibiting a steady political structure as well as socio economic condition of their state. As we know that the stakes are always high with foreign investors so in order to confirm a position for oneself, the developing but stable countries, according to the global trend, attempt to offer more satisfactory and suitable atmosphere or environment for the investors as well as demonstrate the relative economic policies as well as investment laws for those corporations in order to attract them so that they will invest in their nation state.
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Now the later discussion leads us to, importance of stability of a country which makes it a good candidate for the investments of foreign corporations and the factors which affect stability of that corporation. The most common deed which is carried out by the lesser developed as well as stable countries is that they advertise their worthiness by publicizing attractive as well as appealing economic policies for the foreign investors. In the process of choosing a country for the proceeding of international business, the most important factor which should be kept in mind is none other than, its inside condition/state of competence as well as resources as these two features of a company give a detailed view of whether or not the corporation is stable enough in order to establish business in a foreign country or not. Over the last decades, the foreign tycoon investors have made lesser developed countries (from now on, LDCs), as place where they can invest in their businesses. In 1996, net private capital flows to LDCs had full-fledged developed; almost 600% since 1990, reaching a total of $240 billion (World Bank, 1997). The significance of the difference in cultures; difference in economies; difference in currencies exchange rates; difference of political condition, that whether or not the countrys political scenario is stable or not, all of these must be given balanced weightage to get a good grip over the available investment opportunity. Also, to judge the credibility of the targeted foreign country, one should also appreciate difference between social condition of the country to be invested in and ultimately, the difference in the educational condition of that foreign country as it will benefit both the states to learn something out of ordinary or different from each other. c. Capital Inflow under financial meltdown The flow of international capital around the world is very important for the confirmation of a healthy and assured future and it has been arguably said the international capital inflow tend to flow more rapidly into the developing economies due to the sustainable domestic policies, even under the crisis Arias (1994). The role of international trade cannot be emphasized enough as well as international market and its advantages and importance. The significance of international traders and service providers are undeniable as they are the upcoming future go-getters, Drucker (1986). As the cost of labour has declined to high levels of unemployment and relaxations provided by governments around the world in order to kick start their economies. So as a result of it, the multi-national companies are pushed to devote their capital in these states and are left with no other choice but to invest in the most appealing and promising stable country available (Calvo, 1993; Fernandez-Arias, 1994; Cheenan, 1993). The best way for international businesses is to think of themselves as international blood thirsty weapon by getting into this game of cash flow among different firms regardless of their less privileged, overseas auxiliaries (Stopford, J M and Turner, 1985).
d. Portfolio management under financial meltdown

There are a lot of facts and details which should be kept in mind with respect to transportation or transfer of goods and services, importing or exports of material or absolute product, process of taking license in respected foreign country, franchising your outlet over there, how much investment is required, either the investment going to be direct or portfolio. Thus the chief reason of any corporation in conducting a business empire in another state would be none other than having ample profit with very minimum risk threat and with the added significance of portfolio management mechanism; it has become hedging tool for the entities to achieve their set goals. Infact, through the portfolio management mechanism, it has ensured the foreign investors to find the best possible opportunities, on the easier ground, among the many, thus, helping them further to charge to the location on a timely basis.
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e. Balance of payment under financial meltdown

A lot of scholars have showed the importance of countrys socio economic and political stability but the utmost significant feature of a stable country can be none other than profit tax, the ratio of inflation as well as exchange rate is indeed by far the most comparative and virtual feature to be put under consideration of the invested country. Eventually this will help the foreign business investor to understate the issues and problems of workers/ employees in the corporation and to educate how to improve the performance of the conglomerate in international market and produce and manufacture the products, goods and services in the best way possible (Peng, 2001). The echelon of trade in that country which is, in fact, the most crucial point of investigation in the international business as well as market around the world. Its a well known fact that the stability of the countrys currency can only be determined by its exchange rate. As good or elevated currency condition can make a countrys exported manufactured products more costly or pricey and imported products, goods and services in a much cheaper, low priced and economical rate in international market place. It is well understood that exchange rate is the most scrutinized and evaluated feature of a country which makes it the most powerful stability factor of a country so something as powerful as exchange rate can be easily maneuver or influence by political authorities or public body officials in their best interest possible. With huge responsibility, comes the great burden of staying loyal and honest, which lot of investors fail to achieve and get blind folded with greed and personal interest and it has a massive effect on a over performance and to the targeted country as well. Similarly, if a countrys currency rate is not good then the condition will be reversed as the exported goods and services would be of insanely high cost and imports would be on very low priced profits; in short having higher exchange rate in a country is very important in order to attract the internationally stable investors.
Summary
The international businesses and stable countries can be divided into two stages; first stage comprise of the investors considering the factors of the lesser developed as well as stable state by deliberately keeping in the factors which suit their requirements and the other stage includes the policies as well as the environment provided by the stable country are good enough for the settlement of the whole operation or not. Studies show the importance of educational as well as studious value of business in the good judgment of future as well as practical approach in this tricky field of numbers and figures. There is a huge magnitude of international markets and the flow in exchanging of products and goods. The companys success can only be achieved with a constant flow of capital; around the globe. Only those companies are truly successful in every sense who perceive and comprehend the world as a global market or in short one market under one roof regardless of the difference of language and cultural values but when it comes to success then identifying and understanding the world as one is very important (Hout, T., Porter, M.E. and Rudden, E, 1982). Its a wild world out there and in order to make place for you, one has to take calculated risks with familiarization of the needs and wants of people by bringing renovation to already existing merchandise.
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One is suppose to study the material which will not only help him/her in the practical world but will also prepare the newly born babies in this field to stand out as titans and partake in the procedure as well as progression in best possible way and the most important lesson of all time, when an opportunity come knocks your door step, never let it go instead snatch it with both hands and make the best out of it. With international business, one doesnt only profit himself but also facilitate those consumers/shoppers who are actually deprived of lets say a particular product or a distinctive feature in a product which no one else is offering him/her. The multi-national corporations have certain strategies through which they categorize, classify, examine and evaluate the possibility of excessive future profit after their settlement in a particular state. As it takes a lot of man power as well as investment in order to install a business in a state so the experts of foreign investors scrutinize every bit of possibility, policies, stability factors and risks in the lesser developed countries so that there will be no room for liability or imperfection left in decision making. As we know that most stable countries have strict law regarding the environment protection and their policies are strictly followed in this matter so, if they will see the foreign company is going to bring any threat to their already existing policy system, they will refuse to have any further collaboration with them. According to a famous survey conducted in all over the world by experts in Foreign Affiliates of UNCTAD and the World Association of Investment Promotion Agencies (WAIPA), the factors like low income taxes on foreign corporations; access of skilled and cheap labor; an excellent quality and range of communication; know-how of technology; and positive anticipation, guaranteed secured investment with more optimistic approach. So for this reason, the foreign corporations, who are interested in generating foreign business in any stable country should keep the laws, regulations regarding the foreign investors in their mind and should work or perform their functions accordingly for a more satisfied and peaceful future
CONCLUSION: In conclusion to this paper, it is proved true to say that in order to get
enough foreign investments in a nation state to bring bright future, technology and development to a country in it a compulsion to change your political as well as economic policies in favor of foreign investors and foreign corporations. The advantages are going to be enjoyed by both investors and the target country and that both the parties seem to take the comfort of each other. The agencies which a nations authority as appointed to satisfy the needs of the foreign investors are chief key to attract the outside investors as they advertise and give best possible environment to help the foreign investors to settle in their country in a better way. Achieving or over taking the hurdles mentioned above is not as hard as it looks as we know that governments around the world is now opening up to new investors and looking at concept of international business in a more optimistic way then before as it was considered to be intervene in foreign state. The foreign governments have developed special establishments and associations which are there to cater and provide ease to the predicament or hitch which these international companies are facing. Its not just the government which is actually indulging in enhancing this international operation but the main reason behind this massive investment is the interest of that foreign market and the demand of that product. There have been a more positive approach towards the international competition and businessmen are looking at the clash of minds as a path way towards progress and evolution. For the convenience of international businesses, governments around the world have been signing treaty and settlements for quite some time now. Due to which new ideas and innovations can be seen gushing down and helping to develop more this already modern civilization to become more contemporary and current through commercial transactions. Due to positive competition in international market, people know that there wont be any deceitful, unjust or unmerited competition around them and there is only one key to success that would be hard work and new, innovative ideas. Hence, the more stability indicators, that has been unearth earlier, the state will likely to have at his disposal, the more investors would go to bestow, donate and grant their investments in there. 40
REFRENCES
Arias, E. F., (1994) The new wave of private capital inflows: Push or pull? Journal of Development Economics. Vol. 48 (1996) 389-418. Backus, D. K., et. al. (1995) "International Business Cycles: The-ory and Evidence," in Thomas F. Cooley, ed., Frontiers of business cycle research. Prince-ton, NJ: Princeton University Press, pp. 331-57. Baxter, & Marianne, (1991) "Business Cycles, Stylized Facts, and the Exchange Rate Regime: Evidence from the United States." Journal of International Money and Finance, 10(1), pp. 71-88. Calvo, G., Liederman, L., and Reinhart, C., (1993) "Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors." IMF Staff Papers. Drucker, P.F., (1986) "The Changed World Economy", The McKinsey Quarterly, Autumn, pp. 2-26. Fernandez-Arias, E., (1994) The New Wave of Capital Inflows: Push or Pull?" Policy Research Working Paper. Washington D.C.: World Bank. Hout, T, Porter, M.E. and Rudden. E., (1982) "How Global Companies Win Out", Harvard Business Review, September-October, pp.98-108. Johnson, S., et. al., (2000) Corporate governance in the Asian financial crisis. Journal of Financial Economics 58, 141186. Kose, M. Ayhan (2002). "Explaining Business Cycles in Small Open Economies: How Much Do World Prices Matter?" Journal of International Economics, 56(2), pp. 299-327. Lemmon, M., Lins, K., (2002). Ownership structure, corporate governance, and firm value:evidence from the east Asian financial crisis. Journal of Finance, forthcoming. Mendoza, & Enrique G (1995) "The Terms of Trade, the Real Exchange Rate, and Economic Fluctuations." International Economic Review, 36(1), pp. 101-37. Peng. M.W., (2001) The resource-based view and international business. Journal of Management 27(6): 803-829. Richard M. Auty., (1994) World Development Volume 22, Issue 1, January, Pages 11-26 Roubini, (2008), The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster; Global Economic Survey. Robertson, R., (1992) Globalization. Social Theory and Global Culture. Newbury Park, New Delhi. Stopford, J M and Turner, L. (1985), Britain and the Multinationals, John Wiley. World Bank, (1997) Private Capital Flows to Developing Countries. Washington, D.C.: Oxford Press.
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Is Outward Bound Training (OBT) An Effective Tool for Human Resource Development (HRD)? A Case Study from Sri Lanka
Dr. Mohamed Esham Department of Agribusiness Management Sabaragamuwa University of Sri Lanka P. O. Box 02, Belihuloya, Sri Lanka Krishanthi Ganga Vithana Durham Business School, United Kingdom and Department of Agribusiness Management Sabaragamuwa University of Sri Lanka P. O. Box 02, Belihuloya, Sri Lanka
ABSTRACT
The purpose of this study was to examine the effectiveness of outward training programmes as a human resource development tool. For this study 11 organizations practising outward bound training were selected and both survey as well as case study approaches was used to collect data. The results revealed that there is clear difference between outward-bound training programmes and the other human resource development programmes in developing expected outcomes of human resource development as these training programmes address different dimensions of human resource development needs. Moreover, the contribution of outward bound training programmes to develop the expected outcomes considered in the study was much higher than the contribution of other human resource development programmes. However, the findings suggest that both outward-bound training and other conventional human resource development programmes can complement each other to improve the expected outcomes of human resource development. Another important finding of this study was that the outcomes of the outwardbound training programmes are not influenced either by demographic factors of the participants or programme related factors. Hence, outward bound training programmes are suitable for a wide target group within an organization irrespective of their education, gender, age, professional qualifications or position in the management hierarchy. Key words: Outward Bound Training, Human Resource Development, Training Outcomes, Sri Lanka.
"There is more in us than we know. If we can be made to see it, we will be unwilling to settle for less." Kurt Hahn INTRODUCTION
Outward Bound is an innovative educational approach put forth by Kurt Hahn mainly based upon his philosophy of providing experiential learning to empower young people to fulfil their 42
potentials (Stetson, 1996). In literature, interchangeably a number of terms are used to identify OBT such as outdoor-based training, adventure based training, adventure based learning, adventure education, adventure counseling, outdoor adventure learning, outdoor experiential education, wilderness education and outdoor development are some of the terms used. Priest (1990) defined adventure education as being concerned with two relationships, the interpersonal (relationships with others) and the intrapersonal (self-concept). Bagby and Chavarria (1980) defined OBT as a type of educational and/or therapeutic program in which adventure pursuits that are physically and/or psychologically demanding are used within a framework of safety and skills development to promote personal and interpersonal growth. According to Bacon (1983) objectives of OBT are to enhance personal development, interpersonal and environmental awareness, and refine philosophy and values. Outward bound training programmes have become increasingly a popular human resource development tool both in the corporate and public sectors in both developed and developing countries. In Sri Lanka there are about fifteen organizations offering OBT programme packages for organizational clients. The importance placed by local organizations on outward bound training as an important human resource development tool is clearly evidenced by the extensive use of these programmes by both the corporate and the public sectors in Sri Lanka. Notwithstanding its extensive use in Sri Lanka and other countries there are limited empirical research studies undertaken to evaluate their effectiveness as a human resource development tool. Therefore, in order to bridge this knowledge gap we undertake an empirical study with the aim of determining the effectiveness of outward bound training as a HRD tool. Moreover, case studies are undertaken to further the understanding of the role of OBT programmes in enhancing HR skills.
MATERIALS AND METHODS a. Research Sample

This research focused on the institutions already using OBT programmes. For this study 11 organizations practising OBT were selected. These organizations consisting of private and public sector organizations and a university were selected purposively. From each organization ten participants and one top manager from the HR department were selected on simple random basis.
b. Data Collection
As this research was explanatory in nature, survey methods as well as in depth interviews were used for data collection. Primary data was collected using pre-tested questionnaires distributed among the sample of 110 participants from the 11 organizations. Of the 110 participants, 60 participants returned the questionnaire. However, only 41 questionnaires were considered for the analysis due to the missing observations and incompleteness of the questionnaires. In addition, ten in-depth interviews were conducted with the HR managers from the selected organizations to get a clear understanding of the overall effectiveness of the training programmes. As secondary data, documentary information published by selected organizations and training institutions was used.
c. The Research Instrument

The questionnaire was designed to collect data regarding the characteristics of the participants and the attributes of the training programmes. Characteristics of the participants included demographic variables such as age, gender, educational qualifications, professional qualifications, length of experience and the number of training programmes attended during the career. The attributes of the programmes covered in the questionnaires included nature of the training, 43
managerial level for which the training was conducted, number of trainees per batch and the number of trainees per group in the programme, duration of the training, location of the training, group composition and the number of instructors assigned per group. In order to determine the factors contributing to the success of the programme, the potential contributory factors such as course content, training methodology, training environment, tools and equipments used, knowledge and skills of the instructors, behaviours of the instructors, course combination and group size and composition were measured using a five point numerical scale. Based on literature and participatory observations, 12 potential outcomes of OBT were identified. These outcome variables and the descriptions are presented in Table 1. Outcomes were measured by using five point numerical scales based on the question: To what extent OBT programmes contribute to improve the following outcomes? The same numerical scales were used to measure the extent to which other human resource development programmes contribute to improve the same set of potential outcomes. Other human resource development programmes considered in this study consisted of class room training, on the job training (OJT), apprenticeship training and mentoring.
d. Data Analysis Computer aided data analysis techniques with the use of Minitab and Excel package were used to analyze the data. Results were generated using statistical analysis as well as the qualitative analysis data obtained from the case studies. Table 1. Outcome variables and their description
Outcome variable Timely completion of tasks Reduce employee dissatisfaction Reduce wastage Punctuality Reduction of disputes and conflicts Improvement of productivity Improvement of quality Innovations and suggestions Ability to manage work properly Improvement of communication and interpersonal skills Willingness to undertake challenging assignments Ability to manage change Description the extent to which the individual is able to meet deadlines the extent to which the individual is able to maintain cordial relationships with subordinates the extent to which resources are used optimally ability to attend to the assigned task on time reduction in time wasted because of disputes and conflicts the extent to which planed outcomes can be achieved the extent which a task conforms to established standards of performance contribution of new ideas and solutions ability to organize work more efficiently improvement of relationship with subordinates and superiors change in perception about undertaking challenging tasks improvement in perception about change
e. Index to Measure Effectiveness of Outward Bound Training Programmes

A weighted average index to measure the overall effectiveness of the outward bound training programmes was developed using grand total of the measurement scales under each of the potential outcomes(timely completion of tasks, reduce employee dissatisfaction, reduce wastage, punctuality, reduction of disputes and conflicts, improvement of productivity, improvement of quality, number of innovations and suggestions, the ability to manage work properly, improved communication and interpersonal skills, willingness to undertake challenging assignments and ability to manage change). The weights were taken as a proportion of the grand total of the 44
outcome scores. After determining the weights in order to measure the effectiveness of the training programme a composite index was developed using the aggregate of the score multiplied by the weight given to each of the outcome. The composite index value was calculated with respect to each of the participant using the weighted average of the scale measurement indicated under each of the potential outcomes. In order to determine the contribution of the other HRD programmes to develop the same set of outcomes were also measured using the same method.
RESULTS AND DISCUSSION

a. Results of Empirical Analysis
i. Characteristics of the respondents
The characteristics of the respondents are presented in Table 2. The age of the respondents vary from 20 years to 46 years. The majority are either graduates or GCE advanced level qualified. It was not possible to maintain a gender balance in the sample as majority of employees who have undergone OBT were males. The majority of the respondents in the sample had attended only one OBT programme during their career.
Table 2. Characteristics of the respondents

Age 20-29 Years 30-39 Years >40 years Level of Education Masters degree level Bachelors degree level GCE (A/L) and bellow Gender Male Female Responses 39%(16) 36.6%(15) 24.4%(10) 9.8%(4) 41.5%(17) 48.8%(20) 75.6%(31) 24.4%(10)
Number of OBT training programs attended One 51.2%(21) Two 22%(9) Three 9.8%(4) Four or more 17.1%(7) Note: values in the parenthesis are number of respondents
b. Outcomes of Outward Bound Training Programmes

The contribution of OBT programmes to develop each of the identified outcomes was measured using a five point numerical scale. The result of the ANOVA is presented in Table 3. According to the results, almost all the mean values are above 3.0 implying that there is a significant contribution from OBT programme to develop each of the outcomes. According to the confidence intervals, it is clear that the OBT programmes better addresses outcomes such as willingness to undertake challenging assignments, ability to manage work properly and reduction of disputes and conflicts.
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Table 3. ANOVA of OBT programmes

Individual 95% CIs For Mean Based on Pooled StDev Level Mean StDev -----+---------+---------+---------+---(----*----) (----*----) (----*----) (----*----) (----*----) (----*---) (----*----) (----*----) (----*----) (----*----) (----*----) -----+---------+---------+---------+---3.00 3.60 4.20 4.80 TIME COM RE EMP DIS RED WAST PUNCTU RE DIS IMP PROD IMP QLTY INN SUG MG WORK IM COM UND CHALL CHANGE MGT 3.6829 1.2736 3.4878 1.1208 3.7805 1.1071 4.0732 0.7871 3.4878 0.9253 3.3902 0.8910 3.8780 0.8123 4.0732 0.9053 4.0244 1.1065 4.5122 0.5967 3.8780 0.9797
2.9750 0.9470 (----*----)
Notes: (P < 0.000) with adjusted r2 =0.137, Pooled StDev = 0.970 TIME COM -timely completion of task, RE EMP DIS-reduce employee dissatisfaction, RED WASTreduce wastage, PUNCTU-punctuality, RE DIS-reduction of disputes and conflicts, IMP PRODimprovement of productivity, IMP QLTY-improvement of quality, INN SUG -number of innovations and suggestions, MG WORK-the ability to manage work properly, IM COM-improved communication and interpersonal skills, UND CHALL-willingness to undertake challenging assignments and CHANGE MGTability to manage change.
The contribution of other HRD programmes to develop the same set of expected outcomes were measured using the same numerical scale. The results presented in Table 4 indicates that the degree of contribution of other HRD programmes were lesser than outward-bound training programmes. Other HRD programmes contributed largely to develop the outcomes such as improvement of quality and improvement of productivity. However, even these contributions were not higher than the contribution from the OBT programmes.
Table 4. ANOVA of other HRD programmes

Level Individual 95% CIs For Mean Based on Pooled StDev Mean StDev -------+---------+---------+---------+--
TIME COM 2.4634 0.8092 (------*-------) RE EMP DIS 2.4634 0.8092 (------*-------) RED WAST 2.6341 0.8590 (------*-------) PUNCTU 2.5854 0.9213 (-------*-------) RE DIS &CON 2.5122 0.8100 (-------*------) IMP PROD 3.2683 1.0253 (------*-------) IMP QLTY 3.2927 1.0306 (-------*-------) INN &SUG 2.5366 0.7777 (------*-------) MG WORK 2.6341 0.9422 (------*-------) IM COM&IN C 2.5366 0.8396 (------*-------) UND CHALL 2.5366 0.8092 (------*-------) CHANGE MGT 2.5610 0.8077 (------*-------) -------+---------+---------+---------+-2.45 2.80 3.15 3.50
Note: (P < 0.000) with adjusted r2 = 0.142, Pooled StDev = 0.874
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c. Overall Effectiveness of Outward Bound Training Programmes

In order to measure the overall effectiveness of the OBT programme a composite index was developed using the weighted average of the scale data. The weight under each of the outcome was calculated taking the summation of scales under one particular outcome as a proportion of the grand total of the scale measures for all twelve outcomes. A similar composite index was developed to measure the contribution of the other HRD programmes to develop the same set of outcomes. The two indices were then compared and the results are shown in Table 5.
Table 5. ANOVA of OBT vs. HRD

Level Individual 95% CIs For Mean Based on Pooled StDev Mean StDev --------+---------+---------+---------+-
index of OBT 3.8060 0.5739 (----*----) index of other HRD 2.6573 0.6735 (---*----) --------+---------+---------+---------+2.80 3.20 3.60 4.00
Note: (P < 0.000) with adjusted r2 = 0.364 , Pooled StDev = 0.625
The results clearly indicate that there is a significant difference between the two outcome indices. The contribution of the OBT programmes to develop the expected outcomes considered in the study is much higher than the contribution from the other HRD programmes.
d. Factors Influencing the Success of OBT Programmes.

In order to examine the factors influencing the success of OBT programmes, factors such as age, gender, education, professional qualifications, work experience, number of trainings attended, number of trainees per group, number of instructors in a group, group composition and duration of the training were regressed against the composite indices of the individual participants. The results of the multiple regression is presented in Table 6. According to the regression results, despite the regression model being significant none of the demographic variables or variables related to OBT programmes were found to be significant. Implying that the outcomes of the OBT programmes are not significantly influenced by participants demographics or programme related factors considered in this study.
b. Findings from the Case Studies

Case studies were conducted with six organizations representing the banking sector, financial institutions, higher educational institutions, manufacturing organizations, hotel sector and nongovernmental organizations. These selected organizations represented large, medium and small scale organizations. The case studies were conducted through semi structured interviews with the use of a semi structured interview schedules. In addition to the close ended questions, the questionnaire contained many open ended questions to facilitate in-depth discussions with the respondent HR managers from the selected organizations. The number of levels in the organizational hierarchy varied from five to twelve in the selected organizations. All the organizations except the university had obtained the services of the Outward Bound Trust of Sri Lanka which is the only accredited institution to offer OBT programmes under the guidance of the Outward Bound International despite the availability of
47
many other organizations offering OBT programmes to clients. The duration of the OBT programmes offered to employees of selected organizations varied from two to five days.
i. Why choose OBT programmes?

All the respondents in the case study revealed that most of the other HRD programmes to train staff are in-house training conducted within a class room environment to which participants are expected to come formally dressed carrying stationeries such as files, note pads and pens. Therefore, they wanted to change the type of training and allow the participants to be trained in a more relaxed outdoor atmosphere. In addition, they perceived that opportunities to participate in unconventional training programmes will facilitate personal development and job satisfaction of employees. The majority of the HR managers stated that OBT programmes were also chosen to give employees a unique long lasting memorable experience.
ii. Who participates in OBT programmes?

Considering the participant category many organizations have used OBT programmes to train people across the whole organizations representing all the levels of management and occasionally even non-managerial employees. For some organizations they had grouped the participants according to the managerial hierarchy. However, the majority suggested that it would have been more effective given the nature of the programme if employees had participated on departmental basis rather than on the basis of managerial hierarchy. The HR managers of medium and large scale organizations stated that the selection of participants for a programme should be in such a way that it consists of employees representing all the managerial levels of a particular department/s rather than a particular managerial hierarchy or a category. They stated such group composition will better enhance the team performances within the organization. iii. What factors are considered in selecting HRD and OBT programmes? Based on the in-depth interviews conducted with the HR managers of the organizations, the factors they consider in selecting HRD programmes and especially the OBT programmes are illustrated in the Figure 1. Some of the factors are common for all types of HRD programmes. However, some factors are unique for the OBT programmes. Due to the adventures nature and the outdoor environment in which the OBT programme is conducted, the organizations have given considerable attention to factors such as the number of incidence of accidence, safety, discipline as well as the behavioural aspects of both participants and instructors.
Figure 1. Factors considered in selecting OBT and HRD programmes

Exclusively HRD Previous training outcome with trainer Cost Training methodology Course content Effectiveness of the programme Duration Common for HRD and OBT Expected outcome Training location Experience and qualification of trainer Training methodology Course content Training needs of the organization Exclusively OBT Previous experience of HR staff with OBT Give priority to team work Number of accidence Safety Discipline Behaviour of instructors
iv. What are the expected outcomes of the OBT programmes? 48

Given the high expectations from OBT programmes, the priority was given to developing outcomes such as personality, leadership, team building, goal attainment, positive self-concept and ability to face challenges. In addition, most of the organizations highlighted the expectations of developing traits such as self confidence, inter personal relationships among employees and the ability to confront self imposed barriers of individuals. The outcomes such as improving physical fitness, time management, innovation and creative thinking received relatively low scores in our study. v. What were the outcomes of the OBT programmes? Responding to the question to what extent some of the outcomes were developed through OBT programmes, the outcomes which are people oriented received higher scores than the outcomes which are task oriented. The outcomes which received higher scores included team building, cooperativeness, improved individual and group performances, high self confidence, better interpersonal relationships, high flexibility, punctuality, low employee disputes and conflicts, and better cross functional relationships. The outcomes which received moderate scores consisted of timely completion of tasks, reduce employee turnover, number of innovations and suggestions and improvement of productivity, quality and profitability. HR managers also revealed that the OBT programme outcomes are realized at different stages and time periods. Giving special comments on OBT programmes most of the HR managers stated that the OBT programmes are capable of breaking the monotony of the routine life of workers. HR managers have also used OBT programmes to identify potential employees for further development and to develop trust among the employees towards their organization. Further, they tend to consider OBT as a development tool rather than a training tool with direct impacts on the current job. In the in-depth interview conducted with the Dean of a University which has incorporated OBT to its undergraduate curriculum stated that since the employability of the graduate largely depends on the qualities such as leadership, interpersonal skills, communication skills, personality attributes and the ability to work in a challenging environment, OBT was incorporated to their curriculum. Members of the alumni of this University emphasised that the OBT helped them to a greater extent to secure employment and perform well in their current jobs.
CONCLUSION
The use of outdoor experience for educational training and development purposes has a rich as well as a long history since these OBT programmes assist in developing a healthy body as well as a healthy mind within a person. Therefore, this particular training methodology is becoming a very popular among corporate and public sector organizations worldwide and in Sri Lanka. Recognizing the importance of the outcomes addressed through the OBT programmes, even the Universities in Sri Lanka have incorporated OBT programmes into their undergraduate and postgraduate curriculums.The research was conducted with the main objective of determining the effectiveness of OBT programmes as a human resource development tool. The results revealed that there is a clear difference between OBT programmes and other HRD programmes in developing outcomes such as timely completion of tasks, reduce employee dissatisfaction, reduce wastage, punctuality, reduction of disputes and conflicts, improvement of productivity, improvement of quality, number of innovations and suggestions, the ability to manage work properly, improved communication and interpersonal skills, willingness to undertake challenging assignments and ability to manage change. However, it further revealed that the OBT programmes particularly addressed the outcomes such as willingness to undertake challenging assignments, reduction of disputes and conflicts, the ability to manage work properly, improved 49
communication and interpersonal skills, number of innovations and suggestions, ability to manage change and punctuality. Whereas, the other HRD programmes had addressed the outcomes such as improvement of productivity, improvement of quality, timely completion of task, reduce employee dissatisfaction and reduce wastage. Moreover, the contribution of the OBT programmes to develop the expected outcomes considered in the study was much higher than the contribution of other HRD programmes. However, these findings suggest that both OBT and other conventional HRD programmes can complement each other to improve expected outcomes of HRD programmes.Another important finding of this study was that the outcomes of the OBT programmes were not influenced by demographic factors of participants such as age, gender, educational level, professional qualifications, experience, number of programmes attended and programme related factors such as number of trainees in one group, number of instructors per group or the composition of the group. Therefore, it can be concluded that the OBT programmes are suitable for a wide target group within an organization irrespective of their education, gender, age, professional qualifications or management hierarchy. Moreover, the training groups could be heterogeneous and drawn out from different levels of the organizational hierarchy without having negative implications on the effectiveness of the programme. These findings were further confirmed by the case studies. Nevertheless, the results of this study should be cautiously interpreted, as there were number of limitations in conducting this study such as small sample size, personal bias of respondents and limited data used in the analysis.
REFERENCES
Bacon, S. (1983). The conscious use of metaphor. Colorado Outward Bound School, Denver, Colorado. Bagby, S. A. and Chavarria, L. S. (1980). Important Issues in Outdoor Adventure, ERIC/Cress Mini Review, Outdoor Adventure Education and Juvenile Delinquents. Hahn, K., (1957). Outward Bound. World Books, New York. Outward Bound International http://www.outward-bound.org/docs/info/OBSriLanka.htm (Accessed in February 2009). Priest, S. (1990). The Semantic of Adventure Education. In J.C. Miles and S. Priest (Eds.). Adventure Education, State College, PA: Venture Publishing, Inc. pp 113-119. Stetson, C.P. (1996). Journey with Kurt Hahn. Outward Bound International, Victoria, Canada.
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Literature Review: Service Quality in Higher Education Institutions in Malaysia

Anantha Raj A. Arokiasamy Quest International University Perak (QIUP) No. 227, Plaza Teh Teng Seng (Level 2), Jalan Raja Permaisuri Bainun, 30250 Ipoh, Perak, Malaysia.
ABSTRACT The main purpose for this review of literature is to configure the importance of maintaining Service quality in Higher Education industry. The paper would explore the development of the concept of Service Quality. It would also explain the development of Service Quality Measurement Models with respect to the literature as well as their application in various industries and especially the higher education industry. Thus the review paper provides a clear insight on the development of Service Quality Measurement Models. Although a lot of research has been done on the Service Quality; yet the struggle to rightly unfold the concept is still under progress. From 1988 to 2008, eight Service Quality Measurement Models have been developed. In 1988, the first service quality measurement model was developed by Parasuraman, et al. It was introduced by the name of Service Quality (SERVQUAL). This model was empirically tested on the validity of Service Quality Measurement Variable with respect to the multi-industries. Eventually Parasuraman, et al. (1988, p.23) developed five dimensions which were showing significance to the measurement of service quality, namely (a) Tangibles (physical facilities and equipment), (b) Reliability (performing the promised service), (c) Responsiveness (willingness to help customers), (d) Assurance (courtesy of employees to convey trust) and (d) Empathy (individualized attention provided to customers). Keywords: Service quality, higher education, development, measurement and customers.
1.DEFINITION & DIMENSIONS OF SERVICE QUALITY

In this paper, service quality can be defined as the difference between customers expectations for service performance prior to the service encounter and their perceptions of the service received. Service quality theory (Oliver, 1980) predicts that clients will judge that quality is low if performance does not meet their expectations and quality increases as performance exceeds 51
expectations. Hence, customers expectations serve as the foundation on which service quality will be evaluated by customers. In addition, as service quality increases, satisfaction with the service and intentions to reuse the service increases. Institutions of higher education are increasingly realizing that they are part of the service industry and are putting greater emphasis on student satisfaction as they face many competitive pressures. In todays competitive environment, the education has not only become a major industry and need of the day but it is also an investment by the parents for their children. In public as well as private sector the quality of education is an important factor that is considered for attracting and retaining the students who wants to get higher education. Currently every university all over the world tries to become a world class university. In fact quality in higher education is relative concept given the number of various stakeholders involved (Tam, 2001) which ranges from the single student as a primary customer (Hill, 1995) to the whole of the society (students, parents, staff, employees, business and legislators) (Rowley, 1997). Service industries are playing an increasingly important role in the economy of many nations. In todays world of global competition, rendering quality service is a key for success and many experts concur that the most powerful competitive trend currently shaping marketing and business strategy is service quality. Service quality has since emerged as a pervasive strategic force and a key strategic issue on managements agenda. It is no surprise that practitioners and academics alike are keen on accurately measuring service quality in order to better understand its essential antecedents and consequences and ultimately establish methods for improving quality to achieve competitive advantage and build customer loyalty. Parasuraman, Zeithaml and Berry (1985) described service quality as the ability of an organization to meet or exceed customer expectations. The authors defined service quality as the gap between consumer expectations and perceptions. These original dimensions from the framework are illustrated in Table 1 and served as the initial structure of a service quality measurement instrument (SERVQUAL), which was later created by these academics. They listed ten determinants of service quality that can be generalized to any type of service. The ten dimensions are as below:
Table 1 Service Quality Dimensions by Parasuraman et. al

1. 2. 3. 4. 5. 6. 7. 8. 9. Tangibles Reliability Responsiveness Competence Courtesy Credibility Security Access Communication Appearance of physical facilities, equipment, personnel and communications materials Ability to perform the promised service dependably and accurately Willingness to help customers and provide prompt service Possession of the required skills and knowledge to perform the service Politeness, respect, consideration and friendliness of contact personnel Trustworthiness, believability, honesty of the service provider Freedom from danger, risk and doubt Approachability and ease of contact Keeping customers informed in language they can understand and listening to them Making the effort to know customers and their needs
10. Understanding the Customer
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In 1988 Parasuraman, Zeithaml, and Berry developed a generic instrument called SERVQUAL to measure service quality based on input from focus groups. Although SERVQUAL was developed within the marketing sector, it also is used in a variety of organizational settings, including libraries and information centers (Kettinger & Lee, 1994; Nitecki, 1996). Since 1988 Parasuraman, Zeithaml, and Berry have made numerous changes to SERVQUAL, some in response to problems identified by other researchers. These ten dimensions were regrouped in the well known five dimensions in the SERVQUAL model (Parasuraman, Zeithaml and Berry 1990) which include tangible, reliability, responsiveness, assurance and empathy.
Table 2 SERQUAL Model by Parasuraman, Zeithaml and Berry (1990)

1. Tangibles Appearance of physical facilities, equipment, personnel and communications materials Ability to perform the promised service dependably and accurately 2. Reliability 3. Responsiveness Willingness to help customers and provide prompt service Knowledge and courtesy of staff and their ability to convey trust and 4. Assurance confidence Caring and individualized attention to the customer 5. Empathy According to Sasser, Olsen and Wyckoff (1978), service quality is a measure of how well the services (as received) match expectations (as preconceived). The notion of service quality involves more than the outcome quality; the methods and manner by which the service is delivered are of great importance. The quest for service quality has been an essential strategic component for firms attempting to succeed or survive in todays competitive environment. Everyone recognizes good service when they see or experience it. What stands out in the customers mind is excellent service that exceeds their expectations. The real quality revolution has come to services. Sasser, Olsen & Wyckoff (1978) listed seven service attributes which they believe adequately embrace the concept of service quality. These are listed below in Table 3.
Table 3 Service Quality Dimensions by Sasser et. al

1. 2. 3. 4. 5. 6. 7. Security Consistency Attitude Completeness Condition Availability Training Confidence as well as physical safety Receiving the same treatment for each transaction Politeness The availability of ancillary services Of facilities Spatial and temporal customer access to services Of service providers
A firm in order to compete successfully must have an understanding of consumer perception of the quality and the way service quality is influenced. Managing perceived service quality means that the firm has to match the expected service and perceived service to each other so that consumer satisfaction is achieved. The author identified three components of service quality, namely: technical quality; functional quality; and image (see Figure 1 below): (1) Technical quality is the quality of what consumer actually receives as a result of his/her interaction with the service firm and is important to him/her and to his/her evaluation of the quality of service. Functional quality is how he/she gets the technical outcome. This is important to him and to his/her views of service he/she has received. 53
(2)
(3)
Image is very important to service firms and this can be expected to build up mainly by technical and functional quality of service including the other factors (tradition, ideology, word of mouth, pricing and public relations).
Figure 1 - The Perceived Service Quality Model
According to Gronroos (1990), A service is an activity or series of activities of more or less intangible nature that normally, but not necessarily, take place in interactions between the customer and service employees and/or systems of the service provider, which are provided as solutions to customer problems (p. 27) In other words, service quality is an outgrowth of the marketing concept; focus on the customer. What is important is what is perceived as quality by the customer and not what designers or operations people feel is good or bad quality. According to the Perceived Service Quality model (see Figure 1), the quality of a service, as perceived by the customer, is the result of a comparison between the expectations of the customer and his or her real-life experiences. If the experienced quality exceeds expected quality, the total perceived quality is positive. If expectations are not met by performance or the actual experience, the perceived quality is low. There are multiple customers in an internship program: students, internship suppliers, and sponsoring entities, for example. Final success is dependent on initial expectations compared to actual performance. Swartz and Brown (1989) drew some distinctions between different views on service quality, drawing from the work of Grnroos (1983) and Lehtinen and Lehtinen (1982) concerning the dimensions of service quality. What the service delivers is evaluated after performance (Swartz and Brown, 1989, p.190). This dimension is called outcome quality by Parasuraman et al. (1985), technical quality by Grnroos (1983), and physical quality by Lehtinen and Lehtinen (1982). How the service is delivered is evaluated during delivery (Swartz and Brown, 1989, p. 190). This dimension is called process quality by Parasuraman et al. (1985), functional quality by Grnroos (1983), and interactive quality by Lehtinen and Lehtinen (1982). In 1993, Teas developed two models for measuring service quality. Teas was not convinced with the entire concept of measuring the customer perceived quality with the gap of perception and 54
expectation as in SERVQUAL. The major emphasis of the researcher was on the conceptual understanding of Expectation, since the expectation associated to the services could exceed the actual level of performance of the company. Therefore the researcher developed Evaluated Performance model (EP) in order to measures the gap between perceived performance and ideal amount of a performance to gain consumer satisfaction. Further catering to the expectation, the researcher concentrated on the prospect created after the experience of the consumer. Teas (1993) perceived Excellence norm as a result of positive experience of the customer, this led to the creation of Normed Quality model. NQ measures the Quality gap between excellence norm and ideal amount of expectations of the consumer. Both the measurement models are applicable to various industries. However the EP and NQ measurement model were not applied by other researchers in the literature.
2. DISCUSSION OF THE SERVQUAL MODEL

Service quality is defined as the result of the comparison that customers make between expectations about a service and perception of the way the service was delivered (Lehtinen and Lehtinen, 1982; Gronroos, 1984; Parasuraman, Zeithaml & Berry, 1985). SERVQUAL represents service quality as the discrepancy between a customer's expectations for a service offering and the customer's perceptions of the service received, requiring respondents to answer questions about both their expectations and their perceptions Parasuraman et al., (1988). The use of perceived as opposed to actual service received makes the SERVQUAL measure an attitude measure that is related to, but not the same as, satisfaction (Parasuraman et. al., 1988). The difference between expectations and perceptions is called the gap which is the determinant of customers perception of service quality as shown on figure 2 below.
Figure 2 Measuring Service Quality using SERVQUAL Model (Kumar et. al., 2009)
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The expectations of customers are subject to external factors which are under the control of the service provider as shown on the diagram. The Gap 5 on the diagram represents the difference between customers expectations and customers perceptions which is referred to as the perceived service quality (Kumar et al., 2009, p.214). This study focuses on this gap, the difference between grocery store customers expectations and perceptions of service. Brady and Cronin (2001) identified that the foundation of service quality theory has some connection with the product quality and customer satisfaction literature based on the disconfirmation paradigm identified in physical goods literature (Cardozo, 1965, Churchill and Suprenant, 1982; cited by Brady and Cronin, 2001). The discrepancy between customers expectations or desires and their perceptions of the actual service performance was elaborated in the Disconfirmation of Expectations Paradigm (Patterson, 1993) which related satisfaction to customers pre-purchase expectations and perceptions of service performance and identified any differences as Disconfirmation. The comparisons which form the basis of the model are as follows:
1. 2. 3.
Comparison Process Perceived Performance > Perceived Performance Perceived Performance
Expectation
Results High Satisfaction (Delight) Merely Satisfied Dissatisfaction
= Expectation < Expectation
The concept of measuring the difference between expectations and perceptions in the form of the SERVQUAL gap score proved very useful for assessing levels of service quality. Parasuraman et al., argue that, with minor modification, SERVQUAL can be adapted to any service organization. They further argue that information on service quality gaps can help managers diagnose where performance improvement can best be targeted. The largest negative gaps, combined with assessment of where expectations are highest, facilitate prioritization of performance improvement. Equally, if gap scores in some aspects of service do turn out to be positive, implying expectations are actually not just being met but exceeded, then this allows managers to review whether they may be "over-supplying" this particular feature of the service and whether there is potential for re-deployment of resources into features which are underperforming. According to Gronroos (1984), the service quality experienced by a customer has two dimensions; namely technical quality and functional quality. Functional quality describes how the service is delivered and technical quality describes what the customers received during a service delivery. Gronroos also emphasized the importance of corporate image in the experience of service quality, similar to the idea proposed by Lehtinen and Lehtinen (1982). Customers bring their earlier experiences and overall perceptions of a service firm to each encounter because customers often have continuous contacts with the same service firm (Gronroos, 2001). Therefore, the image concept was introduced as yet another important component in the perceived service quality model, so that the dynamic aspect of the service perception process was considered as well. A favorable and well-known image is an asset for any firm because image has an impact on customer perceptions of the communication and operations of the firm in many respects. If a service provider has a positive image in the minds of customers, minor mistakes will be forgiven. If mistakes often occur, however, the image will be damaged. If a providers image is negative, the impact of any mistake will often be magnified in the consumers mind. In a word, image can be viewed as a filter in terms of a consumers perception of quality.
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The SERVQUAL instrument has been widely used in measuring service quality in many research studies (Babakus and Mangold, 1992; Carman, 1990; Cronin and Taylor, 1992; as cited by Parasuraman et. al, 1993). According to Brown, Churchill and Peter (1993) the SERVQUAL is the most popular measure of service quality, which involves the calculation of the difference between expectations and perceptions on a number of specified determinants. Parasuraman et. al (1994), acknowledged that the SERVQUAL model has been used productively and widely for measuring service quality in many published studies examining service quality in a variety of contexts, including Banking, Pest Control, Dry Cleaning and Fast Food (Cronin and Taylor, 1992).
3. CRITICISM OF SERVQUAL
Clearly, the SERVQUAL instrument has been extensively adopted by several academic researchers and practitioners worldwide to measure service quality. The previously mentioned academic research studies are examples of this. However, regardless of its extensive use, numerous theoretical, operational, conceptual, and empirical criticisms of the measurement instrument have been identified and mentioned (Buttle, 1996; Van Dyke et al., 1997, 1999; Ladhari, 2008). Several researchers (Cronin and Taylor, 1992; Brown et. al, 1993) have pinpointed the calculation of difference score (expectation of service quality minus perception of service quality) in the SERVQUAL measure can result in psychometric problems and customers overstating their expectations because of prior bad experience with the organizations (Clow and Vorhies, 1993). As a result, a few scholars, (Shewchuck et. al., 1991; Taylor and Cronin, 1994) have suggested the use of either the expected or perception scale, but not the difference between them. As with any research tool, there are concerns expressed by other researchers. Lam (1997), Williams (1998) and ONeil and Palmer have reviewed the criticism of the original instrument. Critics include the failure to draw on various disciplines of psychology social science and economics. Other issues relate to measuring time, stability over time, the measuring scale, the service quality dimensions and the use of difference scores, that is (Douglas and Connor, 2003);
Perception Expectation = Quality

Van Dyke et al. (1997, 1999) recognized a number of conceptual and empirical criticisms of SERVQUAL. Conceptually, they criticized using two different instruments for measuring two different concepts (perceptions and expectations) to measure a third concept (perceived service quality). Instead, they argued that direct measurement of perceived service quality is more reliable. Moreover, they argued on the uncertainty of the expectations construct as different definitions and views of the concept resulted from uncertainly defined concept. Empirically, they argued that SERVQUAL has a number of empirical problems including low reliability and unstable dimensionality. Ladhari (2008) summarized a list of theoretical and empirical criticisms of the model. First, he argued that the use of gap scores is not the right method because of the lack of the support in literature to consumers evaluating service quality in terms of perception-minus-expectation. He stated that it has been recommended that service quality is more precisely and correctly evaluated by measuring only perceptions of quality. On the other hand, he mentioned that the concept expectation is not well defined and can be interpreted from different perspectives; as a result, the operationalization of SERVQUAL may have different interpretations as well. In addition, he pointed out that previous research suggested using perception-only scores rather than gap scores 57
for the overall assessment of service quality. Last but not least, he emphasized that previous research studies criticize SERVQUAL for its focus on the process of service delivery instead of the result and the outcome of service encounters. The original SERVQUAL used an importance score (the customers service priorities), an expectations score (the customers expected service level), a perception score (the customers agreement that something was provided), and the gap score (the difference between the customers expectation score for service and the perception score). There were several problems with this approach (Kaldenberg et. al., 1997). The questionnaire was the excessively lengthy and redundant, the gap scores were unreliable and neither expectation nor importance scores contributed significantly to explaining variance in service quality (Cronin and Taylor, 1992; 1994). In the light of these, Parasuman,Zeithaml, and Berry (1994) proposed several alternatives to the original SERVQUAL design. Smith and Ennew (2001) outlined interesting aspect about Gronroos model. They highlighted that there was difficult hidden aspect in the choice of satisfaction perception of customer between which is more, the affective indignation and the technical functionality. For example, the particular facility consumed by the students could be judged according to how reliable they are (technical functionality) or according to their ages, appearances, courtesy and empathy (affective). The perfect reliable facility, which is not up to date, but are capable of carrying out the task, may still be negatively rated if the users expect the university to provide up to date facility. These inherent choices are difficult and tedious to measure. Smith and Ennew (2001) also showed that there were specific supportive items known as the peripheral aspect and the university facilities (existing packages), which students consume such as canteens and residential accommodation that will directly and indirectly have a significant impact on the evaluation of the university. Hence, studies on these related aspects are crucial for the reflection of the university. Furthermore, a study made by Saadiatul, Samsinar and Wong (2000) on satisfaction toward higher education in Malaysia using the SERVQUAL showed that the perceived five dimensions was below the expectation. It showed that universities must maintain its service quality in order to maintain universitys good image towards the future students.
4. SERVICE QUALITY IN HIGHER EDUCATION INDUSTRY

Quality, as we know so far, was originally developed in the manufacturing industry. In the area of higher education, the adoption of quality control has been superficial and diluted by the exercise of academic freedom (Lagrosen, et. al, 2004). Further, the prevailing culture of universities is often based on individual autonomy, which is zealously guarded (Colling and Harvey, 1995). Thus, it is usually difficult to apply the features of quality to higher education considering the fact that quality requires teamwork (Boaden and Dale, 1992). However, the quality of higher education is very important for its stakeholders. Notably, providers (funding bodies and the community at large), students, staff and employers of graduates are important (Srikanthan and Dalrymple, 2003). Table 4 summarizes the way product dimensions of quality in higher education can be interpreted.
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Table 4 Product Dimensions of Quality in Higher Education Dimensions Performance Features Reliability Definition in Higher Education
Primary knowledge/ skills required for graduates Secondary/ supplementary knowledge and skills The extent to which knowledge/ skills learned is correct, accurate and up to date The degree to which an institutional programme/courses meets Conformance established standards, plans and promises Depth of learning Durability How well an institution handles customers complaints Serviceability Source: Owlia and Aspinwall (1996)
Service quality issues, over the years, has become an important consumer trend (Parasuraman et al., 1985) and has gained ground in service marketing literature in general and the extant literature on Higher education in particular (Tan and Kek, 2004; Telford and Masson, 2005; Smith et al., 2007). The constructs of quality as conceptualized in the extant literature was based on perceived perceived quality (Fitri et al., 2008). According to Zeithaml et al. (1987) and Zammuto et al. (1996), perceived quality is defined as the consumers judgment about an entitys overall experience or superiority. Similarly, Parasuraman et al. (1994: 43) also concluded that consumer perceptions of service quality result from comparing expectations prior to receiving the service, and their actual experience of the service. Perceived quality is also seen as a form of attitude, related to, but not the same as satisfaction, and resulting from a comparison of expectations with perceptions of performance (Rowley, 1996). Cronin and Taylor (1992) argued that it was unnecessary to evaluate customer expectation in service quality, but measuring perceptions was sufficient. Higher education exhibits all the characteristics of a service provider. It is intangible and heterogeneous, meets the criterion of inseparability by being produced and consumed at the same time, satisfies the perishability criterion and assumes the students participation in the delivery process (Cuthbert, 1996). Seymour (1993) stated that higher education institutions serve students and can be considered as service organizations similar in characteristic to other service industries. The concepts of service quality are therefore directly applicable to higher education. As such, higher education institutions are increasingly attracting more attention to service quality initiatives mainly due to the social requirement for quality evaluation in education and the competitiveness in the higher education market place. The earlier researchers on service quality in higher education emphasized academic more than administration, concentrating on effective course delivery mechanisms and the quality of courses and teaching (Athiyaman, 1997; Bourner, 1998; Cheng and Tam, 1997; McElwee and Redman, 1993; Palihawadana, 1996; Soutar and McNeil, 1996; Varey, 1993; Yorke, 1992). The measurement of service quality of courses and programmes often rely on research instruments (e.g: student feedback questionnaires) devised by representatives of the higher education institutions. Kamal and Ramzi (2002), however, attempted to measure student perception of registration and academic advising across different faculties and other administrative services to assure positive quality service that complements the academic. These days Higher Education Institutions (HEI) are operated on the basis of commercialization. Education is long lasting but the nature is such as it cannot be stored or produced on a large scale, 59
it is intangible, thus the moment it is delivered, it is consumed, however utilization is up to the customer (Hill, 1995; Herstein and Gamliel, 2006; Ruiqi and Adrian, 2009; Houston, 2008). This approach of HEI is due to the lack of available funds as well as economic conditions. Thus HEIs have to be concerned about the perception of students about their institution as well as the level of knowledge gained from the amount of income invested by the customers i.e. students (Abdullah, 2006b; Russell, 2005; Sakthivel and Raju, 2006). Defining student is more complex in service industry as compared with other industries. Since the customers could be external stakeholder (perspective student) or internal stakeholder (faculty and staff) (Venkatraman, 2007; Eagle and Brennan, 2007; Russell, 2005; Hill, 1995; Sakthivel and Raju, 2006). It is the liability of the HEI to be more translucent to their customers when providing information regarding their quality measurement methods. The stake holders previously were more concerned about the nature of programs being offered by the institution and other factors such as fees and location (Sakthivel and Raju, 2006; Houston, 2008). Now the level of compromise has decreased. In such condition the institutions will continuously be inspected by the customers until and unless proper evidence is not provided (Koslowski, 2006; Russell, 2005; Hill, 1995). Maintaining the quality through strategic alliance with recognized institutions worldwide is also the techniques these days. Quality management has been a very important factor for the leaders in higher education. The application of business related quality activities have been a success story for many leading institutions. In this era of extensive competition, quality education is a major concern (Koslowski, 2006; Russell, 2005; Sakthivel and Raju, 2006). The management of service quality in higher education institutions (HEI) is becoming challenging these days, since fulfilling the customer requirement and maintaining a prominent position in the industry is not easy. Students are becoming aware of the significance of money and they want full return with respect to the outcome. Service quality according to the literature has been considered to be the ultimate competitive edge, thus the performance of the institution are attached to the service provided to the students (Smith, et al., 2007; Hill, 1995). Therefore effectual systems have been operated in the institution in order to cope with the performance related issues of the students (Mizikaci, 2006; Snipes, et al., 2006). That is the reason that quality service has connections with the administration as well as teaching and research conducted in the institution. Hence defining Quality service in the context of education is all about the institutions values and norms. When evaluating the system in the institution it should be in terms of the vision, adopted strategies and finally the outcome. This approach helps in synchronization among the departments, consciousness about the related problems, increasing the expectation relating to the performance of the institution (Mizikaci, 2006; Hill, 1995; Snipes, et al., 2006). Thus a proper quality system is essential for the management of an institution, since other quality evaluations are not in detail and leave many issues uncovered (Mizikaci, 2006). Owlia and Aspinwall (1996) based on a review of service quality dimensions; present a comprehensive list with their interpretations for higher education in Table 5 below.
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Table 5 Service Quality Dimensions in Higher Education Dimensions Reliability Definition in Higher Education The degree to which education is correct, accurate and up to date. How well an institution keeps its promises? The degree of consistency in educational process Willingness and readiness of staff to help students Understanding students and their needs The extent to which staff are available for guidance and advice The theoretical and practical knowledge of staff as well as other presentation skills How well lecturers and students communicate in the classroom? The degree of trustworthiness of the institution Confidentiality of information State, sufficiency and availability of equipment and facilities Primary knowledge/skills required for students Supplementary knowledge/skills learned is applicable to other fields The degree to which knowledge/skills learned is applicable to other fields How well an institution handles customers complaints and solves problems?
Responsiveness Understanding customers Access Competence Communication Credibility Security Tangible Performance Completeness Flexibility Redress
Delivering quality service has become an important goal for most Higher Education Institutions (Alves 2006). Universities and faculties strive to provide high quality services because they need to compete for their students (Faganel and Macur 2005) and have become increasingly interested in establishing quality management systems in response to the demands imposed by a complex, uncertain environment (Athiyaman and ODonnell 1994; Jenkins 1994; Sallis and Hingley 1991). Sigala and Baum (2003) mentioned that it becomes even more difficult to attract students, since new generation students have more influence and greater awareness as consumers, becoming more interactive and selective as regards their future and Ford et al. (1999) suggested that institutions need to better understand the nature and quality of the service offered, because of the high competitive intensity surrounding business-related courses. Oldfield and Baron (2000: 86) claimed that institutions should address the issue of quality, not only through the traditional routes of accreditation and course review, students feedback questionnaires on the quality of course delivery and teaching, but also through evaluating what students themselves consider to be elements in service quality. Ford et al. (1999) found out the attributes that contribute towards an excellent university. The most important are: reputation, career opportunities, program issues, physical aspects, and location and may become the basis where universities have to focus their efforts. Vidal et al. (2003) found out that guidance services, in professional, academic and personal matters play an integral part of the education process, while Adee (1997) suggested that several university characteristics can help to explain the perceived quality among students, like competent teaching, the availability of staff for students
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consultation, library services, computer facilities, recreational activities, class sizes, level and difficulty of the subject content, and students workload. The research on quality in higher education concludes that not a single workable definition of quality is possible. Quality is ....a relative concept, meaningful only from the perspective of those judging it at the time (Higher Education Council 1992: 3). Tam (2001) also mentioned that, quality in higher education is a relative concept, with respect to the stakeholders in higher education and the circumstances in which it is involved. In other words, quality means different things to different people as well as the same person may adopt different conceptualizations at different moments (Zafiropoulos et al. 2005). However, Sahney et al. (2004) highlighted that definitions of quality in education follow the general definitions of quality. The term quality in education has been defined as conformance of education output to planned goals, specifications and requirements (Crosby 1979); defect avoidance in the education process (Crosby 1979) excellence in education (Peters and Waterman 1982) and meeting or exceeding customers expectations of education (Parasuraman et al. 1985) and finally fitness of educational outcome and experience for use (Juran and Gryna 1988). 5.CONCLUSION The quality of higher education services, especially in developing countries like Malaysia must be viewed as a strategic issue for social and technological development and economic growth. It is clear that service quality has significant positive relationship with student satisfaction. Thus, it confirms what other literature try to suggest here, which is by improving service quality, it may potentially improve the students satisfaction as well and that is the priority of the higher education institutions. Also, using a literature review from education and marketing, this study emphasized the role of satisfaction and customer orientation as envisioned in these institutions. It is recommended in this study that the changing nature of the higher education marketplace encourage college administrators to apply the customer-oriented principles that are used in profit making institutions. We also hope that we have raised enough attention to increase the research efforts in this area. Our overall hypothesis is that satisfied students are necessary to accomplish the goals of higher education institutions. REFERENCES Adee, A. (1997). Linking student satisfaction and service quality perceptions: the case of university education, European Journal of Marketing 37(7): 528535. Alves, A. C. R. R. and Viera, A. (2006). The SERVQUAL as a marketing instrument to measure services quality in higher education institutions, in Second International Conference: Product management Challenges of the future, Pozna, Poland, May 1820. Athiyainan, A. and ODonnell, B. (1994). Exploring graduates perceptions of the quality of higher education, Journal of Institutional Research in Australasia 3(1): 17. Athiyaman, A. (1997) Linking student satisfaction and service quality perceptions: the case of university education, European Journal of Marketing, 31(7), pp. 528-40
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Adversity Quotient: A new paradigm to explore

Er. Shivinder Phoolka (Corresponding Author) Assistant Professor, Punjabi University Regional Center for IT and Managemnet, Mohali. Residential Area, Phase-7, Mohali, Punjab, India Dr. Navjot Kaur Associate Professor,. School of Management Studies, Punjabi University, Patiala, Punjab, India
ABSTRACT It is said that human mind is the most complex machine on earth. Psychologists have always been trying to know why we behave the way we do or the way our mind functions. It is a complex area of research where explanations have always fallen short. Humans differ in their mental capabilities. There are various tests available to analyze various mental abilities of a human mind which have a direct effect on their behaviour. Some such measures are IQ test, EQ test, personality tests, achievement test, aptitude test, etc. One such relatively new measure is AQ, which stands for adversity quotient. AQ is the predictor of success of a person in face of adversity, how he behaves in a tough situation, how he controls the situation, is he able to find the correct origin of the problem, whether he takes his due ownership in that situation, does he try to limit the effects of adversity and how optimistic he is that the adversity will eventually end. The science of AQ was developed by Dr. Paul G. Stoltz in 1997. This is a conceptual paper which explains at length what is AQ, how is it different from IQ and EQ, dimensions of AQ, building blocks of AQ, levels of adversity, how is AQ different from resilience and hardiness, AQ in organizations, research done on AQ, and how to improve your own and others AQ. Keywords: Adversity Quotient, Intelligence Quotient, Emotional Quotient, Cognitive Psychology, Psychoneuroimmunology, Neurophysiology, Resilience, Hardiness. Note: The terms AQ and Adversity Quotient should be read as AQ and Adversity Quotient throughout the paper. 1. WHAT IS AQ? AQ tells how well a person can withstand adversity and his/her ability to surmount it. Dr. Paul G. Stoltz is the pioneer of the study of AQ which was developed in 1997. AQ tells whether we can exceed expectations or we will fall short. AQ can predict how we behave in difficult situations. AQ can predict resilience and persistence of a person and can be
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used to enhance the effectiveness of teams, relationships, families, communities, cultures, societies and organizations. 1.1 AQ versus IQ and EQ The traditional measure of intelligence is always thought to be IQ, i.e., Intelligence Quotient. It has always been taken for granted to predict the chances of success of a person. Yet there is large number of people who have high IQs but they havent been successful always. It means IQ isnt enough to succeed. There must be something more and over and above IQ that is required for consistently successful people. Then came the idea of EQ, i.e. Emotional Quotient or Emotional Intelligence. EQ is the measure of how well you control your emotions , how will you empathize with others , your level of self awareness, your control on your impulses, your persistence and how effectively you interact with others. Therefore, possessing high EQ with a high IQ can strengthen ones chances of success because to be successful one not only requires intellectual capabilities but also emotional abilities. AQ is something in addition to these two. It can answer the question, why some people persist and keep on striving hard in tough situations while others who are high on IQ and are emotionally well- adjusted still fail and give up? 1.2 What can AQ predict? AQ can be useful to predict performance, motivation, empowerment, creativity, productivity, learning, energy, hope, happiness, vitality, emotional health, physical health, persistence, resilience, attitude, longevity and response to change. 2. THREE LEVELS OF ADVERSITY Stoltz has given a 3- level model of adversity which is a pyramid in shape and begins at top and works downwards. At the top lies the Societal Adversity. At the middle level comes the Workplace Adversity and on the lowest level lies the Individual Adversity as shown in the figure below:
Source: Adversity Quotient- Turning Obstacles into Opportunities, pp. 39 Societal Adversity: The society is changing at a fast pace. We feel vulnerable residing in the society. Social evils like drug abuse, alcoholism, human trafficking, flesh trade, crime among youth, child abuse, teen pregnancy, teenager suicides, domestic violence, sexual assaults, degradation of morality are the common societal adversities worldwide,
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technology and information bombardment have added to the woes. Children and teenagers are getting addicted to the television, internet and entertainment gadgets which in turn are dragging them away from family bonds, relationships, values that they can imbibe from parents and grandparents. Couples are pursuing their individual careers which not only eats up the precious time they used to spend with their children but also drifts husband and wife away from each other increasing the divorce rate because they hardly find any quality time to spend with each other. The highly held institutions like law, educations etc. are losing their credibility. Environment is becoming more and more unsafe to live in. Natural resources are being depleted, important species are becoming extinct, air, water, soil and noise pollution are on rise , forests are recklessly cleared, hurricanes and tsunamis are wiping out populations and global warming has become an uncontrollable menace. Hate crime, intolerance towards other religions and minorities can be seen worldwide. Economic recession is taking the world into its grip. All these are the signs of societal adversity. Workplace Adversity: It is said that if anything is constant, it is change. That is what happening at the workplace of the people worldwide. Employees feel they are always on their toes to keep up with the changing environment. The era of lifelong employment, social security, regular salaries and bonus, pension, old age benefits has ended. Todays employees live in a highly insecure environment of pink slips, salary cuts in the name of cost cutting, downsizing, restructuring, reengineering, mergers, acquisitions, takeovers, hyper competition etc. They have to cope up with ever changing technology, upgrade their skills and knowledge, need to posses multiple skills and do multitasking to survive in the organizations. Then they are even challenged with several ethical dilemmas at work place. Women face biasness, discrimination and sexual harassment at workplace. Individual Adversity: Adversity starts at societal level, seeps into workplace and at last becomes the burden for individuals. Any adversity at societal level ultimately reaches individual level. For example, hate crime which is a societal evil ultimately leads to thrashings or loss of life of individuals and leaves back crying and resentful families. Corruption in the government offices makes a common man fight for his own rights or push him to the wall so much that he prefers to keep mum and watch quietly whatever wrong is happening in the society. Environmental degradation, entry of pesticides into the food chain causes diseases like asthma, cancer, skin diseases etc in individuals. Hence, we can say each individual is vulnerable to and at the receiving end of the societal adversity whether he is or not a reason for the existence of that societal adversity. 2.1 Categories of Adversity Adversity is personal and relative on one hand and universal on the other hand because different people face different challenges in life and react differently to them. Ones hardship may be too small in comparison to someone others. But there is no denial to the fact that ever body faces problems, challenges and adversities in life, big or small. Adversity can be categorized into two areas namely, inner adversity and outer adversity. Examples of inner adversity can be lack of confidence, lethargy, fear , anxiety, uncertainty, depression , self loathing, physical, pain, loneliness, self-doubt, fatigue, poor health, insomnia, loss of appetite, weight loss etc and examples of outer adversity
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are when someone breaches your trust, natural disasters, cancelled flight or reservation, economic downturn, best friend or close relative parts away, theft in the house, your computer crashes, a loved one passes away, your business fails etc. But if we look minutely we can conclude that most of the times outer adversity leads to inner adversity because we humans are not insulated from our environment. What happens at home, in office, at a club or a family get together or in our natural environment has a direct effect on us. 2.2 Adversity can be advantageous Seery, Holman and Silver(2010) examined the effects of adversity on resilience, concluding that cumulative adversity does seem to make us strongerwithin limits. According to their study, the most resilient people are those who have experienced some, but not too many adverse events. People who have suffered many traumas are not a happy bunch, and people who have experienced none have a hard time when hard times finally arrive. Furthermore, people with some prior lifetime adversity were the least affected by recent adverse events. These results suggest that, in moderation, whatever does not kill us may indeed make us stronger. Benoit and Rajshree (2009) found in a study that manufacturers respond to adversity by introducing new and improved processes in goods production. It was also indicated that threat of bankruptcy spurs firms to improve efficiency through process innovation. Karolynn Siegel, and Eric W. Schrimshaw (2000) examined perceptions of illness-related positive change or stressrelated growth among a sample of African American, Puerto Rican, and non-Hispanic White women living with HIV/AIDS in New York City, USA. While these women acknowledged the negative stresses of living with HIV/AIDS, 83% reported at least one positive change in their lives that they attributed to their illness experience like health behaviours, spirituality, interpersonal relationships, view of the self, value of life, and career goals etc. 3. THE CO2 RE DIMENSIONS OF AQ AQ consists of four dimensions. CO2 RE is the acronym for those four dimensions. The four dimensions jointly determine the AQ of a person. The overall score of AQ of a person will not be able to tell what is the weak area of a persons response to adversity. All the four dimensions need to be studied and understood individually to pin point the weak or strong areas of a persons personality. These four dimensions are explained below: C stands for Control This dimension tells how much control a person perceives to have over an adverse situation. Stoltz says the word perceive is used because it is almost impossible to measure the actual control. Perceived control is far more important because that is the symbol of determination in the mind of the person to control an adverse situation. Life is full of such situation in which one feels that the situation cannot be controlled. If we talk about the 9/11 attack on America or 26/11 attack on Mumbai or the latest when tsunami struck Japan and nuclear leak was the major reason of concern, many felt that the situations could not be controlled. But there were few whether in the FBI, fire department, American hospitals who tried their best to help others or people in Mumbai
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police force like Hemant Karkare, Vijay Saleskar, Ashok Kamte or the five star hotel Taj employees who dared to bring the terrorist intrusion in Mumbai under control, or the Japanese scientists, emergency workers, who put their lives on stake to control the havoc caused by tsunami in Japan. All these heroes had or have the power of perceived control. Control begins with the perception that at least something can be done and can go up to Yes! It will be done. O2 stands for Origin and Ownership Origin dimension answers question like where or what was the origin of the problem. Ownership dimension tells to what degree one owns the outcome of the adversity. Superficially, both look the same but they are actually very different. Origin is related to blame. A fair and accurate degree of self blame is required to create learning in a person so that he does not repeat the same mistake next time rather improves himself. The people with low origin score tend to take all the blame on themselves even when it is not so. They think they are the reason behind all the bad that happens. On the other hand people with higher origin score, try to reasonably judge their role in the adverse situation. They also try to consider other, external sources of adversity. Ownership dimension tells how a person takes ownership in an adverse situation irrespective of its cause. Such accountability motivates them to take appropriate and corrective actions to reverse the effects of an adverse situation. A person low on O2 score tends to over blame himself for the sticky situation and runs away from taking any ownership , accountability to solve the situation. R stands for Reach This dimension measures how well the person can limit the effect of adversity in his life, i.e. whether he or she can limit the effects to that particular area where the adversity has cropped or he lets the effects of adversity to creep in other areas of his or her life. For example, a brawl with the spouse affects the productivity at work; a conflict becomes a career failure, etc. These are the signs of lower R score. People with high R score try to limit the effect of the bad event. A poor performance appraisal will not lead to fights at home, a misunderstanding with a loved one will not make his/her entire life meaningless. Dr. Stoltz says limiting the reach of the adversity is very important and desirable. To make life easy and simple we must learn to limit our adversities. If we fail to do so, one adversity in our life can lead to another, then another and so on. At that point, one feels helpless, overwhelmed and overshadowed by problems. For instance, if someone has strained relationships at workplace and he/she discusses it daily with his/her spouse, remains in a bad mood even at home, shouts at his/her family, can have strained relations at home too, his /her children may avoid him/her and ultimately children may go stray which can become a bigger and more serious adversity. Therefore it is both good and healthy to limit the effect our adversities. E stands for Endurance This dimension asks two questions: How long will the adversity last? and How long will the cause of the adversity last? People with high score on this dimension are generally optimistic. They believe that each problem will eventually end. No adversity can have the same effect forever. There are always chances of improvement. Adversity and its causes
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are temporary and can fade with time or even disappear altogether. People who fight diseases like cancer and AIDS, do not always give up on living. In some cases, where there are no chances of full recovery, there are people who at least try to live happily for whatever time they are left with. Whereas, people with low E score tend to take adversity and its causes to be permanent. They often speak like this: This situation can never improve, I am a loser, This relation can never work, I can never get promoted and so on. 4. BUILDING BLOCKS OF AQ Dr. Stoltz with the help of research of many other researchers like Seligman, Hiroto, Ternnan, Eller, Dweck, Oullete , Okun, Werner, Rotter , Barker, Mark, Rene, Locke, Peterson, Vaillant, Nuwer, Squire has been able to establish that there are three building blocks of AQ, namely, Cognitive Psychology, Psycho neuroimmunology and Neurophysiology. These are the three sciences that give a stable ground to the study of AQ as well as the findings of these sciences match with those of AQ studies. Cognitive Psychology: It is that branch of psychology that studies mental processes like how people think, perceive, remember and learn. It is also related to other disciplines, for example, neurosciences, philosophy and linguistics. Cognitive psychology forms the first building block of AQ science because in cognitive psychology is embedded the theory of learned helplessness. Learned helplessness is internalizing the belief that whatever you do, does not matter, the situation is going to remain the same. It is related to giving up the sense of control completely and control is the first dimension of AQ. Psychoneuroimmunology: It studies the relationship between mind (Psyche), the brain (Neuro) and the immune system. Today an increasing number of physicians are recognizing that emotional health has a large impact on immune system of the body. For example strong feelings of hate, suppressed anger, frustration over an extended period of time can produce harmful biochemical change within the body where as feelings of love, laugher, tranquility can lead to healing. That is why we see the growing popularity of yoga, laughter therapy, reiki, art of living courses etc. Similarly, AQ can have direct bearing on ones health because there is a direct link between how you respond to adversity and your mental and physical health. Neurophysiology: It studies the relationship between brain and nervous system. It studies how the electrical signals from the brain carried by the nerves effect the functioning of the body parts. It helps in looking for treatment for diseases like multiple sclerosis, parkinsons disease, epilepsy etc. Research of leading neurophysiologists shows that brain is ideally equipped to form habits which are hardwired in the subconscious region of the brain. Subconscious habits, such as AQ, can be immediately altered, readily forming new habits that are strengthened over time. 5. HOW IS AQ DIFFERENT FROM RESILIENCE AND HARDINESS Hardiness also called as psychological hardiness is a personality style which was first introduced by Suzanne C. Cobasa in 1979. It comprises of three dispositions, namely, commitment, control, and challenge. The commitment disposition is defined as a
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tendency to involve oneself in the activities in life and having a genuine interest in and curiosity about the surrounding world. The control disposition is defined as a tendency to believe and act as if one can influence the events taking place around oneself through ones own effort. And the challenge disposition is defined as the belief that change, rather than stability, is the normal mode of life and constitutes motivating opportunities for personal growth rather than threats to security. Resilience is a dynamic process whereby individuals exhibit positive behavioral adaptation when they encounter significant adversity, trauma, tragedy, threats, or even significant sources of stress. The three dimensions of stress resiliency as described in stress resiliency profile by Kenneth et al. (1992) are deficiency focusing, necessitating and low skill recognition. Deficiency focusing is the tendency of focusing upon the negatives at the expense of the positives. Shortcomings and dangers become the centre of attention, at the expense of strengths and opportunities. This bias in perspective creates an unbalanced, exaggerated sense of how much is wrong and is likely to go wrong. The result is an unnecessary degree of distress or discouragement. Necessitating occurs when one thinks that it is necessary or very important to do a certain task, believing it is a compulsion that one has to do it. It focuses upon commitment at the expense of choice. Necessitating predisposes people to place greater demands on themselves. They believe that the task assigned is an inflexible demand that must be met. Low skill recognition refers to a tendency not to recognize the role of ones own capabilities in producing successes. Instead attention is focused upon external sources, including the help received from others, luck, or the easiness of the tasks - reasons that have little to do with persons own proficiency. The result is often an underestimation of ones competence, and a feeling that successes depend upon things outside the individual. This exaggerated sense of dependence leaves the person feeling helpless in facing subsequent tasks. Now, if we try to compare the three, i.e, hardiness, resilience and AQ, superficially, they all seem to measure ones ability to deal with tough situations. But the way they do it is different. And therefore can measure different aspects of a persons ability to face difficult situations. For example, level of ones commitment and the ability and willingness to take up challenges can be measured by measuring hardiness and it cannot be done through measuring resilience or adversity quotient. Whereas deficiency focussing and necessitating can be measured through resilience and not through hardiness or adversity quotient. Similarly, reach of an adverse event and in ones life and his belief how long it is going to last can be measured through adversity quotient and not through hardiness or resilience. Though Control is one dimension which is common in hardiness and AQ and low skill recognition which is a dimension of resilience also measures how a person gives up his sense of control and feels helpless in a difficult situation. Similarly, we can say that deficiency focussing can make a person believe that situation is not going to improve, may last forever and may affect all areas of his life. Therefore, we can say, hardiness, resilience and AQ, all three constructs have their own method and all three highlight different aspects of a person behaviour when faced with adversity. 6. RESEARCH ON AQ AQ research has already been done on teachers, students, managers, psychologists, hospital staff, entrepreneurs, insurance agents, IT staff, nonprofit organization staff, political leaders, etc. and has proved to improve performance levels, leadership styles and
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practices, resilience, promotions, retention, optimism and commitment to change. Antonette R. Lazarro (2004) studied the adversity quotient and performance level of the middle managers of the different departments in the city of Manila. He used 360 degree method to measure the performance of the managers and established high correlation between their AQ levels and their performance levels. He also studied adversity quotient in relation to their demographic profile and found that there was no significant relation between their age, gender and the adversity quotient scores. He supported the idea that people with high AQ never allow age, gender, race, physical or mental disability, or any other obstacle to come in their way. Guy D. Langvardt (2007) examined the relationship of resilience and commitment to change during a time of organizational transformation. His research is a case study analysis of St. Pauls First Lutheran Church, which is a nonprofit faith-based organization including a church, middle, elementary and preschools serving the community of North Hollywood, California and is a congregation of the Wisconsin Evangelical Lutheran Church (WELS). All adult employees, members and parents of students had the ability to participate in the research on a voluntary basis. The study used the AQ Profile to assess participants resilience, and the Commitment to Change Survey to determine potential correlation. The study confirmed the significance of the relationship that exists between resilience and commitment to change during organizational transformation. Individuals with higher levels of resilience were more committed to change during organizational transformation. Monica Brannon Johnson (2005) studied the relationship between optimism (operationalized by Explanatory Style), response to adversity (operationalized by AQ) and performance of 112 sales employees of a leading Fortune 500 company in the computer hardware industry. Specifically, the study examined whether there is a significant relationship between the two constructs and if there are correlations between each of the constructs and sales performance. The hypothesis that the overall composite score of each model would be significantly correlated was supported. It was also indicated that the higher the salespersons AQ, the better they performed. More specifically, the more they perceived they had control and that negative events were limited, the better they did. It appeared that the assumption of the Explanatory Style model that the more negative events are internalized, the more one will feel helpless and lack control, is not correct. By comparing the two models, more insight was obtained on the role control plays in empowerment and helplessness two essential elements of each model - that can either aid or hinder sales performance. Based on the results of this study, it appears that the AQ model may provide a more complete and consistent framework for identifying who is empowered and who is helpless. Zhou Huijuan (2009) investigated the adversity quotient and academic performance of the selected students in St. Josephs College, Quezon City during the school year 2008-2009. The sample size was 280 male and female college students from the College of Arts and Sciences and the Institute of Nursing who were included in the study through randomized sampling technique. Their GPA(grade point average) during the first semester of the present school year was used in order to determine their academic performance. The largest percentage of the respondents in this study in terms of GPA was those who had obtained a satisfactory academic performance. The adversity quotient of the respondents was not influenced by their sex. However, course and year level were found to be significantly related to their adversity quotient for the student respondents in this study. The level of adversity quotient and academic performance of the respondents were found
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to be significantly related to each other. Bonnie L. Thomas-Sharksnas (2002) studied the relationship between resilience and job satisfaction in mental health care workers. A total of 94 mental health care workers working at a community mental health center in Northeastern Pennsylvania were included in the survey. The researcher says that mental health care workers face increasingly adverse conditions such as low pay, limited respect, as well as a lack of supervision, peer support, and organizational support and resources which can potentially lead to job dissatisfaction. How they respond to this adversity can impact patient care, their likelihood of staying in their job, and their mental health. It was found out that there was no significant correlation between AQ (Adversity Quotient) scores and Job Satisfaction scores and that resilience is not a significant predictor of job satisfaction. No significant correlations between the four dimension scales of the AQ and JIG(Job In General) scores emerged. Pao-Ling Chin and Min-Li Hung (2008) studied why the turnover rate of new insurance agents is high in Taiwan. They tested the moderating effects of Adversity Quotient on the relationship between psychological contract breach and intent to quit of insurance sales agents. A total of 553 insurance agents from one of leading insurance agent companies participated in this research. Results revealed that Adversity Quotient can influence how an employee feels and responds to unfulfilled organizational promises in multiple areas of the psychological contracts which are dimensions of relational, transactional and training and development contracts. This finding reinforces the importance of understanding individual differences as employees may have different belief or take different actions while they feel their psychological contracts with the organization are violated. 7. AQ IN ORGANIZATIONS Stoltz says that the greatest source of adversity for most organizations is the constant avalanche of change. He compares the Normal Change Curve to the High AQ Change Curve. The three stages in any Change Process are: Endings: When people have to stop doing old familiar things, the equilibrium is disturbed. The status quo is disturbed. Old methods, behaviors, procedures, rules regulations come to an end. Transition: When people have to change. In this phase, many lose hope, get demotivated and confused and can also get cynical about the reasons and process of change. New Beginnings: This phase witnesses adoption of new methods, strategies, procedures, rules, behaviors, technologies etc. The length and depth of the transition phase, as well as how high the organization comes out on the other side greatly determines peoples enthusiasm for the current as well as next change. A high AQ organization can greatly reduce the depth and width of the transition phase. People or employees with high AQ will be less worried, confused and sceptical about the change process. Not only this, they can also encourage others to participate in change and expedite change. Synergy and coordination can come from high AQ teams which can result in a leap from Endings to New Beginnings. The AQ of the organization can also be measured. The AQ of the leaders, AQ of the key teams, the talk and language employees use when faced with a change, the perseverance of the
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change agents, the behaviour and reaction of employees, the co-ordination between management and employees, all this put together and many other things can reflect AQ of the organization. Once the AQ of the organization has been gauged, many steps can be taken to improve the AQ of the organization, to make it more robust for future changes and challenges. 7.1 Relationship of AQ with Income, Sales, Performance and Hiring Dr. Gideon Markman, professor of entrepreneurial studies at Rensselaer Polytechnic Institute, conducted a study which revealed that there is a strong relationship between the AQs and income of entrepreneurial inventors. Studies reveal that higher AQ people appear to earn more. One explanation to this can be the higher AQ entrepreneurs have high risk taking ability, they try to have more control over situations, do not give up in lean periods and have the perseverance and conviction to carry on. They look for alternative solutions in sticky situation. They invent new ideas, strategies, products to say ahead of competitors which results in increased profits and higher incomes. Dr. Stoltz team conducted research with sales employees of SBC Telecommunication and found that sales persons with high AQ scores sold more than those with low AQ. In another study conducted at Deloitte and Touche, the team found that AQ of top performers exceeded the AQ of low performers by 17 points which indicate AQ can be a measures of employees performance. Also by giving AQ training to the employees, AQ of the employees can be improved. Companies like SunTrust measure the AQ of every applicant before hiring him/her. 7.2 High AQ Teams These are the high performance teams. They do not produce good results once in a while, rather they sustain outstanding result. These are the Climbing Teams. They are always on their toes for improvement. But such teams are exceptional and rare. Each member contributes to the final output. They share common goals but well defined roles and responsibilities. Its not that members of such teams always think alike. They welcome opposing opinions and build on each others ideas. Team goals are well synchronized and co-ordinated. There is a strong sense of belonging to each team member and the team has a strong cohesion. One members weakness is covered by others strengths. The members have an unquenched thirst for improvement and increased outputs. 7.3 How to improve your or others AQ Dr. Stoltz has given a sequence of steps called LEAD to improve your own or other peoples AQ. Following are the steps involved:
1. Listen to your/others Adversity Response: Try to sense the your/others adversity or take note of the tough situation. Then try to see how you/others responded to the adversity. Try to measure whether it was low or high AQ response. 2. Explore the Origins and your/others ownership of the Outcomes: Try to make out what were the origins of the adversity or what was your/others portion of fault. Also decide how much ownership you/others should genuinely take in the bad event. 3. Analyze the evidence: What evidence is there that you/others have no control over the adversity or it is going to last forever for you/others or that it is going to affect all areas of your/others lives.
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4. Do something or make others to take the necessary action: See what can you/others do to have control over the adversity, how you/others should try to limit its effect, how to make sure that it ends as soon as possible.
8. CONCLUSION AQ is a new paradigm which is useful in todays times where adversity looms in almost every corner. We can measure our own and others AQ with the help of Adversity Quotient profile developed by Dr. Paul G. Stoltz. The AQ of a person can be measured on five dimensions, namely, control, origin, ownership, reach and endurance. AQ is something in addition of IQ and EQ and shares some commonalities with hardiness and resilience and is yet very different. The science of AQ has its roots in cognitive psychology, psychoneuroimmunology and neurophysiology. Adversity is challenging but can bring out the untapped that exists in every individual. Adversity exists in society, at our workplace and in our individual lives and can be internal or external in nature and hence measuring and then improving our/others AQ can smoothen our daytoday lives. REFERENCES Chin, Pao-Ling and Hung, Min-Li. 2008. Consequence of Psychological Contract Breach: The moderating role of adversity quotient, training and tenure, National Taipei University, Available at: www.ntpu.edu.tw Dostie, Benoit and Jayaraman, Rajshree. 2009. The effect of adversity on process innovation and managerial incentives, Available at: papers.ssrn.com Huijuan, Zhou.2009. The adversity quotient and academic performance among college students at St. Josephs College, Quezon City, Ph.D Universiti Kebangsaan, Malaysia, Available at : www.peaklearning.com Johnson, Monica Brannon. 2005. Optimism, adversity and performance: Comparing explanatory style and AQ, Ph.D. San Jose State University, Available at: www.peaklearning.com Langvardt, Guy D. 2007. Resilience and commitment to change: A case study of a non profit organization. Ph. D. Capella University, Available at: www.peaklearning.com Lazaro-Capones, Antonette R.2004. Adversity Quotient and performance level of selected middle managers of the different departments of the city of Manila as revealed by the 360-degree feedback system, IIRA (International Industrial Relations Association).2004, 5th Asian Regional Congress, Seoul, Republic of Korea, 23-26 June 2005. Available at: www.peaklearning.com Markman, Gideon. (2000). Adversity Quotient: The role of personal bounce-back ability in new venture formation, Human Resousce Management Review, Vol.13( 2),2003, pp. 281-301, Available at: Elsevier.com Seery, Mark D., Holman, E. Alison and Silver, Roxane Cohen. 2010. Whatever does not kill us: cumulative lifetime adversity, vulnerability and resilience, Journal of Personality and Social Psychology, Vol 99(6), Dec 2010, pp. 1025-1041 Sharksnas, Bonnie L. Thomas. 2002. The Relationship Between Resilience and Job Satisfaction in Mental Health Care Workers, Sripatum University, Thailand, Available at: www.peaklearning.com
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Siegel, Karolynn and Schrimshaw, Eric W. 2000. Perceiving benefits in adversity: stressrelated growth in women living with HIV/AIDS, Social Science & Medicine, Vol. 51(10),Nov 2000, pp. 1543-1554 Available at: Ideas.repec.org Stoltz, Paul G. (1997). Adversity Quotient- Turning Obstacles into Opportunities, pp-7, 8, 9, 11, 12, 38, 39, 42, 43, 55, 83, 84, 106, 154, 235, 236 Stoltz, Paul G. (2000). Adversity Quotient @ Work- Make Everyday Challenges the Key to Your Success, pp-24, 221 Stoltz, Paul G. and Weihenmayer, Eric. (2006). The Adversity Advantage- Turning everyday struggles into everyday greatness, pp-17
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A study on the international diversification in the emerging equity market and its effect on the Indian capital market
Sk Samim Ferdows Assistant Professor of Management Institute of Durgapur, West Bengal Abhijit Roy Lecturer of Dr. B.C.Roy Engg. College, West Bengal
ABSTRACT With the easy transfer of money and information in cross-country markets has opened the floodgate to the international portfolio managers for the effective utilization of fund. As the return in the emerging markets are more with a given level of risk than that of developed markets so the tendency of flow of funds from the developed economy towards the emerging one is very natural and justified. This trend has made the study about the impact of international diversification in emerging markets as an interesting one. Further it is very much relevant to know the impact of this international diversification on Indian capital market. In this paper an attempt has been made to examine the impact of international diversification and its effect on Indian capital market taking BSE and three exchanges from ASIA (Philippines, Malaysia, and Singapore) and one from America (Mexico). The study reveals that there is a lasting impact of international diversification on India Capital Market affected by the other emerging markets and the flow of FIIs. Key words: BSE , FII, International diversification, Indian capital market. 1. INTRODUCTION Emerging markets exhibited higher intra-day volatility compared to developed markets. It is a sign of an emerging market owing to economic and socio-political variations; the volatility in the emerging markets is generally on the high side. Countries like Indonesia, Brazil and South Korea, did show higher intra-day volatility. Among all the emerging countries studied, Brazil experienced very high intra-day volatility and also extreme value volatility followed by Indonesia, South Korea and Mexico. Intra-day volatility for
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India has been computed for 13 years. Compared to most of the emerging markets sampled here, intra-day volatility in India is low. Extreme value volatility touched its peak in 2000 at 3.17 percent and it continuously slide in the following years and marginally increased to 1.69 percent in 2003. Between BSE SENSEX and S&P, CNX, Nifty, Nifty appears to be more volatile both in terms of open to close and high low dispersions. In India open to open, volatility is always higher than close-to-close volatility and many a times higher than open to close. This observation holds true to both the major exchanges. Intra-day volatility in 2003 has been very slightly higher than the immediate preceding years though nothing disturbing is evidenced. Only Nifty showed a little more intra-day volatility compared to the previous year and to the SENSEX. The international diversification in equity market is effected Indian capital market because FII (Foreign Institutional Investment) and FDI (Foreign Direct Investment) are directly invested in Indian companies with their high volume capital that directly affected Indian Stock Market- BSE & NSE. The impact of it the SENSEX is going to be touched 17000. The performances of the emerging equity markets are matured counterparts in the developed world have shown repeated reversals in recent times; in the pre-Mexican crisis period (1990-1994), most of the emerging markets performed much better compared to the matured markets in terms of both return and associated risk, while the pattern reversed during 1995-2001 (a period affected by the Asian crisis). In the recent past emerging markets (those of Asia and Latin America, in particular) have shown a remarkable recovery, in terms of both the level of return and risk, while the matured markets have experienced drop in return and rise in risk. Such reversals of market performances make foreign equity investment extremely volatile and may have a destabilizing effect on the domestic economy of the recipient country. It is therefore prudent to evolve appropriate built-in mechanisms in these economies such that destabilization and damages can be minimized in case foreign investors suddenly withdraw from the equity market. It is in this context that a careful examination of the nature of foreign institutional investment (FII) flow into an economy may help identify, the strength of various factors likely to affect such flows, and also, the possible impact of such flows on the performance of the equity market concerned. Globalization has meant increased cross-border capital flows, tighter links among financial markets, and greater commercial presence of foreign financial firms around the world. An element of the globalization trend has been the migration of securities market activities abroad, particularly in the case of emerging markets. Many firms now cross-list in global markets, including using Depositary receipts. Many stock exchanges, especially in emerging markets, have seen trading migrate abroad. With foreign listing,firms can obtain access to more liquid markets, attract more easily funds at lower costs and better terms, and tap into wider investor bases. In addition, firms that operate under weak minority shareholder protection frameworks might use the foreign listing as a signal to their shareholders that they are willing to protect minority shareholder rights. The share of trading abroad also seems to be on an increasing trend and advances in technology further accelerate these trends, as remote access to foreign markets has become
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increasingly easy. High liquidity increases the value of additional transactions, leading to more concentration of order flow and even greater liquidity at global exchanges. These developments may make it even more attractive for firms to list abroad. In the following study an attempt has been made to identify the trend of international diversification in emerging markets and the impact of other emerging markets on Indian capital market. The rest of the paper is presented as follows: In first section the objective of the study is shown followed by the limitation of the study in next section. In section three the details of the research methodology is explained along with the sources of data. Section four illustrates the previous related works under the heading review of literature. As the study is done with reference to ICICI Direct .com so a brief the profile is depicted in fifth section. The core part of the study that is the empirical analysis is carried on in section six. Followed by the findings and suggestion and conclusion in section seven and eight respectively. 2. REVIEW OF THE LITERATURE Geert Bekaert & Campbell R. Harvey (Jun 1997) defined that Returns in emerging capital markets are very different from returns in developed markets. From average returns, they analyze the volatility of the returns in emerging equity markets and characterize the time-series of volatility in emerging markets & explore the distributional foundations of the variance process. They investigate the cross-section of volatility and use measures such as asset concentration, market capitalization to GDP, size of the trade sector, cross-sectional volatility of individual securities within each country, turnover, foreign exchange variability and national credit ratings to characterize why volatility is different across emerging markets. Geert Bekaert (1995) develops a return-based measure of market integration for nineteen emerging equity markets. From his conclusions emerge, first, global factors account for a small fraction of the time variation in expected returns in most markets, and global predictability has declined over time. Second, the emerging markets exhibit differing degrees of market integration with the U.S. market, and the differences are not necessarily associated with direct barriers to investment. Third, the most important de facto barriers to global equity-market integration are poor credit ratings, high and variable inflation, exchange rate controls, the lack of a high-quality regulatory and accounting framework, the lack of sufficient country funds or cross-listed securities, and the limited size of some stock markets. Geert Bekaert & Campbell R. Harvey (April 2000) proposes a cross-sectional timeseries model to assess the impact of market liberalizations in emerging equity markets on the cost of capital, volatility, beta, and correlation with world market returns. Liberalizations are defined by regulatory changes, the introduction of depositary receipts and country funds, and structural breaks in equity capital flows to the emerging markets.
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Michael J. Brennan and H. Henry CAO (1997) in their article developed a model of international equity portfolio investment flows based on differences in informational endowments between foreign and domestic investors. When domestic investors possess a cumulative information advantage over foreign investors about their domestic market, investors tend to purchase foreign assets in periods when the return on foreign assets is high and to sell when the return is low. Pavlos Petroulas (May 24, 2004) state that a lot of attention has been directed towards recent financial crises around the world. Empirical studies have found that short-term flows increase financial fragility and also increase the probability of financial crises. This is not the case though for rich countries, where short-term capital flows have no effect on growth. The results in this study indicate that opening up emerging markets capital accounts, which imply increased short-term capital flows, is not a clear-cut way to prosperity. Fernando A. Broner (CREI, Universitat Pompeu Fabra) and Roberto Rigobon (MIT and NBER and University of Maryland) (October 2004) defined that the standard deviations of capital flows to emerging countries are 80 percent higher than those to developed countries. First, they show that very little of this difference can be explained by more volatile fundamentals or by higher sensitivity to fundamentals. Second, they show that most of the difference in volatility can be accounted for by three characteristics of capital flows: (i) capital flows to emerging countries are more subject to occasional large negative shocks (crises) than those to developed countries, (ii) shocks are subject to contagion, and (iii) shocks to capital flows to emerging countries are more persistent than those to developed countries. Finally, they study a number of country characteristics to determine which are most associated with capital flow volatility. In the literature, the relationship between financial liberalisation and economic growth has been extensively studied and so there is no shortage of empirical studies supporting that the former positively impacts the latter. However, the evidence is less apparent as to how a more liberalised financial system delivers growth. In theory, more liquid stock markets can induce more researches on firms, given the incentives to profit from new information (Boot and Thakor, 1997); more liquid stock markets can stimulate greater corporate control, leading to more efficient resource management of firms (Stein, 1988); and more liquid markets can better facilitate the channeling of savings into long-term investment, increasing capital allocation efficiency (Levine, 1991). Hence, a possible channel that financial liberalization can contribute to growth is that it helps develop more liquid financial markets. In Europe, research has found that the creation of the pan-European exchange, Euronext, for instance, has been followed by significant improvements in the market liquidity and efficiency. Using bid-ask spread, trading volume and volatilities as liquidity measurements, Pagano and Padilla (2005) show that the resulting integration of cash trading and clearing platform has contributed to an improvement in liquidity.
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Nielsson (2008) also finds that the integration had significant and positive effects on (i) the liquidity of big firms and firms with foreign sales and (ii) the market share of Euronext. Jess Lee and Alfred Wong (2009) assess the impact of the recent financial reforms in China. Measures introduced encompass deregulation in the banking sector and refinements in various financial markets, as well as allowing more freedom for Chinese and foreign investors to participate and interact domestically and overseas. Compared to other studies on financial liberalisation, this study focuses on a relatively narrower aspect of financial reforms namely, the impact on stock market liquidity. Using a panel data set drawn from the Shanghai stock market, he found a positive and significant liquidity impact associated with the recent round of measures, which reflects not only an improvement in capital allocation efficiency in Chinas equity market but, from a financial stability point of view, also a reduction in its vulnerability. The finding also provides evidence on one of the important channels in which financial liberalization can be transformed into economic growth over time. 3. OBJECTIVES: The main objectives of this study are: To know about the evolution of financial markets. To understand the changes that have recently encroached financial markets To know about the impact of FDI (Foreign Direct Investment) and FII (Foreign Institutional Investment) in Indian Capital Market. To know the impact of other emerging equity market on Indian stock market To inspect the changes density brought about by the study of different factors of changes emergence of private players. To critically analyze my company stands to gain from the changes to make a comparative To know the future trend. To know about international stock market. 4. METHODOLOGY To achieve the above objectives, I planned to adopt the following methodology to collect the necessary data for project For the purpose of this thesis the average return of the stock exchange of Singapore Stock Exchange (SYMAX), Mexico Stock Exchange (MEXBOL), Philippines Stock Exchange (FTSE), Bursa Malaysia Stock Exchange (FBM30) and India Stock Exchange (SENSEX) has been chosen. Here Singapore, Mexico, Philippine and Bursa Malaysia exchange has been chosen on the independent variable and SENSEX has been chosen on the dependent variable. Taking these five variables, MULTIPLE REGRESSION EQUATION is fitted to see the influence of these four exchanges of emerging equity market (Singapore, Mexico, Philippine, Bursa Malaysia) on the Indian Equity Market (SENSEX). Further a Bivariate correlation is tested and shown in the matrix.
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4.1 Source Of Data Secondary data

The secondary data were collected from the books, magazines and website. The index data are collected from the website of the World federation of Exchanges. Other relevant data are collected from the respective web sites of exchanges such as BSE, Philippines Stock Exchange, Bursa Malaysia Stock Exchange, Mexico Stock Exchange and Singapore Stock Exchange.
5. EMPIRICAL ANALYSIS In the era of globalization the world is becoming a global village. All most all developing countries are going for liberalization and open market economy. Developing countries like India, Mexico, Philippines, China, Singapore, Malaysia, and Brazil are lifting their trade barriers to enable the foreign investors to participate in their economy. As a result of that foreign funds in the form of Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) are flowing in the market. As the returns of the emerging markets is much more higher than the returns in developed market so a large pool of investment is flowing form the developed economy towards the emerging market. So in this days the portfolio of investors are no more bounded in the national territory rather it is the funds are invested in the international market to make the portfolio an international portfolio. That means for the purpose of the diversification the funds are invested in the markets spread all over the world. Emerging markets are the first choice of the International portfolio managers because of its above normal returns. India is one of the fastest growing emerging markets in the world. So the flow of FII in Indian market is obvious as a result of international diversification. These FIIs in Indian market have a clear effect, which depicts the impact of international diversification on an emerging market like India. In the following literature the trend of the FII investment of India and its impact on Indian capital market is shown. Further, as Indian capital market is proved to be an efficient market in its semi strong form going towards the near strong from, the impact of the other emerging markets on Indian Capital market is also analyzed, because these others emerging markets are not out of the purview of international portfolio managers. 5.1 Foreign Institutional Investors- an Indian perspective The capital market of India is one of the fastest growing markets in the world. It all started with the liberalization of Indian economy, which was initiated with the view to integrate it with the global economy. The process began in the year 1992 as per the recommendations of the Narasimham Committee report on the Financial System, to open up the countries stock markets for the direct participation of Foreign Institutional Investors (FII). In simple terms, FII is an entity established or incorporated outside India which proposes to make investment in India. These institutional investors include hedge funds, insurance companies, investment trustees, pension funds, mutual funds etc.
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5.2 Trend in FIIs investments in India: With the opening up of the borders for capital movement, the foreign investments in India have grown enormously. Starting from the liberalization period, the intervention of FIIs in terms of their participation (refer Table-1) and quantum of investment (refer Table-2) is gradually growing. Table-1: Distribution of FIIs in different years Year Number of FIIs 1993 1 1994 0 1995 50 1996 100 1997 29 1998 45 1999 33 2000 62 2001 50 2002 47 2003 68 2004 143 Source: www.sebi.gov.in Table -2: Trends in FII Investment (in US $ mn) in different years Year Gross Purchases Gross Sales Net Investment 1992-93 17.40 4 13.40 1993-94 5592.50 466.3 5126.20 1994-95 7631.00 2834.80 4796.30 1995-96 9693.50 2751.60 6942.00 1996-97 15553.90 6989.40 8574.50 1997-98 18694.70 12737.20 5957.50 1998-99 16115.10 17699.40 -1584.50 1999-00 31407.60 25619.60 5788 2000-01 74050.70 64116.30 9934.30 2001-02 49920.10 41165 8755.20 2002-03 45031.50 43232.70 1798.70 2003-04 128729.80 90568.40 38161.50 2004-05 203532.80 156354.10 47178.50 Source : www.sebi.gov.in From the table above it is evident that in each year, except 1998-99, the net investment of FIIs is positive. This implies the growing amount of foreign exchange reserve of our country. The matching of the gross purchase and gross sale of FIIs is shown in the following chart.
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Chart -1 : Trend in FII Investment
Trend in FII investment

250000 200000 150000 100000 50000 0
19 92 19 93 94 19 95 96 19 97 98 20 99 00 20 01 02 20 03 04 -0 5
Gross Purchases Gross Sales
5.3 Why India? : One of the basic reasons why FIIs getting attracted towards Indian market is the inherent strength of Indian economy. SEBIs initiatives towards the development of Indian stock market, like transparency, implementation of screen based trading, efficient settlement mechanism etc, have created havoc in attracting FIIs. For the last few years Indian stock market is giving double digit returns and is one of the best investing destinations for FIIs. The P/E ratio of the market is on the higher side in comparison to BRIC nations and other Asian markets. 5.4 Impact of the FIIs inflow on the stock market: FIIs investments are very volatile in nature. Further the quantum of investment in FIIs is so large that they can put a considerable impact on the movement of various indices. The following table (Table-3) depicts the comparative amount of foreign portfolio investment in relation to average Sensex points. Table-3 Distribution of average sensex and Foreign Portfolio Inv. in different years.
Year 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Average Sensex(points) 2856 2899 3975 3259 3459 3813 3295 4568 4270 3332 3206 4492 5741 8260 Foreign Inv.( $mn) 244 3587 3524 2748 3312 1826 .51 3026 2760 2021 979 11377 8509 12492 Portfolio
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The following chart shows the movement of Sensex with the inflow of foreign portfolio investments. Chart-2 : Movement of Sensex with FPI
14000 12000 10000 8000 6000 4000 2000 0 1992-93 1994-95 1996-97 1998-99 2000-01 2002-03 2004-05
Average Sensex(points) Foreign Portfolio Inv.( $mn)
5.5 Future of FIIs : Participatory notes(PN) offer the advantage of preserving the anonymity of the overseas investor. As of now SEBI has not banned the issuance of PN, but it has banned FIIs from issuing PNs to unregulated entities. At the same time SEBI has amended its definition of the regulated entities, thus making it less strict. In this way SEBI is balancing the whole matter to create a conducive environment for the FIIs. 5.6. Impact of other emerging markets on Indian capital markets: As Indian capital market is proved to be an efficient market in its semi strong form going towards the near strong from, the impact of the other emerging markets on Indian Capital market is also analyzed, because these others emerging markets are not out of the purview of international portfolio managers. Here the impact of other emerging markets namely Singapore, Malaysia, Filipinos, and Mexico is taken to find out their impact on Indian capital market. The multiple regression equation is form taken Indian stock market as dependent variable and other emerging markets are taken as independent or explanatory variables. BSE sensex is used as a proxy of the Indian capital market. The regression equation is fitted as follows. Bse = + 1. phill+ 2.malys+ 3.mex+ 4.sing+ei Bse = Sensex Phill = Philippines Stock Exchange Malys = Malaysia Stock Exchange Mex = Mexico Stock Exchange Sing= Singapore Stock Exchange
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= positive vertical intercept and ei = error term As E (ei) = 0 so we are ignoring the error term Based on the model above the data of the five exchanges under sample are analyze taking BSE as the impendent variable and other four exchanges such as Philippines Stock Exchange, Malaysia Stock Exchange, Mexico Stock Exchange, Singapore Stock Exchange as independent variables. Using the multiple regression analysis the impact of other four exchanges on BSE is obtain. Further, correlation using Bivariate data between all exchanges is calculated and a correlation matrix is prepared. For the purpose of Analysis of Variance (ANOVA) the hypothesis is tasted to judge the significance of the value of F ratio where Null Hypothesis: H0 : the difference in sample means is due to matter of chance
Alternative Hypothesis: H1 : the difference in sample means is due to the impact of international diversification Apart form this individual impact of each independent variable on the dependent variable is also soon drawing the exponential curve. The finding of the study is shown is following section.
6. FINDINGS AND SUGGESTIONS The analysis using the data of five stock exchanges taken under sample is showing different relations between the dependent and independent variables. In the following table (Table 1) the output of multiple regression analysis is shown under the heading model summary. The analysis, giving the result of R square as 0.728 is highly significant for the purpose of this study. This high value of R square (0.728) confirms a high degree of impact of other stock exchanges of emerging economics on BSE SENSEX. That means other emerging market reflecting the impact of international diversification affects Indian capital market. Table 4- Output summery showing R Square coefficients Model Summary Model R R Square Adjusted R Std. Error of Square Estimate 1 .853 .728 .629 15931.2017 Predictors: (Constant), SING, MEX, PHILL, MALYS The details about the dependent and independent variables are given in the following table 2. After minute analysis of table it is clear that Beta coefficient of Philippines and Malaysia stock exchanges are negative which means these two exchanges have negative
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the
or inverse impact on BSE. Other two exchanges are showing a positive Beta coefficient out of which Singapore exchange is showing a very high value of Beta (0.810). The overall t value of the study is 2.723 that are significant. Table 5- Output summery showing Beta coefficients Coefficients Unstandar dized Coefficien ts Model B 1 (Constant) 40561.281 PHILL -.978 MALYS -.157 MEX .494 SING .615 a Dependent Variable: BSE Standard t ized Coeffici ents Beta 2.723 -.285 -1.201 -.320 -1.158 .322 1.620 .810 5.021 Sig.
Std. Error 14896.307 .814 .136 .305 .122
.020 .255 .271 .133 .000
The analysis regarding ANOVA is given in the following table (Table 3). The essence of ANOVA is that in this analysis the total amount of variation in set of data is broken down into two types, that amount which can be attribute to the chance factor and that amount which can be attributed to specified causes. So we set out Null and Alternative Hypothesis (as stated in the previous section) as follows: H0 = the difference in sample means is a matter of chance H1 = the difference in sample means is due to the impact of international diversification The ANOVA is showing an F ratio, which is calculated as means square between the samples divided by the means square within sample. The calculated F ratio here is 7.367, which are much, more than the table value (3.36) at 95% confidence level. This analysis reject the Null Hypothesis that difference in sample means is a matter of chance. The acceptance of Alternative hypothesis proves that the difference the sample means is due to the impact of international diversification. Table 6 ANOVA table Model 1 Sum of Squares Regression 7478742130 .358 Residual 2791835080 .257 Total 1027057721 0.614 df 4 11 15 Mean Square 186968553 2.589 253803189. 114 F 7.367 Sig. .004
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Predictors: (Constant), SING, MEX, PHILL, MALYS Dependent Variable: BSE The impact of independent variables individually is shown using the following exponential growth curve. In the following figure (Figure 1) the relationship between observe and growth curve between BSE and Philippines exchange is clarified. The impact of negative Beta between BSE and Philippines is clear in the growth curve. In figure 2 and 3 also the impact of negative Beta and very low value of positive Beta on BSE due to Malaysia and Mexico Stock Exchange respectively is clearly shown. The impact of a very high degree of positive Beta (0.810) of Singapore exchange with BSE is expressed in Figure 4 with an upward rising growth curve.
Figure 1 Exponential growth chart between BSE and Philippines

BSE
160000
140000
120000
100000
80000
60000 Observed 40000 0 10000 20000 30000 Grow th
PHILL
Figure 2 Exponential growth chart between BSE and Mexico

BSE
160000
140000
120000
100000
80000
60000 Observed 40000 0 20000 40000 60000 80000 100000 Grow th
MEX
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Figure 3 Exponential growth chart between BSE and Singapore
BSE
160000
140000
120000
100000
80000
60000 Observed 40000 0 20000 40000 60000 80000 100000 120000 Grow th
SING
The correlation matrix between BSE and other four exchanges under sample is showing low degree of negative correlation except Singapore, which is showing a high degree of positive correlations (0.702). Other exchanges also showing positive relationship between them except Singapore exchange having low or moderate correlations between them. The result of the correlations would have been much more dependable if more number of observations can be collected. Table 7 Distribution of Correlations Matrix BSE PHILL Pearson Correlation 1.000 -.291 Sig. (2-tailed) . .274 N 16 16 PHILL Pearson Correlation -.291 1.000 Sig. (2-tailed) .274 . N 16 16 MALYS Pearson Correlation -.252 .735 Sig. (2-tailed) .347 .001 N 16 16 MEX Pearson Correlation -.012 .309 Sig. (2-tailed) .964 .244 N 16 16 SING Pearson Correlation .702 .161 Sig. (2-tailed) .002 .552 N 16 16 Correlation is significant at the 0.01 level (2-tailed). Correlation is significant at the 0.05 level (2-tailed). BSE
MALYS -.252 .347 16 .735 .001 16 1.000 . 16 .574 .020 16 .115 .671 16
MEX -.012 .964 16 .309 .244 16 .574 .020 16 1.000 . 16 -.077 .777 16
SING .702 .002 16 .161 .552 16 .115 .671 16 -.077 .777 16 1.000 . 16
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7. LIMITATIONS The time sires data taken for the purpose of analysis is less in number. Only sixteen observation of each variable are abatable for the purpose of the study. Some more observation would have made the multiple regression analysis trust worthier. Pearsons correlations using the Bivariate data world have been more reliable with more number of observations. FDI data of India an other emerging market required more insights. As FIIs are directly related to the stock exchange, so, an index study of other emerging market is due, as it is done in case of Indian market. Relevant data have been collected form website without checking for its authenticity. 8. CONCLUSIONS AND RECOMMENDATIONS Over the past decade India has gradually emerged as an important destination of global investors' investment in emerging equity markets. In this paper we explore the relationship of foreign institutional investment (FII) flows to the Indian equity market with its possible impact based on a time series of yearly data for the period 1992-03 to 2005-06. Here we try to identify the relevant covariates of FII flows into and out of the Indian equity market and also to determine the nature of causality between the relevant variables. We incorporate into the analysis variables that appear, a priori, to be the primary determinants of global investors' demand/supply for/of stocks in the Indian market. The variables taken are reflecting yearly volatility (representing risk) in domestic and international equity markets, based on the BSE SENSEX, Philippines Stock Exchanges, Malaysia Stock Exchange, Mexico Stock Exchange and Singapore Stock Exchange as well as measures of co-movement of impact in these markets (with the relevant betas). In this study several macroeconomic variables like daily returns on the Rupee-Dollar exchange rate, short run interest rate and index of industrial production (IIP); that are likely to affect foreign investors' expectation about returns in the equity market is not considered, which needed special attention. The data set embodies year-toyear variations and hence, is better suited for examination of various interrelationships of equity. Also, we relate yearly FII flows to the exchange index values mentioned above combining three kinds of flows, namely, FII flows into the country or FII purchases, FII flows out of the country or FII sales and the net FII inflows into the country or FII net. Our results show that, though there is a general perception that FII activities exert a strong demonstration effect and thus drive the domestic stock market in India, evidence suggests that FII flows to and from the Indian market tend to be caused by return in the domestic equity market and not the other way round. The regression analysis, in various stages, reveals that returns in the Indian equity market are indeed an important (and perhaps the single most important) factor that influences FII flows into the country. While, the dependence of net FII flows on daily return in the domestic equity market (at a lag, to be more specific) is suggestive of foreign investors' return-chasing behavior, the recent history of market return and its volatility in emerging and domestic stock markets have some significant effect as well. However, while FII sale (and FII net inflow) is
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significantly affected by the performance of the Indian equity market, FII purchase is not responsive to this market performance. Looking at the role of the betas of the Indian market with respect to the Philippines Stock Exchanges, Malaysia Stock Exchange, Mexico Stock Exchange and Singapore Stock Exchange indices it is concluded that foreign institutional investors do not seem to use the Indian equity market for the purpose of diversification of their investments. It is also seen that return from exchange rate variation and fundamentals of the emerging economies may have strong influence on international diversification decisions. Policy implications that emerge are that a move towards a more Liberalized regime, in the emerging market economies like India, should be accompanied by further improvements in the regulatory system of the financial sector. To fully reap the benefits of capital market integration, in India (and other countries having thin and shallow equity markets) the prime focus should be on regaining investors' confidence in the equity market so as to strengthen the domestic investor base of the market, which in turn could act as a built-in cushion against possible destabilizing effects of sudden reversal of foreign inflows. REFERENCES Amihud, Y., 2002, Illiquidity and Stock Returns: Cross-section and Time Series Effects, Journal of Financial Markets 5, 31-56. Bekaert G and R H Campbell (1995)- Time Varying World Market Integration, Journal of Finance, Volume 50, pp. 403-444. Chee-Keong Choong and Kian-Ping Lim (2007)- Foreign Direct Investment in Malaysia: An Economic Analysis, The ICFAI Journal of Applied Economics, Volume 6 No. 1, pp. 75. Endo, Tadashi. 1998. The Indian Securities MarketA Guide for Foreign and Domestic Investors. Vision Books. India. Gupta, L.C. 1998. What Ails the Indian Capital Market? Economic and Political Weekly, 23 , pp. 29-30. Gupta, R (2005)- Economic Development of West Bengal, Vol. I, Icfai University Press, Hyderabad. Hermes, N. and Lensink, R., 2005, Does Financial Liberalization Influence Saving, Investment and Economic Growth? Evidence from 25 Emerging Market Economies, 1973-96, United Nations University, World Institute for Development Economics Research, Research Paper No. 2005/69. Jess Lee and Alfred Wong (2009)- Impact Of Financial Liberalisation On Stock Market Liquidity: Experience Of China Working Paper 03/2009, Honkong. Joydeep Biswas (2007)- Emerging Equity Market: A Cross-country Time Series Analysis, The ICFAI Journal Of Applied Finance, Volume 13 No. 7, pp. 55. Kothari C. R. (2004) Research Methodology Methods and Techniques, New Age International Publishers, pp. 256-264. Misra, B. M. (1997)- Fifty Years of the Indian Capital Market: 1947-1997. In Banking and Financial Sector Reforms in India, Vol. 6, edited by Kapila, Raj and Uma Kapila.
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Nielsson, U., 2008- Stock Exchange Merger and Liquidity: The case of Euronext, Journal of Financial Markets, Article in press. O'Neill, J. (1993) Ecology, Policy and Politics. Human Well-Being and the Natural World Routledge Press , London. Pagano, M. and Padilla, A., 2005, Efficiency Gains from the Integration of Exchanges: Lessons from the Euronext Natural Experiment, A report for Euronext. Peoples Bank of China, 2006, A Year of Smooth Implementation of the Reform of the RMB Exchange Rate Regime, Appendix of Monetary Policy Report, Quarter Two, 2006. Prasad, E., Rogoff, K., Wei, S. and Kose, M., 2003, Effects of Financial Globalization on Developing Countries: Some Empirical Evidence, IMF Occasional paper No.220. Raju M. T. and Anirban Ghosh (2004)- Stock Market Volatility an International Comparison, SEBI Working Paper Series No. 8.Ranciere, R., Tornell, A. and Westermann, F., 2006, Decomposing the Effects of Financial Liberalization: Crises vs. Growth, Journal of Banking & Finance, Volume 30, Issue 12, 3331-3348. Rangarajan, C. 1997- Activating Debt Markets in India. Reserve Bank of India Bulletin. Reddy, Y. V. 1997- The Future of Indias Debt Market. Reserve Bank of India Bulletin. Securities and Exchange Board of India. 1995/96 and 1996/97. Annual Report. India: SEBI . Shah, Ajay, and Susan Thomas. 1997. Securities MarketsTowards Greater Efficiency. In India Development Report, edited by K. Parikh. UK: Oxford University. Tarapore, S. S. The Government Securities Market: The Next Stage of Reform. Banking and Financial Sector Reforms in India, Vol. 4. Websites of BSE, Philippines Stock Exchange, Malaysia Stock Exchange, Mexico Stock Exchange, Singapore Stock Exchange. Williamson, Oliver E. (1999)- Public and Private Bureaucracies: A Transaction Costs Economics Perspective, Journal of Law, Economics and Organization, Vol 15, pp. 306-342.
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APPENDIX I
Summary Statistics Market Capitalizati on Ratio Mean SD Indonesia Thailand India Malaysia Philippines Korea Pakistan Bangladesh Sri Lanka 0.227 0.319 0.312 1.458 0.464 0.416 0.185 0.028 0.110 0.1 33 0.2 39 0.1 43 0.6 85 0.2 65 0.2 70 0.0 92 0.0 34 0.0 51
Turnover Ratio Mean 0.522 0.792 0.829 0.384 0.261 2.210 1.687 0.451 0.158 SD 0.342 0.237 0.753 0.184 0.193 0.939 1.698 0.260 0.059
Valuetraded Ratio Mea SD n 0.11 0.05 1 8 0.32 0.23 6 0 0.34 0.32 6 9 0.65 0.53 8 9 0.12 0.11 3 1 1.04 0.80 9 5 0.17 0.14 1 8 0.01 0.00 1 8 0.01 0.01 7 2
Growth of Listed Companies Mea SD n 0.03 0.044 6 0.02 0.134 7 0.11 0.066 0 0.06 0.050 9 0.01 0.016 5 0.13 0.435 2 0.00 0.023 3 0.03 0.020 4 0.00 0.020 6
Risk
Market Integration SD Mean SD 0.213 0.246 0.193 0.116 0.098 0.214 0.320 0.274 0.150
Mea n 0.16 5 0.19 1 0.22 2 0.08 0 0.10 3 0.09 8 0.17 1 0.13 3 0.16 9
4.546 0.649 6.368 0.405 4.050 0.121 5.478 0.189 4.347 0.271 6.587 0.502 6.240 0.124 5.560 0.282 4.554 0.018
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APPENDIX II FDI Inflows in the East Asian Developing Countries Country/Group FDI Inflows (Million of Dollars) 1970 1980 1985 1990 1995 1997 1998 Developing 788 395 5191 24230 75293 107205 95599 Countries: Asia China 57 1659 3487 25849 44237 43751 China, Hong 50 710 -267 3275 6213 11368 14776 Kong SAR Indonesia 83 180 310 1092 4346 4677 -356 Korea 66 6 234 789 1776 2844 5412 Malaysia 94 934 695 2611 5816 6513 2700 Philippines -25 -106 12 550 1459 1249 1752 Singapore 93 1236 1047 5575 8788 12967 6316 Thailand 43 189 160 2542 2004 3627 5143 Source: UNCTAD (2002), Division on Investment, Technology and The source also can be www.UNCTAD.org./en/subsite/dite/fdistats_files/fdistats.htm
1999 2000 2001 99728 143479 102066 40319 40772 24591 64448 46846 22834
-2745 -4550 -3277 10598 10186 3198 3532 5542 554 737 1489 1792 7197 6390 8609 3562 2448 3759 Enterprise Development. obtained at:
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VOLUME 3 NUMBER 4 April, 2012

International Journal of Contemporary Business Studies

. An International Journal Published by

Copyright 2012 IJCBS Copyright 2012. Academy of Knowledge Process

journal of Contemporary Business Studies

One of the largest Research Databases of world

Open Access Policy

International journal of Contemporary Business Studies

Saddal H.A Editor-in-Chief

VOLUME 3, NUMBER 4 April, 2012

Sumayya Chughtai,Farah Zamir,Ayesha Riaz,Farah Khan.6

Dr A J du Plessis, Ms S Paine, Dr C J Botha... 16

Dr. Mohamed Esham, Krishanthi Ganga Vithana.427

Anantha Raj A. Arokiasamy 51

Er. Shivinder Phoolka, Dr. Navjot Kaur67

Sk Samim Ferdows , Abhijit Roy,,79

Portfolio formation and formulas for measurement

www.brecorder.com/ www.sbp.org.pk/ 3 www.kse.com.pk/

Intercept Rm- RFR SML HML LMU

Intercept Rm- RFR SML HML LMU

OBJECTIVES OF THIS STUDY

LITERATURE REVIEW Background

Recruitment and Retention

Strategic role of HR practitioners

Table 1: Profile of respondents by profession in New Zealand in 2000 and 2008

57.0% 47.7% 40.4% 44.4% 54.6%

1.9% 1.9% 0.6% 3.3% 2.6%

Recruitment and Retention

Table 4: Self-identified capabilities in the area of Recruitment & Retention

Table 5: Self- identified capabilities in the area of Work-Life Balance

Table 6: Self-identified capabilities in the area of Diversity Management

Strategic role of HR practitioners

Table 7: Self- identified capabilities in the area of Strategic HRM

20.5% 39.0% 20.5%

43.7% 42.4% 53.0%

25.1% 12.6% 19.9%

9.3% 4.6% 6.0%

1.3% 1.3% 0.7%

Respondents level of involvement

Table 8: Level of involvement in HR activities

Value1** 1.50 1.62 1.45 1.72 1.75

Value2*** 3.52 3.80 3.12 3.82 4.16

* 1 = 'solely responsible', 5 = 'no involvement'

Value1**= Mean - Std, Value2***= Mean + StD

Figure 1: Areas of great deal of involvement by job classification

Diversity Work-lif e balance Staf f ing/Retention Strategic Planing Change Management

Table 9: Internal reliability test

0.777 0.873 0.804 0.862 0.827

RECOMMENDATIONS FOR HR PRACTITIONERS

LITERATURE REVIEW a. Financial meltdown

b. Political & socio-economic conditions under financial meltdown

d. Portfolio management under financial meltdown

e. Balance of payment under financial meltdown

MATERIALS AND METHODS a. Research Sample

c. The Research Instrument

e. Index to Measure Effectiveness of Outward Bound Training Programmes

RESULTS AND DISCUSSION

Table 2. Characteristics of the respondents

b. Outcomes of Outward Bound Training Programmes

Table 3. ANOVA of OBT programmes

2.9750 0.9470 (----*----)

Value1= Mean - Std, Value2*= Mean + StD